Unfair Dismissal Based on Medical Results in Philippine Labor Law

This article explains when health-related terminations are lawful, when they cross into illegal or “unfair” dismissal, and what both employers and workers should do in the Philippines.

1) Big picture: security of tenure vs. workplace health

The Constitution and the Labor Code protect security of tenure: an employee may be removed only for just or authorized causes, and only after due process. Health status shows up in two legally distinct ways:

“Disease” as an authorized cause for termination (after strict medical and procedural requirements); and
Medical conditions that may not lawfully be used to reject, discipline, or dismiss a worker (anti-discrimination, privacy, and public-health rules).

Fail either track, and the dismissal is illegal.

2) Governing sources (Philippine context)

Labor Code (as renumbered):
- Just causes: serious misconduct, etc. (Art. 297 [formerly 282]).
- Authorized causes: installation of labor-saving devices, redundancy, retrenchment/closure (Art. 298 [formerly 283]); and disease (Art. 299 [formerly 284]).
Implementing rules and DOLE issuances on authorized-cause terminations and notice to DOLE.
Occupational Safety and Health (OSH) standards and related DOLE/DOH joint guidelines (e.g., fitness-to-work, TB policy, return-to-work).
Data Privacy Act: medical data = sensitive personal information; extra consent and confidentiality duties.
Magna Carta for Persons with Disability (RA 7277, as amended): non-discrimination + reasonable accommodation.
Mental Health Act (RA 11036): prohibits discrimination due to mental health conditions; requires workplace policies and accommodations.
HIV and AIDS Policy Act (RA 11166): forbids compulsory HIV testing for employment and discrimination based on HIV status.
Magna Carta of Women (RA 9710) and other laws protecting pregnant workers.
Supreme Court jurisprudence on disease terminations, due process, burden of proof, and damages (e.g., nominal damages for due-process lapses in authorized-cause dismissals).

3) When health can lawfully justify termination: “Disease” as an authorized cause

A termination based on illness is lawful only if the employer proves all of the following:

Competent public health authority certification.
- The certificate must come from a public health authority (e.g., a municipal/city health officer or DOH-accredited public physician), not just the company doctor.
- It must expressly state that: a) the employee suffers from a disease; b) continued employment is either prohibited by law or prejudicial to the employee’s health or to co-workers; and c) the disease cannot be cured within six (6) months even with proper medical treatment.
Reasonable accommodation/transfer considered.
- Before dismissal, the employer should assess temporary leave, light duty, reassignment, remote or modified work, engineering/administrative controls, or other less drastic measures that would avoid termination while keeping the workplace safe.
Procedural due process for authorized cause.
- 30-day written notice to the employee and to the DOLE Regional Office, stating the facts and legal basis, and the effective date.
- Separation pay: at least one (1) month salary or one-half (1/2) month salary per year of service, whichever is higher (a fraction of at least six months counts as one whole year).
- Final pay, certificates, and statutory clearances must follow DOLE timelines.

If any element is missing or defective (e.g., only a company doctor’s note; the certification doesn’t address the six-month incurability; no 30-day dual notice; or no separation pay), the dismissal is illegal.

4) What cannot justify dismissal: prohibited or risky practices

Even if a medical exam is allowed (pre-employment, periodic, or return-to-work), results cannot be used to reject or terminate a worker where the law protects against discrimination or mandates accommodation. Common traps:

HIV status: no compulsory testing for employment; no adverse action because of HIV.
Pregnancy/maternity: dismissal for pregnancy or pregnancy-related conditions is unlawful; grant maternity and related leaves.
Disability/impairment: the law expects reasonable accommodation unless it causes undue hardship. Flat denials based on diagnosis (e.g., hearing loss, controlled epilepsy, diabetes) without individualized assessment are unlawful.
Tuberculosis and similar treatable conditions: DOLE/DOH policies treat TB as curable and generally not a ground for termination; provide treatment and appropriate leave/modified duty.
Mental health conditions: cannot dismiss solely on diagnosis; must assess fitness for particular tasks and provide accommodations.
Age-related screening: blanket exclusions triggered by routine age-based tests risk violating anti-age discrimination principles.
Data privacy breaches: disclosing or mishandling medical data (e.g., circulating lab results or diagnoses) can separately trigger liability.

5) Due process details: authorized-cause vs just-cause

Authorized-cause (disease) requires:
- 30-day notice to the employee and DOLE;
- payment of separation pay; and
- good-faith, evidence-based decision (public health certificate meeting all statutory elements).
Just-cause (misconduct, etc.) requires the twin-notice and hearing rule. This does not apply to disease terminations—but lack of the 30-day dual notice for authorized causes still results in nominal damages even if the substantive ground exists.

6) Burden of proof and evidence

The employer bears the burden of proof to show compliance with substantive (public health certificate, six-month incurability, prejudicial/prohibited nature of continued work) and procedural requirements (30-day dual notice; separation pay).
Company-doctor opinions are not enough. If there’s a conflict between physicians, the law looks to the competent public health authority.
“Unfit for duty” notes that don’t address the six-month curability and prejudicial/prohibited elements are insufficient.

7) Remedies when dismissal is illegal

If the termination fails any legal requirement, the employee is entitled to:

Reinstatement without loss of seniority rights and full backwages from dismissal until actual reinstatement; or
Separation pay in lieu of reinstatement (when reinstatement is no longer feasible), plus backwages until finality of judgment;
Nominal damages for due-process lapses (amounts vary by doctrine);
Moral and exemplary damages in cases of bad faith; and
Attorney’s fees (typically 10%) when unlawful withholding is shown.

If the authorized cause is substantively valid but procedurally defective (e.g., missing 30-day notice), courts typically award nominal damages while sustaining the dismissal.

8) Practical checklists

For employers (to stay lawful)

Pause: Is termination truly necessary? Consider accommodations first.
Obtain the right certificate: From a competent public health authority; ensure it answers all three statutory elements, in writing.
Document job-related risks: Describe why continued work is prohibited by law or prejudicial for this role, and why accommodations are not feasible.
Serve 30-day dual notices: To employee and DOLE, with reasons and effective date.
Compute and tender separation pay correctly.
Protect privacy: Limit access to medical data; secure consent; observe retention limits.
Be consistent: Apply the same standards across similarly situated employees.

For employees (to protect your rights)

Ask for the basis: Request a copy of the public health certificate and the DOLE notice.
Get your own medical opinion and keep records (lab results, fit-to-work notes).
Propose accommodations you can do safely.
Check separation pay and final pay timelines.
Seek redress: File an illegal dismissal complaint (Labor Arbiter) if requirements were not met; preserve evidence of privacy breaches or discrimination.
Mind deadlines: Illegal dismissal actions are generally subject to four-year prescription; money claims three years from accrual.

9) Special topics and recurring scenarios

Pre-employment medical exams: Allowed to determine fitness for a job, but results cannot be used to screen out an applicant unless the condition prevents safe performance even with reasonable accommodation or is otherwise prohibited by law. HIV testing cannot be required.
Periodic medical surveillance (e.g., for hazardous exposures): Legitimate under OSH, but adverse action must still pass the disease-termination test or other legal standards.
Return-to-work after illness or injury: Employers may require a fit-to-work clearance, but indefinite suspension or “no return” policies absent a valid disease-termination ground are unlawful.
Temporary illness: If curable within six months, termination for disease is not allowed; use leave benefits (SSS sickness benefit; company/CBAs) and accommodate.
Contagious diseases: The question is job-specific risk and feasibility of controls (PPE, engineering controls, isolation, remote work), not mere diagnosis.
Mental health: Focus on essential job functions and individualized assessment; provide accommodations like flexible scheduling, task modification, or temporary leave.
Contractual, project, or probationary employees: The same disease-termination rules apply while the employment subsists; prematurely ending a fixed term or project due to health still requires compliance with Article 299.

10) Anatomy of a valid disease-termination packet

Medical: Public health certificate expressly addressing: diagnosis; why continued work is prohibited or prejudicial; why the condition cannot be cured within six months despite proper treatment; and any assessments of contagion and workplace risk.
Operational: Matrix of accommodations explored and why each is not feasible.
Legal: 30-day employee notice; 30-day DOLE notice; computation and tender of separation pay; payroll and clearance timelines; data-privacy compliance (consents, access controls, redaction).
Tone: Respectful, non-stigmatizing language; confidentiality preserved.

11) Red flags that usually make a dismissal illegal

Only a company doctor declared the employee “unfit”—no public health authority certificate.
Certificate fails to mention six-month incurability or prejudicial/prohibited nature of continued employment.
Employer skipped the 30-day dual notice or paid separation pay late/incorrectly.
Blanket policy (e.g., “no epileptics in security,” “automatic termination for TB”).
Employer refused to discuss reasonable accommodation.
Medical results were shared with supervisors or peers without legal basis or consent.

12) FAQs

Q: Can an employer rely on a private hospital specialist’s report? A: As evidence, yes—but the statute requires a certification from a competent public health authority for termination based on disease. Private reports don’t replace this requirement.

Q: What counts as “cannot be cured within six months”? A: It is a medical question the certifying public authority must answer. Many conditions (e.g., TB under proper therapy) are typically curable within that period; others are chronic but manageable—which points to accommodation, not dismissal.

Q: Is separation pay always due? A: Yes, for authorized-cause dismissals (including disease), even when the employer complied with all requirements.

Q: What if the worker is temporarily unfit? A: Use leave, temporary reassignment, or other adjustments; do not terminate under Article 299 unless the six-month incurability and other elements are proven.

Q: Can medical results justify demotion or pay cuts instead? A: Any adverse action must be lawful, necessary, and proportionate, grounded in job-related limitations and, where applicable, reasonable accommodation duties. Otherwise, it risks constructive dismissal or discrimination claims.

13) Takeaways

Health-based dismissals are the exception, not the rule.
The law demands a public health authority certification, six-month incurability, proof that continued work is prohibited or prejudicial, 30-day dual notice, and separation pay.
Many conditions—infectious or chronic—require accommodation, not termination.
Missing any requirement = illegal dismissal, with remedies that can include backwages, reinstatement or separation pay in lieu, and damages.

For specific cases, tailor the medical and operational analysis to the actual job and workplace risks, and document accommodations in good faith.