Disease – An Authorized Cause for Separation
Disease covers any illness that meets the standards.
Contrary to popular belief, the authorized cause on disease is not limited to communicable illnesses. It includes other sickness which meets the two-fold criteria: (a) that the continued employment of the employee is prohibited by law or prejudicial to his/her health as well as to the health of his/her co-employee, and (b) that there must be certification by a competent public health authority that the disease is incurable within a period of six (6) months even with proper medical treatment.
The following jurisprudence explains:
Consistent with this construction, we applied this provision in resolving illegal dismissal cases due to non-contagious diseases such as stroke, heart attack, osteoarthritis, and eye cataract, among others. In Baby Bus, Inc. v. Minister of Labor, we upheld the labor arbitration’s finding that Jacinto Mangalino’s continued employment – after he suffered several strokes – would be prejudicial to his health. In Duterte v. Kingswood Trading Co., Inc., we recognized the applicability of Article 284 of the Labor Code to heart attacks. In that case, we held that the employer- company’s failure to present a certification from a public health authority rendered Roque Duterte’s termination due to a heart attack illegal. We also applied this provision in Sy v. Court of Appeals36 to determine whether Jaime Sahot was illegally dismissed dueto various ailments such as presleyopia, hypertensive retinopathy, osteoarthritis, and heart enlargement, among others. In Manly Express, Inc. v. Payong, Jr., we ruled that the employer-company’s non-presentment of a certification from a public health authority with respect to Romualdo Payong Jr.’s eye cataract was fatal to its defense. (Deoferio v. Intel Technology Philippines, Inc., G.R. No. 202996, 18 June 2014)
Accordingly, if the above illnesses and similar thereto are present, then the employee with the disease may be let go subject to compliance with due process.
The following discusses disease as a ground for authorized cause separation.
Substantive Due Process: Standards for Disease
In compliance with Due Process, the first aspect of due process is on: substantive due process. It is divided into two: just causes and authorized causes.
For our purposes, we will focus on authorized causes wherein the ground is categorized.
Rule I-A of DOLE D.O. 147-15 provides for the standards which have to be complied in order to be valid:
5.4. Standard on Authorized Causes. An employer may terminate an employee for any of the following grounds:
x x x
1. The employee must be suffering from any disease;
2. The continued employment of the employee is prohibited by law or prejudicial to his/her health as well as to the health of his/her co-employees; and
3. There must be certification by a competent public health authority that the disease is incurable within a period of six (6) months even with proper medical treatment.
x x x
In cases of installation of labor-saving devices, redundancy and retrenchment, the “Last-In, First-Out Rule” shall apply except when an employee volunteers to be separated from employment.
The above standards are the requirements to properly implement the authorized cause separation.
Procedural Due Process
The second aspect of due process is on: procedural due process.
Rule I-A of DOLE D.O. 147-15 provides for the procedure to be complied:
5.3. Termination of Employment Based on Authorized Causes. As defined in Articles 298 and 299 of the Labor Code, as amended, the requirements of due process shall be deemed complied with upon service of a written notice to the employee and the appropriate Regional Office of the Department of Labor and Employment (DOLE) at least thirty days [sic] (30) before the effectivity of the termination, specifying the ground or grounds for termination.
Otherwise stated, to properly implement redundancy the following steps have to be followed:
Step 1: 30-Day Notice to the Employee
Step 2: 30-Day Notice to DOLE
Step 3: Separation Pay
The following explains each step.
Step 1: 30-Day Notice to the Employee. – The employee should be provided with a notice regarding his beings separated from employment due to an authorized cause – at least 30 days before the last day of employment.
The current regulation requires that that the notice specify two things: (a) effective date of termination, and (b) the ground/s for the termination.
In practice, it is recommended that a brief description or information regarding the circumstances for the authorized cause be provided to give the concerned employee an idea as to what happened. Further, whenever practicable, the amount of the separation pay should be indicated to communicate well to the employee that the amount will be paid accordingly in compliance with Labor Law.
The purpose of this 30-day notice is to give the employee ample opportunity to prepare. Within this period, the employee may already start considering what he will be doing after the last day – whether to rest for a while, find next gainful employment, do business, study for the time being, attend seminars, or perform any other similar activity.
Step 2: 30-Day Notice to DOLE. – The employer is required to advise DOLE of the separation due to an authorized cause. The current form being used is RKS Form 5 which asks for the relevant information regarding the separation.
The purpose of requiring this 30-day notice to DOLE is so that the regulator will have the opportunity to confirm or verify the existence of the authorized cause. In practice, the DOLE may call for a conference to hear both sides, the employer and the employee. Depending on circumstances, a DOLE personnel may conduct a visit on the establishment to verify the existence of the authorized cause. Whenever everything is good, the DOLE personnel will see to it that the separation pay is paid to the employee.
Step 3: Separation Pay. – Since a separation by authorized cause is not due to a violation by an employee, and in most cases the ground is due to business reasons, the Labor Code requires the employer to pay the employee separation pay. The amount varies depending on the ground.
Rule I-A of DOLE D.O. 147-15 provides for the formula for the separation pay:
5.5. Payment of Separation Pay. Separation pay shall be paid by the employer to an employee terminated due to installation of labor-saving devices, redundancy, retrenchment, closure or cessation of operations not due to serious business losses or financial reverses, and disease.
x x x
An employee terminated due to disease shall be paid by the employer a separation pay equivalent to at least one (1) month pay or one-half (1/2) month salary for every year of service, whichever is higher, a fraction of six (6) months service is considered as one (1) whole year.
For disease, separation pay is thus: one (1) month pay or one-half (1/2) month salary for every year of service, whichever is higher. If there is a fraction of 6 months, it shall be counted as 1 year.
Whenever practicable, it is recommended that the separation pay be paid together with the Final Pay – after the employee is cleared of all accountabilities.
The disease mentioned here is any form of disease which meets the standards. Thus, it is not limited to communicable diseases; other sickness such as mental illness or those that results in the deterioration of a person’s health is included. While the cause is certainly not attributable to the decision of the employer unlike the other authorized causes, separation pay is nonetheless required to be paid to the employee as a form of assistance.
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