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C.

Authorized Causes (Article 283) - requires one month prior written notice to DOLE and to EE; and generally requires the payment of separation pay. Substantial Requirements: Substantial Requirements: ARTIC ! 283. Closure o" establishment and reduction o" #ersonnel. 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 underta!ing unless the closing is for the purpose of circumventing the provisions of this Title by serving a written notice on the wor!ers and the Department of Labor and Employment at least one "#$ month before the intended date thereof. %n case of termination due to the installation of labor saving devices or redundancy the wor!er affected thereby shall be entitled to a separation pay equivalent to at least his one "#$ month pay or to at least one "#$ month pay for every year of service whichever is higher. %n case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or underta!ing not due to serious business losses or financial reverses the separation pay shall be equivalent to one "#$ month pay or to at least one&half "#'($ month pay for every year of service whichever is higher. ) fraction of at least si* "+$ months shall be considered one "#$ whole year. a. installation o" labor$sa%in& de%ices & The installation of labor&saving devices contemplates the installation of machinery to effect economy and efficiency in this method of production. b. redundanc' & E*ists where the services of an employee are in e*cess of what would reasonably be demanded but the actual requirements of the enterprise. (actors: , Over&hiring of wor!ers , Decreased volume of business , Dropping of a particular product line or service , Duplication of wor! Requisites "or the im#lementation o" a redundanc' #ro&ram: #. -ritten notice served on both the EE and the DOLE at least one month to the intended date of retrenchment; (. .ayment of separation pay equivalent to at least one month pay or at least one month pay for every year of service whichever is higher; /. 0ood faith in abolishing the redundant positions; and 1. 2air and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished. c. retrenchment to #re%ent losses )measure o" last resort* & 3etrenchment is an economic ground to reduce the number of employees. %n order to be 4ustified the termination of employment by reason of retrenchment must be due to business losses or reverses which are serious actual and real. 5riteria in laying&off wor!ers6 , Less preferred status "i.e. temporary wor!ers$ , Efficiency rating , 7eniority +usti"'in& standards "or retrenchment: #. Losses e*pected should be substantial and not merely de minimis in e*tent.

& %f the loss purportedly sought to be forestalled by retrenchment is clearly shown to be unsubstantial and inconsequential in character the bona fide nature of the retrenchment would appear to be seriously in question. (. 7ubstantial loss apprehended must be reasonably imminent as such imminence can be perceived ob4ectively and in good faith by the employer. & There should in other words be a certain degree of urgency for the retrenchment which is after all a drastic recourse with serious consequences for the livelihood of the employees retires or otherwise laid& off. /. %t must be reasonably necessary and li!ely to effectively prevent the e*pected losses. 1. )lleged losses if already reali8ed and the e*pected imminent losses sought to be forestalled must be proved by sufficient and convincing evidence. d. the closin& o" o#eration o" the establishment or underta,in& unless the closin& is "or the #ur#ose o" circum%entin& the #ro%isions o" this title & may be either6 #. for serious business losses or (. not due to serious business losses & includes bona fide suspension of operations of business e*ceeding + months & the significance of losses here is that if the cessation of business was due to serious business losses then the employer would not be liable to pay separation pay to the employee. 9owever it would be the other way around if the cessation was not due to serious business losses. -rocedural Requirements Omnibus 3ules 2or termination of employment as based on authori8ed causes defined in )rt (:/ of the L5 the requirements of due process shall be deemed complied6 #. with upon service of a written notice to the "show cause letter$ a. employee and "so that he can loo! for another 4ob$ b. the appropriate 3egional Office of the Department "so that it can chec! the validity of the dismissal and for statistical purposes$ (. at least /; days before the effectivity of the termination /. specifying the ground or grounds of termination .lus< 7eparation pay& will be given /; days after the service of notice of the termination. This is so because it is only then that they are considered separated from service. , %n case of termination due to installation of labor&saving devices or redundancy the wor!er affected thereby shall be entitled to a separation pay equivalent to at least one month pay or at least one month pay for every year of service whichever is higher. , %n case of retrenchment to prevent losses and in cases of closure or cessation of operations of establishment or underta!ing not due to serious business losses or financial reverses the separation pay shall be equivalent to one month pay or at least = month pay for every year of service whichever is higher. ) fraction of at least + months shall be considered one whole year. , %n cases of closure or cessation of operations of establishment due to serious business losses or financial reverses there shall be no separation pay. %f the termination is brought about by the completion of the contract or phase thereof no prior notice is requires. %f the termination is brought about by the failure of an employee to meet the standards of the employer in the case of probationary employment it shall be sufficient that a written notice is served the employee within reasonable time from effective date of termination.

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