‘Will I be entitled to separation pay if I resign?’

Dear PAO,
I AM an employee holding a key position with a trading company. I have committed an error in which the company claimed that might have led to losses to the company. I was told to provide a written explanation and to which I did. Upon meeting with the representative, is it better to voluntarily resign than be terminated or dismissed from service since they concluded that I am at fault. Will I be entitled to separation pay if I resign?
Thank you.
J.R

Dear J.R,
The Supreme Court in a plethora of cases 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 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, although he was lawfully dismissed, in case the employee is dismissed from the service on the basis of any of the authorized causes enumerated in Articles 283 and 284 of the Labor Code.

Under Article 283, the following are the authorized causes of employment termination:

1. Installation of labor-saving devices

2. Redundancy

3. Retrenchment to prevent losses

4. Closure or cessation of operation of the establishment or undertaking

In addition to the foregoing, under Article 284, the employee is entitled to separation pay when the employee has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as the health of his co-employees.

On the contrary, if the termination of the employment is based on a valid ground as those enumerated in Article 282 of the Labor Code, the employee is not entitled to separation pay.

Article 282 of the Labor Code provides, to wit:

“Art. 282. Termination by employer. – An employer may terminate an employment for any of the following just 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 representative; and

(e) Other causes analogous to the foregoing.”

Furthermore, as a general rule, an employee who voluntarily resigns from employment is not entitled to separation pay (Travelaire & Tours Corp. et. al. vs. National Labor Relations Commission, G.R. No. 131523, August 20, 1998).

Thus, if you will voluntarily resign from your present work, you will not be entitled to receive a separation pay. Nevertheless, you mentioned that the representative of your employer has advised you that it is better for you to voluntarily resign than to be terminated or dismissed from service. At this juncture, we are of the opinion that it would be best for you to weigh things whether you should resign from work or should remain in your employment with the threat that you will be terminated from service. You may take into consideration the circumstances of the charge against you by your employer that you have committed an error which may have resulted to the losses to the company. If you think that the said charge is supported by evidence and is one of those enumerated above which is considered as a just cause for you to be removed from service, then we enjoin you to have a word with your employer and request him that even if you resign from your employment, you will receive separation pay. This is sanctioned by the Supreme Court in the case of Candido Alfaro vs. Court Of Appeals, National Labor Relations Commission and Star Paper Corporation (G.R. No. 140812. August 28, 2001), where it recognized the right of the employer and the employee to enter into an agreement where employee would receive separation pay despite having resigned voluntarily. It was further elucidated in the said case that the terms and conditions they (employer and employee) both agreed upon constituted a contract freely entered into, which should be performed in good faith, as it constituted the law between the parties.

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 appreciation of the facts you provided us with. A different legal opinion may be given if other facts not included in your query will be discussed. –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