Due Process in Termination of Employment

Every employee shall be assured security of tenure. No employee can be dismissed from work except for a just or authorized cause, and only after due process.

The essence of due process simply means that the employer shall afford the worker an ample opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain one’s side or an opportunity to seek a reconsideration of the action or ruling complain of (Stayfast Phils. Corp vs. NLRC, G.R. No. 81480 Feb. 9, 1993).

Under the Constitution and the Labor Code, the requirements for the lawful dismissal of an employee by his employer are two-fold: the substantive and procedural.

a. The substantive aspect refers to the legality or illegality of the act of dismissal. The just and lawful cause constitutes the substantive aspect of due process (China City Restaurant Corp. vs. NLRC, G.R. No. 97196 January 22, 1993). In other words, the dismissal must be for a valid or authorized cause as provided by law (San Miguel Corp. vs. NLRC, G.R. No. 78277, May 12, 1989).

b. The procedural aspect refers to the legality or illegality of the manner of dismissal. The rudimentary requirements of due process – notice and hearing – must also be observed before an employee may be dismissed. The illegality of the manner of dismissal constitutes discharge without due process (Shoemart Inc. vs. NLRC, G.R. No. 74229, Aug. 11, 1989).

Constitutional due process differentiated from statutory due process

Constitutional due process protects the individual from the government and assures him of his rights in criminal, civil or administrative proceedings; while, statutory due process found in the Labor Code and Implementing Rules protects employees from being unjustly terminated without just cause after notice and hearing (Agabon vs. NLRC, G.R. No. 158693, Nov. 17, 2004).

Procedural due process to be observed in termination of employment

The procedural due process will depend on the cause of the termination of employment of the employee. In other words, due process for just cause is not the same for an authorized cause.

A. Procedural due process in just cause termination

Articulation of procedural due process in labor cases is found in Article 292 (b) of the Labor Code. Thus:

Art. 292 (277). Miscellaneous Provisions.

x x x x

b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. The Secretary of the Department of Labor and Employment may suspend the effects of the termination pending resolution of the dispute in the event of a prima facie finding by the appropriate official of the Department of Labor and Employment before whom such dispute is pending that the termination may cause a serious labor dispute or is in implementation of a mass lay-off.

x x x x

The procedure can be summarized in this manner. First, the employer must furnish the employee with a written notice containing the cause for termination. Second, the employer must give the employee an opportunity to be heard. This could be done either through a position paper or through a clarificatory hearing. The employee may also be assisted by a representative or counsel. Finally, the employer must give another written notice apprising the employee of its findings and the penalty to be imposed against the employee, if any. In labor cases, these requisites meet the constitutional requirement of procedural due process, which "contemplates notice and opportunity to be heard before judgment is rendered, affecting one’s person or property" (Montinola vs. PAL, G.R. No. 198656, September 8, 2014).

In just cause termination, the twin requirements of notice and hearing constitute essential elements of due process in cases of employee dismissal. Thus, the following procedure should be followed:

1. Service of Pre-Notice – the notice to apprise the employee of the particular acts or omissions for which his dismissal is sought and is considered as the proper charge.

2. Answer and conduct of hearing

3. Service of Post-Notice – The notice informing the employee of the employer’s decision to dismiss him which notice must come only after the employee is given a reasonable period from receipt of the first notice within which to answer the charge, and ample opportunity to be heard and defend himself with the assistance of his representative if he so desires.

1. Service of Pre-Notice (first written notice)

The pre-notice to be served on the employee should contain the following:

a. The specific causes or grounds for termination as provided for under Article 297 of the Labor Code, as amended, and company policies, if any;

b. The detailed narration of the facts and circumstances that will serve as basis for the charge against the employee. This is required in order to enable him to intelligently prepare his explanation and defenses. A general description of the charge will not suffice.

c. A directive that the employee is given the opportunity to submit a written explanation within a reasonable period.

Reasonable period should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employee an opportunity to study the accusation, consult or be represented by a lawyer or union officer, gather data and evidence, and decide on the defenses against the complaint (Unilever vs. Rivera, G.R. No. 201701, Jun. 3, 2013).

2. Conduct of hearing

The employer should schedule and conduct a hearing or conference after serving the pre-notice to the employee. In this process, the employee will be given the opportunity to:

a. Explain and clarify his defenses to the charge/s against him;

b. Present evidence in support of his defenses; and

c. Rebut the evidence presented against him by the management.

During the hearing or conference, the employee is given the chance to defend himself personally, with the assistance of a representative or counsel of his choice. Moreover, this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement.

The general rule is that the conduct of hearing is a requisite only in just cause termination. The exception to this rule is when the just cause of termination of employment is due to abandonment. This just cause is considered a form of gross neglect of duties under Art. 297 (b) of the Labor Code. For obvious reason, the conduct of hearing is no longer required here. Hence, in abandonment cases, due process is consist only of the service of two (2) notices to the employee, viz.: 1. First Notice directing the employee to explain why he should not be declared as having abandoned his job; and 2. Second Notice to inform him of the employer’s decision to dismiss him on the ground of abandonment (Kingsize Manufacturing Corporation vs. NLRC, G.R. Nos. 110452-54, Nov. 24, 1994).

A just cause dismissal without the benefit of a hearing prior to the employee’s termination violates his right to due process which requires that the person sought to be dismissed must be given a chance to answer and be heard on the charges against him before he is dismissed (Bondoc vs. NLRC, G.R. No. 103209, Jul. 28, 1997). Due process is satisfied when the employee is afforded fair and reasonable opportunity to explain his side of the controversy at hand (Gana vs. NLRC, G.R. No. 164640, Jun. 13, 2008).

A formal or trial-type hearing is not at all times and in all instances essential, as the due process requirements are satisfied where the parties are afforded fair and reasonable opportunity to explain their side of the controversy at hand (Valiao vs. CA, G.R. No. 146621, Jul. 30, 2004). Meeting, dialogue, consultation or interview is not the hearing required by law. It may not be a substitute for the actual holding of a hearing (Maneja vs. NLRC, G.R. No. 124013, Jun. 5, 1998).

Due process, therefore, is not violated where a person is not heard because he has chosen, for whatever reason, not to be heard. It should be obvious that if he opts to be silent where he has a right to speak, he cannot later be heard to complain that he was unduly silenced (New Puerto Commercial vs. Lopez, G.R. No. 169999, Jul. 26, 2010). If the employee does not answer, hearing should still proceed (Hagonoy Rural Bank vs. NLRC, G.R. No. 122075, Jan. 28, 1998).

3. Service of Post-Notice (second written notice)

After determining that termination of employment is justified, the employer shall serve the subject employee a written notice of termination indicating the following:

a. That all the circumstances involving the charge/s against the employee has been considered; and

b. That the grounds have been established to justify the severance of his employment (King of Kings Transport, Inc. vs. Mamac, G.R. No. 166208, Jun. 29, 2007).

All the forgoing notices shall be served personally to the employee or to the employee’s last known address (Agabon vs NLRC, G.R. No. 158693, Nov. 17, 2004).

B. Procedural due process in authorized cause termination

Articles 298 and 299 of the Labor Code, as amended, provides for the due process requirement in terminating employees for authorized causes. Due process is deemed complied with upon the separate and simultaneous service of a written notice of the intended termination to both the employee subject of the termination and the appropriate DOLE Regional Office at least 30 days before the intended date of the termination specifying the grounds therefore and the undertaking to pay the separation pay required under the Labor Code.

Separation pay shall be paid by the employer to an employee terminated due to installation of labor-saving devices, redundancy, retrenchment, closure or cessation of operations not due to serious business losses or financial reverses, and disease.

An employee terminated due to installation of labor-saving devices, redundancy and disease shall be paid by the employer a separation pay equivalent to 1 month pay or at least 1 month pay for every year of service, whichever is higher, a fraction of 6 months service is considered as 1 whole year.

An employee terminated due to retrenchment and closure or cessation of business operation not due to serious business losses shall be paid by the employer a separation pay equivalent to 1 month pay or at least ½ month pay for every year of service, whichever is higher, a fraction of 6 months service is considered as 1 whole year.

Where closure is due to serious business losses or financial reverses, no separation pay is required.

C. Procedural due process in probationary employment termination

The services of a probationary employee may be terminated for any of the following: (1) a just cause; (2) an authorized cause; and (3) when he or she fails to qualify as a regular employee in accordance with the reasonable standards prescribed by the employer (Moral vs. Momentum Properties Management Corporation, G.R. No. 226240, March 06, 2019).

Probationary employment may be terminated prior to the lapse of the probationary period for just or authorized cause. In this case, the appropriate procedural due process shall apply.

If the ground invoke is failure to qualify as a regular employee in accordance with the reasonable standards prescribed by the employer, due process of law has already been observed if reasonable standards expected of the employee during his or her probationary period was made known to him or her at the time of his or her probationary employment. In other words, termination of probationary employment in this ground does not require notice and hearing. It is sufficient that a written notice of termination is served to the probationary employee within a reasonable time from the effective date thereof setting forth the justification of such termination. To be valid, however, termination must be done prior to lapse of probationary period (Pasamba vs. NLRC, G.R. No. 168421, Jun. 8, 2007).

D. Procedural due process on the following definite-period employments

Procedural due process is not required for definite-period employments because as to:

a. Project employment – it automatically terminates upon completion of the project.

b. Seasonal employment – it automatically terminates upon the end of the season.

c. Casual employment – it automatically terminates upon the lapse of the agreed period.

d. Fixed-term employment – it automatically terminates upon the expiration of the fixed period.

However, within the period of employment, the project, seasonal, casual or fixed-term employee cannot be terminated without just or authorized cause. Hence, appropriate procedural due process shall be exercise if termination is done during the period of their employment.

References:

- Article 292 par (b) Miscellaneous Provisions, PD No. 422, as amended and renumbered per DOLE Department Advisory No. 1, Series of 2015.

- Article 298. Closure of Establishment and Reduction of Personnel, PD No. 422, as amended and renumbered per DOLE Department Advisory No. 1, Series of 2015.

- Article 299. Disease as Ground for Termination, PD No. 422, as amended and renumbered per DOLE Department Advisory No. 1, Series of 2015.

- Department Order No. 147-15, Series of 2015, Amending the Implementing Rules and Regulations of Book VI of the Labor Code of the Philippines, as amended.

- Poquiz, Labor Relations Law, 2005.

- Supreme Court Decisions