Just Causes For Terminating Employees In The Philippines

In a previous article, we classified the causes for terminating employees in the Philippines as Just and Authorized Causes.  We now give focus to the Just Causes.

A Just cause is an act attributable to the employee which results in his termination.  These causes are normally attended by gravity of the act and willful intent of the employee.  Enumerated as just cause for termination are: a) serious misconduct, b) willful disobedience to lawful orders, c) gross and habitual neglect of duties, d) fraud or willful breach of trust and/or loss of confidence; e) commission of a crime or offense, and f) other analogous causes.


Serious misconduct is inappropriate behavior willfully committed by an employee, which is grave in nature and results to a risk in the reputation or productivity of the company.  The wrongful behavior is characterized by willful intent, and not by mere inadvertent error.


Willful disobedience to lawful orders is described as a transgression of established rules in the workplace.  The rules or orders must be lawful and reasonable, known by the employee, and must pertain to the duties which he has been assigned to discharge.


Gross and habitual neglect of duties implies a repeated failure to perform one’s duties.  Normally, isolated acts of negligence do not count as a cause for termination.  However, a single act of negligence which is grossly damaging to the employer may qualify as a cause for terminating the employee.


Fraud or willful breach of trust and/or loss of confidence is a cause often associated with the dismissal of employees holding managerial or fiduciary posts.  Fraud is an act or omission calculated to deceive another to one’s advantage.  Breach of trust is a violation of the trust and confidence given to an employee.  To be a cause for termination, the fraud or breach of trust must be in connection to the work of the employee and must result in the loss of confidence in him by his employer.


Commission of a crime or offense as a just cause for terminating employees is limited to those which are committed against the employer or any member of his immediate family.  Immediate family includes the spouse, ascendants, descendants, legitimate, natural or adopted siblings of the employer.  Also included are the relatives of the employer by affinity in the same degrees and those by consanguinity within the 4th civil degree.

Analogous cases do not have a definite meaning but is used as a catch-all classification of other just causes of termination.  It covers all unacceptable norms in a work environment which jeopardizes the business and the employment relationship. Samples include gross inefficiency and conflict of interest.

Termination of Employees in the Philippines

Termination of Employees in the Philippines–A Guideline to Foreign Employers

In the recent years, the Philippine government has supported campaigns in attracting foreign investments into the country. With these foreign investments, the problem of unemployment and underemployment is considerably solved. In welcoming foreigners in doing business in the Philippines, adequate information must be given to them, not just as regards the fiscal concerns of business, but also with the employment laws of the country.

Employing a worker is often a very happy event both for the employer and the employee. On the reverse, terminating an employee may be a nightmare not just for the employee, but even for the employer. The foreign employer must be reminded to keep guard of Philippine labor laws when dismissing an employee.

Terminating an employee in the Philippines is valid only when these two factors are present: 1) the attendance of a cause for dismissal, and 2) observance of due process.

Causes for terminating an employee are classified as Just Cause and Authorized Cause. JUST CAUSES are acts chargeable to the employee which will result to his termination. Enumerated as such are: a) serious misconduct, b) willful disobedience to lawful orders, c) gross and habitual neglect of duties, d) fraud or willful breach of trust or loss of confidence; e) commission of a crime or offense, and f) other analogous causes.

On the other hand, AUTHORIZED CAUSES of dismissal are those which pertain to the employer. This is further classified into two types – business and disease. The business reasons include: a) installation of labor-saving devices, b) redundancy, c) retrenchment and closure or cessation of business operation. The health reason pertains to the infliction of a disease which, as ascertained by a competent public authority, is incurable within six months, and one which is prejudicial to the health of the employee and his co-workers if employment is continued.

DUE PROCESS in terminating an employee in the Philippines is known as the TWO-NOTICE or TWIN-NOTICE RULE.

The FIRST NOTICE is that which is sent to the employee apprising him in detail of the basis for his possible termination. It must give the employee at least five days from receipt of the notice to prepare his answer.

A Hearing or Conference is schedules after the employee submits his answer. During the hearing, both employer and employee will have the equal chance to present evidence or refute the claims of the other party. This is also an opportunity for a possible amicable settlement between them.

After the hearing, a SECOND NOTICE is sent to the employee apprising him of the decision to terminate his employment. It must indicate how the decision was reached , and that upon careful consideration of all circumstances, basis has been established to justify the termination.