ER Midterms PDF

Topic 1: Types of Employment the latter will perform work for a term or a A. Casual Employment certain period of time.  A casual employment contract is an  Fixed term employees should have willfully and employm...

Topic 1: Types of Employment the latter will perform work for a term or a A. Casual Employment certain period of time.  A casual employment contract is an  Fixed term employees should have willfully and employment arrangement between an voluntarily entered into the fixed term employer and a casual employee wherein the employment contract. latter performs work that is incidental to the  Fixed term employees should have bargained business. on equal footing on the terms and conditions  Casual employees are those who perform work of employment. that is incidental, auxiliary, or augments the  Non-compliance of the requirements may usual business or trade of the employer. result in the employee being reclassified as a  The employment of casual employees should regular employee. not exceed twelve (12) months.  Burden of proof is on the employer when a  Non-compliance of the requirements may non-regular employment is challenged. result in the employee being reclassified as a The following are the requirements for valid fixed regular employee. term employment contracts:  Burden of proof is on the employer when a 1. The employee must have willfully and non-regular employment is challenged. voluntarily entered into the fixed-term. The following are the requirements: employment contract without any duress, 1. The employee must perform work which are force, intimidation, or undue influence from incidental to the usual trade or business of the the employer. employer (in direct contrast to the work of a 2. The employer and the employee must have regular employee); and bargained on equal footing on the terms and 2. The casual employment period should not conditions of employment. exceed twelve (12) months. D. Project-based Employment B. Seasonal Employment  A project employment contract is an  A seasonal employment contract is an employment arrangement between an employment arrangement between an employer and a project employee wherein the employer and a seasonal employee wherein latter’s employment has been fixed for a the latter has been engaged to render work specific project or undertaking. during a season  The project’s completion or termination should  The employer must be justified in hiring be determined or determinable at the time of additional help via seasonal employees. the engagement of the project employee.  Seasonal employee should work during the  The existence of a project is vital to the validity specified season only. of the project employment.  Regular seasonal employees are those who are  Project employment is co-terminus with the regularly hired for a season. project.  Non-compliance of the requirements may  Non-compliance of the requirements may result in the employee being reclassified as a result in the employee being reclassified as a regular employee. regular employee. The requirements for a valid seasonal employment The requirements for valid project employment contract: contracts: 1. The employee must be performing work or 1. The employee was assigned to carry out a services that are seasonal in nature; and specific project or undertaking. 2. He had been employed for the duration of 2. The duration and scope of which were the season. specified at the time they were engaged for such project. C. Fixed-term Employment  A fixed-term employment contract is an E. Probationary Employment employment arrangement between an  A probationary employment contract is an employer and a fixed-term employee wherein employment arrangement between an  employer and a probationary employee Further, non-regular employees (e.g. probationary, wherein the latter will be required to undergo casual, project, seasonal, fixed term) may be a probationary period to determine their deemed as regular employees if the requirements fitness to qualify for regular employment. for non-regular employment contracts are not  The probationary employment should not complied. For example, a probationary employee exceed 180 calendar days. who is made to work beyond the probation  The standards or criteria for regular becomes a regular employee by operation of law. employment should be made known to the employee on/before the engagement.  Probationary employees enjoy security of Topic 2: SUB/CONTRACTING tenure. A contractor refers to “any person or entity  Non-compliance of the requirements may engaged in a legitimate contracting or result in the employee being reclassified as a subcontracting arrangement providing services for regular employee. a specific job or undertaking farmed out by (a) Requirements for a valid probationary employment principal under a Service Agreement.” (Section 3(d), contract: DO-174) 1. The probationary period should not exceed 180 calendar days. 2. The standards/criteria for regular employment must be made known to the employee on/before the time of engagement (or first day of work). F. Regular Employment  A regular employment contract is an employment arrangement between an employer and a regular employee wherein the latter has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer.  There are those “deemed regular employees” due to the employer’s non-compliance with How it Works? labor laws. 1. What?  Regular employees refers to employees who The principal which decides to farm out a job or performs activities which are usually necessary service to a subcontractor. or desirable in the usual business or trade of 2. How? the employer and have no specific end to their The subcontractor has the capacity to employment unlike non-regular employees. independently undertake the performance of the  Employees are presumed regular unless job or service proven otherwise. 3. Execution There are no specific requirements for a regular The employees are engaged by the subcontractor employment contract to be valid. For one, the to accomplish the job or service. employer may simply extend a regular employment contract to job applicant. If the offer of regular Governing Principles employment is accepted, then a regular  A contractor or a subcontractor is registered employment contract is created. with the Department of Labor and Employment (DOLE) as legitimate job On the other hand, if the employment status of an contractors, who perform a job or work farmed employee is unclear, the Labor Code definition of out or outsourced by a principal under a regular employment becomes important. Service Agreement.  They have a distinct and independent business, liability from payment of future claims, or which enables them to perform the blank payroll prior to being hired as an outsourced job or work according to their own employee to to continue employment. manner and method.  Such other practices, schemes or employment  They are free from the control and/or direction arrangements designed to circumvent the right of the principal. of workers to security of tenure.  The Service Agreement between the principal and the contractor should have terms that Employer’s Responsibilities would ensure compliance with all rights and Listed below is a summary of the mandatory benefits for all the employees of the contractor benefits and provisions for employees in the or subcontractor under labor laws. Philippines under the Labor Code and special laws: 1. Minimum wage DO 174 2. 13th month pay (after 1 month of service) = Department Order No. 174, series of 2017 (DO 174) 1/12 of the total basic salary earned by an or the Rules Implementing Articles 106 to 109 of employee within a calendar year the Labor Code, As Amended was issued by the 3. Overtime pay= 25% premium on hourly rate Department of Labor and Employment (DOLE). 4. Night shift differential if work between 10:00 This document provides set of guidelines governing PM to 6:00 AM = 10% premium on hourly rate contracting and subcontracting. 5. Special Non-Working day = 30% premium if worked DO 174 prohibits labor -only contracting: 6. Regular holiday pay= 100% premium if worked,  The contractor or subcontractor does not paid if unworked employ their right to manage the performance 7. Service Incentive Leave = 5 days paid leave for of an employee’s work. every year of service  Employees recruited and placed by a 8. Maternity Leave = daily maternity benefit contractor or subcontractor perform actions equivalent to one hundred percent (100%) of that are related directly to the principal’s main her average salary credit for sixty (60) days or business operation. seventy-eight (78) days  The contractor or subcontractor does not have 9. Paternity leave = 7 days leave with pay substantial capital. (married only)  The contractor or subcontractor does not 10. Parental leave for solo parents= 7 days leave possess investments in the form of equipment, with pay for every year of service tools, work premises, machinery, supervision, 11. Leave for victims of Republic Act 9262 or Anti- among others. Violence Against Women Law = 10 days leave with pay Other illegal forms of employment 12. Special Leave for Women= Two months leave arrangements with pay for women who underwent surgery  Contracting out of a job due to a strike or due to gynecological disorders lockout, whether actual or imminent. 13. Social Security System contribution (based on  Contracting out of a job currently being salary) performed by union members and interfering 14. Pag-ibig contribution (based on salary) with, restraining, or coercing employees in the 15. Philhealth contribution (based on salary) exercise of their rights to  self-organization.  Repeated hiring by the contractor or Topic 3: Human Resources Policy subcontractor of employees for a brief What are they? duration or under an employment contract. (Company) Policies are formal guidelines or  The contractor or subcontractor or principles that govern the behavior and actions of subcontractor requires employees to sign an employees within an organization. They provide a antedated letter of resignation, waiver of labor framework for decision-making and help ensure standards, quitclaim releasing them from consistency, compliance, and fairness in various Components of a Policy situations. 1. Purpose Identifies the actual guiding principles or what is to HR Policies be done or what the document intends to do.  The policies of HR govern the work, behaviors, 2. Scope interactions and management of employees. Has the following: They can encompass a wide range of  Coverage employment practices including hiring,  References benefits and employee conduct, among others.  Related policies/documents  HR policies support and supplement local and  Tools national laws and regulations regarding the  Other related processes hiring and management of employees. 3. Actions and Responsibilities  HR policies are formal, written guidance on Identifies the people who would have the roles and how various employment-related issues, responsibilities to fulfill the policy challenges, and opportunities should be 4. Definition handled in the workplace. Allow proper definition of terminologies embedded in the process. Purpose 5. Procedures and Controls  Help ensure employees get fair or equitable How to implement the policy. experience 6. Appendixes  Outline acceptable standards of behavior in Any supporting document/s necessary in the the workplace implementation of the policy (e.g.) forms, flowchart  Protect the needs and interests of employees 7. History Log  Help address complaints and provide methods Captures the changes made and the period these to solve them changes were made 8. Exemptions Importance Policy that would provide prerogative in making HR policies and procedures are important because such for the outlined policy they provide clarity and specific guidance to the company’s workforce on what they need to comply Developing a Policy with and how to handle a variety of employment 1. Identify the policy to create issues. It’s important that policies address the 2. Target company values broad spectrum of employment topics and matters 3. Use a clear and simple language and that issues are handled promptly and 4. Keep the policy as coherent and simple as appropriately. possible 1. A mechanism to help document, 5. Consult stakeholders and/or legal department communicate, and administer company- or lawyer if necessary wide standards 2. Help ensure that policy issues or questions are handled in a timely and sensitive Topic 4: Termination of Employment manner What is Termination? 3. Provide guidance, fairness, transparency,  Termination of employment is the end of an and consistent treatment in employment employee’s work with a company. decisions  An employee may be terminated from a job of 4. Ensure compliance with applicable laws their own free will or following a decision and regulations and provide protection made by the employer. against employment claims 5. Address employees’ complaints and Type of Termination grievances and define for employees how 1. Voluntary Termination they can report issues. a) Early Retirement b) Resignation 2. Involuntary Termination  They are called just causes because the a) End of Contract termination of employment is justified due to b) Mandatory Retirement an employee’s actions, behavior, or omission, c) Just and Authorized Causes of Termination either of which resulted in a serious or grave violation of the law, employment contract, 1. Voluntary Termination company policies, collective bargaining a) Early Retirement: agreement, and any other employment  Company initiated retirement program agreement.  Labor Code - RA 7641 – Article 287  Just causes for dismissal of employee may be  Per Labor Code, an early retirement is defined as those lawful or valid grounds for entitled to an employee who is at 60 years termination of employment which arise from old but not more than 65 years old with 5 causes directly attributable to the fault or years of service. negligence of the erring employee.  Retirement pay is equivalent to at least  Just causes are usually serious or grave in one-half (1/2) month salary for every year nature and attended by willful or wrongful of service, a fraction of at least six (6) intent or they reflected adversely on the moral months being considered as one whole character of the employees. year.  This covers all employees - regardless. b) Resignation Labor Code Article 297  Article 300 (formerly Article 285) ART. 297. Termination by Employer. An  30-day notice prior to effective date employer may terminate an employment for any of  Can be immediate upon the ff conditions: the following causes: A. Serious insult by the employer or their a) Serious misconduct or willful disobedience by representative on the honor and person of the employee of the lawful orders of his the employee. employer or representative in connection with B. Inhuman and unbearable treatment by his work; the employer. b) Gross and habitual neglect by the employee of C. Commission of a crime or offense his duties; against the employee by the employer or c) Fraud or willful breach by the employee of the its representative. trust reposed in him by his employer or duly D. Any other analogous circumstances. authorized representative; d) Commission of a crime or offense by the General Rule employee against the person of his employer Aside from mandatory retirement and end of or any immediate member of his family or his contract, employment may only be terminated by duly authorized representatives; and employer for just causes or for authorized causes e) Other causes analogous to the foregoing. under the Labor Code. Grounds for Just Causes DO 147 Series of 2015 (DO 147-15) 1. Serious misconduct  Amending the IRR of Book VI of the Labor Code 2. Willful disobedience to lawful orders of the Philippines 3. Gross and habitual neglect of duty  Rules governing the just and authorized causes 4. Fraud or willful breach of trust (and confidence) for termination 5. Commission of a crime or offense 6. Other causes analogous (other analogous cases) Just Causes for Termination  “Just causes” – refer to “those instances 1. Serious Misconduct enumerated under Article 297 [Termination by  Serious misconduct is an improper conduct Employer] of the Labor Code, as amended. willful in character and of such grave nature These are causes directly attributable to the that transgressed some established and fault or negligence of the employee.”  definite rule of action in relation to the to the employees the rules and regulations of employee’s work. the workplace.  Misconduct refers to “the transgression of DOLE Standards: some established and definite rule of action, a 1) There must be disobedience or forbidden act, a dereliction of duty, willful in insubordination. character and implies wrongful intent and not 2) The disobedience or insubordination must mere error in judgment.” (Section 4 [o], Rule I- be willful or intentional characterized by a A, DOLE D.O. 147-15) wrongful and perverse attitude. DOLE Standards: 3) The order violated must be reasonable, 1) The misconduct must be serious lawful, and made known to the employee. 2) The misconduct must be of such grave 4) The order must pertain to the duties and aggravated character which he has been engaged to discharge. 3) It must relate to the performance of the (Section 5.2[b], Rule I-A, DOLE D.O. 147-15) employee’s duties 4) Must show that the employee has 3. Gross and Habitual Neglect of Duty become unfit to continue working for the  Gross and habitual neglect of duty go together. employer.  Gross neglect refers to “the absence of that  Examples of Serious Misconduct via diligence that an ordinary prudent man would Jurisprudence: use in his/her own affairs.” (Section 4 (j), Rule 1) Sexual Harassment I-A, DOLE D.O. 147-15) 2) Violation of Company Policy  On the other hand, habitual neglect refers to 3) Drunken behavior “repeated failure to perform one’s duties over 4) Drug use in the workplace a period of time, depending upon the 5) Theft of company property circumstances.” (Section 4 (k), Rule I-A, Ibid.) 6) Theft against co-employee  As required by the Labor Code, “in dismissing 7) Physically assaulting a co-employee an employee for gross and habitual neglect of 8) Forgery duties, the negligence should not merely be 9) Obscene, insulting, offensive language against gross, it should also be habitual.” superior DOLE Standards: 10) Accusatory and inflammatory language 1) There must be neglect of duty 11) False, malicious, and libelous remarks 2) The negligence must be both gross and 12) Insulting and offensive language habitual in character. (Section 5.2[c], Rule 13) Challenging superiors to a fight I-A, DOLE D.O. 147-15). 14) Improper Pressure and Influence on Co- employee, and Misrepresentation 4. Fraud and Willful Breach of Trust 15) Immorality or Moral Depravity  Fraud is deceit. 16) Series of irregularities  The commission of fraud refers to “any act, omission, or concealment which involves a 2. Willful Disobedience to Lawful Orders breach of a legal duty, trust or confidence just  Willful disobedience refers to insubordination. reposed and is injurious to another.” (Section 4  Insubordination refers to “the refusal to obey (i), Rule I-A, DOLE D.O. No. 2015-147) some order, which a superior is entitled to give  The commission of fraud implies “bad faith of and have obeyed. It is a willful or intentional the employee in failing to perform his job, to disregard of the lawful and reasonable the detriment of the employer and the latter’s instructions of the employer.” (Section 4 [l], business.” Rule I-A, DOLE D.O. 147-15)  An employee committing fraud is deceiving the  If an employee disobeys a company policy or employer. This usually comes in the form of directive without knowing about it, then it is serious dishonesty or concealment of a not willful in character. It is thus on the material fact. When fraud is committed by the responsibility of the employer to make known employee, this causes prejudice or injury to the employer DOLE Standards: duty, fraud, willful breach of trust, commission 1) There must be an act, omission, or of a crime. concealment.  Examples of analogous causes may be found in 2) The act, omission or concealment involves Supreme Court Decisions or Jurisprudence, a breach of legal duty, trust, or confidence such as insubordination, loss of trust and justly reposed. confidence, attitude problem, excessive 3) It must be committed against the tardiness or absences, discourteous/impolite employer or his/her representative. remarks against a superior, to name a few 4) It must be in connection with the DOLE Standards: employees’ work. (Section 5.2[d], Rule I-A, 1) There must be act or omission similar to DOLE D.O. 147- 15) those specified just causes 2) The act or omission must be voluntary 5. Commission of a Crime or Offense and/or willful on the part of the  This refers to the commission of a crime or employees. offense against the person of the employer, 3) No act or omission shall be considered as his/her immediate family member, or his/her analogous cause unless expressly specified duly authorized representatives. in the company rules and regulations or  Thus, not all crimes or offenses may be policies. (Section 5.2[g], Rule I-A, DOLE used/cited to support this just cause as it D.O. 147-15) specifically and categorically states that the  Examples of Analogous Cases: crime or offense must be against the person, 1. Case of Gross Inefficiency which denotes bodily harm or Injury.  Gross inefficiency is analogous to gross DOLE Standards: and habitual neglect of duty under Article 1) There must be an act or omission 297 (e) in relation to Article 297 (b) of the punishable/prohibited by law. Labor Code, as amended, for both involve 2) The act or omission was committed by the specific acts of omission on the part of the employee against the person of employer, any employee resulting in damage to the immediate member of his/her family, or employer or to his business, and his/her duly authorized representative. constituting, therefore, just cause to  List of Crimes Against a Person: dismiss an employee.  Parricide, Murder, Homicide  Gross inefficiency” is closely related to  Infanticide or Abortion “gross neglect,” for both involve specific  Duel acts of omission on the part of the  Physical Injuries employee resulting in damage to the Accordingly, to properly use this a just cause, the employer or to his business. crime or offense committed should have resulted in 2. Case of Moral depravity some form of bodily injury to a person.  A cause analogous to serious misconduct is a voluntary and/or willful act or However, this does not rule out other crimes or omission attesting to an employee’s moral offenses from being a just cause (e.g. qualified theft, depravity. (Cosmos Bottling Corp. v. libel, robbery, etc.), they can fall under analogous Fermin, G.R. Nos. 193676 and 194303, 20 cause similar to commission of a crime, serious June 2012) misconduct, fraud, or any other just cause 3. Case of Theft against co-employee 4. Case of Abandonment of work 6. Analogous Cases  Two Grounds to justify Abandonment of  “Analogous causes” – refer to similar serious Work: and grave violations/offenses similar in I. The failure to report for work or character and gravity as the other just causes, absence without valid or justifiable namely: serious misconduct, willful reason; and disobedience, gross and habitual neglect of II. A clear intention to sever the employer employee relationship.  business reason or a requirement by law or 5. Case of Attitude Problem regulations.  An employee who cannot get-along with  In these situations, and in the exercise of its his co-employees is detrimental to the management prerogative, the employer is company for he can upset and strain the justified letting go of the employee who is not working environment. Without the at fault and thus given a separation pay. necessary teamwork and synergy, the  It covers all employees - regardless organization cannot function well. Thus, management has the prerogative to take Labor Code Article 298 and 299 the necessary action to correct the ART. 298. Termination by Employer. Closure situation and protect its organization. of Establishment and Reduction of Personnel. The When personal differences between employer may also terminate the employment of employees and management affect the any employee due to the installation of labor-saving work environment, the peace of the devices, redundancy, retrenchment to prevent company is affected. Thus, an employee’s losses or the closing or cessation of operation of attitude problem is a valid ground for his the establishment or undertaking unless the closing termination. is for the purpose of circumventing the provisions 6. Case of “Obesity” of this Title, by serving a written notice on the  Yrasuegi v. Philippine Airlines, Inc., G.R. No. workers and the Ministry of Labor and Employment 168081, 17 October 2008 at least one (1) month before the intended date 7. Disloyalty/Conflict of Interest thereof. In case of termination due to the  Disloyalty exists when one asserts an installation of labor-saving devices or redundancy, interest, or performs acts adverse to one’s the worker affected thereby shall be entitled to a employer, such as secretly engaging in a separation pay equivalent to at least his one (1) business which renders him a competitor month pay or to at least one (1) month pay for and rival of his employer. It constitutes a every year of service, whichever is higher. In case of breach of an implied condition of the retrenchment to prevent losses and in cases of contract of employment. closures or cessation of operations of establishment or undertaking not due to serious business losses or Just Causes for Termination- Summary: financial reverses, the separation pay shall be  Just causes are grounds for termination of equivalent to one (1) month pay or at least one - employment due to employee violations. half (1/2) month pay for every year of service,  The employer is justified dismissing an whichever is higher. A fraction of at least six (6) employee for just cause. months shall be considered one (1) whole year.  There are standards for each just cause set or prescribed by Supreme Court Decisions or ART. 299. Disease as Ground for Termination. Jurisprudence, as well as DOLE regulations. An employer may terminate the services of an  There are analogous causes to just causes employee who has been found to be suffering from found in Supreme Court Decisions or any disease and whose continued Jurisprudence. employment is prohibited by law or is prejudicial to  If there is no just cause in the termination of his health as well as to the health of his co- employment, the employer may be held liable employees: Provided, That he is paid separation pay for illegal dismissal. equivalent to at least one (1) month salary or to one-half (1/2) month salary for every year of service, Authorized Causes for Termination whichever is greater, a fraction of at least six (6)  “Authorized causes” as defined in Article 298 months being considered as one (1) whole year. and 299 of the Labor Code as amended (Article 283 and 284) Grounds for Just Causes  It is called authorized causes because the The Labor Code provides for the following employer is authorized to separate employees authorized causes: from their employment due to a legitimate 1. Installation of labor-saving devices 2. Redundancy machinery, equipment or device and the 3. Retrenchment consequent termination of employment 4. Closing or cessation of business operations of those affected thereby; and, 5. Disease 5) There must be fair and reasonable criteria in selecting employees to be terminated. Separation Pay (DOLE Department Order No. 147, Series  This refers to an additional pay given to of 2015) employees who are separated from their Separation pay: employment due to authorized causes (e.g. At least one (1) month pay or at least one installation of labor-saving devices, (1) month pay for every year of service, whichever redundancy, retrenchment, etc.) as these is higher. employees are not at fault since their employment was ended due to legitimate 2. Redundancy business reasons.  Redundancy occurs when two or more  Both daily-paid and monthly-paid are entitled employees are performing the same work to separation pay. and/or producing the same outputs.  The employee’s status is not relevant.  Redundancy exists when the service capability of the workforce is in excess of what is 1. Installation of Labor Saving Devices reasonably needed to meet the demands of  The installation of labor-saving devices the business enterprise. A position is contemplates the installation of machinery to redundant where it had become superfluous. effect economy and efficiency in its method of  An employer’s declaration of redundancy production. becomes a valid and authorized cause for  Concept of the Installation of Labor-Saving dismissal when the employer proves by Devices as a means for Authorized Termination: substantial evidence that the services of an I. Exercise of Management Prerogative employee are more than what is reasonably The law authorizes an employer to terminate demanded by the requirements of the business the employment of any employee due to the enterprise. installation of labor-saving devices. The  Concept of Redundancy as a means for installation of these devices is a management Authorized Termination: prerogative, and the courts will not interfere I. Exercise of Management Prerogative with its exercise in the absence of abuse of II. Superfluous position discretion, arbitrariness, or maliciousness on Employee’s services are in excess of what the part of management, as in this case. would reasonably be demanded by the actual II. Automation requirements of the enterprise. The institution of “new methods or more III. Inconsistent with Hiring efficient machinery, or of automation” is To dispel any lingering doubt, the Supreme technically a ground for termination of Court has invariably held in a plethora of cases employment by reason of installation of labor- that the employer’s subsequent act of hiring saving devices. additional employees is inconsistent with the DOLE Standards: termination on the ground of redundancy. 1) There must be introduction of machinery, DOLE Standards: equipment or other devices; 1) There must be superfluous positions or 2) The introduction must be done in good services of employees; faith; 2) The positions or services are in excess of 3) The purpose for such introduction must what is reasonably demanded by the be valid such as to save on cost, enhance actual requirements of the enterprise to efficiency and other justifiable economic operate in an economical and efficient reasons; manner; 4) There is no other option available to the 3) There must be good faith in abolishing employer than the introduction of redundant positions;  4) There must be fair and reasonable criteria of orders, shortage of materials, conversion of in selecting the employees to be the plant to a new production program, or terminated; and, automation. 5) There must be an adequate proof of such  The law recognizes a company’s right to redundancy such as but not limited to the retrench employees when “made necessary or new staffing pattern, feasibility compelled by economic factors that would studies/proposal, on the viability of the otherwise endanger its stability or existence.” newly created positions, job description DOLE Standards: and the approval by the management of 1) The retrenchment must be reasonably the restructuring. (DOLE Department necessary and likely to prevent business Order No. 147, Series of 2015) losses;  Focus on the 2 standards: 2) The losses, if already incurred, are not I. Good faith merely de minimis, but substantial, A Company must produce adequate proof of serious, actual and real, or if only such redundancy to justify the dismissal of the expected, are reasonably imminent; affected employees, such as but not limited to 3) The expected or actual losses must be the new staffing pattern, feasibility proved sufficient and convincing evidence; studies/proposal, on the viability of the newly 4) The retrenchment must be in good faith created positions, job description and the for the advancement of its interest and approval by the management of the not to defeat or circumvent the restructuring. employees’ right to security of tenure; Evidence such as the new staffing pattern, and, feasibility studies, proposal on the viability of 5) There must be fair and reasonable criteria the newly created positions, job description in ascertaining who would be dismissed and the approval by the management of the and who would be retained among the restructuring, among others, as adequate to employees, such as status, efficiency, substantiate a claim for redundancy. seniority, physical fitness, age, and II. Fair and reasonable criteria financial hardship for certain workers. Fair and reasonable criteria may include but (DOLE Department Order No. 147, Series are not limited to the following: (a) less of 2015) preferred status (e.g., temporary employee); (b) efficiency; and (c) seniority. The presence of I. Proof of business loss: these criteria used by the employer shows The losses must be supported by sufficient and good faith on its part and is evidence that the convincing evidence and the normal method of implementation of redundancy was discharging this is by the submission of financial painstakingly done by the employer in order to statements duly audited by independent external properly justify the termination from the auditors. service of its employees. 1) The losses expected should be substantial Separation pay: and not merely de minimis in extent At least one (1) month pay of the affected 2) The substantial loss must be reasonably employee, or at least one (1) month pay for every imminent. year of service, whichever is higher. 3) Retrenchment it must be reasonably necessary and likely to effectively prevent 3. Retrenchment the expected losses  Retrenchment is the reduction of work 4) Alleged losses if already realized must be personnel usually due to poor financial returns, proved by sufficient and convincing aimed to cut down costs for operation evidence particularly on salaries and wages. II. Fair and Reasonable Criteria:  It is resorted to during periods of business a) Less preferred status (e.g., temporary recession, industrial depression, seasonal employee) fluctuations, or during lulls occasioned by lack b) Efficiency  c) Seniority 3) There must be a certification by a Separation pay: competent public health authority that One (1) month pay or at least one-half (1/2) the disease is incurable within a period of month pay for every year of service, whichever is six (6) months even with proper medical higher. treatment. (DOLE Department Order No. 147, Series of 2015) 4. Closure or Cessation of Business Separation pay:  Closure of a business or undertaking due to One (1) month pay or at least one-half (1/2) business losses is the reversal of fortune of the month pay for every year of service, whichever is employer whereby there is a complete higher. cessation of business operations to prevent further financial drain upon an employer who Authorized Causes for Termination- Summary: cannot pay anymore his employees since 1. Authorized causes are grounds for separating business has already stopped. an employee through no fault of theirs.  Closure of business may be considered as a 2. There are standards for each authorized cause reversal of an employer’s fortune whereby set or prescribed by Jurisprudence or Supreme there is a complete cessation of business Court Decisions, as well as DOLE regulations. operations and/or an actual locking-up of the 3. Separation pay is due to employees who have doors of the establishment, usually due to be separated due to authorized causes, except financial losses. for closing or cessation of business due to DOLE Standards: serious financial losses. 1) There must be a decision to close or cease operation of the enterprise by the management; 2) The decision was made in good faith; and 3) There is no other option available to the employer except to close or cease operations. (DOLE Department Order No. 147, Series of 2015) Separation pay: One (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. 5. Disease  Subject to procedural due process, the employer is authorized to separate an employee for any disease incurable within six (6) months as certified by a public health authority and wherein the employee’s continued employment is prohibited by law or prejudicial to his/her health, as well as of his co-employees DOLE Standards: 1) The employee must be suffering from any disease; 2) The continued employment of the employee is prohibited by law or prejudicial to his/her health as well as to the health of his/her co-employees; and,