The Philippine Court of Appeals has ruled that Melco Resorts Leisure Corporation must compensate 26 former employees of City of Dreams Manila, following what the court deemed a procedural violation in the company’s 2020 pandemic-related layoffs.
The Philippine Court of Appeals has ruled that Melco Resorts Leisure Corporation must compensate 26 former employees of City of Dreams Manila, following what the court deemed a procedural violation in the company’s 2020 pandemic-related layoffs.
In a 38-page decision issued by the Court’s Third Division on September 12, judges confirmed that while Melco’s decision to downsize during the COVID-19 crisis was economically justified, the company failed to meet a key legal requirement: providing affected employees with 30 days’ written notice prior to termination.
Legal Layoffs, But Procedural Misstep
The court acknowledged that the layoffs were a response to the unprecedented closure of entertainment venues and declining revenues during the pandemic — conditions which justified Melco’s downsizing. However, it ruled that lawful justification does not excuse employers from complying with procedural safeguards enshrined in labor law.
The judgment awards each of the 26 former employees PHP 30,000 (approximately USD 525) in nominal damages, totaling PHP 780,000 (USD 13,700). The court did not order reinstatement or back wages, citing the absence of malicious intent on Melco’s part.
Clarifying Employer Obligations During Crisis
Legal experts say the ruling sets an important precedent. “Even when layoffs are justified, companies must still respect due process rights,” said a Manila-based labor attorney. “Advance notice isn’t just a formality — it’s a fundamental right of employees under Philippine law.”
Melco did not dispute the occurrence of the layoffs but argued that they were necessary for business continuity during the pandemic. The court agreed on the necessity but emphasized that failure to notify constituted a clear violation.
Strategic Exit from City of Dreams Manila
The ruling comes as Melco is reportedly seeking to divest its stake in City of Dreams Manila, aligning with its broader shift toward a “light asset” strategy. The resort, located in Parañaque’s Entertainment City, is a joint venture between Melco and local property firm Belle Corp.
Melco previously disclosed it is in talks with multiple potential buyers and has curated a shortlist of interested parties.
Industry Faces Headwinds
The Philippines’ land-based gaming sector has struggled in 2025. The decline of the POGO (Philippine Offshore Gaming Operator) industry and a drop in Korean tourist arrivals have contributed to a 5.9% year-on-year decrease in gross gaming revenue (GGR), which fell to PHP 93.4 billion (USD 1.65 billion) in the first half of the year.
