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Philippines
 


Source and scope of regulations - 2013    

References
  • Constitution of the Republic of the Philippines
    Date: 1987; view website »
  • Labour Code [LC], Presidential Decree No. 442, 1st May 1974, last amended in 2011
    Date: 2011; view website » (view in NATLEX »)
  • Omnibus rules implementing the Labour Code of 1989
    Date: 27 May 1989 (view in NATLEX »)
Scope
Size of enterprises excluded (≤): none
Remarks:
  • Art. 278 LC

Workers' categories excluded: civil/public servants
Remarks:
  • Art. 278 LC: The provisions of the LC governing termination of employment apply to all private sector employees, whether employed by a profit-making enterprise or not.
    Employees in the public sector are, however, covered by The Civil Service Law, rules and regulations.
    In addition, the Labour Code contains specific provisions (including on termination of employment ) for apprentices (art. 57-77), trainees ("learners": art. 73-77), and domestic workers (art. 141 - 152).

Types of employment contracts - 2013    

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Maximum probationary (trial) period: 6 month(s)

Remarks:
  • Art. 281 LC

Fixed term contract (FTC):
  • FTC regulated: No
  • Valid reasons for FTC use: no limitation
    Remarks:
    • No reference to fixed-term contracts as such in the LC.

      See ILO -TED - National Law Profile, updated in June 2006 by Attorney Jonathan P. Sale:

      Art. 280 of the LC provides for the following categories of employment:
      * Project - where the employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the engagement of the employee;
      * Seasonal - where the work or services to be performed is seasonal in nature and the employment is for the duration of the season; and
      * Casual - where the employment is not covered by the foregoing, provided that an employee who has rendered at least one year of service, whether continuous or broken, shall be considered regular with respect to the activity in which he or she is employed and his or her employment shall continue while the activity exists.

      Another category of employment recognized in jurisprudence is 'term' or 'fixed-period employment'. This is based on art. 1193 of the CC, which states that obligations with a resolutory period take effect at once, but terminate upon arrival of the 'day certain' (understood to be a day that must necessarily come). The decisive determinant in 'term employment' should not be the activities that the employee is called upon to perform, but the day certain agreed upon by the parties for the commencement and termination of the employment relationship. Stipulations in employment contracts providing for 'term employment' or 'fixed-period employment' are valid when the period has been agreed upon knowingly and voluntarily by the parties, without force, duress or improper pressure exerted on the employee, and when such stipulations were not designed to circumvent the laws on security of tenure.
  • Maximum number of successive FTCs: no limitation
    Remarks:
    • No statutory limitation in the legislation reviewed.
  • Maximum cumulative duration of successive FTCs: no limitation
    Remarks:
    • No statutory limitation in the legislation reviewed.

Substantive requirements for dismissals (justified and prohibited grounds) - 2013    

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Obligation to provide reasons to the employee: Yes
Remarks:
  • Art. 277 b) LC: The employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of a representative.


Valid grounds (justified dismissal): any fair reasons
Remarks:
  • In the Philippines, the employee has "the right to security of tenure" (art. 13 (3) of the Constitution and art. 279 LC). This means that an employee can only be dismissed for a just cause or an authorized cause and after the observance of the procedure laid down by the law (Omnibus Implementing Rules, Rule XIV, sec. 1)
    - Just causes are blameworthy acts on the part of the employee such as serious misconduct, willful disobedience, gross and habitual neglect of duties, fraud or willful breach of trust, commission of a crime and other analogous causes (art. 282, LC).
    - Authorized causes are of two types: economic reasons and disease (art. 283 and 284 LC).
    *Economic reasons cover "installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking".
    *Disease cover situation where an "employee has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees".


Prohibited grounds: marital status; pregnancy; maternity leave; filing a complaint against the employer; trade union membership and activities; disabilities; HIV status
Remarks:
  • Art. 135 LC (sexual discrimination), Art. 136 LC (stipulation against marriage), art. 137 LC (prohibited acts)
    Art. 248 a), b) e) f) (unfair labour practices)
    Art. 35 of the Philippine AIDS Prevention and Control Act of 1998 (No. 8504)
    Sec. 32 g) of the Republic Act No. 7277 providing Magna Carta for Disabled Persons.


Workers enjoying special protection: pregnant women and/or women on maternity leave
Remarks:
  • Art. 137 (2) LC: It is prohibited to dismiss a woman while on leave or in confinement due to her pregnancy.
    There is no general prohibition to dismiss a woman during her pregnancy, however pregnancy shall not be a ground for dismissal.


Procedural requirements for individual dismissals - 2013    

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Notification to the worker to be dismissed: written

Remarks:
  • Art. 277 b) LC. See aslo Omnibus Implementing Rules, Rule XIV, sec. 6.

Notice period:
Remarks:
  • The LC establishes a distinction between a dismissal for a just cause and a dismissal for an authorized cause.
    - Authorized causes are of two types: business reasons and disease (art. 283 and 284 LC).
    - Just causes are blameworthy acts on the part of the employee such as serious misconduct, wilful disobedience, gross and habitual neglect of duties, fraud or wilful breach of trust, commission of a crime and other analogous causes (art. 282, LC).
    There is no notice period prior to a dismissal for a just cause or for health reasons.
    The employer is only required to give a one-month notice to the employee in the event of termination for business reasons (art. 283 LC).
    • tenure ≥ 6 months
      • economic dismissal - 1 month(s).
    • tenure ≥ 9 months
      • economic dismissal - 1 month(s).
    • tenure ≥ 2 years
      • economic dismissal - 1 month(s).
    • tenure ≥ 4 years
      • economic dismissal - 1 month(s).
    • tenure ≥ 5 years
      • economic dismissal - 1 month(s).
    • tenure ≥ 10 years
      • economic dismissal - 1 month(s).
    • tenure ≥ 20 years
      • economic dismissal - 1 month(s).

    Pay in lieu of notice: No

    Notification to the public administration: No

    Remarks:
    • No general obligation to notify the administration.
      - No notification required in the event of a dismissal for a just cause.
      ( Please not that, for dismissal based on the grounds of disease, there is no mandatory notification at the time of dismissal. However, before the employer can terminate on the ground of disease, he must obtain from a competent public health authority a certification that the employee¿s disease is of such a nature and at such a stage that it can no longer be cured within a period of six months even with medical attention (art. 284 LC; Implementing Rules of Book VI, LC)).
      - Notification is mandatory in cases of economic dismissals (closure if an establishment or reduction of the workforce and dismissal due to disease): art. 283 LC.

    Notification to workers' representatives: No

    Remarks:
    • Art. 283 LC: Notice shall be served to the workers and the administration. No mention of worker's representatives.

    Approval by public administration or judicial bodies: No

    Approval by workers' representatives: No

    Procedural requirements for collective dismissals for economic reasons (redundancy, retrenchment) - 2013    

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    Definition of collective dismissal (number of employees concerned):
    No statutory definition of collective dismissal.
    Specific legal requirements apply to the dismissal of any employee for economic reasons (installation of labour-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment).

    Remarks:
    • Art. 283 LC

    Prior consultations with trade unions (workers' representatives): No

    Notification to the public administration: Yes

    Remarks:
    • Art. 283 LC: notification to the Ministry of Labor and Employment at least one month before the intended date.

    Notification to workers' representatives: No

    Approval by public administration or judicial bodies: No

    Approval by workers' representatives: No

    Priority rules for collective dismissals (social considerations, age, job tenure): No

    Employer's obligation to consider alternatives to dismissal (transfers, retraining...): No

    Priority rules for re-employment: No

    Severance pay and redundancy payment - 2013    

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    Severance pay:
    Remarks:
    • No severance pay following termination for a just cause.

      - Dismissal for an authorized cause:

      1) Disease (employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees) Art. 284 LC.
      Severance pay shall amount to at least one month's salary or to one-half month's salary for every year of service, whichever is greater, a fraction of at least six months being considered as one whole year.

      2) Economic reasons: redundancy payment differs according to the situation: art. 283 LC.
      * It amounts to at least one month's salary or to one-half month's salary for every year of service, whichever is greater in case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses.

      * However, in case of termination due to the installation of labor-saving devices or redundancy, redundancy payment is higher: it amounts to at least his one (1) month's pay or to at least one (1) month's pay for every year of service, whichever is higher.

    • tenure ≥ 6 months: 1 month(s)
    • tenure ≥ 9 months: 1 month(s)
    • tenure ≥ 1 year: 1 month(s)
    • tenure ≥ 2 years: 1 month(s)
    • tenure ≥ 4 years: 2 month(s)
    • tenure ≥ 5 years: 2.5 month(s)
    • tenure ≥ 10 years: 5 month(s)
    • tenure ≥ 20 years: 10 month(s)
    Redundancy payment:
    Remarks:
    • 1) If the termination is due to the installation of labour-saving devices or redundancy, the separation pay is one month¿s pay for every year of service or one month pay, whichever is higher.
      2) If the termination is due to retrenchment to prevent losses, or closure or cessation of operation of the establishment not due to serious business losses, the separation pay is one-half month¿s pay for every year of service or one month pay, whichever is higher.
    • tenure ≥ 6 months: 1 month(s)
    • tenure ≥ 9 months: 1 month(s)
    • tenure ≥ 1 year: 1 month(s)
    • tenure ≥ 2 years: 2 month(s)
    • tenure ≥ 4 years: 4 month(s)
    • tenure ≥ 5 years: 5 month(s)
    • tenure ≥ 10 years: 10 month(s)
    • tenure ≥ 20 years: 20 month(s)

    Notes / Remarks
    1) Termination for a just cause: no severance pay
    2) Termination for an authorized cause:
    - disease: severance pay;
    - retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses: severance pay;
    - termination due to the installation of labor-saving devices or redundancy: redundancy payment.

    Avenues for redress (penalties, remedies) and litigation procedure for individual complaints - 2013    

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    Compensation for unfair dismissal - free determination by court: No

    Compensation for unfair dismissal - Legal limits (ceiling in months or calculation method):
    Dismissal without an authorized or just cause: Compensation in lieu of reinstatement is not a statutory remedy. The employee shall be entitled to reinstatement without loss of seniority rights and other privileges and full back wages, inclusive of allowances, and other benefits or their monetary equivalent computed from the time the compensation was not paid up to the time of actual reinstatement (art. 279 LC).

    Remarks:
    • Dismissal without a just or authorized cause (unfair dismissal): reinstatement. No compensation in lieu of reinstatement.

      Note that if a dismissal is for a just or authorized cause but the employer failed to comply with the procedural requirement, the dismissal should be upheld. The National Labour Relations Commission has held that while the procedural infirmity cannot be cured, it should not invalidate the dismissal. However, the employer should be held liable for nominal damages for non-compliance with the procedural requirements of due process. (Agabon et al. v. National Labour Relations Commission et al., G.R. No. 158693, November 17, 2004)

    Reinstatement available: Yes

    Remarks:
    • Art. 279 LC: "An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages inclusive of allowance, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement".

    Preliminary mandatory conciliation: No

    Remarks:
    • No preliminary mandatory conciliation as such.
      However, art. 222 of the LC provides that "the Labour Arbiter shall exert all efforts towards the amicable settlement of a labour dispute within his jurisdiction on or before the first hearing. The same rule shall apply to the Commission in the exercise of its original jurisdiction".

    Competent court(s) / tribunal(s): administrative body

    Remarks:
    • The Labour Arbiters of the National Labour Relations Commission have original and exclusive jurisdiction over termination disputes.
      Art. 217 b) LC: The National Labour Relations Commission has exclusive appellate jurisdiction over all cases decided by Labour Arbiters.

    Existing arbitration: Yes

    Remarks:
    • Art. 217 a) LC:
      The Labour Arbiters of the National Labour Relations Commission have original and exclusive jurisdiction over termination disputes.
      Art. 217 b) LC: The National Labour Relations Commission has exclusive appellate jurisdiction over all cases decided by Labour Arbiters.

    Length of procedure: 20 day(s) (statutory)

    Remarks:
    • Omnibus Implementing Rules, Rule XIV, sec. 8: Cases involving the dismissal of a worker shall be decided by the Labour Arbiter within 20 working days from the date of submission of such cases for decision.

      For non-dismissal labour disputes see: Art. 217a) LC: the Labour Arbiters shall hear and decide the dispute, within thirty calendar days after its submission.

    Source of additional information - 2013    

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