Delegation and Employer Liability Under Philippine Labor Law

Introduction

In Philippine labor law, the power to dismiss is part of management prerogative—but it is tightly constrained by (1) substantive grounds for termination and (2) procedural due process. A recurring practical question is: who exactly has the authority to dismiss employees inside a company (owner, president, HR, line manager, supervisor), and what happens when a dismissal is initiated or signed by someone allegedly “unauthorized”?

The short legal reality is this: the “employer” is not limited to the company owner or board. Philippine labor statutes define “employer” broadly and treat actions of management representatives as actions of the employer. As a result, disputes about “authority to dismiss” usually do not absolve the company from liability; instead, they tend to affect (a) internal corporate governance, (b) proof and credibility of the dismissal decision, and (c) in some cases, the treatment of corporate officers or contractors.

1) The Legal Framework: What Grounds and What Process?

A. Substantive grounds (the “why”)

Under the Labor Code (as amended), lawful termination generally falls into:

1) Just causes (employee fault) Commonly cited under Article 297 [formerly Art. 282]:

Serious misconduct or willful disobedience
Gross and habitual neglect of duties
Fraud or willful breach of trust
Commission of a crime/offense against the employer or its representative
Other analogous causes

2) Authorized causes (business/health reasons) Commonly cited under:

Article 298 [formerly Art. 283]: redundancy, retrenchment, installation of labor-saving devices, closure/cessation of business
Article 299 [formerly Art. 284]: disease

If the ground is not proven, the dismissal is illegal—regardless of who signed the papers.

B. Procedural due process (the “how”)

For just causes: the “twin-notice” rule + opportunity to be heard. Key jurisprudence includes King of Kings Transport, Inc. v. Mamac (G.R. No. 166208, June 29, 2007) on notice contents.

For authorized causes: notice to the employee and to DOLE, plus payment of correct separation pay when applicable.

Effect of defective procedure: Even if the ground is valid, failure to observe due process typically results in monetary liability (nominal damages) rather than invalidating the termination automatically, per Agabon v. NLRC (G.R. No. 158693, Nov. 17, 2004) and Jaka Food Processing Corp. v. Pacot (G.R. No. 151378, Mar. 28, 2005).

2) Who Is the “Employer” in Philippine Labor Law?

A critical starting point is the Labor Code’s broad concept of “employer,” which includes not only the entity paying wages but also persons acting in the interest of the employer (e.g., managers, HR, supervisors exercising management functions).

Practical consequence: In labor cases, the company usually cannot escape responsibility by saying:

“That supervisor had no authority,” or
“HR signed but the president didn’t approve,” or
“The manager acted on his own.”

Labor tribunals typically treat management actions within the workplace as employer actions, unless there’s a credible showing that the act was purely personal, clearly outside company business, and promptly repudiated.

3) Who Has Authority to Dismiss Inside the Organization?

A. Default rule: the employer, acting through its authorized representatives

In practice, authority to dismiss may be exercised by:

The owner/sole proprietor (for single proprietorships)
The partners (for partnerships), typically through designated managing partners
The corporation (through its board and delegated officers/management)
The company’s authorized HR/disciplinary committee
A manager to whom authority has been delegated by policy, practice, or corporate action

What matters legally: whether the dismissal is a company decision and whether it complied with substantive and procedural requirements.

B. Corporate setting: Board, officers, and delegation

For corporations, there are two layers to keep distinct:

Labor law layer (employment relationship): The corporation, as employer, may act through managers/HR in discipline and dismissal of employees.
Corporate governance layer (who can bind the corporation): Corporate acts are usually exercised by the board and by officers authorized by by-laws, board resolutions, and established delegations.

In labor disputes involving ordinary employees, labor tribunals commonly focus on whether the company (through its management structure) effected the dismissal, not whether a specific signatory had a perfect board-issued authority document—unless the authority issue undermines due process credibility.

4) Delegation of the Power to Dismiss: How It Works (and How It’s Proven)

A. Delegation may be express or implied

Express delegation examples:

Board resolution authorizing the President/HR Head to discipline and terminate
Company code of conduct providing that HR/disciplinary committee recommends and a named officer approves
Written HR authority matrix (RACI/DOA: delegation of authority)

Implied delegation examples:

Longstanding practice where HR Head signs notices and terminations without objection
Organizational structure where managers routinely issue discipline and the company consistently implements it
Ratification (the company later adopts/defends the termination as its own)

B. Evidence commonly used to prove authority

Employee handbook/code of discipline
Signed policies and acknowledgment forms
Organizational chart + job descriptions
Board resolutions, secretary’s certificates
Prior disciplinary records showing consistent signatory practice
Testimony of officers/HR on approval flow
Email trails and incident reports showing escalation and approval

C. Best practice: separate “investigation” from “approval”

To strengthen due process:

A supervisor reports and initiates incident documentation
HR conducts or manages the administrative investigation
A committee evaluates and recommends
A designated approving officer makes the final decision
Notices clearly state the charge, facts, evidence basis, and decision rationale

This reduces claims of bias and supports the “opportunity to be heard” requirement.

5) If the Person Who Dismissed Was “Unauthorized,” Is the Dismissal Automatically Illegal?

Usually, no—not automatically.

In Philippine labor adjudication, illegality typically turns on:

Was there a valid ground?
Was due process observed?
Can the employer prove it?

An “authority” defect can matter in three ways:

A. It can weaken proof and due process

If the company cannot explain who decided, who reviewed evidence, and who approved, tribunals may find:

procedural due process defects, or
an inference of arbitrariness or pretext.

B. It can create an “internal governance” issue—but not erase employer accountability

Even if a supervisor exceeded internal authority, the company remains the employer. The company may discipline the supervisor internally, but the employee’s labor rights are not defeated by internal delegation lapses.

C. Ratification cures many authority disputes (as to the employer’s act)

If the company:

implements the termination,
issues final pay computations as terminated,
defends the dismissal in NLRC proceedings, it effectively treats the termination as a corporate act—making “lack of authority” arguments less persuasive as a defense.

6) Employer Liability for Acts of Managers, Supervisors, and HR

A. General rule: employer is liable for management acts in employment matters

Because labor law views managers/supervisors as acting in the interest of the employer, the employer bears responsibility for:

illegal dismissals
constructive dismissal
unfair labor practice-related employment acts (where applicable)
procedural due process violations in discipline

B. Personal liability of corporate officers: not automatic

A separate, important issue is whether corporate officers (HR Head, President, directors) can be held personally liable.

General approach in labor cases: The corporation is primarily liable. Corporate officers are typically held personally liable only upon a showing of circumstances such as:

bad faith or malice
acting beyond authority in a manner that is oppressive or unlawful
using the corporate form to evade obligations
direct participation in illegal acts with wrongful intent (fact-specific)

Absent such circumstances, officers usually avoid personal money liability, even if they signed termination documents.

7) Special Situations Where “Who Has Authority” Becomes Central

A. Termination of corporate officers vs. ordinary employees

A corporate officer (in the strict sense) is typically one whose position is provided in the by-laws and who is elected/appointed in accordance with corporate law. Termination/removal may involve:

board action,
stockholder action (in some contexts),
corporate law procedures distinct from labor discipline.

Disputes can arise over forum and standards. Some controversies are treated as “intra-corporate” depending on the role and issue, while others remain labor disputes. The classification is highly fact-sensitive.

B. Contractor/subcontractor workers: principal vs. contractor authority

If a worker is employed by a legitimate independent contractor, the contractor (not the principal) generally has the authority to discipline/dismiss.

Red flags if the principal directly dismisses contractor employees:

it may indicate labor-only contracting or employer-employee relationship with the principal,
it may expose the principal to being deemed the employer and liable for illegal dismissal.

C. Dismissal of probationary employees

Authority may be delegated, but two rules dominate:

probationary termination must be based on known, reasonable standards communicated at engagement; and
due process principles (at least notice and basis) are still relevant, especially if the alleged reason is misconduct rather than failure to meet standards.

D. Union-related terminations / CBA procedures

Even with delegated authority, the employer must respect:

CBA grievance machinery,
due process steps agreed upon,
and avoid terminations that appear retaliatory or discriminatory.

E. Constructive dismissal and “authority”

Constructive dismissal can occur through acts of those with supervisory power—e.g., demotion, unbearable working conditions, forced leave—regardless of whether the actor was “formally authorized,” because what matters is the employer’s control structure and responsibility over workplace conditions.

8) What Must Be Signed, and By Whom? (Practical Compliance)

Philippine law does not require a single universal “only the CEO may sign” rule. What matters is that the notices and decision are issued by the employer through a representative whose role is credible and consistent with company practice.

A. For just cause terminations (recommended signatories)

Charge notice: HR or authorized manager
Notice of decision: a higher approving authority (HR Head/Operations Head/President) consistent with policy
Documentation: committee report, minutes, evidence list

B. For authorized cause terminations

DOLE notice: company authorized representative (often HR Head)
Employee notice: same authorized representative
Separation pay computation: finance/HR, approved by authorized officer

C. For consistency and defensibility

A common weakness in illegal dismissal cases is paper inconsistency:

the notice is signed by a low-level supervisor,
the decision is unsigned or vaguely “management,”
no proof of approval chain,
missing evidence summary.

These gaps are often treated as due process defects or credibility issues.

9) Remedies and Exposure When Dismissal Is Illegal (Employer Liability)

If illegal dismissal is found, typical consequences include:

reinstatement (or separation pay in lieu when reinstatement is no longer viable, depending on circumstances),
full backwages from dismissal to reinstatement/finality (as jurisprudence applies),
correction of benefits, differentials, and sometimes damages/attorney’s fees depending on findings.

If the ground is valid but procedure defective:

nominal damages may be awarded (amount depends on case circumstances, with Agabon/Jaka frameworks often referenced).

10) A Practical “Authority + Due Process” Checklist

To reduce disputes about authority and strengthen defensibility:

Written delegation framework

Delegation of authority matrix or policy
Board/owner authorization for key signatories (especially in corporations)

Clear disciplinary process

Who investigates
Who recommends
Who decides
Timelines and documentation requirements

Twin notices with proper content

Specific acts/omissions charged
Dates/places
Company rules violated
Evidence basis
Clear instruction on how to respond and request a hearing/conference

Document the opportunity to be heard

Written explanation received (or refusal noted)
Administrative conference minutes (if held)
Evaluation memo

Decision memo/notice ties facts to the rule

Findings
Basis for penalty proportionality
Why termination is warranted (and why lesser penalties are insufficient, when relevant)

Consistency

Same signatory roles used across cases
Same templates and compliance standards

Key Takeaways

The employer under Philippine labor law includes persons acting in the employer’s interest, so dismissal authority is commonly exercised through HR and management representatives.
“Lack of authority” is rarely a complete defense; companies remain responsible for workplace management acts.
The legally decisive questions remain: valid ground + due process + proof.
Authority disputes become more critical in corporate officer removals, contracting arrangements, and situations where authority gaps undermine the credibility of the process.
Strong internal delegation documents and consistent disciplinary procedures reduce illegal dismissal risk and improve litigation defensibility.

This article is for general informational purposes in the Philippine setting and is not legal advice. For application to a specific termination scenario (especially involving corporate officers, contractors, or union officers), the facts and documents determine outcomes.