Estrellita Aguilar vs. National Labor Relations Commission, G.R. No.

100878, 2 December 1992

We agree with the NLRC that the acts of herein complainant in

defiantly disobeying the rules of the company even after
investigation, shows her cavalier attitude which leaves the
management no other recourse but to terminate her services. To
condone such conduct will certainly erode the discipline that an
employer would uniformly enforce so that it can expect compliance
with said rules and regulations by its other employees. Otherwise the
rules necessary and proper for the operation of its business would be
rendered ineffectual. 12 An employer cannot legally be compelled to
continue with the employment of a person who admittedly was guilty
of misfeasance or malfeasance towards his employer, and whose
continuance in the service of the latter is patently inimical to his
interests. 13

With regards to the award of financial assistance to petitioner, We

find that the same is not justified. Petitioner’s willful disobedience of
the orders of her employer constitutes serious misconduct. As We
held in the case of Del Monte Phils., Inc. v. NLRC, 14 "henceforth
separation pay shall be allowed as a measure of social justice only in
those instances where the employee is validly dismissed for causes
other than serious misconduct or those reflecting on his moral
character." Hence, the employer, CLUB, may not be required to give
the petitioner separation pay, or financial assistance, or whatever
other name it is called, on the ground of social justice.

Philippine Long Distance Company vs. The National Labor Relations

Commission and Marilyn Abucay, G.R. No. 80609, 23 August 1988

There should be no question that where it comes to such valid but

not iniquitous causes as failure to comply with work standards, the
grant of separation pay to the dismissed employee may be both just
and compassionate, particularly if he has worked for some time with
the company. For example, a subordinate who has irreconcilable
policy or personal differences with his employer may be validly
dismissed for demonstrated loss of confidence, which is an allowable
ground. A working mother who has to be frequently absent because
she has also to take care of her child may also be removed because
of her poor attendance, this being another authorized ground. It is
not the employee's fault if he does not have the necessary aptitude
for his work but on the other hand the company cannot be required
to maintain him just the same at the expense of the efficiency of its
operations. He too may be validly replaced. Under these and similar
circumstances, however, the award to the employee of separation pay
would be sustainable under the social justice policy even if the
separation is for cause.

But where the cause of the separation is more serious than mere
inefficiency, the generosity of the law must be more discerning. There
is no doubt it is compassionate to give separation pay to a salesman
if he is dismissed for his inability to fill his quota but surely he does
not deserve such generosity if his offense is misappropriation of the
receipts of his sales. This is no longer mere incompetence but clear
dishonesty. A security guard found sleeping on the job is doubtless
subject to dismissal but may be allowed separation pay since his
conduct, while inept, is not depraved. But if he was in fact not really
sleeping but sleeping with a prostitute during his tour of duty and in
the company premises, the situation is changed completely. This is
not only inefficiency but immorality and the grant of separation pay
would be entirely unjustified.

We hold that henceforth separation pay shall be allowed as a

measure of social justice only in those instances where the employee
is validly dismissed for causes other than serious misconduct or
those reflecting on his moral character. Where the reason for the valid
dismissal is, for example, habitual intoxication or an offense
involving moral turpitude, like theft or illicit sexual relations with a
fellow worker, the employer may not be required to give the dismissed
employee separation pay, or financial assistance, or whatever other
name it is called, on the ground of social justice.
Juliet G. Apacible vs. Multimed Industries Incorporated G.R. No.
178903, 30 May 2011

Reno Foods, Inc. v. Nagkakaisang Lakas ng Manggagawa (NLM))-

Katipunan16 explains the propriety of granting separation pay in
termination cases in this wise:

The law is clear. Separation pay is only warranted when the cause
for termination is not attributable to the employee’s fault, such as
those provided in Articles 283 and 284 of the Labor Code, as well as
in cases of illegal dismissal in which reinstatement is no longer
feasible. It is not allowed when an employee is dismissed for just
cause, such as serious misconduct.

xxxx

It is true that there have been instances when the Court awarded
financial assistance to employees who were terminated for just
causes, on grounds of equity and social justice. The same, however,
has been curbed and rationalized in Philippine Long Distance
Telephone Company v. National Labor Relations Commission. In that
case, we recognized the harsh realities faced by employees that forced
them, despite their good intentions, to violate company policies, for
which the employer can rightly terminate their employment. For
these instances, the award of financial assistance was allowed. But,
in clear and unmistakable language, we also held that the award of
financial assistance shall not be given to validly terminated
employees, whose offenses are iniquitous or reflective of some
depravity in their moral character. When the employee commits an
act of dishonesty, depravity, or iniquity, the grant of financial
assistance is misplaced compassion. It is tantamount not only to
condoning a patently illegal or dishonest act, but an endorsement
thereof. It will be an insult to all the laborers who despite their
economic difficulties, strive to maintain good values and moral
conduct.

In fact, in the recent case of Toyota Motors Philippines, Corp.

Workers Association (TMPCWA) v. National Labor Relations
Commission, we ruled that separation pay shall not be granted to all
employees who are dismissed on any of the four grounds provided in
Article 282 of the Labor Code. Such ruling was reiterated and further
explained in Central Philippines Bandag Retreaders, Inc. v. Diasnes:

To reiterate our ruling in Toyota, labor adjudicatory officials and the

CA must demur the award of separation pay based on social justice
when an employee’s dismissal is based on serious misconduct or
wilful disobedience; gross and habitual neglect of duty; fraud or wilful
breach of trust; or commission of a crime against the person of the
employer or his immediate family─grounds under Art. 282 of the
Labor Code that sanction dismissals of employees. They must be
most judicious and circumspect in awarding separation pay or
financial assistance as the constitutional policy to provide full
protection to labor is not meant to be an instrument to oppress the
employers. The commitment of the Court to the cause of labor should
not embarrass us from sustaining the employers when they are right,
as assistance to the undeserving and those who are unworthy of the
liberality of the law. (italics in the original, emphasis and
underscoring supplied)

Petitioner was, it bears reiteration, dismissed for wilfully disobeying

the lawful order of her employer to transfer from Cebu to Pasig City.
As correctly noted by the appellate court, petitioner knew and
accepted respondent company’s policy on transfers when she was
hired and was in fact even transferred many times from one area of
operations to another – Bacolod City, Iloilo City and Cebu.

Bascon v. Court of Appeals17 outlines the elements of gross

insubordination as follows:

As regards the appellate court’s finding that petitioners were justly

terminated for gross insubordination or wilful disobedience, Article
282 of the Labor Code provides in part:

An employer may terminate an employment for any of the following

causes:
(a) Serious misconduct or wilful disobedience by the employee of the
lawful orders of his employer or representative in connection with his
work.

However, wilful disobedience of the employer’s lawful orders, as a just

cause for dismissal of an employee, envisages the concurrence of at
least two requisites: (1) the employee’s assailed conduct must have
been wilful, that is, characterized by a wrongful and perverse
attitude; and (2) the order violated must have been reasonable,
lawful, made known to the employee and must pertain to the duties
which he had been engaged to discharge. (emphasis and
underscoring supplied)

Reno Foods Inc and Vicente Khu vs. Nagkakaisang Lakas ng

Manggagawa (NLM) G.R. No. 164016, 15 March 2010

The law is clear. Separation pay is only warranted when the cause
for termination is not attributable to the employee’s fault, such as
those provided in Articles 283 and 284 of the Labor Code, as well as
in cases of illegal dismissal in which reinstatement is no longer
feasible.22 It is not allowed when an employee is dismissed for just
cause,23 such as serious misconduct.

Jurisprudence has classified theft of company property as a serious

misconduct and denied the award of separation pay to the erring
employee.24 We see no reason why the same should not be similarly
applied in the case of Capor. She attempted to steal the property of
her long-time employer. For committing such misconduct, she is
definitely not entitled to an award of separation pay.

It is true that there have been instances when the Court awarded
financial assistance to employees who were terminated for just
causes, on grounds of equity and social justice. The same, however,
has been curbed and rationalized in Philippine Long Distance
Telephone Company v. National Labor Relations Commission.25 In
that case, we recognized the harsh realities faced by employees that
forced them, despite their good intentions, to violate company
policies, for which the employer can rightfully terminate their
employment. For these instances, the award of financial assistance
was allowed. But, in clear and unmistakable language, we also held
that the award of financial assistance shall not be given to validly
terminated employees, whose offenses are iniquitous or reflective of
some depravity in their moral character. When the employee commits
an act of dishonesty, depravity, or iniquity, the grant of financial
assistance is misplaced compassion. It is tantamount not only to
condoning a patently illegal or dishonest act, but an endorsement
thereof. It will be an insult to all the laborers who, despite their
economic difficulties, strive to maintain good values and moral
conduct.

In fact, in the recent case of Toyota Motors Philippines, Corp.

Workers Association (TMPCWA) v. National Labor Relations
Commission,1 we ruled that separation pay shall not be granted to
all employees who are dismissed on any of the four grounds provided
in Article 282 of the Labor Code. Such ruling was reiterated and
further explained in Central Philippines Bandag Retreaders, Inc. v.
Diasnes:2

To reiterate our ruling in Toyota, labor adjudicatory officials and the

CA must demur the award of separation pay based on social justice
when an employee’s dismissal is based on serious misconduct or
willful disobedience; gross and habitual neglect of duty; fraud or
willful breach of trust; or commission of a crime against the person
of the employer or his immediate family – grounds under Art. 282 of
the Labor Code that sanction dismissals of employees. They must be
most judicious and circumspect in awarding separation pay or
financial assistance as the constitutional policy to provide full
protection to labor is not meant to be an instrument to oppress the
employers. The commitment of the Court to the cause of labor should
not embarrass us from sustaining the employers when they are right,
as here. In fine, we should be more cautious in awarding financial

1 G.R. Nos. 158798-99, October 19, 2007, 537 SCRA 171, 219-223.
2 G.R. No. 163607, July 14, 2008, 558 SCRA 194, 207.
assistance to the undeserving and those who are unworthy of the
liberality of the law.

SUPRA MULTI-SERVICES, INC., JESUS TAMBUNTING, JR., AND

RITA CLAIRE T. DABU, vs. LANIE M. LABITIGAN G.R. No.
192297, 3 August 2016

We are not persuaded by Capor's argument that despite the finding

of theft, she should still be granted separation pay in light of her long
years of service with petitioners. We held in Central Pangasinan
Electric Cooperative, Inc. v. National Labor Relations Commission that:

Although long years of service might generally be considered for the

award of separation benefits or some form of financial assistance to
mitigate the effects of termination, this case is not the appropriate
instance for generosity x x x. The fact that private respondent served
petitioner for more than twenty years with no negative record prior
to his dismissal, in our view of this case, does not call for such award
of benefits, since his violation reflects a regrettable lack of loyalty and
worse, betrayal of the company. If an employee's length of service is
to be regarded as justification for moderating the penalty of
dismissal, such gesture will actually become a prize for disloyalty,
distorting the meaning of social justice and undermining the efforts
of labor to clean its ranks of undesirables.
Indeed, length of service and a previously clean employment record
cannot simply erase the gravity of the betrayal exhibited by a
malfeasant employee. Length of service is not a bargaining chip that
can simply be stacked against the employer. After all, an employer-
employee relationship is symbiotic where both parties benefit from
mutual loyalty and dedicated service. If an employer had treated his
employee well, has accorded him fairness and adequate
compensation as determined by law, it is only fair to expect a long-
time employee to return such fairness with at least some respect and
honesty. Thus, it may be said that betrayal by a long-time employee
is more insulting and odious for a fair employer. As stated in another
case:

xxx The fact that [the employer] did not suffer pecuniary damage will
not obliterate respondent's betrayal of trust and confidence reposed
by petitioner. Neither would his length of service justify his
dishonesty or mitigate his liability. His length of service even
aggravates his offense. He should have been more loyal to petitioner
company from which he derived his family bread and butter for
seventeen years.

While we sympathize with Capor's plight, being of retirement age and

having served petitioners for 39 years, we cannot award any financial
assistance in her favor because it is not only against the law but also
a retrogressive public policy. We have already explained the folly of
granting financial assistance in the guise of compassion in the
following pronouncements:

xxx Certainly, a dishonest employee cannot be rewarded with

separation pay or any financial benefit after his culpability is
established in two decisions by competent labor tribunals, which
decisions appear to be well- supported by evidence. To hold
otherwise, even in the name of compassion, would be to send a wrong
signal not only that "crime pays" but also that one can enrich himself
at the expense of another in the name of social justice. And courts as
well as quasi-judicial entities will be overrun by "* petitioners
mouthing dubious pleas for misplaced social justice. Indeed, before
there can be an occasion for compassion and mercy, there must first
be justice for all. Otherwise, employees will be encouraged to steal
and misappropriate in the expectation that eventually, in the name
of social justice and compassion, they will not be penalized but
instead financially rewarded. Verily, a contrary holding will merely
encourage lawlessness, dishonesty, and duplicity. These are not the
values that society cherishes; these are the habits that it abhors.
(Emphases supplied, citations omitted.)
Hence, respondent's length of service of 11 years at petitioner SMSI
did not mitigate, but even aggravated her offense, demonstrating, in
addition to her insubordination and dishonesty, her lack of loyalty.
It is likewise worthy to note that respondent, through her years of
employment, was charged with the commission of several other
transgressions, to wit: failing to regularly deduct from her salary the
payment for her cash advances which already amounted to
P64,173.83; leaving unused bank checks unattended on her desk
even though she was provided a safe/vault in which she was
supposed to keep all pertinent bank documents; leaving the
safe/vault unlocked; failing to submit reports on time; instructing
other people to punch in her time card several times; failing to hand
over the office keys to the guard on duty as company rules
prescribed; and having shortages in the payroll. These administrative
charges of previous acts of dishonesty or negligence form part of
respondent's employment record and which the petitioners could also
very well consider in finally deciding to impose upon respondent the
ultimate penalty of dismissal for her latest infraction.

CENTRAL PANGASINAN ELECTRIC COOPERATIVE,

INC., vs. NATIONAL LABOR RELATIONS COMMISSION and LITO
CAGAMPAN, G.R. No. 163561 24 July 2007

Section 7, Rule I, Book VI of the Omnibus Rules Implementing the

Labor Code provides that when the employee is dismissed for any of
the just causes under Article 2823 of the Labor Code, he shall not be

3ART. 282. Termination by Employer.' An employer may terminate an employment for

any of the following causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of
his employer or representative in connection with his work;

(b) Gross and habitual neglect by the employee of his duties;

(c) Fraud or willful breach by the employee of the trust reposed in him by his employer
or duly authorized representative;

(d) Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized
representative; and
entitled to termination pay without prejudice to applicable collective
bargaining agreement or voluntary employer policy or
practice. Separation pay shall be allowed only in those instances
where the employee is validly dismissed for causes other than serious
misconduct or those reflecting on his moral character.4 Separation
pay in such case is granted to stand as a "measure of social
justice."5 If the cause for the termination of employment cannot be
considered as one of mere inefficiency or incompetence but an act
that constitutes an utter disregard for the interest of the employer or
a palpable breach of trust in him, the grant by the Court of separation
benefits is hardly justifiable.6

In this case, private respondent was found by the Labor Arbiter and
the NLRC to have been validly dismissed for violations of company
rules, and certain acts tantamount to serious misconduct. Such
findings, if supported by substantial evidence, are accorded respect
and even finality by this Court.7

Although long years of service might generally be considered for the

award of separation benefits or some form of financial assistance to
mitigate the effects of termination, this case is not the appropriate
instance for generosity under the Labor Code nor under our prior
decisions. The fact that private respondent served petitioner for more
than twenty years with no negative record prior to his dismissal, in
our view of this case, does not call for such award of benefits, since
his violation reflects a regrettable lack of loyalty and worse, betrayal
of the company. If an employee's length of service is to be regarded
as a justification for moderating the penalty of dismissal, such
gesture will actually become a prize for disloyalty, distorting the

(e) Other causes analogous to the foregoing.

4 Etcuban, Jr. v. Sulpicio Lines, Inc., G.R. No. 148410, January 17, 2005, 448 SCRA
516, 533-534, citing Phil. Long Distance Telephone Co. v. NLRC, No. L-80609, August
23, 1988, 164 SCRA 671, 682.
5 San Miguel Corporation v. Lao, G.R. NOS. 143136-37, July 11, 2002, 384 SCRA 504,

510.
6 Id.
7Tres Reyes v. Maxim's Tea House, G.R. No. 140853, February 27, 2003, 398 SCRA
288, 298.
meaning of social justice and undermining the efforts of labor to
cleanse its ranks of undesirables.8

Central Philippines Bandag Retreaders vs. Diasnes G.R. No. 163607,

14 July 2008

To reiterate our ruling in Toyota, labor adjudicatory officials and the

CA must demur the award of separation pay based on social justice
when an employee's dismissal is based on serious misconduct or
willful disobedience; gross and habitual neglect of duty; fraud or
willful breach of trust; or commission of a crime against the person
of the employer or his immediate family grounds under Art. 282 14 of
the Labor Code that sanction dismissals of employees. They must be
most judicious and circumspect in awarding separation pay or
financial assistance as the constitutional policy to provide full
protection to labor is not meant to be an instrument to oppress the
employers. The commitment of the Court to the cause of labor should
not embarrass us from sustaining the employers when they are right,
as here. In fine, we should be more cautious in awarding financial
assistance to the undeserving and those who are unworthy of the
liberality of the law.

The attendant circumstances in the present case considered, we are

constrained to deny Diasnes separation pay since the cause for the
termination of his employment amounts to gross and habitual
neglect of his duties. His repeated and continuous absences without
prior leave and his frequent tardiness within the last two months
prior to his dismissal exemplify his utter disregard for his
employment and his employer's interest. Diasnes' character is also
put into question if we take into consideration that he should have
been dismissed as early as January 1996, if not for Bandag's
benevolence and goodwill. It is unthinkable to award separation pay
or financial assistance to an unworthy employee who exploited and

8Etcuban, Jr. v. Sulpicio Lines, Inc., supra at 532, citing Flores v. National Labor
Relations Commission, G.R. No. 96969, March 2, 1993, 219 SCRA 350, 355.
took advantage of his employer's past generosity and
accommodation.

Toyota Motor Phils. Corp Workers Association vs. National Labor

Relations Commission G.R. Nos. 158798-99, 19 October 2007

A recall of recent cases decided bearing on the issue reveals that

when the termination is legally justified on any of the grounds under
Art. 282, separation pay was not allowed. In Ha Yuan Restaurant v.
NLRC,68 we deleted the award of separation pay to an employee who,
while unprovoked, hit her co-worker's face, causing injuries, which
then resulted in a series of fights and scuffles between them. We
viewed her act as serious misconduct which did not warrant the
award of separation pay. In House of Sara Lee v. Rey,69 this Court
deleted the award of separation pay to a branch supervisor who
regularly, without authorization, extended the payment deadlines of
the company's sales agents. Since the cause for the supervisor's
dismissal involved her integrity (which can be considered as breach
of trust), she was not worthy of compassion as to deserve separation
pay based on her length of service. In Gustilo v. Wyeth Phils.,
Inc.,70 this Court found no exceptional circumstance to warrant the
grant of financial assistance to an employee who repeatedly violated
the company's disciplinary rules and regulations and whose
employment was thus terminated for gross and habitual neglect of
his duties. In the doctrinal case of San Miguel v. Lao,71 this Court
reversed and set aside the ruling of the CA granting retirement
benefits or separation pay to an employee who was dismissed for
willful breach of trust and confidence by causing the delivery of raw
materials, which are needed for its glass production plant, to its
competitor. While a review of the case reports does not reveal a case
involving a termination by reason of the commission of a crime
against the employer or his/her family which dealt with the issue of
separation pay, it would be adding insult to injury if the employer
would still be compelled to shell out money to the offender after the
harm done.

In all of the foregoing situations, the Court declined to grant

termination pay because the causes for dismissal recognized under
Art. 282 of the Labor Code were serious or grave in nature and
attended by willful or wrongful intent or they reflected adversely on
the moral character of the employees. We therefore find that in
addition to serious misconduct, in dismissals based on other grounds
under Art. 282 like willful disobedience, gross and habitual neglect
of duty, fraud or willful breach of trust, and commission of a crime
against the employer or his family, separation pay should not be
conceded to the dismissed employee.

In analogous causes for termination like inefficiency, drug use, and

others, the NLRC or the courts may opt to grant separation pay
anchored on social justice in consideration of the length of service of
the employee, the amount involved, whether the act is the first
offense, the performance of the employee and the like, using the
guideposts enunciated in PLDT on the propriety of the award of
separation pay.

Nissan Motors Phils Inc. vs. Victorino Angelo G.R. No. 164181, 14
September 2011

Going through the records, this Court found evidence to support the
allegation of serious misconduct or insubordination. Petitioner
claims that the language used by respondent in his Letter-
Explanation is akin to a manifest refusal to cooperate with company
officers, and resorted to conduct which smacks of outright disrespect
and willful defiance of authority or insubordination. The misconduct
to be serious within the meaning of the Labor Code must be of such
a grave and aggravated character and not merely trivial or
unimportant.20 The Letter-Explanation21 partly reads:
Again, it's not negligence on my part and I'm not alone to be blamed.
It's negligence on your part [Perla Go] and A.A. Del Rosario kasi,
noong pang April 1999 ay alam ninyo na hindi ako ang dapat may
responsibilidad ng payroll kundi ang Section Head eh bakit hindi
ninyo pinahawak sa Section Head noon pa. Pati kaming dalawa sa
payroll, kasama ko si Thelma. Tinanggal nyo si Thelma. Hindi nyo ba
naisip na kailangan dalawa ang tao sa payroll para pag absent ang
isa ay may gagawa. Dapat noon nyo pa naisip iyan. Ang tagal kong
gumawa ng trabahong hindi ko naman dapat ginagawa.

This Court finds the above to be grossly discourteous in content and

tenor. The most appropriate thing he could have done was simply to
state his facts without resorting to such strong language. Past
decisions of this Court have been one in ruling that accusatory and
inflammatory language used by an employee to the employer or
superior can be a ground for dismissal or termination.22

X xx

However, although the dismissal was legal, respondent is still entitled

to a separation pay as a measure of financial assistance, considering
his length of service and his poor physical condition which was one
of the reasons he filed a leave of absence. As a general rule, an
employee who has been dismissed for any of the just causes
enumerated under Article 28229 of the Labor Code is not entitled to
separation pay.30 Although by way of exception, the grant of
separation pay or some other financial assistance may be allowed to
an employee dismissed for just causes on the basis of equity.31 This
concept has been thoroughly discussed in Solidbank Corporation v.
NLRC,32 thus:

The reason that the law does not statutorily grant separation pay or
financial assistance in instances of termination due to a just cause
is precisely because the cause for termination is due to the acts of
the employee. In such instances, however, this Court, inspired by
compassionate and social justice, has in the past awarded
financial assistance to dismissed employees when
circumstances warranted such an award.