Dear Atty. Kathy,
My sister and I are among the employees who will be affected by the redundancy program of our company, due to its merger with another company. By the time of our separation, my tenure with the company will be one year and five months, while my sister’s tenure is five months.
When HR discussed the redundancy separation pay with my sister and me, I was surprised that we have the same computation for the separation pay, both equal to one-month salary.
Shouldn’t I get a bigger amount since I have a longer tenure?
Hayden
*****
Dear Hayden,
Article 298 of the Labor Code provides that in case of termination of employment due to redundancy, the affected employee shall be entitled to a separation pay equivalent to at least his/her one- month pay or to at least one-month pay for every year of service, whichever is higher, where a fraction of at least six months shall be considered one whole year.
The one-month pay is the minimum amount an employee terminated under Article 298 should receive, regardless of the length of service of the affected employee. Thus, your sister is entitled to a separation pay equivalent to at least her one-month pay, for her five months of service.
In your case, according to Article 298, for your tenure of one year and five months, your period of service, for the purpose of computing your separation pay, shall only be considered one year. If your tenure is one year and six months, your period of service shall be deemed at least two years for purposes of computing your separation pay, since a fraction of at least six months shall be considered one whole year.
Atty. Kathy Larios