Bodota & Batungbacal Law Offices
Termination of Employment in the Philippines
Just and Authorized Causes for Doing Such
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Employment cannot be terminated simply because an employer decides to end the employment relationship.
Under Philippine labor law, termination of employment must be based on either a just cause or an authorized cause. Even when a valid ground exists, the employer must still comply with substantive and procedural due process.
In simple terms, there must be a lawful reason for the dismissal, and the required process must be followed.
What are just causes for termination
Just causes are grounds for dismissal based on the employee’s act, omission, or conduct. An employer may terminate employment for any of the following just causes:
1. Serious misconduct or willful disobedience of lawful orders in connection with work;
2. Gross and habitual neglect of duties;
3. Fraud or willful breach of trust, also commonly associated with loss of trust and confidence;
4. Commission of a crime or offense against the employer, the employer’s immediate family member, or duly authorized representative; and
5. Other causes analogous to the foregoing.
These causes generally involve conduct attributable to the employee.
What are authorized causes for termination?
Authorized causes are grounds for termination that are not necessarily based on employee misconduct. These usually arise from business reasons, operational needs, or circumstances recognized by law. An employer may terminate employment due to the following authorized causes:
1. Installation of labor-saving devices;
2. Redundancy;
3. Retrenchment to prevent losses;
4. Closure or cessation of operations, subject to the applicable rules on serious business losses, financial reverses, and notice requirements; and
5. Disease, when the employee is found to be suffering from a disease and continued employment is prohibited by law or prejudicial to the employee’s health or the health of co-employees, with separation pay as provided by law.
Because authorized causes may involve business judgment and factual circumstances, proper documentation is important.
Valid cause is not enough by itself
Even if there is a valid just cause or authorized cause, the employer must still observe due process.
This means that the employer must comply with the required notice and hearing or opportunity-to-be-heard requirements, depending on the ground relied upon.
The law does not allow employers to skip procedure simply because they believe the ground for termination is valid.
The employer has the burden proof
In termination cases, the burden of proving that the dismissal was for a valid or authorized cause rests on the employer.
This means the employer must be able to show that the ground for dismissal exists and that the required procedure was followed.
For this reason, employers should make sure that termination decisions are supported by documents, records, notices, explanations, and other relevant evidence.
What happens when due process is not followed?
If an employee is dismissed for a valid cause but procedural due process is not observed, liability may still attach.
Philippine case law recognizes that failure to comply with procedural due process may result in the award of nominal damages, even if the dismissal itself is based on a valid ground.
This is why both the reason for dismissal and the process followed are important.
Key Takeways
Termination of employment in the Philippines must be handled carefully.
There must be a valid just cause or authorized cause, and the employer must comply with the required procedure. The employer must also be prepared to prove both the ground for termination and compliance with due process.
For employers and employees, legal advice should be sought when dealing with termination issues, especially where the facts, documentation, or procedure are disputed.
Attorney Ralph Borja Bodota
Attorney Roberto Narvasa Batungbacal
This article is for general informational purposes only and does not constitute legal advice. For more questions, feel free to send us an email.