Source: https://asksonnie.info/termination-authorized-causes/
Timestamp: 2019-02-23 01:52:41
Document Index: 14954187

Matched Legal Cases: ['art. 283', 'Art. 283', 'Art. 283', 'Art. 284', 'Art. 283', 'Art. 284', 'art 3', 'Art. 283', 'Art. 284']

🏠 ‣ Articles ‣ HR ‣ Employee Relations ‣ Termination ‣ Termination: Authorized Causes
by Sonnie | Due Process, HR ToolBox, Termination | 7 comments
Termination blog series 3 of 4 (Authorized Causes)
articles of the entire series is available here
This is the 3rd installment to this blog series, and discussion is focused on authorized causes, per art. 283 *298 and 284 *299 of the labor code. The intention of this series is to guide business owners on how to exercise their prerogatives, and educate employees of the parameters governing their right to security of tenure, thru the proper implementation of due process.
In an earlier post, we discussed about the valid causes to terminate an employee — the just causes or the acts of the employee that can lead to termination either thru a series of acts or a single act. Let’s discuss now the authorized causes
Art. 283 *298 and 284 *299 of the Philippine Labor Code
Art. 283 *298. Closure of establishment and reduction of personnel.
The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year.
Art. 284 *299. Disease as ground for termination.
On this post, let’s focus on Art. 283 *298
Yes, you read it right, an employee can also lose his job for the following authorized causes:
the closing or cessation of operation of the establishment.
Installation of Labor Saving Devices, Redundancy
With the stiff global competition, an enterprise, in order to survive, must institute productivity measures. This can be in a form of investment on equipment, technology or systemization of operations. This may result to the streamlining of organization and make certain positions “redundant” (in short, not needed). In this way, an employee can lose his job.
Likewise, if an establishment is not making enough to keep itself afloat, one option is to downsize it’s operations. Downsizing will also lead to the termination of some employees.
On extreme situation, if the losses can’t be reversed, the best option may be to shut down operations. In this case, all employees will lose their job.
Losses, however, is not a pre-requisite for a business owner to close his company. A capitalist may opt to pull out his investments and relocate to another country. This had happened in the Philippines where in some companies relocated their operations to another ASEAN country or China, for productivity and competitiveness reasons.
In all of these, guidelines are in place so employers will know how to go about the situation. Like in cases of redundancy and retrenchment, bases on who to retain and who to terminate should be clear. Like the first in-last out method or performance based scheme. End result, should be strive to be value adding to all stakeholders.
Due process requirements as provided for by the law:
serving a written notice on the workers and the Department of Labor and Employment at least one (1) month before the intended date thereof.
In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole
In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole. Please note that financial assistance may not be required if closure is due to serious business losses.
On my next post, we will discuss termination due to health reasons. It’s actually part of authorized causes, but I opted to give the topic a dedicated post.
ASKSonnie on January 15, 2016 at 9:52 AM
Hu Juwan, Retrenchment is due to financial loses.
Juwan CRuz on August 4, 2009 at 5:04 PM
What is the difference between redundancy and retrenchment? When factors are used to determine if you will be made redundant versus being retrenched especially so that redundancy provides for 1 month salary for every year of service whereas retrenchemt only gives 1/2 month salary for every year of service?
Lue-Rjea D. Tumpalan on February 12, 2009 at 5:25 PM
Hi! I am now reviewing the right to due process which entails you to really review our Labor Code. I would like to know however about RA 9165 The comprehensive Dangerous Drugs Act. I would like to know why the law required this a “Random Drug Test” is it because the employers may violate the “right to due process”. In what context? Can you give some words of wisdom about this. I really appreciate the help
Lue-Rjea Tumpalan
ASKSonnie on January 15, 2016 at 9:51 AM
The right to due process will come-in when employee yielded positive result, after the confirmatory test (drug testing undergoes two level of confirmation).
The twin notice rule comes in before you implement corrective actions.
ASKSonnie on May 16, 2007 at 6:58 PM
@ Margaret– many thanks for your feedback.
@ Ces– I will discuss Art. 284 on my next post. Thanks for the visit and the feedback 😀
Ces on May 16, 2007 at 11:17 AM
Thanks for the informative blogs… could you please name those diseases that would cause someone’s job… (as you have mentioned in this series)
Margaret on May 15, 2007 at 8:12 PM
Thank you for that wonderful presentation which on’ how to loose your job part 3′.I have learnt a lot out of it and i believe that it was worthywhile.I will be put it in to practice apart from sharing the information with other workers so that they can also benefit from it.
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