Just Cause vs Authorized Cause Dismissal

The just causes are in Article 297 of the Labor Code (Article 282 before the 2015 renumbering), as quoted by the Supreme Court in Aldovino v. Gold and Green Manpower (2019). They are all about the employee's conduct:

• serious misconduct, or willful disobedience of the employer's lawful orders connected with the work;
• gross and habitual neglect of duties;
• fraud, or willful breach of the trust given by the employer;
• a crime or offense against the employer, a member of the employer's immediate family, or the employer's representative;
• other causes analogous to these.

Abandonment of work is treated as a form of neglect. See What happens if I go AWOL? and Valid reasons to fire an employee.

The authorized causes in Article 298 [283], as quoted in Keng Hua Paper Products v. Ainza (2023), are business reasons: installing labor-saving devices, redundancy, retrenchment to prevent losses, and closing or stopping the business. A closure meant only to get around the Labor Code is not allowed.

The employee did nothing wrong. That is why the law asks the employer to pay separation pay. In Jaka Food Processing v. Pacot (2005), the Supreme Court explained that in a just-cause dismissal "payment of separation pay, as a rule, is not required," while for an authorized cause the law requires it.

Ending the employment of a worker who has a disease is a separate ground, with its own conditions in the Labor Code's implementing rules. This page does not cover that ground.

They are completely different:

• Just cause. The employer must follow the two-notice rule. The implementing rules quoted in C.P. Reyes Hospital v. Barbosa (2024) require a written notice stating the grounds and giving a reasonable chance to explain, a hearing or conference, and a written notice of termination. In Aldovino, the Court put it simply: the employer must comply with the two-notice requirement, and the employee must be given an opportunity to be heard.
• Authorized cause. The employer must serve a written notice on the workers and on DOLE at least one month before the intended date. In Keng Hua, the Court said this written notice to the employees and to DOLE is required "regardless of cause".

See Fired without notice? and Retrenchment and closure: when is it legal?

It depends on the ground, under Article 298 [283]:

In every case, a fraction of at least six months counts as one whole year. Use the separation pay calculator for an estimate, and see the final pay and separation pay guide.

The dismissal stays valid, but the employer pays nominal damages to the employee for the violation of due process.

• In Agabon v. NLRC (2004), a just-cause case, the Court fixed them at ₱30,000. It said the amount "is addressed to the sound discretion of the court".
• In Jaka (2005), an authorized-cause case, the Court fixed them at ₱50,000. It made the sanction stiffer because an authorized-cause dismissal is started by the employer's own business decision.

These were the amounts in those cases. They are not fixed fines, and courts set the amount on the facts. If there was no valid cause at all, the dismissal is illegal. See Illegally dismissed: what can you get?

These are made-up examples to show how the rules work. They are not advice for any real case.

Bea. Bea, a cashier, is caught taking money from the cash box and is fired the same day without any notice. Fraud is a just cause, so the dismissal can be valid. Because she got no notices, the employer may be ordered to pay nominal damages. She is not entitled to separation pay as a rule.

Carlo. Carlo earns ₱20,000 a month and has worked for 7 years and 7 months when his bank declares his position redundant. The seven months count as a whole year, so he has 8 years. One month pay per year gives 8 × ₱20,000 = ₱160,000, which is higher than one month pay.

Weng. Weng earns ₱18,000 and has worked 4 years and 3 months when her store closes, not because of serious losses. Three months is less than six, so she has 4 years. Half a month per year gives 4 × ₱9,000 = ₱36,000, which is higher than one month pay.

Edwin. Edwin earns ₱15,000 and has worked 1 year and 2 months when he is retrenched. Half a month for 1 year is ₱7,500, which is lower than one month pay, so he gets ₱15,000.

Talk to a lawyer if you received a notice of termination, if the reason given looks doubtful, or if you were told your job is redundant or the company is closing. Whether losses are real and whether notices were properly served depend on documents. If you cannot afford a lawyer, see Free legal help in the Philippines for the Public Attorney's Office (PAO) and other options.