Most illegal dismissal cases are lost on procedure, not on the reason. Here is what the Labor Code expects.
There must be a valid cause
The Labor Code allows dismissal for just causes, which are faults of the employee such as serious misconduct, wilful disobedience, gross neglect, fraud or a crime against the employer. It also allows authorised causes, which are business reasons such as redundancy, retrenchment to prevent losses, closure or disease.
For just causes: the twin-notice rule
The employer must first give a written notice stating the specific acts complained of and giving the employee at least five calendar days to explain. The employee must have a real chance to be heard. If the employer then decides to dismiss, a second written notice states the decision and the reasons.
For authorised causes: notice and separation pay
The employer must give written notice to the employee and to the DOLE at least thirty days before the termination takes effect, and pay separation pay. The amount depends on the cause; for redundancy it is at least one month’s pay for every year of service.
Keep the paper trail
In a case before the NLRC, the employer must prove the cause and the process. Keep copies of the notices, the employee’s reply, the minutes of any hearing and proof of delivery.
Preventive suspension
While investigating a serious charge, an employer may place the employee under preventive suspension for up to thirty days if the employee’s presence poses a real threat to people or property. It is not a penalty, and if it runs longer the employee must be paid.
What happens if the process is wrong
If the cause is valid but the procedure was not followed, the dismissal stands but the employer pays nominal damages. If the cause itself is not proven, the dismissal is illegal: the employee is entitled to reinstatement and full back wages, or separation pay where reinstatement is no longer possible.
Final pay and the certificate of employment
Whatever the reason for leaving, the employee is entitled to final pay, usually within thirty days, and to a certificate of employment within three days of asking for it. Withholding either is a common source of complaints.
Probationary employees
Probationary employees have security of tenure too. They may be let go during probation only for a just or authorised cause, or for failing to meet reasonable standards that were explained to them in writing when they were hired. Without those written standards, the employee is treated as regular from the first day.
This guide is general information, not legal advice. Talk to us before you issue the first notice.