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Computation of separation pay

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1 Computation of separation pay on Fri Mar 25, 2011 8:12 pm

jumer


Arresto Menor
I will be closing shop this year, my employee will have to go. the question are:
a). What are my obligation to my employee, I have 5 employee only.

b). How is the separation pay computed for 25 year of service?

c). What document are to signed by the employee so that the settlement will be final to prevent further claim ?

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2 Re: Computation of separation pay on Sat Mar 26, 2011 6:07 pm

attyLLL


moderator
30 days before closure date, you have to give written notice to both the the employees and the DOLE (they have a form) that the business is closing.

the employees are entitled to 1 month of salary for every year of service. ask them to sign a waiver upon payment.


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3 Re: Computation of separation pay on Sat Mar 26, 2011 8:41 pm

jumer


Arresto Menor
Thank you for the reply.
So if the salary of one employee is 8,000, then for 25 years, the separation pay would be 200K per employee or 1 million total for 5 employee.
Is there any way to reduce this, because the reason for closing shop is it is not earning anymore.

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4 Re: Computation of separation pay on Sat Mar 26, 2011 9:24 pm

council


Reclusion Perpetua

In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year.

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5 Re: Computation of separation pay on Sun Mar 27, 2011 8:39 pm

attyLLL


moderator
jumer, to protect yourself, get an honest to goodness independent financial audit so you will be able to show that the business does not have enough to pay the employees.

is this a corporation, partnership or single proprietorship?


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6 Re: Computation of separation pay on Mon Mar 28, 2011 7:03 pm

jumer


Arresto Menor
The business is single proprietorship.

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7 Re: Computation of separation pay on Mon Mar 28, 2011 9:44 pm

attyLLL


moderator
then your audit has to show your losses. be prepared that your employees will be dissatisfied and will file cases at nlrc.


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