An employee will be regularized after completing their probationary period of six (6) months. After completing this period, they will be entitled to receive additional benefits and compensations. However, depending on specific instances, regular employees may be terminated by their employer.
As an employer or employee, it is important to have a comprehensive understanding of your rights and the labor laws that govern the workplace. For employers, it ensures fair treatment of employees and helps avoid potential legal disputes. For employees, it empowers them to assert their rights and seek redress if they are subjected to unfair labor practices.
What are the Reasons for Termination of Regularized Employees?
An employer may terminate an employee either through just cases, authorized causes, and other instances.
Termination Due to Just Causes
Under Article 297 of the Labor Code, an employer can dismiss an employee for just causes, including:
- 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
- Other similar causes.
Termination Due to Authorized Causes
According to Article 298 of the same Code, employers can terminate an employee for authorized causes, such as:
- Installation of labor-saving devices;
- Redundancy;
- Retrenchment or reduction of costs to prevent losses; or
- Cessation of business operation.
Additionally, pursuant to Article 299 of Labor Code, employers can dismiss an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as the health of his colleagues.
Termination Due to Other Instances
An employer can terminate an employee due to other instances, such as:
- If the employee is a project-based and when the project ends;
- If the employee is hired for seasonal labor; and
- If the employee is a casual laborer.
What are the Exemptions to Terminate a Regularized Employee in the Philippines?
The following cannot be a cause for termination:
- An employee who took maternity or paternity leave;
- An employee who is practicing their labor rights;
- Based on an employee’s race, ethnicity, gender, religion, age, and any other characteristics, reflecting to discrimination;
- Based on an employee’s political beliefs or affiliations, which violates their right to political expression; and
- Based on the employee’s physical appearance.
How to Terminate an Employee?
The termination process for just causes and authorized causes are different.
Termination Process for Just Causes
The termination process for just causes involves a two-notice rule, which:
- Notice to Explain or Show Cause Letter is considered to be the first notice to inform the employee of the specific act or acts constituting the grounds for termination. This must give the employee the opportunity to explain their side and ensure that they are aware of the charges against them.
- Notice of Termination or Termination Letter is the second notice, stating the reason for termination clearly and definitively. This serves as a formal letter of their dismissal.
Termination Process for Authorized Causes
The termination process for authorized causes requires a 30-day notice, involving the following:
- Written Notice of Dismissal should be submitted by the employee at least thirty (30) days before the effective date of termination.
- Copy of the Notice should be provided to the Regional Office of the Department of Labor and Employment (DOLE) where the employer is located.
What Will Happen If There’s No Procedural Due Process?
If there is no procedural due process, such as there is no just cause procedure or authorized cause procedure, in the termination or separation from employment of an employee, the employer may be held liable.
What are the Rights of Employees After Termination?
After termination, the employees have the right to receive their separation pay or severance pay. It is a compensation an employee receives when their employment ends due to reasons specified in the Philippine Labor Code. It also serves as a financial buffer to help employees while looking for a new job. However, separation pay is not provided if the company closes due to bankruptcy.
When to Receive Separation Pay?
Labor Advisory No. 6 states that employers should release separation pay within thirty (30) days from the date of separation or termination of employment, unless there is more favorable company policy and if the employee agreed upon to. If an employer fails to release the separation pay, the employee may file a complaint to the Department of Labor and Employment (DOLE) or seek legal action to practice their employment rights.
What will Happen if Separation Pay is Delayed?
There is no specific law that addresses an exact timeframe for the release of separation, but employers are expected to release it within thirty (30) days from the date of the employee’s last working day. If an employer fails to release the separation pay, the employee may file a complaint to the Department of Labor and Employment (DOLE) or seek legal action to practice their employment rights.
How to Compute Separation Pay?
Separation pay is calculated based on the reason for termination and the employee’s length of service. The computation should be based on the employee’s latest salary rate.
If the employee got terminated because of the installation of labor-saving devices or redundancy, he/she must receive the equivalent of one (1) month pay for every year of service (a fraction of 6 months is considered one year), with the formula:
One month salary x Year of service = Total amount of Separation Pay
While if the employee got terminated because of closure of the business or health reasons, he/she must receive one (1) month pay or half a month pay for every year of service (a fraction of 6 months is considered one year), whichever is higher and is computed as:
One month salary ÷ 2 x Years of service = Total amount of Separation Pay
What Should An Employee Do If They Got Unjustly Terminated by Their Employer?
A regular employee is protected by security of tenure against unjust termination by their employee, pursuant to Article 279 of the Labor Code of the Philippines. Therefore, employees who believe they were unjustly terminated or that due process was not followed can file a case with the National Labor Relations Commission (NLRC). The NLRC is a quasi-judicial body responsible for promoting and maintaining industrial peace based on social justice.
Need further information and assistance regarding Termination of Regularized Employees? Talk to our team at Duran & Duran-Schulze Law in Bonifacio Global City, Taguig, Philippines to know more about the requirements and process. Call us today at (+632) 8478 5826 or +63 917 194 0482, or send an email to info@duranschulze.com for more information.
