Separation pay as a measure of social justice

Generally, an employee dismissed for any of the just causes under Article 297 is not entitled to separation pay. By way of exception, the Court has allowed the grant of separation pay based on equity and as a measure of social justice, as long as the dismissal was for causes other than serious conduct or those manifesting moral depravity.[1]

In applying the exception, of course, the Supreme Court is always mindful of the new rule it established in Toyota v. NLRC,[2] where it held that "in addition to serious misconduct, in dismissals based on other grounds under Art. 282[3] like willful disobedience, gross and habitual neglect of duty, fraud or willful breach of trust, and commission of a crime against the employer or his family, separation pay should not be conceded to the dismissed employee."[4] However, the High Court also recognizes that some cases merit a relaxation of this rule, taking into consideration their peculiar circumstances.

[1] Philippine Commercial International Bank v. Abad, 492 Phil. 657, 663-664 (2005).
[2] 562 Phil. 759, 812 (2007).
[3] Now Article 297 of the Labor Code.
[4] Toyota v. NLRC, supra note 27 at 812.

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