The Legal Requirements for Terminating a Regular Employee

While it’s never a pleasant process to encounter, there are times when the only cause of action is terminating a regular employee, but provided there are adequate grounds with regards to the Philippine Labor Code, the process can be made as smooth and as mutually beneficial for both employer and former-employee as possible. Let’s discuss both ‘just cause’ and ‘authorized cause’ for when an HR department might have to consider termination of one of more employees.


Just Cause


The due process involved in ‘just cause’, as stipulated under Article 296 of the Philippine Labor Code, indicates that a regular employee may be terminated under the following conditions:

* In cases of willful and intentional disobedience, or gross misconduct, with regards to the contractual obligations in terms of the assigned and required work-related duties.

* Repeated and gross neglect of duties.

* Outright fraud or an intentional breach of trust between the employee in question and either the employee or a suitably authorized company representative.

* The commission of a criminal offence by the employee against either the employer, a suitably authorized company representative, or any immediate member of the employer’s family.

* Other clear causes that would be directly comparable to the four points previously listed.


Prior to official termination, under ‘just cause’ the employer is legally required to first provide the employee with a written notification of the action in question that could potentially lead to termination. To this notice, the employee must respond in writing indicating their own case for defense within five days of the receipt of the first notice, after which the employee must also be given sufficient time to both submit evidence and explain the case for defense further, either in person or in writing; this is usually conducted in writing unless a meeting in person is specifically requested in writing by the employee, if there is a considerable amount of evidence to be considered, if it is company policy to do so, or if other such circumstances require the procedure to be done face-to-face. If the employee readily admits to the charges, no such investigation will be required and the employee must simply be formally notified of the outcome.

Dependent upon the outcome of the issuance of the first notice, a secondary notice must then be issued that directly informs the employee that the company intends to process a termination order.


Authorized Cause


The due process involved here, as per Article 297 of the Philippine Labor Code, permits the employer to terminate any employee in the event of organizational/establishmental closure, and an overall reduction of personnel, while Article 298 allows for termination due to disease.

Under ‘authorized cause’, Philippine law stipulates that both the employee (each individual employee separately in the case of mass termination) and the Department of Labor and Employment (DOLE) be duly notified of the intention to terminate at least 30 days prior to the notice taking affect.

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