Here’s a practical, no-nonsense guide to everything you need to know about just causes for termination under Philippine law. This is general information (not legal advice). Laws and jurisprudence evolve, so if you’re handling a live case, talk to counsel.

What “just cause” means (and how it differs from other grounds)

Under the Labor Code, just causes are employee-fault grounds that make dismissal lawful because the employee committed a serious breach of duty. They’re found in Article 297 [formerly 282] of the Labor Code (renumbered 2017).

This is different from authorized causes (e.g., redundancy, retrenchment, closure, disease), which are management/operational grounds under Articles 298–299 and usually require separation pay and DOLE notice. For just causes, there’s generally no separation pay, and there’s no DOLE 30-day notice (but procedural due process vis-à-vis the employee is mandatory—more on that below).

The five statutory just causes (Art. 297 [282])

Serious misconduct
Willful disobedience (insubordination)
Gross and habitual neglect of duties
Fraud or willful breach of trust (loss of trust and confidence)
Commission of a crime or offense against the person of the employer, the employer’s immediate family, or duly authorized representative
Other causes analogous to the foregoing (catch-all for similar gravity)

Below are the elements, typical examples, and pitfalls for each.

1) Serious misconduct

What must be shown

Misconduct that is serious (grave, not trivial);
Related to the performance of duties (or shows unfitness to continue working); and
Done with wrongful intent (not an innocent mistake).

Examples

Sexual harassment; fighting or assault at work; intoxication leading to serious workplace incident; falsification tied to duties; grossly indecent conduct during work.

Common employer mistakes

Penalizing trivial or isolated rudeness as “serious” misconduct.
Failing to connect the act to work or to prove wrongful intent.

2) Willful disobedience (insubordination)

What must be shown

An order that is lawful and reasonable;
Known to the employee;
Related to duties; and
Willful refusal (perverse attitude, not mere misunderstanding).

Examples

Refusing a lawful safety directive; ignoring a shift assignment within job scope; rejecting a reasonable, written performance directive.

Watch-outs

Orders outside job scope or contrary to law/company policy won’t qualify.
If the employee had a good-faith safety or legal objection, termination may fail.

3) Gross and habitual neglect of duties

What must be shown

Neglect that is both gross (serious, flagrant) and habitual (repeated).
Usually evidenced by patterns: repeated absences/tardiness, chronic failure to accomplish essential tasks, repeated safety lapses.

Abandonment as neglect / analogous cause

Abandonment is recognized as a just cause when the employer proves both: (a) failure to report for work without valid reason; and (b) a clear intention to sever employment (animus deserendi) shown by overt acts (e.g., ignoring return-to-work directives).
Mere absence isn’t abandonment; there must be proof of intent to abandon.

Pitfalls

Using a single act of ordinary negligence.
Poor performance alone (without proof of grossness/habituality) is insufficient—address via performance management first.

4) Fraud or willful breach of trust (Loss of Trust & Confidence, “LOTC”)

What must be shown

The employee either: (a) occupies a position of trust (e.g., managerial), or (b) is a fiduciary rank-and-file (cashiers, auditors, property custodians); and
There are clearly established facts—not mere suspicion—showing fraud, dishonesty, or breach of trust related to duties.

Standards by role

Managerial employees: broader discretion; a reasonable basis suffices if supported by substantial evidence.
Fiduciary rank-and-file: employer must prove actual involvement or culpable neglect tied to loss or risk.

Examples

Falsified expense claims; skimming or unauthorized discounts; data theft; deliberate inventory shrinkage; revealing trade secrets.

Pitfalls

Invoking LOTC for minor mistakes or performance issues.
Relying solely on hearsay without corroboration (e.g., unsigned anonymous tips).

5) Crime or offense against the person of the employer/family/authorized representative

What must be shown

Commission of an offense against the person (e.g., physical assault, grave threats, serious coercion).
Criminal conviction is not strictly required for dismissal, but the employer must present substantial evidence of the act.

Notes

If the offense is against property (e.g., theft from employer), it usually falls under fraud/LOTC instead.

6) Analogous causes

Covers grave, employee-fault conduct similar in character to the enumerated causes. Common examples in jurisprudence:

Gross inefficiency/incompetence rising to neglect;
Habitual tardiness/absenteeism with serious impact;
Sleeping on duty in safety-critical roles;
Conflict of interest/serious policy breach (e.g., moonlighting that harms employer, confidentiality breaches);
Positive drug test with a valid, DOH-compliant program and chain-of-custody;
Serious online misconduct targeting co-workers/clients and disrupting operations.

Analogous causes must be comparable in gravity to the listed grounds and tied to work.

Due process: the “twin-notice” rule + hearing

A dismissal for just cause is valid only if the employer proves both substantive just cause and procedural due process.

Procedural steps (codified by DOLE rules and case law):

First Notice (Notice to Explain, NTE)
- State the specific acts/omissions, relevant dates/places, and policy/Code provisions violated.
- Give the employee a reasonable period to respond—at least 5 calendar days is the benchmark adopted by the Supreme Court and DOLE rules.
- Advise of the right to submit evidence and be assisted by a representative.
Hearing/Conference
- Hold a genuine opportunity to be heard: clarify issues, allow the employee to present evidence/witnesses and respond to accusations. A written explanation alone may suffice in straightforward cases, but a meeting is best practice—especially if credibility is in issue.
Second Notice (Notice of Decision)
- After evaluating all submissions, issue a written decision stating the facts established, the rule violated, the legal ground (e.g., Art. 297 serious misconduct), and the penalty.

Service & documentation tips

Serve notices to the last known address and work email.
For employees on AWOL, send NTE and return-to-work directives; keep proof of mailing/receipt.
Keep minutes, attendance sheets, and signed acknowledgments.

Preventive suspension

Allowed only if the employee’s continued presence poses a serious and imminent threat to life/property or to the investigation.
Maximum 30 calendar days without pay. If more time is needed, extend with pay. Preventive suspension is not a penalty.

Burden and standard of proof

The employer bears the burden to prove just cause and due process.
The standard is substantial evidence (relevant evidence a reasonable mind might accept), not proof beyond reasonable doubt.
Labor proceedings are non-technical, but evidence must still be competent (e.g., authenticated documents, sworn statements with personal knowledge, audit trails, CCTV extracts).

Remedies and liabilities if dismissal is defective

If no just cause (or cause unproven) or there is a fatal procedural defect:

Illegal dismissal: remedies typically include reinstatement without loss of seniority and full backwages from dismissal until actual reinstatement.
If reinstatement is no longer feasible (strained relations, position gone), courts award separation pay in lieu of reinstatement plus backwages.

If just cause exists but due process was defective:

Dismissal stands, but the employer may be ordered to pay nominal damages (commonly ₱30,000 for just-cause cases) for violation of procedural due process—distinct from authorized-cause cases (₱50,000).

Damages/fees

Moral and exemplary damages may be awarded if the employer acted in bad faith or in an oppressive manner.
Attorney’s fees (often 10%) may be granted if the employee was compelled to litigate to recover lawful wages/benefits.

Separation pay in just-cause dismissals

General rule: No separation pay for dismissals due to just causes because the employee’s breach precipitated the termination. Exception (narrow, discretionary): Courts have occasionally granted financial assistance for certain analogous causes not involving serious misconduct, moral turpitude, or willful breach (e.g., some inefficiency cases). But Supreme Court doctrine also cautions that social justice does not reward wrongdoing. Expect no separation pay where the cause reflects on the employee’s moral character (e.g., theft, fraud, sexual harassment).

Special situations

Probationary employees

May be terminated for just causes or for failure to meet reasonable standards made known at hiring. The “standards” ground is separate from Art. 297 and has its own requirements.

Fixed-term, project, seasonal workers

Just-cause rules apply during the term. End-of-term/project/season is a different mode of separation.

Unionized workplaces / CBAs

Follow the CBA grievance/disciplines and the statutory twin-notice rule; CBAs do not replace legal due process.

Remote/hybrid settings

Use electronic service (company email/HRIS) and courier to last known address; document delivery/read receipts and online hearings.

Criminal complaints

You may terminate on substantial evidence without waiting for criminal conviction. Conversely, an acquittal does not automatically invalidate a dismissal proven on substantial evidence.

Prescription

Illegal dismissal complaints generally prescribe in four (4) years (civil action for injury to rights). Wage/monetary claims: three (3) years.

Practical checklists

For employers

Before NTE:
- Collect documents (CCTV, emails, system logs, audit reports), identify violated rules/Code, secure sworn statements.
NTE:
- Cite facts, dates, places, rules; give ≥5 calendar days to reply; advise right to counsel/representative; schedule hearing.
Hearing:
- Record minutes; allow questions; consider written submissions.
Decision:
- Make findings; link facts → rule → legal ground; impose proportionate penalty; issue Second Notice.
Retention:
- Keep an investigation file (proofs of service, minutes, evidence index).

For employees

Read the NTE carefully; ask for documents used against you; submit a detailed written explanation within the deadline; gather evidence and witness statements; attend the hearing with a representative; request copies of minutes; if dismissed, review the Second Notice and consult counsel promptly.

Right-sizing the penalty (proportionality)

Even with just cause, dismissal should be proportionate. Consider: nature and gravity of the offense, harm to the company, employee’s length of service, past record, and consistency with how similar cases were treated. Lesser penalties (warning, suspension) may be appropriate for first or low-impact offenses.

Sample templates (short, editable)

(A) Notice to Explain (NTE)

Subject: Notice to Explain – [Alleged Violation] Dear [Employee], Based on our initial fact-finding, you are charged with [specific act] committed on [date/time] at [place], in violation of [Company Code § X / Policy Y], corresponding to [serious misconduct / willful disobedience / etc.] under Article 297 of the Labor Code.

Please submit a written explanation within five (5) calendar days from receipt of this notice. You may attach evidence and name witnesses. You may be assisted by a representative. A conference is scheduled on [date/time/venue or video link].

Pending this process, [state if preventive suspension applies and why; if not, say none].

Sincerely, [HR/Authorized Representative]

(B) Notice of Decision

Subject: Notice of Decision – Termination for Just Cause Dear [Employee], After evaluating your written explanation dated [date], the conference on [date], and the records (Annexes A-F), we find you committed [factual findings] constituting [serious misconduct / willful disobedience / etc.] under Article 297.

Considering the gravity of the offense, its relation to your duties, and your past record, the penalty is termination effective [date]. You will receive your final pay for earned wages and benefits less accountabilities. You may claim your COE upon clearance.

Sincerely, [HR/Authorized Representative]

Frequently asked clarifiers

Do I need a company code of conduct? It’s best practice. While statutory just causes exist even without a code, having a clear, communicated code strengthens due process and fairness.
Can we dismiss for poor performance? Poor performance by itself is not a just cause unless it amounts to gross and habitual neglect or an analogous cause (gross inefficiency). For probationary employees, failure to meet known standards may justify termination.
Is an apology or restitution a defense? It may mitigate the penalty but doesn’t erase serious misconduct or fraud.
Can we rely on anonymous complaints? Tips can trigger an investigation, but termination must rest on substantial, corroborated evidence.

Quick distinctions table

Ground	Who’s at fault?	Separation pay?	DOLE 30-day notice?	Twin-notice to employee?
Just causes (Art. 297)	Employee	No (generally)	No	Yes
Authorized causes (Arts. 298–299)	Employer/Operational	Yes (by law)	Yes	Yes

Final reminders

Always prove (1) the ground and (2) the process.
Calibrate penalties; be consistent across cases.
Keep a meticulous paper trail.
If in doubt, seek counsel early—errors are costly.

If you want, I can adapt this into a one-page HR checklist or draft tailored notices for a particular scenario.