Library of PH Labor Law

D – Closure or cessation of business

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1. Summary

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

2. 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.

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References

▪ 1987 Philippine Constitution

▪ Presidential Decree No. 442, a.k.a. Labor Code

▪ Department of Labor and Employment, Department Order No. 147, Series of 2015

▪ Jurisprudence or Supreme Court Decisions

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