The employee in this case was declared to have been dismissed for a valid cause. It was found that the said employee not only violated Security Bank Savings Corporation’s Code of Conduct, but also committed gross and habitual neglect of duties when he repeatedly allowed his branch manager to bring outside the bank premises checkbooks and bank forms despite knowledge of the bank’s prohibition on the matter.
Notwithstanding the foregoing findings, separation pay was awarded the employee for the following reasons:
- it was a measure of social justice;
- the employee’s infractions involved violations of company policy and habitual neglect of duties, not serious misconduct;
- the employee’s dismissal from work was not reflective of his moral character;
- the employee did not commit a dishonest act since he readily admitted to the bank that he allowed the branch manager to bring out the subject checkbooks; and
- although the employee acquiesced to the branch manager’s improper marketing strategy, there was no showing that his conduct was perpetrated with self-interest or for an unlawful purpose.
The Supreme Court, however, ruled that the award of separation pay in the employee’s favor was not proper.
Rule:
An employee dismissed for any of the just causes enumerated under Article 2971ARTICLE 297. (Formerly ARTICLE 282) Termination by Employer. — An employer may terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
(d) 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 representatives; and
(e) Other causes analogous to the foregoing. of the Labor Code of the Philippines, being causes attributable to the employee’s fault, is not, as a general rule, entitled to separation pay. According to the Court, the non-grant of such right to separation pay is premised on the reason that an erring employee should not benefit from his wrongful acts.
Exception:
As an exception, the grant of separation pay or financial assistance to a legally dismissed employee has been allowed in certain instances as a measure of social justice or on grounds of equity. The Court said:
There should be no question that where it comes to such valid but not iniquitous causes as failure to comply with work standards, the grant of separation pay to the dismissed employee may be both just and compassionate, particularly if he has worked for some time with the company. It is not the employee’s fault if he does not have the necessary aptitude for his work but on the other hand the company cannot be required to maintain him just the same at the expense of the efficiency of its operations. He too may be validly replaced. Under these and similar circumstances, however, the award to the employee of separation pay would be sustainable under the social justice policy even if the separation is for cause.
Clarification:
The Court, nonetheless, stated that the grant of separation pay to such a dismissed employee is primarily determined by the cause of the dismissal.
Instances excluded from the grant of separation pay based on social justice are those listed under Article 2972ARTICLE 297. (Formerly ARTICLE 282) Termination by Employer. — An employer may terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
(d) 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 representatives; x x x
of the Labor Code of the Philippines, namely, 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.
However, with respect to analogous causes3ARTICLE 297. (Formerly ARTICLE 282) Termination by Employer. — An employer may terminate an employment for any of the following causes:
(e) Other causes analogous to the foregoing. for termination like inefficiency, drug use, and others, the social justice exception could be made to apply depending on certain considerations, such as the length of service of the employee, the amount involved, whether the act is the first offense, the performance of the employee, and the like.
In the present case, the employee’s valid dismissal on the ground of gross and habitual neglect of duty had already been established, not having been contested on appeal.
The Court noted that the employee was the custodian of accountable bank forms in his assigned branch and as such, was mandated to strictly comply with the monitoring procedure and disposition thereof as a security measure to avoid the attendant high risk to the bank.
However, the employee’s repeated act of allowing the branch manager to bring checkbooks and bank forms outside of the bank’s premises violated bank policy, put the bank’s credibility and business at risk, and exposed the bank to regulatory sanction.
The Court emphasized that the banking industry is imbued with public interest. Banks are required to possess not only ordinary diligence in the conduct of its business but extraordinary diligence in the care of its accounts and the interests of its stakeholders. The banking business is highly sensitive with a fiduciary duty towards its client and the public in general, such that central measures must be strictly observed.
With regard to the employee’s excuse that the branch manager merely prompted him towards such ineptitude, the Court found no reason to lend credence to the same. The Court found that the employee readily admitted that he violated established company policy against bringing out checkbooks and bank forms, which meant that he was well aware of the fact that the same was prohibited. Nevertheless, he still chose to, regardless of his superior’s influence, disobey the same not only once, but on numerous occasions. All throughout, there was no showing that he questioned the acts of the branch manager; neither did he take it upon himself to report said irregularities to a higher authority.
The Court maintained that the infractions, while not indicative of wrongful intent on the part of the employee, was, nonetheless, serious in nature when one considered the employee’s functions. The Court accordingly found no reason to award separation pay based on social justice. Said the Court: “A contrary ruling would effectively reward (the employee) for his negligent acts instead of punishing him for his offense, in observation of the principle of equity.”
Further reading:
- Security Bank Savings Corp. v. Singson, G.R. No. 214230, February 10, 2016.
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