Large numbers of dismissal would still require that they fall under any of the authorized causes for termination: installation of labour-saving devices, redundancy, retrenchment, and closure of business.
An employer may implement termination by redundancy when the following are present:
- Superfluous positions or services of employees;
- Positions or services are in excess of what is reasonably demanded by the actual requirements of the enterprise to operate in an economical and efficient manner;
- Good faith in abolishing redundant positions;
- Fair and reasonable criteria in selecting the employees to be terminated; and
- Adequate proof of redundancy such as feasibility studies/proposals.9
A valid retrenchment program requires the concurrence of the following:
- Retrenchment must be reasonably necessary and likely to prevent business losses;
- Losses, if already incurred, are substantial, serious, actual and real, or if only expected, are reasonably imminent;
- Expected or actual losses must be proved by sufficient and convincing evidence;
- Retrenchment must be in good faith and not to defeat or circumvent the employees’ right to security of tenure; and
- Fair and reasonable criteria in ascertaining the retention and dismissal of employees, such as, but not limited to: status, efficiency, seniority, physical fitness, age, and financial hardship for certain workers.10
Mass termination due to closure of business or cessation of operation requires the concurrence of the following:
- There is a decision to close or cease operation of the enterprise by the management:
- Such decision was made in good faith; and
- No other option available to the employer except to close or cease operations.11
A valid termination due to the installation of labour-saving devices requires the concurrence of the following:
- Introduction of machinery, equipment or other devices;
- Introduction must be done in good faith;
- Purpose for such introduction must be valid such as to save on cost, enhance efficiency, and other justifiable economic reasons;
- 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
- Fair and reasonable criteria in selecting employees to be terminated.12
The foregoing requirements must always be complied with regardless of the number of employees affected.
Further, with regard to the installation of labour-saving devices, redundancy, and retrenchment, when there are two (2) employees occupying the same position in the company to be affected by any of the three (3) enumerated authorized causes of termination, the last one employed will necessarily be the first one to go, i.e., Last-In, First-Out Rule, except when an employee volunteers to be separated from employment.13
Footnote(s):
9 Section 5.4 (b), DOLE D.O. No. 147-15; see also Dole Philippines, Inc. vs. NLRC, 365 SCRA 124 (2001).
10 Section 5.4 (c), DOLE D.O. No. 147-15; see also San Miguel Corp. vs. NLRC, 304 SCRA 1 (1999).
11 Section 5.4 (d), DOLE D.O. No. 147-15; see also Cheniver Deco Print Technics Corp. vs. NLRC, 325 SCRA 758 (2000).
12 Section 5.4 (a), DOLE D.O. No. 147-15; see also Edge Apparel, Inc. vs. NLRC, 286 SCRA 302 (1998).
13 Maya Farms Employees Organization vs. NLRC, 309 Phil. 465 (1994).