Termination of Employment due to Just Causes

Termination of Employment due to Just Causes is an employer-initiated severance of employment relationship directly attributable to the fault or negligence of the employee.

Defining Termination of Employment due to Just Causes

What is Termination of Employment due to Just Causes?

The Termination of Employment due to Just Causes is stated in Article 297 of the renumbered Labor Code of the Philippines:

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 employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative;
(d) 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
(e) Other causes analogous to the foregoing.

Article 297 [282], Title I, Book 6 from the Labor Code of the Philippines regarding Termination by Employer

Process in Terminating the Employment due to Just Causes

How to process Termination of Employment due to Just Causes?

Department of Labor and Employment (DOLE) has issued Department Order No. 147, series of 2015 that clarifies and outlines the process of the termination of employment due to Just Causes. The process may be encompassed in phrase of "Twin Notice and Hearing" process. It is a "Twin" notice as there are 2 notices that are served and a hearing wherein the employee is given to an opportunity to be heard.

Step #1: First Written Notice (Notice of Grounds for Termination of Employment)

What is the content of the First Written Notice? The first step in the process of the Termination of Employment due to Just Causes is drafting the first written notice.

The following should be indicated in the First Written Notice:

  • The specific causes or grounds for termination as provided for under Article 297 of the Labor Code, as amended, and company policies, if any;
  • Detailed narration of the facts and circumstances that will serve as basis for the charge against the employee. A general description of the charge will not suffice;
  • A directive that the employee is given opportunity to submit a written explanation with a reasonable period.

The "Reasonable period" is explicitly stated in the Implementing Rules and Regulations of the Labor Code of the Philippines as at least five (5) calendar days from the receipt of the First Written Notice. This period is given for the employee an opportunity to do the following:

  • To study the accusation;
  • consult or be represented by a lawyer or union;
  • Gather data and evidence; and
  • Decide on the defenses against the complaint.

Step #2: Hearing

After the expiration of the Reasonable period afforded to the employee, the "Hearing" step of the Termination of Employment may be in tackled in verbal hearing or written letter as this step is the official statement of the employee to defend themselves, and may be assisted by their representative, regarding the written notice given to them.

Employers are required to give an employee "ample opportunity to be heard". An "Ample opportunity to be heard" is defined in the Implementing Rules and Regulations of the Labor Code of the Philippines:

“Ample opportunity to be heard” means any meaningful opportunity (verbal or written) given to the employee to answer the charges against him/her and submit evidence in support of his/her defense, whether in a hearing, conference or some other fair, just and reasonable way. A formal hearing or conference becomes mandatory only when requested by the employee in writing or substantial evidentiary disputes exist or a company rule or practice requires it, or when similar circumstances justify it.

Step #3: Second Written Notice (Notice of Termination of Employment)

What is the content of the Second Written Notice? Once the Termination of Employment is assessed by employers or Human Resource Officers to be justified and has valid grounds, the employer shall serve a written notice of termination which indicates that following:

  • (1) all circumstances involving the charge against the employee have been considered; and
  • (2) the grounds have been established to justify the severance of their employment.

How should the written notices be served to an employee?

The notices shall be served personally to the employee. Should an employee not report for work and unable to report, the notices shall be sent to the employee’s last known address.

Can a former employee contest the Termination of Employment?

Yes, it is the right of an employee to contest the Termination of Employment.

Can a verbal Notice of Termination be sufficient?

No, it is explicitly indicated in the Implementing Rules and Regulation of the Labor Code that it should be written. Likewise, the written notices and other relevant documents would be used and submitted should the Termination of Employment be contested with the National Labor Relations Commission (NLRC).

Can any of the steps on the Termination of Employment be skipped or not followed ?

No, the process on the Termination of Employment due to Just Causes has clearly been laid out by the Implementing Rules and Regulations of the Labor Code. Skipping or not following any of the steps may be meted with illegal dismissal by the courts.

Grounds for the Termination of the Employment due to Just Causes

What are the grounds for the Termination of Employment due to Just Causes? The following are the 7 standards or grounds that an employer may terminate the employment of an employee:

Serious Misconduct

  • There must be misconduct;
  • The misconduct must be of such grave and aggravated character;
  • It must relate to the performance of the employee’s duties; and
  • There must be showing that the employee becomes unfit to continue working for the employer.

Willful Disobedience or Insubordination

  • There must be disobedience or insubordination;
  • The disobedience or insubordination must be willful or intentional characterized by a wrongful and perverse attitude;
  • The order violated must be reasonable, lawful, and made known to the employee; and
  • The order must pertain to the duties which he has been engaged to discharge.

Gross and Habitual Neglect of Duties

  • There must be neglect of duty; and
  • The negligence must be both gross and habitual in character.

Fraud or Willful Breach of Trust

  • There must be an act, omission or concealment;
  • The act, omission or concealment involves a breach of legal duty, trust, or confidence justly reposed;
  • It must be committed against the employer or his/her representative; and
  • It must be in connection with the employees’ work.

Loss of Confidence

  • There must be an act, omission or concealment;
  • The act, omission or concealment justifies the loss of trust and confidence of the employer to the employee;
  • The employee concerned must be holding a position of trust and confidence;
  • The loss of trust and confidence should not be simulated;
  • It should not be used as a subterfuge for causes which are improper, illegal, or unjustified; and
  • It must be genuine and not a mere afterthought to justify an earlier action taken in bad faith.

Commission of a Crime of Offense

  • There must be an act or omission punishable/prohibited by law; and
  • The act or omission was committed by the employee against the person of employer, any immediate member of his/her family, or his/her duly authorized representative.

Analogous Causes

  • There must be act or omission similar to those specified just causes; and
  • The act or omission must be voluntary and/or willful on the part of the employees.
  • No act or omission shall be considered as analogous cause unless expressly specified in the company rules and regulations or policies.

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