Hanford Philippines, Incorporated vs. Joseph, 454 SCRA 786, March 31, 2005

8/29/2021 SUPREME COURT REPORTS ANNOTATED VOLUME 454
786 SUPREME COURT REPORTS ANNOTATED

Hanford Philippines, Incorporated vs. Joseph
*
G.R. No. 158251. March 31, 2005.
HANFORD PHILIPPINES, INCORPORATED and

VICTOR TE, petitioners, vs. SHIRLEY JOSEPH,
respondent.
Labor Law; Resignation; Separation Pay; It is well to note

that there is no provision in the Labor Code which grants
separation pay to employees who voluntarily resigns.—It is well to
note that there is no provision in the Labor Code which grants
separation pay to employees who voluntarily resign. Under the
Code, separation pay may be awarded only in cases when the
termination of employment is due to: (a) installation of labor
saving devices, (b) redundancy, (c) retrenchment, (d) closing or
cessation of business operations, (e) disease of an employee and
his continued employment is prejudicial to himself or his co-
employees, or (f) when an employee is illegally dismissed but
reinstatement is no longer feasible.
Same; Same; Same; An exception to the general rule that an
employee who voluntarily resigns is not entitled to separation pay
is when it is stipulated in the employment contract or CBA or such
payment is authorized by the employer’s practice or policy.—In
Hinatuan Mining Corporation and/or the Manager versus
National Labor Relations and Margot Batister, we held that while
it is true that under the Labor Code, an employee who voluntarily
resigns may not be granted separation pay, as in fact, the general
rule is that an employee who voluntarily resigns is not entitled to
separation pay, however, there is an exception, that is, when it is
stipulated in the employment contract or CBA or such payment is
authorized by the employer’s practice or policy, as in this case.
Same; Same; Same; If an employer could be liberal to those
employees who retired, there is no reason why it should not also
extend such liberality to one who resigned after serving the
employer for 21 years.—Records show that petitioners granted the
employees mentioned earlier their separation pay upon their
separation by reason of their retirement. Under the Labor Code,
retirement is not also a ground for the grant of separation pay. If
https://www.central.com.ph/sfsreader/session/0000017b91f4033d80ca8ddf000d00d40059004a/t/?o=False 1/7
petitioners could be liberal to those employees who retired, there

is no reason why they should
_______________
* THIRD DIVISION.
787
VOL. 454, MARCH 31, 2005 787
not also extend such liberality to respondent considering that she

served petitioner for twenty one years.
PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.

Froilan M. Bacungan & Associates for petitioners.
Apolinario N. Lomabao, Jr. for respondent.
SANDOVAL-GUTIERREZ, J.:
Before us is a petition for review on certiorari under Rule

45 of the 1997 Rules 1 of Civil Procedure, as amended,
assailing the Decision of the Court of Appeals dated
January 23, 2003 and its Resolution dated April 29, 2003 in
CA-G.R. SP No. 60701.
On July 17, 1978, petitioner Hanford Philippines, Inc.
(Hanford) hired Shirley Joseph, herein respondent, as a
sewer.
On August 10, 1998, respondent voluntarily tendered
2
her resignation effective September 3
17, 1998, which
petitioner accepted the following day.
Petitioner then paid respondent her last salary, 13th
month pay and the cash conversion of her unused vacation
and sick leave. 4
On November 19, 1998, respondent sent a letter to
petitioner requesting payment of her separation pay
pursuant to Section 1, Article IV of the Collective
Bargaining Agreement (CBA) quoted as follows:
_______________
1 Penned by Presiding Justice Cancio C. Garcia (now Associate Justice

of this Court) and concurred in by Associate Justices Eloy R. Bello, Jr. and
Sergio L. Pestaño, both retired.
2 Annex “C”, Rollo at p. 37.
3 Annex “D”, id., at p. 38.
4 Rollo at p. 76.
788

SECTION 1. Regular employees or workers separated by the

COMPANY because of reduction of personnel and employees or
workers who may be separated without cause, or those
whose services are terminated or are separated from work due to
suspension or cessation of operation shall be entitled to a
termination pay in accordance with law. The COMPANY shall
give termination pay to those who voluntarily resign due
to the reasons heretofore stated subject to the following terms
and conditions:
a) 1 to 30 years of service shall be paid 20 days for every year

of service;
b) 16 to 20 years of service to the COMPANY shall be paid 15
days pay for every year of service;
c) 11 to 15 years of service to the COMPANY shall be paid 10
days pay for every year of service; and
d) 5 to 10 years of service to the COMPANY
5
shall be paid 5
days pay for every year of service.”
Petitioner denied respondent’s request on the ground that

under the Labor Code, voluntary resignation is not one 6
of
the grounds which justifies the grant of separation pay.
On December 17, 1998, respondent filed with the Office
of the Labor Arbiter a complaint for the payment of her
separation pay against petitioner Hanford and co-petitioner
Victor Te, docketed as NLRC NCR CN. 00-12-10238-98. 7
On May 20, 1999, the Labor Arbiter rendered a Decision
granting respondent’s petition and ordering petitioners to
pay her separation pay in the amount of P93,820.00 as
authorized by Section 1, Article IV of the parties’ CBA.
On appeal, the National Labor 8
Relations Commission
(NLRC) rendered its Resolution dated April 14, 2000
affirming the Labor Arbiter’s Decision.
_______________
5 Annex “E”, id., at p. 39.

6 Rollo at pp. 77-78.
7Id., at pp. 40-44.
8Id., at pp. 45-52.
789
VOL. 454, MARCH 31, 2005 789

Forthwith, petitioners filed their motion for reconsideration

9
but was denied by the NLRC in its Resolution dated July
24, 2000, prompting them to file with the Court of Appeals
a petition for certiorari under Rule 65 of the 1997 Rules of
Civil Procedure, as amended.
On January
10
23, 2003, the Appellate Court rendered its
Decision dismissing the petition.
The Court of Appeals held that the parties’ CBA clearly
provides that petitioner Hanford shall give termination pay
to those who voluntarily resigned due to the following
reasons: reduction of personnel; employees or workers who
may be separated without cause; and those whose services
are terminated due to suspension or cessation of operation.
Here, respondent voluntarily resigned. This separation
from the service is one “without cause” as provided by the
CBA. Hence, pursuant thereto, petitioner is entitled to a
separation pay.
Petitioners filed a motion for reconsideration. However,
it was denied by11
the Appellate Court in a Resolution dated
April 29, 2003.
Hence, the present recourse. Petitioners contend that
the Court of Appeals erred in ruling that a resigned
employee is entitled 12to separation pay under Section 1,
Article IV of the CBA.
Respondent counters that the Decision of the Court of
Appeals should not be disturbed. She worked with
petitioner company for twenty years but decided to resign
believing that pursuant to the CBA, she is entitled to a
separation pay. She also avers that several former
employees of petitioner, namely: Astor Madamag, Danilo
Suplito, Domingo Bobis, Rosita Bobis, Evelyn Cunanan, Fe
Viray, Doris Angeles and
_______________
9Id., at pp. 53-54.

10Id., at pp. 26-34.
11Id., at p. 36.
12Id., at p. 15.
790

Dula Imperia, were granted separation pay 13

pursuant to the
CBA and petitioners’ policy and practice.
It is well to note that there is no provision in the Labor
Code which grants separation pay to employees who
voluntarily resign. Under the Code, separation pay may be
awarded only in cases when the termination of employment
is due to: (a) installation of labor saving devices, (b)
redundancy, (c) retrenchment, (d) closing or cessation of
business operations, (e) disease of an employee and his
continued employment is prejudicial to himself or his co-
employees, or (f) when an employee is illegally dismissed
but reinstatement is no longer feasible.
In Hinatuan Mining Corporation and/or the Manager 14
versus National Labor Relations and Margot Batister, we
held that while it is true that under the Labor Code, an
employee who voluntarily resigns may not be granted
separation pay, as in fact, the general rule is that an
employee who voluntarily resigns is not entitled to
separation pay, however, there is an exception, that is,
when it is stipulated in the employment contract or CBA or
such payment is authorized
15
by the employer’s practice or
policy, as in this case.
As aptly held by the Labor Arbiter, the NLRC and the
Court of Appeals, it is very clear from the CBA that when
an employee or worker voluntarily resigns due to,
among others, “separation from the company without
cause,” such as voluntary resignation, then he is entitled to
a separation pay.
Moreover, records show that petitioners granted the
employees mentioned earlier their separation pay upon
their
_______________
13Id., at p. 66.
14 G.R. No. 117394, February 21, 1997, 268 SCRA 622, citing CJC
Trading, Inc. vs. National Labor Relations Commission, G.R. No. 115884,
July 20, 1995, 246 SCRA 724.
15 Id.; Travelaire & Tours Corp. and/or Christine B. Ojeda vs. National
Labor Relations Commission and Nenita I. Medelyn, G.R. No. 131523,
August 20, 1998, 294 SCRA 505.
791
VOL. 454, MARCH 31, 2005 791

separation by reason of their retirement. Under the Labor

Code, retirement is not also a ground for the grant of
separation pay. If petitioners could be liberal to those
employees who retired, there is no reason why they should
not also extend such liberality to respondent considering
that she served petitioner for twenty one years.
Our ruling in Philippine National Construction vs.
NLRC finds application here, thus:
“In the interpretation of an employer’s program providing for

separation benefits, all doubts should be construed in favor of
labor. After all, workers are the intended beneficiaries of such
program and our Constitution mandates a clear bias in favor of
the working class.”
WHEREFORE, the petition is hereby DENIED. Costs

against petitioners.
SO ORDERED.
Panganiban (Chairman), Corona and Carpio-

Morales, JJ., concur.
Garcia, J., No Part.
Petition denied.
Notes.—Where the reason for the dismissal of the

employee is gross negligence in the performance of his
duties resulting in loss of trust and confidence, financial
assistance may be given the employee. (Camua vs.
National Labor Relations Commission, 279 SCRA 45
[1997])
Award for financial assistance is justified only in those
instances where the employee is validly dismissed for
causes other than the serious misconduct or those
adversely affecting his moral character. (Philippine
Airlines, Inc. vs. National Labor Relations Commission, 328
SCRA 273 [2000])
——o0o——
792
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8/29/2021 SUPREME COURT REPORTS ANNOTATED VOLUME 454

786 SUPREME COURT REPORTS ANNOTATED

HANFORD PHILIPPINES, INCORPORATED and

Labor Law; Resignation; Separation Pay; It is well to note

petitioners could be liberal to those employees who retired, there

VOL. 454, MARCH 31, 2005 787

Hanford Philippines, Incorporated vs. Joseph

not also extend such liberality to respondent considering that she

PETITION for review on certiorari of the decision and

The facts are stated in the opinion of the Court.

Before us is a petition for review on certiorari under Rule

1 Penned by Presiding Justice Cancio C. Garcia (now Associate Justice

788 SUPREME COURT REPORTS ANNOTATED

SECTION 1. Regular employees or workers separated by the

a) 1 to 30 years of service shall be paid 20 days for every year

Petitioner denied respondent’s request on the ground that

5 Annex “E”, id., at p. 39.

VOL. 454, MARCH 31, 2005 789

Forthwith, petitioners filed their motion for reconsideration

9Id., at pp. 53-54.

790 SUPREME COURT REPORTS ANNOTATED

Dula Imperia, were granted separation pay 13

VOL. 454, MARCH 31, 2005 791

separation by reason of their retirement. Under the Labor

“In the interpretation of an employer’s program providing for

WHEREFORE, the petition is hereby DENIED. Costs

Panganiban (Chairman), Corona and Carpio-

Notes.—Where the reason for the dismissal of the

© Copyright 2021 Central Book Supply, Inc. All rights reserved.

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