Text of the provision
Art. 283. Closure of establishment and reduction of personnel. The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one
(1) month before the intended date thereof. In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one
(1) month pay or to at least one
(1) month pay for every year of service, whichever is higher. 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.
Labor Code of the Philippines, Presidential Decree No. 442, as amended. Reproduced in full from the official enactment and verified against the LawPhil and ChanRobles renderings.
What this article means
An employer may also terminate employees because of installation of labor-saving devices, redundancy, retrenchment to prevent losses, or closure or cessation of operations — but not if the closing is meant to circumvent this Title — upon written notice to the workers and to the Ministry of Labor and Employment at least one (1) month before the intended date. For labor-saving devices or redundancy, separation pay is at least one (1) month pay, or one (1) month pay for every year of service, whichever is higher; for retrenchment and for closures not due to serious business losses, it is one (1) month pay or at least one-half (1/2) month pay per year of service, whichever is higher, with a fraction of at least six (6) months counted as one whole year.
Questions about this provision
- Can my employer shut down the business just to avoid paying benefits, then reopen under a new name?
- What happens if my employer skips the one-month notice before laying me off for redundancy?
Related provisions
- Article 282 — Just Causes For Dismissal.
- Article 284 — Disease As A Ground.
A note on article numbers. The articles of the Labor Code have been administratively renumbered, so the same provision is often cited under a different number. Supreme Court decisions write both, in the form “Article 297 [282]” — the new number first, the original in brackets. The text on this page is published under its original number, which is the numbering both source texts use. When citing, check which numbering your source follows.
Cases interpreting this article
- Authorities on this article will be added here as each is verified against primary sources.