Bona fide suspension of operation or undertaking

1. Concept

“Bona fide suspension of operation or undertaking” – refers to the temporary suspension or cessation of business operations or undertaking for a period not exceeding six (6) months.

a. Legal basis

1) Labor Code

ART. 301. [286] When Employment not Deemed Terminated. The bona fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a military or civic duty shall not terminate employment. In all such cases, the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than one (1) month from the resumption of operations of his employer or from his relief from the military or civic duty. (P.D. 442, Labor Code)

b. Management prerogative

The decision to implement a bona fide suspension of operations or undertaking is a management prerogative. This means that, if there are valid economic and business reasons for temporary work suspensions, it will still be the decision of the management whether to call for the temporary of suspension of work or continue with work (even if it means workers will be doing nothing).

Indeed, closure or suspension of operations for economic reasons is recognized as a valid exercise of management prerogative. (Innodata Knowledge Services, Inc. v. Inting, G.R. No. 211892, 06 December 2017)

Innodata Knowledge Services, Inc. v. Inting, G.R. No. 2118...

 



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