Separation Pay under Special Laws


Special laws can and do provide specific instances in which payment of separation pay is required. Otherwise put, under laws outside PD 442 or beyond collective bargaining agreements (CBAs) and contracts of employment, certain specified elements or events or actions can give rise to an obligation of paying separation pay on the part of an employer.

For instance, it is provided under RA 7610 [June 17, 1992], otherwise known as the “Special Protection of Children Against Abuse, Exploitation and Discrimination Act,” as amended, that in case the violation of its provisions has resulted in the death, insanity or serious physical injury to a child employed in such establishment or that the firm or establishment has employed a child for prostitution or obscene or lewd shows or if there is imminent danger to the life and limb of the working child in accordance with the occupational safety and health standards, the establishment shall be ordered closed immediately and permanently and the employer shall pay all employees affected by the closure their separation pay and other monetary benefits provided for by law.
Although the said law does not specify the amount of separation pay and other monetary benefits that should be paid to the employees affected by the closure, the same is readily determinable as the law itself and its implementing rules state that it shall be in accordance with the separation pay and other monetary benefits “provided for by law,” obviously referring to the separation pay provided under Article 283 of the Labor Code on closure or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses the amount of which 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.

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