messageus

Are you victim of illegal dismissal?

Q: What are the just causes for the dismissal of an employee?

A:  Under Article 282 of the Labor Code, an employer may terminate an employment for any of the following 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 representatives; and
(e) Other causes analogous to the foregoing.

Q:  What are the other authorized causes for the dismissal of an employee?

A:  Under Article 283 of the Labor Code, the employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Department of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year.

Q:  When is a dismissed employee entitled to separation pay?

A:  The Labor Code requires a valid cause to terminate an employee. If there is no valid cause, there is no valid termination and the employer will be held liable for illegal dismissal.  If the cause of dismissal falls under any of the five circumstances of Article 282, no separation pay shall be given to the dismissed employee. In dismissal cases falling under Article 283, separation pay shall only be required if the dismissal is due to the installation of labor-saving devices or redundancy.  In these two cases, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher.

If the dismissal is due to retrenchment to prevent losses or closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher.  In all cases, a fraction of at least six (6) months shall be considered one (1) whole year.

On the other hand if the dismissal is due to retrenchment to prevent losses or closures or cessation of operations of establishment or undertaking due to serious business losses or financial reverses no separation pay shall be given to the dismissed employee.

Q: What are the steps to follow to ensure that the dismissed employee is given due process?

A:  a.  Notice of Dismissal – The employer shall furnish the workers a written notice stating the particular acts or omissions constituting the grounds for his dismissal.  In cases of abandonment of work, the notice shall be served at the worker’s last known address.

b.  Answer – The worker may answer the allegations stated against him in the notice of dismissal within a reasonable period.

c.  Hearing – The employer shall afford the worker ample opportunity to be heard and defend himself with the assistance of his representative, if he so desires.

d.  Notice of decision – The employer shall immediately notify a worker in writing of a decision to dismiss him stating clearly the reasons therefor.

e.  Report on dismissal – The employer shall submit a monthly report to the regional Office having jurisdiction over the place of work, all dismissals effected by him during the month, specifying therein the names of the dismissed workers, the reasons for their dismissal, the dates of commencement and termination of employment, the positions last held by them and such other information as may ber required by the Department of labor for policy guidance and statistical purposes.

Authorized causes

As maybe broadly defined, authorized causes for dismissal of employee refer to those lawful grounds for termination which in general do not arise from fault or negligence of the employee. “Authorized causes” are distinguished from “just causes” under Article 282 in that the latter are always based on acts attributable to the employee’s own fault or negligence.


Authorized causes


The authorized causes for termination of employee are enumerated under Article 283 and 284 of the Labor Code, as follows:
Installation of labor-saving devices. The installation of labor-saving devices contemplates the installation of machinery to effect economy and efficiency in the method of production.


Redundancy. Redundancy exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. A position is redundant where it superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as over hiring of workers, decreased of volume business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise.


Retrenchment to prevent losses. Retrenchment is an economic ground to reduce the number of employees. Retrenchment is the reduction of personnel for the purpose of cutting down on costs of operations in terms of salaries and wages resorted to by an employer because of losses in operation of a business occasioned by lack of work and considerable reduction in the volume of business[3]. It is sometimes also referred to as downsizing. It is aimed at saving a financially ailing business establishment from eventually collapsing.
Closure or cessation of operation. The closure of a business establishment is a ground for the termination of the services of an employee unless the closing is for the purpose of circumventing pertinent provisions of the Labor Code.


Disease. An employer may terminate the services of 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 co-employees.
It should be noted though that the above enumeration is not an exhaustive list of authorized causes of termination of employment. Valid application of union security clause, relocation of business, among others, may also considered authorized causes of termination.

Constructive dismissal

Constructive dismissal is an employer’s act amounting to dismissal but made to appear as if it were not – a dismissal in disguise. In most cases of constructive dismissal, the employee is allowed to continue to work, but is simply reassigned, or demoted, or his pay diminished without a valid reason to do so.


Constructive dismissal does not always involve forthright dismissal or diminution in rank, compensation, benefit and privileges. There may be constructive dismissal if an act of clear discrimination, insensibility or disdain by an employer becomes so unbearable on the part or the employee that it could foreclose any choice by him except to forego his continued employment. (See Hyatt Taxi Services case, G.R. No. 143204, June 26, 2001.)


Constructive Dismissal and Involuntary Resignation


Constructive dismissal is an involuntary resignation resulting in cessation of work resorted to when continued employment becomes impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to an employee.


In Globe Telecom, Inc. v. Florendo-Flores, it was held that where an employee ceases to work due to a demotion of rank or a diminution of pay, an unreasonable situation arises which creates an adverse working environment rendering it impossible for such employee to continue working for her employer. Hence, her severance from the company was not of her own making and therefore amounted to an illegal termination of employment. (Cited in Francisco vs. NLRC, G.R. No. 170087, August 21, 2006.)