Resigning worker seeking separation pay

PERSIDA ACOSTA

Dear PAO,
I have been working in a company for 10 years now. I have SSS and Philhealth. My problem is until now the policy of this company is “no work no pay.” Because of that, I want to look for another job. If I am going to resign from the company, can I get a separation pay? Thank you.

AH Dear AH,
At the outset, we find it necessary to discuss the concept of separation pay in order for us to answer your query as to whether you are entitled to it when you resign from your work.

In one case, the Supreme Court has enunciated that a separation pay is 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 a 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.

Also, the Labor Code requires a valid cause to terminate an employment. No valid cause, no termination. If such cause exists, termination may properly be done and no separation pay need be paid. This is the general rule now with regard to separation pay. (The Labor Code with Comments and Cases, Volume II, Revised Edition 1996, page 759, C. A. Azucena Jr.)

An employee is entitled to a separation pay only, although he was lawfully dismissed, 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 was found to have been suffering from a disease such that his continued employment is prohibited by law. (Articles 283 and 284, Labor Code)

Consequently, an employee who voluntarily resigns from employment is not entitled to a separation pay. However, there may be a separation pay where there is a stipulation for payment of such in the employment contract or collective bargaining agreement (CBA), or payment of the amount is sanctioned by established employer practice or policy.  (Travelaire & Tours Corp. et. al. v National Labor Relations Commission, GR 131523, August 20, 1998)
Thus, you are not entitled to receive a separation pay if you will resign from your work except when there is a stipulation for payment of such in your employment contract or CBA, or payment of the said amount is sanctioned by established employer practice or policy.

Before we end, we would like to stress that even if you will look for another job, the same policy of “no work, no pay” shall be enforced. This is for the simple reason that the age-old rule governing the relation between labor and capital, or management and employee, of a “fair day’s wage for a fair day’s labor” remains as the basic factor in determining employees’ wages. If there is no work performed by the employee, there can be no wage or pay—unless, of course, the laborer was able, willing and ready to work but was illegally locked out, suspended or dismissed or otherwise illegally prevented from working. (Bernardino V. Navarro v P.V. Pajarillo Liner Inc., GR 164681, April 24, 2009).

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

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