Termination of Employment in the Philippines: Legal Grounds and Employee Rights

Simplified Query: Can an employee in the Philippines be terminated without resignation after nearly 6 years of service?

In the Philippines, employment termination is governed by strict regulations to protect the rights of workers. The Labor Code of the Philippines specifies the valid grounds for termination of employment, which can occur under certain conditions and must follow due process.

Valid Grounds for Termination
Employment can be terminated by the employer on several grounds, which are generally categorized into two: just causes and authorized causes.

  1. Just Causes: These are reasons related to the employee's conduct or capacity to work. They include serious misconduct, willful disobedience, gross and habitual neglect of duties, fraud or willful breach of trust, commission of a crime against the employer or any immediate member of the family, and other analogous cases. These actions must be proven and the employer is required to follow procedural due process.

  2. Authorized Causes: These include installation of labor-saving devices, redundancy, retrenchment to prevent losses, closure or cessation of operation, and disease of an employee not curable within six months and with certification by a competent public health authority. These are economic or business-related decisions that necessitate employee separation.

Due Process in Termination
Due process must be observed in both just and authorized causes of termination. This involves two notices and a hearing:

  • The first notice informs the employee of the specific cause of termination.
  • A hearing or conference allows the employee to explain and defend their side.
  • The final notice communicates the decision to terminate, giving details of the reasons and grounds supporting the decision.

Employee Tenure and Termination
Regarding the query about an employee nearing six years of service, length of service does not exempt an employee from termination if valid grounds exist. However, the longer service may affect the computation of severance pay or separation benefits, particularly under authorized causes. For instance, in cases of retrenchment or redundancy, the employee is typically entitled to separation pay equivalent to one month pay or at least half a month pay for every year of service, whichever is higher.

Protection against Unjust Termination
If an employee is terminated without just or authorized cause or without the due observance of procedural due process, they are entitled to reinstatement without loss of seniority rights and other privileges, or to separation pay in lieu of reinstatement, and full backwages. This reflects the protective stance of Philippine labor laws towards employees, ensuring fairness and justice in employment termination.

In conclusion, while employers in the Philippines have the right to terminate employment for valid reasons, this right is balanced by stringent requirements for due process and fair treatment, safeguarding employee rights, particularly for those with substantial tenure like the nearly six-year service mentioned in the query. Employees who believe their termination was unjustified may seek redress through the Department of Labor and Employment (DOLE) or the courts.