Case Summary (G.R. No. 80609)
Petitioner and Respondent
Petitioner: Philippine Long Distance Telephone Company (PLDT)
Respondents: National Labor Relations Commission (NLRC) and Marilyn Abucay
Key Dates
– Investigation and dismissal: prior to 1987
– NLRC resolution upholding separation pay: September 22, 1987
– Supreme Court decision: August 23, 1988
Applicable Law
– 1987 Philippine Constitution (social justice provisions under Articles II and XIII)
– Labor Code of the Philippines and Omnibus Rules Implementing the Labor Code (Book VI, Rule 1, Section 7)
Issue Presented
Whether an employee lawfully dismissed for dishonesty may nonetheless receive separation pay as a matter of equity or social justice under the Labor Code and the Constitution.
Petitioner’s Argument
PLDT contends that separation pay is not provided by law for employees dismissed for cause such as dishonesty. Awarding financial assistance on grounds of equity or compassion rewards misconduct, undermines deterrence, and lacks legal authorization.
Public Respondent’s Position
The NLRC and Solicitor General invoke social and compassionate justice, citing precedents (e.g., Firestone Tire & Rubber Co. v. Lariosa; Soco v. Mercantile Corp.; Filipro, Inc. v. NLRC) where separation pay was granted despite valid dismissals, arguing that long years of service and the constitutional mandate to promote workers’ welfare justify such assistance.
Survey of Precedents
The Supreme Court reviewed several decisions allowing separation pay for validly dismissed employees:
- Full separation pay for theft (Firestone/Tire & Rubber Co.)
- Half‐month pay per year for unauthorized vehicle use (Soco)
- Two months’ pay for two years’ service (Filipro, Inc.)
- Half‐month pay per year for loss of confidence (Metro Drug Corp.)
- Three months’ pay for three years’ service (Engineering Equipment, Inc.)
- Full separation pay for misappropriation (San Miguel Corp.)
Constitutional Basis for Separation Pay
The Court observed that the 1987 Constitution’s explicit commitment to social justice and labor protection in Articles II and XIII constitutes positive law justifying separation pay as a measure of social justice, even where dismissal for cause is lawful and the Labor Code is silent on such relief.
Need to Rationalize the Exception
Noting inconsistencies in past awards—varying amounts irrespective of the severity of misconduct or service length—the Court deemed it necessary to rationalize the exception so that separation pay truly serves social justice rather than rewarding serious misconduct.
New Rule on Separation Pay
Separation pay as social justice relief shall be awarded only when an employee is validly dismissed for causes other than serious misconduct or offenses reflecting on moral character. Valid but non-iniquitous grounds (e.g., inefficiency, loss of confidence, poor attendance) remain eligible
...continue readingCase Syllabus (G.R. No. 80609)
Facts of the Case
- Marilyn Abucay, traffic operator at PLDT, was accused by two complainants of demanding and receiving ₱3,800 in exchange for facilitating telephone installation approvals.
- A company investigation and hearing found her guilty of the charge; she was dismissed for cause.
- Abucay filed a complaint with the Ministry of Labor and Employment, claiming illegal removal.
Labor Arbiter’s Decision
- Complaint dismissed for lack of merit.
- Nonetheless, the arbiter awarded Abucay one month’s pay for every year of service (ten months in total) as “financial assistance,” citing equity and compassion despite her partial blame in the transaction.
NLRC Resolution
- Both PLDT and Abucay appealed to the NLRC; it affirmed the labor arbiter’s decision in toto, including the award of separation pay.
- The NLRC characterized the grant as equitable compensation for long service, while still upholding her dismissal for malfeasance.
Petition Before the Supreme Court
- PLDT invoked certiorari to annul the financial assistance award, arguing:
• No legal basis exists for separation pay when an employee is validly dismissed for cause.
• Equity and compassion cannot override clear statutory provisions.
• The award effectively rewards dishonesty and may encourage future corruption.
Government’s Position
- The Solicitor General contended separation pay may be granted on grounds of social and compassionate justice, even where dismissal for cause is lawful.
- Cited precedents allowing separation pay despite valid termination (Firestone Tire v. Lariosa; Soco v. Mercantile; Filipro, Inc. v. NLRC; Metro Drug Corp. v. NLRC; Engineering Equipment, Inc. v. NLRC; New Frontier Mines v. NLRC; San Miguel Corp. cases).
Statutory Rule and Equity Exception
- The Labor Code (Omnibus Rules, Book VI, Rule 1, Section 7) provides that employees dismissed for cause are not entitled to separation pay.