A clear, practical guide explaining how employee termination works in the Philippines—so you follow due process, avoid legal risk, and handle exits professionally.
Why This Matters
Employee termination is never easy.
In the Philippines—where labor laws strongly protect employees—it’s also a legal process, not just an HR decision.
One missed step can cost a company time, money, and reputation.
This guide gives you the essentials to handle terminations properly, confidently, and humanely—without confusion or guesswork.
| Two Legal Grounds for Termination |
|
Just Causes (Employee Fault)
|
- Serious misconduct
- Willful disobedience
- Gross neglect of duties
- Fraud or breach of trust
- Criminal acts related to work
|
|
Authorized Causes (Business Reasons)
|
- Redundancy
- Retrenchment
- Company closure
- Long-term illness (not curable within six months)
|
| Due Process |
|
Just Causes (Employee Fault)
|
-
Notice to Explain (NTE)
A written notice stating the incident and grounds for termination.
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Administrative Hearing
The employee is given a fair chance to respond.
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Final Notice of Termination
The employer’s decision with clear justification.
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Last pay calculation is entitled only to earned wages and benefits,
but not to separation pay.
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Requires notice and a reasonable time to explain before termination
can take effect.
|
|
Authorized Causes (Business Reasons)
|
-
The employer must send a written notice to the employee and DOLE
at least 30 days before termination takes effect.
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Separation Pay Calculation
- Authorized cause: ½ to 1 month per year of service
- Closure (not due to losses): 1 month per year of service
- Disease: ½ month per year of service
|
Documentation Protects Everyone
If it isn’t documented, it didn’t happen. Employers should maintain:
- Performance records
- Attendance logs
- Written warnings
- Employment contracts
- Investigation notes
- Email and communication trails
Documentation isn’t about punishment—it ensures fairness, clarity, and legal protection for both parties.
Why This Matters for Employers
Mishandled termination can result in:
- Reinstatement orders
- Back wages
- Monetary damages
- Legal disputes
- Reputational harm
Termination doesn’t have to feel risky or hostile.
With the right process, it becomes a clean, lawful transition that protects the business and respects the employee.
