Termination

Just causes for dismissal of employee may be defined as those lawful or valid grounds for termination of
employment which arise from causes directly attributable to the fault or negligence of the erring
employee. Just causes are usually serious or grave in nature and attended by willful or wrongful intent or
they reflected adversely on the moral character of the employees.

As opposed to authorized causes under Article 283 wherein the termination of employment is dictated by
necessity of the business, the dismissal under just causes is imposed by the employer to the erring
employee as a punishment for the latter’s acts or omission.

Just Causes Under the Labor Code

Just causes for termination under the Labor Code is found in Article 282 and enumerated here as follows:

Serious misconduct. Serious misconduct is an improper conduct willful in character and of such grave
nature that transgressed some established and definite rule of action in relation to the employee’s work.

Willful disobedience to lawful orders. The employees are bound to follow reasonable and lawful orders
of the employer which are in connection with their work. Failure to do so may be a ground for dismissal
or other disciplinary action.

Gross and habitual neglect of duties. Gross negligence has been defined as the want or absence of or
failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard
of consequences without exerting any effort to avoid them.

Fraud or willful breach of trust / Loss of confidence. Fraud is any act, omission, or concealment which
involves a breach of legal duty, trust, or confidence justly reposed and is injurious to another.

Commission of a crime or offense. Commission of a crime or offense by the employee against his
employer or any immediate member of his family or his duly authorized representative, is a just cause for
termination of employment.

Analogous causes. Other causes analogous to the above grounds may also be a just cause for
termination of employment.

Examples of Analogous Causes

Abandonment. Abandonment of job is a form of neglect of duty. There is abandonment when the
employee leave his job or position with a clear and deliberate intent to discontinue his employment
without any intention of returning back.

Gross inefficiency. Gross inefficiency is analogous to and closely related to gross neglect for both involve
acts or omissions on the part of the employee resulting in damage to the employer or to his business. (See
Lim vs. NLRC, G.R. No. 118434, July 26, 1996.)

Disloyalty/conflict of interest. Disloyalty exists when one asserts an interest, or performs acts adverse
to one’s employer, such as secretly engaging in a business which renders him a competitor and rival of his
employer. It constitutes a breach of an implied condition of the contract of employment. (See Elizalde
International vs. Court of Appeals, G.R. No. L40553 February 26, 1981.)

Dishonesty. Acts of dishonesty deemed to be patently inimical to the employer is analogous to breach
of trust and is a valid cause for termination of employment.

No Separation Pay

An employee who is terminated from employment for a just cause is not entitled to payment of separation
benefits. Section 7, Rule I, Book VI, of the Omnibus Rules Implementing the Labor Code provides:

“Sec. 7. Termination of employment by employer. – The just causes for terminating the services of an
employee shall be those provided in Article 282 of the Code. The separation from work of an employee
for a just cause does not entitle him to the termination pay provided in Code, without prejudice, however,
to whatever rights, benefits and privileges he may have under the applicable individual or collective
bargaining agreement with the employer or voluntary employer policy or practice.”

Authorized Cause
The due process involved here, as per Article 297 of the Philippine Labor Code, permits the employer to
terminate any employee in the event of organizational/establishmental closure, and an overall reduction
of personnel, while Article 298 allows for termination due to disease.

Under ‘authorized cause’, Philippine law stipulates that both the employee (each individual employee
separately in the case of mass termination) and the Department of Labor and Employment (DOLE) be duly
notified of the intention to terminate at least 30 days prior to the notice taking affect.

In a termination for an authorized cause, due process means a written notice of dismissal to the employee
specifying the grounds at least 30 days before the date of termination. A copy of the notice shall also be
furnished the Regional Office of the Department of Labor and Employment (DOLE) where the employer is
located.