MANILA POLO CLUB EMPLOYEES’ UNION (MPCEU) FUR-TUCP v. MANILA POLO CLUB, INC., G.R. No. 172846, July 24, 2013

Labor Law; Summarizing the standards for a valid closure or cessation of business operations. (A) Closure or cessation of operations of establishment or undertaking may either be partial or total. (B) Closure or cessation of operations of establishment or undertaking may or may not be due to serious business losses or financial reverses. However, in both instances, proof must be shown that: (1) it was done in good faith to advance the employer’s interest and not for the purpose of defeating or circumventing the rights of employees under the law or a valid agreement; and (2) a written notice on the affected employees and the DOLE is served at least one month before the intended date of termination of employment. (C) The employer can lawfully close shop even if not due to serious business losses or financial reverses but separation pay, which is equivalent to at least one month pay as provided for by Article 283 of the Labor Code, as amended, must be given to all the affected employees. (D) If the closure or cessation of operations of establishment or undertaking is due to serious business losses or financial reverses, the employer must prove such allegation in order to avoid the payment of separation pay. Otherwise, the affected employees are entitled to separation pay. (E) The burden of proving compliance with all the above-stated falls upon the employer.

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