What Are the Valid Reasons to Fire an Employee?

Article 297 of the Labor Code (Article 282 before the 2015 renumbering by the Department of Labor and Employment) lists the just causes. The Supreme Court quoted the article in Aldovino v. Gold and Green Manpower (2019) and in Daguinod v. Southgate Foods (2019). In simple words, the employer may terminate the employment for:

1. Serious misconduct or willful disobedience. Serious misconduct by the employee, or willful disobedience of the lawful orders of the employer or its representative, in connection with the work.
2. Gross and habitual neglect of duties. Neglect that is both serious and repeated.
3. Fraud or willful breach of trust. Fraud, or a willful breach of the trust that the employer or its authorized representative placed in the employee.
4. Crime or offense against the employer. A crime or offense by the employee against the person of the employer, any immediate member of the employer's family, or the employer's authorized representatives.
5. Analogous causes. Other causes similar to the four above.

Each word matters. The misconduct must be "serious", the disobedience "willful" and about "lawful orders" connected with the work, and the neglect "gross and habitual". Whether a given act meets these words is decided on the facts of each case.

It can be. In Agabon v. NLRC (2004), the Court said abandonment is "a form of neglect of duty, hence, a just cause for termination of employment by the employer". But there must be both an absence without a valid reason and a clear intention to cut ties with the employer, shown by overt acts. An absence with a valid reason does not meet the first element, and absence alone does not prove the second. See What happens if I go AWOL? and the case explainer Agabon v. NLRC.

The employer. In Aldovino, the Court said: "In illegal dismissal cases, the burden of proof that employees were validly dismissed rests on the employers." If the employer cannot prove it, the dismissal is illegal. In that case the workers were let go only because the employer no longer wanted their services. The Court said this is not a just or authorized cause, adding: "Employment contracts cannot be terminated on a whim."

Old problems that the employer never acted on may not help it later. In C.P. Reyes Hospital v. Barbosa (2024), the hospital relied on absences for which it never asked the employee to explain. The Court said that ground was used "merely as an afterthought" and found the dismissal illegal.

A valid cause is not enough on its own. The employer must also follow due process. For just causes, the implementing rules as amended by DOLE Department Order No. 147-15, as quoted in C.P. Reyes (2024), require:

1. A first written notice stating the ground or grounds, giving the employee a reasonable chance to explain.
2. A hearing or conference where the employee, with a lawyer if he or she wants, can answer the charge, present evidence and rebut the evidence against him or her.
3. A written notice of termination stating that, after considering everything, the grounds were established.

If the cause is valid but the steps were skipped, the dismissal still stands, but the employer may be ordered to pay nominal damages. See Fired without notice?

These are not just causes. Redundancy, labor-saving devices, retrenchment to prevent losses and closure are authorized causes under Article 298 [283]. They come from the employer's business decisions, need one month written notice to the workers and to DOLE, and generally require separation pay. Termination because of a disease is covered by a separate article of the Code. See Retrenchment and closure: when is it legal? and Just cause vs authorized cause.

As a rule, no. In Jaka Food Processing v. Pacot (2005), the Court explained that for a just cause "payment of separation pay, as a rule, is not required", while the law requires it for authorized causes. You still get what you already earned, such as unpaid salary and benefits. In Agabon, even though the dismissal was upheld, the employer still had to pay the workers' unpaid holiday pay and service incentive leave pay, and the unpaid balance of one worker's 13th month pay. See final pay and separation pay.

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

Dennis, a warehouse worker in Laguna, is caught on CCTV taking boxes of stock home to sell. This can be fraud or willful breach of trust. His employer still has to send him a notice to explain, hear his side and then send a written notice of termination.

Carla is late for work once because of a flood. The article speaks of neglect that is "gross and habitual". A single late arrival with a reason like this is hard to fit within those words, but each case is decided on its facts.

Rey, a driver, punches his manager during an argument. A crime or offense against the employer's authorized representative is a listed just cause, so this may fall under it. The employer still has to follow the notice and hearing steps.

Tess refuses her supervisor's order to sign a false inventory report. The article covers willful disobedience of "lawful orders", so refusing an order to falsify a record does not fit that ground.

For the other rules on resignation, dismissal and leaves, see Employee rights in the Philippines.

Talk to a lawyer if you received a notice to explain and the charge is serious, if you were dismissed without a clear reason, or if you are an employer deciding whether a ground is strong enough. The answer depends on the evidence. If you cannot afford a lawyer, see Free legal help in the Philippines for the Public Attorney's Office (PAO) and other options.