Overview

Illness alone is not a lawful reason to fire an employee in the Philippines. Termination on account of disease is permitted only under the narrow conditions of Article 299 of the Labor Code (formerly Art. 284) and after observing due process. When employers skip any statutory requirement—even with sincere health concerns—the dismissal is illegal, and the worker is entitled to remedies.

This article explains the legal standards, due-process steps, documentary requirements, typical mistakes that invalidate dismissals, and the remedies available to employees.

The Legal Standard (Article 299, Labor Code)

An employer may end employment due to disease only if all the following are true:

Actual illness: The employee is suffering from a disease; and
Health or legal risk: Continued employment is prohibited by law or prejudicial to the employee’s health or to that of co-workers; and
Medical certification: A competent public health authority certifies that the disease is incurable within six (6) months even with proper medical treatment.

If the disease is curable within six months, termination is not allowed. The lawful course is temporary leave, sick leave, or suitable alternative work while treatment is ongoing.

Separation pay (if dismissal is lawful): at least one (1) month salary or one-half (1/2) month salary per year of service, whichever is higher (a fraction of six months counts as one year).

“Competent Public Health Authority”: What It Means

The certification must come from a public health official or physician (e.g., city/municipal health officer, DOH hospital/clinic physician).
A company doctor or private physician is not enough by itself. Employers may present private medical opinions, but the statute requires a certification from a public health authority for dismissal to stand.
The certification must be clear and specific: diagnosis, prognosis, risk to self/others, and a statement that the condition cannot be cured within six months despite proper treatment.

Practical tip: Employees who are declared fit to work or whose conditions are controllable (e.g., with medication, schedule adjustments, or temporary reassignment) typically do not meet the “incurable within six months” threshold.

Due Process Requirements

Although Article 299 is not an “authorized cause” under Article 298 (which requires 30-day DOLE notice), procedural due process still applies:

First written notice to the employee explaining the medical basis and the employer’s intent to consider termination under Art. 299; enclose medical reports and advise the employee of the right to respond and submit contrary medical evidence.
Opportunity to be heard: meeting or conference where the employee may explain, submit medical certificates, or request further evaluation.
Second written notice stating the final decision and the specific legal and medical grounds, including the public health certification relied upon and the computation of separation pay.

Skipping these steps (especially relying only on a private doctor, or failing to obtain a public health certification) commonly results in a finding of illegal dismissal. Even when the medical ground is valid, procedural lapses expose the employer to nominal damages.

What Employers Must Consider Before Dismissal

Six-month curability test: If treatable within six months, keep the employment relationship (paid sick leave if available under policy/CBAs, or leave without pay, as applicable) or arrange temporary accommodation.
Reasonable adjustments: Where feasible, offer lighter duties, different shifts, temporary reassignment, or work-from-home to remove the health risk.
Non-discrimination duties: The Magna Carta for Persons with Disability (RA 7277, as amended by RA 10524) prohibits discrimination and encourages reasonable accommodation for qualified persons with disability arising from illness.
Disease-specific rules:
- Tuberculosis: DOLE and DOH issuances emphasize non-discrimination, treatment, and return-to-work upon fit-to-work clearance; automatic termination is disfavored.
- HIV: RA 11166 ensures confidentiality and forbids discriminatory termination; fitness is a medical, not stigma-based, question.
Data privacy: Medical information is sensitive personal information under the Data Privacy Act (RA 10173); collect only what is necessary, secure it, and limit access.

Common Employer Errors That Make Dismissal Illegal

No public health authority certificate (relying solely on a private or company physician).
Vague or generic diagnoses not proving incurability within six months.
No proof of health risk to the employee or co-workers, especially where accommodation was possible.
Bypassing due process (no twin notices, no real chance to rebut).
Treating Article 299 like Article 298 (e.g., giving 30-day DOLE notice but still lacking the required public certification).
“Forced resignation,” indefinite suspension, or sidelining without pay to avoid the stricter Article 299 standard—often deemed constructive dismissal.

Employee Rights and Remedies if Illegally Dismissed

Reinstatement to former position without loss of seniority rights, plus full backwages from dismissal until actual reinstatement.
If reinstatement is no longer viable (e.g., position abolished in good faith, strained relations, or medically unfit despite employer fault), courts may award separation pay in lieu of reinstatement plus backwages up to finality.
Damages:
- Moral and exemplary damages for bad faith or oppressive conduct.
- Nominal damages for procedural due process violations even when the substantive ground exists.
Attorney’s fees: commonly 10% of the monetary award when bad faith or unlawful withholding is shown.
Tax treatment: Separation benefits due to sickness/disability or causes beyond the employee’s control are generally income tax-exempt under the Tax Code.

Where and How to File

Forum: File a complaint for illegal dismissal with the Labor Arbiter (NLRC); single-entry approach (SEnA) may first attempt conciliation at DOLE.
Prescriptive periods:
- Illegal dismissal actions: 4 years from dismissal (an action for injury to rights).
- Pure money claims (e.g., unpaid benefits not tied to the illegal dismissal case): 3 years.

Prepare: employment contract, payslips, company notices, all medical certificates (yours and the company’s), and any correspondence or chat/email showing the circumstances.

Computing Monetary Awards (Illustrative)

Backwages = monthly salary × months from dismissal to reinstatement (or to finality if separation pay in lieu is ordered), including regular allowances and 13th-month pay.
Separation pay in lieu of reinstatement (when granted despite illegal dismissal) is typically one month salary per year of service (jurisprudential), distinct from Article 299 separation pay (which applies only when the dismissal due to disease is lawful).
Legal interest accrues (rate and reckoning depend on prevailing jurisprudence).
Attorney’s fees and damages as awarded.

Note the distinction: Article 299 separation pay is available only when the dismissal for disease is valid. If the dismissal is illegal, the usual relief is reinstatement + backwages (or separation pay in lieu) not the Article 299 separation pay.

Special Notes for Specific Employment Situations

Probationary employees: Protected by Article 299; illness-based termination still needs the public health certification and due process.
Fixed-term and project employees: Same disease rule applies; the contract term does not excuse non-compliance.
Domestic workers (Kasambahay Law): Protection against unlawful termination applies; employers must still follow Article 299 standards and due process.
Unionized workplaces: CBAs may provide better sick leave or accommodation; statutory minimums still control legality of dismissal.

Best-Practice Checklist

For employees (to protect your rights):

Keep copies of fit-to-work or treatment certificates from your physician.
If told you cannot return, ask in writing for the employer’s medical basis and identify the “competent public health authority” certificate (demand a copy).
Offer or request temporary accommodations consistent with your doctor’s advice.
Document any forced leave, indefinite suspension, or pressure to resign.

For employers (to avoid liability):

Obtain a public health authority certification that squarely meets Article 299’s elements.
Provide twin notices and a bona fide hearing; keep minutes.
Consider accommodations and the six-month curability rule.
Release separation pay (if dismissal is valid) with final pay and a written computation.
Safeguard medical privacy under RA 10173.

Quick Answers to Frequent Questions

Can my employer fire me because I was repeatedly on sick leave? Not for illness alone. They must prove Article 299 requirements and due process. Attendance issues might implicate other rules, but illness-based termination requires the public health certification and the six-month incurability finding.
My company doctor says I’m unfit. Is that enough? No. The law requires a certification from a competent public health authority. A private/company doctor’s note is insufficient to lawfully terminate under Article 299.
I’m recovering and my doctor says I’m fit to work with restrictions. The employer should consider accommodation or temporary reassignment. Termination is suspect if curability within six months or accommodation is feasible.
If the dismissal is upheld, what do I get? Separation pay: at least one month salary or 1/2 month per year of service, whichever is higher (six months = one year). Other earned benefits and final pay are also due.
If the dismissal is illegal, what do I get? Reinstatement with backwages, or separation pay in lieu plus backwages, and possibly damages and attorney’s fees.

Bottom Line

To lawfully dismiss an employee due to illness in the Philippines, an employer must (1) secure a public health authority certification of incurability within six months and risk to health or legal prohibition, and (2) observe twin-notice and hearing due process. Absent any of these, the dismissal is illegal. Employees who experience such dismissals have strong remedies—often reinstatement and backwages or separation pay in lieu—alongside possible damages.