Separation pay by way of financial assistance - G.R. No. 155109

G.R. No. 155109

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Separation pay may be given as a form of financial assistance when a worker is dismissed in cases such as the 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.[36]  It is a statutory right 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.[37] It is oriented towards the immediate future, the transitional period the dismissed employee must undergo before locating a replacement job.[38] As a general rule, when just causes for terminating the services of an employee exist, the employee is not entitled to separation pay because lawbreakers should not benefit from their illegal acts.[39] The rule, however, is subject to exceptions.[40] The Court, in Philippine Long Distance Telephone Co. v. NLRC,[41] laid down the guidelines when separation pay in the form of financial assistance may be allowed, to wit:

We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice.

A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding rather than punishing the erring employee for his offense. And we do not agree that the punishment is his dismissal only and that the separation pay has nothing to do with the wrong he has committed x x x.[42]  

          We had the occasion to resolve the same issue in Toyota Motor Phils. Corp. Workers Association (TMPCWA) v. National Labor Relations Commission.[43] Following the declaration that the strike staged by the Union members is illegal, the Union officers and members were considered validly dismissed from employment for committing illegal acts during the illegal strike. The Court affirmed the CA’s conclusion that the commission of illegal acts during the illegal strike constituted serious misconduct.[44] Hence, the award of separation pay to the Union officials and members was not sustained.[45]  

          Indeed, we applied social justice and equity considerations in several cases to justify the award of financial assistance. In Piñero v. National Labor Relations Commission,[46] the Court declared the strike to be illegal for failure to comply with the procedural requirements. We, likewise, sustained the dismissal of the Union president for participating in said illegal strike. Considering, however, that his infraction is not so reprehensible and unscrupulous as to warrant complete disregard of his long years of service, and considering further that he has no previous derogatory records, we granted financial assistance to support him in the twilight of his life after long years of service.[47] The same compassion was also applied in Aparente, Sr. v. NLRC[48] where the employee was declared to have been validly terminated from service after having been found guilty of driving without a valid driver’s license, which is a clear violation of the company’s rules and regulations.[49] We, likewise, awarded financial assistance inSalavarria v. Letran College[50] to the legally dismissed teacher for violation of school policy because such infraction neither amounted to serious misconduct nor reflected that of a morally depraved person.  

          However, in a number of cases cited in Toyota Motor Phils. Corp. Workers Association (TMPCWA) v. National Labor Relations Commission,[51] we refrained from awarding separation pay or financial assistance to Union officers and members who were separated from service due to their participation in or commission of illegal acts during the strike.[52]  In Pilipino Telephone Corporation v. Pilipino Telephone Employees Association (PILTEA),[53] the strike was found to be illegal because of procedural infirmities and for defiance of the Secretary of Labor’s assumption order. Hence, we upheld the Union officers’ dismissal without granting financial assistance. InSukhotai Cuisine and Restaurant v. Court of Appeals,[54] and Manila Diamond Hotel and Resort, Inc. (Manila Diamond Hotel) v. Manila Diamond Hotel Employees Union,[55] the Union officers and members who participated in and committed illegal acts during the illegal strike were deemed to have lost their employment status and were not awarded financial assistance.

         

In Telefunken Semiconductors Employees Union v. Court of Appeals,[56] the Court held that the strikers’ open and willful defiance of the assumption order of the Secretary of Labor constitute serious misconduct and reflective of their moral character, hence, granting of financial assistance to them cannot be justified. In Chua v. National Labor Relations Commission,[57] we disallowed the award of financial assistance to the dismissed employees for their participation in the unlawful and violent strike which resulted in multiple deaths and extensive property damage because it constitutes serious misconduct on their part.

          Here, not only did the Court declare the strike illegal, rather, it also found the Union officers to have knowingly participated in the illegal strike. Worse, the Union members committed prohibited acts during the strike. Thus, as we concluded in Toyota, Telefunken, Chua and the other cases cited above, we delete the award of separation pay as a form of financial assistance.

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