In the Philippines, security of tenure is a constitutionally protected right. However, this right is not absolute. The law recognizes that an employer cannot be compelled to retain an employee whose continued employment is prohibited by law or is prejudicial to their health or the health of their co-workers.
Termination due to disease is classified as an Authorized Cause under Article 299 (formerly Article 284) of the Labor Code.
The Legal Requisites for Valid Termination
For a dismissal based on illness to be legal, the employer must strictly comply with both substantive and procedural due process. Failure to meet these requirements can lead to a finding of illegal dismissal, resulting in backwages and reinstatement.
1. Substantive Due Process (The "Why")
The law establishes three specific conditions that must coexist:
- The Disease is Prohibited by Law: The employee must be suffering from a disease.
- Incurability within Six Months: The disease must be of such a nature or at such a stage that it cannot be cured within a period of six (6) months, even with proper medical treatment.
- Medical Certification: The employer must obtain a certification from a competent public health authority affirming that the disease is of such a character.
2. Procedural Due Process (The "How")
Unlike terminations for "Just Causes" (e.g., misconduct), which require a two-notice rule and a hearing, termination for "Authorized Causes" like disease follows a different path:
- The 30-Day Notice: The employer must serve a written notice of termination to the employee and the Department of Labor and Employment (DOLE) at least one month before the intended date of termination.
The Critical Role of the Medical Certificate
Jurisprudence (notably in Triple Eight Integrated Services, Inc. vs. NLRC) emphasizes that a medical certificate is indispensable.
- Who issues it? It must be a physician from a government clinic or hospital (a "public health authority"). A certificate from a company doctor or a private physician is generally insufficient unless validated by a public authority.
- The "Six-Month" Clause: If the illness is curable within six months, the employer cannot terminate the employee; instead, the employee should be granted a medical leave of absence.
Financial Benefits: Separation Pay
Termination due to illness is not the employee's fault. Therefore, the law mandates the payment of Separation Pay.
| Benefit Type | Amount Mandated by Law |
|---|---|
| Separation Pay | At least one (1) month salary OR one-half (1/2) month salary for every year of service, whichever is higher. |
| Fraction of a Year | A fraction of at least six (6) months is considered as one (1) whole year. |
| Final Pay | Inclusion of pro-rated 13th-month pay and converted unused Service Incentive Leaves (SIL). |
Note: If the illness is work-related, the employee may also be entitled to compensation benefits under the Employees' Compensation Commission (ECC) through the SSS.
Important Considerations & Nuances
- Fit to Work Clearances: If an employee recovers and presents a "Fit to Work" certification before the 30-day notice expires, the ground for termination may cease to exist.
- The Burden of Proof: The employer bears the burden of proving that the disease is indeed incurable within six months. Without the specific certification from a public health officer, the dismissal is void.
- Permanent Total Disability: If an employee is declared permanently and totally disabled, they are generally entitled to retirement benefits or separation pay, depending on which is more favorable under the Collective Bargaining Agreement (CBA) or company policy.
Summary of Rights
If you are an employee facing termination due to illness, ensure that:
- You have been served a 30-day notice.
- DOLE has been notified of the termination.
- There is a valid certification from a government doctor stating your illness is not curable within six months.
- You receive your full separation pay and final pay.
Would you like me to draft a sample 30-day notice of termination due to disease that complies with DOLE requirements?