[Letter from the Concerned Employee]

Dear Attorney,

I recently received a notice to explain from top management based on an incident report filed by my immediate superior. The notice itself references only a single allegation and does not include any attachments or supporting documents. I am unsure how to properly respond to this notice, what rights I have under Philippine employment law, and what steps I can take to ensure a fair and just resolution of this matter. Could you kindly advise me on the best approach to drafting my reply and any procedural safeguards that might apply to my situation?

Respectfully,
A Concerned Employee

Comprehensive Legal Article on Philippine Law Relating to Notices to Explain and Incident Reports

Under Philippine employment law, the issuance of a notice to explain (NTE) is a foundational step in the observance of due process within the employer-employee relationship. When an employee is alleged to have committed a workplace infraction, misconduct, negligence, or any act that violates company policies or the law, the employer is generally required to undertake a procedure that respects both substantive and procedural due process. One of the central components of this process is the proper issuance and handling of a notice to explain, often triggered by an incident report from a superior, co-employee, or any individual who may have witnessed or been affected by the alleged infraction.

1. Legal Basis and Rationale for the Notice to Explain

Philippine labor law sources, including the Labor Code of the Philippines and its implementing rules, as well as jurisprudence from the Supreme Court, emphasize the importance of due process in disciplinary proceedings. The notice to explain serves as an initial step to inform the employee of the specific allegations against them and to afford them an opportunity to respond. Due process in the workplace context consists of two aspects: substantive due process, which pertains to the correctness and validity of the grounds for discipline or dismissal, and procedural due process, which involves compliance with the required steps before an employee may be penalized.

The issuance of a notice to explain is grounded in the fundamental principle that an employee must not be dismissed or sanctioned without being given the chance to defend themselves. This principle stems from the constitutional guarantee of security of tenure for employees and the explicit directives in the Labor Code, particularly Article 297 (formerly Article 282) and related provisions. In landmark cases such as Agabon v. NLRC (G.R. No. 158693, 2004), the Supreme Court emphasized that the twin requirements of notice and hearing must be observed, and the notice to explain is the formal manner of initiating that due process.

2. Contents and Format of a Proper Notice to Explain

While there is no singular, rigid format for the notice to explain under Philippine law, jurisprudence and best practices guide what it should contain. Generally, the notice must state the following:

Specific allegation(s) of wrongdoing: The NTE must detail the acts or omissions the employee allegedly committed, referencing the particular company policy, code of conduct provision, or legal rule that may have been violated.
Factual basis: The allegations must be supported by enough details to enable the employee to understand the nature of the charge. Vague or overly broad accusations may be deemed insufficient.
Opportunity to respond: The notice should clearly state that the employee is being given an opportunity to submit a written explanation or attend a hearing, if applicable, within a reasonable period. Typically, a 48-hour period or a timeframe aligned with company policy is considered fair.

It is not always mandatory for the notice to explain to include all attachments or evidence at the outset. However, providing such attachments is considered best practice, as it allows the employee to prepare a more informed and meaningful reply. Should the employer fail to provide attachments or additional documentation, the employee may request copies to facilitate a proper defense. Philippine law leans in favor of transparency in disciplinary proceedings, and withholding evidence unnecessarily could be questioned if a dispute reaches litigation.

3. Incident Reports as Basis for the Notice to Explain

Incident reports serve as the foundation upon which the notice to explain is often built. A supervisor, manager, or coworker who witnesses an alleged infraction or is affected by it typically documents the incident. This report should include details such as the date, time, place, persons involved, and the specific nature of the misconduct. While the law does not require that the incident report be attached to the NTE, doing so can lend credibility and clarity to the allegations.

In practice, many employers opt to attach the incident report or at least quote relevant portions in the notice to explain. This ensures that the accused employee has a fair understanding of the basis for the charges. If no attachment is provided, the employee can raise a request or note in their response that they lack sufficient documentary evidence to address specific allegations, thus building a record that they were not given complete information at the outset.

4. Procedural Due Process Requirements

Procedural due process in Philippine labor law generally involves the following steps:

First notice (Notice to Explain): The employee receives a written notice informing them of the charge(s).
Employee’s explanation or hearing: The employee is given an opportunity to submit a written explanation and/or attend a hearing or conference to present their side, produce evidence, and clarify any details.
Second notice (Notice of Decision): After considering the employee’s explanation, the employer issues a written notice informing the employee of the employer’s decision, whether it be exoneration, imposition of a penalty less than dismissal, or termination.

In some cases, the law and jurisprudence allow flexibility, especially if the employee waives the right to a hearing or chooses to answer in writing only. As long as the employee was granted a meaningful opportunity to respond, procedural due process is generally considered observed.

5. Importance of the Written Explanation

When an employee receives a notice to explain without attachments, it remains crucial for them to submit a well-considered written explanation. Even without the complete documentation, the employee should:

State their understanding of the allegation.
Provide their own account of the incident or clarify any misunderstandings.
Request additional documents or evidence if necessary.
Assert their rights under Philippine law and company policy.
Maintain a respectful and factual tone.

An employee’s written explanation is not only a right but also a tool to shape the narrative of the incident. By carefully drafting this explanation, the employee can potentially avoid unjust penalties and preserve their employment record.

6. Ensuring Substantive Due Process

Substantive due process requires that any disciplinary action be based on a valid and legal cause. Under the Labor Code, just causes for termination include serious misconduct, willful disobedience, gross and habitual neglect of duties, fraud, and commission of crimes against the employer or other employees, among others. For less severe infractions, lesser penalties such as suspension, reprimand, or performance improvement plans may be implemented.

If the notice to explain is founded on an incident that does not constitute a valid cause for disciplinary action under the law, the employee may argue that the charge lacks substantive merit. The employee’s explanation should highlight any discrepancies, factual inaccuracies, or lack of legal basis to undermine the substantive foundation of the alleged violation.

7. Distinguishing Between Procedural and Substantive Violations

In the event that the employer fails to follow proper procedures (e.g., not providing a proper notice, not giving the employee sufficient time to explain, or not conducting a fair hearing), the employee could raise procedural due process violations. While such procedural lapses do not always invalidate the termination if there is a clear just cause, under the Agabon doctrine, procedural defects could lead to liability for nominal damages.

On the other hand, if the cause for disciplinary action itself is not justified by law or company policy, then there is a substantive due process violation. This can lead to reinstatement, full backwages, and other forms of relief if the employee is wrongfully dismissed.

8. Potential Remedies if Due Process Is Not Observed

If an employee believes that they were not given proper notice or that the procedures mandated by law were not followed, they may:

Raise their concerns in their written explanation or at the hearing.
File a grievance if the company’s internal policies provide for one.
Seek intervention from the Department of Labor and Employment (DOLE) if applicable.
Ultimately, if the disciplinary action results in unjust dismissal, the employee may file a complaint before the National Labor Relations Commission (NLRC) or through compulsory arbitration procedures.

Remedies can include reinstatement, payment of backwages, and damages. Philippine jurisprudence is replete with cases where employees have been reinstated or awarded relief due to the employer’s failure to observe due process.

9. Best Practices for Employers and Employees

Employers are encouraged to maintain clear and consistently implemented disciplinary policies, including templates and guidelines for issuing notices to explain. Employers should ensure that employees receive all relevant documents or, at a minimum, have the option to request them. This promotes transparency and fairness, reduces litigation risk, and fosters trust within the workplace.

Employees, for their part, should respond to a notice to explain thoughtfully and promptly, even if they believe the charge is unfounded or if documentation is lacking. By providing a comprehensive written explanation, requesting missing documents, and citing their rights under Philippine law, employees can better protect themselves should the dispute escalate.

10. Relevance of Company Policies and Internal Codes of Conduct

Company policies and codes of conduct often outline the grounds for disciplinary action and the procedures for issuing notices to explain. In many cases, company rules mirror or supplement the requirements of law. Such policies, when properly disseminated and consistently applied, carry significant weight in evaluating the validity of a notice to explain and subsequent disciplinary decisions.

If an employee believes that the notice to explain deviates from the company’s own procedures, they may include that observation in their written explanation. Inconsistency with established policy can be a ground for challenging the fairness of the proceeding.

11. The Role of the Department of Labor and Employment (DOLE)

While the DOLE does not generally adjudicate individual labor disputes at first instance (that role typically falls to the Labor Arbiters and the NLRC), its rules and regulations offer guidance on due process. For instance, DOLE Department Order No. 147-15 provides guidelines on the termination of employment and the required due process. Although these guidelines mainly address dismissals, they also implicitly shape the handling of lower-level disciplinary measures, such as the issuance of notices to explain.

Employers who fail to comply with these guidelines risk adverse findings in the event of a formal complaint. Employees can cite these regulations as persuasive authority, demonstrating that the employer did not follow best practices or the “standards of due process” that DOLE expects from employers.

12. The Effect of Non-Attachment of Evidence

The absence of attachments or evidence in the notice to explain is not automatically fatal to an employer’s case, but it does raise questions. Under Philippine law, the notice should be sufficiently detailed to allow the employee to respond meaningfully. If crucial evidence, such as the original incident report, is not provided, the employee can argue that they were deprived of the opportunity to fully prepare their defense.

If the matter proceeds to a labor dispute, Labor Arbiters and the NLRC will review the totality of evidence. If the employer fails to produce the underlying documents during the adjudication, this could weaken the employer’s case and bolster the employee’s claim that due process was not observed at the company level.

13. Constructive Approaches to Resolution

Before the situation escalates into a formal labor dispute, both employer and employee have incentives to resolve the matter internally. The employee, upon receiving the notice to explain, can submit a reasoned, factual, and respectful explanation. This might lead management to reconsider the severity of the allegations or even withdraw them if they prove unsubstantiated.

Conversely, employers who find that their initial incident report or allegations are not sufficiently backed by evidence can opt to conduct further fact-finding before proceeding with disciplinary action. By engaging in good faith efforts to clarify misunderstandings and gather all relevant facts, employers and employees can maintain a more harmonious work environment.

14. Legal Representation and Assistance

It is not uncommon for employees who fear serious consequences—such as suspension, demotion, or termination—to seek legal advice upon receiving a notice to explain. While not mandatory, consulting with an attorney knowledgeable in Philippine labor law can help ensure that the employee’s rights are protected. An attorney can review the notice, draft a robust response, and advise on the procedural and substantive legal aspects involved.

Employers, too, often seek counsel to ensure compliance with due process requirements. A well-informed employer guided by legal counsel is better positioned to avoid procedural missteps and reduce the risk of labor litigation.

15. Conclusion

The notice to explain is a crucial mechanism in the Philippine employment law framework, serving as the gateway to ensuring both parties are heard and that disciplinary decisions are reached fairly and lawfully. When handled correctly, it upholds the constitutional right to due process and promotes industrial peace. When mishandled—by omitting key evidence, providing vague allegations, or ignoring the employee’s right to respond—it can lead to disputes, legal challenges, and significant costs for the employer.

For employees, responding properly to a notice to explain, even if attachments are missing, is paramount. By asserting their rights, requesting necessary documentation, and carefully crafting their written explanation, employees can place themselves in a strong position, whether the matter concludes internally or proceeds to a formal adjudication before labor tribunals.

In sum, the legal landscape of notices to explain and incident reports in Philippine employment law emphasizes transparency, fairness, and adherence to both substantive and procedural due process. Employers and employees alike must recognize the gravity of the notice to explain and treat it not merely as a formality, but as a cornerstone of a just and equitable disciplinary process.