Behind every successful company are the blood, sweat, and tears of those who didn’t make the cut. Harsh as it may be, it’s an inescapable reality that some employees need to be let go eventually. There may be varying reasons why, but the main point is that the employment ties are severed, and the displaced worker would need to find greener pastures elsewhere.

But it doesn’t have to be a messy breakup. When laying off an employee, here are a couple of Do’s and Don’ts that would ensure that the termination process is done in a legal and professional manner.


Layoffs must have a valid basis: such as Just or Authorized Causes under the law

Don’t believe everything you see on TV. (The Apprentice, anyone?) You can’t just fire an employee for no good reason, or else the Department of Labor would come breathing down your neck.

To layoff an employee, it must be for Just or Authorized Causes under the law.

Just Causes are due to the fault or misconduct of the employee which is related to the performance of his work. These include:

  • Serious Misconduct
  • Gross Insubordination
  • Gross and Habitual Neglect of Duties
  • Loss of Trust and Confidence
  • Fraud or Willful Breach of Trust
  • Commission of a Crime by Employee Against the Employer
  • Other Analogous Causes (Incompetence, Immorality)

Authorized Causes on the other hand, are layoffs which are brought about by legitimate business concerns, such as serious losses, or layoffs for purposes of streamlining. These include:

  • Disease
  • Installation of Labor Saving Devices
  • Retrenchment
  • Redundancy
  • Closure (either for serious business losses or not)

To know more about these causes, check out the following sites which offer comprehensive explanations per item:

For further clarification, it would be best to approach your company’s legal team.

Proper Due Process

The essence of proper due process involves the twin requirements of Notice and Hearing.

Notice is a two step process, which consist of: Notice of Appraisal, and Notice of Termination.

Notice of Appraisal (or First Notice) is a written notice served on the employee, which specifies the grounds of termination and gives the employee a reasonable opportunity for him to explain his side. This notice should contain a detailed narration of facts and circumstances which will serve as the basis for the charge against him. A general description of the charge is not enough. It should specifically mention which company rules, if any, are violated.

Next up is the Hearing. Although preferred, the existence of a formal trial-type hearing is not absolutely necessary to satisfy an employee’s right to be heard. Since only substantial evidence is necessary, as long as the employee is given the opportunity to respond to the charge, to present his evidence, or to rebut the evidence presented against him: the requirement for hearing is already satisfied, even if this be through mere submission of paperwork only. It is also important to note that there is no necessity for a hearing when an employee already admits responsibility for the alleged misconduct, as long as the proper notices are furnished to him, of course.

The second notice, or the Notice of Termination, is the last step. It is a written notice of termination served upon the employee, which indicates that upon due consideration of all the circumstances, the grounds have been established to justify his termination.

Failure to comply with the proper steps will result to the violation of the employee’s rights to due process. Such violation would give rise to damages amounting to P30,000 – P50,000. (Agabon v NLRC)

Handle the layoff process professionally

Even if the company is a small one, the layoff process should still be handled professionally. Terminating the employee’s services in a casual setting, such as a coffee shop or restaurant, might backfire and result to horrendous consequences. An article by Lisa Quast at illustrates this best:

“Because the woman was a good employee, [the boss] thought he would soften the blow by giving her the news at a nearby restaurant after work, rather than at the office. Needless to say, it backfired in a big way and it was the last thing she was expecting. The employee ended the conversation by saying, ‘…and I can’t believe you made me miss my son’s soccer game so you could lay me off’ and then SMACK, she slapped his face and stormed out of the restaurant.” – Managers: 7 Tips for Laying Off Employees Due to Downsizing

Ouch. Thus, it would be advisable to layoff employees during office hours, in the office itself. Preferably in the conference room, with the blinds drawn, out of earshot, away from prying co-workers. No promises that the employer/ HR won’t get slapped; however, it’s the best setting that gives off the “Nothing personal, just business” vibe.

Don’t be disrespectful or uncompassionate

Be it for any cause, the employer or the HR should be civil and sympathetic when delivering the news to the employee. Preferably, keep an HR person with a psychology or counseling background handy. Again from the article:

“…They will go through (to some degree) a formal grieving process not dissimilar to losing a loved one, ending a relationship, or making some other type of unanticipated life change. They will have real concerns – how will I pay my mortgage, feed my family, find a new job? Never lose sight of this, and make sure compassion and empathy are at the top of your list of actions.”

Don’t go in blindly. Have a game plan

People react differently to bad news; some would cry, others would probably be aggressive and argumentative, while others would perhaps plead for a second chance.

Always be in charge of the situation by having a solid game plan. This means that the HR doing the firing should have a solid outline, covering all important bases. The grounds justifying his termination must be meaningfully communicated to him.

Lastly, the approach and tone towards the employee should also be calibrated accordingly. Any questions or doubts should be addressed and answered convincingly. Most importantly, the layoff process must be pursuant to the proper procedure according to Labor laws. That way, the company would not be blindsided by fired employees filing erroneous reinstatement claims.

Don’t give your employees a hard time transitioning

Beyond the salary, your employees are also human beings with feelings and emotions. Thus, it would be basic human decency to help the employee transition into a new job.

Furnish them with the necessary recommendation letters, and accept calls from inquiring employers. Be nice. Who knows, you may end up crossing each other’s paths someday, as collaborators, colleagues, or even as clients.



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