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Termination By Employer

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Whether you are an employer or employee, when it comes to termination of employment it’s important to know your rights and obligations under the law. Let’s take a close look.

 

The right to security of tenure of an employee is granted under the 1987 Philippine Constitution and the Labor Code of the Philippines (both of which you can find in the Resources section on our Homepage). An employer cannot terminate an employee except for what are termed ‘Just Causes’ or ‘Authorized Causes’.

Article 297 of the Labor Code of the Philippines enumerates the Just Causes for terminating an employee as follows:

  1. Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;

  2. Gross and habitual neglect by the employee of his duties;

  3. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;

  4. Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and

  5. Other causes analogous to the foregoing.

Article 298 of the Labor Code of the Philippines, meanwhile, enumerates the Authorized Causes for terminating an employee as follows:

  1. Installation of labor-saving devices;

  2. Redundancy;

  3. Retrenchment to prevent losses; and

  4. Closure or cessation of operation of the establishment.

An employer may also terminate an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees pursuant to Article 299 of the Labor Code of the Philippines.

Before terminating an employee, the employer must observe procedural due process. This varies depending on whether an employee is being terminated on the ground of just causes or on the ground of authorized causes.

The case of Unilever Philippines Inc. vs. Maria Ruby Rivera, G.R. No. 201701, 03 June 2013, provides the procedural due process to be observed before termination of an employee based on a just cause thus:

  1. First written notice to the employee containing the specific causes or grounds for termination against them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. “Reasonable opportunity” under the Omnibus Rules means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense. This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint.

  1. A hearing or conference during which the employee concerned, with the assistance of counsel if employee so desires, is given opportunity to respond to the charge, present his evidence or rebut evidence presented against him or her; and

  1. A written notice of termination served on the employee indicating upon due consideration of all circumstance, grounds has been established to justify his or her termination.

However, it must be noted that a hearing or conference is not mandatory so long as the employee has been given ample opportunity to be heard.  In the case of Felix B. Perez vs. Philippine Telegraph and Telephone Company, G.R. No. 152048, 07 April 2009, the Court held that, “A hearing means that a party should be given a chance to adduce his evidence to support his side of the case and that the evidence should be taken into account in the adjudication of the controversy. “To be heard” does not mean verbal argumentation alone inasmuch as one may be heard just as effectively through written explanations, submissions or pleadings. Therefore, while the phrase “ample opportunity to be heard” may in fact include an actual hearing, it is not limited to a formal hearing only. In other words, the existence of an actual, formal “trial-type” hearing, although preferred, is not absolutely necessary to satisfy the employee’s right to be heard.”

The procedural due process of terminating an employee based on authorized cause is provided in Article 298 of the Labor Code of the Philippines, to wit:

  1. Written Notice to the employee at least one (1) month before the intended date of termination; and

  2. Written Notice to the Department of Labor and Employment at least one (1) month before the intended date of termination;

An employee’s termination would be considered illegal if the employer did not observe the afore-stated due process.

I hope this information has been useful. Don’t forget, if you have a labor-related problem, we are here to help.

And we find solutions.

Atty. Cindy Climaco.  Sept. 12, 2018

LINK :  Labor Code of the Philippines

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