I. Overview

In the Philippines, an employee who is terminated because of a disease, prolonged illness, or health-related incapacity may be entitled to separation pay, but the entitlement depends on the legal ground used for termination, the medical basis for the termination, and whether the employer complied with substantive and procedural due process.

Health-related absences are not automatically a valid reason for dismissal. The law distinguishes between:

Termination due to disease under Article 299 of the Labor Code;
Dismissal for authorized causes, such as redundancy, retrenchment, or closure, where illness may be incidental but not the legal cause;
Dismissal for just causes, such as serious misconduct, willful disobedience, or gross and habitual neglect of duties;
Resignation or abandonment, where separation pay is generally not required unless granted by contract, policy, or practice;
Disability-related benefits, which are separate from separation pay.

The most important rule is this: an employee terminated because of disease is entitled to separation pay equivalent to at least one month salary or one-half month salary for every year of service, whichever is greater.

This entitlement comes from the Labor Code and applies when the employer validly terminates the employee because the employee’s continued employment is prohibited by law or prejudicial to the employee’s health or to the health of co-employees.

II. Governing Law: Article 299 of the Labor Code

The principal legal provision is Article 299 of the Labor Code, formerly Article 284, which provides that an employer may terminate an employee who is found suffering from a disease and whose continued employment is either:

Prohibited by law; or
Prejudicial to the employee’s health; or
Prejudicial to the health of co-employees.

When termination is validly made on this ground, the employer must pay separation pay equivalent to:

At least one month salary, or one-half month salary for every year of service, whichever is greater.

A fraction of at least six months is generally considered as one whole year for purposes of computing separation pay.

III. Nature of Termination for Disease

Termination due to disease is an authorized cause, not a just cause.

This distinction matters.

A just cause usually involves fault or wrongdoing by the employee, such as serious misconduct, fraud, willful disobedience, or gross and habitual neglect of duties. In just-cause dismissals, separation pay is generally not required, except in exceptional circumstances or when provided by company policy, contract, or collective bargaining agreement.

An authorized cause, on the other hand, is a lawful reason for termination not necessarily involving employee fault. Disease is one such authorized cause. Since the employee is not being dismissed for misconduct, the law provides separation pay as a form of statutory financial relief.

Thus, where an employee is terminated because of a qualifying illness or health condition, the employer cannot simply dismiss the employee without paying separation pay.

IV. When Health-Related Absences May Justify Termination

Health-related absences may lead to lawful termination only when the requirements of Article 299 are met.

The employee’s absence, by itself, is not enough. The employer must establish that the employee has a disease or health condition of such nature, or at such a stage, that continued employment is legally prohibited or prejudicial to health.

Examples may include:

A contagious illness that poses a real risk to co-workers or the public;
A serious medical condition that makes continued work unsafe for the employee;
A condition that prevents the employee from performing the essential functions of the job despite reasonable opportunity to recover;
A disease or incapacity that has become prolonged and is medically certified as not curable within the period contemplated by law and regulation.

The employer must be careful not to equate mere sick leave, hospitalization, medical absence, or temporary incapacity with a valid ground for dismissal.

Temporary illness generally does not justify termination if the employee is expected to recover and return to work within a reasonable period.

V. The Medical Certification Requirement

A valid termination due to disease requires a competent medical basis.

Under implementing rules, the employer should obtain a certification from a competent public health authority that:

The disease is of such nature or at such stage that continued employment is prohibited by law or prejudicial to the health of the employee or co-workers; and
The disease cannot be cured within a period of six months, even with proper medical treatment.

If the disease can be cured within six months, the employer should not immediately terminate the employee. The proper course is usually to place the employee on leave, allow the use of available leave credits, or provide a reasonable period for treatment and recovery.

The medical certification requirement is not a mere technicality. It is a substantive safeguard against arbitrary dismissal. Without proper medical certification, a dismissal supposedly based on illness may be declared illegal.

VI. Who May Issue the Certification

The certification contemplated by law and rules is not merely any doctor’s note obtained by the employer.

The usual legal standard requires certification from a competent public health authority. In practice, this may involve a government physician, public health officer, or authorized public medical authority competent to evaluate the disease or health condition.

A company physician’s opinion may be relevant, but standing alone it may not be enough if the law or rules require certification from a public health authority. Similarly, a private medical certificate may support the facts of illness but may not fully satisfy the statutory requirement if it does not meet the legal standard.

The safest legal approach for employers is to secure an independent and competent medical evaluation that satisfies the requirements of Article 299 and its implementing rules.

VII. Separation Pay Due for Termination Due to Disease

The separation pay due is:

One month salary or one-half month salary for every year of service, whichever is higher.

Formula

The employee receives whichever is greater between:

One month salary; or
One-half month salary × years of service.

A fraction of at least six months is usually counted as one year.

Example 1: Employee with 1 year of service

Monthly salary: ₱25,000 Years of service: 1 year

One month salary: ₱25,000 One-half month salary × 1 year: ₱12,500

Separation pay due: ₱25,000

Example 2: Employee with 5 years of service

Monthly salary: ₱25,000 Years of service: 5 years

One month salary: ₱25,000 One-half month salary × 5 years: ₱62,500

Separation pay due: ₱62,500

Example 3: Employee with 3 years and 7 months of service

Monthly salary: ₱30,000 Years counted: 4 years, because the fraction of at least six months is treated as one year

One month salary: ₱30,000 One-half month salary × 4 years: ₱60,000

Separation pay due: ₱60,000

VIII. What Is Included in “One Month Salary”

The statutory term is generally understood as the employee’s regular monthly salary. The specific components may depend on the employee’s compensation structure, company practice, contract, CBA, or applicable jurisprudence.

As a practical matter, computation may consider:

Basic monthly wage;
Regular allowances integrated into salary;
Other salary components treated as part of regular compensation.

Items that are not normally part of salary, such as discretionary bonuses, reimbursements, or purely contingent incentives, are generally excluded unless the contract, CBA, company policy, or established practice provides otherwise.

For daily-paid employees, the monthly salary equivalent is generally determined based on the applicable wage computation method, considering the employee’s wage rate and regular working days.

IX. Health-Related Absences Versus Abandonment

Employers sometimes characterize prolonged absences as abandonment. This is risky when the absence is due to illness.

Abandonment requires two elements:

Failure to report for work or absence without valid or justifiable reason; and
A clear intention to sever the employment relationship.

Illness, hospitalization, medical treatment, or documented incapacity may negate the second element. An employee who is absent because of a medical condition usually cannot be presumed to have abandoned employment merely because the absence was prolonged.

If the employer treats the employee’s health-related absence as abandonment without proper factual and procedural basis, the dismissal may be illegal.

X. Health-Related Absences Versus Gross and Habitual Neglect

An employer may not automatically treat repeated sick absences as gross and habitual neglect.

Gross and habitual neglect requires a serious pattern of negligence or indifference to work duties. Absences caused by legitimate illness do not ordinarily show willful or culpable neglect. However, the situation may differ if the employee:

Falsified medical certificates;
Claimed illness while engaging in incompatible activities;
Refused to comply with reasonable reporting or medical documentation requirements;
Was repeatedly absent without notice and without proof of illness;
Used sick leave fraudulently or dishonestly.

In such cases, the legal issue may shift from illness to dishonesty, fraud, insubordination, or neglect. If the dismissal is validly based on a just cause, statutory separation pay may not be due.

XI. Procedural Due Process in Termination for Disease

Even when there is a valid medical ground, the employer must observe due process.

For authorized causes, including disease, procedural due process generally requires:

Written notice to the employee stating the ground for termination; and
Written notice to the Department of Labor and Employment, usually at least 30 days before the intended date of termination.

For disease-based termination, the employer should also provide or rely on the required medical certification.

Failure to comply with procedural due process may expose the employer to liability, even if the substantive ground for termination exists.

Where the dismissal is substantively valid but procedurally defective, the employer may be liable for nominal damages. Where both substantive and procedural requirements are absent, the dismissal may be illegal, exposing the employer to reinstatement, full backwages, separation pay in lieu of reinstatement where applicable, and other monetary awards.

XII. The Six-Month Rule

A key concept in disease termination is whether the disease can be cured within six months with proper medical treatment.

If the disease can be cured within six months, the employee should generally not be terminated on disease grounds. The employer should allow a leave of absence, medical leave, or other legally appropriate arrangement.

If the disease cannot be cured within six months, and continued employment is prohibited by law or prejudicial to health, termination may be legally allowed, provided the employer complies with the requirements of Article 299.

The six-month rule protects employees from losing their jobs because of temporary illness.

XIII. What If the Employee Has Exhausted Sick Leave?

Exhaustion of sick leave does not automatically authorize termination.

Sick leave benefits and termination standards are different. An employee may have no remaining paid sick leave but still be protected from unlawful dismissal.

After leave credits are exhausted, the employer may treat further absence as unpaid leave, require medical documentation, or evaluate whether continued employment is possible. Termination becomes lawful only if a valid ground exists and due process is observed.

In disease cases, the employer must still comply with Article 299 and the medical certification requirement.

XIV. What If the Employee Is on Prolonged Leave Without Pay?

A prolonged leave without pay may raise operational concerns for the employer, but it still does not automatically justify dismissal.

The employer may evaluate:

The nature of the employee’s illness;
The expected period of recovery;
Whether the employee can return to work;
Whether the job can reasonably remain open;
Whether continued employment is prejudicial to health;
Whether there is a valid medical certification;
Whether any company policy, CBA, or employment contract governs prolonged medical leave.

If the illness is temporary and curable within the statutory period, termination for disease is generally improper.

If the illness is serious, prolonged, and medically certified as not curable within the required period, termination with separation pay may be lawful.

XV. What If the Illness Is Work-Related?

If the illness or disability is work-related, the employee may have remedies beyond separation pay.

Possible benefits may include:

Employees’ Compensation Commission benefits;
SSS sickness or disability benefits;
PhilHealth benefits;
Company medical or disability benefits;
Benefits under a CBA or insurance plan;
Damages, in appropriate cases, if employer negligence is established.

Separation pay under Article 299 is separate from statutory sickness, disability, or compensation benefits.

An employee may be entitled to separation pay because the employment is terminated, and also to separate disability or compensation benefits under other laws or programs.

XVI. Separation Pay Versus Retirement Pay

Separation pay and retirement pay are different.

Separation pay is paid because employment is terminated for an authorized cause, including disease.

Retirement pay is paid because the employee has reached retirement age or qualifies under a retirement plan, CBA, company policy, or the Labor Code.

If an employee is both medically unfit and already eligible for retirement, the governing documents and applicable law must be examined. The employee should generally receive the benefit that is legally due. In some cases, the employee may receive the superior benefit if the retirement plan, CBA, or company policy so provides.

Employers should not use disease termination to avoid paying retirement benefits, especially if retirement rights have already vested.

XVII. Separation Pay Versus Final Pay

Separation pay is only one component of the total amount an employee may receive upon termination.

The employee’s final pay may include:

Unpaid salary;
Pro-rated 13th month pay;
Cash conversion of unused service incentive leave, if applicable;
Unused vacation leave or sick leave convertible to cash under policy, CBA, or contract;
Commissions, incentives, or bonuses already earned and demandable;
Tax refunds or adjustments, if any;
Separation pay;
Retirement or other benefits, where applicable.

Thus, even if separation pay is computed correctly, the employer must still settle other final pay items.

XVIII. Is Separation Pay Due If the Employee Resigns Due to Illness?

Generally, no statutory separation pay is required for resignation, even if the resignation is due to illness.

However, separation pay may still be due if provided by:

Employment contract;
Company policy;
Collective bargaining agreement;
Established company practice;
Voluntary employer grant;
Retirement plan;
Settlement agreement.

There is also a practical legal issue: an employer should not pressure a sick employee to resign in order to avoid paying separation pay. If resignation is involuntary, coerced, or obtained through pressure, it may be treated as constructive dismissal.

XIX. Constructive Dismissal in Health-Related Cases

Constructive dismissal occurs when continued employment becomes impossible, unreasonable, or unlikely, or when the employee is forced to resign because of the employer’s acts.

In health-related cases, constructive dismissal may arise if the employer:

Refuses to allow the employee to return despite medical clearance;
Demotes or humiliates the employee because of illness;
Pressures the employee to resign;
Places the employee on indefinite floating status without lawful basis;
Refuses reasonable communication or accommodation;
Treats medical leave as abandonment without proper basis;
Terminates the employee without the required medical certification.

If constructive dismissal is established, the employee may be entitled to remedies for illegal dismissal, not merely Article 299 separation pay.

XX. Remedies for Illegal Dismissal

If the termination for health-related absences is invalid, the employee may be entitled to:

Reinstatement without loss of seniority rights;
Full backwages from the time compensation was withheld until actual reinstatement;
Separation pay in lieu of reinstatement, if reinstatement is no longer feasible;
Payment of unpaid wages and benefits;
Nominal damages, if due process was violated;
Moral and exemplary damages, in proper cases involving bad faith, oppression, or malice;
Attorney’s fees, where legally justified.

The employer’s liability can be significantly higher if it dismisses an employee for illness without satisfying Article 299.

XXI. Termination of Probationary Employees for Health Reasons

Probationary employees also have security of tenure during the probationary period. They may be dismissed only for:

Just cause;
Authorized cause;
Failure to qualify under reasonable standards made known at the time of engagement.

If a probationary employee is dismissed because of disease, Article 299 may still apply. The employer must establish the statutory requirements and pay the corresponding separation pay if termination is validly based on disease.

A probationary employee cannot be dismissed solely because the employer suspects poor attendance due to illness, unless there is a valid legal basis and due process is followed.

XXII. Termination of Fixed-Term Employees

For fixed-term employees, the end of the agreed term generally ends the employment relationship without separation pay, unless the arrangement is invalid or the contract provides otherwise.

However, if the employer terminates the fixed-term employee before the end of the term due to disease, Article 299 principles may apply, including separation pay.

If the fixed-term arrangement is used to evade security of tenure, the employee may be treated as regular, and ordinary rules on termination will apply.

XXIII. Termination of Project and Seasonal Employees

For project employees, employment generally ends upon completion of the project or phase for which the employee was hired. For seasonal employees, employment may end with the season, subject to rules on repeated engagement and regular seasonal status.

If the employment ends because the project or season truly ended, separation pay for disease may not arise.

But if the employer terminates the employee during the project or season because of illness, the employer should comply with Article 299 if disease is the real ground for termination.

XXIV. Health-Related Absences and Disability Discrimination

Philippine law protects persons with disabilities from discrimination in employment.

Employers must be careful not to terminate employees based merely on disability, diagnosis, stigma, or assumptions about capacity. The relevant question is not simply whether the employee has a condition, but whether the employee can perform the essential functions of the job and whether continued employment is legally prohibited or prejudicial to health.

A medical condition does not automatically mean incapacity. Many employees with chronic illnesses or disabilities remain capable of productive work.

Dismissal based on prejudice, stigma, or unsupported assumptions may expose the employer to claims of illegal dismissal and discrimination.

XXV. HIV, Tuberculosis, Mental Health, and Other Sensitive Conditions

Certain health conditions require special care because they involve privacy, stigma, and anti-discrimination protections.

HIV

Philippine law prohibits discrimination against persons living with HIV. An employee may not be dismissed simply because of HIV status. Medical confidentiality must also be respected.

Termination must be based on lawful grounds and actual job-related medical incapacity, not fear, stigma, or assumptions.

Tuberculosis

Tuberculosis may be curable and treatable. Employers should avoid automatic dismissal. The key legal inquiry remains whether continued employment is prohibited or prejudicial to health and whether the condition cannot be cured within the required period with proper treatment.

Mental Health Conditions

Mental health conditions must be handled with confidentiality and fairness. A diagnosis alone does not justify dismissal. The employer must determine whether the employee can perform the job, whether accommodations or leave are appropriate, and whether Article 299 requirements are satisfied.

Chronic Illnesses

Diabetes, hypertension, kidney disease, cancer, autoimmune disorders, and similar conditions do not automatically justify termination. The question is whether the condition makes continued employment legally prohibited or prejudicial to health, and whether it is medically certified as not curable within the required period.

XXVI. Employer’s Right to Require Medical Examination

An employer may require a medical examination when reasonably related to employment, workplace safety, fitness to work, or return-to-work clearance. This is especially relevant where the employee has been absent for a prolonged period or occupies a safety-sensitive position.

However, the employer must observe:

Medical confidentiality;
Data privacy requirements;
Non-discrimination principles;
Reasonableness;
Job-related necessity;
Due process.

A medical examination should not be used as a pretext to remove an employee.

XXVII. Return-to-Work Clearance

If an employee presents a fit-to-work certificate, the employer should evaluate it in good faith.

The employer may seek clarification, require further evaluation, or refer the employee to a competent physician if there is a genuine concern. But outright refusal to reinstate an employee who is medically cleared may be legally problematic.

Where conflicting medical opinions exist, the employer should avoid hasty termination and should seek a competent, neutral, and legally sufficient medical determination.

XXVIII. When No Separation Pay Is Due

Separation pay for health-related absences may not be due in the following situations:

The employee voluntarily resigned and no policy, contract, CBA, or practice grants separation pay;
The employee was validly dismissed for a just cause unrelated to illness;
The employee abandoned work, and abandonment is clearly proven;
The employment ended by completion of a valid fixed term, project, or season;
The employee is not terminated but remains on valid leave or unpaid leave;
The employee is separated under a different lawful scheme where the applicable benefit has already been paid;
The company policy expressly limits benefits and no statutory separation pay applies.

However, employers should be cautious. If the real cause of termination is the employee’s disease, Article 299 may apply regardless of the label used.

XXIX. When More Than Statutory Separation Pay May Be Due

The Labor Code provides the minimum. The employee may be entitled to a higher amount if a superior benefit exists under:

Employment contract;
Company handbook;
Collective bargaining agreement;
Retirement plan;
Long-standing company practice;
Settlement agreement;
Employer policy for medical separation;
Management-approved benefit program.

For example, a company policy may grant one month salary per year of service for medical separation. In that case, the employee may claim the higher contractual or policy-based benefit.

The rule is that statutory benefits are minimum labor standards. They may not be reduced by agreement, but they may be improved by contract or policy.

XXX. Comparison With Other Authorized Causes

Separation pay varies depending on the authorized cause.

For disease under Article 299, the amount is:

One month salary or one-half month salary per year of service, whichever is higher.

For redundancy or installation of labor-saving devices, the separation pay is usually:

One month salary per year of service or at least one month salary, whichever is higher.

For retrenchment, closure not due to serious business losses, or disease, the benefit is generally:

One month salary or one-half month salary per year of service, whichever is higher.

The legal ground matters because it affects the computation.

An employer cannot simply choose the cheapest label. The actual reason for termination controls.

XXXI. Documentation Employers Should Keep

For a valid disease-based termination, employers should keep:

Medical reports and certificates;
Certification from a competent public health authority;
Records of absences and leave usage;
Communications with the employee;
Return-to-work evaluations;
Notices to the employee;
Notice to DOLE;
Computation of separation pay and final pay;
Proof of payment;
Board or management approval, if applicable;
Company policy or CBA provisions relied upon.

Proper documentation is critical in case of a labor complaint.

XXXII. Documentation Employees Should Keep

Employees should keep:

Medical certificates;
Hospital records;
Fit-to-work certificates;
Leave applications;
Emails or messages notifying the employer of illness;
Company responses;
Payslips;
Employment contract;
Company handbook;
CBA, if applicable;
Clearance documents;
Final pay computation;
Termination notice;
Proof of non-payment or underpayment.

These documents may be needed before the DOLE, NLRC, or courts.

XXXIII. Common Employer Mistakes

Common mistakes include:

Terminating an employee merely because sick leave was exhausted;
Treating illness as abandonment without proof of intent to sever employment;
Relying solely on a company doctor without the required public health certification;
Failing to give notice to the employee and DOLE;
Misclassifying disease termination as resignation;
Pressuring the employee to resign;
Refusing to reinstate an employee with medical clearance;
Ignoring disability and anti-discrimination laws;
Computing separation pay based only on basic pay when policy includes allowances;
Failing to pay final pay items separate from separation pay.

XXXIV. Common Employee Misconceptions

Common misconceptions include:

Believing every health-related absence automatically entitles the employee to separation pay;
Believing resignation due to illness always requires separation pay;
Assuming SSS sickness benefits are the same as employer-paid separation pay;
Assuming a medical certificate alone prevents dismissal indefinitely;
Believing that all unused sick leave must be converted to cash even without policy or agreement;
Assuming all illnesses make termination illegal;
Believing separation pay and backwages are always both available in a valid authorized-cause termination.

The employee’s entitlement depends on the legal ground and facts.

XXXV. Practical Computation Guide

To compute separation pay for valid termination due to disease:

Step 1: Determine monthly salary

Use the employee’s monthly salary or monthly equivalent.

Step 2: Determine years of service

Count actual years of service. A fraction of at least six months is generally counted as one year.

Step 3: Compute one-half month salary per year of service

Monthly salary ÷ 2 × credited years of service.

Step 4: Compare with one month salary

The employee receives the higher amount.

Step 5: Add final pay items

Add unpaid salary, pro-rated 13th month pay, leave conversions if applicable, and other earned benefits.

XXXVI. Sample Computation Table

Monthly Salary	Years of Service	One Month Salary	½ Month × Years	Separation Pay Due
₱20,000	1	₱20,000	₱10,000	₱20,000
₱20,000	2	₱20,000	₱20,000	₱20,000
₱20,000	3	₱20,000	₱30,000	₱30,000
₱30,000	5	₱30,000	₱75,000	₱75,000
₱40,000	10	₱40,000	₱200,000	₱200,000

XXXVII. Tax Treatment

The tax treatment of separation pay depends on the circumstances.

Separation benefits received because of death, sickness, or other physical disability, or for causes beyond the employee’s control, may be treated differently from ordinary compensation, subject to tax rules and documentation requirements.

Employers should properly document the reason for separation and comply with BIR rules. Employees should review the tax treatment reflected in their final pay documents and withholding tax certificates.

XXXVIII. Release, Waiver, and Quitclaim

Employers commonly ask separated employees to sign a quitclaim.

A quitclaim is not automatically invalid, but it must be voluntary, reasonable, and supported by full payment of legally due amounts. A waiver cannot defeat statutory labor rights if the consideration is unconscionably low or if the employee signed under pressure, fraud, or mistake.

An employee who signs a quitclaim after receiving proper separation pay and final pay may still challenge it if there was coercion, misrepresentation, or substantial underpayment.

XXXIX. Prescriptive Periods and Filing of Claims

Money claims arising from employment generally have a prescriptive period under labor law. Illegal dismissal claims and related monetary claims must be filed within the applicable legal periods.

Employees should act promptly if they dispute the termination, computation, or non-payment of benefits.

The usual forums may include:

Company grievance machinery, if applicable;
DOLE, for certain labor standards matters;
National Labor Relations Commission, for illegal dismissal and money claims;
Voluntary arbitration, for CBA-covered disputes;
Courts, in exceptional or appellate proceedings.

XL. Key Legal Tests

For a valid termination due to disease, the employer should be able to answer “yes” to the following:

Is the employee suffering from a disease or health condition?
Is continued employment prohibited by law or prejudicial to the employee’s health or the health of co-employees?
Is there a certification from a competent public health authority?
Does the certification state that the disease cannot be cured within six months with proper medical treatment?
Was written notice given to the employee?
Was written notice given to DOLE?
Was separation pay computed and paid correctly?
Were all final pay items settled?
Was the employee treated without discrimination, coercion, or bad faith?

If the employer cannot satisfy these requirements, the termination may be vulnerable to challenge.

XLI. Key Rules Summarized

Health-related absences alone do not automatically justify dismissal.
Termination due to disease is an authorized cause under Article 299 of the Labor Code.
A valid disease-based termination requires medical certification from a competent public health authority.
The disease must make continued employment prohibited by law or prejudicial to health.
If the disease can be cured within six months, termination is generally improper.
Separation pay is one month salary or one-half month salary per year of service, whichever is higher.
A fraction of at least six months is generally counted as one year.
Separation pay is separate from final pay, SSS benefits, disability benefits, and retirement benefits.
Resignation due to illness does not automatically require separation pay.
Illegal dismissal may result in reinstatement, backwages, damages, attorney’s fees, and other awards.

XLII. Conclusion

In the Philippine setting, separation pay after termination for health-related absences is not determined merely by the length of absence or the seriousness of the illness. The controlling legal issue is whether the employer validly terminated the employee under Article 299 of the Labor Code.

If the employee is lawfully terminated because of disease, the minimum separation pay is one month salary or one-half month salary for every year of service, whichever is greater. The employer must also comply with medical certification requirements, notices, and final pay obligations.

A dismissal based on unsupported assumptions, exhausted sick leave, stigma, or prolonged absence without the required medical basis may be illegal. Conversely, when the employee’s condition is medically established as one that makes continued employment legally prohibited or prejudicial to health, and the disease cannot be cured within the required period, the law permits termination but requires the employer to pay the statutory separation benefit.