3. Security Bank Savings Corporation vs.

Author: Banico
Singson
G.R. No. 214230, Febuary 10, 2016
Topic: Social Justice; Application
Perlas-Bernabe
Doctrine:
1. Separation pay is awarded when the cause for termination is not the fault of the employee, as
well as illegal dismissal were reinstatement is no longer feasible. Conversely, an employee
who is validly terminated for just cause, is not, as a general rule, entitled to separation pay.
2. As an exception, case law grants separation pay or financial assistance as a measure of
social justice or equity.
3. the Court excluded from the grant of separation pay based on social justice the other
instances listed under Article 296, to wit: wilful disobedience, gross and habitual neglect of
duty, fraud or wilful breach of trust, and commission of a crime

Emergency Recit:
Singson was employed by SBSC. He was promoted numerous times till he was assigned under Branch
Manager Pinero. A show-cause order was given to Singson, requiring him to explain the violation of
the Bank’s Code of Conduct. He was transferred numerous time from one branch to another. He
tendered his resignation, but instead he was dismissed for Gross and Habitual Neglect of duty. He filed
for an illegal dismissal case. The LA ruled that there was valid termination for just cause, however
separation pay is awarded (Social Justice and Equity). The NLRC and the CA affirmed such decision.
The SC disagreed. Separation pay was deleted in the decision. As a general rule, separation pay is
not awarded to validly terminated employees. However, case law provides that because of social justice
and equity, they may be awarded as such. In the Toyota Motors vs. NLRC, the ground for gross and
habitual neglect was excluded as one of the grounds to be awarded with separation pay. Therefore,
since Singson was terminated on the grounds of gross and habitual neglect, he is not entitled to
separation pay.

Facts:
1. Private Respondent, Singson was employed by petitioner, Security Bank Savings Corp.
Numerous promotions were given to Singson until he was assigned as Customer Service
Operation Head under Branch Manager Pinero.
2. Subsequently, Singson received a show-cause order, charging him of violating the Bank’s
Code of Conduct for mishandling checkbooks and other bank forms.
3. At the conference before the Investigating Committee, Singson admitted allowing Pinero to
bring out the missing checkbooks and other bank forms. The reason he allowed Pinero was his
lengthy reputation and good standing, as well as it was a marketing strategy by (Pinero). He
also reported that the missing checkbooks were returned.
4. Singson was transferred to another branch. He was again issued a memorandum directing an
explanation for inaccurate reporting for some Returned Checks and other Cash Items (P46k).
He was again transferred to another branch.
5. Dismayed by his frequent transfer, he tendered his resignation. However, it was rejected as the
decision to terminate his employment was issued on the grounds of Habitual Neglect of
Duties.
6. He filed an illegal dismissal case. The LA ruled that there was a valid cause to terminate his
employment. Notwithstanding the valid termination, Singson was awarded separation pay by
way of financial assistance.
7. Petitioner appealed to the NLRC, which the latter affirmed the decision of the LA. It ruled that
the grant of separation pay was justified. Petitioner elevated the case to the CA, which again
affirmed such decision. The CA justified that it is allowed as a measure of social justice
 where an employee was validly dismissed for cause other than serious misconduct or
those reflecting his moral character. Hence this petition.
Issues: Whether or not Singson should be granted separation pay on the grounds of social justice?
Ruling: No, the petition is meritorious.
Ratio:
Separation pay is awarded when the cause for termination is not the fault of the employee, as well as
illegal dismissal were reinstatement is no longer feasible. Conversely, an employee who is validly
terminated for just cause, is not, as a general rule, entitled to separation pay.

As an exception, case law grants separation pay or financial assistance as a measure of social
justice or equity. The Court stated that “We hold that 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. In PLDT vs.
NLRC, the Court laid down the parameters: a. was not a serious misconduct; and b. does not reflect on
the moral character of the employee, or would involve moral turpitude.

However, in a later case (Toyota Motor vs. NLRC), the Court excluded from the grant of separation
pay based on social justice the other instances listed under Article 296, to wit: wilful disobedience,
gross and habitual neglect of duty, fraud or wilful breach of trust, and commission of a crime…
Since the LA already ruled that the acts of Singson constituted gross and habitual neglect of duty (he
did not appeal), the award for separation pay based on social justice is improper.

WHEREFORE, the petition is granted The decision of the CA is REVERSED and SET ASIDE,
deleting the award for separation pay.