Authorized Cause Archives - LVS Rich Publishing

10 Dec

Employees on Temporary Layoff Should Still be given Written Notice of Retrenchment

What happens if the employees are already on temporary layoff under Article 301 of the Labor Code, and the employer decided to forego of their employment, should the latter still issue a written notice of retrenchment? The Supreme Court resolved this poser in the case of Keng Hua Paper Products vs. Ainza, [G.R. No. 224097, February 22, 2023]. Citing Sanoh Fulton Phils., Inc. v. Bernardo, the SC explained that Article 298 and emphasized that retrenchment to prevent losses or the closing [...]

By Atty Elvin Labor Law atty. elvin, Authorized Cause, labor, Labor Code, labor law, Retrenchment 0 Comments Read more...

12 Sep

Good Faith of the Employer is Required in Redundancy Program

Under Article 298 (formerly 283) of the Labor Code, redundancy is recognized as an authorized cause for dismissal, viz.: Article 298 [283]. Closure of Establishment and Reduction of Personnel. – The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving [...]

By Atty Elvin Labor Law atty. elvin, Authorized Cause, good faith, Illegal dismissal, Labor Code, labor law, Redundancy 0 Comments Read more...

11 Sep

Employer may Resort to Redundancy since it has no legal obligation to keep more employees than are necessary

Redundancy exists when the service capability of the workforce is in excess of what is reasonably needed to meet the demands of the business enterprise. A position is redundant where it had become superfluous. Superfluity of a position or positions may be the outcome of a number of factors such as over-hiring of workers, decrease in volume of business, or dropping a particular product line or service activity previously manufactured or undertaken by the enterprise. A valid redundancy program must comply [...]

By Atty Elvin Labor Law atty. elvin, Authorized Cause, labor, Labor Code, labor law, Redundancy 0 Comments Read more...

08 Sep

Redundancy Scheme is Ineffective if there is no Power to Terminate Services

Redundancy is one of the grounds to terminate services under authorized cause in Article 298 of the Labor Code, as amended. Termination letter is usually signed by the individual holding the authority to execute the act. However, in the case of Alfredo American Power Conversion Corporation, et al. vs. Lim, G.R. No. 214291, January 11, 2018, the Supreme Court held, in part, that the termination is ineffective where there is no authority to effect redundancy. In this case, the employee, Lim [...]

By Atty Elvin Labor Law atty. elvin, authority to terminate, Authorized Cause, labor, Labor Code, labor law, Redundancy, termination 0 Comments Read more...

11 Jul

Retrenchment Due to Existence or Imminence of Substantial Losses

Retrenchment is one of the grounds for dismissal under the Labor Code. In the case of Team Pacific Corporation vs. Parente, G.R. No. 206789, July 15, 2020. The employer claiming “existence or imminence of substantial losses” that would warrant the retrenchment, must prove the same. In Lopez Sugar Corporation v. Federation of Free Workers: Firstly, the losses expected should be substantial and not merely de minimis in extent. If the loss purportedly sought to be forestalled by retrenchment is clearly shown to be insubstantial and [...]

By Atty Elvin Labor Law atty. elvin, Authorized Cause, labor, Labor Code, losses, Retrenchment 0 Comments Read more...

02 Jul

Retrenchment Based on Lack of Order

Retrenchment is one of the grounds for dismissal under Art. 298 of the Labor Code, as amended. Retrenchment usually pertains to financial difficulty encountered by the employer. It can include business hardship due to lack of order. The rule in this case states that if the ground cited by the employer for retrenchment is lack of order the same must be of such nature as would severely affect the business operations. In a 2013 case the employer pointed out as reason for [...]

By Atty Elvin Labor Law atty. elvin, Authorized Cause, labor, Labor Code, labor law, Retrenchment 0 Comments Read more...

29 Jun

Retrenchment and Redundancy

Retrenchment is the termination of employment effected by management during periods of business recession, industrial depression, seasonal fluctuations, lack of work or considerable reduction in the volume of the employer’s business. Resorted to by an employer to avoid or minimize business losses. (Somerville Stainless Steel Corporation vs. National Labor Relations Commission, 350 Phil. 859, 869 (1998)) To prevent losses” means that retrenchment or termination of the services of some employees is authorized to be undertaken by the employer sometime before [...]

By Atty Elvin Labor Law atty. elvin, Authorized Cause, labor, Labor Code, labor law, Redundancy, Retrenchment 0 Comments Read more...

29 Jun

Notice Requirement in Redundancy and Issue on Bad Faith

Notice is required to be given to affected employee and the Department of Labor and Employment (DOLE) as part of the procedural due process for termination due to authorized cause. It is clear from the wordings of Article 298 of the Labor Code, as amended, that notice to the employee should be made at least one month before the redundancy takes effect. If the employee consents to the redundancy, will the lack of notice comply with the procedural requirement? In the case [...]

By Atty Elvin Labor Law atty. elvin, Authorized Cause, bad faith, employee termination, labor, Labor Code, labor law, Redundancy 0 Comments Read more...

26 Jun

Redundancy Program Requisites for Validity

By Atty Elvin Labor Law atty. elvin, Authorized Cause, Labor Code, labor law, Redundancy, termination 0 Comments Read more...

23 Jun

Circumstances that Would Substantiate Termination due to Redundancy

Redundancy as a ground for dismissal for authorized cause requires existence of business exigency allowed by law as basis to declare position surplusage. For most employers, the question is what circumstances would justify the redundancy? While there is no hard and fast rule since every business situation may be unique in its own way, the Supreme Court provided examples in its decision. In Panlilio vs. National Labor Relations Commission, it was held that the following evidence may be proffered to substantiate [...]

By Atty Elvin Labor Law atty. elvin, Authorized Cause, employee termination, Labor Code, labor law, Redundancy 0 Comments Read more...

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