Dismissal Procedure for Serious Misconduct of Regular Employees in the Philippines
Article 297 [formerly 282] of the Labor Code lists “serious misconduct” as a just cause for termination. While a just cause focuses on what was done, dismissal legality ultimately depends on how the employer handles the process.
1. Statutory & Regulatory Framework
| Source | Key Provisions | Notes |
|---|---|---|
| Labor Code – Art. 297 (Just Causes) | Lists “serious misconduct” as a ground for dismissal. | Amended numbering under R.A. 10151; substance unchanged. |
| Department Order (D.O.) 147-15, Series of 2015 | Codifies due-process steps (twin-notice rule, five-day reply period, hearing requirements, 30-day cap on preventive suspension). | Binding on private employers. |
| R.A. 10395 (Sexual Harassment) & other special laws | Certain misconduct (e.g., sexual harassment, drug use) simultaneously violate special statutes. | May trigger criminal or administrative liability. |
| DOLE Labor Advisories / Issuances | Require submission of Termination Report (RKS Form 5) to the DOLE Field/Provincial Office within 30 days from effectivity of dismissal. |
2. What Constitutes “Serious Misconduct”
Philippine jurisprudence distils four elements (see Toyota Motors Phils. Corp. v. NLRC, G.R. No. 101904, 26 Jan 1993; Gonzales v. Nat’l Labor Relations Commission, G.R. No. 147824, 17 Jan 2013):
- Misconduct – a wrongful act, transgression, or improper conduct.
- Serious and Grave – of such weight that it annihilates the employee’s moral ascendancy or renders continued employment untenable.
- Related to Duties – must have a clear connection to the employee’s work or show an unfitness to continue working.
- Presence of Wrongful Intent – willful and with perverse or obstinate purpose; negligence alone is not misconduct.
Commonly‐Recognized Examples
| Category | Illustrative Acts | Landmark Cases |
|---|---|---|
| Dishonesty/Theft | Stealing company money, equipment, proprietary data. | Firestone Tire v. Lariosa (G.R. No. 70479, 30 Jan 1986) |
| Violence/Threats | Assaulting co-worker, brandishing weapons in the workplace. | Studio 23 v. NLRC (G.R. No. 167218, 23 Mar 2011) |
| Serious Insubordination | Willful refusal to obey lawful orders on critical matters. | St. Luke’s Medical Ctr. v. Notario (G.R. No. 215760, 14 Apr 2021) |
| Sexual Harassment | Unwelcome sexual acts toward colleagues. | Asuncion v. NLRC (G.R. No. 159984, 10 Mar 2010) |
| Drug Use at Work | Testing positive for shabu/marijuana in the workplace. | Sermonia v. Sandiganbayan (though criminal, adopted in labor cases) |
3. Dual Due-Process Requirements
3.1 Substantive Due Process
The employer bears the burden to prove the misconduct satisfies all four elements and is supported by substantial evidence (that amount of relevant evidence a reasonable mind might accept).
3.2 Procedural Due Process (D.O. 147-15)
| Step | Timing & Contents | Practical Tips |
|---|---|---|
| 1. Notice to Explain (NTE) | Serve written charge describing: • specific acts & dates • rule violated • possible penalty. ⚑ Must give employee ≥ 5 calendar days to submit a written explanation. |
Attach evidence (CCTV grabs, audit sheets). Personal delivery with acknowledgment; else registered mail. |
| 2. Administrative Hearing / Conference | Mandatory only if • requested in writing by the employee, or • substantial factual issues/conflicts of evidence exist, or • company policy requires it. |
Allow representation by counsel or union officer; provide interpreter if needed; minute the proceedings. |
| 3. Notice of Decision | After weighing submissions, issue written decision stating: • facts & findings • legal basis (Art. 297, company code) • effectivity date of dismissal. Serve personally or by registered mail. |
Must be issued within a reasonable time—jurisprudence treats 30-day gaps as presumptively reasonable if investigation complex. |
| 4. DOLE Termination Report | File RKS Form 5 within 30 days from effectivity. | Keep proof of receipt for litigation. |
4. Preventive Suspension vs. Dismissal
| Aspect | Preventive Suspension | Dismissal |
|---|---|---|
| Purpose | Remove employee who poses risk to people/property or might tamper with evidence. | Permanent severance of employment. |
| Duration | Maximum 30 calendar days (extendable only if investigation needs more time and with pay for extension). | Effective on date indicated in 2nd notice. |
| Pay Status | No pay for first 30 days (unless CBA/company rule provides otherwise). | No pay; separation benefits depend on cause. |
5. Separation Pay & Final Pay
- No separation pay is due for dismissals based on serious misconduct (PLDT v. NLRC, G.R. No. 124985, 23 Nov 2001) unless there is a company practice, CBA provision, or equitable humanitarian grounds recognized by the employer.
- Final pay (earned wages, pro-rated 13th-month pay, unused SIL) must be released within 30 days of dismissal (DOLE Labor Advisory 06-20).
6. Consequences of Due-Process Violations
| Scenario | Effect on Dismissal | Monetary Liabilities |
|---|---|---|
| Substantive defect – cause not proven or not serious. | Dismissal illegal; reinstatement with full backwages (Century Canning v. Ramil, G.R. No. 171630, 15 Apr 2013). | Backwages + reinstatement (or separation pay in lieu) + damages/attorney’s fees when warranted. |
| Procedural defect only – just cause exists but twin-notice rule violated. | Dismissal valid, but employer liable for nominal damages. | ₱ 30,000 if just cause (JAKA Food v. Pacot, G.R. No. 151378, 10 Mar 2005); adjusted upward to ₱ 50,000 in recent cases. |
7. Best-Practice Checklist for Employers
- Establish clear Code of Conduct aligned with Art. 297 grounds.
- Document everything – incident reports, witness affidavits, investigation minutes.
- Issue NTE within 24–48 hours from discovery to show prompt action.
- Adhere to 5-day reply rule; extensions upon written request.
- Conduct hearing even if not requested when allegations are disputed.
- Draft a reasoned decision citing evidence and applicable case law.
- File RKS Form 5 and keep copies of all served notices.
- Release final pay and issue Certificate of Employment promptly.
- Keep records ≥ 3 years (Art. 305) to defend against NLRC complaints.
8. Common Employee Defenses & Employer Rebuttals
| Employee Argument | Employer Rebuttal Strategy |
|---|---|
| Act was isolated, not serious. | Show gravity (value of theft, injury caused, prior warnings). |
| Misconduct unrelated to work. | Demonstrate connection (work premises, on duty, affects trust). |
| No intent – negligence only. | Produce evidence of willfulness (CCTV, confession, pattern). |
| Procedural lapses. | Exhibit NTE, reply, hearing notices, decision; explain timing. |
9. Intersection with Criminal and Civil Liability
- Independent Proceedings: Criminal action (e.g., qualified theft) may proceed irrespective of labor case and vice-versa. NLRC’s finding does not bind criminal courts.
- Evidence Sharing: Documents gathered in admin inquiry can be used in criminal complaints; secure employee consent if they contain personal data (Data Privacy Act compliance).
10. Key Take-Aways
- Serious misconduct demands proof of willful, job-related, grave wrongdoing.
- Twin-notice rule & opportunity to be heard are non-negotiable procedural steps.
- Preventive suspension is a stop-gap, not an automatic consequence of a charge.
- Reporting to DOLE and releasing final pay round out compliance.
- Lapses in procedure cost money; lapses in substance cost the whole case.
A methodical, rights-respecting process is the employer’s best shield—and the employee’s best assurance of fair play—in dismissals for serious misconduct.