Download Termination of Employment under the Labor Code of the Philippines and more Assignments Human Resource Management in PDF only on Docsity! TERMINATION OF EMPLOYMENT One of the legal bases under our labor code for the termination of employment by the employer is called authorized causes. The reason for being called such is because of its justification or validity due to legitimate business reasons or as a requirement by law or regulations. Under the Labor Code of the Philippines, the following are authorized causes: 1) Installation of Labor-Saving Device; 2) Redundancy; 3) Retrenchment; 4) Closure or Cessation of Business Operations; 5) Disease; 6) Reinstatement; and 7) Strained Relations Under the first authorized cause which is also known as automation, an introduction of machinery, equipment, or other devices are done in good faith to save on cost, enhance efficiency and other justifiable economic reasons, which is the only option available to the employer and the consequent termination of the employment of those affected thereby. On the other hand, redundancy exits where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. The standards which must be met for this cause to be a valid reason for termination of employment are: A. There must be a superfluous positions or services of employees; B. These positions or services are in excess of what is reasonably demanded by the actual requirements of the enterprise to operate in an economical or efficient manner; C. The abolishment of the redundant positions must be done in good faith; D. Existence of a fair and reasonable criteria in the selection of employees to be terminated; E. Adequate proof of the redundancy must exist. Evidence to substantiate redundancy include: ▪ New Staffing Pattern ▪ Proposal on the viability of the newly created positions ▪ Job description ▪ Approval by the management of the restructuring For retrenchment, the reduction of the personnel is due to poor financial returns, a cost- cutting measure immediately necessary by business reduction or reverses. Standards for Retrenchment: A. Substantial losses are expected and not merely de minimis in extent; B. The same are imminent, can be perceived objectively, and in good faith by the employer; C. Retrenchment must be reasonably necessary to prevent expected losses; and D. Such losses must be proved by sufficient and convincing evidence. Consequently, under closure or cessation of business operations, when such shut down is due to serious business losses or to an act of government, the no separation pay is required. Standards: A. There must be a decision to close or cease operation of the enterprise by the management; B. The same was done in good faith; C. No other option left to the employer except to close or cease operations.
