Compassionate justice

Is an employee who voluntarily resigns from employment entitled to separation pay? This is the question answered in this case of Ruel.

Ruel was originally employed in June 1963 as a machine operator by RMC, a company engaged in the business of manufacturing and selling PVC pipes owned and managed by Leon Yee. Over a period of 20 years, the company changed its name four times. Starting 1993 it was already operating under the name of YHG. Despite changes in the company name Ruel, remained in the employ of Mr. Yee.

On October 5, 1998, Ruel got sick and was confined at the hospital. After his recovery, because of his failing health, Ruel asked Mr. Yee that he be assigned to a lighter kind of work. Mr Yee however just told him to return to work. But instead of returning back, Ruel asked for his separation pay for the period from 1963 to 1999. Since Yee offered him the sum of P15,000 which corresponds to the period between 1993 and 1999 only when he worked with YHG, Ruel instead just filed a complaint for payment of separa-tion pay computed from his first day of employment in June 1963, and of service incentive leave for three years plus attorney’s fees.

On November 27, 2000, the Labor Arbiter (LA) rendered judgment in favor of Ruel granting him separation benefits of one month salary for every year of service from June, 1963 to October, 1998 or a total of P91,445 plus incentive leave in the amount of P3,015. This was affirmed by the National Labor Relations Commission (NLRC). Were the LA and the NLRC correct?

No. An employee is entitled to separation pay pursuant to Article 284 of the Labor Code if the employer terminates the services of an employee found to be suffering from any disease and whose continued employment is prohibited by law or prejudicial to his health as well as the health of the co-employees. Under Article 283, separation pay may also be given to the employee where there is illegal dismissal and reinstatement is no longer feasible. So it is the employer who terminates the services. It does not contemplate a situation where it is the employee who voluntarily resigns or severs his/her employment ties. 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 employer practice or policy or when the court allows separation pay as a measure of social justice.

In this case it was Ruel the employee who initiated the severance of his employment with Mr. Yee. The latter did not terminate the employment of Ruel. In fact he rejected Yee’s offer for him to return to work which is tantamount to resignation. So he is not entitled to separation pay under the provisions of the Labor Code.

However taking into consideration the factual circumstance obtaining in the present case Ruel is entitled to some kind of financial assistance as a matter of social and compas-sionate justice. He has been in the employ of Yee for more than 35 years. While, the name of the company has changed four times, the present company YHG is not distinct from its predecessors but in fact merely continued the operation of the latter under the same owner and the same business venture. Hence Ruel should be paid P50,000 as fi-nancial assistance (Villaruel vs. Yeo Han Guan etc. R.R. 169191, June 1, 2011). –Jose C. Sison (The Philippine Star)

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E-mail at: jcson@pldtdsl.net