Alfaro v. CA, NLRC, Star Paper Corp. (2001)

Alfaro v. CA (2001) is about the payment of Separation pay to an employee who voluntarily resigned.

Related Tags:

  • Voluntary Resignation
  • Separation Pay

Details of Decision

Reference Number:G.R. No. 140812
Date:August 28, 2001
Action:Petition for Review on Certiorari


I. Facts

Candido Alfaro was employed as a helper/operator of Star Paper Corporation in 1990. In 1993, he suffered an illness which made him take a vacation leave. Upon returning, another person was recruited to his position and was transferred to another section. Alfaro complained of the work being too difficult which he interpreted as a punishment given to him. As a result, Alfaro alleged that he was dismissed without valid cause and without due process of law. Further, he was not paid 13th month pay and 15 days sick leave which he was claiming because he refused to sign a document renouncing all his claim against Star Paper.

Alfaro went to Star Paper to claim his 13th monthly and his 15 days sick leave pay. He received the amount of P3,000.00 but he was allegedly pressured to sign a Quitclaim and Release with no amount or consideration written on said document. Further, complainant also alleges that he was also made to sign a prepared resignation letter in exchange for the P3,000.00 which he received which was contrary to the claim of the respondent corporation that he received P8,452.00.

Alfaro filed a case to the NLRC against the Star Paper for non-payment of separation pay. Said complaint was later amended on August 1, 1996 by claiming illegal dismissal and damages in lieu of separation pay, with a prayer for reinstatement with backwages and attorney's fees.

Star Paper alleged that Alfaro, in view of his illness, asked them that he be allowed to resign with benefits. Star Paper agreed which resulted in Alfaro submitting a resignation letter. Upon receipt of an amount of P8,452.50, Alfaro executed a Release and Quitclaim in favor of Star Paper.

II. Issues

Whether Alfaro is entitled to separation pay despite voluntarily resigning?

III. Ruling

Yes, Alfaro is entitled to separation pay despite his voluntary resignation.

Voluntary resignation is defined as the act of an employee, who find himself in a situation in which he believes that personal reasons cannot be sacrificed in favor of the exigency of the service; thus, he has no other choice but to disassociate himself from his employment. Generally, separation pay need not be paid to an employee who voluntarily resigns. However, an employer who agrees to expend such benefit as an incident of the resignation should not be allowed to renege in the performance of such commitment. Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represented a reasonable settlement, it is binding on the parties and may not later be disowned, simply because of a change of mind.

Alfaro was already suffering from an illness at the time and his continued employment would have been detrimental not only to his health, but also to his performance as an employee of private respondent. Upon the request of Alfaro, Star Paper agreed to a scheme whereby Alfaro would receive separation pay despite having resigned voluntarily. Thus, the terms and conditions they both agreed upon constituted a contract freely entered into, which should be performed in good faith, as it constituted the law between the parties.

An employee who resigns and executes a quitclaim in favor of the employer is generally estopped from filing any further money claims against the employer arising from the employment. However, Star Paper has not complied with its obligation and directed to give Alfaro's separation pay in the amount of P8,542.50.

IV. Fallo

WHEREFORE, the Petition is hereby DENIED and the assailed Decision of the Court of Appeals AFFIRMED, with the modification that private respondent is
directed to pay petitioner P8,452.50 plus legal interest thereon, computed from December 7, 1993, until fully paid, representing the unpaid separation pay benefit agreed upon by the parties.


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