How to Terminate an Underperforming Remote Worker in the Philippines

Introduction: Why foreign managers get into trouble with Philippine termination rules

Foreign managers supervising remote teams in the Philippines sometimes assume they can end employment “at will” if performance is poor. Philippine law does not recognize “at-will employment” in the ordinary private employment setting. Instead, a dismissal must satisfy substantive due process (a lawful ground) and procedural due process (the legally required notices and opportunity to be heard). Failure on either front commonly results in an illegal dismissal finding, backwages exposure, and separation pay or reinstatement liabilities.

Governing legal framework (what rules control termination)

Philippine rules on termination are anchored on the worker’s constitutional and statutory security of tenure, implemented through the Labor Code’s dismissal standards and DOLE regulations on due process. The foundational requirements are reiterated in the Omnibus Rules Implementing the Labor Code, which states that workers may be dismissed only for a just or authorized cause and after due process (Rules to Implement the Labor Code, 1989, Rule XIV, Sec. 1). The Labor Code (as amended) also requires written notice, an opportunity to be heard, and places the burden of proof on the employer (Republic Act No. 6715, 1989).

DOLE has codified termination due process through regulations that explain the two-notice rule, what a “reasonable period” to respond means, and when a hearing is required (DOLE Department Order No. 147, series of 2015).

The “at-will employment” myth: what Philippine law requires instead

In the Philippines, the employer must prove both:

(1) Substantive due process — termination must be based on a legally recognized just cause or authorized cause; and

(2) Procedural due process — termination must follow the prescribed steps, most importantly the two written notices (for just causes), plus a meaningful chance to respond.

The Supreme Court continues to enforce these twin requirements. It explains that substantive due process concerns the existence of a valid ground, while procedural due process requires notice and hearing, including the two written notices prior to effecting termination (Borromeo et al. v. Lazada E-Services Philippines, Inc., et al., 2024).

Underperformance: when it can be a “just cause” (substantive due process)

Underperformance is not automatically a lawful ground. Termination for poor performance is typically treated as a form of just cause (often framed as inefficiency, failure to meet reasonable standards, or a performance-based violation of company rules), but it must be supported by evidence that the worker failed to meet reasonable, known standards and that the employer acted fairly and consistently.

What employers must prove in performance-based termination

In performance-related dismissals, employers should be prepared to prove these points using contemporaneous records:

• Clear performance standards that were communicated to the remote worker (KPIs, metrics, scorecards, quality standards, turnaround times).
• Documented performance gaps (missed deadlines, error rates, customer escalations, quality audits, productivity logs).
• Fair opportunity to improve (coaching, feedback, performance improvement plan, reasonable timelines).
• Consistency (similar performance issues handled similarly across the team, to reduce discrimination or bad faith arguments).

While the precise evidentiary mix varies by role (e.g., support agent vs. developer vs. sales), the consistent theme is that termination cannot be based on a vague claim that the remote worker is “not a fit” or “not performing” without concrete proof.

The Two-Notice Rule: why foreign employers must follow it

For termination based on just causes, Philippine regulations require two written notices served on the employee and a meaningful chance to respond. DOLE’s rules specify what each notice must contain and what counts as a reasonable time to respond (DOLE Department Order No. 147, series of 2015; Rules to Implement the Labor Code, 1989, Rule XIV, Secs. 2, 5–6).

Step-by-step procedure (procedural due process) for underperformance cases

Step 1: Issue the First Notice (Notice to Explain / Charge Sheet)

The first notice must do more than accuse the employee in general terms. DOLE requires that it include: (a) the specific grounds, (b) a detailed narration of facts and circumstances, and (c) a directive giving the employee a chance to submit a written explanation within a reasonable period (DOLE Department Order No. 147, series of 2015).

DOLE clarifies that a “reasonable period” should be at least five (5) calendar days from receipt, to allow the employee to study the allegations, consult counsel or a representative, and prepare a defense (DOLE Department Order No. 147, series of 2015).

Step 2: Give an ample opportunity to be heard

After the first notice, the employer must provide the employee a meaningful opportunity to answer the charge and submit evidence. DOLE recognizes that this may be done through a hearing, conference, or another fair method; a formal hearing is mandatory in certain situations such as when the employee requests it in writing or when there are substantial factual disputes (DOLE Department Order No. 147, series of 2015).

For remote workers, this is commonly done through a scheduled video conference with minutes and an attendance record, plus an email trail confirming the issues discussed and documents reviewed.

Step 3: Issue the Second Notice (Notice of Decision / Notice of Termination)

If the employer concludes that dismissal is justified, the second notice must be served stating that: (1) all circumstances involving the charge were considered, and (2) the grounds were established to justify severance (DOLE Department Order No. 147, series of 2015). The Omnibus Rules likewise require a written decision clearly stating reasons (Rules to Implement the Labor Code, 1989, Rule XIV, Sec. 6).

Service of notices for remote workers: email is not always enough

Philippine rules contemplate service to the worker’s last known address (Rules to Implement the Labor Code, 1989, Rule XIV, Sec. 2; DOLE Department Order No. 18-A, 2011, Sec. 12(13)). For remote workers, employers should align their process with this standard by:

• Sending notices to the employee’s recorded residential address via a reliable courier (keep proof of delivery); and
• Sending copies by email and company messaging platforms to show actual notice and to avoid disputes on receipt.

This dual-track approach helps prevent defenses that the employee never received the Notice to Explain or the Notice of Decision.

Typical remote-work scenarios (and how the two-notice rule applies)

Scenario A: Missed deadlines and low output over several months

Use documented metrics, prior coaching notes, and a performance plan. The first notice should identify concrete missed deliverables and dates, attach performance reports, and cite the breached performance standard. Then hold a meeting (video call) and document the employee’s explanation before issuing a decision notice if warranted.

Scenario B: Poor quality work (errors, customer complaints, rework)

Present objective quality audits, client emails, tickets, QA scoring, and rework time logs. Give the employee a chance to explain (tools issues, unclear instructions, training gaps). If the employer rejects the explanation, the second notice should state why the evidence outweighs the defense.

Scenario C: The manager wants immediate termination because “trust is gone”

Unless the situation involves a different just cause (e.g., serious misconduct) or an authorized cause (e.g., redundancy), underperformance alone usually requires documentation and due process steps. Skipping the first notice/hearing commonly triggers procedural due process violations and increased exposure.

Authorized causes vs. just causes: do they use the same notice steps?

No. For authorized causes (e.g., redundancy, retrenchment, closure), DOLE rules generally apply a one-notice requirement served to both the employee and DOLE at least 30 days before effectivity (DOLE Department Order No. 18-A, 2011, Sec. 12(II)). Underperformance is not an authorized cause; it is generally pursued, if at all, as a just-cause process requiring the two notices.

Table: Compliance checklist for terminating an underperforming remote worker

Item	What the employer should have	Primary legal basis
Lawful ground	Evidence of failure to meet reasonable standards / documented performance deficiencies	Substantive due process concept recognized in Supreme Court rulings (Borromeo et al. v. Lazada E-Services Philippines, Inc., et al., 2024)
First written notice	Specific grounds, detailed facts, directive to explain	DOLE Department Order No. 147, series of 2015
Time to respond	At least 5 calendar days from receipt	DOLE Department Order No. 147, series of 2015
Opportunity to be heard	Conference/hearing (video call is acceptable if fair and documented); mandatory in defined situations	DOLE Department Order No. 147, series of 2015; Republic Act No. 6715, 1989
Second written notice	Written decision stating reasons and that defenses were considered	Rules to Implement the Labor Code, 1989, Rule XIV, Sec. 6; DOLE Department Order No. 147, series of 2015
Proof of service	Courier proof to last known address plus email copies	Rules to Implement the Labor Code, 1989, Rule XIV, Sec. 2; DOLE Department Order No. 18-A, 2011, Sec. 12(13)

What happens if you have a valid ground but failed the two-notice rule?

Philippine jurisprudence recognizes that even where a dismissal is substantively valid, failure to comply with procedural due process can still expose the employer to monetary consequences. The Supreme Court has discussed that noncompliance with notice requirements does not necessarily invalidate a dismissal for valid/authorized causes, but it allows recovery of nominal damages for violation of due process (as discussed in Bacani et al. v. Fiber Textile Manufacturing Corp., et al., 2025, citing Agabon v. NLRC).

That said, employers should not treat this as a tolerable risk. In many underperformance disputes, the more serious problem is that the employer lacks sufficient documentation to prove the ground itself, making the dismissal illegal on substantive grounds as well (Borromeo et al. v. Lazada E-Services Philippines, Inc., et al., 2024).

Common employer mistakes in remote-worker terminations

• Vague accusations (“low performance,” “not a fit”) without dates, metrics, and examples, contrary to DOLE’s requirement for detailed narration in the first notice (DOLE Department Order No. 147, series of 2015).
• Rushing termination without giving at least 5 days to explain (DOLE Department Order No. 147, series of 2015).
• No documented hearing or conference, or no record that the employee was allowed to answer and submit evidence (DOLE Department Order No. 147, series of 2015; Republic Act No. 6715, 1989).
• No proof of service to the last known address (Rules to Implement the Labor Code, 1989; DOLE Department Order No. 18-A, 2011).
• Misclassification issues (labeling a worker an “independent contractor” when they function as a regular employee), which can lead to findings of illegal dismissal when the “contract” is simply not renewed or is ended early (Borromeo et al. v. Lazada E-Services Philippines, Inc., et al., 2024).

Compliance-oriented recommendations (to reduce illegal dismissal exposure)

Employers supervising remote workers in the Philippines should implement a termination-ready performance system before any dispute arises:

• Define measurable performance standards in writing and confirm employee receipt.
• Document performance coaching and set improvement timelines with check-ins.
• Use a defensible Notice to Explain that narrates facts with dates, metrics, and attached evidence (DOLE Department Order No. 147, series of 2015).
• Hold and document a conference (video call is fine) and retain minutes and exhibits submitted.
• Serve notices with proof to the last known address, with email copies for redundancy (Rules to Implement the Labor Code, 1989; DOLE Department Order No. 18-A, 2011).

Conclusion: termination is possible, but only with a lawful ground and a defensible process

Philippine employment law is built around security of tenure, not at-will termination. Dismissing an underperforming remote worker can be lawful, but only if the employer can prove a valid basis and complies with procedural due process, including the two-notice rule and a meaningful opportunity to be heard (Republic Act No. 6715, 1989; DOLE Department Order No. 147, series of 2015; Rules to Implement the Labor Code, 1989). For foreign managers, the most defensible approach is to treat performance termination as a documented, step-based process rather than a single decision.

About Nicolas and De Vega Law Offices

 Nicolas and de Vega Law Offices is a full-service law firm in the Philippines.  You may visit us at the 16th Flr., Suite 1607 AIC Burgundy Empire Tower, ADB Ave., Ortigas Center, 1605 Pasig City, Metro Manila, Philippines.  You may also call us at +632 84706126, +632 84706130, +632 84016392 or e-mail us at [email protected]. Visit our website https://ndvlaw.com.