Separation Pay as a measure of Social Justice

May a validly dismissed employee be entitled to severance pay or financial assistance?

As a general rule, when the employee was terminated for any just cause enumerated under Article 282 of the Labor Code, he is not entitled to a separation pay.

However, when the court finds justification in applying the principle of social justice, then a validly dismissed employee may be given separation pay. Except when he was dismissed due to serious misconduct or that which reflects adversely his moral character.

In the case of PLDT v. NLRC, the private respondent was found guilty  for having demanded and received a certain amount in consideration of her promise to facilitate approval of applications for telephone installation. Here,  Supreme Court held that he is not entitled to financial assistance. It maintains that 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. It explains that the policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense. Compassion for the poor is an imperative of every humane society but only when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot be permitted to be refuge of scoundrels any more than can equity be an impediment to the punishment of the guilty. Those who invoke social justice may do so only if their hands are clean and their motives blameless and not simply because they happen to be poor. This great policy of our Constitution is not meant for the protection of those who have proved they are not worthy of it, like the workers who have tainted the cause of labor with the blemishes of their own character.

The Supreme Court had an occasion to answer the question whether the ruling likewise precludes the grant of separation pay when the employee is validly terminated from work on grounds laid down in Article 282 of the Labor Code other than serious misconduct in the case of Toyota Motor Phils. Corporation Workers Association v. NLRC. Here, Toyota dismissed Union members for allegedly participating in concerted actions in violation of its Code of Conduct and for serious misconduct under Article 282 of the Labor Code. The NLRC declared that the strikes staged by the Union as illegal. As well as the mass actions as illegal as it failed to comply with the procedural requirements of a valid strike under Article 263 of the Labor Code. Accordingly, the CA affirmed the NLRC's decision and reinstated the grant of severance compensation to the dismissed employees based on social justice on its later decision.

Unfortunately, the Supreme Court 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 strikes. It further explains that in addition to serious misconduct, in dismissals based on other grounds under Article 282 such as willful disobedience, gross and habitual neglect of duty, fraud or willful breach of trust, and commission of a crime against the employer or his family, separation pay should not be conceded to the dismissed employee. However, in analogous causes for termination like inefficiency, drug use, and others, the NLRC or the courts may opt to grant separation pay anchored on social justice in consideration of the length of service of the employee, the amount involved, whether the act is the first offense, the performance of the employee and the like.

Thus, on a recent case of Del Monte Fresh Produce Inc. v. Betonio, where the Respondent was the Senior Manager of the petitioner and was dismissed due to gross and habitual neglect of duties, and breach of trust and confidence. Notwithstanding the fact that the Supreme Court found out that he was validly dismissed, he was given financial assistance as a measure of social justice and equitable concession because Betonio's dismissal was not due to any act attributable to his moral character.

CASES: 

PLDT v. NLRC, G.R. No. L-80609, August 23, 1998, 164 SCRA 671

Toyota Motor Phils. Corporation Workers Association v. NLRC, G.R. Nos.  158798-99. October 19, 2007

Del Monte Fresh Produce Inc. v. Betonio, G.R. No. 223485, December 4, 2019