Termination of Employment for Just Causes

What is meant by “just causes” when it comes to termination of employment?

Just causes refer to those instances enumerated under Art. 297 [Termination by Employer] of the Labor Code, as amended. These are causes directly attributable to the fault or negligence of the employee.[1]

They are different from “authorized causes” in that the latter are causes brought by the necessity and exigencies of business, changing economic conditions and illness of the employee.[2] In other words, authorized causes are grounds for termination independent of fault on the part of the employee.

What are the just causes under Art. 297 of the Labor Code and what are the requisites for them to be valid grounds for termination?

A. Serious Misconduct

(a) There must be misconduct;

(b) The misconduct must be of such grave and aggravated character;

(c) It must relate to the performance of the employee's duties; and

(d) There must be showing that the employee becomes unfit to continue working for the employer.[3]

B. Willful Disobedience or Insubordination

(a) There must be disobedience or insubordination;

(b) The disobedience or insubordination must be willful or intentional characterized by a wrongful perverse attitude;

(c) The order violated must be reasonable, lawful, and made known to the employee; and

(d) The order must pertain to the duties which he has been engaged to discharge.[4]

C. Gross and Habitual Neglect of Duties

(a) There must neglect of duty; and

(b) The negligence must be both gross and habitual in character.[5]

D. Fraud or Willful Breach of Trust

(a) There must be an act, omission, or concealment;

(b) The act, omission or concealment involves a breach of legal duty, trust, or confidence justly reposed;

(c) It must be committed against the employer or his/her representative; and

(d) It must be in connection with the employee's work.[6]

E. Loss of Confidence

(a) There must be an act, omission or concealment;

(b) The act, omission or concealment justifies the loss of trust and confidence of the employer to the employee;

(c) The employee concerned must be holding a position of trust and confidence;

(d) The loss of trust and confidence should not be simulated;

(e) It should not be used as a subterfuge for causes which are improper, illegal, or unjustified; and

(f) It must be genuine and not a mere afterthought to justify an earlier action taken in bad faith.[7]

F. Commission of a Crime or Offense

(a) There must be an act or omission punishable/prohibited by law, and

(b) The act or omission was committed by the employee against the person of employer, any immediate member of his/her family, or his/her duly authorized representative.[8]

G. Analogous Causes

(a) There must be an act or omission similar to those specified just causes; and

(b) The act or omission must be voluntary and/or willful on the part of the employees.

No act or omission shall be considered as analogous cause unless expressly specified in the company rules and regulations or policies.[9]

Is an employee whose employment was terminated for just cause entitled to separation pay?

No. In Reno Foods, Inc. v. Nagkakaisang Lakas ng Manggagawa (NLM) – Katipunan[10], the Supreme Court had the occasion to say the following: “The law is clear. Separation pay is only warranted when the cause for termination is not attributable to the employee’s fault, such as those provided in Articles 283 [now 298] and 284 [now 299] of the Labor Code, as well as in cases of illegal dismissal in which reinstatement is no longer feasible. It is not allowed when an employee is dismissed for just cause, such as serious misconduct.”

See related post: "Due process in employe termination"

[1] Section 4 (b), Rule I-A, Department of Labor and Employment (DOLE) Department Order No. 147-15, Series of 2015, Amending the Implementing Rules and Regulations of Book VI of the Labor Code of the Philippines, as amended. [2] Sec. 4 (a), Id. [3] Sec. 5.2 (a), Id. [4] Sec. 5.2 (b), Id. [5] Sec. 5.2 (c), Id. [6] Sec. 5.2 (d), Id. [7] Sec. 5.2 (e), Id. [8] Sec. 5.2 (f), Id. [9] Sec. 5.2 (g), Id. [10] G.R. No. 164016, March 15, 2010.

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