Dismissal [Labor Code] JUST CAUSES ART. 282. Termination by employer.

- An employer may terminate an employment for any of the following causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; (b) Gross and habitual neglect by the employee of his duties; (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; (d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and (e) Other causes analogous to the foregoing. AUTHORIZED CAUSES

Definition

As maybe broadly defined, authorized causes for dismissal of employee refer to those lawful grounds for termination which in general do not arise from fault or negligence of the employee. Authorized causes are distinguished from just causes under Article 282 in that the latter are always based on acts attributable to the employees own fault or negligence. The authorized causes for termination of employee are enumerated under Article 283 and 284 of the Labor Code, as follows: 1. Installation of labor-saving devices. The installation of labor-saving devices contemplates the installation of machinery to effect economy and efficiency in the method of production. 2. Redundancy. 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 superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as over hiring of workers, decreased of volume business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. 3. Retrenchment to prevent losses. Retrenchment is an economic ground to reduce the number of employees. Retrenchment is the reduction of personnel for the purpose of cutting down on costs of operations in terms of salaries and wages resorted to by an employer because of losses in operation of a business occasioned by lack of work and considerable reduction in the volume of business[3]. It is sometimes also referred to as downsizing. It is aimed at saving a financially ailing business establishment from eventually collapsing. 4. Closure or cessation of operation. The closure of a business establishment is a ground for the termination of the services of an employee unless the closing is for the purpose of circumventing pertinent provisions of the Labor Code. 5. Disease. An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as the health of his co-employees. It should be noted though that the above enumeration is not an exhaustive list of authorized causes of termination of employment. Valid application of union security clause, relocation of business, among others, may also considered authorized causes of termination. Labor Laws in the Philippines allow employers to terminate employees. The termination, however, must not be based on mere whim or caprice of the employer against his employee. It must stand on reasonable ground for the termination to be considered legal. These grounds are called the Authorized Causes of Termination. Differentiated from the Just Causes of Termination, Authorized causes are those which do not arise from fault or negligence of the employee. These authorized causes are attributable to the employer and are anchored on management prerogative. Enumerated as the authorized c1auses are: 1) Installation of Labor-Saving Devices, 2) Redundancy, 3) Retrenchment to Prevent Losses, 4) Closure or Cessation of Operation and 5) Disease. Installation of labor-saving devices concerns the introduction of machinery or automation processes in the work system in order to improve productivity.

Redundancy happens when there is an overlap of the services rendered by employees than what is required in the business. This may result from decreased volume of business or the dropping of a product or service previously offered by the company. Retrenchment to prevent losses involves the preemptive cutting of costs in salaries and wages in order to avoid perceivable business losses. The losses perceived must be serious, actual and real. Closure or cessation of business points to the actual shutting down of a business. The closure may be total or partial, as when only a department ceases its operations. The cessation of business is essential to thwart the establishments further financial drain. Lastly, an employee may be terminated because of the affliction of a disease. The continued employment of the sick person must be prejudicial to his health and his co-workers. The disease must also be one that is not curable within 6 months even with proper medical treatment. Proper due process must be observed when dismissing employees due to authorized causes. If the basis is installation of labor-saving devices, redundancy, retrenchment to prevent losses and closure or cessation of operations, the employer is mandated to serve written notice to both the employee and the concerned Regional Office of the Department of Labor at least 30 days before the effectivity of the termination. In addition, the termination for an authorized cause must be attended with good faith. There must also be a fair and reasonable criteria in the selection of employee termination. In the appropriate cases, separation pay must be paid to the employee at the time of his dismissal from work.