A comprehensive Philippine legal article

Separation pay in the Philippines is a statutory or contractual monetary benefit given to an employee upon termination of employment in specific situations recognized by law, jurisprudence, contract, company policy, or collective bargaining agreement. It is not automatically due in every case of employment ending. Whether it is payable depends mainly on the ground for termination, the employee’s status, the applicable Labor Code provisions, and Supreme Court doctrine.

This article explains the topic in depth: what separation pay is, when it is required, when it is not, how it is computed, who is entitled, how it differs from final pay and retirement pay, how it applies in closures, retrenchment, redundancy, disease, dismissals for cause, project and fixed-term employment, and what remedies employees have in disputes.

1. What separation pay is

Separation pay is the amount paid to an employee whose employment is ended under circumstances where the law, a contract, policy, or established company practice grants that benefit.

In Philippine labor law, separation pay most commonly arises in three broad ways:

Termination for authorized causes under the Labor Code These are employer-initiated terminations for business or health-related reasons recognized by law.
Separation pay in lieu of reinstatement in illegal dismissal cases When reinstatement is no longer feasible, labor tribunals or courts may award separation pay instead.
Separation pay granted by contract, CBA, company policy, or employer practice Even when the Labor Code does not require it, an employer may still be bound to pay it because of a binding promise or established practice.

Separation pay is therefore not the same thing as backwages, final pay, retirement pay, quitclaim money, or damages, although these may arise together in the same case.

2. Main legal basis

The principal source is the Labor Code of the Philippines, especially the provisions on authorized causes for termination. The classic authorized causes are:

installation of labor-saving devices
redundancy
retrenchment to prevent losses
closure or cessation of business
termination due to disease

Under these causes, the law generally requires notice and separation pay, except in some closure situations involving serious business losses.

Philippine Supreme Court decisions also heavily shape the rules, especially on:

separation pay in illegal dismissal cases
whether separation pay may still be granted to employees dismissed for just causes
the meaning of gross losses
how to compute the benefit
whether years of service are rounded up
whether employees on probationary, project, or fixed-term status may claim it

3. Separation pay versus final pay

This distinction is often misunderstood.

Separation pay

This is a specific benefit that is due only when there is a legal, contractual, or jurisprudential basis for it.

Final pay

Final pay is the sum of all amounts still owing to the employee at the end of employment, which may include:

unpaid salary
proportionate 13th month pay
cash conversion of unused service incentive leave, if applicable
unpaid commissions or allowances, if due
tax refund, if any
return of bond or deposits, if lawful
separation pay, if applicable
retirement benefits, if applicable

An employee may receive final pay without separation pay, and may also receive both if both are due.

4. Separation pay versus retirement pay

These are also different.

Separation pay

Paid because employment ended under certain grounds.

Retirement pay

Paid because the employee retired under the law, a retirement plan, a CBA, or company retirement policy.

As a rule, an employee is not automatically entitled to both for the same act of severance unless:

the law allows it,
the retirement plan or CBA allows it,
or the employer policy provides both.

Whether both may be claimed depends on the wording of the retirement plan, CBA, or company policy and on jurisprudence.

5. When separation pay is mandatory under the Labor Code

The clearest cases are authorized cause terminations.

A. Installation of labor-saving devices

When an employer terminates employees because machinery, technology, automation, or other efficiency measures make certain positions unnecessary, affected employees are entitled to separation pay.

Rate

At least one month pay or one month pay for every year of service, whichever is higher.

A fraction of at least six months is generally considered one whole year.

B. Redundancy

A position is redundant when it is superfluous, excessive, duplicative, or no longer reasonably necessary to the enterprise. The employer does not need to prove actual losses, but it must prove that the redundancy is genuine and done in good faith.

Rate

At least one month pay or one month pay for every year of service, whichever is higher.

Common indicators of valid redundancy

overlapping functions
overstaffing
reorganization
abolition of unnecessary positions
efficiency study showing excess manpower

Legal caution

Redundancy cannot be used as a disguise to target unionists, whistleblowers, or particular employees in bad faith.

C. Retrenchment to prevent losses

Retrenchment is a reduction of personnel undertaken to prevent business losses that are substantial, serious, actual, or reasonably imminent.

Rate

At least one month pay or one-half month pay for every year of service, whichever is higher.

What the employer must generally show

losses are serious, actual, or imminent
retrenchment is reasonably necessary
less drastic measures were considered first
the selection of who will be retrenched is fair and reasonable
the action is in good faith

Retrenchment is one of the most litigated authorized causes because it directly affects job security. The employer carries the burden of proving the factual basis.

D. Closure or cessation of business operations

This happens when the business shuts down entirely or ceases a department or operation.

If closure is not due to serious business losses or financial reverses

Affected employees are entitled to separation pay.

Rate

At least one month pay or one-half month pay for every year of service, whichever is higher.

If closure is due to serious business losses or financial reverses

As a rule, no separation pay is required.

This is one of the most important exceptions. Mere decline in profits is not always enough. The employer must usually prove serious losses through competent evidence, often audited financial statements.

Partial closure

If only a branch, division, or department is closed, the same principles may apply to employees affected by that partial cessation.

E. Termination due to disease

If an employee suffers from a disease and continued employment is prohibited by law or is prejudicial to the employee’s health or that of co-employees, termination may be valid if the legal requirements are met.

Rate

At least one month pay or one-half month pay for every year of service, whichever is higher.

Important requirement

There must generally be certification by a competent public health authority that the disease is of such nature or stage that it cannot be cured within six months even with proper medical treatment, or that continued employment is prohibited or prejudicial.

Termination due to disease is tightly regulated because it can easily become discriminatory if mishandled.

6. Required notice in authorized cause termination

In authorized cause terminations, the employer must generally serve:

a written notice to the employee, and
a written notice to the Department of Labor and Employment (DOLE)

These notices must generally be served at least 30 days before the intended date of termination.

Failure to comply with notice requirements can expose the employer to liability even if the underlying authorized cause exists.

7. Standard computation rules

The Labor Code formulas use either:

one month pay per year of service, or
one-half month pay per year of service, with a minimum of one month pay, whichever is higher.

A. Meaning of “one month pay”

This usually refers to the employee’s monthly basic salary, though the exact inclusions may become contentious depending on law, contract, payroll structure, and jurisprudence.

B. Fraction of at least six months

A fraction of at least six months is usually treated as one whole year for this purpose.

Examples:

5 years and 6 months = 6 years
10 years and 11 months = 11 years
3 years and 5 months = 3 years

C. Minimum floor

Even if the employee has served less than one year, the employee may still be entitled to at least one month pay if that is the governing formula.

D. Which is higher

For example, under redundancy:

one month pay, or
one month pay for every year of service, whichever is higher.

An employee with 8 years of service under redundancy would ordinarily get 8 months pay.

An employee with 4 months of service under redundancy would ordinarily get at least 1 month pay.

8. Quick guide to rates

One month pay or one month pay per year of service, whichever is higher

Applies generally to:

installation of labor-saving devices
redundancy

One month pay or one-half month pay per year of service, whichever is higher

Applies generally to:

retrenchment to prevent losses
closure or cessation not due to serious losses
disease

No separation pay as a rule

Applies generally to:

closure due to serious business losses or financial reverses
resignation, unless contract/policy/CBA provides
expiration of project or fixed-term employment, unless contract/policy/CBA provides
dismissal for just cause, subject to limited jurisprudential nuances discussed below

9. Who bears the burden of proof

In termination disputes, the employer bears the burden of proving that the dismissal or termination was valid.

For authorized cause cases, the employer must prove:

the existence of the authorized cause
compliance with notice requirements
good faith
fair and reasonable criteria in selecting employees to be terminated, where applicable
correct payment of separation pay, where required

If the employer fails to prove these, the termination may be declared illegal or procedurally defective.

10. Separation pay in illegal dismissal cases

This is a separate doctrine from authorized-cause separation pay.

When an employee is illegally dismissed, the normal relief is:

reinstatement without loss of seniority rights, and
full backwages

However, if reinstatement is no longer possible or appropriate, the employee may instead be awarded:

separation pay in lieu of reinstatement, plus
backwages

When separation pay in lieu of reinstatement may be awarded

Common examples:

strained relations
abolition of the position
closure of business
reinstatement is impossible or impractical
employee already reached retirement age
the employment relationship has become severely damaged in a manner recognized by law

Typical rate

A commonly applied rate is one month pay for every year of service, though the exact framing depends on the case and the nature of the award.

This kind of separation pay is conceptually different from statutory separation pay for authorized causes. One arises as a remedy for illegal dismissal; the other arises from a valid termination for authorized cause.

11. Can an employee dismissed for just cause still get separation pay?

This is one of the most nuanced areas in Philippine labor law.

General rule

An employee validly dismissed for just cause is not entitled to separation pay.

Just causes include serious misconduct, willful disobedience, gross and habitual neglect, fraud, willful breach of trust, commission of a crime against the employer or the employer’s family or duly authorized representative, and analogous causes.

Historical equitable doctrine

Older jurisprudence at times allowed a measure of financial assistance or separation pay on compassionate or social justice grounds to employees dismissed for causes not involving serious misconduct or moral turpitude.

Modern limitation

That equitable approach was narrowed significantly. The prevailing doctrine is that separation pay or financial assistance is generally not granted when dismissal is for serious misconduct, fraud, willful breach of trust, or acts reflecting moral depravity, and courts have become more restrictive even beyond those categories.

Practical rule

For practical purposes, a worker dismissed for just cause should not assume any right to separation pay unless:

a company policy or CBA grants it,
the employer voluntarily gives it,
or highly specific equitable circumstances exist under case law.

12. Resignation: is separation pay due?

Voluntary resignation

As a rule, no separation pay is required when the employee voluntarily resigns.

The employee is still entitled to final pay items already earned, but not statutory separation pay.

Exceptions

Separation pay may still be due if:

the employment contract grants it
the CBA grants it
the company has a retirement or resignation benefit policy
a consistent company practice has ripened into an enforceable benefit
the resignation is actually a case of constructive dismissal

13. Constructive dismissal

An employee may appear to have resigned, but if the resignation was forced by unbearable, unreasonable, humiliating, or discriminatory working conditions, or by unlawful demotion or pay cuts, the case may be constructive dismissal.

If constructive dismissal is proven, the employee may be entitled to:

reinstatement and backwages, or
separation pay in lieu of reinstatement and backwages

This is important because many employers label departures as “resignation” to avoid separation pay exposure.

14. Project employees

A true project employee is hired for a specific project or a distinct phase of a project, with the duration and scope made known at the time of engagement.

General rule

If the project is completed and the employment naturally ends, separation pay is generally not due, because the employment ends by completion of the undertaking, not by dismissal.

But separation pay may still arise if

the employee was misclassified and is really regular
the project completion was a pretext
the employee was terminated before project completion without valid cause
company policy, contract, or CBA grants the benefit

In industries like construction, project employment rules can be especially technical.

15. Fixed-term employees

A fixed-term employee hired for a valid fixed period typically is not entitled to separation pay simply because the term expires.

But again, separation pay may become due if:

the fixed term was invalid or used to defeat security of tenure
the employee is actually regular
the employee was terminated before term expiry without valid cause
contract or policy provides for a termination benefit

16. Probationary employees

Probationary employees are not excluded from labor standards and due process protections.

If lawfully terminated for failure to meet reasonable standards made known at engagement

No statutory separation pay is generally due.

If terminated for an authorized cause

They may be entitled to separation pay, depending on the cause and their length of service.

If illegally dismissed

They may be entitled to the remedies for illegal dismissal, including separation pay in lieu of reinstatement where appropriate.

17. Casual, seasonal, and other non-regular employees

Employment status matters, but it does not by itself decide separation pay. The real questions are:

Why did the employment end?
Was the employee in fact regular by function or duration?
Was the termination due to an authorized cause?
Is there a contractual or policy basis for separation pay?

Seasonal or casual workers can still claim separation pay if the law and facts support it.

18. Domestic workers and special categories

For kasambahays and certain workers governed partly by special laws, the answer may not always track ordinary Labor Code rules exactly. Final entitlements can differ depending on the governing statute, contract, and regulations.

Still, the broad distinction remains:

not every ending of employment creates a right to separation pay
legal basis must exist

19. Overseas Filipino workers

For OFWs, the issue is different because their rights often arise from:

employment contract
POEA/DMW regulations
specific statutes
illegal dismissal or pre-termination rules

“Separation pay” in the domestic Labor Code sense is not always the exact framework used in overseas cases. The key remedy may instead be salary for the unexpired portion, damages, or other statutory relief.

20. Closure due to serious losses: a critical exception

This topic deserves emphasis.

Many employees assume that closure always entitles them to separation pay. That is incorrect.

Rule

If the employer closes the business because of serious business losses or financial reverses, separation pay is generally not required.

What employers usually need to show

competent proof of serious losses
often audited financial statements
losses are real and substantial, not speculative
closure is genuine and in good faith

What is not enough by itself

bare allegation of losses
self-serving statements
ordinary downturns without proof
unverified internal documents

If the employer fails to prove serious losses, employees may claim the separation pay applicable to closure not due to serious losses.

21. Retrenchment versus closure

These are often confused.

Retrenchment

The business continues but reduces its workforce to prevent losses.

Closure

The business or an identifiable operation ceases altogether.

Both may involve losses, but:

retrenchment generally still requires separation pay
closure due to serious losses generally does not

22. Redundancy versus retrenchment

These are also different.

Redundancy

The position has become unnecessary, excessive, duplicative, or no longer needed.

Retrenchment

The business cuts personnel to prevent substantial losses.

Why the distinction matters

The separation pay rate is different:

redundancy: one month pay per year or one month minimum, whichever is higher
retrenchment: one-half month pay per year or one month minimum, whichever is higher

23. Disease as a ground: employee protection concerns

Termination due to disease is not left to the employer’s discretion alone.

Safeguards

public health certification is generally required
disease must be of such nature or stage that employment is prohibited or prejudicial, or not curable within six months with proper treatment
employer cannot rely only on private suspicion or generalized fear
anti-discrimination concerns may arise, especially with stigmatized illnesses

If the legal requirements are not followed, the termination may be invalid.

24. Due process in authorized cause cases

Authorized cause termination is not only about proving the cause. The employer must also follow statutory procedure.

Required elements commonly include

written notice to employee
written notice to DOLE
observance of the 30-day period
payment of correct separation pay when due

Defects in procedure may result in liability for nominal damages or other consequences even if the ground exists.

25. Due process in just cause dismissal is different

For dismissals based on employee fault, the employer must generally follow the two-notice rule and opportunity to be heard:

notice to explain
hearing or meaningful opportunity to respond
notice of decision

This is different from authorized cause termination, which uses the 30-day notice framework.

26. Is managerial status relevant?

Managerial employees are not excluded from separation pay rights where the law grants them. If a managerial employee is terminated for authorized cause, the relevant authorized-cause rules still apply unless a specific exception exists.

However, managerial employees are often involved in cases of loss of trust and confidence, where just-cause dismissal usually defeats a claim for separation pay.

27. Is union membership relevant?

Union membership does not reduce separation pay rights. In fact, unions may improve them through a collective bargaining agreement.

A CBA may provide:

higher separation pay
retirement benefits
special shutdown benefits
resignation benefits
enhanced redundancy packages

Where a CBA provides better terms than the Labor Code minimum, the more favorable benefit generally prevails.

28. Company policy and practice

Even when not required by the Labor Code, separation benefits may become enforceable because of:

written HR manuals
employee handbooks
retirement or severance plans
board resolutions
repeated company practice consistently applied over time

If an employer has long and consistently granted a benefit, employees may argue it has ripened into a demandable company practice.

29. Tax treatment

The tax treatment of separation pay can be highly technical.

Some separation benefits may be treated favorably for tax purposes depending on:

whether they arise from involuntary separation
cause of separation
retirement law provisions
BIR rules and thresholds

This area is rule-driven and should be checked carefully in actual implementation, especially for payroll processing and quitclaim documentation.

30. Quitclaims and waivers

Employers often require employees receiving final pay or separation pay to sign:

quitclaims
waivers
release documents

Are quitclaims valid?

They are not automatically invalid, but they are scrutinized closely.

A quitclaim may be upheld if:

it was voluntary
the consideration was reasonable and credible
there was no fraud, coercion, or deception
the employee understood the waiver

But quitclaims that are unconscionable, forced, or grossly unfair may be set aside.

An employee should not assume that signing a quitclaim always destroys all legal remedies. Courts examine the circumstances.

31. Can separation pay be offset against liabilities?

Employers sometimes attempt to deduct losses, shortages, accountabilities, or unreturned property from the employee’s pay.

Deductions are tightly regulated. Not every alleged liability may lawfully be offset. The legality depends on:

employee authorization
due process
proof of accountability
labor standards rules on deductions
whether the amount is already liquidated and demandable

Improper deductions can create separate liabilities.

32. Timing of payment

Philippine labor regulations and advisories have addressed the release of final pay within a prescribed period in ordinary cases, subject to lawful deductions and completion of clearance processes that are not abusive.

Where separation pay forms part of final pay, unjustified delay can trigger disputes, complaints, and possible money claims.

33. Separation pay in insolvency or business distress

Where a company is in financial trouble, separation pay claims do not automatically disappear. The answer depends on:

whether the closure is truly due to serious losses
whether the law requires separation pay on the facts
corporate rehabilitation or insolvency rules
priority of claims principles in labor law and insolvency law

Labor claims are often given special legal protection, but actual recovery may still be affected by the employer’s assets and proceedings.

34. Illegal dismissal plus authorized cause defense

Some employers defend a dismissal by claiming redundancy, retrenchment, or closure only after the fact.

Labor tribunals look at:

the real reason for dismissal
timing
board approvals
notices
financial records
selection criteria
whether the authorized cause was genuine or fabricated

If the defense fails, the dismissal may be illegal and the employer may become liable for backwages and separation pay in lieu of reinstatement.

35. How employees are selected for retrenchment or redundancy

Even if redundancy or retrenchment is allowed, the employer must use fair and reasonable criteria in choosing who will be affected.

Common lawful criteria may include:

status
efficiency
seniority
physical fitness
age
less preferred alternatives
disciplinary record

What matters is that the criteria are objective, fair, and applied in good faith. Selection cannot be used to discriminate or retaliate.

36. What employees should examine in a separation package

An employee receiving or reviewing a separation package should check:

the stated ground for termination
whether it is an authorized cause, just cause, resignation, or project completion
whether the required notice was given
whether DOLE notice was served where required
length of service used in the computation
salary base used
inclusion of prorated 13th month pay
leave conversions
commissions or incentives due
tax handling
whether the quitclaim is fair
whether the amount matches the correct statutory rate
whether the employer is claiming serious losses and has proof

37. What employers should examine

Employers must ensure:

the chosen termination ground is factually correct
the ground fits the Labor Code category
supporting records exist
notices are timely and proper
the selection process is defensible
separation pay is correctly computed and documented
releases and quitclaims are not coercive
payroll and tax treatment are compliant

A weak paper trail often turns a supposedly valid termination into litigation risk.

38. Common misunderstandings

Misunderstanding 1: Every terminated employee gets separation pay

False. It depends on the legal basis.

Misunderstanding 2: Resignation automatically carries separation pay

False, unless contract, CBA, policy, or practice says so.

Misunderstanding 3: Closure always requires separation pay

False. Closure due to serious business losses generally does not.

Misunderstanding 4: Just cause dismissal always allows “humanitarian” separation pay

Not as a rule. That doctrine is limited and unreliable as a claim.

Misunderstanding 5: Final pay and separation pay are the same

False. Separation pay may be only one component of final pay.

Misunderstanding 6: Probationary or non-regular workers never get separation pay

False. They may, depending on the ground and actual status.

39. Sample computations

Example 1: Redundancy

Employee monthly salary: ₱25,000 Length of service: 7 years and 8 months

Redundancy rate: one month pay per year of service, or one month pay, whichever is higher. 7 years and 8 months becomes 8 years.

Separation pay = 8 × ₱25,000 = ₱200,000

Example 2: Retrenchment

Employee monthly salary: ₱20,000 Length of service: 3 years and 4 months

Retrenchment rate: one-half month pay per year of service, or one month pay, whichever is higher. 3 years and 4 months stays 3 years.

One-half month × 3 years = 1.5 months pay 1.5 × ₱20,000 = ₱30,000

Since ₱30,000 is higher than one month pay of ₱20,000, separation pay = ₱30,000

Example 3: Closure not due to serious losses

Employee monthly salary: ₱18,000 Length of service: 8 months

Closure rate: one-half month pay per year of service, or one month pay, whichever is higher. 8 months counts as 1 year.

One-half month × 1 year = ₱9,000 One month minimum = ₱18,000

Separation pay = ₱18,000

Example 4: Disease

Employee monthly salary: ₱30,000 Length of service: 10 years and 6 months

10 years and 6 months becomes 11 years.

One-half month × 11 = 5.5 months pay 5.5 × ₱30,000 = ₱165,000

Compare with one month minimum of ₱30,000. Separation pay = ₱165,000

40. Remedies when separation pay is denied or underpaid

An employee who believes separation pay is due may file the proper labor complaint or money claim before the appropriate labor authorities, typically involving the National Labor Relations Commission system through the Labor Arbiter, depending on the nature of the dispute.

Possible claims may include:

unpaid separation pay
illegal dismissal
backwages
damages
attorney’s fees in proper cases
correction of final pay computations

The remedy depends on whether the issue is:

only nonpayment of money,
validity of dismissal,
or both.

41. Prescription of claims

Labor claims are subject to prescriptive periods. Money claims arising from employer-employee relations generally prescribe within a statutory period under the Labor Code, while illegal dismissal claims are governed by a different period under civil law doctrine as applied in jurisprudence.

Because prescription issues can be outcome-determinative, delay can defeat otherwise valid claims.

42. Separation pay and seniority rights

In illegal dismissal cases, separation pay in lieu of reinstatement substitutes for the return to work that would otherwise restore seniority. In contrast, statutory separation pay for authorized causes ends the employment relationship lawfully and does not preserve ongoing seniority the way reinstatement does.

43. Interaction with service charges, commissions, and allowances

Whether these are included in computing “one month pay” may depend on:

whether they are fixed or variable
whether they are considered part of regular wage
contract wording
payroll treatment
jurisprudence on inclusions and exclusions

This is often disputed where employees receive mixed pay structures.

44. Separation pay in mergers, acquisitions, outsourcing, and contracting-out

Corporate restructuring can create difficult questions.

Merger or sale of business

Employees are not always entitled to separation pay merely because ownership changes. The answer depends on whether employment is actually terminated, whether the new employer absorbs the workforce, and whether a lawful authorized cause is invoked.

Outsourcing or contracting-out

If work is outsourced and employees are terminated due to redundancy or other authorized cause, separation pay rules may apply.

Asset sale versus stock sale

The legal effect on employment can differ significantly.

These transactions are fact-sensitive and often litigated.

45. Good faith matters

Across redundancy, retrenchment, and closure cases, good faith is essential.

Bad faith may be shown by:

targeting disfavored employees
creating fake positions or abolitions
claiming losses without records
announcing closure then reopening under another name with the same business
manipulating payroll or service records

A finding of bad faith can transform the case from valid termination into illegal dismissal or other liability.

46. Social justice does not erase legal requirements

Philippine labor law is protective of labor, but protection does not mean separation pay exists in every sympathetic case. Courts balance:

security of tenure
management prerogative
business survival
fairness
statutory text
due process

That is why the exact ground for separation remains decisive.

47. Core legal rules distilled

The most important rules are these:

Separation pay is not universal. It exists only where law, policy, contract, practice, CBA, or jurisprudence provides it.
Authorized causes are the main statutory source.
Redundancy and labor-saving devices usually carry the higher rate: one month pay per year of service, or one month minimum, whichever is higher.
Retrenchment, closure not due to serious losses, and disease usually carry the lower rate: one-half month pay per year of service, or one month minimum, whichever is higher.
Closure due to serious business losses generally does not require separation pay.
Voluntary resignation generally does not require separation pay.
Just-cause dismissal generally does not entitle the employee to separation pay.
Illegal dismissal can lead to separation pay in lieu of reinstatement, plus backwages, when reinstatement is no longer viable.
Notice and proof matter. Even a legally recognized ground can fail if badly documented or procedurally defective.
Company policy, CBA, or practice can improve on the Labor Code minimum.

48. Practical conclusion

Under Philippine labor law, separation pay is best understood not as a universal end-of-employment benefit, but as a legally conditioned severance entitlement. The pivotal question is always: why did the employment end?

If the employment ended because of a lawful authorized cause, separation pay is often mandatory, except notably in closure due to serious losses. If the employment ended through voluntary resignation, expiration of a valid project or fixed term, or dismissal for just cause, statutory separation pay is generally absent. If the employee was illegally dismissed, separation pay may arise not as a statutory termination benefit, but as a judicial substitute for reinstatement.

In practice, most separation pay disputes turn on four things:

the true reason for termination,
the employer’s evidence,
compliance with notice and due process,
and the correctness of the computation.

Because the topic sits at the intersection of statutory text, labor policy, and case law, the safest legal approach is always to classify the ground for severance first, then apply the correct rule, rate, and procedure.