Jobs are protected by law
In the Philippines, an employee can only be dismissed for a just or an authorized cause under the Labor Code, and only after due process. This is called security of tenure.
When Remote Employee® is the employer, we handle this process, the notices, and the final pay.
Just causes
A just cause is something the employee did. Article 297 of the Labor Code lists:
- Serious misconduct, or willful disobedience of lawful orders connected with the work
- Gross and habitual neglect of duties
- Fraud, or willful breach of the employer’s trust
- A crime against the employer, the employer’s family, or its representative
- Other causes of the same kind, written into company rules
Dismissal for a just cause carries no separation pay, unless company policy or an agreement says otherwise.
Authorized causes and separation pay
An authorized cause is a business or health reason, not the employee’s fault. Each comes with set separation pay (Articles 298 and 299):
| Cause | Separation pay |
|---|---|
| Labor-saving devices or redundancy | One month’s pay per year of service, or one month’s pay, whichever is higher |
| Retrenchment to prevent losses | Half a month’s pay per year of service, or one month’s pay, whichever is higher |
| Closure, not due to serious losses | Half a month’s pay per year of service, or one month’s pay, whichever is higher |
| Closure due to serious losses | None required |
| A disease that can’t be cured within 6 months | Half a month’s pay per year of service, or one month’s pay, whichever is higher |
A fraction of at least six months counts as a full year of service.
Due process
For a just cause, the employer follows three steps:
- First written noticeThe specific grounds and facts, with at least 5 calendar days to answer in writing.
- A real chance to be heardThe employee answers in writing or in a meeting. A formal hearing is needed if they ask for one or the facts are disputed.
- Second written noticeThe decision, and the grounds that were established.
For an authorized cause, the employee and the DOLE regional office get written notice at least 30 days before the termination takes effect.
Resignation
An employee who resigns gives at least one month’s written notice (Article 300). They can leave without notice for serious reasons the law lists, such as a serious insult, inhuman treatment, or a crime against them or their family by the employer.
Final pay and the certificate of employment
- Final pay is released within 30 days of the last day, unless company policy is more favorable (DOLE Labor Advisory No. 06, Series of 2020).
- It includes unpaid salary, prorated 13th month pay, the cash value of unused service incentive leave, any separation or retirement pay, and any tax refund.
- A certificate of employment is issued within 3 days of the employee’s request.
Retirement
Without a company retirement plan, an employee aged 60 to 65 with at least 5 years of service gets at least half a month’s salary per year of service (Republic Act No. 7641).
If a hire isn’t the right fit
Replacing a hire costs nothing extra: if you’re not happy, we replace them for free.
Sources
We checked the Philippine rules on this page against these official sources. Rates and rules change, so check the latest before you act on them.
