Extension of Bona Fide Suspension of Operations with Sample Notice Per DOLE DO 2015, Series of 2020
Extension of bona fide suspension of operations was not provided in Art. 301 of the Labor Code. As a background, bona fide suspension of operations provided under the Labor Code allows companies to temporarily close on account of lack of raw materials, orders, etc.
Article 301 [Formerly Article 286] of the Labor Code contemplates a situation when employment is not deemed terminated. The bona-fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a military or civic duty shall not terminate employment.
Under Article 301 of the Labor Code, a bona fide suspension of business operations for not more than six (6) months does not terminate employment. After six (6) months, the employee may be recalled to work or be permanently laid off. (See Labor Code, Atty. Elvin B. Villanueva, page 296 citing Waterfront Cebu City Hotel vs. Jimenez, G.R. No. 174214, June 13, 2012.)
The law set six (6) months as the period where the operation of a business or undertaking may be suspended, thereby also suspending the employment of the employees concerned.
The resulting temporary lay-off, wherein the employees likewise cease to work, should also not last longer than six (6) months. After the period of six (6) months, the employees should either then be recalled to work or permanently retrenched following the requirements of the law.
Failure to comply with this requirement would be tantamount to dismissing the employees, making the employer responsible for such dismissal. (PT&T v. NLRC, 496 Phil. 164, 177 (2005) cited in Innodata Knowledge Services, Inc. vs. Inting, G.R. No. 211892, December 6, 2017)
On October 23, 2020 however, the DOLE issued Department Order (D.O.) No. 215, Series of 2020 providing that in case of declaration of war, pandemic and similar national emergencies, the employer and
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the employees, through the union, if any, or with the assistance of the department of labor and employment, shall meet in good faith for the purpose of extending the suspension of employment for a period not exceeding six (6) months.
That employer shall report to the department of labor and employment, through the regional offices, the extension of suspension of employment ten (10) days prior to the effectivity thereof subject to inspection.
The extension of suspension of employment shall not affect the right of the employees to separation pay. The first six (6) months of suspension of employment shall be included in the computation of the employees’ separation pay.
Below is a sample Notice of Extension of Bona Fide Suspension of Operations.
November 11, 2020
JUAN DELA CRUZ
123 Azaoa Nimari
Araogavi Wafantee City
SUBJECT: EXTENSION OF BONA FIDE SUSPENSION
Dear Mr. Dela Cruz:
This refers to the decision of the company to suspend its operations on account of the COVID-19 Pandemic last May 31, 2020. To recall, the company served on you a letter of bona fide suspension of operations on April 30, 2020 informing you that the company would suspend operations effective May 31, 2020.
Likewise, the company also furnished the Department of Labor and Employment (DOLE) a copy of 
the said decision and submitted the necessary DOLE report.
Unfortunately, the company’s sales and volume of transactions have not improved within the six-month bona fide suspension period. In fact, it declined further after May 31, 2020.
In this regard, in accordance with Article 301 of the Labor Code, as amended, and per IRR of the DOLE DO 2015, Series of 2020, the company hereby extends the suspension of operations for another six (6) months, maximum on account of the situations stated above.
Hence, effective May 31, 2020, the company shall extend its bona fide suspension status. You will be notified of any development which we hope would involve the company’s business recovery.
For your guidance and strict compliance.
MARIA CLAVASA
HR Manager
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