Authorized Causes


▪ Authorized causes are grounds for separating an employee through no fault of theirs.

▪ There are standards for each authorized cause set or prescribed by Jurisprudence or Supreme Court Decisions, as well as DOLE regulations.

▪ Separation pay is due to employees who have be separated due to authorized causes, except for closing or cessation of business due to serious financial losses.

1. Concept

Authorized causes are grounds for separation of employment.

It is called authorized causes because the employer is authorized to separate employees from their employment due to a legitimate business reason or a requirement by law or regulations.

In these situations, and in the exercise of its management prerogative, the employer is justified letting go of the employee who is not at fault and thus given a separation pay.

2. Coverage

Authorized causes cover all employees, regardless of rank or status, whether rank-and-file, supervisory, managerial in rank, as well as whether regular, probationary, casual, project, seasonal, or fixed-term.

3. The authorized causes

a. Labor Code

The Labor Code provides for the following authorized causes:

1) Installation of labor-saving devices;

2) Redundancy;

3) Retrenchment;

4) Closing or cessation of business operations;

5) Disease; and

6) Permanent lay-off (after 6-month work suspension).

b. Jurisprudence or Supreme Court Decisions

Jurisprudence or Supreme Court Decisions provide fo...


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