What are the monetary benefits given to an employee who is terminated due to the installation of labor-saving devices or redundancy?
When an employee is terminated due to the installation of labor-saving devices or redundancy, the law entitles them to receive separation pay. This compensation serves to cushion the impact of losing their livelihood through no fault of their own. Specifically, the worker affected shall receive a separation pay equivalent to at least their one month pay or to at least one month pay for every year of service. The law mandates that the employee must receive whichever of these two computed amounts is higher. These exact severance benefits are mandated under Article 298 Labor Code of the Philippines. “ART. 298. 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 Ministry 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.” 02-Jun-26About Nicolas and De Vega Law Offices
Nicolas and De Vega Law Offices is a full-service law firm in the Philippines. You may visit us at the 16th Flr., Suite 1607 AIC Burgundy Empire Tower, ADB Ave., Ortigas Center, 1605 Pasig City, Metro Manila, Philippines. You may also call us at +632 84706126, +632 84706130, +632 84016392 or e-mail us at [email protected]. Visit our website https://ndvlaw.com/.
