Separation pay

Dear Atty. Vlad,

I have been with a BPO company for 10 years. However, since I found a better paying job in another company, I decided to resign. When I was asking for my separation/resignation pay, my employer told me that I am not entitled to any separation pay because the Company does not have any policy of granting separation pay to resigning employees. Is my employer correct? I hope you can help me.

Catherine

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Dear Catherine,

From what you narrated, your Company has no policy regarding the grant of resignation (separation) pay to resigning employees. In the case of CJC Trading, Inc., et al., vs National Labor Relations Commission, Ricardo Ausan Jr. and Ernesto Alanan, G.R. No. 115884, 20 July 1995, the Supreme Court stated, viz:

“An employee who voluntarily resigns is not entitled to separation pay unless otherwise stipulated in an employment contract or collective bargaining agreement, or sanctioned by established employer practice or policy. The Labor Code is devoid of any provision which grants separation pay to employees who voluntarily resign. Neither was there anything in the record that shows that, in the instant case, there is a collective bargaining agreement or any other agreement or established company policy concerning the payment of separation pay to employees who resign.”

Since you did not mention that there was any stipulation in either your Employment Contract or in the Company Policy that resigning employees are entitled to resignation (separation) pay, pursuant to the above-cited Decision, you will not be entitled to payment of any resignation pay.

What you will be entitled to will only be your last pay or unpaid earned pay, proportionate 13th month pay and other accrued benefits like your earned leaves, if any.

I hope that I was able to help you based on the facts that you shared.

Atty. Vlad del Rosario