A. Termination or Suspension by Employer

Legal and Enforceable Dismissal of Employees during Conciliation

When the strike notice was filed by the union, the chain of events which culminated in the termination of the 14 salespersons’ employment was already taking place; the series of defiant refusals by said sales representatives to comply with GTE’s requirement to submit individual reports was already in progress. At that time, no less than 3 of the ultimate 6 direct orders of the employer for the submission of the reports had already been disobeyed. The filing of the strike notice, and the commencement of conciliation activities by the BLR did not operate to make GTE’s orders illegal and unenforceable so as to excuse continued noncompliance therewith. (GTE Directories v. Sanchez, G.R. No. 76219, 1991)

Two kinds of losses to justify retrenchment

• Incurred losses which are substantial, serious, actual and real; and
• Expected losses – which are reasonably imminent. (Sanoh Fulton Phils. Inc. v. Bernardo & Tagohoy, G.R. No. 187214, 2013)

INSTALLATION OF LABOR-SAVING DEVICE

This refers to the installation of machinery to effect economy and efficiency in the employer’s method of production (Edge Apparel, Inc. v. NLRC, G.R. No. 121314, 1998)

Elements of a valid termination based on installation of labor-saving devices

• There must be introduction of machinery, equipment or other devices;
• The introduction must be done in good faith;
• The purpose for such introduction must be valid such as to save on cost, enhance efficiency and other justifiable economic reasons;
• There is no other option available to the employer than the introduction of machinery, equipment or device and the consequent termination of employment of those affected thereby; and
• There must be fair and reasonable criteria in selecting employees to be terminated. (DO 147-15)

Elements of Closure or Cessation of Operation

• There must be a decision to close or cease operation of the enterprise by the management;
• The decision was made in good faith; and
• There is no other option available to the employer except to close or cease operations. (DO 147-15)

Due to Closure or Cessation of Operation

• Service of written notice to the employees and to the DOLE at least one month before the intended date thereof;
• The cessation of or withdrawal from business operations must be bona fide in character; and
• If the closure is not due to serious business losses or financial reverses, payment to the employees of separation pay amounting to at least one-half (1/2) month pay for each year of service, or one month pay, whichever is higher. Statutory separation pay is not required for closure due to serious business losses or financial reverses. (Labor Code, Art. 298 [283]) (Azucena, The Labor Code with Comments and Cases Volume II-B, 903, 2016)