In the Philippines, the security of tenure is a constitutionally mandated right. Under the Labor Code of the Philippines, no worker shall be dismissed from employment except for a just or authorized cause and only after due process. When an employer terminates an employee without satisfying these legal requirements, the termination is classified as Illegal Dismissal.

I. Just Causes vs. Authorized Causes

To validly terminate an employee, the employer must base the dismissal on either "Just Causes" (fault of the employee) or "Authorized Causes" (business necessities).

1. Just Causes (Article 297, Labor Code)

These are acts or omissions attributable to the employee’s own conduct:

Serious Misconduct: Improper or wrong conduct that is serious in nature and connected to the employee's work.
Willful Disobedience (Insubordination): Refusal to comply with reasonable and lawful orders of the employer.
Gross and Habitual Neglect of Duties: Repeated failure to perform tasks; however, a single instance of gross negligence may suffice in some contexts.
Fraud or Willful Breach of Trust: Often applied to employees in positions of trust (e.g., managers or cashiers).
Commission of a Crime: A crime committed against the person of the employer, their family, or their representative.

2. Authorized Causes (Articles 298 and 299)

These are terminations due to business or health reasons, where the employee is not at fault:

Redundancy: When the employee's services are in excess of what is reasonably demanded by the actual requirements of the enterprise.
Retrenchment: A management tool to prevent serious business losses.
Installation of Labor-Saving Devices: Replacing manual labor with machinery.
Closure of Establishment: Ceasing operations of the business.
Disease: When the employee's continued employment is prohibited by law or prejudicial to their health or the health of co-workers.

II. Redundancy: Deep Dive

Redundancy exists when the service of an employee is "superfluous." This may be due to a decrease in the volume of business, over-hiring, or a restructuring of the company.

Requirements for a Valid Redundancy

For redundancy to be legal and not a cloak for illegal dismissal, the employer must prove:

Good Faith: The reorganization must be genuine and not aimed at a specific individual.
Substantial Evidence: Records showing that the positions are indeed redundant (e.g., new charts, audit reports).
Fair and Reasonable Criteria: The employer must use objective standards in selecting who to let go (e.g., "Last In, First Out," efficiency ratings, or seniority).
Notice Requirement: Written notice must be served to the Employee and the Department of Labor and Employment (DOLE) at least 30 days before the intended date of termination.
Separation Pay: The employee must receive separation pay equivalent to at least one (1) month's pay or one (1) month's pay for every year of service, whichever is higher.

III. The Two-Fold Due Process Requirement

Even if a valid cause exists, the dismissal is illegal if due process is not followed.

For Just Causes: The "Two-Notice Rule"

First Written Notice (Notice to Explain): Specifies the ground for termination and gives the employee a reasonable opportunity to explain (usually at least 5 calendar days).
Hearing or Conference: Gives the employee the chance to present evidence or rebut the charges.
Second Written Notice (Notice of Termination): Notifies the employee of the employer’s decision after considering their defense.

For Authorized Causes (Redundancy/Retrenchment)

30-Day Notice: Both the employee and DOLE must be notified one month in advance.
Payment of Separation Pay: Statutory amounts must be paid at the time of termination.

IV. Consequences of Illegal Dismissal

If the Labor Arbiter or the courts find that an employee was dismissed without cause or due process, the employee is entitled to several reliefs:

Reinstatement: Restoring the employee to their former position without loss of seniority rights.
Full Backwages: Payment of wages, inclusive of allowances and other benefits, from the time compensation was withheld up to the time of actual reinstatement.
Separation Pay in Lieu of Reinstatement: If "strained relations" exist between the employer and employee, the court may award separation pay (usually 1 month per year of service) instead of forcing the employee back into the company.
Moral and Exemplary Damages: Awarded if the dismissal was done in a wanton, oppressive, or malevolent manner.
Attorney’s Fees: Generally 10% of the total monetary award.

V. Burden of Proof

In illegal dismissal cases, the burden of proof rests on the employer. The employer must show, by substantial evidence, that the termination was for a valid cause and that due process was observed. Failure to discharge this burden leads to a finding of illegal dismissal.