1) Why this issue matters

In the Philippines, a Certificate of Employment (COE) is commonly required for job applications, bank loans, visas, and professional licensing. Because it functions as a basic proof of employment, what an employer includes—or refuses to include—can materially affect a worker’s opportunities. A notation like “Not Eligible for Rehire” (NER) is not just administrative; it carries a strong negative signal and can operate as a de facto “scarlet letter.”

The legal question is not simply “Is it forbidden to have rehire policies?” (they’re generally allowed), but whether it is lawful to embed a negative employability judgment inside a COE, a document that Philippine labor standards treat as a limited, factual certification.

2) What a COE is supposed to contain (Philippine labor standards)

Philippine labor standards impose a duty on employers to issue a COE upon the employee’s request. The COE is intended to be factual and minimal. In standard compliance practice, a COE typically includes:

Employee’s name
Dates of employment (start and end)
Position(s) held / nature of work
Employer identity and signature/authority

Key compliance principle: a COE is not meant to be a performance evaluation, a disciplinary record, or a narrative explanation of separation. In other words, it is a certification of employment facts, not a “character reference” or “exit assessment.”

This limited-purpose nature is the first major reason NER language in a COE is legally risky: it looks and functions like a negative appraisal rather than a neutral certification.

3) Is “Not Eligible for Rehire” in a COE legal? The practical legal answer

There is no single sentence in one statute that says “you may never write ‘not eligible for rehire’ in a COE.” But in Philippine context, including NER in a COE is legally vulnerable for multiple overlapping reasons:

A. COE-content compliance risk (COE is meant to be factual/minimal)

An NER notation is not a basic employment fact like “worked from X to Y as a Sales Associate.” It is an employer judgment—often based on internal policy, alleged misconduct, resignation circumstances, or performance issues. Because the COE duty is understood as a limited certification, adding NER can be viewed as going beyond what the COE is for, and potentially as circumventing the policy that the COE should not be used to broadcast performance-related conclusions.

Practical effect: A worker can argue the employer failed to provide a proper COE (or provided a “tainted” one) and demand a corrected COE.

B. Civil law exposure (abuse of rights; damages)

Even if an employer has a genuine rehire policy, the Philippines recognizes civil liability for acts that are contrary to morals, good customs, or public policy, or that cause injury through abuse of rights. If the NER note effectively blocks employment prospects without necessity—and especially if it’s punitive or retaliatory—an employee may frame it as an actionable wrongful act giving rise to damages.

This becomes stronger if:

the worker disputes the basis for NER, or
the employer did not observe due process in imposing discipline that supposedly justifies ineligibility, or
the notation is used vindictively to “punish” someone who resigned, filed a complaint, or asserted a legal right.

C. Defamation / reputational harm risk (depending on wording and context)

“Not eligible for rehire” can imply misconduct, incompetence, or untrustworthiness. If it is false, unsupported, or communicated with malice, it can generate exposure for reputational harm claims. Even if the phrase is arguably “opinion,” it is often treated in real-world hiring as a statement of negative fact about employability.

Risk increases if the COE is shown to third parties (which is exactly why COEs exist), and the employer cannot substantiate the basis objectively.

D. Data Privacy Act risk (relevance, proportionality, purpose limitation)

A COE involves personal information processing. Under Philippine data privacy principles, personal data shared should be:

relevant to the declared purpose,
not excessive, and
processed fairly and lawfully.

A COE’s purpose is to confirm employment. An NER notation is often beyond what is necessary to prove employment, making it vulnerable as disproportionate/excessive processing—especially if the employee requested a standard COE and did not request a character reference or consent to additional evaluative statements.

E. Labor-relations retaliation concerns (context-driven)

If NER is imposed because the employee:

joined/organized a union,
filed a labor case,
reported harassment,
asserted a statutory right, then the notation can be attacked as a retaliatory act connected to protected activity. This is highly fact-specific, but it is a recurring pattern in disputes: employers use “not eligible” labels as a non-monetary penalty.

4) Rehire eligibility policy vs. putting it in the COE

Internal rehire policy: Generally allowed. Employers may set standards on who can be rehired (e.g., no pending accountabilities, no dismissal for just cause, no gross misconduct findings, etc.). The employer can keep internal HR notes and apply them consistently.

Publishing NER in a COE: A different act. It is external-facing, and can operate as a negative employment credential. The legal risk is not the internal policy; it’s the choice of document and the method of disclosure.

A safer separation many compliant employers follow:

COE = neutral certification of employment facts
Reference letter (optional) = only upon request/consent; may include performance/rehire commentary
Background check response = limited, truthful, and ideally with employee authorization

5) When might rehire-related information be legitimately disclosed?

There are scenarios where an employer can discuss rehire eligibility outside the COE context, but it should be handled carefully:

Employee requests it explicitly (e.g., asks for a reference letter stating “eligible for rehire”).
Employee gives clear authorization for the employer to disclose separation-related information to a prospective employer.
Legal compulsion (subpoena, lawful order, government audit requirement)—and even then disclosure should be limited to what is required.
Truthful response to a direct inquiry during a reference check, provided it is accurate, made in good faith, and limited.

Even in these cases, the employer should:

stick to verifiable facts,
avoid unnecessary detail,
avoid loaded language,
document the basis for what was said.

6) Employee options if a COE contains “Not Eligible for Rehire”

If an employee receives a COE with an NER notation, common practical/legal steps in the Philippine setting include:

Demand a corrected COE in writing Ask for a COE containing only factual employment details (name, dates, position). Keep the request polite and formal.
Request assistance through labor mechanisms Employees often pursue conciliation/assistance routes (commonly through labor offices/mediation channels) to compel issuance of a compliant COE or correction of improper content.
Consider a data privacy angle If the NER notation is unnecessary/excessive or circulated broadly, the employee may explore data privacy remedies—especially where the employer processes/discloses evaluative tags without proper basis.
Consider claims for damages if harm is provable If the notation caused a lost job offer, delayed hiring, or reputational harm, and appears malicious or baseless, civil/labor claims may be explored. Evidence matters: emails from recruiters, withdrawn offers, hiring notes, etc.

7) Employer best practices (risk-reducing approach)

If an employer wants to minimize risk and stay aligned with the COE’s limited purpose:

Issue a neutral COE: name, dates, positions held, basic work nature.
Do not include NER in the COE.
If a prospective employer asks about rehire eligibility:
- respond only with employee authorization, and
- use a standardized, carefully vetted script (and only if the employer has a defensible basis).
Maintain a documented rehire policy with objective criteria and consistent application.
Ensure any “ineligible” designation is supported by records and, where tied to misconduct, is backed by due process documentation.

A common conservative script many employers use for reference checks:

confirm employment facts only, or
state that the company policy is to provide only dates/position and not comment on rehire eligibility.

8) Bottom line

In the Philippine context, putting “Not Eligible for Rehire” in a Certificate of Employment is legally risky and often inconsistent with the COE’s intended limited, factual function. While employers may maintain internal rehire policies, publishing a negative employability judgment inside a COE can expose the employer to disputes over improper COE content, potential reputational harm claims, data privacy concerns, and—depending on motive—retaliation-related labor issues.

If you want, share the exact wording used in the COE (just the text, no personal identifiers) and the separation context (resigned/terminated/laid off), and this can be mapped into the most likely legal vulnerabilities and the most effective demand letter language.