• Resigned employee is not entitled to a separation pay


    Persida Acosta

    Dear PAO,
    Romeo is one of the route salesmen in a company where I am working as supervisor. He suffered A heart ailment in February this year, so he applied for sick leave. After recuperating from his illness, he reported to work and I asked him if he has a medical certificate that he is fit for work. Maybe he did not take my question lightly and he answered, “I do not want to work anymore, sir. I am already tired.” Then, he drafted a resignation letter and submitted it to the HR officer. I offered that he will serve as clerk for the meantime, but he refused and left the company premises. Last week, Romeo called up. He was demanding for his separation pay. According to him, he was unjustly dismissed. Is Romeo entitled to separation pay?

    Dear Arnulfo,
    Pursuant to Article 282 of Presidential Decree No. 442, as amended, “an employer may terminate an employment for any of the following causes:

    “a. Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;

    b. Gross and habitual neglect by the employee of his duties;

    c. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;

    d. Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and

    e. Other causes analogous to the foregoing.”

    The other just causes for termination are as follows: closure of establishment and reduction of personnel (Article 283, Id.) and disease (Article 284, Id.). If the ground relied upon by the employer is not one among those enumerated, then the dismissal is unjust or illegal.

    In the instant case, Romeo was not dismissed from work but he voluntarily resigned. In Villaruel vs Guan (GR No. 169191, June 1, 2011), the Supreme Court, through Associate Justice Diosdado M. Peralta ruled that:
    “Resignation is defined as the voluntary act of an employee who finds himself in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service and he has no other choice but to disassociate himself from his employment.

    It may not be amiss to point out at this juncture that aside from Article 284 of the Labor Code, the award of separation pay is also authorized in the situations dealt with in Article 283 of the same Code and under Section 4 (b), Rule I, Book VI of the Implementing Rules and Regulations of the said Code where there is illegal dismissal and reinstatement is no longer feasible. By way of exception, this Court has allowed grants of separation pay to stand as ‘a measure of social justice’ where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. However, there is no provision in the Labor Code which grants separation pay to voluntarily resigning employees. In fact, the rule is that an employee who voluntarily resigns from employment is not entitled to separation pay, except when it is stipulated in the employment contract or CBA, or it is sanctioned by established employer practice or policy. In the present case, neither the abovementioned provisions of the Labor Code and its implementing rules and regulations nor the exceptions apply because petitioner was not dismissed from his employment and there is no evidence to show that payment of separation pay is stipulated in his employment contract or sanctioned by established practice or policy of herein respondent, his employer.”

    Applying the said decision, a resigned employee like Romeo is not entitled to a separation pay unless there is a stipulation in the contract of employment he signed with the company or collective bargaining agreement (CBA).
    Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.

    We hope that we were able to enlighten you on the matter.


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