Employment termination is a serious matter that affects lives and businesses alike. But did you know that under Philippine labor law, not all terminations are created equal? The concept of authorized cause of termination is crucial—it defines when an employer can legally end an employment relationship without fault on the employee’s part. Understanding this can save you from costly legal battles or unexpected job loss.

What Is an Authorized Cause of Termination?

An authorized cause of termination refers to specific, lawful grounds under which an employer is permitted to separate an employee from their job due to legitimate business reasons or legal requirements—not because of employee misconduct. This means the employee is not at fault, but the employer’s operational needs or external circumstances necessitate the termination.

Why “Authorized”?

The term “authorized” underscores that the employer’s decision is backed by law or regulations. It’s not arbitrary or punitive but a recognized management prerogative when certain conditions arise.

The Legal Framework Behind Authorized Causes

Authorized causes are primarily governed by the Labor Code of the Philippines, especially Articles 298 and 299, and are further clarified by Department of Labor and Employment (DOLE) issuances such as Department Order No. 147, series of 2015.

The Main Authorized Causes Under Philippine Law

The Labor Code lists the following as authorized causes of termination:

• Installation of labor-saving devices
• Redundancy (excess workforce)
• Retrenchment to prevent losses
• Closure or cessation of business operations
• Disease that makes the employee unfit to work
• Permanent lay-off after a six-month work suspension

Additionally, jurisprudence and DOLE regulations have expanded authorized causes to include situations like the impossibility of reinstatement due to business closure or lack of service assignments for security guards.

How Does Authorized Cause Differ from Just Cause?

Just cause involves employee fault—misconduct, negligence, or breach of contract—warranting dismissal. Authorized cause, however, is purely business-driven or health-related, independent of employee wrongdoing.

Procedural Requirements for Termination Due to Authorized Cause

Employers must strictly follow procedural rules to validate termination based on authorized cause:

• Provide written notice to both the Department of Labor and Employment and the affected employee(s) at least 30 days before the termination takes effect.
• Pay separation pay to the employee, except in cases of business closure due to serious financial losses.

Failing to comply can result in the termination being declared illegal, requiring reinstatement and back wages.

What Employees Should Know About Authorized Cause of Termination

If you face termination under an authorized cause, remember:

• You are entitled to separation pay, except when the business closes due to grave financial losses.
• The employer cannot terminate you without proper notice and due process.
• If the termination is without an authorized cause or due process, you may be entitled to reinstatement and full back wages.

Practical Takeaways for Employers and Employees

• Employers: Always document the business reasons for termination clearly. Follow the legal procedures meticulously to avoid disputes.
• Employees: Understand your rights regarding separation pay and due process if terminated under authorized causes. Seek legal advice if you suspect unfair treatment.

Conclusion

The authorized cause of termination is a vital concept that balances the employer’s need to manage their business and the employee’s right to fair treatment. It ensures that separations are lawful, justified, and accompanied by due process and benefits. Whether you’re an employer planning workforce adjustments or an employee facing job loss, knowing the legal contours of authorized causes empowers you to act wisely and protect your interests.

For a detailed discussion on termination due to illness, a specific authorized cause, visit this comprehensive resource on authorized cause of termination.

Understanding authorized causes is not just about compliance—it’s about fairness and clarity in the workplace. Stay informed, stay protected!