PCIB vs. Abad, February 28, 2005

Facts:
Anastacio Abad was the Senior Assistant Manager of PCIB, Tacloban City, when he was dismissed from work on Aug. 3, 1998. On Mar. 13, 1998, Abad received a memorandum from PCIB concerning the irregular clearing of PNB-Naval Check of Sixtu Chu, a valued client. Abad denied that he instructed his subordinates to validate the out-of-town checks of Chu presented for deposit or encashment as local clearing checks. During the investigation conducted by the PCIB, several transactions violative of the Bank’s Policies and Rules and Regulations were uncovered by the Fact-Finding Committee. Consequently, Lorenzo Cervantes, Fact-Finding officer, issued another memorandum to Abad asking the latter to explain the newly discovered irregularities. Not satisfied with the explanations of Abad, PCIB served another memorandum, terminating his employment effective immediately upon receipt. Abad instituted a Complaint for Illegal dismissal against PCIB. The LA ruled that the dismissal was legal. However, it directed PCIB to pay Abad the amount of P10,000.00 for its failure to comply with the requirements of due process.
 
In appeal, NLRC issued a decision affirming the decision of LA with modification ordering PCIB to pay Abad the amount of P21,209.31 representing his 13th month pay for 1998. The CA also sustained the validity of the dismissal but modified the award to separation pay equivalent to ½ month pay for every year of service in accordance with social justice policy in favor of the working class.

Issue:
Is an employee entitled to separation pay even if legally dismissed.

​Held:
Yes. An employee dismissed for any of just causes enumerated under Art. 282 of the LC is not, as a rule, entitled to separation pay. As an exception, allowing the grant of separation pay or some other financial assistance to an employee dismissed for just causes is based on equity. The Court has granted separation pay as a measure of social justice even when an employee has been validly dismissed, as long as the dismissal was not due to serious misconduct or reflective of personal integrity or morality. The dismissal in the present case was due to loss of trust and confidence, not serious misconduct. As facts indicate, his actions were motivated by a desire to accommodate a valued client of the bank.