1) Why this issue matters

In the Philippines, employers commonly end employment by issuing an “End-of-Contract,” “Non-Renewal,” or “Contract Expiry” letter. Employees, on the other hand, may be asked to “just resign” to smoothen paperwork. These labels can be lawful—or they can be used to disguise a dismissal that the law treats as illegal, triggering liabilities such as reinstatement, backwages, damages, and attorney’s fees depending on the circumstances.

The key legal question is rarely the title of the letter. It is what actually happened, what the worker’s employment status really was, and whether the separation was done for a lawful cause and with required due process.

2) The basic legal framework

A. Security of tenure (the North Star rule)

Philippine labor law strongly protects security of tenure: an employee may be removed only for a just cause or authorized cause, and generally only after complying with due process. Any separation that violates these rules may be illegal dismissal, even if it is packaged as “contract expiration” or “resignation.”

B. The burden of proof is on the employer

In illegal dismissal cases, the employer generally bears the burden to prove that the employee’s separation was lawful—whether the employer claims it was due to contract expiry, abandonment, resignation, or termination for cause.

3) Resignation vs. termination: what legally distinguishes them

A. Resignation

Resignation is the voluntary act of an employee who intends to end the employment relationship.

Core elements (in practice):

Clear intent to resign
Voluntariness (free from coercion, threat, or undue pressure)
Often (but not always) a written resignation letter
For ordinary resignations, a 30-day notice is the standard rule, unless a shorter period is agreed or justified by law (e.g., serious insult, inhuman treatment, commission of a crime against the employee, and similar grounds)

Red flags that a “resignation” may be invalid or coerced:

Employee was told “resign or we will terminate you” without lawful basis
Employee was pressured to sign immediately, without time to read or consult
Threats relating to final pay, clearance, or certificates unless resignation is signed
The “resignation letter” was pre-prepared by management and merely signed
Employee immediately filed a complaint, protested, or demanded reinstatement soon after “resigning” (behavior inconsistent with a voluntary resignation)

B. Termination (dismissal)

Termination is the employer’s act of ending employment.

Termination must be supported by:

A just cause (employee fault, e.g., serious misconduct, willful disobedience, gross neglect, fraud, loss of trust and confidence under strict standards, commission of a crime against employer or representatives, analogous causes), or
An authorized cause (business or operational reasons, e.g., redundancy, retrenchment, closure, installation of labor-saving devices, disease under legal standards)

And typically must comply with:

Procedural due process (varies depending on just vs authorized cause)

4) End-of-contract letters: when they are legitimate

An “end-of-contract” separation is generally lawful if the employment is truly fixed-term or truly project-based, and the engagement ends because the term really expired or the project really ended, not because the employer simply wanted to remove an employee who should already enjoy security of tenure.

A. Legitimate fixed-term employment (conceptually)

Fixed-term employment can be lawful when:

The period is definite, agreed upon knowingly and voluntarily
The arrangement is not used to defeat security of tenure
The term is not repeatedly used to keep the employee perpetually “temporary” despite the work being necessary and desirable to the business

Practical risk area: repeated renewals over roles that are regular in nature can undermine the “contract expiry” narrative.

B. Legitimate project-based employment

Project employees are engaged for a specific project or undertaking, the completion or termination of which is determined at the time of engagement.

Indicators that project employment is genuine:

The employee is assigned to a specific project with a defined scope
Employment ends upon project completion
The employer treats the worker as project-based in records and practice (e.g., project assignment documentation)

Practical risk area: if the “project” is just the employer’s ordinary continuing business, and employees are continuously rehired to do the same continuing work, “project” labeling may be rejected.

C. Probationary employment ending at the end of probation

Probationary employment may end if the employee fails to meet reasonable standards made known at engagement. But probationary non-regularization is still regulated and can be illegal if:

Standards were not communicated at the start
The reason is not performance-based or not supported by evidence
The process is arbitrary or discriminatory

5) When end-of-contract becomes illegal dismissal

An end-of-contract letter becomes legally dangerous when it is used to mask a dismissal, especially in any of these patterns:

A. The employee is actually “regular,” despite the contract label

A common route to illegality is misclassification. Employees doing work that is usually necessary or desirable in the employer’s usual business may be considered regular depending on facts and length/continuity of service. If the worker has attained regular status, the employer cannot lawfully end employment simply by letting a contract “expire.”

Common indicators of misclassification:

The employee performs core business functions (e.g., sales for a retail chain; teller work in banking; kitchen staff for a restaurant; production line work for a manufacturer)
The employee works continuously, or with only short artificial breaks
Contract renewals appear automatic and repetitive
The job is ongoing and not tied to a discrete, finite project

If a worker is regular, “end-of-contract” without a lawful cause and due process can be illegal dismissal.

B. “Fixed-term” is used to defeat security of tenure

Even where a contract states a fixed term, the law looks at purpose and practice. If the fixed term is used to keep employees from becoming regular or to remove them without cause, the “contract expiry” justification may fail.

C. Non-renewal is used as retaliation or discrimination

Even genuine term arrangements can be questioned if non-renewal is driven by unlawful motives, such as:

Retaliation for filing complaints, union involvement, or exercising labor rights
Discrimination on protected grounds or in violation of workplace policies or law
Punitive non-renewal for refusing illegal instructions

D. The “end-of-contract” letter is actually a mid-term pretermination

If the employer ends the relationship before the stated end date without a lawful cause and due process, it is termination—not “expiry.”

E. The employee was forced to “resign” upon contract expiry

Sometimes employers issue an end-of-contract letter and also demand a resignation letter “for clearance.” If the resignation is not truly voluntary, the separation may be treated as dismissal, with the resignation treated as void or as a coerced act.

6) Resignation that is actually dismissal: forced resignation and constructive dismissal

A. Forced resignation

Forced resignation exists when resignation is obtained through:

Threats, intimidation, undue pressure
Deception or manipulation
Conditioning final pay or documents on signing resignation
“Take-it-or-leave-it” demands without real choice

If proven, it is treated as dismissal.

B. Constructive dismissal

Even without an outright termination letter, constructive dismissal exists when the employer makes continued work impossible, unreasonable, or unlikely, such as:

Demotion in rank or pay without valid reason
Severe reduction of hours/income or withdrawal of essential duties to humiliate
Transfer to an unreasonable location or role, designed to force quitting
Harassment, hostile conditions, or punitive scheduling intended to drive the employee out

Constructive dismissal can intersect with contract endings when employers “pressure out” an employee right before “contract expiry” and then claim the employee quit.

7) Due process: where many cases are won or lost

A. If the employer claims a just cause termination

The standard procedural due process is commonly discussed as:

First notice (written): specific charges, factual basis, rule violated, and directive to explain
Opportunity to be heard: explanation meeting/conference, chance to present evidence
Second notice (written): decision, reasons, and effectivity

Skipping or shortcutting these steps increases exposure. Even if there is a valid cause, defective procedure can produce monetary consequences.

B. If the employer claims an authorized cause

Authorized cause termination has different requirements, typically involving:

Written notices to the employee and to the labor authorities within the required period
Separation pay when applicable (depending on the authorized cause)

An employer cannot replace authorized-cause compliance with a mere “end-of-contract” letter if the reality is redundancy/retrenchment/closure affecting an otherwise regular employee.

8) Evidence issues: what usually decides the case

A. Evidence that supports “resignation”

Employee’s resignation letter written in their own words (not templated)
Emails/messages showing employee initiating resignation
Proof the employee already had another job and coordinated a smooth turnover
Lack of immediate protest; consistent post-resignation behavior
Clearance processes that do not show coercion

B. Evidence that supports “dismissal disguised as resignation”

“Resign or be terminated” messages
Employer-prepared resignation letter
Same-day resignation demanded under pressure
Witness accounts of intimidation
Immediate filing of a complaint or written protest demanding reinstatement
Holding final pay or certificates hostage to force resignation

C. Evidence that supports “contract expiry”

A true fixed-term agreement entered knowingly and fairly
A clear project scope or term
Documentation that the project ended or term genuinely expired
Consistent HR treatment showing project/term nature

D. Evidence that supports “illegal dismissal via end-of-contract”

Work is continuous and integral to the business
Repeated renewals doing the same continuing job
Lack of genuine project definition
Employer cannot credibly explain why a “project” exists in an ongoing role
Non-renewal timing suggests retaliation or targeting

9) Quitclaims, waivers, and final pay: not automatically a shield

Employers often rely on quitclaims (releases) signed during clearance. In Philippine labor practice, quitclaims are not automatically invalid, but they are often scrutinized for:

Voluntariness
Understanding
Reasonableness of consideration (whether the amount is fair)
Absence of fraud, undue influence, or coercion

A quitclaim obtained under pressure, for an unconscionably low amount, or as a condition to release legally due wages may be disregarded.

10) Remedies and liabilities when the separation is illegal

If a separation is ruled illegal dismissal, typical consequences can include:

Reinstatement (to the same position or equivalent) without loss of seniority rights, and
Full backwages from dismissal until reinstatement (or finality of decision, depending on the outcome), and/or
Separation pay in lieu of reinstatement in certain situations (e.g., strained relations doctrine in appropriate cases)

Additional possible monetary awards depending on facts:

Unpaid wages/benefits (including 13th month pay proportionate share, service incentive leave conversions if applicable, etc.)
Moral and exemplary damages in cases involving bad faith, fraud, or oppressive conduct
Attorney’s fees in proper cases

Liabilities vary heavily with facts; “contract expiry” language alone does not prevent these consequences.

11) Common scenarios—and how the law tends to see them (fact-driven)

Scenario 1: Continuous renewals in a core role

Facts: A cashier’s contract is renewed every 5 months for 3 years; same duties, same schedule, same store. The employer issues an end-of-contract letter and refuses renewal without explanation. Risk: Strong argument that the employee is not truly “temporary.” If treated as regular, non-renewal without cause is likely treated as dismissal.

Scenario 2: Genuine project ends

Facts: A construction worker is hired for a specific building project with defined scope, and employment ends upon project completion with records supporting completion. Risk: Lower—this is closer to a legitimate project-based expiration, assuming the engagement was truly tied to that project.

Scenario 3: “Resignation for clearance” demanded

Facts: Employee is told: “Your contract ends today. Sign this resignation so we can process your final pay.” Employee protests but signs to get paid. Risk: The resignation may be treated as coerced. If the employee is actually regular, the end-of-contract is also vulnerable.

Scenario 4: Mid-term termination disguised as contract expiry

Facts: Contract ends in 2 months, but employer issues end-of-contract letter now and removes employee immediately. Risk: This is termination, not expiry. Employer must justify lawful cause and comply with due process.

Scenario 5: Probationary non-regularization without standards

Facts: Employer ends probation at month 5 saying “you didn’t pass,” but cannot show communicated standards or documented evaluations. Risk: Vulnerable; non-regularization must be tied to reasonable standards made known at engagement and supported by evidence.

12) Practical compliance guide (Philippine HR reality)

For employers: reduce exposure

Classify correctly: fixed-term/project/probationary/regular should match real work and practice
Document projects: scope, timeline, assignment, and proof of completion
Avoid “perma-temporary” renewals for roles integral to business operations
Don’t demand resignation as a condition for pay or documents
Use proper termination routes (just/authorized causes) when the reality is termination
Maintain consistent records: contracts, evaluations, notices, DOLE-related requirements when applicable

For employees: protect your position

Keep copies of contracts, payslips, schedules, communications, and any “renewal” messages
If pressured to resign, document the pressure (messages, witnesses, contemporaneous notes)
If you object to a forced resignation or questionable end-of-contract, a prompt written protest is often powerful evidence of lack of voluntariness
Track your tenure, role continuity, and whether your work is core to the business

13) The real takeaway: labels don’t control—facts control

In the Philippine setting, an end-of-contract letter is not automatically lawful, and a resignation letter is not automatically voluntary. The law looks through form to substance:

If the worker is effectively regular, “contract expiry” is not a free exit.
If the resignation is coerced or the working conditions forced the employee out, it can be treated as dismissal.
If the separation is actually a business-driven termination, the employer must follow authorized-cause rules, not hide behind “non-renewal.”
If it is a disciplinary termination, the employer must prove just cause and comply with due process.

In short: an end-of-contract letter becomes illegal dismissal when it is used to end employment that the law considers protected by security of tenure, or when it disguises a termination without lawful cause and proper procedure.