When is the dismissal of an employee from work legal?

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“You’re fired!”

This is the famous line of American businessman (now United States President) Donald J. Trump in the reality TV series The Apprentice.

He usually pulls out and points a finger gun whenever he says it.

By finger gun, it refers to the hand gesture imitating a handgun.

Meaning of “You’re fired!”

When an employer tells an employee “you’re fired,” he is letting him know his employment is terminated.

He is telling him he is dismissed from work.


In the United States, a labor law rule known as “Employment-at-will” is being followed.

Because of the rule, an employer there can at any time dismiss an employee from work for any or no reason without adverse legal effects.

He can at any time tell an employee “you’re fired” for any or no reason with no liability.

No employment-at-will in the Philippines

Unlike in the United States, there is no employment-at-will in the Philippines.

This means an employer here cannot at any time dismiss an employee from work for any or no reason at all.

He cannot tell an employee “you’re fired” at will.

If an employer dismissed an employee from work at will, the dismissal will be deemed illegal.

Given that it is illegal, it will surely carry adverse legal effects with it.

Legal dismissal

For the dismissal to be legal, an employer must observe the substantive and procedural due process.

Substantive due process

By substantive due process, it means the dismissal must be based on any of the valid causes.

Valid causes for dismissal

In turn, the following are the valid causes:

(a) Just causes; and,

(b) Authorized causes.

Just causes for dismissal

By law, the following are the just 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 representative; and,

(e) Other causes analogous to the foregoing.

Authorized causes for dismissal

While the authorized causes, which are either for business or health reasons, are the following:

(a) Installation of labor-saving devices;

(b) Redundancy;

(c) Retrenchment to prevent losses;

(d) Closure or cessation of operation of the establishment or undertaking, unless the closure is for the purpose of circumventing the provisions of the Labor Code; and,

(e) Disease of an employee.

Basic distinction between just and authorized causes

The basic distinction between the valid causes for dismissal can of course be shown with ease.

The just causes are those directly attributable to the fault or negligence of an employee.

While the authorized causes are those brought about by the necessity and exigencies of business, changing economic conditions and illness of an employee.

Procedural due process

By procedural due process, it means compliance with the procedure for dismissal found in the Labor Code, its implementing rules, and settled jurisprudence.

Illegal dismissal

Failure to observe the substantive and procedural due process will of course make the dismissal illegal.

Effect of illegal dismissal

If the dismissal is illegal, an employee is entitled to the following:

(a) Reinstatement without loss of seniority rights and other privileges, or separation pay if reinstatement is no longer possible due to strained relations;

(b) Full backwages, inclusive of allowances;

(c) Other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement; and,

(d) Damages and attorney’s fees, if the dismissal is done in bad faith.

Separation pay in legal dismissal due to authorized causes

But when it comes to legal dismissal due to authorized causes, save for closure or cessation of operation of the establishment or undertaking due to serious business losses or financial reverses, an employer is required to pay an employee separation pay.

[References: Articles 292-302 (formerly Articles 277-287) of the Labor Code of the Philippines, Leonardo D. Suario vs. Bank of the Philippine Islands, et. al., G.R. No. L-50459, August 25, 1989, Reahs Corporation, et. al. vs. National Labor Relations Commission, et. al., G.R. no. 117473, April 15, 1997, King of Kings Transport, Inc., Claire Dela Fuente and Melissa Lim vs. Santiago O. Mamac, G.R. No. 166208, June 29, 2007, Eduardo Bughaw, Jr. vs. Treasure Island Industrial Corporation, G.R. No. 173151, March 28, 2008, D.M. Consunji, Inc. vs. Antonio Gobres, Magellan Dalisay, Godofredo Paragsa, Emilio Aleta and Generoso Melo, G.R. No. 169170, August 8, 2010, Billy M. Realda vs. New Age Graphics, Inc. and Julian I. Mirasol, Jr., G.R. No. 192190, April 25, 2012, Unilever Philippines, Inc. vs. Maria Ruby M. Rivera, G.R. No. 201701, June 3, 2013, Manila Polo Club Employees’ Union (MPCEU) FUR-TUCP vs. Manila Polo Club, Inc., G.R. No. 172846, July 24, 2013, Wenphil Corporation vs. Almer R. Abing and Anabelle M. Tuazon, G.R. No. 207983, April 7, 2014, Marlo A. Deoferio vs. Intel Technology Philippines, Inc. and/or Mike Wentling, G.R. No. 202996, June 18, 2014, Nancy S. Montinola vs. Philippine Airlines, G.R. No. 198656, September 8, 2014, and Ma. Charito C. Gadia, et. al. vs. Sykes Asia, Inc., et. a., G.R. No. 209499, January 28, 2015, DOLE Department Order No. 147-15, Series of 2015, titled “Amending the Implementing Rules and Regulations of Book VI of the Labor Code of the Philippines, As Amended,” and dated September 7, 2015.]


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