Almirante: Entitlement to separation pay

Dominador A. Almirante

PETITIONER Rey Ben P. Madrio was formerly the area sales manager of respondent Atlas Fertilizer Corp. (AFC) until he tendered his resignation, which however, was not shown to have been approved by the company. He requested payment of several monetary benefits, but the same remained unheeded.

Aggrieved, petitioner filed a complaint against AFC for the payment of several monetary benefits. Among others, he claimed that he was entitled to his separation benefits pursuant to AFC’s retirement/separation policy.

For its part, AFC categorically denied that the retirement plan is the retirement/separation policy it had for its employees. In any event, it argued that it would be unreasonable for it to pay separation benefits to petitioner who was solely responsible in causing the company a whopping financial loss of P43,023,550.21 attributed to his gross negligence in the handling of uncollected receivables from Richfield Agri-Supply (RAS). It further averred that the disciplinary proceeding against petitioner was only deferred out of human consideration. He was given the chance to redeem himself, but he just unceremoniously left the company without obtaining any clearance or permission from the management.

Are AFC’s arguments meritorious?

Ruling: Yes.

In light of these special conditions, it is fairly apparent that the separation benefits under the retirement plan are not in the nature of benefits incurred in the normal course of AFC’s business, such as salary differentials, service incentive leave pay or holiday pay. As such, the burden is on the employee to prove his entitlement thereto; failing in which, the latter should not be paid the same.

In this case, petitioner only submitted a copy of the retirement plan as proof of his entitlement to the separation benefits claimed. However, by and of itself, the said document only proves what the retirement/separation policy of AFC is. It does not, in any way, demonstrate that the conditions for entitlement had already been met by the employee.

Most glaring of all is the failure of petitioner to at least, prima facie show that he had no derogatory record before voluntarily resigning from the company. As indicated in AFC’s March 20, 2016 reply-letter, AFC was still dealing with the P43,023,550.21 financial loss from the RAS account based on petitioner’s alleged gross negligence at the time he abruptly “resigned” from the company. While the records do not show that petitioner was disciplined for such infraction, AFC claims that “due to petitioner’s unceremonious resignation, it was no longer able to conduct disciplinary proceedings and/or administrative hearings in relation to petitioner’s nonfeasance. It might even be safe to say that petitioner resigned just to preempt AFC from instituting disciplinary proceedings against him.” As such, it cannot be said that petitioner has no derogatory record with the company. Hence, unless proven otherwise, petitioner is not qualified to claim separation benefits from AFC.

Moreover, petitioner’s claim for separation benefits appears to be premature. It is undisputed that petitioner left the company while his separation benefits were still being processed and yet to be approved by the retirement committee pursuant to the “company’s normal operating procedure.” This is clear from the March 20, 2016 reply-letter, which contrary to the findings of the labor tribunals, was not an admission of liability but, quite the contrary, an assertion that petitioner’s claim for separation benefits was still subject to a contingency, i.e., the approval by the Retirement Committee. (Rey Ben P. Madrio vs. Atlas Fertilizer Corp., G.R. 241445, August 14, 2019).