Employees in the Philippines enjoy security of tenure which means that an employee can be dismissed only: (a) for causes provided by law; and (b) after due process is observed.
Employers can dismiss an employee based only on just and authorized causes. Just causes are based on acts attributable to an employee’s own wrongful actions or negligence (i.e. insubordination, habitual tardiness). Authorized causes refer to lawful grounds for termination which do not arise from the employee’s fault or negligence (i.e. closure of the business, retrenchment to prevent losses). On the other hand, due process refers to the employee’s right to be informed of the reason for his dismissal and, in case of just cases, an opportunity to defend himself.
An Employee Termination Letter helps satisfy both of the above requirements by informing the employee that his employment is being terminated and the reason for the same. It also includes other details of the termination such as the date when the termination will be effective and the amount of separation pay the employee will receive, if any.