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Employee’s length of service refers to the duration of time that the employee has been under the employ of the same employer or company. NLRC.) The reason for the employee’s separation from service is an important factor in the computation of separation pay.

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But, if the reduction of salary was made to circumvent the provision of the Labor Code, that is, to avoid payment of higher separation pay, the salary rate before the reduction shall be used in the computation of separation pay.

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The amount of separation pay under the Labor Code depends on the following factors: The employee’s last salary refers to the salary rate of the employee at the time of his termination from service.

It determines the based to be used in the computation of separation pay.