Nicolas and De Vega Law Offices What Do You Get When You Resign

This Applies to Voluntary Resignation

Parting is such sweet sorrow. For some, resigning from work is a sad event while for others it is a release from bondage.  Whatever the reason may be, the question looming in an employee’s mind is – What would I get when I resign?

In BMG Recors vs. Aparecio (G.R. No. 153290, 05 September 2007), the Philippine Supreme Court defined resignation as “the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and one has no other choice but to dissociate oneself from employment. It is a formal pronouncement or relinquishment of an office, with the intention of relinquishing the office accompanied by the act of relinquishment”. Since this is a voluntary act on the part of the employee, the employer cannot be charged with the obligation to give more than what is required by law.  Thus, under the law, an employee who resigned is entitled to his final pay for work rendered, pro-rated thirteenth month pay and monetization of unused service incentive leaves.

No Separation Pay for Voluntarily Resigning Employees

It is often asked if an employee who resigned is entitled to separation pay. The answer is no.  In numerous decisions by the Supreme Court, it has been enunciated that there is NO provision in the Labor Code granting separation pay to voluntarily resigning employees.  Thus, as held in Hinatuan Mining Corporation vs. National Labor Relations Commission (G.R. No. 117394, 21 February 1997), 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, 

(f) when an employee is illegally dismissed but reinstatement is no longer feasible

 (g) when it is sanctioned by established employer practice of policy.

Additionally, in the case of Alfaro vs. Court of Appeals (G.R. No. 140812, 28 August 2001), the High Court held that although 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 on the fulfillment of such commitment. In short, if the resignation was motivated by a promise of the employer of the grant of benefits and/or separation pay, then such pay must be given.

What An Employee Receives Upon Resignation

However, the general rule still stands. An employee who resigned is not entitled to separation pay.  Thus, it is best to think hard and weigh the pros and cons before tendering that letter of resignation. So, what will an employee receive when he resigns? Final pay for work rendered, pro-rated thirteenth month pay and unused service incentive leaves.  That is all.

About Nicolas and De Vega Law Offices

If you need assistance with labor-related issues, compliance with DOLE issuances, and help in the enforcement of company employment policies,   we can help you. Nicolas and de Vega Law Offices is a full-service law firm in the Philippines.  You may visit us at the 16th Flr., Suite 1607 AIC Burgundy Empire Tower, ADB Ave., Ortigas Center, 1605 Pasig City, Metro Manila, Philippines.  You may also call us at +632 84706126, +632 84706130, +632 84016392 or e-mail us at [email protected]. Visit our website