Boracay workers’ lay-offs and payment of separation pay PDF Print E-mail
Thursday, 12 April 2018 13:21



The opinion expressed the other day by Labor and Employment Secretary Silvestre Bello III is reassuring to the workers in Boracay but it does not square with present law and jurisprudence. He said that “establishments in the island of Boracay could not simply lay off their workers due to its impending six-month closure on April 26. Employers should first have a “just cause” to lay off workers. Those who would be laid off should also receive separation pay from their employers.” Very well said.

As a general rule, employers must comply with the stringent “2-notice rule” requirement of law in dismissing an employee—just cause and compliance with due process which are: notice and hearing. Non-compliance to one of these requisites shall, in the eyes of the law, be considered as illegal. Because of illegal dismissal, an employee is entitled under the law the payment of separation pay.

But the situation in Boracay island is far different. There exists no valid or authorized cause in the severance or termination of the employer-employee relationship between the employers and their workers as provided for in Articles 282 and 283 of the Labor Code. The closure or cessation of businesses there was due to the issuance and the implementation of an Executive Order by President Duterte, closing the entire island beach resort for six months from local and foreign tourists upon the recommendation of the DOT, DILG, and the DENR. The purpose was to rehabilitate and totally clean the island resort as it is now becoming a cesspool of wastes coming from the various establishments in the island. Establishments doing business in the island had no choice but to heed the presidential order and close business operations which affect thousands of workers.

The resulting severance of employment clearly does not make out a case of illegal dismissal nor termination due to cessation of business operation or undertaking under Article 283 of the Labor Code warranting payment of separation pay, primarily because dismissal presupposes a unilateral act by the employer in terminating the employment of its workers. The situation is different in Boracay. The employers there still wanted to continue doing business and have no intention of terminating their employees. They were merely forced to cease business operations and undertakings by the implementation of an Executive Order. It was not because they wanted it to happen. It was forced upon them by an act of the State.

With no income earned during this period of closure, they cannot be compelled to sustain and pay their workers doing nothing. Understandably, workers out of job and with no income are forced to look for another job for their daily needs. But the termination of employee-employer relationship by virtue of the implementation of an Executive order does not make out a case for illegal dismissal nor termination due to authorized cause under Article 283 of the Labor Code. It necessarily follows that there being no illegal dismissal, no separation pay shall likewise be paid the workers.

But it bears stressing, however, that up to now, there is no definite Supreme Court ruling or jurisprudence with regard to this kind of a situation where the cause of termination of employee-employer relationship is an act of State and not those enumerated in Articles 282 and 283 of the Labor Code. But a similar case decided by the Court of Appeals, involving the then anti-Marcos Chinese newspaper in Manila owned and managed by the father of the late Betty Go-Belmonte, came out with a similar ruling—that no illegal dismissal was committed by the employer when the cessation or closure of its newspaper was because of Martial Law—an act of state. There being no illegal dismissal, the workers are not entitled to separation pay. Another similar appellate ruling by the NLRC 8th Division, involving workers of the Rieth’s Patalon Coconut Estate locate here in Zamboanga City West Coast, stated that “It would be the height of injustice and inequity if the workers would still be allowed or paid separation pay or exact payment from their employer. To say that their situation falls similar to what is termed cessation of business or undertaking under Article 283 of the Labor Code is stretching and straining too far the interpretation of law. (Sagadan, et. al. and NFL vs. Patalon Coconut Estate, et. al., NLRC CA M-002823 (1986); Alfredo Cañete and 260 others vs. Phil. Rubber Project Co. Inc., et. al., NLRC CA M-002934 (NLRC Fifth Division Rulings).

Similarly now, we have this 4-month fishing ban imposed by the Bureau of Aquatic Resources in the entire Zamboanga Peninsula and in the Basilan and Sulu Seas. Many canneries and sardine producers in this city ceased operations during this period leaving thousands of workers jobless and others laid off from their jobs. Again, the severance of employment relationship between the canneries and their workers was due to an act of State—the imposition of a 4-month fishing ban. Can they be compelled to pay their laid off workers separation pay?