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Learn more about Employment Termination Letter in Philippines

Notification of termination occurs at the end of the termination process. The Employment Termination Letter must be carefully drafted. It will serve as the basis for a possible dispute if the Employee decides to take the case to the labor court later. Our Employment Termination Letter includes the following grounds for termination: Failure to perform work duties, frequent lateness, absence from work without permission, disclosure of confidential information, violation of heath and safety policy, violation of drug and alcohol policy, Theft of company property and Threats to colleague. If you wish to inform an employee of misconduct or poor performance, you can also download an Employee Warning Letter.

Table of contents


What is an Employment Termination Letter?

An Employment Termination Letter in the Philippines is a document that serves as formal notice of the end of an employment relationship between an employer and an employee. It is a written record of the termination of an employee’s contract, which is typically provided by the employer to the employee.

The letter usually contains information about the reason for the termination, the effective date of termination, any remaining salary or benefits owed to the employee, and other important details related to the termination.

Employment termination letters in the Philippines are important for both employers and employees as they serve as a legal record of the termination of the employment contract. They also help to ensure that the termination process is fair and transparent, and that both parties are clear about their rights and obligations.

How to terminate an employee in the Philippines?

Terminating an employee in the Philippines can be a complex process that involves legal and regulatory requirements. Here are the general steps an employer should follow to properly terminate an employee in the Philippines:

Step 1. Review the employment contract

Reviewing the employment contract as well as labor laws and regulations is crucial to ensure that the employee’s termination is done in a legal and compliant way.

Step 2. Document the reasons

It is then necessary to document the reason and the recovery of evidence to support the licensing decision.

Step 3. Meet with the employee

The company must arrange a meeting with the employee to inform them of the decision. During the meeting, the reasons for the dismissal must be explained in a clear and professional way.

Step 4. Provide the employee with a written termination letter

The written letter of termination must include the reasons for the termination, the effective date, any remaining salary or benefits owned and any other relevant details.

Step 5. Process the necessary paperwork for the termination

It is essential to process the necessary paperwork such as the clearance and release documents required by the Department of Labor and Employment (DOLE).

Step 6. Give the employee all of the benefits and compensation

The company shall pay the employee any compensation for which it is liable including any unused vacation or sick leave, final pay and separation pay if applicable.

Step 7. Notify the relevant government agencies

The company must notify government agencies involved in the licensing process such as the Social Security System (SSS), the Philippine Health Insurance Corporation (PhilHealth), and the Home Development Mutual Fund (Pag-IBIG), as required by law.

What are the rules governing Employee Termination Letter?

In the Philippines, the rules governing Employee Termination Letters are outlined in the Labor Code of the Philippines. Here are some of the key rules to keep in mind:

1. Provide written notice: Employers must provide written notice to the employee of the grounds for termination. The notice should be clear and specific, outlining the reasons for the termination and the effective date.

2. Follow due process: Employers must follow due process, which includes giving the employee an opportunity to respond to the allegations and conducting an investigation if necessary.

3. Consider progressive discipline: Employers should consider progressive discipline, which involves a series of disciplinary measures leading up to termination. This allows the employee an opportunity to correct their behavior and avoid termination.

4. Comply with local labor laws: Employers must comply with local labor laws and regulations, including the Labor Code of the Philippines and any other relevant regulations.

5. Provide separation pay: If an employee is terminated without just cause, they may be entitled to separation pay. The amount of separation pay varies based on the length of service and the reason for termination.

6. Provide final pay and benefits: Employers must provide the employee with their final pay and any other benefits or compensation owed to them, such as unused vacation time.

It is important for employers to ensure that they comply with local labor laws and regulations when issuing an Employee Termination Letter. Failure to comply with these rules can result in legal action and financial penalties.

How to write an Employee Termination Letter?

Writing an Employee Termination Letter in the Philippines can be a difficult and sensitive task. Here are some best practices to follow:

➤ Follow local labor laws: Ensure that the letter complies with local labor laws and regulations, including providing the employee with their final pay and any separation pay owed.
➤ Use a professional tone: The tone of the letter should be professional and respectful, using language that is clear and concise.
➤ Be specific and clear: Clearly state the reason for the termination and provide specific details about the employee's performance or behavior that led to the decision.
➤ Be empathetic: It is important to approach the situation with empathy and understanding. The termination can be a difficult time for the employee and the company, and it is important to handle the situation with professionalism and respect.
➤ Offer assistance: If appropriate, offer assistance to the employee, such as help with finding a new job or guidance on how to access unemployment benefits.
➤ Keep a record: Keep a copy of the termination letter and any other relevant documentation in the employee's file. This can be used as evidence if legal action is taken.
➤ Use our template: Using our Employee Termination Letter template will help ensure that the letter includes all the necessary information and is formatted correctly. Using our template ensure that the tone of the letter is appropriate and professional.

How to properly document Employee Termination in the Philippines?

Properly documenting employee termination in the Philippines is essential for both legal and practical reasons. Here are some steps to follow when documenting employee termination:

➤ Review company policies: Review your company's policies and procedures for employee termination, and make sure that you follow them.
➤ Create a written record: Create a written record of the termination that includes the employee's name, position, date of hire, termination date, reason for termination, and any other relevant details.
➤ Provide documentation: Provide the employee with a copy of the termination letter, along with any other documentation that may be relevant, such as performance evaluations or disciplinary reports.
➤ Document the return of company property: Document the return of any company property that the employee had, such as keys, uniforms, or equipment.
➤ Comply with legal requirements: Comply with legal requirements for terminating employees, such as providing the employee with their final pay and any separation pay owed.
➤ Keep confidentiality: Maintain confidentiality of the employee's personal information, and only share information on a need-to-know basis.

By following these steps, employers can help ensure that the employee termination process is documented accurately and effectively. This documentation can be used as evidence in case of legal action, and can also be used for future reference if necessary.

Does the employee have to be informed of the reason?

This is in compliance with the Philippine Labor Code, which provides that an employee can only be terminated for just or authorized causes. Just causes include serious misconduct, willful disobedience, and gross neglect of duty, while authorized causes include installation of labor-saving devices, redundancy, retrenchment, and closure of business operations.

An employee who is being terminated for any of these causes must be informed of the reason for the termination, and given an opportunity to respond to the allegations. If the employee is not informed of the reason for the termination, the termination may be considered illegal and the employee may be entitled to reinstatement and back wages.

It is also important to document the reason for the termination and keep it in the employee’s personnel file, as this can be used as evidence in case of any disputes or legal action.

What are the main reasons to terminate an employee?

In the Philippines, termination of an employee can be done for various reasons. The most common reasons for termination are:

➤ Just causes: These are serious and grave offenses committed by the employee that can result in termination. Examples of just causes include gross misconduct, insubordination, willful disobedience, fraud, theft, and habitual neglect of duties.
➤ Authorized causes: These are circumstances that are beyond the control of the employer and can lead to termination. Examples of authorized causes include redundancy, retrenchment, closure of business operations, and disease or illness that renders the employee unfit to work.
➤ Illegal or improper acts: These are actions committed by the employee that violate company policies or rules, but are not serious enough to be classified as just causes. Examples of improper acts include habitual tardiness, habitual absenteeism, and violation of company policies.

It is important to note that employers must follow due process when terminating an employee. This includes giving the employee notice of termination and an opportunity to be heard. Additionally, employers must comply with the requirements set by law such as providing the necessary notice periods and separation pay for certain types of termination.

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