Explainer: Illegal dismissal

Summary

▪ Illegal dismissal is the termination of employment or separation from employment without complying with due process of law.

▪ Illegal dismissal may result in reinstatement, full backwages, moral damages, exemplary damages, nominal damages, and attorney’s fees.

1. Concept

Illegal dismissal is the termination of employment or separation from employment without complying with due process of law.

For more discussions, refer to Due Process.

a. Just cause termination, a.k.a. due process termination

In all cases of termination of employment, the standards of due process laid down in Article 299 (b) of the Labor Code (just causes), as amended, and settled jurisprudence on the matter. (Section 5, Rule I-A, DOLE Department Order No. 147, Series of 2015)

For more discussions, refer toJust Causes and Just Cause Procedure.

b. Authorized cause separation, a.k.a. due process separation

As defined in Articles 298 and 299 of the Labor Code (authorized causes), 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 DOLE at least thirty (30) days before the effectivity of the termination, specifying he ground/s for termination. (Section 5.3, Rule I-A, Ibid.)

For more discussions, refer to Authorized Causes and Authorized Cause Procedure.

2. Consequences of illegal dismissal

a. Reinstatement

An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges. (Article 294 [279], Ibid.)

For more discussions, refer to Reinstatement.

b. Full backwages

An employee who is unjustly dismissed from work shall be entitled to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. (Article 294 [279], Ibid.)

For more discussions, refer to Full backwages.

c. Moral damages

Moral damages are recoverable where the dismissal of the employee was attended by bad faith or fraud or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs or public policy. (San Miguel Corporation v. Teodosio, G.R. No. 163033, 02 October 2009)

For more discussions, refer to Moral Damages.

d. Exemplary damages

Exemplary damages are proper when the dismissal was effected in a wanton, oppressive or malevolent manner, and public policy requires that these acts must be suppressed and discouraged. (Ibid.)

For more discussions, refer to Exemplary Damages.

e. Attorney’s fees

In cases of unlawful withholding of wages, the culpable party may be assessed attorney’s fees equivalent to ten percent of the amount of wages recovered. (Article 111[a], Labor Code)

It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the recovery of wages, attorney’s fees which exceed ten percent of the amount of wages recovered. (Article 111[b], Ibid.)

In a catena of cases, the Court awarded attorney’s fees in favor of illegally dismissed employees who were compelled to file an action for the recovery of their lawful wages, which were withheld by the employer without any valid and legal basis. (Alva v. High Capacity Security Force, Inc., G.R. No. 203328, 08 November 2017)

For more discussions, refer to Attorney’s Fees.

References

▪ Presidential Decree No. 442, a.k.a. Labor Code of the Philippines

▪ DOLE Department Order No. 147, Series of 2015

▪ Jurisprudence or Supreme Court Decisions (as cited above)

Additional Resources

▪ Explainer: Illegal Dismissal

▪ Cases on: Illegal Dismissal

▪ FAQ on: Illegal Dismissal