A Severance Letter is a crucial document used when terminating employment relationships in the Philippines, whether due to authorized causes such as redundancy, retrenchment, or closure of operations. This document must strictly comply with Philippine labor laws, particularly the Labor Code and Department of Labor and Employment (DOLE) regulations. The Severance Letter serves multiple purposes: it formally communicates the termination decision, documents the legal basis for separation, details the severance package computation, outlines final pay components, and specifies any continuing obligations or benefits. It's essential for protecting both employer and employee interests and ensuring compliance with local employment regulations. The document typically includes information about statutory benefits, separation pay calculations, final pay components, and other relevant terms of the employment termination.
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1. Letter Header: Company letterhead, date, and employee's complete contact information
2. Subject Line: Clear indication that this is a severance letter
3. Opening Statement: Formal confirmation of employment termination and its effective date
4. Reason for Termination: Clear statement of the authorized cause for termination as per Philippine Labor Code
5. Severance Payment Details: Detailed breakdown of the severance package calculation and payment method
6. Final Pay Components: List of all final payments including pro-rated 13th month pay, unused leave credits, and other statutory benefits
7. Return of Company Property: List of company properties to be returned and the process for doing so
8. Continuing Obligations: Reference to any ongoing obligations such as confidentiality or non-compete agreements
9. Certificate of Employment: Confirmation that a certificate of employment will be provided
10. Acknowledgment: Space for both employer and employee signatures with date
11. Contact Information: Details of who to contact for questions or clarifications
1. Outplacement Support: Details of any career transition assistance offered, if applicable
2. Medical Benefits Extension: Information about continuation of medical benefits, if offered
3. Release and Quitclaim: Terms of separation agreement and waiver of claims, if being offered as part of the package
4. Stock Options/Equity: Treatment of any outstanding stock options or equity compensation
5. Retirement Benefits: Additional information if the severance is related to retirement
6. Training Certificate: Reference to certificates for completed training programs, if relevant to future employment
1. Schedule A - Severance Calculation: Detailed computation of severance pay including years of service, base salary, and multipliers
2. Schedule B - Final Pay Computation: Breakdown of all final pay components including pro-rated benefits, tax computations, and deductions
3. Schedule C - Benefits Summary: Comprehensive list of all benefits and their status post-termination
4. Schedule D - Company Property Checklist: Itemized list of company properties to be returned with their condition status
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