Philippines – Termination Due To Disease.

4 August 2021

 

Under our labor law, authorized causes for termination refer to grounds which do not arise from fault or negligence of the employee; rather, these arise due to business/economic or health reasons.
 

To recall, termination due to business/economic reasons include: Installation of labor-saving devices; redundancy; retrenchment (reduction of costs) to prevent losses; and the closing or cessation of operation.
 

Meanwhile, termination due to disease is where an employee has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees, and a competent public health authority has certified that the disease is incurable within a period of six months even with proper medical treatment (Article 299, Labor Code).
 

Just like any ground for termination, an employer terminating an employee due to a disease must comply with substantive and procedural requirements. Non-compliance of which renders the termination illegal.
 

In terminating an employee due to disease, the Labor Code and its Implementing Rules and Regulations (IRR) require the presence of the following substantive requirement:
 

(1) An employer has been found to be suffering from any disease.
 

(2) His continued employment is prohibited by law or prejudicial to his health, as well as to the health of his co-employees.
 

(3) A competent public health authority certifies that the disease is of such nature or at such a stage that it cannot be cured within a period of six months even with proper medical treatment.
 

With respect to the first and second elements, the Supreme Court liberally construed the phrase “prejudicial to his health as well as to the health of his co-employees” to mean “prejudicial to his health or to the health of his co-employees.” Moreover, the Court did not limit the scope of this phrase to contagious diseases for the reason that this phrase is preceded by the phrase “any disease.” Consistent with this construction, the Court applied this provision in resolving illegal dismissal cases due to non-contagious diseases such as stroke, heart attack, osteoarthritis, and eye cataract, among others.
 

The third element is not merely a procedural requirement, but a substantive one. It substantiates the contention that the employee has indeed been suffering from a disease that: (1) is prejudicial to his health as well as to the health of his co-employees; and (2) cannot be cured within a period of six months even with proper medical treatment. Without the medical certificate, there can be no authorized cause for the employee’s dismissal. The absence of this element thus renders the dismissal void and illegal.
 

Under the law, the employer has the burden to prove the abovementioned elements. In the 2020 case of Omanfil vs Mesina (GR 217169, 4 November 2020), the Supreme Court held that the employer illegally terminated the employee since none of the latter’s medical records showed that his ailment was permanent or that he suffered from a disease which could not be cured within six months, and that his continued employment was prohibited by law or prejudicial to his health or to the health of his co-employees. Further, there was an absence of the required certification from a competent public authority certifying to such a health condition on the employee’s part.
 

Note that the law states that should the disease be curable within six months, the employee should be asked to take a leave of absence instead of terminating his employment. Moreover, the employee is subject to reinstatement after his recovery from his disease.
 

The Labor Code and its IRR are silent on the procedural due process required in terminations due to disease. Despite the seeming gap in the law, the IRR expressly states that the employee should be afforded procedural due process in all cases of dismissals.
 

Jurisprudence pronounced the rule that the employer must furnish the employee two written notices in terminations due to disease, namely:
 

(1) the notice to apprise the employee of the ground for which his dismissal is sought; and
 

(2) the notice informing the employee of his dismissal, to be issued after the employee has been given reasonable opportunity to answer and to be heard on his defense.
 

To accord employees procedural due process reinforces the State policy of protecting the workers from being terminated without cause and without affording them the opportunity to explain their side of the controversy.
 

Note as well that an employee terminated due to health reasons is entitled to receive separation pay equivalent of one month pay or one-half month pay for every year of service, whichever is higher.