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Philippines: Termination of employment

Original and updating authors: Luisito V. Liban, Marianne M. Miguel and Patricia A. Madarang, SyCip Salazar Hernandez & Gatmaitan
Consultant editor: Emerico O. De Guzman, ACCRALAW

Summary

  • Employees generally have a right to "security of tenure", whereby they must not be dismissed except where the employer has a "just" or "authorised" cause and follows "due process". (See General)
  • In cases of dismissal for an authorised cause, the employer must give the employee at least one month's written notice, while employees must generally give at least one month's written notice of resignation. (See Notice periods)
  • When dismissing an employee for a just cause - this relates primarily to the employee's fault or negligence - an employer must follow a statutory procedure that involves two written notices and an opportunity for the employee to be heard and to defend him- or herself. (See Dismissal for just causes)
  • The authorised causes for dismissal (with notice) are the installation of labour-saving devices, redundancy, "retrenchment", the closure or cessation of operation of the employer's establishment and, in certain circumstances, the employee's illness. (See Dismissal for authorised causes)
  • Employers are specifically prohibited from dismissing employees for certain reasons, such as unlawful discrimination and, in the case of female employees, pregnancy or marriage. (See Prohibited grounds for dismissal)
  • Constructive dismissal is deemed to occur when an employee resigns involuntarily, because continued employment has become impossible, unreasonable or unlikely. (See Constructive dismissal)
  • It is left in the first instance to the employment contract or an applicable collective agreement to stipulate an employee's retirement age; in the absence of an agreed retirement age, employees who have at least five years' service are entitled to retire from the age of 60, but are not required to do so, and can be obliged to retire from the age of 65 if the employer so wishes. (See Retirement)
  • Employees may resign at any time with at least one month's notice, and in certain circumstances without notice. (See Resignation)
  • An employee who is dismissed for an authorised cause is generally entitled to statutory "separation pay" from the employer, of either half a month's pay per year of service or one month's pay per year of service, depending on the reason for dismissal. (See Termination payments)
  • The main remedies for dismissal without a just or authorised cause are reinstatement or, in some cases, the payment of separation pay. Such cases are generally dealt with initially under a "mediation-conciliation" procedure at the Department of Labor and Employment and, if no settlement is reached, referred to a "labour arbiter" for a decision. (See Contesting dismissals)