CASE TITLE COSMOPOLITAN FUNERAL HOMES, INC.

, petitioner,
vs.
NOLI MAALAT and NATIONAL LABOR RELATIONS
COMMISSION, respondents.

DATE G.R. No. 86693 July 2, 1990

PONENTE Justice Guttierez Jr.

FACTS
Maalat was engaged sometime in 1962
as a “supervisor” selling funeral
services and was paid by petitioner
Cosmo on commission basis for
the amounts he has collected and
remitted. Maalat was dismissed on 15
January 1987 for violation of certain
conditions despite him being
forewarned. He thereafter filed a
complaint of illegal dismissal seeking
for payment of his commissions
which was granted by the labor
arbiter, ordering petitioner to pay
separation pay, commission, interests
and attorneys fees totaling to P
205,571.52. On appeal before the
NLRC, the labor arbiters decision was
modified declaring the dismissal of
Maalat as valid and remanding the case
to the Regional Arbitration
in consideration of his monetary
claims in accordance with NLRCs
decision over the case, which has
ordered petitioner to pay Maalat
separation pay equivalent to one-half
 (1/2%) month average income for
every year of service by way of
equitable relief and in the interest
of social and compassionate justice.
Petioners motion for reconsideration
was fatal. Thus, this petition
Maalat was engaged sometime in 1962 as a “supervisor” selling funeral services and was
paid by petitioner Cosmo on a commission basis for the amounts he has collected and
remitted.

Maalat was dismissed on 15 January 1987 for violation of certain conditions despite him
being forewarned. He thereafter filed a complaint of illegal dismissal seeking payment
of his commissions which was granted by the labor arbiter, ordering the petitioner to
pay separation pay, commission, interests, and attorney’s fees totaling P 205,571.52.

On appeal before the NLRC, the labor arbiter’s decision was modified declaring the
dismissal of Maalat as valid and remanding the case to the Regional Arbitration in
consideration of his monetary claims in accordance with the NLRCs decision over the
case, which has ordered the petitioner to pay Maalat separation pay equivalent to one-
half (1/2) month average income for every year of service by way of equitable relief and
in the interest of social and compassionate justice. Petitioner’s motion for
reconsideration was fatal. Thus, this petition.

ISSUE Whether or not there is an equitable basis for the separation pay.

RULING NO, there is no equitable basis for the separation pay.

Under the law, a grant for separation pay to an employee who has been validly
dismissed for dishonesty finds no legal basis. As held in PLDT vs. NLRC:

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.

A contrary rule would, as the petitioner correctly argues, have the effect of rewarding
rather than punishing the erring employee for his offense. xxx

The policy of social justice is not intended to countenance wrongdoing simply

because it is committed by the underprivileged. At best it may mitigate the penalty
but it certainly will not condone the offense. Compassion for the poor is an imperative of
every humane society but only when the recipient is not a rascal claiming an undeserved
privilege xxx

The Court cannot disturb the findings of NLRC that Maalat was indeed dishonest in the
discharge of his duties. Additionally, Maalat did not appeal NLRC’s decision that he was
validly dismissed, thereby impliedly accepting the validity of his dismissal. Thus, the
court takes exception to the award of separation pay.