Labor Law, 2019 Bar — Question B.19-b

ESSAY

Because of dwindling sales and the consequent limitation of production, rumors were rife that XYZ, Inc. would reduce its employee force. The next day, the employees of XYZ, Inc. received a notice that the company will have a winding down period of 10 days, after which there will be a six (6)-month suspension of operations to allow the company to address its precarious financial position. On the fourth (4th) month of suspension of its operations, XYZ, Inc. posted an announcement that it will resume its operations in 60 days but at the same time announced that instead of closing down due to financial losses, it will retrench 50% of the work force. (b) Assuming that XYZ, Inc., instead of retrenchment, extended the suspension of its operations from six (6) months to eight (8) months, would the same be legally permissible? If not, what are the consequences? (2.5%)

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