Your employee can be clearly at fault — and firing them can still cost you

Philippine labor law allows employee termination, provided employers can prove both valid grounds and fair procedure.

Imagine catching an employee stealing company property, repeatedly ignoring orders or committing a serious workplace offense.

For many employers, the instinct may be simple: fire the employee.

Philippine labor law says: not so fast.

Dismissal is governed by strict rules because workers enjoy constitutional protection and security of tenure. An employer generally needs not only a valid legal ground for termination but also the proper process for carrying it out.

That is why firing an employee—even one clearly at fault—can become a legal minefield.

Having a reason is not enough

Article 297 of the Labor Code recognizes just causes including serious misconduct, willful disobedience, gross and habitual neglect of duties, fraud or willful breach of trust, commission of a crime against the employer or certain representatives, and analogous causes.

But labels alone are insufficient.

Poor performance does not automatically amount to gross and habitual neglect. A minor violation may not constitute serious misconduct. Loss of trust and confidence also has legal requirements and generally applies to managerial employees and others occupying positions of trust.

If challenged, the employer carries the burden of proving that the dismissal was valid.

You still have to let the employee explain

For dismissal based on just cause, due process normally requires the twin-notice rule.

First comes a written notice identifying the accusations and giving the employee a reasonable opportunity to answer. Supreme Court jurisprudence has interpreted this as at least five calendar days.

The worker must then be given a meaningful opportunity to respond. A formal hearing is not automatically required in every case, but may become necessary when requested in writing or when substantial factual disputes need to be resolved.

Only after considering the employee’s defense should the employer issue the second written notice explaining its decision.

A dismissal supported by a valid just cause does not automatically become illegal merely because procedural due process was violated. The employer, however, may become liable for nominal damages.

Documentation can decide the case

Employers therefore need evidence: incident reports, attendance records, performance evaluations, written policies, previous warnings and the employee’s explanation.

Progressive discipline can also matter, particularly for repeated but less serious violations. But there is no universal rule requiring every employee to go through verbal warning, written warning and suspension before dismissal. A sufficiently grave first offense can justify termination when supported by law and evidence.

Trying to force someone to resign can be even riskier. Demotion, discriminatory transfer, drastic reduction in pay or deliberately unbearable working conditions may result in a claim for constructive dismissal.

Philippine labor law does not make employees impossible to fire.

It makes employers prove why they fired them—and show that they did it fairly.

When someone’s livelihood is at stake, committing a workplace offense may be grounds for dismissal. It is not grounds for abandoning due process.

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