SEPARATION PAY. On 15 March 2020, the Philippine Government imposed a General Community Quarantine (GCQ) over the island of Luzon. The law is consistent that employees of the Philippines should receive at least one month of salary for the separation pay. General Luna St., Intramuros, Manila, 1002, Philippines Monday - Friday: 8:00 am - 5:00 pm (except holidays) Separation pay is given to employees in instances covered by Articles 298 and 299 (formerly Articles 283 and 284) of the Labor Code of the Philippines. When the allowable period is up, the employee can either be retrenched with separation pay or asked to return to work. An employee’s entitlement to separation pay depends on the reason or ground for the termination of his or her services. Administrative requirement for exemption To confirm the eligibility for tax exemption of the separation pay, the BIR issued Revenue Memorandum Order No. Where the termination results from the expiration of the contract between the principal and the contractor Reduction of pay on the last salary is not allowed from companies just to give a lower separation pay for employees. Recording the separation pay to an account other than salaries or disclosing it under the relevant notes to financial statements could help address the issue. Separation pay. However, as an exception, separation pay or financial assistance to a legally-dismissed employee may be granted as a measure of social justice or on grounds of equity. Separation Pay in the Philippines - Reasons for Termination Your employer should submit documents and undergo due process when terminating employees because of authorized causes. After six (6) months, the employer has two options: (a) to order the employees to return to work; or (b) to separate them from employment subject to payment of the applicable separation pay. So once and for all, this is the encompassing entry on how much an employer should pay you if they are terminating your employment. Department of Labor and Employment (DOLE) Building, Muralla Wing cor. To a certain extent, this is akin to backwages in the Philippines. But in the case of Bustamante vs. NLRC (G.R. Thus, under Article 298 of the Labor Code, employees who are laid-off from work due to authorized causes such as installation of labor-saving devices, redundancy, retrenchment, closure or cessation of business operations, and disease shall be entitled to a separation pay. 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