Almirante: Company practice

Dominador Almirante
·3 min read

Respondent Juraldine N. Gerasmio (Juraldine) filed a complaint for illegal dismissal asking for separation pay, among other claims, against petitioner Italkarat 18 Inc. While he signed a resignation letter and quitclaim, it was upon the promise of Noel San Pedro, then officer-in-charge of petitioner, that he will be given a sum of P170,000. However, to his dismay he was later informed by San Pedro that he would be receiving only the amount of P26,901.34.

On the other hand, the petitioner alleged that Juraldine voluntarily resigned from his job. During the last year of his employment, he took leaves of absence in order to process his papers for a possible seaman’s job.

When the case reached the Court of Appeals (CA), it found that Juraldine’s resignation was not unconditional since he was demanding payment for his separation pay in accordance with the alleged company practice. The CA opined that Juraldine relied on San Pedro’s promise that he would be paid P170,000 if he would resign. The quitclaim will not serve as a bar to demand the promised amount.

Did the CA err?

Ruling: Yes.

As a general rule, the law does not require employers to pay employees that have resigned any separation pay, unless there is a contract that provides otherwise

or there exists a company practice of giving separation pay to resignees.

Aside from the contract, Juraldine alternatively argued that it was a company practice to give resignees separation pay. To prove his allegations, Juraldine relied on affidavits of two former employees of the company. The company, on the other hand, also presented affidavits of its own, accompanied with the final payslips of former employees who have resigned.

We have ruled that a company’s practice of paying separation pay to resignees must be proven to exist as this is an exception to the general rule that employees who voluntarily resign are not entitled to separation pay.

In this case, we agree with the National Labor Commission’s findings that there was no company practice. The evidence would show that the affidavits presented by Juraldine were made by former employees who were not in the same department or job position as him. While we cannot hastily conclude that the affiants are perjuring themselves (it may be possible that they were indeed given separation pay), these affidavits are not sufficient in proving that the company gives separation pay as a matter of practice especially given the evidence presented by the company, which paints a different picture.

We are inclined to give more weight to the company’s affidavits as these were accompanied by the final payslips of former employees who have resigned, especially considering that at the time of resignation of one of these former employees Gaylord Nebril occupied the same job position as Juraldine when the latter resigned, which is maintenance director. This is compared to the job positions of accountant and worker at the Lacquering and Wax Department held by Ms. Clarita A. Pangandayon and Ms. Evelyn A. Abella, respectively.

In conclusion, considering that there was no dismissal involved in this case as Juraldine voluntarily resigned from work, his claims arising from his complaint for illegal dismissal must be denied. This includes his claim for separation pay as he failed to prove his entitlement thereto, either via contract or company practice. (Italkarat 18 Inc. vs. Juraldine N. Gerasmio, G.R. 221411, Sept. 28, 2020).