G.R. No. 211525 . December 10, 2018
Jude Darry A. Del Rio, Petitioner, vs. DPO Philippines, Inc., Daniel Pans and Grace Lucero, Respondents.

FACTS

Petitioner Jude Darry Del Rio was an Assistant Country Manager of respondent DPO Philippines, Inc., a food distribution company. On September 7, 2009, he voluntarily submitted his resignation, effective October 7, 2009, which the company accepted. After his resignation took effect, Del Rio sought payment of his final salary, accrued leave credits, and separation pay. DPO refused the separation pay claim, arguing it was not due to a voluntarily resigning employee.
Del Rio filed a complaint before the Labor Arbiter, who ruled in his favor, ordering DPO to pay his monetary claims, including separation pay. The NLRC affirmed this decision. DPO then filed a petition for certiorari with the Court of Appeals, contesting the separation pay award. The CA modified the NLRC decision by deleting the separation pay, ruling that an employee who voluntarily resigns is not entitled to it unless stipulated in a contract, CBA, or established company practice.

ISSUE

Whether or not the Court of Appeals correctly deleted the award of separation pay to petitioner, who voluntarily resigned from his employment.

RULING

Yes, the Court of Appeals was correct. The Supreme Court affirmed the CA’s ruling, holding that separation pay is not a vested right for an employee who voluntarily resigns. Under Article 298 (formerly Article 283) of the Labor Code, separation pay is generally mandated only in cases of termination due to authorized causes (like retrenchment) or illegal dismissal. Voluntary resignation is not among these instances.
The Court examined petitioner’s claim that a company practice of granting separation pay to resigned employees had been established, citing two other employees (Legaspi and Martinez) who received such benefits. The Court found this argument unmeritorious. The payments to Legaspi and Martinez were not the result of a general company policy but were specific acts of liberality by DPO. These employees were allowed to resign in lieu of facing administrative charges for conniving with Del Rio in activities competing with DPO’s business. Their separation pay was part of an agreement to encourage their resignation and save their employment records. In contrast, Del Rio resigned entirely of his own volition, and no such promise or agreement was extended to him. Therefore, no established company practice existed that he could rightfully claim. Since none of the exceptions—contractual stipulation, CBA provision, or established employer practice—were present, the award of separation pay had no legal basis and was properly deleted.