The High Cost of Unlawful Termination: Understanding Illegal Dismissal in the Philippine Workplace

In the Philippine workplace, illegal dismissal is a serious violation of employees’ rights that carries significant financial consequences for employers. Understanding the high cost of unlawful termination is essential for employers and employees. Not only can it result in hefty financial penalties, but it can also damage a company’s reputation and lead to low employee morale.


An employee dismissed without just cause, authorized cause or due process is considered illegal dismissal under Presidential Decree No. 442 or the Labor Code of the Philippines, as amended. Unlawful termination can occur for various reasons, such as discrimination, retaliation, or even as a result of an employer’s failure to follow proper dismissal procedures.


For employees, being unlawfully terminated can have a devastating impact on their livelihoods, leaving them without income and job security. It is important for employees to be aware of their rights and understand how to pursue legal recourse if they find themselves in this situation.


By understanding the high cost of unlawful termination and taking proactive steps to prevent it, employers can protect themselves and create a positive work environment for their employees.

Understanding the labor laws in the Philippines

Presidential Decree No. 442 or the Labor Code of the Philippines is designed to protect the rights of employees and ensure fair treatment in the workplace. One key aspect of these laws is the prohibition of unlawful termination. Under Philippine labor laws, an employee can only be dismissed for just cause or authorized reasons, following due process.


The Labor Code of the Philippines provides a comprehensive framework that outlines employers’ and employees’ rights and obligations. It covers various aspects of employment, including working conditions, wages, benefits, and termination procedures. Employers are

Consequences of unlawful termination for employers

Unlawful termination or Illegal Dismissal can have severe consequences for employers, both financially and reputationally. In the Philippines, following Article 294 of the Labor Code of the Philippines, employers found guilty of illegal dismissal may be required to reinstate the employee, pay reinstatement wages, back wages, separation pay if applicable, and other monetary awards to the affected employee. These financial penalties can be substantial and can significantly impact a company’s bottom line.


Furthermore, the negative publicity and damage to the company’s reputation resulting from an unlawful termination case can have long-lasting effects. It can lead to a loss of trust from both employees and customers, making it difficult to attract and retain top talent and maintain positive relationships with clients and stakeholders, causing stress and hardship in their personal lives.

Steps to take if you believe you have been unlawfully terminated

If an employee believes they have been unlawfully terminated, taking appropriate steps to protect their rights and pursue legal recourse is crucial. The first step is to gather evidence and document any relevant information, such as emails, electronic communications, memos, or witness statements, that support their claim. It is essential to keep a detailed record of the events leading up to the termination.


The next step is to consult with a labor lawyer who specializes in employment law. One of these law firms that specializes in Labor Law is Ricasio Law. Such lawyer can provide guidance on the legal options available and help determine the best course of action. They can assist in filing a complaint with the National Labor Relations Commission or the Department of Labor and Employment (DOLE) and represent the employee throughout the legal process.

Filing a complaint with the Department of Labor and Employment (DOLE) or the National Labor Relations Commission (NLRC)

Filing a complaint with the Department of Labor and Employment (DOLE) or the National Labor Relations Commission (NLRC) is crucial in seeking justice for unlawful termination. The DOLE is responsible for enforcing labor laws and ensuring compliance by employers while the NLRC is a quasi-judicial body for adjudicating illegal dismissal claims.


The complaint should include detailed information about the termination, including dates, events, and any supporting evidence. The appropriate labor body will conduct an investigation to determine if there are grounds for the complaint. If it finds merit in the complaint, they may facilitate a settlement between the employee and the employer. If a settlement cannot be reached, the case may proceed to the National Labor Relations Commission (NLRC) for resolution

Legal remedies for victims of unlawful termination

Employees who have been unlawfully terminated have legal remedies available to seek redress for their grievances. Following the Labor Code of the Philippines, the  NLRC is the primary venue for resolving labor disputes, including cases of illegal dismissal. The NLRC has the authority to hear and decide on complaints filed by employees against their employers.


If the NLRC finds in favor of the employee, they may order the employer to reinstate the employee with full back wages and benefits. Additionally, the NLRC may award damages to compensate for any financial losses, emotional distress, or other harm suffered due to the unlawful termination. The exact remedies and amounts awarded will vary based on the circumstances of each case.


Illegal dismissal is a grave violation of employees’ rights that carries significant financial consequences for employers in the Philippine workplace. Understanding the high cost of unlawful termination is crucial for both employers and employees to ensure compliance with labor laws and promote a fair and positive work environment. By adhering to proper dismissal procedures and respecting employee rights, employers can avoid legal battles, financial penalties, and damage to their brand reputation. Employees must be aware of their rights and take appropriate steps to pursue legal recourse if they believe they have been unlawfully terminated. Together, we can create a workplace that respects and protects the rights of all individuals involved.

How Ricasio Law can assist you?

Ricasio Law is an expert in labor issues. Our team of law experts can give you useful advice and help you figure out the best thing to do. Get in touch with us right away to talk about your case and let us help you protect your property rights.

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