Supreme Court Provides New Penalties for Due Process Violations

Introduction

Philippine labour laws distinguish between two categories of employer-initiated terminations: (i) those involving blameworthy conduct (eg, serious misconduct, fraud, breach of trust, and gross and habitual neglect); and (ii) those involving economic motives (eg, redundancy, retrenchment, installation of labour-saving devices and closure).

The procedural steps for these types of termination differ. For blameworthy conduct, the employer must comply with the requirements of a written notice of charge, summary hearing and written notice of termination. Where economic motives are involved, the employer must comply with a written notice sent to the employee and the Labour Department 30 days prior to the discharge. In addition, payment of separation benefits is mandatory in cases of economic dismissal, but it is not required in terminations for blameworthy conduct.