Separation Pay of Retrenched Employees Should Include Basic Salary and Regular Allowances
Separation pay is mandated to be paid to employees who were retrenched from service. Under Article 298 of the Labor Code, in case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay 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 [...]
