• When termination of services is illegal

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    Persida Acosta

    Dear PAO,
    I would like to inquire about my entitlement to separation pay. I was employed by my former employer for almost two years when I was terminated two months ago for no apparent reason at all. Am I entitled to separation pay?
    Andrew

    Dear Andrew,
    Being employed for more than a year, it is safe to assume that you were a regular employee prior to the severance of your employment. As such, the same cannot be terminated by your employer without cause as provided by law. As can be deduced from your letter, your termination was illegal considering that the same was done without any justifiable reason or cause allowed by law. According to the Labor Code of the Philippines, an employee who was illegally terminated from work is entitled to full backwages and reinstatement without loss of seniority rights and other benefits. This is according to Article 279 of the law, which provides:

    “Article 279. Security of tenure. – In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.”

    Separation pay is not mentioned in the above provision. Nevertheless, in cases where reinstatement is no longer possible because of the strained relationship or the tension created between the employer and the employee brought about by the illegal dismissal, there are cases decided by the Supreme Court involving the award of separation pay instead of reinstatement. One is the case of Golden Ace Builders vs. Jose A. Talde (G.R. No. 187200, May 5, 2010; ponente: former Associate Justice Conchita Carpio-Morales) wherein the Supreme Court enunciated the following:

    “[T]he award of separation pay is inconsistent with a finding that there was no illegal dismissal, for under Article 279 of the Labor Code and as held in a catena of cases, an employee who is dismissed without just cause and without due process is entitled to backwages and reinstatement or payment of separation pay in lieu thereof:

    “Thus, an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. The two reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and backwages.

    “The normal consequences of respondents’ illegal dismissal, then, are reinstatement without loss of seniority rights, and payment of backwages computed from the time compensation was withheld up to the date of actual reinstatement. Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for every year of service should be awarded as an alternative. The payment of separation pay is in addition to payment of backwages.” (Emphasis, italics and underscoring supplied)

    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 guide you with our opinion on the matter.

    Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net

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