TERMINATION OF EMPLOYMENT

(Part 5. Procedure to Terminate Employment)

DUE PROCESS

Subject to the constitutional right of workers to security of tenure

and their right to be protected against dismissal except for a just
and authorized cause without prejudice to the requirement of
notice under Article 283 of this Code, the employer shall furnish
the worker whose employment is sought to be terminated a
written notice containing a statement of the causes for
termination and shall afford the latter ample opportunity to be
heard and to defend himself with the assistance of his
representative if he so desires in accordance with company rules
and regulations promulgated pursuant to guidelines set by the
Department of Labor and Employment. Any decision taken by the
employer shall be without prejudice to the right of the worker to
contest the validity or legality of his dismissal by filing a
complaint with the regional branch of the National Labor Relations
Commission. The burden of proving that the termination was for a
valid or authorized cause shall rest on the employer.
Requisites for Valid Dismissal
(1)

Substantive due process:

The dismissal must be based on just or authorized causes.
o

PROCEDURE TO BE OBSERVED IN TERMINATION CASES

JUST CAUSE :

1. Notice specifying the grounds for which dismissal is sought.

2. Hearing or opportunity to be heard.
3. Notice of the decision to dismiss.
o

AUTHORIZED CAUSE

Notice to:
(1) Employee, and
(2) DOLE at least 1 month prior to the effectivity of the separation .

Two-Notice Requirement For the Just and the Authorized Causes

The employer has the burden of proving that a dismissed worker has been
served two notices:
(1) The first to inform the employee of the particular acts or omissions for
which the employer seeks his dismissal, and
(2) The second to inform the employee of his employer's decision to
terminate him.
When notice is not needed ?
- If the employee consented to his retrenchment or voluntarily
applied for retrenchment with the employer due to the
installation of labor-saving devices, redundancy, closure or
cessation of operation or to prevent financial losses to the
business of the employer, the required previous notice to the
DOLE is not necessary as the employee thereby acknowledge the
existence of a valid cause for termination of his employment.
(International Hardware vs. NLRC)

Right to Counsel
The right to counsel, a very basic requirement of substantive due process,
has to be observed. Indeed, the rights to counsel and to due process of law
are two of the fundamental rights guaranteed by the 1987 Constitution to
any person under investigation, be the proceeding administrative, civil, or
criminal. [Salaw v. NLRC, G.R. No. 90786, September 27, 1991]
(2)

Procedural due process:

The employee must be afforded an opportunity to be heard

and defend himself. [Fujitsu Computer Products Corporation of the Phil. v.
Court of Appeals, G.R. No. 158232, March 31, 2005]
MEANING OF OPPORTUNITY TO BE HEARD

"Ample opportunity to be heard" means any meaningful

opportunity (verbal or written) given to the employee to
answer the charges against him and submit evidence in
support of his defense, whether in a hearing, conference or
some other fair, just and reasonable way.
What kind of evidence to support his defense?

o Substantial evidence is required and it is such relevant

evidence as a reasonable mind might accept as adequate to
support a conclusion .
o Proof Beyond Reasonable Doubt is Not Required.

In employee dismissal cases, the essence of due process is

simply an opportunity to be heard; it is the denial of this
opportunity that constitutes violation of due process of law .
[Technol Eight Philippines Corporation v. NLRC, G.R. No. 187605,
April 13, 2010]

WHEN HEARING IS NOT REQUIRED?

- No hearing is needed if the employee has admitted his guilt.
-

But there must be admission of guilt.

If the employee merely narrated and explained what he did, without
admitting his guilt, then conducting a hearing is required;
otherwise, there is a failure of due process.

PREVENTIVE SUSPENSION
-is a disciplinary measure for the protection of the company's property
pending investigation of any alleged malfeasance or misfeasance
committed by the employee.

The employer may place the worker concerned under

preventive suspension if his continued employment poses a
serious and imminent threat to the life or property of the
employer or of his co-workers.
However, when it is determined that there is no sufficient
basis to justify an employee's preventive suspension, the
latter is entitled to the payment of salaries
during the time of preventive suspension. [Gatbonton v. NLRC,
G.R. No. 146779, January 23, 2006]

Preventive suspension is justified where the employee's

continued employment poses a serious and imminent

threat to the life or property of the employer or of the

employee's co-workers. Without this kind of threat,
preventive suspension is not proper. [Artificio v. NLRC, G.R. No.
172988, July 26, 2010]

The code implementing rules provide that no

preventive suspension shall last longer than thirty
(30) days. After that period the employer shall
reinstate the worker in his former position of
suspension , provided that during the period of
suspension, he pays the wages and other benefits
due to the worker . Otherwise beyond this maximum
period amounts to CONSTRUCTIVE DISMISSAL.
CONSTRUCTIVE DISMISSAL
is cessation of work because continued employment is
rendered impossible, unreasonable or unlikely; when there
is a demotion in rank or diminution in pay or both; or when
a clear discrimination, insensibility, or disdain by an
employer becomes unbearable to the employee.
The test of constructive dismissal is whether a reasonable
person in the employee's position would have felt
compelled to give up his position under the circumstances.
The law recognizes and resolves this situation in favor of
employees in order to protect their rights and interests
from the coercive acts of the employer. In fact, the
employee who is constructively dismissed may be allowed
to keep on coming to work. [McMer Corp., Inc. v. NLRC, G.R. No.
193421, June 4, 2014]

Situation
Validity of Dismissal
Just or Authorized Cause
+ Due Process
Valid
authorized cause
No Just or Authorized Cause
+ Due Process
separation pay.

Liability of ER
No liability.
Separation pay only in

Invalid

Reinstatement or
If reinstatement not

possible, + full backwages

No Just or Authorized Cause
+ No Due Process
pay.

Invalid

Reinstatement or separation
If reinstatement not possible,

+ full backwages
Just or Authorized Cause
+ No Due Process
infirmity.

Valid

Liable for damages due to procedural

Separation pay if for

authorized cause
Non-Compliance with Due Process Requirements

Before the Agabon case, the doctrine in Serrano v. NLRC was

followed. It states that termination due to authorized cause without
giving the notice required under the Labor Code is not a violation of
due process. It is valid although declared irregular/ineffectual. He shall
however be entitled to SEPARATION PAY AND BACKWAGES
AGABON V. NLRC 17 November 2004 Modifies SERRANO Case.

Dismissal for a an authorized or just cause, without procedural due

process is not an illegal dismissal which warrants backwages;
employee entitled only to nominal damages.
The Court interpreted Art. 279 to the effect that termination is illegal
only if it is not for any of the justified or authorizes causes provided by
law. Payment of backwages and other benefits, including
reinstatement, is justified only if the employee was unjustly dismissed.
The Court decided to follow WENPHIL CORP. v. NLRC that where the
dismissal is for a just cause, the lack of statutory due process should
not nullify the dismissal or render it illegal. However, the employer
should indemnify the employee for the violation of his rights. The
indemnity should be stiffer than that provided in WENPHIL to
discourage the practice of dismiss now pay later.
The indemnity should be in the form of nominal damages, which is
adjudicated in order that a right of plaintiff, which has been violated by
the defendant, may be vindicated.

Doctrine in
effect

Validit
y of
Dismis
sal

Liability of ER

Feb. 1989
1999
Wenphil

Valid

(no reinstatement and

backwages)

But employer to
indemnify employee for
damges.

Jan. 2000
Oct. 2004
Serrano

Valid

Employee is entitled to
the payment of full
backwages.
It is computed from the
time of dismissal until
the court finds the
dismissal to be for just
cause.

Nov. 2004
present
Agabon

Valid

(no reinstatement and

backwages)
But the employer indemnify
employee in the form of
nominal damages.

Indemnity is stiffer than

WENPHIL CORP V. NLRC to
discourage the practice of
dismiss now pay
later.