Just Cause Procedure

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  • P.D. 442, as amended, Supreme Court Decisions, and DOLE Regulations, are the bases for just cause procedure.
  • Just cause procedure is the steps or process of implementing due process in relation to termination of employment.
  • There are 3 steps in a just cause procedure.
  • The first step is the issuance of a 1st written notice.
  • The second step is the observance of the ample opportunity to explain.
  • The third step is the issuance of the 2nd written notice.
  • If there is no just cause procedure, the dismissal is valid but the employer may be held liable for nominal damages.

Legal basis

The legal basis is the P.D. 442, otherwise known as the Labor Code, Supreme Court Decisions, and DOLE Regulations.

Concept

Just cause procedure is the steps or process of implementing due process in relation to termination of employment.

Procedure

The following are the steps:

Step 1: Issuance of 1st Written Notice

Step 2: Observance of Ample Opportunity to Explain

Step 3: Issuance of 2nd Written Notice

Step 1: Issuance of 1st Written Notice

The employer is required to issue a 1st Written Notice to the employee.

It should contain the following:

1. The specific causes or grounds for termination as provided for under the Labor Code, as amended, employment contract, and company policies, if any.

2. Detailed narration of facts and circumstances that will serve as basis for the charge against the employee. A general description of the charge will not suffice.

3. A directive that the employee is given opportunity to submit a written explanation within a reasonable period, which should be at least (5) calendar days.

The 1st Written Notice, otherwise known as the Notice to Explain, may also contain a directive for the employee to appear at a scheduled formal administrative hearing, at the discretion of the employer or when necessary as provided for by law. (See discussions below.)

Step 2: Observance of Ample Opportunity to Explain

The ample opportunity to explain is satisfied by either giving the employee the chance to defend himself/herself via:

1. A written explanation; or

2. A formal administrative hearing.

Both of which should be at least five (5) calendar days from receipt of the 1st written notice in order for the employee to study the accusations, consult or be represented by a lawyer or union officer, gather data and evidence, and decide on the defenses against the charges/complaint.

As a general rule, a formal administrative hearing is optional or at the discretion of the employer. By way of exceptions, the employer is required to conduct a formal administrative hearing when requested in writing by the employee, substantial evidentiary disputes exist, or a company rule or practice requires it, or when similar circumstances justify it.

The employee waives his/her right for an opportunity to explain if he/she does not submit a written explanation or does not attend the scheduled formal administrative hearing.

Step 3: Issuance of 2nd Written Notice

The employer shall issue a 2nd Written Notice to the employee after evaluating all available pieces of evidence and the explanation of the employee, if any.

The results may either be that the employee is innocent or guilty.

If the employee is innocent, the 2nd written notice will indicate so. This is often referred to as a Notice of Results.

If the employee is guilty, the 2nd written notice shall state that all circumstances involving the charge against him/her have been considered and grounds have been established to justify the imposition of a penalty. This is often referred to as a Termination Notice.

The penalty may either one of the following: verbal reprimand, written warning, suspension, dismissal.

Penalty commensurate to offense

It is a general principle in labor law that: the penalty must be commensurate to the offense.

If the offense/violation is severe, the penalty of dismissal may be warranted. This may apply even to a first-time offense/violation.

For lighter forms of offenses/violations, the penalty should be less than dismissal, such as a verbal warning, written reprimand, or suspension.

In case of a labor complaint, it is the employer who is required to justify the penalty in view of the offense/violation.

Documentation and proof of service

All notices mentioned herein should be properly documented on how it was served.

The notices should be served personally, whenever practicable. This act of service may be proven through a receiving copy or an affidavit of service, in case the employee unjustifiably refuses to sign a receiving copy.

If personal service is not available such as the employee being absent, the notice may be sent to his last known address through mail. This act of service may be proven through the official receipt of the mailing or an affidavit of service on the mailing.

Consequence if no just cause procedure

If there is no just cause procedure in the termination of employment, and despite having a just cause, the employer may be held liable for nominal damages.

Nominal damages are awarded to the employee in recognition of his/her right to just cause procedure which was violated by the employer.

The dismissal, however, is valid if there is a just cause.

References

  • 1987 Constitution
  • Presidential Decree No. 442, a.k.a. Labor Code
  • DOLE Department Order No. 147, Series of 2015