ROMEO VILLARUEL, petitioner, vs.

YEO HAN GUAN, doing business under the nae and

st!"e YUHAN# EN$ER%RI#E#, respondent.
G.R. No. &'(&(&. )une &, *+&&.,
Labor Law; Termination of Employment; Article 284 of the Labor Code clearly presupposes that it is the
employer who terminates the services of the employee found to be suffering from any disease and whose
continued employment is prohibited by law or is preudicial to his health as well as to the health of his co!
employees"#A plain reading of the above$uoted 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 preudicial to his health as well as to the health of his co!employees" %t
does not contemplate a situation where it is the employee who severs his or her employment ties" This is
precisely the reason why &ection 8' (ule )' *oo+ ,% of the -mnibus (ules %mplementing the Labor Code'
directs that an employer shall not terminate the services of the employee unless there is a certification by a
competent public health authority that the disease is of such nature or at such a stage that it cannot be cured
within a period of si. /01 months even with proper medical treatment"
&ame; &ame; (esignation; 2efinition of (esignation"#%n consonance with the above findings' the Court
finds that petitioner was the one who initiated the severance of his employment relations with respondent" %t
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" %ndeed' petitioner did not as+ for reinstatement" %n
fact' he reected respondent3s offer for him to return to wor+" This is tantamount to resignation" (esignation
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 e.igency of the service and he has no other choice but
to disassociate himself from his employment"
&ame; &ame; &ame; &eparation 4ay; The rule is that an employee who voluntarily resigns from employment
is not entitled to separation pay' e.cept when it is stipulated in the employment contract or Collective
*argaining Agreement /C*A1' or it is sanctioned by established employer practice or policy; by way of
e.ception' Court has allowed grants of separation pay to stand as 5a measure of social ustice"6#%t may not
be amiss to point out at this uncture that aside from Article 284 of the Labor Code' the award of separation
pay is also authori7ed in the situations dealt with in Article 288 of the same Code and under &ection 4 /b1'
(ule %' *oo+ ,% of the %mplementing (ules and (egulations of the said Code where there is illegal dismissal
and reinstatement is no longer feasible" *y way of e.ception' this Court has allowed grants of separation pay
to stand as 5a measure of social ustice6 where the employee is validly dismissed for causes other than
serious misconduct or those reflecting on his moral character" 9owever' there is no provision in the Labor
Code which grants separation pay to voluntarily resigning employees" %n fact' the rule is that an employee
who voluntarily resigns from employment is not entitled to separation pay' e.cept when it is stipulated in the
employment contract or C*A' or it is sanctioned by established employer practice or policy" %n the present
case' neither the abovementioned provisions of the Labor Code and its implementing rules and regulations
nor the e.ceptions apply because petitioner was not dismissed from his employment and there is no evidence
to show that payment of separation pay is stipulated in his employment contract or sanctioned by established
practice or policy of herein respondent' his employer"
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.
Taquio and Associates for petitioner.
Cabio Law Offices and Associates for respondent.
PERALTA !."
Assailed in the present petition are the #ecision$ and Resolution% of the Court of Appeals &CA'
dated (ebruar) $* %++, and Au-ust % %++, respectivel) in CA./.R. 0P No. 12$+,. The CA
#ecision 3odified the 4arch 5$ %++5 #ecision of the National Labor Relations Co33ission
&NLRC' in NLRC NCR CA +%6+,+.+$ while the CA Resolution denied petitioner7s 4otion for
Reconsideration.
The antecedents of the case are as follows"
On (ebruar) $, $222 herein petitioner filed with the NLRC National Capital Re-ion 8ue9on Cit)
a Co3plaint5 for pa)3ent of separation pa) a-ainst :uhans Enterprises.
0ubsequentl) in his A3ended Co3plaint and Position Paper; dated #ece3ber * $222 petitioner
alle-ed that in !une $2*5 he was e3plo)ed as a 3achine operator b) Ribonette 4anufacturin-
Co3pan) an enterprise en-a-ed in the business of 3anufacturin- and sellin- P<C pipes and is
owned and 3ana-ed b) herein respondent :eo =an /uan. Over a period of al3ost twent) &%+'
)ears the co3pan) chan-ed its na3e four ti3es. 0tartin- in $225 up to the ti3e of the filin- of
petitioner7s co3plaint in $222 the co3pan) was operatin- under the na3e of :uhans Enterprises.
#espite the chan-es in the co3pan)7s na3e petitioner re3ained in the e3plo) of respondent.
Petitioner further alle-ed that on October , $226 he -ot sic> and was confined in a hospital? on
#ece3ber $% $226 he reported for wor> but was no lon-er per3itted to -o bac> because of his
illness? he as>ed that respondent allow hi3 to continue wor>in- but be assi-ned a li-hter >ind of
wor> but his request was denied? instead he was offered a su3 of P$,+++.++ as his separation
pa)? however the said a3ount corresponds onl) to the period between $225 and $222? petitioner
pra)ed that he be -ranted separation pa) co3puted fro3 his first da) of e3plo)3ent in !une $2*5
but respondent refused. Aside fro3 separation pa) petitioner pra)ed for the pa)3ent of service
incentive leave for three )ears as well as attorne)7s fees.
On the other hand respondent averred in his Position Paper, that petitioner was hired as 3achine
operator fro3 4arch $ $225 until he stopped wor>in- so3eti3e in (ebruar) $222 on the -round
that he was sufferin- fro3 illness? after his recover) petitioner was directed to report for wor> but
he never showed up. Respondent was later cau-ht b) surprise when petitioner filed the instant
case for recover) of separation pa). Respondent clai3ed that he never ter3inated the services of
petitioner and that durin- their 3andator) conference he even told the latter that he could -o bac>
to wor> an)ti3e but petitioner clearl) 3anifested that he was no lon-er interested in returnin- to
wor> and instead as>ed for separation pa).
On Nove3ber %1 %+++ the Labor Arbiter handlin- the case rendered @ud-3ent in favor of
petitioner. The dispositive portion of the Labor Arbiter7s #ecision reads thus"
AB=ERE(ORE pre3ises considered @ud-3ent is hereb) rendered in favor of the co3plainant and
a-ainst herein respondent as follows"
$. Orderin- the respondents to pa) separation benefits equivalent to one.half &C' 3onth salar)
per )ear of service a fraction of siD 3onths equivalent to one )ear to herein co3plainant based on
the co3plainant7s len-th of service rec>oned fro3 !une $2*5 up to October $226 as provided
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under Article %6; of the Labor Code the sa3e co3puted b) the Co3putation and EDa3ination Enit
which we hereb) adopt and approved &sic' as our own in the a3ount of NINET:.ONE T=OE0AN#
(OER =EN#RE# (ORT:.(I<E PE0O0 &P2$;;,.++'?
%. Orderin- the respondents to pa) service incentive leave equivalent to fifteen da)s7 salar) in
the a3ount of T=REE T=OE0AN# (I(TEEN PE0O0 &P5+$,.++'.
All other clai3s are dis3issed for lac> of 3erit.
0O OR#ERE#.F*
A--rieved respondent filed an appeal with the NLRC.
On 4arch 5$ %++5 the Third #ivision of the NLRC rendered its #ecision1 dis3issin- respondent7s
appeal and affir3in- the Labor Arbiter7s #ecision.
Respondent filed a 4otion for Reconsideration6 but the sa3e was denied b) the NLRC in a
Resolution2 dated 4a) 5+ %++5.
Respondent then filed with the CA a petition for certiorari under Rule *, of the Rules of Court.
On (ebruar) $* %++, the CA pro3ul-ated its presentl) assailed #ecision disposin- as follows"
AB=ERE(ORE pre3ises considered the petition is partiall) /RANTE#. The award of separation
pa) is hereb) #ELETE# but the #ecision insofar as it awards private respondent Gherein
petitionerH service incentive leave pa) of three thousand and fifteen pesos &P5+$,.++' stands. The
NLRC is per3anentl) EN!OINE# fro3 partiall) eDecutin- its #ecision dated Nove3ber %1 %+++
insofar as the award of separation pa) is concerned? or if it has alread) effected eDecution it
should order the private respondent to forthwith restitute the sa3e.
0O OR#ERE#.F$+
=erein petitioner filed his 4otion for Reconsideration$$ of the CA #ecision but it was denied b) the
CA via a Resolution$% dated Au-ust % %++,.
=ence the instant petition based on the followin- assi-n3ent of errors"
I
T=E =ONORAILE COERT O( APPEAL0 0ERIOE0L: ERRE# IN IT0 (AILERE TO
APPRECIATE T=E A#4I00ION I: GPETITIONERH O( T=E (ACT AN# <ALI#IT: O( =I0
TER4INATION I: T=E GRE0PON#ENTH.
II
GT=E =ONORAILE COERT O( APPEAL0 0ERIOE0L: ERRE#H IN #EN:IN/ GPETITIONER70H
ENTITLE4ENT TO 0EPARATION PA: EN#ER ARTICLE %6; O( T=E LAIOR CO#E AN#
EN#ER T=E O4NIIE0 RELE0 I4PLE4ENTIN/ T=E LAIOR CO#E.
III
T=E =ONORAILE COERT O( APPEAL0 0ERIOE0L: ERRE# IN IT0 (IN#IN/ T=AT T=E
IER#EN O( PROO( T=AT AN E4PLO:EE I0 0E((ERIN/ (RO4 #I0EA0E T=AT =A0 TO IE
TER4INATE# RE0TG0H EPON T=E E4PLO:ER IN OR#ER (OR T=E E4PLO:EE TO IE
ENTITLE# TO 0EPARATION PA:.
I<
T=E =ONORAILE COERT O( APPEAL0 0ERIOE0L: ERRE# IN OR#ERIN/ T=E #ELETION
O( T=E ABAR# O( 0EPARATION PA: TO T=E GPETITIONERH.$5
The Court finds the petition without 3erit.
The assi-ned errors in the instant petition essentiall) boil down to the question of whether
petitioner is entitled to separation pa) under the provisions of the Labor Code particularl) Article
%6; thereof which reads as follows"
AAn e3plo)er 3a) ter3inate the services of an e3plo)ee who has been found to be sufferin- fro3
an) disease and whose continued e3plo)3ent is prohibited b) law or is pre@udicial to his health as
well as to the health of his co.e3plo)ees" Provided That he is paid separation pa) equivalent to at
least one &$' 3onth salar) or to one.half &C' 3onth salar) for ever) )ear of service whichever is
-reater a fraction of at least siD 3onths bein- considered as one &$' whole )ear.F
A plain readin- of the abovequoted provision clearl) presupposes that it is the e3plo)er who
ter3inates the services of the e3plo)ee found to be sufferin- fro3 an) disease and whose
continued e3plo)3ent is prohibited b) law or is pre@udicial to his health as well as to the health of
his co.e3plo)ees. It does not conte3plate a situation where it is the e3plo)ee who severs his or
her e3plo)3ent ties. This is precisel) the reason wh) 0ection 6$; Rule $ Ioo> <I of the O3nibus
Rules I3ple3entin- the Labor Code directs that an e3plo)er shall not ter3inate the services of
the e3plo)ee unless there is a certification b) a co3petent public health authorit) that the disease
is of such nature or at such a sta-e that it cannot be cured within a period of siD &*' 3onths even
with proper 3edical treat3ent.
=ence the pivotal question that should be settled in the present case is whether respondent in
fact dis3issed petitioner fro3 his e3plo)3ent.
A perusal of the #ecisions of the Labor Arbiter and the NLRC would show however that there was
no discussion with respect to the above3entioned issue. Ioth lower tribunals 3erel) concluded
that petitioner is entitled to separation pa) under Article %6; of the Labor Code without an)
eDplanation. The Court finds no convincin- @ustification in the #ecision of the Labor Arbiter on wh)
petitioner is entitled to such pa). In the sa3e 3anner the NLRC #ecision did not -ive an)
rationali9ation as the -ist thereof si3pl) consisted of a quoted portion of the appealed #ecision of
the Labor Arbiter.
On the other hand the Court a-rees with the CA in its observation of the followin- circu3stances
as proof that respondent did not ter3inate petitioner7s e3plo)3ent" first the onl) cause of action in
petitioner7s ori-inal co3plaint is that he was Aoffered a ver) low separation pa)F? second there was
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no alle-ation of ille-al dis3issal both in petitioner7s ori-inal and a3ended co3plaints and position
paper? and third there was no pra)er for reinstate3ent.
In consonance with the above findin-s the Court finds that petitioner was the one who initiated the
severance of his e3plo)3ent relations with respondent. It is evident fro3 the various pleadin-s
filed b) petitioner that he never intended to return to his e3plo)3ent with respondent on the
-round that his health is failin-. Indeed petitioner did not as> for reinstate3ent. In fact he re@ected
respondent7s offer for hi3 to return to wor>. This is tanta3ount to resi-nation.
Resi-nation is defined as the voluntar) act of an e3plo)ee who finds hi3self in a situation where
he believes that personal reasons cannot be sacrificed in favor of the eDi-enc) of the service and
he has no other choice but to disassociate hi3self fro3 his e3plo)3ent.$,
It 3a) not be a3iss to point out at this @uncture that aside fro3 Article %6; of the Labor Code the
award of separation pa) is also authori9ed in the situations dealt with in Article %65$* of the sa3e
Code and under 0ection ; &b' Rule I Ioo> <I of the I3ple3entin- Rules and Re-ulations of the
said Code$1 where there is ille-al dis3issal and reinstate3ent is no lon-er feasible. I) wa) of
eDception this Court has allowed -rants of separation pa) to stand as Aa 3easure of social @usticeF
where the e3plo)ee is validl) dis3issed for causes other than serious 3isconduct or those
reflectin- on his 3oral character.$6 =owever there is no provision in the Labor Code which -rants
separation pa) to voluntaril) resi-nin- e3plo)ees. In fact the rule is that an e3plo)ee who
voluntaril) resi-ns fro3 e3plo)3ent is not entitled to separation pa) eDcept when it is stipulated in
the e3plo)3ent contract or CIA or it is sanctioned b) established e3plo)er practice or polic).$2
In the present case neither the above3entioned provisions of the Labor Code and its
i3ple3entin- rules and re-ulations nor the eDceptions appl) because petitioner was not dis3issed
fro3 his e3plo)3ent and there is no evidence to show that pa)3ent of separation pa) is stipulated
in his e3plo)3ent contract or sanctioned b) established practice or polic) of herein respondent
his e3plo)er.
0ince petitioner was not ter3inated fro3 his e3plo)3ent and instead is dee3ed to have resi-ned
therefro3 he is not entitled to separation pa) under the provisions of the Labor Code.
The fore-oin- notwithstandin- this Court in a nu3ber of cases has -ranted financial assistance
to separated e3plo)ees as a 3easure of social and co3passionate @ustice and as an equitable
concession. Ta>in- into consideration the factual circu3stances obtainin- in the present case the
Court finds that petitioner is entitled to this >ind of assistance.
Citin- Eastern 0hippin- Lines Inc. v. 0edan%+ this Court in the 3ore recent case of Eastern
0hippin- Lines v. Antonio%$ held"
AIut we 3ust stress that this Court did allow in several instances the -rant of financial assistance.
In the words of !ustice 0abino de Leon !r. now deceased financial assistance 3a) be allowed as
a 3easure of social @ustice and eDceptional circu3stances and as an equitable concession. The
instant case equall) calls for balancin- the interests of the e3plo)er with those of the wor>er if
onl) to approDi3ate what !ustice Laurel calls @ustice in its secular sense.
In this instance our attention has been called to the followin- circu3stances" that private
respondent @oined the co3pan) when he was a )oun- 3an of %, )ears and sta)ed on until he was
;6 )ears old? that he had -iven to the co3pan) the best )ears of his )outh wor>in- on board ship
for al3ost %; )ears? that in those )ears there was not a sin-le report of hi3 trans-ressin- an) of
the co3pan) rules and re-ulations? that he applied for optional retire3ent under the co3pan)7s
non.contributor) plan when his dau-hter died and for his own health reasons? and that it would
appear that he had served the co3pan) well since even the co3pan) said that the reason it
refused his application for optional retire3ent was that it still needed his services? that he denies
receivin- the tele-ra3 as>in- hi3 to report bac> to wor>? but that considerin- his a-e and health
he preferred to sta) ho3e rather than ris> further wor>in- in a ship at sea.
In our view with these special circu3stances we can call upon the sa3e Asocial and
co3passionate @usticeF cited in several cases allowin- financial assistance. These circu3stances
indubitabl) 3erit equitable concessions via the principle of Aco3passionate @usticeF for the wor>in-
class. D D D
In the present case respondent had been e3plo)ed with the petitioner for al3ost twelve &$%'
)ears. On (ebruar) $5 $22* he suffered fro3 a Afractured left transverse process of fourth lu3bar
vertebraF while their vessel was at the port of :o>oha3a !apan. After consultin- a doctor he was
required to rest for a 3onth. Bhen he was repatriated to 4anila and eDa3ined b) a co3pan)
doctor he was declared fit to continue his wor>. Bhen he reported for wor> petitioner refused to
e3plo) hi3 despite the assurance of its personnel 3ana-er. Respondent patientl) waited for 3ore
than one )ear to e3bar> on the vessel as %nd En-ineer but the position was not -iven to hi3 as it
was occupied b) another person >nown to one of the stoc>holders. Consequentl) for havin- been
deprived of continued e3plo)3ent with petitioner7s vessel respondent opted to appl) for optional
retire3ent. In addition records show that respondent7s sea3an7s boo> as dul) noted and si-ned
b) the captain of the vessel was 3ar>ed A<er) /oodF and Areco33ended for hire.F 4oreover
respondent had no dero-ator) record on file over his lon- )ears of service with the petitioner.
Considerin- all of the fore-oin- and in line with Eastern the ends of social and co3passionate
@ustice would be served best if respondent will be -iven so3e equitable relief. Thus the award of
P$+++++.++ to respondent as financial assistance is dee3ed equitable under the
circu3stances.F%%
Bhile the abovecited cases authori9ed the -rant of financial assistance in lieu of retire3ent
benefits the Court finds no co-ent reason not to e3plo) the sa3e -uidin- principle of
co3passionate @ustice applied b) the Court ta>in- into consideration the factual circu3stances
obtainin- in the present case. In this re-ard the Court finds credence in petitioner7s contention that
he is in the e3plo) of respondent for 3ore than 5, )ears. In the absence of a substantial refutation
on the part of respondent the Court a-rees with the findin-s of the Labor Arbiter and the NLRC
that respondent co3pan) is not distinct fro3 its predecessors but in fact 3erel) continued the
operation of the latter under the sa3e owners and the sa3e business venture. The Court further
notes that there is no evidence on record to show that petitioner has an) dero-ator) record durin-
his lon- )ears of service with respondent and that his e3plo)3ent was severed not b) reason of
an) infraction on his part but because of his failin- ph)sical condition. Add to this the willin-ness of
respondent to -ive hi3 financial assistance. =ence based on the fore-oin- the Court finds that
the award of P,++++.++ to petitioner as financial assistance is dee3ed equitable under the
circu3stances.
B=ERE(ORE the instant petition is #ENIE#. The assailed #ecision and Resolution of the Court
of Appeals are A((IR4E# with 4O#I(ICATION b) awardin- petitioner with financial assistance in
the a3ount of P,++++.++.
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0O OR#ERE#.
Carpio &Chairperson' Nachura Abad and 4endo9a !!. concur.
Petition denied @ud-3ent and resolution affir3ed with 3odification.
Note.J(or an e3plo)ee to be validl) dis3issed for a cause analo-ous to those enu3erated in
Article %6% the cause 3ust involve a voluntar) andKor willful act or o3ission of the e3plo)ee.
&Philippine National Ian> vs. <elasco ,*; 0CRA ,$% G%++6H'
4 | V i l l a r u e l