In brief
Recent developments
On 23 October 2020, the Department of Labor and Employment (DOLE) issued Department Order No. 215, Series of 2020, which amends the rule on suspension of employment relationship.
Implications for business and transactions in the Philippines
Employers are given the opportunity to suspend the employment of employees for up to one year instead of having to dismiss the employees after a six-month suspension of operations.
What the new rules say
An employment relationship shall be deemed suspended in case of, among others, suspension of operations of the business or undertaking of the employer for a period not exceeding six months. In case of declaration of war, pandemic and similar national emergencies, the employer and its employees may meet in good faith for the purpose of extending the suspension of such employment relationship for a period not exceeding six months. In such case, the employer should report the extension of suspension of employment to the DOLE at least 10 days prior to the effectivity thereof.
In case the employees find alternative employment during the extended suspension of employment, they shall not lose employment unless they voluntarily resign through the submission of a written, unequivocal resignation letter.
In case retrenchment is necessary before or after the expiration of the extension of suspension of employment, the affected employees shall be entitled to separation pay, and shall have priority in re-hiring if they indicate their desire to resume their work not later than one month from the resumption
of operations.
The extension of suspension of employment shall not affect the right of the employees to separation pay, and the first six months of suspension of employment shall be included in the computation of the employees’ separation pay.
