- In case of cessation of operations, is the corporation bound to give the employee's the separation pay?
- What are the authorized causes provided under the law?
- What should be the corresponding value of the separation pay as to each cause?
(2) Authorized causes under the Labor Code, are those which termination of employees are grounded upon, not referring to those arising from fault or negligence of the employee. Under the Labor Code, these are:
Installation of Labor Saving devices - installation of machinery to effect economy and efficiency in the method of production.
Redundancy - happens when the services of he employee are in excess of what is reasonably demanded by the actual requirements of the enterprise.
Retrenchment- this is done to prevent losses. This is an economic ground to reduce the number of employees. Reduction of the personnel for the purpose of cutting down costs of operations in terms of salaries and wages.
Closing or Cessation of Operation - The closure of business is a ground for termination of the services of employee unless the closing is for the purpose of circumventing pertinent provisions of the Labor Code.
Disease or illness - this is an independent authorized cause which may be made by the employer if employee has been found to be suffering from any disease and whose continued employment is prohibited by law or prejudicial to his health as well as health of his
AMOUNT OF PAYMENT
Equivalent 1 month pay or 1 month pay for every year of service
Equivalent to 1 month pay or 1 month pay for every year of service
Equivalent to 1 month pay of 1/2 month pay for every year of service. Fraction of 6 months shall be considered as 1 whole year
Closing or Cessation of Operations
Equivalent to 1 month pay or 1/2 month pay for every year of service. Fraction of 6 months shall be considered as 1 whole year
Disease or illness