Requirements of Procedural Due Processs.
For valid termination based on authorized causes such as installation of labor-saving devices, redundancy, retrenchment to prevent losses, and closure or cessation of operation, the employer must serve written notice to the individual employee concerned and to the appropriate Regional Office of DOLE at least 30 days before the effectivity of the termination.
Also, the employer must observe the following requirements as part of the process of termination:
- Good faith in the termination of employee, i.e., the implementation of the company program resulting to termination of employees must be for a valid cause and not merely a tool to circumvent the law on employee’s security of tenure;
- The employer must adopt a fair and reasonable criteria in the selection of employee to be dismissed; and,
- The employee must be paid separation pay not less than the amount fixed by law.
Criteria in Selection of Employee to be Dismissed.
In the selection of the employee to be dismissed, the employer must adopt of a fair and reasonable criteria which must be applied in good faith, such as:
- Less preferred status of employee;
- Efficiency rating; and
Payment of Separation Pay.
In termination of employment due to authorized causes, the employer is required to give separation pay to the employee concerned. The amount of separation pay depends on the specified cause of termination.
- In case of termination due to the installation of labor-saving devices or redundancy – at least one month pay or to at least one month pay for every year of service, whichever is higher.
- In case of (a) retrenchment to prevent losses and (b) closures not due to serious financial reverses – one month pay or at least one-half month pay for every year of service, whichever is higher.
- No separation pay for closure due to serious business losses.
- No separation pay is required when the closure of business is due to serious business losses or financial reverses. (North Davao Mining, 1996.)
- When closure of the business establishment is forced upon the employer and ultimately for the benefit of the employees. The closure contemplated under Article 283 of the Labor Code is a unilateral and voluntary act on the part of the employer to close the business establishment. (National Federation of Labor vs. NLRC, 2000.)
Effects of Termination.
- If the termination is for authorized cause and the employee is given 30-day prior notice, the dismissal is valid.
- If the termination is for authorized cause but the employee was not given 30-day prior notice, the dismissal is valid but the employer may be ordered to pay nominal damages to dismissed employee. In Jaka Food Processing vs. Pacot, 2005, the amount of nominal damages is P50,000.00.
- If the dismissal is not for a valid authorized cause, the dismissal is illegal, whether or not there is 30-day prior notice. Consequently the employee shall be entitled to reinstatement and backwages, and damages if warranted.
Last Edited: Sunday, March 20, 2011