Question & AnswerQ&A (BLR Department Order No. 147-15)
The guiding principle is that a worker's right to security of tenure is guaranteed under the Philippine Constitution and other laws, and no employee shall be terminated except for just or authorized cause and only upon observance of due process.
This rule applies to all parties of work arrangements where an employer-employee relationship exists, including all parties of legitimate contracting and subcontracting arrangements with existing employer-employee relationships.
The four-fold test includes: (1) selection and engagement of the employee; (2) payment of wages; (3) the power of dismissal; and (4) the power to control the employee's conduct (control test).
The control test exists where the person for whom the services are performed reserves the right to control not only the end achieved but also the manner and means used to achieve that end. It is the most crucial and determinative indicator of an employer-employee relationship.
Just causes refer to grounds for termination attributable directly to the fault or negligence of the employee as enumerated under Article 297 of the Labor Code.
Authorized causes refer to grounds for termination brought by necessity and exigencies of business, changing economic conditions, and illness of the employee, as enumerated under Articles 298 and 299 of the Labor Code.
The employer must serve two written notices: the first notice must specify the causes and detailed facts for termination and give the employee a reasonable period (at least five calendar days) to respond; after an opportunity to be heard is given, a second written notice of termination stating that grounds have been established must be served personally or to the employee's last known address.
Valid just causes include serious misconduct, willful disobedience or insubordination, gross and habitual neglect of duties, fraud or willful breach of trust, loss of confidence in employees holding positions of trust, commission of a crime or offense against employer or family, and analogous causes specified in company policy.
Termination based on authorized causes such as installation of labor-saving devices, redundancy, retrenchment, closure, or disease requires a written notice to the employee and the DOLE's Regional Office at least 30 days before termination specifying the grounds.
An employee terminated due to installation of labor-saving devices or redundancy shall receive at least one month pay or one month pay per year of service, whichever is higher. For retrenchment, separation pay is one month or at least one-half month pay per year of service, whichever is higher; for closure not due to serious losses and disease, separation pay is also one month or one-half month pay per year of service, whichever is higher.
No, employees terminated for just causes are not entitled to separation pay unless it is expressly provided in company policy or Collective Bargaining Agreement.
No, an employee shall not be terminated based on actual, perceived, or suspected HIV or Hepatitis B status.
All termination disputes are subject to mandatory conciliation-mediation under Republic Act No. 10396 via Single Entry Assistance Desk Officers; if no settlement is reached, cases may proceed to compulsory arbitration or voluntary arbitration with parties' consent.
The settlement agreement may be enforced by requesting referral to the Regional Arbitration Branch of the NLRC for enforcement, docketed as an arbitration case, or parties may file appropriate cases before the proper forum.