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How to fire someone the right way

The procedure plays an important role
By Entrepreneur Staff |

Letting go of an employee is never easy and entrepreneurs are advised to follow the law to avoid any problems in the long run. Better to be compliant rather than risk any legal setbacks afterwards.


To ensure that the rights of employees are not trampled upon during a termination, the law dictates that the requirements of due process—which are enshrined in no less than the Philippine Constitution itself—must be strictly observed.

Legal advocates refer to this as the twin requirements of notice and hearing, which mandate that everyone has the right to be notified of the charges against him or her and to be afforded the opportunity to be heard. This is in recognition of the fact that nobody wants to be accused of something he or she didn’t do. And for this reason, the employee must be given a chance to explain his or her side in a hearing called by management for such purpose. Failure of management to comply with due process renders the termination illegal.

There are two notices that must be sent to an employee before he or she can be dismissed for a just cause:

1. A first notice that informs the employee of the particular acts or omissions for which his dismissal is sought. Such a notice must state the specific charges against the employee. The notice should also mention the date and time of the hearing during which the employee will be given the opportunity to explain his or her side; and

2. A second notice that is sent once the hearing is concluded. This notice informs the employee of management’s evaluation of the hearing and the penalty that will be imposed, if any. It should also state clearly the reasons for the action taken against the employee.

It should be noted that an employee may be terminated not only as a result of his conduct on the job. The law recognizes that there are times when employers are authorized to dismiss employees by reason of any of the following: (1) the installation of labor saving devices; (2) redundancy; (3) retrenchment to prevent losses; or (4) closure or cessation of operation of an establishment. In such cases, prior to the intended date of termination, a one-month notice must be served to the employees concerned as well as to the Department of Labor and Employment. The DOLE will then evaluate the legitimacy of the reasons cited by the employer.

In cases of dismissal due to the installation of labor saving devices or redundancy, it is further required that the employee must be given a separation pay equivalent to at least one month pay, or at least one month pay per year of service, whichever is higher. In cases of retrenchment to prevent losses and closure or cessation of business operations not arising from serious business losses or financial reverses, the separation pay is equivalent to one-month pay or at least one-half-month pay per year of service, whichever is higher. In either case, employment for a fraction of six months is considered as one whole year.

Every employer should keep these rules clearly in mind when deciding to dismiss an employee. Rash or impulsive actions should be avoided. To ensure compliance with the law, careful consideration of the employee’s rights should be followed.

To protect the rights of employees facing dismissal, the law says that requirements of due process must be observed.


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