RA 1052: Termination Pay Law

Section 1. In cases of employment, without a definite period, in a commercial, industrial, or agricultural establishment or enterprise, the employer or the employee may terminate at any time the employment with just cause; or without just cause in the case of an employee by serving written notice on the employer at least one month in advance, or in the case of an employer, by serving such notice to the employee at least one month in advance or one-half month for every year of service of the employee, whichever is longer, a fraction of at least six months being considered as one whole year.

The employer, upon whom no such notice was served in case of termination of employment without just cause may hold the employee liable for damages.

The employee, upon whom no such notice was served in case of termination of employment without just cause shall be entitled to compensation from the date of termination of his employment in an amount equivalent to his salaries or wages corresponding to the required period of notice.

The following are just causes for terminating an employment without a definite period:

  1. By the employer —

    1. The closing or cessation of operation of the establishment or enterprise, unless the closing is for the purpose of defeating the intention of this law;

    2. Serious misconduct or willful disobedience by the employee of the orders of his employer or representative in connection with his work;

    3. Gross and habitual neglect by the employee of his duties;

    4. Fraud or willful breach by the employee of the trust reposed in him by his employer or representative;

    5. Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family, or representatives; and

    6. Other causes analogous to any of the foregoing

  2. By the employee —

    1. Serious insult by the employer or his representative on the honor or person of the employee;

    2. Inhuman and unbearable treatment accorded by the employer or his representative of the employee;

    3. Commission of a crime or offense by the employer or his representative against the person of the employee or any of the immediate members of his family; and

    4. Other causes analogous to any of the foregoing.