- Intended to provide the EE money during period in which he will be looking for another employment
- Distinct from”Backwages” (which is designed to restore income that was lost by reason of unjust dismissal)
11.1 Concept of SP
- An aid given to an EE upon his separation from service so that he may have something on which to fall back when he loses his means of livelihood.
- Amount designed to provide him with the wherewithal during the period that he is looking for employment.
11.2 Purpose of SP
- a social legislation, to alleviate the difficulties which confront a dismissed employee thrown into the streets to face the harsh necessities of life. It is for this reason that the said statute compels the
employer to dole out money, reasonable under circumstances, to cushion the adverse effects of sudden separation from employment. This gives the employee a leeway, commensurate to his years of service, to tide him and his family over in the meantime that he goes job hunting. To one who has been accustomed to a certain type of job in one company, adjustment to other job opportunities becomes a problem. Advanced age, too, may reduce him to a low priority in the labor market
11.3 When SP is Proper
- Awarded to EE’s who are terminated by reason of: o Redundancy
o Installation of labor-saving devices o Retrenchment
o Closure of establishment not due to serious business losses o Disease
o Lay-off/suspension of operations for more that 6 mos. - If EE have been unjustly dismissed, is SP proper?
o Exceptional circumstances entitling such EE to SP:
If the reinstatement of the EE has been rendered impossible by supervening events (such as:
closure of establishment,
sale/transfer of business ownership, abolition of position
reduction of personnel physical incapacity of EE)
If the reinstatement of the EE is no longer feasible Doctrine of Strained Relations
No substantially equivalent position is available
- If EE was dismissed for a just and valid cause, is he entitled to SP? o GR: Such worker is not entitled
o EXCEPTION: SC held that SP may be awarded as measure of social justice even if the dismissal is found to be valid and justified, but only in those instances where EE was validly dismissed for a cause other than serious misconduct or offenses reflecting on his moral character.
Case: Phil. Long Distance Telephone Company v. NLRC
“xxx 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.
A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding rather than punishing the erring employee for his offense. And we do not agree that the punishment is his dismissal only and that the separation pay has nothing to do with the wrong he has committed. Of course it has. Indeed, if the employee who steals from the company is granted separation pay even as he is validly dismissed, it is not unlikely that he will commit a similar offense in his next employment because he thinks he can expect a like leniency if he is again found out. This kind of misplaced compassion is not going to do labor in general any good as it will encourage the infiltration of its ranks by those who do not deserve the protection and concern of the Constitution”
- EE resigned from employment, is he entitled to SP? o GR: NO
o EXCEPTION: it is stipulated in the employment contract, CBA or established employer practice/policy
- EE retires from employment, entitled to SP? o GR: NO
He is only entitled to retirement pay, which is different for SP.
Retirement result of a bilateral act of parties, a voluntary agreement between ER and EEs whereby latter after reaching a certain age agrees and/or consents to sever his employment with the former. Dismissal refers to unilateral act of ER in
12. Damages
- Damages, specifically moral and exemplary damages in unjust dismissal are reliefs prescribed not by the Labor Code but by the Civil Code.
- Entitlement thereto should be established along the principles established by the Civil Code.
- It is not enough for an employee to just prove that he was dismissed without just or due process. Additional facts must be pleaded and proven to warrant the grant of moral damages.
- The employee should prove that his dismissal was attended by bad faith or fraud, or constituted an act contrary to morals, good customs or public policy, and of course, that social humiliation, wounded feelings, grave anxiety, and similar injury resulted therefrom.
- With regard to exemplary damages, the employee should prove that his dismissal was effected in a wanton, oppressive or malevolent manner.
Philippine Airlines, Inc. vs. NLRC
Held: “Not every employee who is illegally dismissed or suspended is entitled to
damages. As a rule, moral damages are recoverable only where the dismissal of the employee was attended by bad faith or fraud, or committed an act oppressive to labor, or was done in a manner contrary to morals, good customs or public policy. Bad faith does not simply mean negligence or bad judgment. It involves a state of mind dominated by ill will or motive. It implies a conscious and intentional design to do a wrongful act for a dishonest purpose or some moral obliquity. The person claiming moral damages must prove the existence of bad faith by clear and convincing evidence for the law always assumes good faith.”