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What Your Business Attorney Would Tell You about Terminating an Employee

May 25, 2018

Your business in the Philippines is doing well, more clients are signing up for your services, and sales keep growing every month. Then all of a sudden an employee starts violating company policy, and things begin to go downhill after that. As the owner, you only want what’s best for the company, so you don’t want to compromise everything on the account of one employee. You want to terminate that employ but you are having second thoughts because you’re not sure whether that decision is legal.

 

 

In confusion, you decided to set a meeting with your business attorney to seek for advice. Here’s what they would most likely tell you about terminating an employee.

 

Establishing Grounds

 

You are right for not firing your employee too quickly, considering that you have doubts. Seeking advice from a law firm, such as Yap Law Office, is your safest course of action. The first step you need to take is to establish grounds for termination. Keep in mind that your employees have rights that are backed by laws so terminating them without a just cause may result in serious legal consequences.

 

Article 282 of the Labor Code identifies the different just causes for termination:

 

  1. Serious misconduct. Serious misconduct is an improper conduct willful in character and of such grave nature that transgressed some established and definite rule of action in relation to the employee’s work.
  2. Willful disobedience to lawful orders. The employees are bound to follow reasonable and lawful orders of the employer which are in connection with their work. Failure to do so may be a ground for dismissal or other disciplinary action.
  3. Gross and habitual neglect of duties. Gross negligence has been defined as the want or absence of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them.
  4. Fraud or willful breach of trust / Loss of confidence. Fraud is any act, omission, or concealment which involves a breach of legal duty, trust, or confidence justly reposed and is injurious to another.
  5. Commission of a crime or offense. Commission of a crime or offense by the employee against his employer or any immediate member of his family or his duly authorized representative, is a just cause for termination of employment.
  6. Analogous causes. Other causes analogous to the above grounds may also be a just cause for termination of employment.

 

Procedural Due Process

 

As soon as you establish a just cause for termination, a procedural due process shall follow. This involves notifying the concerned employee of the decision and giving them the opportunity to respond to the charge. In general, you are required by law to provide them with two types of notice—notice to show cause and notice of termination. In case the employee refuses to participate in the hearing and investigation, their response will be deemed as an act of waiving their right to defend themselves.

 

The validity of the dismissal depends on two situations. If the dismissal is for just cause and with prior notice and hearing, it will be deemed as valid. Should you fail to provide prior notice, the dismissal may still be deemed as valid except you will be required to pay nominal damages to the terminated employee.

 

There are a lot of other complexities in the process of terminating an employee. Don’t risk facing disputes. Make sure that your decision is supported by papers. Contact a law firm, such as the Yap Law Office, to help you prepare your case. They also have a tax law attorney that can help you with other issues your business is facing.

 

Sources:

 

LABOR CODE OF THE PHILIPPINES PD 442, AS AMENDED, laborlaw.usc-law.org

Termination Process (Just Causes), laborlaw.usc-law.org

Yap Law Office