Suspension of Employment Relationship

On 26 October 2020, the Department of Labor and Employment posted a copy of Department Order No. 215, Series of 2020 on its website. This issuance amends Section 12, Rule 1, Book VI of the Rules Implementing the Labor Code of the Philippines. Relevant portions of the amendment state:

SECTION 12. Suspension of relationship. – The employer-employee relationship shall be deemed suspended in case of suspension of operation of the business or undertaking of the employer for a period not exceeding six (6) months, unless the suspension is for the purpose of defeating the rights of the employees under the Code, and in case of mandatory fulfillment by the employee of a military or civic duty. The payment of wages of the employee as well as the grant of other benefits and privileges while he is on suspended employment or on a military or civic duty shall be subject to existing laws and decrees and to the applicable individual or collective bargaining agreement and voluntary employer practice or policy.

In case of declaration of war, pandemic and similar national emergencies, the employer and the employees, through the union, if any, or with the assistance of the Department of Labor and Employment, shall meet in good faith for the purpose of extending the suspension of employment for a period not exceeding six (6) months: Provided, that the employer shall report to the Department of Labor and Employment, through the Regional Offices, the extension of suspension of employment ten (10) days prior to the effectivity thereof subject to inspection; Provided, however, that the employees shall not lose employment if they find alternative employment during the extended suspension of employment except in cases of written, unequivocal and voluntary resignation; Provided further, that should retrenchment be necessary before or after the expiration of the extension of suspension of employment, the affected employee shall be entitled to separation pay as prescribed by the Labor Code, company policies or collective bargaining agreement, whichever is higher; Provided, finally, that the retrenched employees shall have priority in the re-hiring if they indicate their desire to resume their work not later than one (1) month from the resumption of operations.

This notwithstanding, by mutual agreement of the employer and the employees, through the union, if any, or with the assistance of the Department of Labor and Employment, employees may be recalled to work or retrenched subject to the requirement of notice and separation pay, anytime before the expiration of the extension of suspension of employment.

The extension of suspension of employment shall not affect the right of the employees to separation pay. The first six (6) months of suspension of employment shall be included in the computation of the employees’ separation pay.

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