Grounds for Valid Dismissal
(Article 297, Labor Code of the Philippines – formerly Article 282)
I. Statutory Basis & Historical Note
Article 297 of the Labor Code (as renumbered by R.A. 10151 in 2011) lists the “just causes” that allow an employer to terminate an employee without incurring liability for illegal dismissal, provided that both substantive and procedural due-process requirements are satisfied.¹ It corresponds to the old Article 282, codified in Presidential Decree 442 (Labor Code, 1974).
Text of Art. 297: “An employer may terminate an employment for any of the following causes: (a) Serious misconduct or willful disobedience … (b) Gross and habitual neglect of duties; (c) Fraud or willful breach of the trust reposed … (d) Commission of a crime or offense … against the employer, his family, or his representative; and (e) Other causes analogous to the foregoing.”
II. The Six Just Causes Explained
| # | Ground | Elements the Employer Must Prove | Illustrative Cases |
|---|---|---|---|
| 1 | Serious Misconduct | (a) Misconduct must be serious; (b) It must relate to the performance of the employee’s duties; (c) It must show wrongful intent. | Leo’s Restaurant v. Densing, G.R. L-40037 (1980) – drunkenness + brawling inside kitchen upheld as serious misconduct. Toyota v. NLRC, G.R. 158786 (2007) – illegal strike tactics constituted serious misconduct. |
| 2 | Willful Disobedience / Insubordination | (a) The order was reasonable, lawful, & made known to the employee; (b) Relation to duties; (c) Refusal willful & unjustified. | McKenzie v. NLRC, G.R. 86870 (1991) – ignoring ban on private towing trips = valid dismissal. |
| 3 | Gross & Habitual Neglect of Duties | (a) Negligence must be gross (flagrant, extreme) and (b) Habitual (repeated, not isolated) — though a single act causing grave loss can qualify. | Citibank v. Gatchalian, G.R. 111222 (1996) – repeated cash-count errors; Phil. Long Distance Tel. Co. v. NLRC, G.R. 166038 (2008) – single multi-million-peso loss through gross negligence justified dismissal. |
| 4 | Fraud or Willful Breach of Trust (“Loss of Confidence”) | (a) Act/omission justifies loss of trust; (b) Employee holds a position of trust (managerial or fiduciary rank-and-file); (c) Loss of confidence genuine, not simulated, founded on clearly established facts. | Coca-Cola Bottlers v. Del Villar, G.R. 165469 (2009) – sales route fraud; Wesleyan Univ.-Phil. v. Reyes, G.R. 208321 (2023) – registrar’s falsified records. |
| 5 | Commission of a Crime or Offense against employer, his family, or authorized representative | Proof may be by criminal conviction or by substantial evidence in an internal investigation; the offense must make continued employment impossible or prejudicial. | Golden Donuts v. Timog, G.R. 155098 (2008) – theft of store funds; dismissal sustained despite pending criminal case. |
| 6 | Analogous Causes | (a) Cause must be “analogous” – similar in gravity and relation to work; (b) Clearly described in the notice of dismissal; (c) Supported by substantial evidence. Typical examples: - Habitual absenteeism⁴ - Drunkenness on duty - Gross inefficiency - Violation of confidentiality. | Imasen Phils. v. Alcon, G.R. 194884 (2015) – sleeping on the job in high-risk factory held analogous. |
Key rule: The employer bears the burden of proof in just-cause dismissals. Failure to discharge this shifts the scales in favor of the employee.
III. Jurisprudential Threads & Nuances
Intent vs. Effect – In Nissan Motor Phils. v. Angelo (G.R. 164181, 2016) even honest mistakes did not justify termination; serious misconduct requires wrongful intent.
Managerial vs. Rank-and-File Trust Positions – A lower quantum of proof (substantial evidence) suffices to dismiss a fiduciary cashier (Sevilla v. NLRC, 182 SCRA 186), but caprice or bad faith will nullify dismissal (Digital Telecommunications v. Ayapana, 652 Phil. 531).
Single Gross Negligence – Though the Code says “gross and habitual,” a single act causing extreme prejudice can suffice (Goya, Inc. v. Goyala, G.R. 205330, 2017).
Analogous Cause Must Be Cited – Employer must specify the particular analogous ground in the first notice; invoking it for the first time on appeal violates due process (Sps. Jardin v. NLRC, G.R. 133168, 2002).
IV. Due-Process Requirements (Twin-Notice Rule)
| Stage | Content | Timeline / Best Practice |
|---|---|---|
| 1st Notice (“Charge Notice”) | Clear statement of facts & specific ground (Art. 297), directive to explain within a reasonable period (SC guidelines: 7-10 days). | Serve personally or via registered mail. |
| Hearing / Conference | Opportunity to explain in writing AND be heard. Formal trial not required; minutes should be kept. | May be waived if employee fails to appear despite notice. |
| 2nd Notice (“Decision Notice”) | Findings of fact, legal basis, and decision to dismiss (or impose lesser penalty), effective date, and final pay instructions. | Serve after evaluation, ideally within 30 days from 1st notice. |
Failure to comply with procedural due process does not invalidate a dismissal that is substantively justified, but mandates nominal damages (₱30,000 – Jaka Food Processing v. Pacot, G.R. 151378, 2005; ₱10,000 when just cause exists, ₱50,000 when authorized-cause, per Agabon v. NLRC rules).
V. Remedies, Defenses & Pitfalls
For Employers
- Ensure documentary trail (IRs, investigation reports, minutes, notices).
- Apply the penalty-less-severe-than-dismissal test—dismiss only if penalty of last resort.
- Observe proportionality; SC overturns dismissals when penalty disproportionate (Valiao v. CA, 563 Phil. 349 – eight-peso over-weighing error did not justify termination).
For Employees
- File illegal-dismissal complaint within four (4) years (Art. 1146 Civil Code, applied in labor cases).
- Claim reinstatement without loss of seniority and full backwages (Art. 294).
- Damages and attorney’s fees available if dismissal made in bad-faith.
VI. Interplay with Other Provisions
- Article 299 (281) – Authorized causes (redundancy, retrenchment, disease, installation of labor-saving devices) require 30-day prior notice + separation pay; they are distinct from Art. 297 just causes.
- Security of Tenure (Art. 294) – Employees may be dismissed only for just or authorized causes and with due process.
- CBA & Company Policies – May define specific offenses but cannot diminish statutory just causes. They may impose graduated penalties (e.g., suspension before dismissal).
VII. Practical Checklist for HR / Legal Officers
- Identify the correct Article 297 ground.
- Gather evidence: CCTV, audit reports, witness affidavits.
- Issue 1st notice with complete narration; give at least five (5) calendar days (best-practice: 7–10).
- Conduct hearing; allow counsel.
- Deliberate – consider length of service, past record, gravity, mitigating factors.
- Issue 2nd notice; arrange final pay and Certificate of Employment within 30 days (per DOLE D.O. 174-17).
- Archive records for at least five (5) years (Labor Arbiter filings often happen years later).
VIII. Conclusion
Article 297 embodies the constitutional guarantee of both enterprise autonomy and employee security of tenure. Substantive just cause and scrupulous observance of the twin-notice rule remain the twin pillars of a valid dismissal. Employers who treat the provision as a license rather than a last resort expose themselves to reinstatement orders, hefty backwages, nominal or actual damages, and even moral and exemplary damages for bad-faith. Conversely, employees must remember that security of tenure does not condone willful infractions. In a balanced reading, Article 297 enables the workplace to remain productive, orderly, and fair.
Footnote ¹ Implementing rules: Sec. 5, Rule I, Book VI, Omnibus Rules Implementing the Labor Code; DOLE Department Order 147-15 (Series of 2015).
⁴ Habitual absenteeism and tardiness were upheld as “analogous cause” in Wensha Spa Center v. Liao, G.R. 240677 (2022).
(This article synthesizes statutory text and Supreme Court jurisprudence up to June 12 2025.)