Wednesday, January 06, 2016

Say goodbye

Sometimes employers have to let go of their employees because they are losing money. This is a sad event but sometimes necessary to keep the business going.

In the Philippines, the employer has to give written notice to the worker and to the Department of Labor and Employment at least one month before the intended termination date.

The employer claiming business losses must prove by substantial evidence that the losses are actual and urgent. Retrenchment is necessary to keep the business operations going.

The employer must also choose in good faith the employees to be terminated. The usual criteria is to use rank, efficiency, seniority, and other similar standards.

If the cause of termination is the installation of labor saving devices or redundancy, the employer has to give separation pay of at least one month pay or at least one month pay for every year of service, whichever is higher.

If the cause of retrenchment is to prevent business losses or the closure or cessation of operation, the employer has to give separation pay of at least one month pay or at least one-half month pay for every year of service, whichever is higher.

While retrenchment is hard, the law gives some protection to workers. In the Philippines, it may be better to be let go than to resign because there is separation pay if the termination is for an authorized cause.



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