Employer can only terminate an employee in the Philippines if you have a just cause or an authorized reason. A just cause can be an employee’s unethical behavior or negligence. Legal grounds, on the other hand, are the basis for authorized termination.
To end an employment contract, you need to document the employee’s behavior and bring out the specific instances that led to termination.
The following just causes by the employee can be the basis for firing an employee in the Philippines:
- Serious misconduct or wilful disobedience
- Gross and habitual neglect of duty
- Fraud or deliberate breach of trust
- Commission of a crime or offense
- Other similar reasons
However, Article 283 states that you can also terminate an employee for authorized causes, including business reasons such as:
- Installation of labor-saving devices
- Redundancy
- Reduction of costs to prevent losses
- The closing or cessation of operation
Also, if employee suffers from a health condition that lasts more than 6 months or the law prohibits them from working with such disease or working is harmful to themselves or their co-workers, you are entitled to terminate their contract.
The second type of employee termination is when the employee decides to resign. Without a cause, your employee needs to hand in a letter of resignation with a month notice. If they do not submit a notification, employer can charge them for any concurrent damages. For example, for the amount of work they fail to deliver due to their untimely resignation.
However, if your employee resigns for any of the following reasons, they do not have to submit a resignation letter:
- a grave insult to the honor and person of the employee
- inhuman and unbearable treatment by the employer
- crime committed against the person of the employee or any immediate members of the employee’s family
- other similar causes
Note: Employer don’t have to pay separation compensation if employee leaves voluntarily. The benefit only applies if the employee loses their job due to reasons that are not their fault.
For example, if you close down the business or aggregate their position.