In the Philippines, the right to Security of Tenure is a constitutionally protected guarantee. No worker shall be dismissed from employment except for a just or authorized cause and after due process. When an employer violates these standards, the employee has the right to seek redress through the Department of Labor and Employment (DOLE) and the National Labor Relations Commission (NLRC).
1. Grounds for Dismissal: Just vs. Authorized Causes
A dismissal is only legal if it is based on the grounds provided under the Labor Code of the Philippines. These are divided into two categories:
Just Causes (Article 297)
These are acts attributable to the employee’s fault or negligence.
- Serious Misconduct: Improper or wrong conduct of such a grave character.
- Willful Disobedience: Refusal to follow lawful and reasonable orders connected to work.
- Gross and Habitual Neglect of Duties: Repeated failure to perform tasks.
- Fraud or Willful Breach of Trust: Loss of confidence in an employee handling property or funds.
- Commission of a Crime: Against the employer, their family, or representatives.
Authorized Causes (Articles 298–299)
These are due to business or health reasons, not necessarily the fault of the employee.
- Installation of Labor-Saving Devices: Automation replacing manual labor.
- Redundancy: When a position is in excess of what is needed.
- Retrenchment: To prevent serious business losses.
- Closure of Establishment: Ceasing operations.
- Disease: When continued employment is prohibited by law or prejudicial to the employee’s or co-workers' health.
2. The Requirement of Procedural Due Process
Even if a valid cause exists, the dismissal is illegal if the "Two-Notice Rule" is not followed.
- First Written Notice (Notice to Explain): The employer must serve a notice specifying the grounds for termination and giving the employee at least five (5) calendar days to submit an explanation.
- Hearing or Conference: The employer must provide the employee an opportunity to be heard, often with the assistance of counsel if desired.
- Second Written Notice (Notice of Decision): If the explanation is unsatisfactory, a final notice must be served stating that all circumstances have been considered and the grounds for termination have been established.
Note: For authorized causes, the employer must serve a written notice to the employee and the DOLE at least one month before the intended date of termination.
3. The 13th-Month Pay Entitlement
Under Presidential Decree No. 851, all rank-and-file employees are entitled to 13th-month pay, regardless of their designation or the method by which their wages are paid, provided they worked for at least one (1) month during the calendar year.
Calculation for Terminated Employees
When an employee is dismissed (legally or illegally), they are entitled to a pro-rated 13th-month pay. This is calculated by taking the total basic salary earned during the calendar year and dividing it by 12.
$$\text{Pro-rated 13th Month} = \frac{\text{Total Basic Salary Earned in the Year}}{12}$$
This amount must be included in the employee's Final Pay, which should typically be released within 30 days from the date of separation.
4. The Litigation Process: Step-by-Step
If you believe you were illegally dismissed or have not received your 13th-month pay, the legal process follows a specific hierarchy.
Step 1: Single Entry Approach (SEnA)
Before filing a formal case, a request for assistance must be filed with the SEnA at the nearest DOLE office. This is a mandatory 30-day conciliation-mediation period aimed at reaching an amicable settlement.
Step 2: Filing the Formal Complaint
If SEnA fails, the mediator will issue a "Referral to Compulsory Arbitration." You will then file a formal complaint before the Labor Arbiter (LA) of the NLRC.
Step 3: Mandatory Conciliation and Position Papers
The Labor Arbiter will schedule mandatory conferences. If no settlement is reached, both parties are ordered to submit their Position Papers, which detail their arguments and include supporting evidence (affidavits, payslips, notices).
Step 4: The Decision
The Labor Arbiter will issue a decision based on the papers submitted. This decision can be appealed to the NLRC Commission, then to the Court of Appeals, and finally to the Supreme Court.
5. Remedies and Reliefs for the Employee
If the Labor Arbiter rules in favor of the employee, the following reliefs may be awarded:
| Relief | Description |
|---|---|
| Reinstatement | Restoring the employee to their former position without loss of seniority rights. |
| Full Backwages | Payment of salaries, allowances, and benefits from the time of illegal dismissal up to actual reinstatement. |
| Separation Pay | Awarded in lieu of reinstatement if "strained relations" exist between the parties (usually 1 month's salary per year of service). |
| Nominal Damages | Awarded if there was a valid cause for dismissal but procedural due process (the two-notice rule) was violated. |
| Attorney's Fees | Usually 10% of the total monetary award if the employee was forced to litigate to protect their rights. |
6. Prescription Periods
Do not delay in filing your claim. Under Philippine law, the following time limits apply:
- Illegal Dismissal: Must be filed within four (4) years from the time of dismissal.
- Money Claims (13th-Month Pay): Must be filed within three (3) years from the time the cause of action accrued.