Published 9 December 2019, The Daily Tribune

Dismissal of employees from work is a recognized management prerogative of employers. It is settled that “an employer cannot be compelled to retain an employee who is guilty of acts inimical to the interests of the employer.” Indeed, employers have the “right to dismiss its employees if only as a measure of self-protection (Visayan Electric Company Employees Union-ALU-TUCP vs Visayan Electric Company Inc., GR 205575, 22 July 2015).”

However, employers should bear in mind that the dismissal of employees cannot be exercised in a whimsical and capricious manner. Employers must comply with the requirements of substantive and procedural due process.

Substantive due process requires that the termination of employment must be based on just or authorized causes. Just causes for termination of employment (Article 297 of the Labor Code) are as follows:

a. Serious misconduct. To be a valid ground for termination, there must be a misconduct which must be of such grave and aggravated character. It must relate to the performance of the employee’s duties. It must be shown that the employee becomes unfit to continue working for the employer.

b. Willful disobedience or insubordination. The disobedience or insubordination must be willful or intentional characterized by a wrongful and perverse attitude. The order violated must be reasonable, lawful, and made known to the employee and must pertain to the duties which he has been engaged to discharge.

c. Gross and habitual neglect of duties. The employee must have committed a neglect of duty and the negligence must be both gross and habitual in character.

d. Fraud or willful breach of trust. There must be an act, omission or concealment on the part of the employee, which involves a breach of legal duty, trust, or confidence justly reposed. It must be committed against the employer or his/her representative and must be in connection with the employer’s work.

e. Loss of confidence. The employee commits an act, omission or concealment which justifies the loss of trust and confidence of the employer to the employee. The employee concerned must be holding a position of trust and confidence. The loss of trust and confidence should not be simulated, and should not be used as a subterfuge for causes which are improper, illegal, or unjustified.

Also, it must be genuine and not a mere afterthought to justify an earlier action taken in bad faith.

f. Commission of a crime or offense. The employee must have committed an act or omission punishable by law against the person of employer, any immediate member of his/her family, or his/her duly authorized representative.

g. Other causes analogous to the foregoing. In one case, an employee’s attitude problem was considered a situation analogous to loss of trust and confidence. (Heavylift Manila vs Court of Appeals, GR 154410, 20 October 2005).

There are instances, however, when the termination of employment may not be caused by an employee’s misbehavior or violation against the employer, but is initiated by the employer for any of the following purposes/causes: (a) installation of labor-saving device; (b) redundancy; (c) retrenchment to prevent losses; (d) closure or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses; and (e) disease of an employee prejudicial to his or his co-employees’ health. These are known as the authorized causes under Articles 298 and 299 of the Labor Code.

Note that before employers should prove that they did not illegally dismiss their employees, the latter must first establish by substantial evidence the fact of their dismissal. (Tri-C General Services vs. Matuto, GR 194686, 23 September 2015). Hence, an employee who voluntarily resigned or unjustifiably abandoned his or her work with clear intention to sever employer-employee relationship cannot claim to have been dismissed from employment, much less illegally terminated.

While valid cause/s exists for the dismissal of undesirable employees from service, employees’ termination may still be branded as illegal if employers will not observe the proper procedure.
Procedural due process consists of the twin requirements of notice and hearing. The employers must furnish the employees with two written notices before the termination of employment can be effected.

The first written notice apprises the employees of the particular acts or omissions for which their dismissal is sought. It should contain the specific causes or grounds for termination against them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. “Reasonable opportunity” means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense, which may be construed as a period of at least five calendar days from notice.

After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the employees are given the opportunity to explain and clarify their defenses to the charge against them; present evidence in support of their defenses; and rebut the evidence presented against them by the management. The requirement of a hearing is complied with as long as there was an opportunity to be heard, and not necessarily that an actual hearing was conducted.

The second written notice (of termination) informs the employees of the employers’ decision to dismiss them. It indicates that all circumstances involving the charge against the employees have been considered, and grounds have been established to justify the severance of their employment (See Distribution and Control Products Inc. vs Santos, GR 212616, 10 July 2017, citing Unilever Philippines Inc. vs Rivera GR 201701, 3 June 2013).

Employers are thus strongly urged to judiciously observe and comply with the foregoing requirements of due process on employees’ dismissal from work in order to avoid adverse consequences relating thereto.

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