Article 282 of the Labor Code states: ART. Art. -An employee who is dismissed without just cause is entitled to any or all of the following: -Reinstatement means restoration of the employee to the position from which they were unjustly removed. The decision to close business is a management prerogative exclusive to the employer, the exercise of which no court or tribunal can meddle with, except only when the employer fails to prove compliance with the requirements of Art. -An employee may question their dismissal based on substantive or procedural grounds: Suppose the employer denies dismissing the employee, who has the duty to prove that the dismissal is without valid cause? the substantive aspect pertains to the absence of a just or authorized cause supporting the dismissal; and. … The Bureau, Its History, Mandate and Mission, Appeals and Review Unit – Mediation-Arbitration Unit, Union Registration and Workers’ Empowerment Division, Program Management and Technical Support Services Division, Bureau of Workers with Special Concerns (BWSC), National Reintegration Center for OFWs (NRCO), National Conciliation and Mediation Board (NCMB), National Labor Relations Commission (NLRC), National Wages and Productivity Commission (NWPC), Occupational Safety and Health Center (OSHC), Overseas Workers Welfare Administration (OWWA), Philippine Overseas Employment Administration (POEA), Technical Education and Skills Development Authority (TESDA). 21. A copy of the notice shall also be furnished the Regional Office of the Department of Labor and Employment (DOLE) where the employer is located. 4. Involuntary servitude is prohibited. - (a) An employee may terminate without just cause the employee-employer relationship by serving a written notice on the employer at least one (1) month in advance. These grounds are called the Authorized Causes of Termination. temporary employee), efficiency and seniority (Asian Alcohol Corp. vs. NLRC, 305 SCRA 416); A one-month prior notice is given to the employee and DOLE Regional Office as prescribed by law. The substantive aspect pertains to the absence of a just or authorized cause supporting the dismissal. 187200); c) full backwages, inclusive of allowances and other benefits or their monetary equivalent from the time compensation was withheld up to the time of reinstatement; d) damages if the dismissal was done in bad faith (Aurora Land Project Corp. vs NLRC, 266 SCRA 48). THE LABOR CODE OF THE PHILIPPINES. In cases of illegal dismissal, who has the duty of proving that the dismissal is valid? The failure to notify may give rise to liability for damages. Proof of actual or imminent financial losses that are substantive in character must be proven by the employer to justify retrenchment (Lopez Sugar Central vs. NLRC, 189 SCRA 179). Reinstatement without loss of seniority rights means that the employee, upon reinstatement, should be treated in matter involving seniority and continuity of employment as though he or she had not been dismissed from work. What is the right to security of tenure? Quick Links. from my last employer because _____ 4. Are there other conditions before an employee may be dismissed on the ground of redundancy? 5 C. Lay-Offs v. Terminations It is important to distinguish between the two major types of terminations: 1) Lay-offs; and 2) Terminations. Fair and reasonable criteria in selecting employees to be dismissed, such as but not limited to less preferred status (e.g. A just cause can be an employee’s unethical behavior or negligence. Art. Before terminating the services of an employee, what procedure should the employer observe? – An employer may terminate an employment for any of the following causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; (b) Gross and habitual neglect by the… Submission of a written notice of dismissal to the employee specifying the grounds for dismissal at least 30 days before the date of termination; and. The employee has the right to claim backwages to cover the period between dismissal from work and business closure. In a termination for an authorized cause, due process means a written notice of dismissal to the employee specifying the grounds at least 30 days before the date of termination. by Webmaster under Elvin Villanueva, Labor Law Books Book Title: Guide to Valid Dismissal of Employees. The employee should be treated in a matter involving seniority and continuity of employment as though they had not been dismissed from work. If due process is not accorded to the employee before termination of the employment or the termination itself is declared illegal, the employee is entitled to receive reinstatement and full backwages (Art. 9, Series of 1997, an employee should be reinstated to their former position or in a substantially equivalent position after the prescribed 30-day period. However, if the strike was staged for a purpose not recognized by law, an employee who knowingly participates in the commission of illegal acts during the strike may be declared to have lost their employment status. 442, AS AMENDED. It is resorted to during periods of business recession, industrial depression, or seasonal fluctuations or during lulls occasioned by lack of orders, shortage of materials, conversion of the plant for a new production program or the introduction of new methods or more … A written notice, commonly referred to as a notice to explain specifying the grounds for termination and giving the employee ample opportunity to explain their side; A hearing or conference to allow the employee to respond to the charge/s, present evidence, or rebut the evidence presented against them; and. Full backwages refer to all compensations, including allowances and other benefits with monetary equivalent that should have been earned by the employee but was not collected by him or her because of unjust dismissal. When a Labor Arbiter rules for an illegal dismissal, reinstatement is immediately executory even when pending approval by the employer. In a termination for an authorized cause, due process means a written notice of dismissal to the employee specifying the grounds at least 30 days before the date of termination. 9. 282. Termination of Employment in the Philippines Terminating an employee in the Philippines is taken VERY seriously and can be a complex process, especially after the employee is regularized. Under LA 06-20, “Final Pay” was defined as the sum or totality of all the wages or monetary benefits due the employee regardless of the cause of the termination of employment, including but not limited to the following: a) Unpaid earned salary of the employee; b) Cash conversion of unused Service Incentive Leave (SIL) pursuant to Article 95 of the Labor Code; c) Cash conversions of remaining unused vacation, sick or other l… The suspension, commonly referred to as “preventive suspension”, shall not last for more than thirty (30) days. Unlike the United States of America, which has an “at-will employment” doctrine, employers in the Philippines can only terminate their relationship with an employee if a “just” or “authorized” cause, as defined under the law, has been established, after undergoing due process. An employee who is dismissed without just cause is entitled to any or all of the following: a) reinstatement without loss of seniority rights; b) in lieu of reinstatement, an employee may be given separation pay of one month pay for every year of service (Golden Ace Builders, et. According to Article 282 of the Labor Code, an employer can terminate an employee for just causes, which could be any of the following: Employers can also terminate an employee based on authorized causes like business and health reasons. Labor Laws in the Philippines allow employers to terminate employees. Reinstatement pending appeal may be actual or by payroll, at the option of the employer. Thus, terminating an employee in the country is taken VERY seriously and can be a complex process, especially since, when in doubt, the Labor Code of the Philippines is construed in favor of employees. You may visit us at the 16th Flr., Suite 1607 AIC Burgundy Empire Tower, ADB Ave., Ortigas Center, 1605 Pasig City, Metro Manila, Philippines. -The employee is entitled to payment of indemnity or nominal damages in a sum of not more than 30,000 pesos in cases of termination for just causes and not more than 50,000 pesos for authorized causes. 283, Labor Code) or disease contracted by the employee that could be prejudicial to their health as well as the health of their co-workers (Art. 28. An employee is entitled to separation pay equivalent to one-month pay or at least one-month pay for every year of service, whichever is higher. The period of service is deemed to have lasted up to the time of closure of the establishment. 13. 5. The procedural aspect refers to the failure of the employer to give the employee the opportunity to explain his or her side. Quitclaims entered into by union officers and some members do not bind those who did not sign it (Liana’s Supermarket vs. NLRC, 257 SCRA 186). The termination, however, must not be based on mere whim or caprice of the employer against his employee. Substantive due process means that the termination must be based on just and/or authorized causes for dismissal. 18. When an establishment announces business closure, can an employee entitled to reinstatement claim benefits? 285 of the Labor Code which recognizes two kinds of termination an employee can initiate – without just cause and with just cause. Yes. Security of tenure is a constitutionally guaranteed right in the Philippines. This sample employee termination letter can help you when faced with the difficult task of letting someone go. “Retrenchment is the termination of employment initiated by the employer through no fault of and without prejudice to the employees. 285 indicates the just causes for resignation as follows: It should be noted that employees who voluntarily resign from work are not entitled to separation pay. May an employee be placed on floating status? Is proof of financial losses necessary to justify retrenchment? The employer may terminate employment on ground of disease only upon the issuance of a certification by a competent public health authority that the disease is of such nature or at such stage that it cannot be cured within a period of six months even with proper medical treatment. This type of termination is strengthened by the provisions of Art. In establishments with a collective bargaining agreement (CBA), the dismissal may be questioned through the grievance machinery established under the CBA. A notice of decision indicating the justification for termination as well as the corresponding sanctions (if any) after due consideration of all evidence. a) Good faith in abolishing redundant position; and. Can an employee be terminated if they participate in a union strike? Regular employment is the default status of an employee. 284, Labor Code). There are two types of employment termination in the Philippines: termination by employer and voluntary resignation or termination by employee. 4 Effective Ways To Avoid Bad Hires During the COVID-19 Pandemic, The Importance of Salary Benchmarking for Recruitment During COVID-19, 5 Best Strategies to Find Top Candidates During the COVID-19 Pandemic. installation of labor-saving devices or redundancy- equivalent of at least one (1) month pay or one (1) month for every year of service, whichever is higher, retrenchment, closure or cessation of business- equivalent of at least one (1) month pay or one-half (1/2) month pay for every year of service, whichever is higher, incurable disease- equivalent of at least one (1) month pay or one-half (1/2) month pay for every year of service, whichever is greater, demotion in rank or a diminution in pay; or. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employment law guide to termination of employment in the Philippines, including notice periods, dismissal for a just cause, dismissal for an authorised cause, prohibited grounds for dismissal, constructive dismissal, retirement, resignation, termination payments and contesting dismissals. Dismissals based on just causes involve the two-notice rule: Dismissals based on authorized causes involve the following: -The right to security of tenure is a Constitutional guarantee that means an employee cannot be dismissed from the service for causes other than those provided by the law and only after due process is accorded to them. The right to security of tenure means that a regular employee shall remain employed unless his or her services are terminated for just or authorized cause and after observance of procedural due process. It provides structure to your own letter as well as important elements that help you avoid misunderstandings and disputes. It must stand on reasonable ground for the termination to be considered legal. Author: Atty Elvin Villanueva. When a Labor Arbiter rules for an illegal dismissal, reinstatement is immediately executory even pending appeal by the employer (Article 223 of the Labor Code, as amended). Employment contracts are imbued with public interest. POST EMPLOYMENT. FURTHER AFFIANT SAYETH NAUGHT. According to Section 9 of Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code, as amended by Department Order No. No. May an employer dismiss an employee? Title I TERMINATION OF EMPLOYMENT… serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; gross and habitual neglect by the employee of his duties; fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representatives; commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and, retrenchment (reduction of costs) to prevent losses; or. In establishments with a collective bargaining agreement (CBA), the dismissal may be questioned through the grievance machinery established under the CBA. Address: 8-C Marajo Tower, 312 26th Street West corner 4th Avenue, Bonifacio Global City, Taguig, Philippines 1634, Are You Hiring the Right Candidates? Separation pay may also be granted to an illegally dismissed employee in lieu of reinstatement. Regular or Permanent Employment is when an employee performs activities that are usually necessary or desirable in the usual business or trade of the employer. Monday - Friday: 8:00 am - 5:00 pm (except holidays) DOLE Offices. Employers can dismiss an employee based on just and authorized causes. Suppose the employer denies dismissing the employee, who has the duty to prove that the dismissal is without valid cause? In cases of illegal dismissal, who has the duty of proving that the dismissal is valid? Fraud or willful breach by the employee of the trust reposed in him by his employer … Nicolas & De Vega Law Offices is a full service law firm in the Philippines. In cases of termination due to just or authorized causes, the employer must comply with procedural due process. -Yes, but only on grounds where the employee’s continued presence inside the company premises poses a serious and imminent threat to the life or property of the employer and/or the other employees in the company. 298]. -The amount given to the employee depends on the specific authorized cause for their termination, which could be any of the following: -Constructive dismissal is an involuntary resignation resorted to when continued employment becomes impossible, unreasonable, or unlikely, due to any of the following: Constructive dismissal is illegal and usually occurs when an employee resigns as a result of unfavorable work conditions instigated by the employer. Commission of a crime or offense as a just cause for terminating employees is limited to those which are committed against the employer or any member of his immediate family. General Luna St., Intramuros, Manila, 1002, Philippines. An employer may terminate an employment for any of the following causes: 1. What is the sanction if the employer failed to observe procedural due process in cases of legal and authorized termination? Yes. In cases of retrenchment, closure or cessation of business or incurable disease, the employee is entitled to receive the equivalent of one month pay or one-half month pay for every year of service, whichever is higher. An employee is not entitled to separation pay when he or she resigns voluntarily, unless it is a company practice or provided in the CBA (Hanford Philippines Inc. vs. Shirley Joseph, 454 SCRA 786, March 31, 2005). Where termination of employment will follow a business sale, employees would have to be notified 30 days ahead of their termination. Industrial Security Agency Corp. vs. Virgilio Dapiton and NLRC, 320 SCRA 124). Payroll reinstatement is a means of paying wages and other benefits to the employee without allowing or requiring them to physically report to work. payment of damages and/or attorney’s fees if the dismissal was done in bad faith. A… business closure, cessation of operation, retrenchment (reduction of costs) to prevent losses, etc. There are two types of employment termination in the Philippines: termination by employer and voluntary resignation or termination by employee. In what forms may reinstatement be affected? Elvin Villanueva. If they do not submit a notification, you can charge them for any concurrent damages. -Under the provisions of Art. By using our website, you consent to all cookies in accordance with our Privacy Policy. 8. May an employee question the legality of his or her dismissal? The DOLE has to be notified of the termination 30 days ahead of it as well. A fraction of at least six months shall be considered as one whole year. Termination of business is one of the prerogatives which business owner may exercise in the pursuit of his business. temporary employee), efficiency and seniority (Asian Alcohol Corp. vs. NLRC, 305 SCRA 416); c) A one-month prior notice is given to the employee and DOLE Regional Office as prescribed by law. Beyond this period, floating status becomes constructive dismissal which entitles the employee to separation pay (Phil. Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; 2. 19. 11. Immediate family includes the spouse, ascendants, descendants, legitimate, natural or adopted siblings of the employer. Constructive dismissal refers to an involuntary resignation resorted to when continued employment becomes impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to an employee or an unwarranted transfer or demotion of a employee, or other unjustified action prejudicial to the employee. What are the rights afforded to an unjustly dismissed employee? 10. al vs. Jose Talde, May 5, 2010, GR No. Procedure for termination due to authorized causes: (1) Serve a written notice upon the worker at least one month or 30 days before the intended date of the termination. 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