How is a fraction of a year treated when computing separation pay for an employee terminated due to a disease?
When an employee is legally terminated because they suffer from a disease prejudicial to health, they are entitled to a mandatory separation pay. This compensation is calculated based on the employee’s length of service, specifically at least one month salary or one-half month salary for every year of service, whichever is greater. For the purpose of this computation, the law provides a specific rounding rule to benefit the worker. Any fraction of at least six months of service must be considered and counted as one whole year. This computation method is explicitly mandated in Article 299 Labor Code of the Philippines. “Provided, That he is paid separation pay equivalent to at least one (1) month salary or to one-half (1/2) month salary for every year of service, whichever is greater, a fraction of at least six (6) months being considered as one (1) whole year.” 02-Jun-26About Nicolas and De Vega Law Offices
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