AN ACT TO AMEND SECTIONS ONE AND TWO OF REPUBLIC ACT NUMBERED TEN HUNDRED AND FIFTY-TWO. (Re termination pay.)

Case Overview and Summary

Summary of Republic Act No. 1787

Termination of Employment Without Definite Period
- Employer or employee may terminate employment with just cause at any time. (Section 1)
- Without just cause, employee must give 1 month's written notice, or employer must give:
  - 1 month's notice, or
  - 1/2 month per year of service, whichever is longer (minimum 6 months = 1 year). (Section 1)
- If no notice given, employer liable for damages, employee entitled to compensation equal to salary for notice period. (Section 1)

Just Causes for Termination
1. By Employer: (Section 1)
  - Closure/cessation of operations (unless to defeat law's intent)
  - Serious misconduct or willful disobedience
  - Gross and habitual neglect of duties
  - Fraud or willful breach of trust
  - Crime/offense against employer or family
  - Other analogous causes
2. By Employee: (Section 1)
  - Serious insult to honor/person
  - Inhuman and unbearable treatment
  - Crime/offense by employer against employee or family
  - Other analogous causes

Suspension of Operations and Military/Civic Duty
- Suspension of operations up to 6 months not attributable to employer's fault does not terminate employment. (Section 2)
- Employee must be reinstated after military/civic duty within 60 days of relief. Employer's failure is liable for damages. (Section 2)

Collective Bargaining Agreements
- Contracts contrary to Section 1 are null and void. (Section 2)
- Employers and employees may agree to more liberal terms than this law. (Section 2)