Who gets separation pay?

Dear PAO,

I recently resigned from my previous employer after almost 10 years of service because of the delay in my salary increase due to promotion. I was promised that I would be promoted as assistant fleet manager in November 2008. I went through the necessary procedure to earn my promotion that came in March 2009, almost five months after it was promised to me. Based on company manual, it should only be three months.

I tendered my resignation on March 16, which was to take effect a month later on April 16. However, I was ordered by the head of the department not to report for work on the night of March 18. He told my boss that I should leave my table because my service was terminated. The next day, I was not allowed to enter the building but with the help of my boss, I was able to render my turnover list in the last two days of that week.

March 20 was my last day of work.

After returning all company properties, I inquired from the company’s human resource head what was be due to me since I resigned. I was told I would not be given a separation pay and any increase because of my promotion since it did not take effect (although technically it did). I also learned that the management has been saying negative things about me and my work.

Am I entitled to a separation pay and the promotion that was not given to me?

Hazel L. L.

Dear Hazel,

Separation pay is defined as the amount that an employee receives at the time of his severance from the service and is designed to provide the employee with the wherewithal during the period that he is looking for another employment. It is also settled that separation pay may be awarded as a measure of social justice in those instances where the employee is validly dismissed but for causes other than serious misconduct or those involving moral turpitude.

An employee is entitled to separation pay only in cases such as installation of labor- saving devices, redundancy, retrenchment to prevent losses, closing or cessation of operation of the establishment or in case the employee is found to have been suffering from a disease such that his continued employment is prohibited by law.

Furthermore, the Supreme Court has constantly ruled that where the strained relationship of the employer and employee renders the continued working relationship between them unfeasible and reinstatement impractical, there is rationale for an award of separation pay.

At the outset, you are not entitled to receive separation pay since you tendered your resignation last March 16, 2009, which took effect a month later or on April 16, 2009.

The notification requirement of 30 days under the Labor Code was devised in order to ensure that no disruption of work would be involved by reason of the resignation. Thus, the rule of requiring an employee to stay or complete the 30-day period prior to the effectivity of his resignation becomes discretionary on the part of management.

Your employer through the head of your department opted not to require you to complete your 30-day notice.

Hence, on account of your voluntary resignation, you are not entitled to separation pay, except when there is a stipulation for payment of such in the employment contract or Collective Bargaining Agreement, or payment of the amount is sanctioned by established employer practice or policy.

And you may not claim the promotion that was promised to you, particularly the increase of your salary.

It is a well-settled rule that labor laws do not authorize interference with the employer’s judgment in the conduct of his business. The employer is free to determine, using his own discretion and business judgment, all elements of employment, “from hiring to firing,” except in cases of unlawful discrimination or those that may be provided for by law.

It may be that your promotion was withheld for reasons known only to the management, which may not be questioned absent clear showing of abuse of discretion on their part.

It follows that you cannot ask for the salary increase you are expecting on account of your promotion since the same is not legally demandable.

We hope that we were able to enlighten you on the matter. Please take note however, that all the information contained herein are based on our appreciat–Persida Acosta, Manila Times

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 or via text message (key in: Times dearpao <YOUR QUESTION> and send to 2299).