Article 294 [279] of the Labor Code: Security of tenure
The number in brackets, [279], is the article's number before the 2015 renumbering of the Labor Code.
Status: Amended
Amended
This provision has been amended. The text below is the current version.
- Amended by: Republic Act No. 6715
What does Article 294 [279] say?
In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.
Read the Labor Code on the DOLE website (it uses the article numbers before 2015)
What does it mean in plain language?
Article 294 (Article 279 before the 2015 renumbering) is the basic rule of security of tenure. An employer may not dismiss a regular employee except for a just cause or an authorized cause allowed by the Labor Code. An employee who is unjustly dismissed is entitled to be reinstated and to receive full backwages.
The full text, as amended by Republic Act No. 6715 (1989):
In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.
How does it work in real life?
Nestor: "Huwag ka nang pumasok"
Nestor, a regular factory worker, is told by his supervisor not to come back, with no notice and no reason. If the Labor Arbiter finds that he was dismissed without a just or authorized cause, Article 294 entitles him to reinstatement and full backwages from the day his pay stopped.
Nestor's new job
While his case is pending, Nestor takes a job at another factory. Under Bustamante, his backwages are generally not reduced by what he earns there.
Lea: going back is not possible
Lea wins her illegal dismissal case, but the relationship with her employer has broken down. The court orders separation pay of one month salary for every year of service in place of reinstatement, with backwages up to the finality of the decision, as in Keng Hua. The separation pay calculator shows how such amounts are usually computed.
What does this mean in practice?
- An order of reinstatement by the Labor Arbiter takes effect immediately, even if the employer appeals ([Article 229 [223]](/law/labor-code/article-229)).
- A dismissal for a just cause without the required notices is not illegal, but the employer may be ordered to pay nominal damages (Agabon v. NLRC). Article 294's reinstatement and backwages apply when there was no valid cause at all.
- For the full list of remedies, see remedies for illegal dismissal. For an overview, see the employee rights topic. For how to start a case, see how to file a labor complaint.
What are the valid reasons to end employment?
Article 294 itself does not list them. It points to two groups found in the same Title of the Code:
- Just causes are faults of the employee, such as serious misconduct, gross and habitual neglect of duties, or fraud. They are listed in [Article 297 [282]](/law/labor-code/article-297).
- Authorized causes are business or health reasons that are not the employee's fault: labor-saving devices, redundancy, retrenchment, closure ([Article 298 [283]](/law/labor-code/article-298)) and disease ([Article 299 [284]](/law/labor-code/article-299)).
A dismissal for any other reason is not allowed. A dismissal for a valid reason can still be defective if the required notices were not given: see fired without notice.
What does an illegally dismissed employee receive?
Article 294 gives two things:
- Reinstatement without loss of seniority rights and other privileges. The worker returns to the job without losing seniority.
- Full backwages, inclusive of allowances, plus other benefits or their money equivalent. These are counted from the day pay was withheld up to the day of actual reinstatement. See the glossary entry on backwages.
The Supreme Court has added rules on how these are computed:
- Separation pay in place of reinstatement. When going back is no longer feasible, courts may order separation pay instead. In Keng Hua Paper Products v. Ainza (2023), the Court said this separation pay "shall be equivalent to one month salary for every year of service", and that backwages are then "computed from the time of dismissal until the finality of the decision ordering separation pay".
- No deduction for other earnings. In Bustamante v. NLRC (1996), the Court said backwages "should not, as a general rule, be diminished or reduced by the earnings derived by him elsewhere during the period of his illegal dismissal."
- Interest. In Keng Hua, the Court ordered legal interest of 6% per annum on the monetary awards from the finality of its decision until fully paid.
Does security of tenure protect probationary employees?
Yes, within limits. A probationary employee may be dismissed for a just cause or for failing to meet reasonable standards made known at the time of hiring ([Article 296 [281]](/law/labor-code/article-296)). In C.P. Reyes Hospital v. Barbosa (2024), the Supreme Court En Banc held that illegally dismissed probationary employees, like regular employees, are entitled to backwages up to actual reinstatement, or up to the finality of the decision if reinstatement is not feasible.
Who must prove the cause for dismissal?
The employer. In Aldovino v. Gold and Green Manpower (2019), the Supreme Court said that "in illegal dismissal cases, the burden of proof that employees were validly dismissed rests on the employers." Doubts in reading the Code are resolved in favor of labor under Article 4.
Which Supreme Court rulings are relevant?
Frequently asked questions
What is security of tenure in the Philippines?
It is the right of an employee not to be dismissed except for a just cause or an authorized cause allowed by the Labor Code. Article 294 [279] states it for regular employment, and the Supreme Court applies the same protection to probationary employees within the limits of Article 296 [281].
What does an illegally dismissed employee get?
Under Article 294, reinstatement without loss of seniority rights and other privileges, plus full backwages, inclusive of allowances, and other benefits or their money equivalent, counted from the time pay was withheld up to actual reinstatement.
What if going back to work is no longer possible?
Courts may order separation pay in place of reinstatement. In Keng Hua Paper Products v. Ainza (2023), the Supreme Court said such separation pay is one month salary for every year of service, and backwages then run from dismissal until the decision ordering separation pay becomes final.
Are backwages reduced by what I earn from a new job while the case is pending?
As a general rule, no. In Bustamante v. NLRC (1996), the Supreme Court said backwages should not be diminished or reduced by earnings from other work during the period of illegal dismissal.
Who has to prove that the dismissal was valid?
The employer. In Aldovino v. Gold and Green Manpower (2019), the Supreme Court said that in illegal dismissal cases, the burden of proof that employees were validly dismissed rests on the employers.
General information, not legal advice. For your case, ask a lawyer, the Public Attorney's Office (PAO) or the agency.
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