Obligation to Pay Breach of Contract Penalty When Resigning Before Completing a Three-Year Contract in the Philippines
Query:
An individual is in the second year of a three-year employment contract and is considering resignation. HR states that the individual would need to pay a breach of contract penalty. Is this obligation factual, even if a two-weeks notice is given to the employer?
Answer:
Employment Contracts and Penalties:
In the Philippines, it's common for employment contracts to include clauses specifying penalties for premature termination of the contract. These are legally binding provisions, and failure to adhere to them can result in financial liabilities for the employee.
Two-Weeks Notice:
Providing a two-weeks notice may fulfill a separate contractual or ethical obligation to give advance notice before resigning. However, it may not necessarily absolve the employee from paying a breach of contract penalty if such a provision exists in the employment agreement.
Legal Remedies:
Review the Contract: The first step is to carefully review the employment contract to understand the exact terms related to termination and penalties.
Consult Labor Code: Philippine Labor Code provisions also guide contractual obligations, and certain penalties may be deemed "unconscionable" or "unfair" under the law.
Legal Advice: Consult a lawyer to explore options such as negotiating the penalty or examining whether the penalty clause is enforceable under Philippine law.
Summary:
If the employment contract includes a penalty clause for premature termination, then the HR department's claim is likely factual. Providing a two-weeks notice does not automatically nullify this contractual obligation. To fully understand one’s rights and obligations, a thorough review of the contract and possibly seeking legal counsel is advisable.
Note: This article is for informational purposes only and should not be considered as legal advice. For advice tailored to your specific situation, consult a qualified legal professional.