UNFAIR (ILLEGAL) DISMISSAL IN THE PHILIPPINES – 2025 COMPLETE GUIDE

1. Constitutional & Statutory Foundations

Security of tenure is expressly guaranteed by the 1987 Constitution (Art. XIII §3) and echoed in Art. 294 of the Labor Code: “No employee shall be dismissed except for a just or authorized cause and after observance of due process.” (Respicio & Co.)
The Labor Code (Pres. Decree 442, Book VI) contains the central rules. In 2015 the Department of Labor and Employment (DOLE) renumbered the Code, so older cases cite the “old” article numbers (e.g., 282) while new issuances cite the “renumbered” ones (e.g., 297). (Respicio & Co.)

2. What Counts as a “Just” or “Authorized” Cause?

Ground	Article	Essence	Key Points
Just Causes (fault of the employee)	297	Serious misconduct, willful disobedience, gross & habitual neglect, fraud or willful breach of trust, crime against employer/family, other analogous causes	No separation pay; twin-notice rule applies
Authorized Causes (business/health necessity)	298–299	Installation of labor-saving devices, redundancy, retrenchment to prevent losses, closure/cessation, incurable disease	Always requires separation pay and 30-day notice to employee and DOLE

Sources (Lexology, InCorp Philippines)

3. Procedural Due Process – “Twin-Notice” vs. 30-Day Rule

Just causes (Art. 297).
1. First notice (Notice to Explain). States specific acts and gives at least five (5) calendar days to answer (DOLE Department Order 147-15).
2. Opportunity to be heard. Written explanation, conference, or hearing.
3. Second notice (Decision). Informs the employee of the finding and the evidence relied upon. (Alburo Law Offices, Scribd)
Authorized causes (Arts. 298-299).
- One-month written notice served on both the employee and the DOLE Regional Office; no hearing required. (Lexology, InCorp Philippines)

Failure to comply with the procedure does not validate the dismissal; the employer is solidarily liable for nominal damages (₱30 000 for just causes; ₱50 000 for authorized causes – Agabon and Jaka Food doctrines). (Alburo Law Offices)

4. Burden & Quantum of Proof

The employer always bears the burden to prove both (a) the existence of a valid cause and (b) compliance with the correct procedure by substantial evidence. Doubts are resolved in favor of labor. (Respicio & Co.)

5. Reliefs When Dismissal Is Found Illegal

Relief	Statutory / Jurisprudential Basis	Highlights
Reinstatement (actual or payroll)	Art. 294	Immediately executory even when the employer appeals; refusal exposes the employer to separate liabilities. (Respicio & Co.)
Full Back-wages	Art. 294	From date of dismissal until actual reinstatement or finality of decision.
Separation pay in lieu of reinstatement	Jurisprudence	One month salary per year of service when reinstatement is impossible (e.g., strained relations, closure).
Nominal damages	Agabon, Jaka Food	Sanction for due-process violations where cause exists.
Moral & Exemplary damages / Attorney’s fees / Legal interest	Civil Code arts. 2224-2232; Nacar	Granted when bad faith, malice, or oppressive acts are proven.

Probationary Update (2024). The Supreme Court clarified in C.P. Reyes Hospital v. Barbosa, G.R. 228357, 16 Apr 2024 that illegally dismissed probationary workers are entitled to back-wages up to actual reinstatement, not merely up to the probationary period’s end. (DivinaLaw)

6. Special Situations & Emerging Trends

Constructive dismissal – any forced resignation or demotion tantamount to dismissal; standards in Globe Telecom v. Florendo-Flores (2016).
Managerial & confidential employees – broader application of “loss of trust,” but still need due process.
Fixed-term / Project / Seasonal employment – premature termination without cause equals illegal dismissal; completion of the fixed term/project is not dismissal. (RESPICIO & CO.)
Dismissal due to disease – requires DOH/DOL-accredited physician’s certification; otherwise invalid.
Overseas Filipino Workers (OFWs) – entitled to salaries for the unexpired portion of the contract under R.A. 10022 if dismissal is unjust.
Criminal liability for defying reinstatement orders – Art. 303 (old 288) imposes fines and/or imprisonment on recalcitrant employers. (Respicio & Co.)

7. Litigation Road-Map

Step 1 – SEnA (Single-Entry Approach). Mandatory 30-day conciliation-mediation before filing.
Step 2 – NLRC / Labor Arbiter. File complaint within four (4) years for reinstatement and within three (3) years for money claims; Labor Arbiters have original and exclusive jurisdiction over termination disputes. (Google Sites)
Step 3 – NLRC Commission appeal. 10-day period; appeal by employer must be accompanied by a cash or surety bond equal to the monetary award.
Step 4 – Court of Appeals (Rule 65), then Supreme Court. On questions of law or grave abuse of discretion.

Because reinstatement is immediately executory, employers who appeal are well advised to place the employee on payroll reinstatement to avoid mounting liabilities.

8. Practical Compliance Checklist for Employers

✔ Internal code of conduct and KPIs clearly communicated at hiring (especially for probationary staff). ✔ Maintain documentation – incident reports, notices, minutes of hearings. ✔ Observe the five-day reply period and hold a meaningful conference. ✔ Issue the decision notice with factual findings. ✔ For redundancy or retrenchment, prepare board resolution, financial statements, and 30-day notices. ✔ File required reports with DOLE. Failure in any of these steps frequently leads to multi-million-peso illegal-dismissal awards.

9. Strategic Tips for Employees

Act promptly: missing the prescriptive periods extinguishes the claim.
Secure copies of employment contracts, payslips, e-mails, CCTV footage, and witness statements.
Attend SEnA but prepare for escalation; compromise settlements often fetch 30-50 % of the computed award.
Compute potential entitlements (back-wages, 13th-month, allowances, interest). (RESPICIO & CO.)

10. Key Supreme Court Cases to Know

Case	Doctrine / Take-away
Agabon v. NLRC (2004)	Nominal damages when cause exists but procedure is defective.
Jaka Food Processing v. Pacot (2005)	₱50 000 nominal damages for authorized-cause dismissals without procedure.
Abbott Labs v. Alcaraz (2013)	Standards for probationary dismissal must be reasonable and communicated at hiring.
Redentor Agustin v. Alphaland (2020)	Reiterated two-fold due process requirement. (Alburo Law Offices)
Keng Hua Paper Products v. Ainza (G.R. 224097, 22 Feb 2023)	Separation pay in lieu of reinstatement may be ordered even after finding of illegal dismissal where reinstatement is no longer viable. (Lawphil)
C.P. Reyes Hospital v. Barbosa (2024)	Full back-wages for illegally dismissed probationary employees up to reinstatement. (DivinaLaw)

11. Conclusion

In Philippine labor law, “unfair dismissal” is legally framed as illegal dismissal. The twin pillars are just/authorized cause and due process. Mastery of both the substantive grounds and the procedural steps—and staying abreast of fast-evolving Supreme Court jurisprudence—remains the best defense against multi-layered monetary liabilities for employers and the surest path to justice for employees.

Need help tailoring any of these points to a specific situation? Feel free to ask!