What is the twin notice rule for employee termination?

The twin notice rule requires employers to issue two written notices for just-cause termination: (1) a Notice to Explain (NTE) detailing the specific charges with at least 5 days for the employee to respond, and (2) a Notice of Decision after a hearing or conference, stating whether the employee is dismissed or not and the reasons.

How much separation pay do I owe for redundancy vs. retrenchment?

For redundancy and installation of labor-saving devices, separation pay is one month's salary per year of service. For retrenchment and closure (not due to serious losses), it is one-half month's salary per year of service. A fraction of 6 months or more counts as one full year.

Can I terminate a probationary employee before 6 months?

Yes. A probationary employee can be terminated for just cause or for failure to meet the reasonable standards communicated at the time of engagement. However, due process must still be followed — you cannot simply stop allowing the employee to report for work.

What happens if I skip due process but have a valid reason to terminate?

The Supreme Court has ruled that termination with valid cause but without proper procedural due process is not illegal dismissal, but the employer may be liable for nominal damages. In practice, awards range from P30,000 to P50,000 per employee depending on the violation.

How long can I place an employee on preventive suspension?

Preventive suspension is limited to a maximum of 30 calendar days. If the investigation is not concluded within 30 days, the employer must either reinstate the employee (even to a payroll-only status) or extend the suspension with pay.

Employee Termination Due Process in the Philippines: The Complete Employer's Guide

Employee termination is the highest-risk compliance area for Philippine employers. Mistakes in due process lead to illegal dismissal cases before the National Labor Relations Commission (NLRC), where the typical remedy is reinstatement plus full backwages — potentially years' worth of salary.

This guide covers the legal grounds for termination, the procedural requirements, separation pay rules, and common pitfalls.

Grounds for Termination

The Philippine Labor Code recognizes two categories of lawful termination: just causes (employee's fault) and authorized causes (business reasons).

Just Causes (Article 297, Labor Code)

Just causes are attributable to the employee's conduct:

Serious misconduct — Willful wrongdoing connected to work duties
Willful disobedience — Deliberate refusal to follow lawful and reasonable employer orders
Gross and habitual neglect of duties — Repeated failure to perform work responsibilities
Fraud or breach of trust — Dishonesty toward the employer, especially for employees in positions of trust
Commission of a crime — Against the employer, their family, or authorized representatives
Analogous causes — Similar offenses of comparable gravity

Authorized Causes (Articles 298-299, Labor Code)

Authorized causes are business-driven and not the employee's fault:

Authorized Cause	Employer Requirement	Separation Pay
Redundancy	30-day written notice to employee + DOLE	1 month per year of service
Installation of labor-saving devices	30-day written notice to employee + DOLE	1 month per year of service
Retrenchment (prevent losses)	30-day written notice to employee + DOLE	1/2 month per year of service
Closure not due to serious losses	30-day written notice to employee + DOLE	1/2 month per year of service
Disease (prejudicial to health)	Competent public health authority certification	1/2 month per year of service

For separation pay computation, a fraction of at least 6 months of service is considered one full year.

The Twin Notice Rule

For just-cause terminations, due process requires the "twin notice" procedure:

Notice 1: Notice to Explain (NTE)

The first written notice must:

Specify the act(s) or omission(s) constituting the ground for termination
State the specific company rule or policy violated, if applicable
Give the employee at least 5 calendar days to prepare a written explanation
Be delivered in a manner that ensures receipt (hand-delivery with acknowledgment, or registered mail)

Hearing or Conference

After the employee submits their response (or the 5-day period lapses):

Conduct a hearing or conference where the employee can explain, present evidence, and confront witnesses
The hearing need not follow courtroom procedure — it must simply be a meaningful opportunity to be heard
Document the proceedings in writing

Notice 2: Notice of Decision

After the hearing:

Issue a written notice of the employer's decision
State whether the employee is dismissed or not
Detail the specific findings and reasons for the decision
Specify the effective date of termination

Authorized Cause Procedure

For authorized-cause terminations, the procedure is different:

Written notice to the employee at least 30 calendar days before the effective date
Written notice to DOLE at least 30 calendar days before the effective date
Payment of separation pay on the last day or within a reasonable period

No hearing is required for authorized causes, but the 30-day notice requirement is strict.

Preventive Suspension

Employers may place an employee under preventive suspension while investigating potential misconduct — but only if the employee's continued presence poses a serious and imminent threat to the employer's property or other employees.

Rule	Limit
Maximum duration without pay	30 calendar days
After 30 days	Must reinstate or extend with pay

Preventive suspension is not a penalty — it is a precautionary measure during investigation.

Separation Pay Computation

For Authorized Causes

One month per year of service:

Redundancy
Installation of labor-saving devices

One-half month per year of service:

Retrenchment to prevent losses
Closure not due to serious losses
Disease

Example: Redundancy

Employee with P30,000 monthly salary, 5 years and 8 months of service:

Years of service: 5 years + 8 months = 6 years (fraction of 6+ months rounds up)
Separation pay: P30,000 x 6 = P180,000

Example: Retrenchment

Employee with P25,000 monthly salary, 3 years and 2 months of service:

Years of service: 3 years + 2 months = 3 years (fraction under 6 months stays)
Separation pay: P25,000 x 0.5 x 3 = P37,500

For Just Causes

No separation pay is required for just-cause termination. However, some employers offer "financial assistance" as a goodwill gesture — this is not legally mandated.

Illegal Dismissal Consequences

If a termination is found to be illegal, the typical remedies are:

Reinstatement to the former position without loss of seniority
Full backwages from the date of dismissal to the date of actual reinstatement (can span years)
Moral and exemplary damages in cases of bad faith
Attorney's fees (typically 10% of the total award)

If reinstatement is no longer feasible, separation pay in lieu of reinstatement is awarded (typically one month per year of service).

Common Termination Mistakes

Skipping the NTE — Verbally telling an employee they're fired violates due process. Even with a valid just cause, failure to issue the twin notices exposes the employer to nominal damages of P30,000-P50,000.
Vague NTE charges — The notice must specify the exact act, date, and rule violated. "Poor performance" is not enough; state which standard was not met and the specific instances.
Less than 5 days to respond — Giving the employee only 1-2 days to reply to the NTE undermines their right to be heard. The 5-day minimum is a strict requirement.
No hearing or conference — The employee must have a meaningful opportunity to present their side. Skipping this step, even with written notices, is a due process violation.
Missing the 30-day DOLE notice for authorized causes — For redundancy, retrenchment, or closure, both the employee and DOLE must receive written notice 30 days before the effective date. Missing this invalidates the termination.

How TalinoHR Handles Termination

TalinoHR's Personnel Actions module automates the compliance-heavy parts of the termination process:

Twin notice tracking — The system computes the NTE response deadline (date issued + 5 calendar days) and alerts HR when the response period expires
Preventive suspension monitoring — Automatically flags when a preventive suspension approaches the 30-day limit
Authorized cause notice tracking — Enforces the 30-day advance notice requirement for authorized causes
Multi-level approval workflow — Termination actions (just cause and authorized cause) require SUPER_ADMIN approval by default, ensuring proper oversight
Clearance checklist — On approval, the system auto-generates a clearance checklist across 5 categories (Property, IT, Finance, HR, Government)
Audit trail — Every status change is recorded with timestamp and user, creating a defensible paper trail for NLRC proceedings

No missed deadlines. No procedural gaps. Book a demo to see TalinoHR's termination compliance workflow.