Collective Dismissal and Efficiency-Based Termination During Economic Downturn: Legal Framework and Employer Obligation

Employers considering collective dismissal must first exhaust all preventive measures as mandated by the Minister of Manpower Circular Letter and ILO Recommendation. If termination is unavoidable, particularly due to efficiency, employers are legally required to provide timely notice, calculate employee entitlements in accordance with statutory formulas, and follow the structured dispute resolution process from bipartite negotiations to potential adjudication before the Industrial Relations Court. In today’s economic climate, compliance is essential to mitigate legal risk, reputational harm, and industrial dispute.

You are more than welcome to check out our latest article for an in-depth breakdown of the regulation and its impact at  this link