1) Why “due process for poor performance” matters in Philippine labor law

In the Philippines, an employee’s security of tenure means employment cannot be ended without:

a valid ground (substantive due process), and
fair procedure (procedural due process).

“Poor performance” is one of the most commonly mishandled grounds for termination because it sits at the intersection of management prerogative (the right to set standards) and employee protection (the right not to be dismissed arbitrarily). Employers must be able to prove poor performance using fair, objective, and communicated standards, and must observe the two-notice rule (for just-cause dismissals) or the rules applicable to probationary termination/non-regularization.

2) Key legal anchors (Philippine context)

A. Substantive due process (the “why”)

The Labor Code recognizes just causes (employee’s fault) and authorized causes (business reasons). Poor performance is typically pursued as a just cause termination—most often framed under:

Gross and habitual neglect of duties (for sustained failure to perform duties properly); and/or
Other analogous causes recognized in jurisprudence (e.g., proven incompetence/inefficiency that is serious, repeated, and work-related).

Practical point: The Labor Code doesn’t list “poor performance” as a standalone phrase; it is usually prosecuted as neglect/inefficiency or an analogous cause, supported by documented performance standards and repeated failure.

B. Procedural due process (the “how”)

For just causes, procedural due process generally follows the two-notice rule:

First notice: a Notice to Explain (NTE) / charge memo specifying the acts/omissions and the rule/standard violated, giving the employee a meaningful chance to respond.
Second notice: a Notice of Decision stating the employer’s findings, the basis, and the penalty (including dismissal if warranted), after considering the employee’s explanation and any hearing/conference.

A hearing is not always mandatory in every case, but the employee must be given a real opportunity to be heard—through written explanation and, when appropriate, a conference/hearing (especially if requested, if facts are disputed, or if fairness requires it).

3) What counts as “poor performance” that can justify dismissal

Not every performance issue is a dismissible offense. To justify termination, poor performance generally must be:

Work-related: connected to the employee’s job duties and legitimate business standards.
Measured against reasonable standards: not arbitrary, impossible, or shifting.
Known to the employee: standards, targets, KPIs, or expectations must have been communicated (ideally in writing).
Sustained and significant: a pattern of failing to meet standards, not an isolated off-month or a minor dip.
Not caused primarily by the employer’s own failures: e.g., lack of training, unclear instructions, defective tools, unrealistic quotas, understaffing, or contradictory directives can undermine a poor-performance case.
Supported by evidence: contemporaneous records—evaluations, coaching notes, PIP documents, metrics, error logs, client complaints (validated), audit findings, etc.

Common scenarios

Sales/production roles failing to meet reasonable, communicated quotas over time
Quality-control roles with repeated documented errors
Support roles with persistently missed deadlines and verified performance gaps
Supervisory roles with documented failure to deliver essential outputs despite coaching

Red flags that often lead to “illegal dismissal” findings

Vague labels like “not performing well” without objective standards
Surprise standards introduced only when termination is already planned
Unexplained negative ratings inconsistent with prior evaluations
No coaching, no feedback cycle, no chance to improve
“Comparative ranking” without clear criteria or with discriminatory bias
Termination based on a single incident (unless it separately constitutes a different just cause)

4) The Notice to Explain (NTE): what it is and what it must contain

An NTE is the employer’s formal written notice that:

identifies the performance shortfall(s),
specifies the standard(s) and how the employee failed them,
attaches or references supporting evidence,
warns of possible disciplinary action (including termination if applicable), and
gives the employee a reasonable period to submit a written explanation.

Core contents of a strong NTE for poor performance

Employee details: name, position, department
Date and subject: “Notice to Explain – Poor Performance”
Specific allegations:
- time period covered (e.g., Q2 2025, July–September 2025)
- the KPI/standard and the employee’s actual results
- concrete examples (missed deadlines, error rates, incomplete deliverables)
Reference to standards/policies:
- job description, performance standards, KPI policy, handbook provisions, code of conduct (if applicable)
Prior interventions (if any):
- coaching dates, warnings, PIP start/end, training provided
Evidence list:
- performance scorecards, reports, client emails (verified), audit findings, trackers
Directive:
- require a written explanation addressing the gaps and circumstances
Time to respond:
- provide a meaningful time window (commonly at least five calendar days in practice for just-cause investigations, consistent with implementing rules and due process principles)
Right to be heard / conference option:
- indicate the employee may request a conference/hearing and may be assisted by a representative (as applicable)
Consequences:

state that failure to respond may mean the case will be decided on available records

5) Due process flow for poor performance (step-by-step)

Step 1: Set and communicate standards (before problems arise)

Document KPIs, targets, job duties, service levels, and evaluation methods.
Ensure standards are reasonable and aligned with the job level, market realities, and available tools/resources.
Acknowledge receipt: onboarding documents, KPI sign-off, handbook acknowledgment, performance agreement.

Step 2: Identify the gap and intervene early (coaching and documentation)

Provide timely feedback and coaching.
Record discussions: dates, issues, agreed action items.
Provide training or tools if needed (and document that support was offered).

Step 3: Use a Performance Improvement Plan (PIP) when appropriate

A PIP is not strictly required by law, but it is often crucial evidence of fairness and opportunity to improve.

A good PIP includes:

baseline performance data
measurable improvement targets
support to be provided (training, mentorship)
review checkpoints
timeline (reasonable for the role)
consequences if targets are not met

Step 4: Issue the NTE (first notice)

Detail failures and evidence.
Give time to explain.
Offer conference/hearing as warranted.

Step 5: Evaluate the explanation; conduct a conference if needed

If the employee disputes facts, requests a hearing, or fairness calls for it, conduct an administrative conference.
Keep minutes and attendance records.

Step 6: Decide proportionate discipline; issue the Notice of Decision (second notice)

State facts established, evidence considered, and why the explanation is accepted/rejected.
Cite the policy/standard and the ground for discipline.
Impose proportionate penalty:
- reminder/coaching
- written warning
- final warning
- termination (only when justified and properly supported)

6) Substantive standards the employer must prove in a poor-performance dismissal

To withstand challenge, an employer generally needs to show:

Clear performance standards existed and were communicated.
The employee failed to meet those standards, supported by records.
The failure was significant and sustained, not trivial or isolated.
The employee was given a fair chance to improve (often shown via coaching/PIP and reasonable time).
The decision was not arbitrary, discriminatory, or retaliatory.
The penalty of dismissal was proportionate to the degree and persistence of poor performance.

7) Probationary employees: special rules (and common mistakes)

A. Legal concept

Probationary employment allows an employer to end employment for failure to meet the reasonable standards made known at the time of engagement. If standards were not made known at hiring/onboarding, termination for failing to meet them is legally vulnerable.

B. Due process still matters

Even for probationary employees, the employer should observe fair procedure—at minimum:

communicate standards early,
document evaluations and feedback,
provide notice of deficiencies,
allow explanation,
issue a written notice of termination/non-regularization.

Best practice: still follow an NTE + decision notice approach, because disputes about facts and fairness often arise even in probationary cases.

C. Common probationary pitfalls

No written standards at start
Termination near end of probation without earlier feedback
Vague “not a good fit” reasoning
Using probation to mask a regular employee’s termination without just cause

8) The employee’s rights upon receiving an NTE

An employee who receives an NTE should typically consider:

Requesting the evidence relied upon (scorecards, reports, complaints)
Submitting a timely written explanation addressing each allegation point-by-point
Highlighting work constraints: tools, staffing, unrealistic targets, changed KPIs, medical issues (where applicable), unclear instructions
Showing efforts to improve: training completed, achieved metrics, corrective actions
Requesting a conference/hearing if facts are disputed
Asking for reasonable extension if needed (and documenting the request)

Employees should avoid ignoring an NTE; non-response often results in the employer deciding based on its records alone.

9) If procedure is defective: legal consequences and typical remedies

A. If there is no valid ground (substantive defect)

Termination may be deemed illegal dismissal, which can lead to:

reinstatement (when feasible) and/or
backwages, plus other monetary awards depending on circumstances.

B. If there is a valid ground but procedure was not followed (procedural defect)

Courts have recognized that even where dismissal is substantively justified, failure to observe procedural due process can result in monetary liabilities, often in the form of nominal damages (amount depends on case circumstances and prevailing jurisprudence trends).

Practical point: Many employers “win” on poor performance evidence but still pay because they skipped proper NTE/decision notices or rushed the timeline.

10) Practical drafting guide: what a “good” poor-performance NTE looks like (outline)

Subject: Notice to Explain – Poor Performance

Specific performance standards (KPI, target, quality benchmark, deadlines)
Coverage period and actual results
Concrete instances (dates, deliverables missed, error samples, client escalation references)
Prior coaching/PIP (dates and summaries)
Directive to explain: “Explain in writing within [X] days why no disciplinary action should be imposed.”
Option for conference and instruction on how to request it
List of attachments/evidence
Reminder: failure to respond → case decided on records

11) Best practices (employer side) to make poor-performance cases defensible

Make standards clear early (especially for probationary employees).
Use objective metrics where possible; if subjective, define rubrics and examples.
Ensure raters are trained; avoid inconsistent scoring.
Keep a clean paper trail: coaching notes, emails, scorecards, PIP reviews.
Give realistic time and support for improvement.
Avoid “performance ambushes” (first negative feedback at termination time).
Align discipline with progressive steps unless the gap is extreme and well-documented.
Apply standards consistently across similarly situated employees (to avoid discrimination claims).
Separate performance management from retaliation risks (e.g., after complaints, union activity, leave usage).
Ensure final decision notice is reasoned, evidence-based, and issued after real consideration.

12) Common “boundary issues” and how they’re treated

A. Poor performance vs. misconduct

If the issue is dishonesty, insubordination, fraud, harassment, or willful refusal to work, it may be misconduct, not mere poor performance—use the correct ground and evidence.

B. Poor performance vs. redundancy/retrenchment

If the job is being removed or headcount reduced, that is typically an authorized cause (with different notice requirements, and usually separation pay). Don’t label a redundancy as poor performance to avoid authorized-cause obligations.

C. Poor performance caused by illness or disability

If performance issues are connected to health conditions, tread carefully:

consider medical leave, accommodation where feasible, and proper documentation
avoid discriminatory handling
ensure decisions are grounded on legitimate business necessity and fair process

D. Forced resignation / constructive dismissal risk

Pressuring an employee to resign “or else” (especially without process) can be treated as constructive dismissal. If separation is employer-initiated, due process and correct grounds matter.

13) Checklist: “Are we ready to terminate for poor performance?”

Clear, reasonable standards existed
Standards were communicated (ideally acknowledged in writing)
Performance data proves sustained underperformance
Employee received feedback/coaching and reasonable time to improve
PIP (if used) was fair, measurable, and documented
NTE is specific, evidence-backed, and gives meaningful time to respond
Explanation was genuinely considered; conference held if warranted
Decision notice is detailed, cites basis, and penalty is proportionate
Records are organized for DOLE/NLRC/Labor Arbiter review

14) Bottom line

In the Philippines, a defensible poor-performance termination is rarely about a single bad rating. It is about clear standards, documented facts, real opportunity to improve, and strict procedural fairness—with the Notice to Explain as the keystone document that starts the formal due process.

If you want, paste your company’s draft NTE (redact names), and it can be tightened for Philippine due process compliance and evidentiary strength.