RESPONDENT Leticia P. Perez was hired by petitioner Diliman Preparatory School as a teacher for elementary pupils. But after having committed an irregularity, she was suspended from work effective May 26, 1995 to June 11, 1995. On June 14, 1995, she tendered her resignation. She received all amounts due her under the Private Education Retirement Annuity.
Nothing was heard from her until she filed a complaint for separation benefits on June 15, 1998. She argued that she was constructively dismissed from employment and prayed that she be granted separation pay for her 23 years of service. She submitted an affidavit executed by one Teresita Limochin who attested that she (Limochin) received separation pay from the petitioner following her voluntary resignation.
The Labor Arbiter (LA), the National Labor Relations Commission (NLRC), and the Court of Appeals (CA) granted her claim for separation pay. Is the grant justified?
Ruling: No.
As a general rule, an employee who voluntarily resigns from employment is not entitled to separation pay, except when it is stipulated in the employment contract or collective bargaining agreement (CBA), or it is sanctioned by established employer practice or policy.
To be considered as a regular company practice, the employee must prove by substantial evidence that the giving of the benefit was done over a long period of time, and that it has been made consistently and deliberately.
In an effort to show that the school has a policy of granting separation pay to its employees who resigned, Perez submitted an Affidavit executed by Limochin, a co-teacher who received separation pay from the school despite having resigned from work.
A scrutiny of Limochin’s affidavit reveals that the school’s grant of separation benefits or financial assistance to her was an isolated act, not borne out by any established employer practice or policy. In fact, Limochin stated that she was made to choose either to voluntarily resign from work with payment of separation benefits or to face administrative proceedings, which may lead to termination, in view of her habitual absenteeism. Rather than face an investigation, Limochin chose the first option. Still, there is nothing in her affidavit that would disclose that the School granted her monetary benefits by virtue of an established practice or policy.
Besides, Limochin’s situation was different from Perez’s; aside from resigning three years after Perez did, the school gave Limochin a choice only because she faced the possibility of an eventual termination of employment, whereas Perez did not. In Chiang Kai Shek College v. Torres, 731 Phil. 177 (2014), the Court acknowledged that, a compromise agreement, which allows an employee facing an imminent dismissal to opt for honorable severance from employment, may be validly entered into between an employer and employee.
On this note, it is well to emphasize that not every employee who stands to lose his job for valid cause is entitled to receive separation pay or financial assistance from his/her employer. The Court distinguishes between an employee who deserves the same and one who does not; to merit the application of social justice and equity, such employee must not be dismissed by reason of serious misconduct or causes reflective of his lack of moral character. Otherwise, it will have the effect of rewarding rather than punishing the erring employee for his offense. The Court disagrees with the view of the labor tribunals and the CA relative to the award of separation benefits to Perez. They clearly overlooked the lack of substantial evidence proving that the school grants separation pay to all its employees who resigned; its one-time act of giving separation benefits or financial assistance to an employee could hardly be considered as a practice done consistently and deliberately over a long period of time. (Reyes, Jr., J., SC 2nd Division, Alicia M.L. Coseteng and Diliman Preparatory School vs. Leticia P. Perez, G.R. No. 185938, Sept. 6, 2017).