Resignation, separation pay

Dear Atty. Joji,

I have been working as a supervisor in a call center for 12 years now and I can no longer stand the toxic environment in our office. I am very unhappy and I just want to leave by the end of this year. I am aware that the company does not have an early retirement program for loyal employees but I heard two of my former officemates were promised separation pay and were given when they resigned after more than 10 years. I want to know if I could also demand this so I can start anew with my life and use the money for a business. Please help.

Rita

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Dear Rita,

Unfortunately, when a company does not have an existing policy or Collective Bargaining Agreement or CBA on an early retirement program, an employee who tenders resignation will not be entitled to payment except for the final pay, 13th-month pay, and sick and vacation leave monetary conversions.

Under the Labor Code, an employee who voluntarily resigns from employment is not entitled to separation pay, except when it is stipulated in the employment contract or the CBA, or it is sanctioned by established employer practice or policy. Based on the facts you mentioned, there was no employment contract, much less a CBA, which contained the stipulation that would grant separation pay to resigning employees. Neither was there a company practice or policy that was proven to exist.

To clarify, severance pay under Art. 283 of the Labor Code only refers to the termination of employment due to retrenchment and cessation of operation not due to serious business losses or financial reverses. It does not refer to separation by reason of voluntary resignation. In fact, the rule is that an employee who voluntarily resigns from employment is not entitled to separation pay.

Regarding the promise to pay and the acceptance of separation pay by your two former officemates who resigned, the Supreme Court ruled in Del Rio v. DPO Philippines, Inc., G.R. 211525 (2018) that this is an exception. As the company expressly provided assurance to them, it had to make good on its promise. 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. It is only correct that they were paid based on the company's promised benefit.

However, this cannot be applied in your case if there will be no promise or benefit given to you. If you resign out of your own volition and the company does not extend this incentive, you cannot demand any commitment of payment when you decide to resign.

Atty. Joji Alonso