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AFTER GETTING DOLI’S OK Troubled companies can lay off workers
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Posted on Jun 08 1999
In distress firms who failed to include in the work contracts of their nonresident workers a provision which would allow them to terminate employment due to economic hardship may seek an amendment with the Department of Labor and Immigration.
According to David A. Wiseman, chairman of the Government Relations Committee, DOLI regulation provides that employers are not liable to pay nonresident workers when they are dismissed while their contract is in effect if such provision is included in the terms and conditions of employment.
However, if the employment contract does not provide for such eventuality then employers must pay its workers equivalent to the salaries that the latter should be getting if still employed.
Currently, the contract form that DOLI provides to employers does not have that clause but only provides that “cessation of business activities or bankruptcy,” as grounds for termination.
Wiseman said that laying off of employees based on the slowdown of some type of business activity could qualify as a cessation of business activity or facility, and consequently, an approved termination of a contract.
The tourism industry has been severely affected by the financial crisis that has swept across Asia, and HANMI has expressed fears of possible closure of some hotels due to the continuous downtrend in tourist arrivals.
Gov. Pedro P. Tenorio had received a deluge of requests from various businesses in the island which have been incurring huge losses due to the current decline in the island’s economy.
Almost 1,000 businesses have closed down as a result of the deepening financial crisis in Asia and many establishments have reduced the number of manhours and workforce in order to survive.
The hotel industry has sought a five percent reduction in room tax and a cut in bar tax. They have also asked the governor to give them tax credits as incentive to spend more money in promoting the Northern Marianas as a tourist destination.
Most of the hotels have made substantial cuts in room rates to attract more guests and compete in the shrinking tourism market. Hotel occupancy has plunged by 50 percent and some hotels have shut down a number of floors or converted them into barracks.
