CASE DIGEST: Manila Water v. Del Rosario (G.R. No. 188747)

CASE DIGEST: [725 Phil. 513] SECOND DIVISION [ G.R. No. 188747, January 29, 2014 ] MANILA WATER COMPANY, PETITIONER, VS. CARLITO DEL ROSARIO, RESPONDENT. FACTS: In Manila Water v. Del Rosario (G.R. No. 188747, January 29, 2014), Manila Water essentially questions the award of separation pay to respondent who was dismissed for stealing the company’s property which amounted to gross misconduct. It argues that separation pay or financial assistance is not awarded to employees guilty of gross misconduct or for cause reflecting on his moral character.

Del Rosario for his part maintains that there is no legal ground to justify his termination from employment. He insists that his admission pertaining to his involvement in the loss of the water meters was merely coerced by the company. Since his dismissal was without valid or just cause, Del Rosario avers that Manila Water is guilty of illegal dismissal rendering it liable for the payment of backwages and separation pay.

ISSUE: Was the award of separation pay proper?

HELD: No, the award of separation pay is not proper.

The attendant circumstances in the present case considered, the Supreme Court was constrained to deny Del Rosario separation pay since the admitted cause of his dismissal amounts to serious misconduct. He is not only responsible for the loss of the water meters in flagrant violation of the company’s policy but his act is in utter disregard of his partnership with his employer in the pursuit of mutual benefits.

In the recent case of Daabay v. Coca-Cola Bottlers, the High Court reiterated its ruling in Toyota and disallowed the payment of separation pay to an employee who was found guilty of stealing the company’s property. The Court repeated that an award of separation pay in such an instance is misplaced compassion for the undeserving who may find their way back and weaken the fiber of labor.

As a general rule, an employee who has been dismissed for any of the just causes enumerated under Article 282[1] of the Labor Code is not entitled to a separation pay.[2] Section 7, Rule I, Book VI of the Omnibus Rules implementing the Labor Code provides:

Sec. 7. Termination of employment by employer. — The just causes for terminating the services of an employee shall be those provided in Article 282 of the Code. The separation from work of an employee for a just cause does not entitle him to the termination pay provided in the Code, without prejudice, however, to whatever rights, benefits and privileges he may have under the applicable individual or collective agreement with the employer or voluntary employer policy or practice.

In exceptional cases, however, the Court has granted separation pay to a legally dismissed employee as an act of "social justice" or on "equitable grounds."[3] In both instances, it is required that the dismissal (1) was not for serious misconduct; and (2) did not reflect on the moral character of the employee.[4]

In the leading case of Philippine Long Distance Telephone Company v. NLRC,[5] we laid down the rule that separation pay shall be allowed as a measure of social justice only in the instances where the employee is validly dismissed for causes other than serious misconduct reflecting his moral character.

[1] ART. 282. Termination by employer. - An employer may terminate an employment for any of the following causes:

Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;

Gross and habitual neglect by the employee of his duties;

Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;

Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and

Other causes analogous to the foregoing.

[2] Central Pangasinan Electric Cooperative, Inc. v. National Labor Relations Commission, 555 Phil. 134, 138-139 (2007).

[3] Unilever Philippines, Inc. v. Rivera, G.R. No. 201701, 3 June 3013. As an exception, he may assign an error where the purpose is to maintain the judgment on other grounds, but he cannot seek modification or reversal of the judgment or affirmative relief unless he has also appealed or filed a separate action. See Aklan College, Inc. v. Enero, G.R. No. 178309, 27 January 2009, 577 SCRA 64, 80.

[4] Id.

[5] 247 Phil. 641 (1988).