Retrenchment or downsizing

Summary

⦁ Retrenchment is the reduction of work personnel usually due to poor financial returns, aimed to cut down costs for operation particularly on salaries and wages.

⦁ To be valid, the authorized cause of retrenchment or downsizing should comply with prescribed standards.

⦁ The law on retrenchment covers migrant workers.

1. Concept

Retrenchment is the termination of employment initiated by the employer through no fault of and without prejudice to the employees. It is resorted to during periods of business recession, industrial depression, seasonal fluctuations, or during lulls occasioned by lack of orders, shortage of materials, conversion of the plant to a new production program, or automation. (Lambert Pawnbrokers v. Binamira, G.R. No. 170464, 12 July 2010)

Retrenchment is the reduction of work personnel usually due to poor financial returns, aimed to cut down costs for operation particularly on salaries and wages. It is one of the economic grounds to dismiss employees and is resorted by an employer primarily to avoid or minimize business losses. (International Management Services v. Logarta, G.R. No. 163657, 18 April 2012)

Retrenchment is the reduction of personnel for the purpose of cutting down on costs of operations in terms of salaries and wages resorted to by an employer because of losses in operation of a business occasioned by lack of work and considerable reduction in the volume of business. (Manila Polo Club Employees’ Union [MPCEU] FUR-...

 



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