Tag Archives: termination pay

Computation of Termination Pay

The minimum amount of a terminated or dismissed employee’s termination pay depends on the reason or ground for his dismissal, either a half month’s pay or one month’s pay for every year of service, but in no case will an employee get the equivalent of less than one month’s pay.

Cases where employee is entitled to a half month’s pay for every year

  1. Retrenchment to prevent losses, i.e. reduction of personnel affected by management to prevent losses
  2. Closure or cessation of operation of an establishment not due to serious losses or financial reverses; and
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Are Dismissed Employees Entitled to Separation Pay?

“ARE DISMISSED EMPLOYEES ENTITLED TO SEPARATION PAY?”

By:  Atty. Elvin Villanueva

The common impression is that an employee who has been dismissed from service for cause is not entitled to any separation pay.

            This public notion is correct since it is the general rule when it comes to this issue. However, previous decisions allowed certain exceptions making the rule a little bit muddy.

In a recent decision by the Supreme Court, the rules on the payment of separation pay to validly dismissed employees were made clearer.

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