In the landscape of Philippine labor law, the security of tenure is a constitutionally protected right. It ensures that no employee shall be dismissed from employment except for a just or authorized cause and only after due process is observed. When an employer fails to strike the balance between management prerogative and employee rights, they open themselves to costly litigation involving illegal dismissal and backwages.

I. The Dual Aspects of Due Process

Under Philippine jurisprudence, for a dismissal to be valid, the employer must comply with two fundamental requirements:

Substantive Due Process: There must be a valid reason for the termination as provided under the Labor Code (Just or Authorized Causes).
Procedural Due Process: The employer must follow the prescribed manner of dismissing the employee (the "Two-Notice Rule").

Just Causes vs. Authorized Causes

Just Causes (Art. 297): These are attributable to the fault or negligence of the employee (e.g., serious misconduct, willful disobedience, gross and habitual neglect of duty, fraud, or commission of a crime).
Authorized Causes (Art. 298-299): These are business-related reasons not necessarily the fault of the employee (e.g., redundancy, retrenchment to prevent losses, installation of labor-saving devices, or disease).

II. The Procedural Requirements: The "Two-Notice Rule"

For dismissals based on Just Causes, the Supreme Court (notably in King of Kings Transport, Inc. v. Mamac) has solidified the "Two-Notice Rule" and the requirement of a hearing:

1. The First Written Notice (Notice to Explain)

The employer must serve the employee a written notice containing:

The specific causes or grounds for termination.
A directive giving the employee a reasonable opportunity (at least five calendar days) to submit a written explanation.
A detailed enumeration of the facts and circumstances serving as the basis for the charge.

2. The Hearing or Conference

The employer must afford the employee an opportunity to be heard. This allows the employee to adduce evidence and rebut the accusations. While a formal trial-type hearing is not always mandatory, the "ample opportunity to be heard" must be real and not merely illusory.

3. The Second Written Notice (Notice of Termination)

If the employer decides that dismissal is warranted, a second notice must be served indicating:

That all circumstances involving the charge against the employee have been considered.
That grounds have been established to justify the severance of employment.

III. Preventive Suspension: A Temporary Measure

Preventive suspension is often misunderstood. It is not a penalty, but a measure to protect the employer’s property or the life of the employer/co-workers while an investigation is ongoing.

Key Rules on Preventive Suspension:

Grounds: It is only valid if the employee's continued presence poses a serious and imminent threat to the life or property of the employer or co-employees.
Duration: The maximum period is 30 days.
Payment: During these 30 days, the employer is not required to pay wages. However, if the employer extends the suspension beyond 30 days, they must pay the employee’s wages during the extension (often called "payroll reinstatement"), or the employee must be reinstated.
Constructive Dismissal: If a suspension exceeds 30 days without a valid extension or if it is imposed without a legitimate threat, it may be deemed a "constructive dismissal."

IV. Illegal Dismissal and Remedies

If an employer fails to prove substantive or procedural due process, the dismissal is deemed "illegal." The consequences depend on which aspect was violated:

1. Lack of Substantive Due Process

If there is no valid cause for dismissal, the employee is entitled to:

Full Backwages: Computed from the time compensation was withheld up to the time of actual reinstatement.
Reinstatement: Restoration to the former position without loss of seniority rights.
Separation Pay: If reinstatement is no longer viable due to "strained relations," separation pay (usually one month's salary for every year of service) is awarded in lieu of reinstatement.

2. Lack of Procedural Due Process (The Agabon Doctrine)

If the dismissal was for a just cause but the employer failed to follow the procedural requirements (e.g., failed to give the two notices), the dismissal is sustained, but the employer is liable for Nominal Damages.

For Just Causes: Usually ₱30,000.
For Authorized Causes: Usually ₱50,000.

3. Moral and Exemplary Damages

These are awarded if the dismissal was attended by bad faith, fraud, or was oppressive to labor, or done in a manner contrary to morals, good customs, or public policy.

V. Summary Table: Burden of Proof

In illegal dismissal cases, the burden of proof rests solely on the employer. They must prove by substantial evidence (that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion) that the dismissal was valid.

Situation	Status	Primary Remedy
Valid Cause + Valid Procedure	Legal Dismissal	None
No Valid Cause + Valid Procedure	Illegal Dismissal	Reinstatement + Backwages
Valid Cause + Invalid Procedure	Valid but Irregular	Nominal Damages (Agabon)
No Valid Cause + Invalid Procedure	Illegal Dismissal	Reinstatement + Backwages + Damages

VI. Constructive Dismissal

This occurs when an employer creates an environment so hostile, or makes a transfer/demotion so unreasonable, that the employee is forced to quit. Under the law, this is treated as a "quitting which is an involuntary resignation" and is legally equivalent to illegal dismissal. The test is whether a reasonable person in the employee’s position would have felt compelled to give up their job under the circumstances.