Company practice
To be considered a company practice, the giving of the benefits should have been done over a long period of time, and must be shown to have been consistent and deliberate.
Petitioner Jude Darry A. del Rio was an employee of respondent DPO Philippines Inc. (DPO). On Sept. 7, 2009, he submitted his notice of resignation to take effect on Oct. 7, 2009. On Sept. 14, 2009, respondent DPO accepted his resignation.
On Oct. 9, 2009, petitioner filed a complaint against DPO for payment of his salary from Sept. 16, 2009 to Oct. 7, 2009, accrued leave credits and separation pay.
The Court of Appeals (CA) affirmed with modification the decision of the National Labor Relations Commission (NLRC) by deleting the award of separation pay, ratiocinating that an employee who voluntarily resigns from his employment is not entitled to separation pay unless otherwise stipulated in the employment contract or in the collective bargaining agreement (CBA), or sanctioned by established employer practice or policy.
In justifying his claim for separation pay, petitioner cited as a precedent the payment of separation pay to co-employees Michael Legaspi and Felinio Martinez, who like him, also resigned from DPO.
Does this claim find merit?
Ruling: No.
To be considered a company practice, the giving of the benefits should have been done over a long period of time, and must be shown to have been consistent and deliberate.
As records would show, the giving of the monetary benefit by respondents in favor of Legaspi and Martinez is merely an isolated instance. From the beginning of respondents’ business and up until petitioner’s resignation took effect on Oct. 7, 2009, there was no showing that payments of such benefit had been made by respondents to their employees who voluntarily resigned.
The first and only instance when such a benefit was given to resigned employees was on or after Nov. 15, 2009—not because it was a company practice, but only to pave the way for Legaspi and Martinez’s graceful exit, so to speak.
As explained by respondents, the said benefit was not intended as a separation pay but more of a promise or an assurance to Legaspi and Martinez that they would be paid a benefit if they tendered their resignation.
Given respondents’ knowledge of Legaspi and Martinez’s acts of disloyalty and betrayal of trust, respondents opted to give them an alternative way of exit, in lieu of termination.
Respondents’ decision to give Legaspi and Martinez a graceful exit is perfectly within their prerogative. It is settled that there is nothing reprehensible or illegal when the employer grants the employee a chance to resign and save face rather than smear the latter’s employment record.
Relying on respondents’ assurance, Legaspi and Martinez tendered their resignation and it is incumbent upon respondents to make good of their promise. As held in Alfaro v. Court of Appeals, an employer who agrees to expend such benefit as an incident of the resignation should not be allowed to renege in the performance of such commitment. And true enough, after Legaspi and Martinez resigned, they were paid the promised benefit.
This was not the case for petitioner. There was no promise given to him.
Rather, petitioner resigned on his own volition. Respondents did not make any commitment to petitioner that he would be paid after his voluntary resignation.
Based on the foregoing, it becomes all too apparent that the CA committed no reversible error in issuing the assailed decision and ruling that petitioner voluntarily resigned from his employment. Thus, the granting of separation pay in his favor has no basis in law and jurisprudence, and must be deleted. ( Jude Darry A. Del Rio vs. DPO Philippines, Inc., et.al., G.R. No. 211525, December 10, 2018).