C. Authorized Causes (Article 283)- requires one month prior written notice to DOLE and to EE; and generally requires the payment of separation pay.

Substantial Requirements:Substantial Requirements:ARTICLE 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 a written notice on the workers and the Department of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor saving devices or redundancy, 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. 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 to 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.

a. installation of labor-saving devices - The installation of labor-saving devices contemplates the installation of machinery to effect economy and efficiency in this method of production.

b. redundancy - Exists where the services of an employee are in excess of what would reasonably be demanded but the actual requirements of the enterprise.

Factors:• Over-hiring of workers • Decreased volume of business • Dropping of a particular product line or service • Duplication of work

Requisites for the implementation of a redundancy program:1. Written notice served on both the EE and the DOLE at least one month to the intended date of retrenchment; 2. Payment of separation pay equivalent to at least one month pay or at least one month pay for every year of service, whichever is higher; 3. Good faith in abolishing the redundant positions; and 4. Fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished.

c. retrenchment to prevent losses “measure of last resort” - Retrenchment is an economic ground to reduce the number of employees. In order to be justified, the termination of employment by reason of retrenchment must be due to business losses or reverses which are serious, actual and real. Criteria in laying-off workers:• Less preferred status (i.e. temporary workers) • Efficiency rating • Seniority

Justifying standards for retrenchment:1. 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 unsubstantial and inconsequential in character, the bona fide nature of the retrenchment would appear to be seriously in question. 2. Substantial loss apprehended must be reasonably imminent, as such imminence can be perceived objectively and in good faith by the employer. - There should in other words be a certain degree of urgency, for the retrenchment, which is after all a drastic recourse with serious consequences for the livelihood of the employees retires or otherwise laid-off. 3. It must be reasonably necessary and likely to effectively prevent the expected losses. 4. Alleged losses if already realized, and the expected imminent losses sought to be forestalled, must be proved by sufficient and convincing evidence.

d. the closing of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this title

- may be either: 1. for serious business losses or 2. not due to serious business losses - includes bona fide suspension of operations of business exceeding 6 months - the significance of losses here is that, if the cessation of business was due to serious business losses then the employer would not be liable to pay separation pay to the employee. However, it would be the other way around if the cessation was not due to serious business losses.

Procedural RequirementsOmnibus Rules For termination of employment as based on authorized causes defined in Art 283 of the LC, the requirements of due process shall be deemed complied: 1. with upon service of a written notice to the (show cause letter)

a. employee and (so that he can look for another job) b. the appropriate Regional Office of the Department (so that it can check the validity of the dismissal and for statistical purposes)

2. at least 30 days before the effectivity of the termination 3. specifying the ground or grounds of termination Plus!

Separation pay- will be given 30 days after the service of notice of the termination. This is so because it is only then that they are considered separated from service.

• In case of termination due to installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least one month pay or at least one month pay for every year of service, whichever is higher.

• In case of retrenchment to prevent losses and in cases of closure 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 month pay or at least ½ month pay for every year of service, whichever is higher. A fraction of at least 6 months shall be considered one whole year.

• In cases of closure or cessation of operations of establishment due to serious business losses or financial reverses, there shall be no separation pay.

If the termination is brought about by the completion of the contract or phase thereof, no prior notice is requires.If the termination is brought about by the failure of an employee to meet the standards of the employer in the case of probationary employment, it shall be sufficient that a written notice is served the employee within reasonable time from effective date of termination.