How to Make a Legal Termination

Philippine laws tend to favor labor over capital, as solidified and personified greatly by the right to security of tenure. This means that no employee can be removed from the organization without valid reason, and without undergoing the termination procedures provided by law. The key word for the matter is “due process”. If you would search over the Internet any labor-related cases elevated to the Supreme Court, you would find that most of them involve illegal termination.

Business owners and persons holding human resource functions must take note of the following when executing a legal termination:

Substantial due process. The first requisite in termination is the substantial due process, wherein you must have a valid reason for the termination. We can classify these reasons into two: just cause, which pertains to inflicting serious physical harm towards the employer, fraud, gross and habitual neglect of his tasks, and similar cases; and authorized cause or installing devices that replace manual labor, closing of establishment, and similar cases. For authorized causes, the employer is required by law to notify the DOLE 30 days prior the termination.

Termination in the Philippines is unlike those we see on television wherein the employer simply tells the employees they are fired. It follows a long process and requires tremendous effort on the part of the employer.

Procedural due process. The second requisite is following the procedures in termination provided by law. The key term that you must remember is the “twin notice rule.” During the first notice, you must indicate the reason for instituting a termination proceeding against the employee, giving ample opportunity for them to respond and explain their side. This does not necessarily mean that you should actually wait for them to submit their response; rather, providing them time is enough. Whether or not they respond is left to their own discretion.

Another thing to note is that an employee who decides to resign from the company must follow the 30-day notice rule, where the employee must inform the employer, at least 30 days before due date, his/her intention to resign from the company. If damages occur because of the employee’s failure to comply with such requirement, he/ she can be made liable by the company for the damages.

It is always a good idea to keep everything formal and in writing in business, most especially in sensitive cases like termination. Receiving copies must be signed, agreements must be written down, and meetings be recorded in minutes. Always remember to follow rules and procedures provided by law. Keep formalities intact despite whatever your employee may have violated.

To know more about this topic, BusinessCoach, Inc., a leading business seminar provider, conducts a seminar entitled “Labor Laws for Entrepreneurs and Managers.” Contact (02) 727-5628, (02) 727-8860, (0915) 205-0133 or visit www.businesscoachphil.com for details.

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*Originally published by the Manila Bulletin. C-6, Sunday, November 23, 2014. Written by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) All rights reserved. May not be reproduced or copied without express written permission of the copyright holders.