Notes on separation pay

WHAT DOES THE LABOR CODE PROVIDE REGARDING PAYMENT OF SEPARATION PAY TO EMPLOYEES?

Here are instances for which the Labor Code (PD 442) prescribes payment of separation pay. They are the following:

[1] When termination is due to authorized causes:

Under Article 283 of PD 442, the following are authorized causes for the termination of employment: (1) installation of labor-saving devices; (2) redundancy; (3) retrenchment; or (4) closing or cessation of business operations. Under Article 284, when termination is due to the disease of an employee and his continued employment is prejudicial to himself or his co-employees, termination is authorized.

[2] Under Article 286 when employment is deemed terminated after the lapse of six (6) months in cases involving bona-fide suspension of the operation of business or undertaking or after the lapse of a “floating status.” [3] Under Article 149, when the employer terminates without just cause, the services of a househelper prior to the expiration of the fixed-term employment.

The discussion under [3] no longer controls due to the enactment of the Kasambahay Law. Specifically, the repealing law is Section 32, Article V of RA 10361, otherwise known as the “Domestic Workers Act” or “Batas Kasambahay.” Thus, “(i)f the domestic worker is unjustly dismissed, the domestic worker shall be paid the compensation already earned plus the equivalent of fifteen (15) days work by way of indemnity.”

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