PUBLISHED ON: November 14, 2020
LAST UPDATED ON: May 1, 2021
Termination of Employment is the act of severing the employment relationship between an employee and an employer. Termination of Employment in the Philippines is guided by provisions contained in Articles 278 - 287 stated in Book Six (6) of Presidential Decree No. 442, also known as the Labor Code of the Philippines. The aforementioned Articles are related to job security and termination of employment.
The latest Implementing Rules and Regulations issued by Department of Labor and Employment (DOLE) regarding Book VI on Post-employment is stated in Department Order No. 147, series of 2015.
Terminating the employment of an employee is probably one of the most difficult tasks a Human Resource Officer may perform as the employer may face penalties if proper procedure was followed. For an employee, it may be a life changing event as the employment is the lifeblood of the person and their family.
Worse, if the employer is insisting on terminating the employment of an employee without due process. An employee may file a case to the National Labor Relations Commission (NLRC), which is an attached agency under the Department of Labor and Employment (DOLE), should the employee believe that there was an illegal dismissal of their services.
Types of Termination of Employment
The termination of employment may be exercised by either the Employee and the Employer. Although the following is not an official classification, there is are five (5) kinds of termination of employment:
- Termination of Employment by Employee;
- Termination of Employment by Employer due Just Causes;
- Termination of Employment by Employer due to Authorized Causes;
- Retirement; and
Employers should always keep in mind of Article 279 of the Labor Code as amended by Section 35, Republic Act No. 6715 regarding Security of Tenure.
Termination of Employment by Employee
The Termination of Employment by the Employee is mostly referred to Resignation. So why the fancy term? Resignation is not actually a term indicated indicated in the Presidential Decree 442 (PD 442) or more commonly known as the Labor Code of the Philippines.
An employee exercise it by submitting a resignation letter and the Employer exercise it through the process of termination for either Just or Authorized Causes.
Termination of Employment by Employer due to Just Causes
The termination of Employment by the Employer due to Just Causes is attributable to the fault or negligence of the employee.
The following are the Just Causes of Termination of Employment:
- Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;
- Gross and habitual neglect by the employee of his duties;
- Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
- 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,
- Other causes analogous to the foregoing.
Employees whose employment is terminated due to Just Causes are not entitled to Separation Pay.
Termination of Employment by Employer due to Authorized Causes
The Termination of Employment by the Employer due to Authorized Causes is attributable to the exigency of the business. Termination of Employment that arises due to such causes are due to the economic situation that the employer is facing.
The following are Authorized causes of Termination of Employment:
- Installation of labor-saving devices;
- Closing or Cessation of Operation of the establishment; and
- Disease of an employee.
The difference between Retrenchment and Redundancy is that the latter reducing manpower to avoid financial loss while the former only requires proof that manpower is in excess of what is demanded.
Employees whose employment is terminated due to Authorized Causes are entitled to Separation Pay unless an employer permanently ceased the operations of the business due to serious financial losses.
Should an employee wish to contest or complain of illegal dismissal, the (former) employee should file the complaint to the Department of Labor and Employment. Unlike Termination of Employment due to Just Causes, an investigation and hearing is not required to be conducted as the employer posits that the employee is not at fault in their termination. This is the reason for requirement that the employer is required to submit a notice of termination to the Department of Labor and Employment (DOLE).
Retirement is simply an employee reaching the age of sixty (60) or more but not exceeding 65 and wishes to separate him or herself voluntary from employment. This age range is commonly when people aged to the point they are no longer able to work.
The death of an employee extinguishes the employment relationship between an employee and an employer. A deceased employee will no longer have an employment relationship for the obvious reasons. Should the death may be related to the company due to their negligence, the employer may be found liable.
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