Philippines - Termination

Philippines - Termination

There are two types of reasons to terminate:

  • just cause, Related to the employee's fault or negligence (serious misconduct; willful disobedience; gross and habitual neglect of duty; fraud or breach of trust; commission of a crime, etc)
  • authorized cause, related to the necessity of business (installation of labor-saving devices; redundancy; retrenchment to prevent losses; closure or cessation of business)

The procedure you mentioned below (a two-notice rule) is required for a termination due to a just cause. (Art. 5.1. DOLE Department Order No. 147).

Termination based on an authorised cause (business reasons) requires the following process:

1. notice to the employee:  at least 30 days before the intended date of termination. In our case 3 months as contractually stated.  This notice must outline the reason for the redundancy and provide sufficient details to justify the decision.
2. notice to DOLE: Alongside notifying the employee, the employer must also inform the DOLE (Regional Office) with the same at least 30-day notice period. This ensures that the termination process is transparent and complies with regulatory oversight. I’d suggest using the same 3-month notice period as for the employee.
3. calculation of Separation Pay: 30 days for each year of service, a fraction of 6 months of service is considered as a whole year. 

Termination for Just Causes
Inefficiency or Poor Performance: Termination may be justified if an employee consistently fails to meet the required performance standards despite sufficient training. This means we need proof of the above. PIP and some follow up emails summarizing she failed would be a proof. 


Severance pay is eligible in case of redundancy. Otherwise the employee receives notice period + unused holiday.

Payment in lieu is not permitted but employer can dismiss can the employee from performing any task.


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