In the Philippine legal landscape, the security of tenure is a constitutionally protected right. Under the Labor Code, no employee may be terminated except for a just or authorized cause and only after the observance of due process. The cornerstone of this due process in disciplinary cases is the Notice to Explain (NTE).

Failure to handle an NTE correctly—on the part of either the employer or the employee—can lead to protracted legal battles, claims for backwages, or the affirmation of a valid dismissal.

I. The Concept of Procedural Due Process

The Philippine Supreme Court has consistently held that for a dismissal based on just causes (Article 297 of the Labor Code) to be valid, the "Two-Notice Rule" must be followed:

The First Written Notice (NTE): Informing the employee of the specific causes for dismissal and giving them an opportunity to explain.
The Hearing/Conference: A physical or written opportunity for the employee to adduce evidence.
The Second Written Notice: Informing the employee of the management's decision after considering their explanation.

II. Essential Elements of a Valid NTE

An NTE is not a mere formality; it must be substantive. To satisfy the requirements of the law, an NTE should contain the following:

Specific Allegations: It must clearly state the acts or omissions complained of. Vague references to "misconduct" or "violation of company policy" without details (dates, times, specific rules violated) are legally insufficient.
Reference to Company Policy or Labor Code: It should cite the specific provision of the Employee Code of Conduct or the Article of the Labor Code being invoked.
Directive to Explain: A clear instruction for the employee to submit a written explanation within a reasonable period.
The "Reasonable Period" Requirement: Current jurisprudence and Department of Labor and Employment (DOLE) regulations (specifically Department Order No. 147-15) define a "reasonable period" as at least five (5) calendar days from receipt of the notice. This is to allow the employee to consult a representative or gather evidence.
Notice of Right to Counsel: It should inform the employee that they may be assisted by a representative or legal counsel during the investigation.

III. How to Draft the Written Explanation

When an employee receives an NTE, the written response is their primary defense. It should be approached with precision and sobriety.

1. Analyze the Charges

Break down the NTE into specific allegations. Determine if the charges are factual or based on hearsay.

2. Stick to the Facts

The response should be objective. Use a chronological format if necessary.

Admit facts that are true but provide context or mitigating circumstances.
Deny facts that are false, ideally providing evidence (emails, logs, witness statements) to support the denial.

3. Address the Specific Policy

If the NTE cites a specific company rule, explain why your actions did not violate that rule or why the rule was not applicable in that specific instance.

4. Present Mitigating Circumstances

If the infraction did occur, the explanation should highlight factors that might lean toward a lighter penalty, such as:

Length of service.
Previous clean disciplinary record (First-time offense).
Lack of prejudice/damage to the company.
Good faith or honest mistake.

5. Request a Formal Hearing

Even if the company does not schedule one, the employee has the right to request a face-to-face conference to better explain their side and confront the evidence against them.

IV. Preventive Suspension

In many cases, an NTE is accompanied by a Preventive Suspension.

Purpose: This is not a penalty. It is a measure to protect the company’s property or the safety of coworkers if the employee’s continued presence poses a "serious and imminent threat."
Duration: It must not exceed 30 days.
Payment: Preventive suspension is generally unpaid. However, if the employer extends the suspension beyond 30 days, they must pay the employee’s wages during the extension, or reinstate them to the payroll.

V. Common Pitfalls to Avoid

For Employers	For Employees
Providing less than 5 days to answer.	Refusing to receive the NTE (This does not stop the process; the employer can simply note "refused to sign").
Using "pro-forma" or "copy-paste" charges.	Being emotional, aggressive, or disrespectful in the written reply.
Deciding the penalty before reading the explanation.	Failing to submit a reply at all (This is often construed as a waiver of the right to be heard).
Failing to hold a hearing when requested or necessary.	Admitting to charges without explaining the context or provocation.

VI. The "Totality of Infractions" Rule

While an NTE focuses on a specific incident, Philippine labor law allows employers to consider the employee’s past record. This is known as the Totality of Infractions Rule. It means that previous offenses for which the employee was already penalized can be used to justify a heavier penalty (like dismissal) for a current offense, provided the current offense is proven.

VII. Legal Consequences of Non-Compliance

Illegal Dismissal: If the just cause is not proven, the dismissal is illegal. The employee may be entitled to reinstatement and full backwages.
Indemnity (Nominal Damages): If there is a just cause for dismissal but the procedural due process (the NTE and the 5-day rule) was not followed, the dismissal is upheld, but the employer is ordered to pay "Nominal Damages" (usually ranging from ₱30,000 to ₱50,000) for violating the employee's right to due process (the Agabon Doctrine).