Being Fired: Valid Reasons, Notices, Separation Pay and Illegal Dismissal

Security of Tenure: The Starting Rule

The Constitution and the Labor Code protect your security of tenure (the right to keep your job unless the law allows it to be ended). Under Article 294 of the Labor Code (formerly Article 279), an employer may not end the work of a regular employee except for a cause the law allows.

There are two kinds of valid causes:

• Just causes (Article 297, formerly Article 282): something you did wrong.
• Authorized causes (Articles 298 and 299, formerly Articles 283 and 284): a business reason, or a disease that keeps you from working safely. You did nothing wrong, so the law usually gives you separation pay.

In a dismissal case, it is the employer who must prove that the dismissal was for a valid cause. You do not have to prove that it was not.

Probationary employees can also be let go for failing to meet the standards for becoming regular, if those standards were made known when they were hired. See When do I become a regular employee?

Just Causes and the Twin-Notice Rule

Article 297 lists these just causes:

• serious misconduct, or willful disobedience of the employer's lawful orders connected with your work;
• gross and habitual neglect of duties (serious and repeated failure to do your job);
• fraud, or willful breach of the trust the employer placed in you;
• a crime or offense against the employer, a member of their immediate family, or their authorized representative; and
• other causes similar to these (analogous causes).

Before dismissing you for a just cause, the employer must follow the twin-notice rule (two written notices with a hearing in between):

1. First written notice, often called a Notice to Explain: it states the specific acts you are charged with and gives you a reasonable time to answer in writing.
2. A chance to be heard: you can answer in writing, present evidence, and ask for a meeting or hearing, with someone to assist you if you wish.
3. Second written notice: the employer's decision, stating the reasons for dismissal.

Separation pay is generally not given when the dismissal is for a just cause. You still get your final pay, such as unpaid salary and pro-rated 13th month pay.

Authorized Causes and Separation Pay Rates

For an authorized cause, the employer must give written notice to you and to the DOLE office at least one month before the date the dismissal takes effect, and pay separation pay (money given because your job ended through no fault of yours) at these rates:

Counting years. A fraction of at least six months counts as one whole year. So 4 years and 7 months of service counts as 5 years.

Example. A worker earning ₱18,000 a month, with 4 years and 7 months of service, loses their job in a retrenchment. Half a month's pay is ₱9,000, times 5 years, is ₱45,000. That is higher than one month's pay (₱18,000), so the separation pay is at least ₱45,000.

Your contract, company policy or Collective Bargaining Agreement (union contract) may give more than these minimums.

If You Were Fired Illegally

What you can get depends on what went wrong.

No valid cause (illegal dismissal). Under Article 294, a worker who is unjustly dismissed is entitled to:

• reinstatement (getting your job back) without loss of seniority rights; and
• full backwages (the pay you missed), including allowances and other benefits, from the time your pay was withheld until you are actually reinstated.

When going back is no longer workable, for example because the relationship has become too strained or the position no longer exists, the Labor Arbiter (the NLRC officer who hears the case) may award separation pay in lieu of reinstatement (instead of getting your job back). The Supreme Court has generally set this at one month's pay for every year of service, on top of backwages.

Valid cause, but the notices were skipped. The dismissal stands, but the employer must pay nominal damages (a fixed sum for not following the required steps). In Agabon v. NLRC (2004), the Supreme Court awarded ₱30,000 for a just-cause dismissal without proper notice. In Jaka Food Processing Corp. v. Pacot (2005), it awarded ₱50,000 for an authorized-cause dismissal without proper notice, a higher amount because the employer started the process for its own business reasons. The exact amount is up to the court.

Forced to resign. Being pressured to resign, or made to work under conditions so bad that you have no real choice but to leave, is called constructive dismissal. It is treated as a dismissal, and the same remedies apply.

See also Can my employer fire me without notice?

Where to Go and the Deadline

1. Keep your evidence: notices, text messages, your ID, contract, payslips, and names of co-workers who know what happened. Write down dates while you still remember them.
2. SEnA at DOLE. File a Request for Assistance under DOLE's Single Entry Approach (SEnA) at the DOLE office that covers your workplace. A SEnA officer helps you and the employer try to settle within 30 days.
3. NLRC. If there is no settlement, the case is referred to the National Labor Relations Commission (NLRC), where you file a complaint for illegal dismissal before a Labor Arbiter.

Deadline. An illegal dismissal case should be filed within four years from the dismissal, as the Supreme Court has applied Article 1146 of the Civil Code. Claims for unpaid money (wages, 13th month pay, final pay) must be filed within three years from when they were due, under Article 306 (formerly Article 291). Do not wait: evidence and witnesses are easier to find early.

Before you sign a quitclaim (a paper saying you were paid in full and give up further claims), read it carefully. Courts set aside quitclaims that were not voluntary or that pay far less than what is owed, but a signed one can make your case harder.

For free help, go to the Public Attorney's Office (PAO) if you meet its indigency test, an IBP legal aid office, or the public assistance desk at DOLE or the NLRC. For the step-by-step filing process, see complaining about your employer. To ask for your last pay in writing, use the Request for Final Pay template.