Dear Atty. Kathy,

We have an employee, X, who has been suffering from a mental health condition. Our company doctor certified that X's condition is not curable within six months, even with medical treatment, and that X's continued employment would be prejudicial to X's mental health. Does our company have grounds to terminate X's employment due to disease, even if his mental health condition is not a contagious disease?

Zoe

***

Dear Zoe,

For termination of employment due to disease, the Labor Code and its Implementing Rules, require the following elements: (1) An employee has been found to be suffering from any disease; (2) The employee's continued employment is prohibited by law or prejudicial to his/her health, as well as to the health of his/her co-employees; and (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 regard to the first and second elements, the Supreme Court has 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."

Further, 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" under Article 299 [284] of the Labor Code, to wit: "Art. 299 [284]. Disease as ground for termination. — An employer may terminate the services of an employee who 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: Provided, That he is paid separation pay equivalent to at least one month salary or to one-half (1/2) month salary for every year of service, whichever is greater, a fraction of at least six months being considered as one (1) whole year." (Emphasis supplied.)

Consistent with this construction, the Court has applied this provision in resolving illegal dismissal cases due to non-contagious diseases such as stroke, heart attack, osteoarthritis, and eye cataract, among others.