Philippine Labor Law Glossary
Definition: Authorized Cause is a ground recognized by the Labor Code that may allow an employer to terminate employment for business, operational or health reasons not based on employee fault, subject to specific proof, notice and separation-pay requirements.
Full guide: What is the proper procedure for authorized-cause termination in the Philippines? — the step-by-step procedure, DOLE notice timing, selection criteria, separation-pay rates and remedies.
Sa Filipino · Filipino Explanation
Ano ang Authorized Cause?
Ang authorized cause ay legal na ground para sa employer-initiated termination na hindi nakabatay sa kasalanan ng empleyado, gaya ng redundancy, retrenchment, installation of labor-saving devices, o qualifying closure.
May sariling substantive requirements, notice obligations, at possible separation-pay consequences ang bawat authorized cause.
What Authorized Cause Means
Authorized cause refers to employer-initiated termination permitted by law because of a legitimate business, operational or health-related condition. Unlike just cause, it does not depend on employee misconduct or fault. The employer must prove the specific ground and comply with the legal procedure that applies to it.[1]
Article 298 covers installation of labor-saving devices, redundancy, retrenchment to prevent losses, and closure or cessation of operations. Article 299 covers termination because of disease when continued employment is prohibited by law or prejudicial to the employee’s health or the health of co-employees, subject to the required medical certification and separation pay.[1]
Legal Basis
| Authority | Classification | Rule supported | Binding effect | Official source |
|---|---|---|---|---|
| Labor Code, Article 298, formerly Article 283 | Labor Code provision | Lists labor-saving devices, redundancy, retrenchment and closure or cessation as authorized causes and sets notice and separation-pay rules. | Binding law | Supreme Court E-Library |
| Labor Code, Article 299, formerly Article 284 | Labor Code provision | Allows termination due to disease under stated conditions and requires statutory separation pay. | Binding law | DOLE Book VI |
| Zambrano et al. v. Philippine Carpet Manufacturing Corporation, G.R. No. 224099, June 21, 2017 | Supreme Court jurisprudence | Explains Article 298 closure requirements and the need for bona fide cessation, notice and applicable separation pay. | Controlling jurisprudence | Supreme Court E-Library |
Requirements, Burden and Evidence
Requirements: each authorized cause needs its own proof, fair selection where only some employees are affected, advance written notice to the employee and DOLE, and the separation pay set for that ground. The steps are in the guide’s authorized-cause termination procedure.
Burden: once a dismissal is shown, the employer must prove the authorized cause and its compliance with the procedure. See the guide’s employer burden of proof and the Burden of Proof entry.
Evidence: the records that matter differ by ground, from staffing studies and audited financial statements to the public health authority’s certification in disease cases. They are listed in the guide’s evidence and documentation section.
Why the Term Matters
Calling a dismissal an authorized cause does not make it valid. A legally recognized ground, evidence, notice and the applicable separation-pay computation must align. If the cause is unsupported or the selection is arbitrary, the termination may be challenged as illegal dismissal.
Practical Example
Hypothetical example: A company removes two duplicate accounting roles after adopting a centralized system. It documents the new structure, compares duties, applies stated selection criteria, gives written notice to the affected employees and DOLE at least one month in advance, and pays the Article 298 separation amount. The issue is not whether the employees committed wrongdoing, but whether genuine redundancy and all legal requirements can be proved.
Common Misunderstanding
Misunderstanding: An employer can terminate any employee by paying separation pay.
Correct approach: Separation pay does not replace a valid cause. The employer must first prove a recognized authorized cause and comply with the appropriate procedure.
Continue Exploring
Related Glossary Terms
Practical Guides and Tools
Sources and Legal Citations
- Labor Code of the Philippines, Presidential Decree No. 442, Articles 298 and 299, formerly Articles 283 and 284, Supreme Court E-Library. Supports: authorized grounds, notice and separation pay.
- Department of Labor and Employment, Labor Code of the Philippines, Renumbered, Book VI—Post Employment, official DOLE page. Supports: current article numbering and statutory text.
- Zambrano et al. v. Philippine Carpet Manufacturing Corporation/Pacific Carpet Manufacturing Corporation, G.R. No. 224099, June 21, 2017, Supreme Court of the Philippines, decision. Supports: closure requirements under Article 298.
Sources rechecked as of: August 2, 2026
Disclaimer
This glossary entry is for general educational and legal-information purposes and is not legal advice. Labor disputes depend on specific facts and current law. LaborCode.ph is independent and is not a government website, tribunal or law firm.