“At-Will” Employment and Termination in the Philippines

Among the first concepts that we have to extensively discuss with foreign clients is the absence of “at-will employment” under Philippine labor law. “At-will employment” basically refers to an employment arrangement wherein either the employer or the employee can terminate the relationship even without cause. In the Philippines, the employer can only terminate an employee for cause and after complying with due process, even if the employment contract grants the employer the power to dismiss without notice.

Termination for cause

Termination may be based on just causes (i.e., serious misconduct or willful disobedience, gross and habitual neglect, fraud, loss of trust and confidence, commission of a crime, analogous cases) or authorized causes (i.e., retrenchment, redundancy, installation of labor saving device, closure of business, disease). There are other reasons for the cessation of employment, including the expiration of a fixed-term contract or project employment. This requires a more extensive discussion, perhaps in another article.

Due process requirements

The employer must comply with procedural requirements in terminating an employee. The employer is required to furnish the employee with two written notices and, as a general rule, conduct an administrative hearing. The first written notice, commonly known as the show-cause notice, informs the employee of the charges and requires him to explain. The second written notice contains the decision of the company. [See Due Process in Employment Termination]

Any termination without cause is considered as illegal dismissal, which entitles the employee to backwages and reinstatement (or separation pay in certain instances). A termination for cause, but without due process, renders the employer liable for damages.

In sum, a manager or the Chief Executive Officer cannot simply call a worker to his office and, right there and then, tell the employee, “You’re fired!” It does not matter if the employee is rank-and-file, a supervisor or a manager. Even a probationary employee is entitled to due process.

Atty.Fred

11 thoughts on ““At-Will” Employment and Termination in the Philippines

  1. Avatarwillingslave

    I would just like to ask if its justifiable to suspend a employee for 15 working days due to losing an O.R? I would also like to inquire on how should employers imply salary deductions? Can employers deduct the total incurred salary on each payday? Is it justifiable to deduct the employees salary even if he will not have any money for the next 15 days?

    Reply
  2. Avatarjvclem

    I worked as consultant assigned in private company (client) under an IT provider company.

    Me and our client are agreed to end up my stay with them due to performance level issue. My provider is asking me for a revenue liabilities loss due to terminating my contract with them. Prior to this one, client already inform them about this issue and the provider does not make any actions until such time that me and our client both agreed to end it up.

    But pinipilit pa rin kasi ng provider na pumasok pa rin daw ako until a certain period but me and our client agreed to end it up already.

    My question is, do I have a legal obligation to them (provider) to pay the amount of my entire contract or equivalent considering na ayaw na ng client sa service ko sa kanila due to a certain issues?

    Right now kasi, the provider is claiming also for this amount from me as they insist that this is under my contract with them na kapag hindi natapos yung contract ay may certaim amount ako na dapat bayaran.

    Ano po ba ang aking karatan para dito? Ang gusto ko lang naman kasi is to end up my employment contract with them (Provider and Client) without any financial obligation to settle kasi hindi na rin naman maganda ang working relationship namin between me and the client.

    Reply
    1. AvatarCharm

      Hello,

      I have the same case with jvclem. Since i have submitted immediate resignation, the company will deduct an amount of Php350 x 30 days = Php10,500 from my last pay (backpay).

      I am a regular employee and does not have any bond amount with the company.
      Is this legal?

      Thanks.

      Reply
  3. Avatarrobertjohn28

    I am angry with the firm who are not paying overtime correctly, Even they are abused to employees etc.

    Reply
  4. Avatarkareengrace.lacorte

    Can an employer deny the issuance of BIR 2316 if the resigned employee still has existing payables to them?

    Reply
  5. AvatarAriel

    I just want to ask my previous work is in the hospitality industry. I file a resignation letter last year and it take effect October 15, 2015.Now this is the start of my long story…the mgt. Hold my resignation up to December 2015 because peak season daw so I agree then the owner ask me if I can stay pa for one month that’s January 2016 and I agree din. Nagkabilihan pero Hindi nag change ng company name kasi yung one of the old owner yung bumili ng stock of the other owners. That was happened December 2015 pero nag bigay sila ng gratuity fee for all the employees kaso saakin 2,000 lng kasi daw resigned ako. Tapos now naman don sa BIR form ko ang refund ko 56.00.Samantalang nong 2014 ang narefund ko is 3,500.00. Ang tanung ko po makatarungan po ba itong ginawa saakin?

    Reply
  6. Avatarmiguel

    i was terminated by my company a few days ago for just reasons. i’m not contesting my violation of company rules my question is, they gave me the written termination notice on “payday” itself. we usually get our pay around 6pm in the evening and the company gave me my termination notice around 9pm. HR said they are holding my pay for that particular pay period and will include it in my “last pay”,after i’m done processing my clearance. my question is, is it legal for them to do so? because i feel that when everyone got their pay in their ATM at 6pm, technically i was still employed because the termination notice wasn’t given to me yet. I need your advice on this.

    Thank you.

    Reply
  7. AvatarTeresita

    Is it legal to stipulate in the contract that the employer can terminate an employee without cause? The employment is under a Memorandum of Agreement.

    Reply
  8. Avatarjay

    Hi Po,
    Nagsubmit po ako ng resignation letter ko dated June 21,2018
    ito po yung letter,

    Hi Sir,

    Good day!

    Please accept this letter as my formal resignation as Autocad Operator effective dated August 24, 2018. I am not in depth of how is this in accordance with company rules, however, I have very little choice so please guide me through. I am very sorry to be leaving your company but rest assured I will leave my duties and responsibilities in good order here in the company.

    It has been 8 months now since I have been paid with many delays. Until now I’m still waiting for my salary in my last rotation. We all work for money and we depend on this income. By the start of every month, common people have bills to pay and meet all their needs. I only have one job, which means I am completely depending on this money. Not getting my salary on time creates a lot of financial constraint on me. As my family is growing, it is important that I look after their welfare. Delays in paydays and not knowing if I still have a job to go back to can be traumatizing. My heart is full with gratitude for the opportunity you gave me but I have to go after what’s best for my career and family.

    Sincerely,

    Jay

    Tanong ko lang po , pagdating po ba ng August 24, 2018, totally resigned na po ba ako? pinadala po kasi nila ako sa labas ng bansa, paguwi ko po ba kailangan po ba ng 30 days ulit kahit sobra na sa 60 days yung notice ko sa kanila? or for 1 day clearance na lang po ba? Regarding po sa salary , hndi pa po nila binibigay yung sweldo ko nung month ng May, so lahat po ba yun sa simula May-August na sweldo eh sa August ko pa makukuha?
    Sa contract ko po may statement na :
    12. Outsourced Service Associate is required for a one day reporting at k2rjl office for clearance and surrendering of company ID after the contract agreement.
    salamat po!

    Reply
  9. Pingback: Labor Code of the Philippines (Presidential Decree No. 442): Table of Contents, Full Text » Philippine e-Legal Forum

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