Almirante: Separation pay

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Friday, April 11, 2014

SOMETIME in May 1993, petitioner Reynaldo Hayan Moya was hired by respondent First Solid Rubber Industries, Inc., which manufactured tires and rubber. The last position he held was head of the Tire Curing Department.

On Oct. 15, 2004, he reported an incident about an undercuring of tires in his department, which led to the damage of five tires. He stated that the damage was caused by machine failure. Respondent, however, found out about his willful intention to cancel the truth or cover up the mistake of a subordinate, Melandro Autor, a
machine operator, who failed to properly operate the machine.

In a case for illegal dismissal and money claims filed by Moya against respondent, both the labor arbiter and the National Labor Relations Commission (NLRC) found sufficient and valid grounds to dismiss him but still granted an award for separation pay in lieu of reinstatement.


The Court of Appeals (CA) modified the decision of the NLRC by deleting the award for separation pay. Did the CA err?

Supreme Court (Second Division) ruling: No.

The petitioner is not entitled to separation pay. Payment of separation pay cannot be justified by his length of service.

It must be stressed that Moya was not an ordinary rank-and-file employee. He was holding a supervisory rank, being the officer-in-charge of the Tire Curing Department.

The position, naturally one of trust, required of him abiding honesty as compared to ordinary rank-and-file employees. When he made a false report attributing the damage of five tires to machine failure, he breached the trust and confidence reposed upon him by the company.

x x x

As pronounced in the recent case of Unilever Philippines, Inc., v. Rivera, G.R. No. 201701, June 3, 2013, an employee who has been dismissed for any of the just causes enumerated under Article 282 of the Labor Code, including breach of trust, is not entitled to separation pay (Tirazona v. Philippine EDS Techno-Service, Inc. (PET, Inc.), G.R. No. 169712, Jan. 20, 2009, 576 SCRA 625, 628-629). This is further bolstered by Section 7, Rule I, Book VI of the Omnibus Rules Implementing the Labor Code which provides that:

Section 7: Termination of employment by employer. The just causes for terminating the services of an employee shall be those provided in Article 282 of the Code. The separation from work of an employee for a just cause does not entitle him to the termination pay provided in the Code, without prejudice, however, to whatever rights, benefits and privileges he may have under the applicable individual or collective agreement with the employer or voluntary employer policy or practice (Reynaldo Hayan Moya vs. First Solid Rubber Industries, Inc., G.R. No. 184011, Sept. 18, 2013).

Published in the Sun.Star Cebu newspaper on April 12, 2014.


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