Layoff Separation Agreement

Layoff Separation Agreement Template for Philippines

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Key Requirements PROMPT example:

"I need a Layoff Separation Agreement for our Manila-based tech company's restructuring, which will affect 50 software developers due to automation, with the separation date set for March 15, 2025; the agreement should include enhanced severance packages and outplacement support provisions."

Document background

The Layoff Separation Agreement is a crucial document used in the Philippines when implementing workforce reductions due to authorized causes such as redundancy, retrenchment, or business closure. It must strictly comply with the Labor Code of the Philippines and DOLE regulations, which mandate specific requirements for separation pay, notice periods, and documentation. This agreement is typically used during company restructuring, economic downturns, or organizational changes that necessitate workforce reduction. It details the complete separation package, including statutory benefits, tax implications, and any additional company-specific benefits. The document serves as both a legal protection and a formal record of the mutually agreed terms of separation, ensuring transparency and compliance with Philippine employment laws.

Suggested Sections

1. Parties: Identification of the employer and employee, including complete legal names and addresses

2. Background: Context of the separation, including employment history and the authorized cause for termination (e.g., redundancy, retrenchment, or closure)

3. Definitions: Key terms used throughout the agreement, including relevant Philippine legal terminology

4. Effective Date of Separation: Clear statement of the last day of employment and when the separation takes effect

5. Separation Package: Detailed breakdown of the separation pay and benefits as per Philippine Labor Code requirements

6. Final Salary and Benefits: Details of final salary payment, pro-rated 13th month pay, unused leave credits, and other statutory benefits

7. Tax Treatment: Information on tax handling of separation payments as per Philippine tax laws

8. Return of Company Property: Requirements and timeline for returning company assets and properties

9. Confidentiality Obligations: Ongoing confidentiality requirements post-employment

10. Release and Waiver: Mutual release of claims, compliant with Philippine labor law protections

11. Governing Law: Specification of Philippine law as governing law and relevant jurisdiction

12. Acknowledgment and Voluntariness: Employee's acknowledgment of understanding and voluntary acceptance of the agreement

Optional Sections

1. Post-Employment Restrictions: Non-compete and non-solicitation clauses, if applicable and reasonable under Philippine law

2. Reference and Communication: Terms regarding employment references and internal/external communication about the separation

3. Outplacement Support: Details of any career transition assistance offered

4. Medical Benefits Extension: Terms for extending medical coverage, if offered

5. Re-employment Rights: Provisions regarding potential future re-employment, if applicable

6. Government Reporting: Specific provisions about required reporting to DOLE or other government agencies

7. Dispute Resolution: Alternative dispute resolution procedures, if parties agree to include

8. Continuation of Specific Benefits: Details of any benefits that will continue post-employment

Suggested Schedules

1. Schedule A - Separation Payment Calculation: Detailed computation of separation pay and other benefits

2. Schedule B - Company Property Checklist: List of company properties to be returned

3. Schedule C - Benefits Summary: Summary of all benefits and their treatment post-separation

4. Appendix 1 - Clearance Form: Standard company clearance form for departing employees

5. Appendix 2 - Certificate of Employment: Draft of the certificate of employment to be issued

6. Appendix 3 - DOLE Requirements: Required forms and notices for DOLE compliance

7. Appendix 4 - Tax Computation: Detailed breakdown of tax treatment of separation benefits

Authors

Alex Denne

Head of Growth (Open Source Law) @ ��Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co

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Manufacturing

Technology

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Retail

Healthcare

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Construction

Education

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Hospitality

Mining

Agriculture

Transportation

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Relevant Teams

Human Resources

Legal

Compliance

Employee Relations

Corporate Secretariat

Industrial Relations

Finance

Compensation and Benefits

Risk Management

Internal Audit

Relevant Roles

Human Resources Director

Legal Counsel

HR Manager

Compliance Officer

Employee Relations Manager

HR Business Partner

Legal Manager

Labor Relations Specialist

HR Operations Manager

Corporate Secretary

Chief Human Resources Officer

HR Administrator

Compensation and Benefits Manager

HR Generalist

Industrial Relations Manager

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Layoff Separation Agreement Template for Philippines

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