Villaruel v. Yeo Han (G.R. No. 169191; June 1, 2011)

CASE DIGEST: ROMEO VILLARUEL, Petitioner v. YEO HAN GUAN, DOING BUSINESS UNDER THE NAME AND STYLE YUHANS ENTERPRISES, Respondent. (G.R. No. 169191; June 1, 2011).

FACTS: Petitioner filed with the NLRC, National Capital Region, Quezon City a Complaint for payment of separation pay against Yuhans Enterprises.

Petitioner alleged that he was employed as a machine operator by Ribonette Manufacturing Company, an enterprise engaged in the business of manufacturing and selling PVC pipes and is owned and managed by herein respondent Yeo Han Guan. Over a period of almost twenty (20) years, the company changed its name four times. Starting in 1993 up to the time of the filing of petitioner's complaint in 1999, the company was operating under the name of Yuhans Enterprises.Despite the changes in the company's name, petitioner remained in the employ of respondent. Petitioner further alleged that he got sick and was confined in a hospital; that he reported for work but was no longer permitted to go back because of his illness; he asked that respondent allow him to continue working but be assigned a lighter kind of work but his request was denied; instead, he was offered his separation pay; however, the amount corresponds only to the period between 1993 and 1999; petitioner prayed that he be granted separation pay computed from his first day of employment in June 1963, but respondent refused. Aside from separation pay, petitioner prayed for the payment of service incentive leave for three years as well as attorney's fees.

Respondent averred that petitioner was hired as machine operator from March 1993 until he stopped working sometime in February 1999 on the ground that he was suffering from illness; after his recovery, petitioner was directed to report for work, but he never showed up.Respondent was later caught by surprise when petitioner filed the instant case for recovery of separation pay. Respondent claimed that he never terminated the services of petitioner and that during their mandatory conference, he even told the latter that he could go back to work anytime but petitioner clearly manifested that he was no longer interested in returning to work and instead asked for separation pay.

Petitioner filed a Motion for Reconsideration of the CA Decision concerning the deletion of his separation pay, but it was denied by the CA via a Resolution. Hence, this petition.

ISSUE: Is petitioner entitled to separation pay?

HELD: A plain reading of the above-quoted provision clearly presupposes that it is the employer who terminates the services of the employee found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees. It does not contemplate a situation where it is the employee who severs his or her employment ties.

The pivotal question that should be settled in the present case is whether respondent, in fact, dismissed petitioner from his employment.

A perusal of the Decisions of the Labor Arbiter and the NLRC would show, however, that there was no discussion with respect to the abovementioned issue. Both lower tribunals merely concluded that petitioner is entitled to separation pay under Article 284 of the Labor Code without any explanation. The Court finds no convincing justification, in the Decision of the Labor Arbiter on why petitioner is entitled to such pay. In the same manner, the NLRC Decision did not give any rationalization as the gist thereof simply consisted of a quoted portion of the appealed Decision of the Labor Arbiter.On the other hand, the Court agrees with the CA in its observation of the following circumstances as proof that respondent did not terminate petitioner's employment: first, the only cause of action in petitioner's original complaint is that he was "offered a very low separation pay"; second, there was no allegation of illegal dismissal, both in petitioner's original and amended complaints and position paper; and, third, there was no prayer for reinstatement.

The Court finds that petitioner was the one who initiated the severance of his employment relations with respondent. It is evident from the various pleadings filed by petitioner that he never intended to return to his employment with respondent on the ground that his health is failing. Indeed, petitioner did not ask for reinstatement. In fact, he rejected respondent's offer for him to return to work. This is tantamount to resignation.

Resignation is defined as the voluntary act of an employee who finds himself in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service and he has no other choice but to disassociate himself from his employment.

Since petitioner was not terminated from his employment and, instead, is deemed to have resigned therefrom, he is not entitled to separation pay under the provisions of the Labor Code.

The foregoing notwithstanding, this Court, in a number of cases, has granted financial assistance to separated employees as a measure of social and compassionate justice and as an equitable concession. Taking into consideration the factual circumstances obtaining in the present case, the Court finds that petitioner is entitled to this kind of assistance.

While the above cited cases authorized the grant of financial assistance in lieu of retirement benefits, the Court finds no cogent reason not to employ the same guiding principle of compassionate justice applied by the Court, taking into consideration the factual circumstances obtaining in the present case. In this regard, the Court finds credence in petitioner's contention that he is in the employ of respondent for more than 35 years. The Court further notes that there is no evidence on record to show that petitioner has any derogatory record during his long years of service with respondent and that his employment was severed not by reason of any infraction on his part but because of his failing physical condition. Add to this the willingness of respondent to give him financial assistance. Hence, based on the foregoing, the Court finds that the award of P50,000.00 to petitioner as financial assistance is deemed equitable under the circumstances. DENIED.