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IX. TERMINATION OF EMPLOYMENT - Coggle Diagram

- - - - NO NOTICE NEEDED IF:
        
        SERIOUS INSULT TO HONOR/PERSON TO EE or REP
        
        INHUMAN/UNBEARABLE TREATMENT
        
        CRIME/OFFENSE AGAINST
        a. EE
        b. IMMEDIATE MEMBERS OF FAMILY
        
        OTHER ANALOGOUS CAUSES
        An employee may put an end to the relationship without serving any notice on the employer for
        any of the following just causes:
        a. Serious insult by the employer or his representative on the honor and person of the
        employee;
        b. Inhuman and unbearable treatment accorded the employee by the employer or his
        representative;
        c. Commission of a crime or offense by the employer or his representative against the
        person of the employee or any of the immediate members of his family; and
        d. Other causes analogous to any of the foregoing
        
        INTENT TO RELINQUISH PROVEN BY:
        ACTS BEFORE AND AFTER RESIGNATION
        Intent to relinquish must concur with the overt act of relinquishment, the acts of the employee before and after the alleged resignation must be considered in determining whether in fact, he or she intended to sever from his or her employment.
        
        ONCE PROVEN, UP TO EMPLOYER TO ACCEPT/WITHDRAW RESIGNATION
        When the employee later signified the intention of continuing his or her work, it was already up to the employer to accept the withdrawal of his or her resignation.
        
        VITIATED CONSENT:
        TO IMPUGN, VICE OF CONSENT MUST BE PROVEN
        Vices of consent in terms of resignation (fraud, intimidation, undue influence) must be proved with evidence, whether concrete or circumstantial.
        
        EXAMPLES OF VITIATED CONSENT
        
        MISTAKE
        a. DUE TO UNWRITTEN COMPANY POLICY
        Although the company policy is valid, as it is with justification, the Court also held that the private respondent acted in good faith in thinking that he could run without resigning from the company. Thus, it should only be counted as an unauthorized absence. As this infraction was his first, dismissal would be too severe a penalty to impose on him. Suspension for one month would be sufficient penalty for his unauthorized
        absences
        
        The radio station asserts that, as a matter of company policy, any employee who files a certificate of candidacy for any elective national or local office would be considered resigned from the company. This company policy, however, is unwritten. Respondent still ran but lost; he tried to return to work but wasn’t allowed anymore on the ground that his employment had been terminated.
        
        PROOF:
        
        TELLING PEOPLE SHE'S RESIGNING
        
        SUBMITTING RESIGNATION LETTER
        
        INITIATING PROCESS FOR CLEARANCE
        The SC held that she was not illegally dismissed but had voluntarily resigned. There was no proof (direct or circumstantial) nor were the requirements met for fraud and intimidation. Furthermore, there were circumstances surrounding her resignation that showed her intent; such as telling people she was about to resign; submitting her resignation letter, and initiating the process of her clearance.
      - DAMAGES:
        IF NOT COMPLIED WITH BY EE, EMPLOYER CAN FILE FOR DAMAGES
      - EXTENSION REQS:
        
        VALID BUSINESS REASONS
        
        GOOD FAITH
        
        ACCEPTANCE = IRREVOCABLE
        Upon such acceptance, it may not be unilaterally withdrawn without the consent of petitioners.
        
        REFUSAL DOES NOT MEAN ILLEGAL DISMISSAL
        Mere fact that the withdrawal was not accepted does not constitute illegal dismissal, the acceptance of the withdrawal of the resignation being the employer’s sole prerogative
        
        INVALID TO REFUSE
        It is not valid to refuse a resignation letter.
  - - - BREACH OF TRUST AND CONFIDENCE
        (MANAGERIAL EMPLOYEE)
        Employers are allowed a wider latitude of discretion in terminating the employment of managerial employees as they perform functions which require the employer’s full trust and confidence. An employer has every right to dismiss a managerial employee for breach of trust and confidence as a measure of self-preservation against acts patently inimical to its interests. (Salvador v Phil. Mining Service Corp).
        
        RATIO: TRUST, ONCE LOST, IS
        DIFFICULT OR IMPOSSIBLE TO GAIN
        The petitioner’s dismissal for loss of trust and confidence was duly supported by substantial evidence. Unlike other just causes for dismissal, trust in employees, once lost is difficult, if not impossible to regain.
- - - - 3. GROSS AND HABITUAL NEGLECT OF DUTIES
        
        4. FRAUD
        
        5. WILLFUL BREACH OF TRUST - LOSS OF CONFIDENCE
        
        6. COMMISSION OF CRIME
        
        7. ANALOGOUS CAUSES
        
        ABANDONMENT
        
        2 more items...
        
        REQS:
        
        ANALOGOUS
        
        MADE KNOWN TO EE
        This is where using private phones, social media in the workplace may be considered grounds. However, to be a valid analogous cause it must be
        a. [1] Must be analogous to causes above b. [2] Must be made known to employee before they can be charged w/ it i. This is where company handbook & company code of conduct comes into play
        
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        REQ
        
        RELATED TO WORK;
        OR
        
        IF NOT, DIRECTED TO ER/CORP
        Commission of crime/offense- If the crime was not directed to ER (ex. Murder, warrant of arrest) or corporation then it does not fall under this ground.
        
        REQS:
        
        WILLFUL
        a. NO JUSTIFIABLE EXCUSE
        
        POSITION OF TRUST
        A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse...
        
        POSITIONS OF TRUST ONLY
        For willful breach of trust / Loss of confidence, a lot of employers fail to realize the requirement that the employee must hold a position of trust / confidence.
        
        QUANTUM OF PROOF:
        
        INVOLVEMENT IN ALLEGED EVENTS
        a. SUBSTANTIAL EVIDENCE
        Substantial evidence is sufficient as long as such loss of confidence is well-founded or if the employer has reasonable ground to believe that the employee concerned is responsible for the misconduct and her act rendered her unworthy of the trust and confidence demanded of her position.
        
        Loss of trust and confidence as ground for valid dismissal requires proof of involvement in the alleged events in question, and that mere uncorroborated assertions and accusations by the employer will not be sufficient.
        
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        INVALID EXAMPLES:
        
        KARGADOR & SALESLADY
        Regular employee (ex. saleslady, kargador, secretary) not positions imbued w/ trust and confidence cannot be terminated under this ground. It must be inherent in position. One way to determine this is by looking at the job description. If it is not apparent, one may look at actual practice. It must be willful in nature, mere neglect is not sufficient
        
        ASSISTANT CASHIER
        (d) On breach of trust and confidence because of her position: Belga was an assistant cashier -- her work is essentially clerical. ○ Hence, her position cannot be considered as one of responsibility or imbued with trust & confidence
        
        CARELESS, THOUGHTLESS NOT WILLFUL
        as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently.
        
        CONCEALED FACT OF PAST CRIMES FROM PRE-EMPLOYMENT STAGE
        If the employee concealed the fact of past crimes, then it may fall under fraud, especially if the employee misrepresented himself during the pre-employment stage.
        
        MUST BE:
        
        GROSS; AND
        
        HABITUAL
        
        DUTY-RELATED
        Not a positive act, but negligent act. It must be both gross (very serious) AND habitual (occurs more than once). Poor performance may fall under this ground as the assumption is he is neglecting his duties. (Chavez v. NLRC)
        
        BURDEN OF PROOF ON ER
        It is on the employer to prove gross and habitual neglect. One way to terminate an employee on this ground by basing it on evaluation. Common practices by employers include:
        
        VALID EXAMPLES:
        
        HABITUAL AWOL + WARNINGS
        Valiao was terminated after several reports of his tardiness and absenteeism. His repeated infractions, committed despite several warnings, constitute gross misconduct unexpected
        from an employee of Petitioner’s stature. Court has held that habitual absenteeism without leave
        constitute gross negligence and is sufficient to justify termination of an employee (Club Filipino
        Inc v Sebastian)
        
        Private Respondent Cortez (company nurse) was given P900 so she can open an ATM card of 9 employees. However, no application and no deposit was made. After being served 2 memorada, the 3rd one informed her of her termination from service on the ground of gross and habitual neglect of duties (among others)
        
        INVALID EXAMPLES:
        
        NOT HABITUAL
        The single and isolated act of petitioner’s negligence in the proper maintenance of the truck alleged by the respondents does not amount to “gross and habitual neglect”
        
        NURSE + ATM OPENING
        Cortez was illegally dismissed. As a company nurse, opening an ATM is not her primary duty. Neither did the petitioner show that Cortez intentionally, knowingly, and purposely delayed the opening of ATM accounts (bad faith
        
        ACCIDENT
        Private respondent Melchor (taxi driver) was allegedly in a vehicular accident, and cost petitioner (his employer) damages. In addition, petitioner also alleged that Melchor was included in 3 vehicular incidents in total, and that a prosecutor even recommended that a criminal information be filed against PR Melchor for his reckless driving. Petitioner dismissed Melchor on the ground of his reckless driving
        
        OTHER OPTIONS:
        
        GRACEFUL EXIT
        a. Graceful exit- encouraging employee to resign. Opportunity by er to ee to part ways amicably w/o tarnishing records or reputation of ee w/o dismissal. However, it must be done in good faith. The employer must never use it as an excuse to terminate ee w/o due process
        
        PERFORMANCE IMPROVEMENT PLAN
        b. BPO: Performance Improvement Plan- giving employee an opportunity to improve in a shortened period. This is to give another chance to the employee. If the employee does not improve, this then fulfills the requisite of habituality
      - WILFULL DISOBEDIENCE OF
        
        WILFULL
        a. WRONGFUL/PERVERSE ATTITUDE
        the employee's assailed conduct must have been willful, that is,
        ○ characterized by a wrongful and perverse attitude; and
        
        ORDER VIOLATED WAS:
        a. LAWFUL
        b. REASONABLE
        c. KNOWN TO EE
        d. DUTY-RELATED
        the order violated must have been
        ○ reasonable,
        ○ lawful,
        ○ made known to the employee and
        ○ must pertain to the duties which he had been engaged to discharge
        
        INVALID EXAMPLES
        
        UNRELATED TO JOB
        Must be willful in nature and based on a valid order on part of employer relating to the job/functions of employee.
        ○ Ex. if er tasks driver to weld 2 steel pipes together, and he refuses, obviously it is not willful disobedience because it is not part of job description
        ○ Ex. tasks secretary to buy coffee and refuses ■ It is willful disobedience, however, even if disobedience is willful in nature, it must be considered whether the penalty is too harsh for violation committed
        
        NOT KNOWN TO EE
        Hermosa was unlawfully dismissed. Both elements of willful disobedience are lacking. It appears that the alleged company procedure for leaving the ignition key of the company's vehicles within office premises was not even made known to him. At any rate, dismissal was too harsh a penalty for the omission imputed to him.
        
        DISPROPORTIONAL PENALTY
        In this case, the participation of the petitioners were limited to the wearing of armbands and putting up placards-- which may not be construed as illegal acts. Moreover, the Court failed to find the elements that constitute a valid termination due to willful disobedience in this case. Not every case of willful disobedience by an employee of a lawful work-connected order of the employer may be penalized with dismissal. There must be reasonable proportionality between, on the one hand, the willful disobedience by the employee and, on the other hand, the penalty imposed therefor.
        
        U
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    - - TARDINESS NOT SERIOUS FOR FACTORIES
        Ex. tardiness not serious for factory line, junk shop, talier
      - SUBSTANTIAL EVIDENCE BY ER
        It is the burden on the employer to prove it is serious.
        ● An employee’s dismissal due to serious misconduct must be supported by substantial
        evidence.
      - NOT MERE ERROR IN JUDGMENT
        Serious Misconduct Defined (PLDT v. Romeo Bolso)
        ● Misconduct is improper or wrong conduct. It is the transgression of some established
        and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and
        implies wrongful intent and not mere error in judgment.
        ● The misconduct to be serious within the meaning of the Labor Code must be of
        such a grave and aggravated character and not merely trivial or unimportant.
        ● Such misconduct, however serious, must nevertheless be in connection with the
        employee’s work to constitute just cause for his separation.
  - - - 2. REDUNDANCY
        
        3. RETRENCHMENT TO PREVENT LOSSES
        
        RETRENCHMENT
        There are two types of retrenchment:
        
        PREVENT
        Prevent losses- no losses yet
        
        SUFFERED
        Financial losses - company is already suffering losses
        
        i. RE-HIRING EFFECT
        
        RE-HIRING DOES NOT NEGATE IMMINENCE OF LOSSES
        The evidence of substantial losses suffered by the company shows that the redundancy program was an appropriate cost-cutting measure to stave off impending losses.
        While it is true that the company rehired or re-employed some of the dismissed workers, it has been shown that such action was made only as company projects became available. It was also done in pursuance of the company's policy of giving preference to its former workers in the hiring of project employees. The rehiring or reemployment does not negate the imminence to losses, which prompted respondent to retrench.
        
        REASONS:
        
        INTRODUCTION OF NEW METHODS OR MORE EFFICIENT MACHINERY, OR OF AUTOMATION.
        
        CONVERSION OF THE PLANT FOR A NEW PRODUCTION PROGRAM
        
        LULLS BY LACK OF ORDERS,
        
        INDUSTRIAL DEPRESSION, OR
        
        PERIODS OF BUSINESS RECESSION,
        
        SEASONAL FLUCTUATIONS; OR
        
        SHORTAGE OF MATERIALS,
        
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        LOSS MUST BE
        
        SUBSTANTIAL AND NOT DE MINIMIS;
        
        ACTUAL OR REASONABLY IMMINENT;
        
        REASONABLY NECESSARY
        a. AND LIKELY TO BE EFFECTIVE; AND
        
        ALLEGED LOSSES, IF ALREADY INCURRED, OR THE EXPECTED IMMINENT LOSSES SOUGHT TO BE FORESTALLED ARE
        
        PROVEN BY SUFFICIENT AND CONVINCING EVIDENCE.
        Reduction of personnel becomes legal, any claim of actual or potential business losses
        must satisfy established standards as follows: (Tanjuan v. Phil. Postal Savings Bank)
        
        ○ The employer has the burden of proving that the losses are serious, actual and real
        
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        4. CLOSING OF BUSINESS
        
        5. FLOATING STATUS ART. 301
        
        6. DISEASE
        
        REQ
        
        6-MONTH INCURABILITY
        
        MEDICAL CERTIFICATE
        a. PUBLIC HEALTH AUTHORITY
        --NOT private practitioner
        Disease- Incurable within a span of 6 months. Must be med cert from public health
        authority (public hospital) certifying that disease is incurable for period of 6 months, not acceptable if private practitioner. Employee is entitled to pay sep. pay. Doesn’t have to be life-threatening, but as long as it prevents him from doing his duties
        
        3 more items...
        
        FLOATING STATUS:
        
        6 MONTHS, IF REGULAR
        
        3 MONTHS, IF CONTRACTUAL
        ● Also called temporary closure
        ● Employer’s can put employee’s on floating status/temporarily closure
        ○ 6 mo’s (if regular),
        ○ 3 mo’s (if contractual)
        
        EXAMPLES:
        NO BUSINESS PERMIT
        ● Ex. no business permit; er is suffering losses & wants to re-evaluate or re-organize
        company;
        
        NO WORK, NO PAY
        FOR PERIOD
        ● No work no pay applies but no sep. pay as the employee was not terminated
        
        1 more item...
        
        NO SERIOUS FINANCIAL LOSSES
        Two types of closure:
        
        As normal mode of cessation/reparations- this requires payment of sep. pay
        
        VALID EXAMPLE
        
        ABSORBED BY ANOTHER CONTRACTOR
        a. AS REGULAR EMPLOYEES
        
        DECLARED TEMPORARY + NO REPORT
        Alabang Country Club (ACCI) management decided to cease operating its Food & Beverage Department, after a study of profitability showed it incurred substantial losses. ACCI then sent employees in the department letters informing them their services would be terminated, and informed them the new contractor/concessionaire would absorb all the affected employees with the status of regular employees without need to undergo probationary period; and that they would receive the same salary. The Union, however, still filed a complaint for illegal dismissal.
        The SC held that the employees were validly terminated, as this was a case for closure of a business establishment under Art. 283 and NOT retrenchment or closure due to financial reverses or business losses. When petitioner decided to cease operating its F & B Department and open the same to a concessionaire, it did not reduce the number of personnel assigned thereat. It terminated the employment of all personnel assigned at the department.
        Held
        The respondents were dismissed, and such dismissal was illegal. Petitioners admit that since April 1997, when hotel operations were suspended due to the termination of the lease of the old premises, respondents Loveres, Macandog, Llarena, Nicerio and Guades have not been permitted to work, and were not recalled after six months, thus amounting to dismissal, even if the lay-off was supposed to be temporary. If it were true that the lay-off was temporary but then serious business losses prevented the reinstatement of respondents, then petitioners should have complied with the requirements of written notice. And even assuming that the closure was due to a reason beyond the control of the employer, it still has to accord its employees some relief in the form of severance pay
        Doctrine
        Serious business losses do not excuse the employer from complying with the clearance or report required under Article 283 of the Labor Code and its implementing rules before terminating the employment of its workers.
        
        SERIOUS FINANCIAL LOSSES
        
        CONTINUOUS
        
        REPETITIVE
        
        GROSS/LARGE AMOUNT
        Due to serious financial losses- Does not require sep. pay. Burden of proving seriousness of financial losses lies on employer. SC has held that losses to be held serious not that it be held in 1 fiscal year, but be continuous and repetitive, and is gross/large in amount. Losses are natural part of life cycle of business; thus those that are light in nature are not a ground
        
        LOSSES ARE:
        
        SUBSTANTIAL & ACTUAL/IMMINENT
        
        INCREASED THROUGH PERIOD OF TIME
        
        UNLIKELY TO IMPROVE
        Employer must prove (Alabang Country Club v. NLRC)
        
        losses incurred are substantial and actual or reasonably imminent;
        
        the same increased through a period of time; and
        
        the condition of the company is not likely to improve in the near future.
        
        PARTIAL OR TOTAL
        Closure of a business NOT due to serious business losses or financial reverses (Alabang Country Club v. NLRC)
        ● Closure of operation of an establishment or undertaking not due to serious business losses or financial reverses includes both the complete cessation of operations and the cessation of only part of a company's activities.
        
        ANYTIME + GOOD FAITH
        ○ For any bona fide reason, an employer can lawfully close shop anytime. Just as no law forces anyone to go into business, no law can compel anybody to continue the same.
        ● Management's exercise of its prerogative to close a section, branch, department, plant or shop will be upheld as long as it is done in good faith to advance the employer's interest and not for the purpose of defeating or circumventing the rights of employees under the law or a valid agreement
        
        TEMPORARY-ABLE
        CAN BE TEMPORARY
        Temporary Retrenchment/ Lay off (Sebugero v. NLRC (1995)) Art 283 speaks of a permanent retrenchment. There is no specific provision of law which treats of a temporary retrenchment or lay-off and provides for the requisites in effecting it or a period or duration therefor. These employees cannot forever be temporarily laid-off. To remedy this situation or fill the hiatus, Article 286 may be applied but only by analogy to set a specific period that employees may remain temporarily laid-off or in floating status.
        
        NO TERMINATION IF:
        
        LESS THAN 6mo BONA FIDE SUSPENSION
        ● The bona-fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months, or
        
        MILITARY/CIVIC DUTY
        ● the fulfillment by the employee of a military or civic duty shall not terminate employment.
        
        AFTER 6 MONTHS, ER MUST:
        
        RECALLED;
        OR
        
        PERMANENTLY RETRENCHED
        After six months, the employees should either be recalled to work or permanently retrenched following the requirements of the law, and that failing to comply with this would be tantamount to dismissing the employees and the employer would thus be liable for such dismissal.
        
        RESTORE REQS:
        
        1-MONTH RESUMPTION FROM:
        a. RESUMPTION
        b. RELIEF
        In all such cases, the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than one (1) month from the resumption of operations of his employer or from his relief from the military or civic duty.
        
        FAILURE TO RECALL BEFORE PERMANENT RETRENCHMENT
        Petitioners herein were regular employees of the Private Respondent but they received
        “temporary lay-off” notices by the latter on 22 January 1991 due to alleged lack of work and heavy
        losses caused by the cancellation of orders from abroad and by the garments embargo of 1990.
        Believing the “temporary lay-offs” to be a scheme of the employer to get rid of them due to their
        union activities, they filed a complaint for illegal dismissal.
        Private Respondent, claims that it was their prerogative to lay-off its employees temporarily
        for a period not exceeding 6 months to prevent losses due to lack of work or job orders from
        abroad. It justified its failure to recall the 38 laid-off employees after the lapse of six months
        because of the subsequent cancellations of job orders made by its foreign principals, a fact which
        was communicated to the petitioners and the other complainants who were all offered severance pay.
        Held
        The retrenchment executed by the employer was defective for lack of notice to the DOLE and lack
        of written notice to the employees. The written notice to permanently retrench them must be
        given at least one month prior to the date of the intended retrenchment.
        That they were already on temporary lay-off at the time notice should have been given to them is not an
        excuse to forego the one-month written notice because by this time, their lay-off is to become
        permanent and they were definitely losing their employment.
        
        NO LAW, JUST ANALOGOUS
        Six months is the period set by law that the operation of a business or undertaking may be suspended thereby suspending the employment of the employees concerned. The temporary lay-off wherein the employees likewise cease to work should also not last longer than six months.
        
        LACK OF NOTICE = ILLEGAL DISMISSAL
        Where the dismissal is based on an authorized cause under Article 283 of the Labor Code but the employer failed to comply with the notice requirement, the sanction should be stiff as the dismissal process was initiated by the employer's exercise of his management prerogative, as opposed to a dismissal based on a just cause under Article 282 with the same procedural infirmity where the sanction to be imposed upon the employer should be tempered as the dismissal process was, in effect, initiated by an act imputable to the employee.
        
        Redundancy- Headcount is too many for their needs
        Redundancy and installation of labor saving devices are similar in that it is based on no longer needing the employee. In these cases there is a requirement to pay separation pay, 1 month pay per year of service.
        
        FAIR & REASONABLE CRITERIA FOR RETAINING
        
        PREFERRED STATUS
        
        EFFICIENCY
        
        SENIORITY
        Criteria In Implementing Redundancy Program (Panlilio v. NLRC) It is important for a company to have fair and reasonable criteria in implementing its redundancy program, such as but not limited to:
        a. preferred status
        b. efficiency, and
        c. seniority.
        
        RELEVANT PROOF OF REDUNDANCY
        
        OVERHIRING
        
        DECREASED VOLUME OF BUSINESS
        
        DROPPED PRODUCT LINE/SERVICE
        
        NEW STAFFING PATTERN
        
        FEASIBILITY STUDIES/PROPOSAL
        
        VIABILITY OF NEWLY-CREATED POSITION
        
        JOB DESCRIPTION
        
        APPROVAL OF RESTRUCTURING
        Some factors which would confirm that a position is indeed redundant are overhiring of workers, decreased volume of business or dropping of a product line or service activity
        
        The SC ruled that Panlilio was illegally dismissed. The alleged redundancy of his position was not adequately proven. The documents the company presented do not even present the necessary factors which would confirm that a position is indeed redundant, such as overhiring of workers, decreased volume of business or dropping of a product line or service activity. The SC agreed with the POEA's decision that the company should have presented evidence to support redundancy, such as but not limited to the new staffing pattern, feasibility studies/proposal, on the viability of the newly-created positions, job description, and the approval by the management of the restructuring
        
        OVERHIRING
        
        DECREASED VOLUME OF BUSINESS
        
        JOB DESCRIPTION
        
        DROPPED PRODUCT LINE/SERVICE
        
        VIABILITY OF NEWLY-CREATED POSITION
        
        FEASIBILITY STUDIES/PROPOSAL
        
        APPROVAL OF RESTRUCTURING
        
        NEW STAFFING PATTERN
        
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      - TECHNOLOGY REPLACING EMPLOYEE
        Authorized causes are based on circumstances beyond the control control of the employee
        
        Installation of labor saving device- Employees being replaced by technology
        ○ Ex. robot vacuum cleaner
    - - 1-MONTH NOTICE
        REQ: by serving a written notice on the workers and the Ministry of Labor and Employment at
        least one (1) month before the intended date thereof.
        
        INSTALLATION OF LABOR-SAVING DEVICES
        
        REDUNDANCY
        ● TRIG: In case of termination due to the installation of labor-saving devices or redundancy,
        
        WHICHEVER IS HIGHER
        
        1 MONTH PAY
        
        1 MONTH PAY PER YOS
        ○ EFF: the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher.
        
        RETRENCHMENT
        
        CLOSURE/CESSATION
        a. NOT SERIOUS BUSINESS LOSSES
        
        DISEASE
        ● TRIG: 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,
        
        WHICHEVER IS HIGHER
        
        1 MONTH PAY
        
        1/2 MONTH PAY PER YOS
        ○ EFF: 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 least six (6) months shall be considered one (1) whole year.
        
        CLOSURE/CESSATION
        a. SERIOUS BUSINESS LOSSES
        
        NO SEPARATION PAY
      - CLOSING IS TO CIRCUMVENT
        ○ EXC: unless the closing is for the purpose of circumventing the provisions of this
        Title,
        
        REDUNDANCY NEEDS NO LOSSES
        Redundancy exists where the services of an employee are in excess of what is
        reasonably demanded by the actual requirements of the enterprise. A position is redundant
        where it is superfluous, and superfluity of a position or positions may be the outcome of a
        number of factors, such as overhiring of workers, decreased volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise.
        
        RETRENCHMENT INVOLVES LOSSES
        Retrenchment, on the other hand, is used interchangeably with the term "lay-off." It is the termination of employment initiated by the employer through no fault of the employee's and without prejudice to the latter, resorted to by management during periods of business recession, industrial depression, or seasonal fluctuations, or during lulls occasioned by lack of orders, shortage of materials, conversion of the plant for a new production program or the introduction of new methods or more efficient machinery, or of automation. Simply put, it is an act of the employer of dismissing employees because of losses in the operation of a business, lack of work, and considerable reduction on the volume of his business, a right consistently recognized and affirmed by this Court.