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Closing or cessation of business operations

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  • To be valid, the authorized cause of closure or cessation of operation should comply with prescribed standards.

Legal basis

The legal basis is the P.D. 442, otherwise known as the Labor Code, Supreme Court Decisions, and DOLE Regulations.

Standards have been set or prescribed for each authorized cause through Supreme Court Decisions and DOLE regulations, such as Department Order No. 147, series of 2015.

Standards for Closure or Cessation of Operation

The standards are:

1. There must be a decision to close or cease operation of the enterprise by the management;

2. The decision was made in good faith; and,

3. There is no other option available to the employer except to close or cease operations.


  • 1987 Constitution
  • Presidential Decree No. 442, a.k.a. Labor Code
  • DOLE Department Order No. 147, Series of 2015
  • Jurisprudence or Supreme Court Decisions
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