Unlawful Dismissal Complaint and Employee Rights under Philippine Labor Law
(Disclaimer: This article is for general informational purposes only and does not constitute legal advice. For specific concerns, it is best to consult a qualified legal professional.)

1. Introduction

In the Philippines, the Labor Code and relevant regulations underscore the importance of security of tenure, ensuring that employees cannot be dismissed without just or authorized cause and due process. “Unlawful dismissal” (often referred to as “illegal dismissal”) occurs when an employer ends an employee’s services without complying with the substantive and procedural requirements set by law. This article provides a comprehensive overview of the grounds for dismissal, the required procedure, the process for filing a complaint, and the remedies and rights afforded to employees under Philippine labor law.

2. Legal Framework

1974 Labor Code of the Philippines (Presidential Decree No. 442, as amended)
The Labor Code is the primary legislation governing employment relationships in the Philippines. It lays down provisions on the rights of workers, conditions of employment, labor relations, and resolution of labor disputes.
Jurisdiction of Labor Tribunals
- National Labor Relations Commission (NLRC): Handles labor disputes, including unlawful dismissal claims.
- Labor Arbiters: Have original and exclusive jurisdiction over illegal dismissal cases at the trial level (i.e., first instance).
Constitutional Provisions
- The 1987 Philippine Constitution protects the rights of workers, including the right to security of tenure (Article XIII, Section 3).

3. Security of Tenure

Security of tenure means that once an employee has become regular (i.e., after the probationary period or by the nature of work), they cannot be removed from their position without meeting lawful grounds (just or authorized causes) and following due process. Any violation of these requirements renders the dismissal unlawful.

4. Types of Employment Status

Regular Employment
- An employee who has rendered at least six (6) months of service, or whose tasks are necessary or desirable to the employer’s usual business or trade, is typically considered a regular employee.
- Has full security of tenure.
Probationary Employment
- Limited to a maximum of six (6) months (unless a longer period is required by law or if covered by apprenticeship agreements).
- The employer must inform the probationary employee of the reasonable standards for regularization at the start of the engagement.
Project or Fixed-Term Employment
- Applies when the employment is tied to a specific project or period.
- If used in bad faith or to circumvent a worker’s right to security of tenure, it may be declared invalid.
Seasonal Employment or Casual Employment
- Employment is based on seasonal activities or short-term, intermittent tasks.
- Rights still apply, but the nature of dismissal or completion of contract depends on the specific arrangement and compliance with labor laws.

5. Valid Grounds for Termination of Employment

5.1 Just Causes

Under Article 297 (formerly Article 282) of the Labor Code, employers may legally terminate an employee for the following just causes:

Serious Misconduct or Willful Disobedience
- An intentional and deliberate disregard of the employer’s rules or lawful orders, which must be reasonable and related to the job.
Gross and Habitual Neglect of Duties
- Failure to perform obligations over a period, demonstrating a pattern of neglect with serious consequences.
Fraud or Willful Breach of Trust
- Deceit or violation of the trust placed by the employer, especially if the position involves fiduciary responsibilities.
Commission of a Crime or Offense Against the Employer or Immediate Family
- Example: Theft, assault, or other offenses that make continued employment untenable.
Other Analogous Causes
- Causes not explicitly listed but analogous in nature and severity (e.g., abandonment, serious violation of company policies).

5.2 Authorized Causes

Under Articles 298 and 299 (formerly Articles 283 and 284) of the Labor Code, an employer may end employment for authorized causes, which are generally based on business or health reasons:

Installation of Labor-Saving Devices
Redundancy
Retrenchment to Prevent Losses
Closure or Cessation of Business
Disease or Illness
- When continued employment endangers the health of the employee or coworkers.

Unlike just causes, authorized causes typically require separation pay even if the dismissal is legal, and the employer must provide at least one (1) month’s notice to both the employee and the Department of Labor and Employment (DOLE).

6. Procedural Due Process Requirements

6.1 For Just Causes (“Two-Notice Rule”)

First Notice (Charge Sheet)
- A written notice stating the specific acts or omissions for which dismissal is sought.
- Employee is given a reasonable period to respond in writing.
Opportunity to be Heard
- The employer must conduct a hearing or conference giving the employee the chance to explain their side and present evidence or witnesses.
Second Notice (Decision Notice)
- After considering the employee’s explanation, the employer issues a final written notice of termination if they find justification.
- Must contain the facts, circumstances, and grounds for dismissal, as well as the reasons behind the decision.

6.2 For Authorized Causes

One-Month Advance Notice
- Written notice to both the employee and the DOLE at least 30 days before the date of termination.
- State the reasons for the dismissal (e.g., redundancy, retrenchment).
Separation Pay
- Amount varies depending on the authorized cause (commonly, one month’s salary or at least one month’s pay per year of service for redundancy and retrenchment, or half-month’s pay per year of service for closure not due to serious losses).

Failure to comply with the correct procedure, even if the cause is valid, may still result in liability for nominal damages on the part of the employer. If the cause is invalid, the dismissal is deemed illegal.

7. Constructive Dismissal

Constructive dismissal occurs when an employer’s actions or policies make continued employment impossible, unreasonable, or unlikely—effectively forcing the employee to resign. Examples:

Demotion without valid cause or basis.
Non-payment or underpayment of wages.
Harassment and unfair treatment.
Transfer to a remote or inferior position or location for no legitimate reason.

In such cases, even if the employee appears to “resign,” the law may treat it as a dismissal without just or authorized cause.

8. Filing an Illegal (Unlawful) Dismissal Complaint

Venue of the Complaint
- Cases must be filed with the Regional Arbitration Branch of the NLRC having jurisdiction over the place where the employee resides or where the employer’s principal office is situated.
Prescriptive Period
- The employee has four (4) years from the date of dismissal to file a complaint for illegal dismissal, although it is recommended to file as soon as possible.
Mandatory Conciliation and Mediation
- Before proceeding to litigation, the complaint is typically referred to the Single Entry Approach (SEnA) at the Department of Labor and Employment (DOLE) to attempt an amicable settlement within 30 days.
Proceedings Before the Labor Arbiter
- If unresolved at SEnA, the case is raffled to a Labor Arbiter of the NLRC for formal hearing and adjudication.

9. Remedies and Awards for Unlawful Dismissal

If the labor tribunal (Labor Arbiter, NLRC, or the courts) finds that the dismissal is unlawful, possible remedies include:

Reinstatement
- The illegally dismissed employee is reinstated to the former position without loss of seniority rights.
Back Wages
- The employee may be entitled to receive salaries and other benefits from the time of dismissal up to actual reinstatement (or finality of the decision, depending on applicable jurisprudence).
Separation Pay in Lieu of Reinstatement
- If reinstatement is no longer feasible (e.g., strained relations, closure of business), the tribunal may order payment of separation pay instead.
Damages
- Moral and Exemplary Damages: Awarded if the dismissal was done in bad faith or in an oppressive manner.
- Nominal Damages: Awarded if the dismissal is based on valid cause but the employer fails to observe due process.
Attorney’s Fees
- The tribunal may grant attorney’s fees of up to 10% of the total monetary award if the employee was compelled to litigate.

10. Employer’s Defenses

In contesting an illegal dismissal claim, employers usually need to prove:

Existence of a Valid Cause
- Documentary or testimonial evidence showing an act of misconduct, redundancy, or any other just/authorized cause.
Compliance with Procedural Due Process
- Proof of notice, hearing, and opportunity to be heard.
Absence of Bad Faith or Malice
- Demonstrating legitimate business decisions or valid disciplinary grounds.

Failure to prove both the cause and the observance of due process typically results in a decision for the employee.

11. Best Practices for Employers and Employees

11.1 For Employers

Maintain Accurate Records: Keep well-documented records of employee performance, disciplinary action, and business decisions.
Adopt Clear Company Policies: Ensure rules and procedures are reasonable, communicated, and consistently implemented.
Follow the Two-Notice Rule: Observe proper notice and hearing to avoid technical violations.
Provide Separation Pay When Required: Comply with legal mandates for authorized causes.

11.2 For Employees

Know Your Employment Status: Understand your rights if you are a regular, probationary, project-based, or seasonal worker.
Document Everything: Keep personal copies of employment contracts, payslips, memos, and relevant communications.
Promptly Address Work-Related Issues: If you receive notices or memos, respond in writing and attend hearings if required.
Seek Legal Assistance Early: If you believe you are unfairly treated or dismissed, consult with a lawyer or the DOLE to understand your options.

12. Conclusion

Philippine labor law strongly protects employees’ right to security of tenure, making unlawful dismissal a significant issue for both employers and employees. Dismissal must be based on just or authorized causes, and must follow procedural due process—otherwise, it risks being declared illegal. Employees who are unjustly or arbitrarily terminated have the right to file a complaint with the NLRC and may be entitled to reinstatement, back wages, damages, and other monetary awards.

Understanding the intricacies of lawful termination and the remedial process is crucial for both sides of the employment relationship. Employers are advised to follow proper procedures and valid grounds, while employees should be aware of the remedies available to them in cases of unlawful dismissal. Should there be any doubt or dispute, consulting a qualified labor lawyer or approaching the appropriate government agencies (e.g., DOLE, NLRC) is the best course of action to ensure protection of rights and adherence to due process.

Disclaimer: This article provides a general overview and should not be relied upon as a substitute for professional legal advice. Philippine labor laws and regulations may change over time, and legal strategies must be tailored to the specific facts of each case. If you need assistance with a particular labor dispute, it is best to consult with an attorney or seek guidance from the Department of Labor and Employment or the National Labor Relations Commission.