In the Philippine labor landscape, the use of illegal drugs by an employee is considered a serious breach of the employment contract and a potential threat to workplace safety. However, the dismissal of an employee for testing positive is not automatic. The Philippine Labor Code and prevailing jurisprudence require strict adherence to both substantive and procedural due process to ensure the termination is valid and resistant to illegal dismissal suits.

I. Substantive Due Process: The Legal Ground

For a dismissal to be substantively valid, it must be based on a "just cause" under Article 297 (formerly 282) of the Labor Code. Drug use typically falls under:

Serious Misconduct: The use of prohibited drugs is inherently a transgression of standard behavior.
Willful Disobedience: If the employee violates a clear, known company policy prohibiting drug use.

The "Company Policy" Requirement Under Republic Act No. 9165 (The Comprehensive Dangerous Drugs Act of 2002) and DOLE Department Order No. 53-03, establishments with 10 or more employees are mandated to implement a Drug-Free Workplace Policy. Without a formal, disseminated policy, a company may find it difficult to justify termination based solely on a positive test result.

II. The Validity of the Drug Test

A "positive" result is only legally actionable if the testing process complies with the standards set by the Department of Health (DOH):

Accredited Laboratory: The test must be conducted by a DOH-accredited drug testing center.
Two-Tiered Testing:

Screening Test: The initial test to determine the presence of drug metabolites.
Confirmatory Test: If the screening is positive, a second, more sophisticated test (usually Gas Chromatography-Mass Spectrometry) must be performed on the same specimen to confirm the result.

Chain of Custody: The employer must be able to prove that the specimen was handled correctly from collection to testing to avoid allegations of tampering or "switching."

III. Procedural Due Process: The Two-Notice Rule

Even with a valid confirmatory positive result, an employer cannot terminate the employee immediately ("on the spot"). The Two-Notice Rule must be observed:

1. The First Written Notice (Notice to Explain)

The employer must serve a written notice to the employee containing:

The specific grounds for termination (the positive drug test and the specific company policy violated).
A directive for the employee to submit a written explanation within a reasonable period (usually at least 5 calendar days).
A notification of the employee’s right to be assisted by counsel or a representative, if they so desire.

2. The Administrative Hearing

While not always mandatory to have a "trial-type" hearing, the employer must provide a genuine opportunity for the employee to be heard. This allows the employee to contest the results, explain the presence of substances (e.g., use of prescription medication that might cause a false positive), or present mitigating circumstances.

3. The Second Written Notice (Notice of Decision)

After considering the employee's explanation and the evidence, the employer must issue a second notice. This notice must state:

Whether the employee is being terminated or if a lesser penalty is being applied.
The reasons justifying the decision (e.g., the confirmatory test result remains unrebutted).

IV. Key Jurisprudential Nuances

Random vs. For-Cause Testing: Random drug testing in the workplace is generally considered a valid exercise of management prerogative, provided it is conducted in a non-discriminatory and random manner as part of the company's drug-free policy.
The Burden of Proof: In illegal dismissal cases, the burden of proof rests entirely on the employer to show that the dismissal was for a just cause and that due process was followed.
Rehabilitation vs. Termination: While the law encourages rehabilitation, the Supreme Court has ruled in various cases (such as Social Justice Society vs. Dangerous Drugs Board) that a positive drug test can be a valid ground for termination, especially if the safety of the public or the workplace is at stake. However, some Collective Bargaining Agreements (CBAs) may mandate a "first-offense rehabilitation" clause, which the employer must honor.

V. Consequences of Non-Compliance

Failure to comply with either substantive or procedural due process leads to significant liabilities:

Illegal Dismissal: If there is no just cause (substantive failure), the employee may be entitled to reinstatement and full backwages.
Nominal Damages: If there is a just cause (the employee did use drugs) but the employer failed to follow the procedural notices, the dismissal is valid, but the employer must pay nominal damages (usually ranging from ₱30,000 to ₱50,000) for violating the employee's right to due process.