Two lawyers share insights on compliance, documentation, and dispute resolution
Recently, at an employment tribunal in Manchester, a delivery rider was dismissed for using offensive language toward a colleague.
While the employer argued that the rider’s behavior warranted termination, the tribunal ruled the dismissal unfair, citing deeper systemic issues within the workplace.
Specifically, the tribunal criticized the company for failing to address a "lawless and toxic" work environment, where rules were inconsistently enforced and workplace culture was neglected.
The decision highlights how improper handling of terminations—without procedural fairness or consistent policy application—can lead to legal challenges, even when the employee's conduct appears to justify dismissal.
From structuring progressive discipline policies to conducting compliant investigations, Philippine labor law sets strict requirements for employers. Adherence to these legal frameworks not only protects businesses from litigation but also helps foster trust and accountability in the workplace.
Speaking to HRD Asia, Attorneys Anna Camille Crisostomo and Xela Lauren Catedrilla underscore the importance of documentation, adherence to procedural requirements, and fostering open communication to minimize risks and promote fairness.
Proper documentation is vital when managing potential dismissal or termination cases. Employers must maintain detailed records of employee performance and behavior to avoid claims of unfair dismissal.
“A good practice would be to write and record everything and anything related to an employee’s performance of duties,” says Crisostomo. “Attendance sheets and disciplinary records all serve as good foundations for a proper dismissal. Performance appraisals, specifically, provide a snapshot of an employee’s year-to-year performance or non-performance.”
Incident reports also play a crucial role, particularly in cases of gross misconduct.
“For infrequent but gross misdemeanors, incident reports are the best evidentiary basis,” Crisostomo adds. “On the other hand, performance reviews can provide a long-term view of recurring work issues.”
To ensure compliance and fairness, employers must establish clear and legally sound discipline policies. Employee handbooks are central to this process, and employees must confirm in writing that they have read and understood the policies.
“Each violation should be properly recorded, with supporting evidence,” Crisostomo advises. “If an employee commits a violation, an incident report should be created immediately. This ensures consistency and transparency.”
Crisostomo also highlights the procedural requirements under Philippine labor law.
“Of course, employers must observe the twin-notice rule. [This] ensures the employee has an opportunity to present evidence and answer the charges. The final disciplinary decision must be supported by evidence and aligned with the penalties outlined in the employee handbook.”
Errors in termination procedures can leave employers vulnerable to legal claims. Delays in addressing misconduct or infractions, for example, can undermine the case for termination.
“[If there’s] a lapse of time between the infraction and the disciplinary action… It could be interpreted as condoning the employee’s behavior,” says Crisostomo.
Additionally, a lack of supporting evidence can weaken an employer’s position. “Under our laws, an employer cannot terminate an employee merely based on its whims and fancies,” she says.
For cases of poor performance, consistent underperformance may qualify as just cause for termination. Crisostomo recommends relying on a combination of performance reviews and incident reports. Thus, an employer should aim to keep a comprehensive record as “these documents provide both a detailed and overarching view of the employee’s failure to meet expectations.”
Catedrilla further stresses that legally compliant terminations must meet two criteria: substantive grounds and procedural due process.
“Substantive grounds refer to just and authorized causes for termination as defined in the Labor Code of the Philippines,” she explains. These include serious misconduct, willful disobedience, gross neglect of duties, fraud, and redundancy.
On the other hand, procedural due process involves the twin requirements of notice and hearing.
“Employers must furnish two written notices: the first informs the employee of the charges, and the second communicates the decision to terminate,” says Catedrilla. “The hearing requirement is satisfied as long as the employee has an opportunity to be heard, even if an actual hearing is not conducted.”
Employers must tread carefully when handling resignations that escalate into dismissal complaints. While voluntary resignations typically absolve employers of liability, forced resignations may lead to claims of constructive dismissal.
“A better way to avert constructive dismissal is to create a healthy working environment and a grievance machinery,” says Catedrilla. “While this is easier said than done, it is best to practice proper documentation of resigned employees,” she adds.
She also points out the importance of “disengaging” from “psychological warfare” in the workplace since it may be construed, later on, as unfair or discriminatory acts.
Conducting thorough investigations is key to resolving allegations of misconduct fairly and effectively. Administrative hearings, while not mandatory, are a valuable tool in this process.
“Best practices include sending a Notice of Administrative Hearing, recording attendance and the hearing itself with the employee’s consent, and preparing detailed minutes,” says Catedrilla. She advises maintaining neutrality throughout the process.
“Employers must avoid making premature conclusions, as this can compromise the integrity of the investigation.”
A reasonable time gap between the hearing and the issuance of a decision is also essential. “This shows that the decision was properly deliberated, taking into account the facts and evidence presented,” Catedrilla adds.
While termination-related litigation is sometimes unavoidable, employers can take steps to minimize disputes.
“Addressing grievances at the micro-level through a grievance machinery procedure is an effective tool,” says Catedrilla.
If disputes escalate, she suggests pursuing settlement through the National Conciliation and Mediation Board (NCMB). “Settlement is encouraged to avoid protracted litigation and save time and resources,” she notes.
