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Villaruel vs. Yeo Han Guan FACTS: Villaruel Filed With The NLRC NCR-Quezon City A Complaint For

Villaruel filed a complaint against Yeo Han Guan for payment of separation pay. Villaruel had worked for Yeo Han Guan's company since 1963 as a machine operator. In 1998, Villaruel got sick and was no longer allowed to return to work after recovering. He asked to return to lighter duties but was denied and offered 15,000 pesos in separation pay, which only covered from 1993-1999, not his entire employment period. The court found that Villaruel resigned by intention to not return due to illness, not that he was terminated. There is no entitlement to separation pay for voluntary resignation under the labor code. However, considering Villaruel's long service of over 35 years, the

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87 views2 pages

Villaruel vs. Yeo Han Guan FACTS: Villaruel Filed With The NLRC NCR-Quezon City A Complaint For

Villaruel filed a complaint against Yeo Han Guan for payment of separation pay. Villaruel had worked for Yeo Han Guan's company since 1963 as a machine operator. In 1998, Villaruel got sick and was no longer allowed to return to work after recovering. He asked to return to lighter duties but was denied and offered 15,000 pesos in separation pay, which only covered from 1993-1999, not his entire employment period. The court found that Villaruel resigned by intention to not return due to illness, not that he was terminated. There is no entitlement to separation pay for voluntary resignation under the labor code. However, considering Villaruel's long service of over 35 years, the

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Princess Magpatoc
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© © All Rights Reserved
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VILLARUEL VS.

YEO HAN GUAN

FACTS: Villaruel filed with the NLRC NCR-Quezon City a Complaint for


payment of separation pay against Yuhans Enterprises.

June 1963, Villaruel was employed as a machine operator by Ribonette


Manufacturing Company owned and managed by herein respondent Yeo Han
Guan.

in October 1998, he got sick and was confined in a hospital and in

December 1998, he reported for work but was no longer permitted to go back
because  of his illness;

he asked that respondent allow him to continue working but be assigned a


lighter kind of work but his request was denied; instead, he was offered a sum
of P15,000.00 as his separation pay; however, the said amount corresponds
only to the period between 1993 and 1999;

petitioner prayed that he be granted separation pay computed from his first
day of employment in June 1963, but respondent refused because according
to him the petitioner was hired as machine operator from March 1993 until he
stopped working sometime in February 1999 on the ground that he was
suffering from illness; after his recovery, petitioner was directed to report for
work, but he never showed up.  Respondent was later caught by surprise
when petitioner filed the instant case for recovery of separation pay.
Respondent claimed that he never terminated the services of petitioner and
that during their mandatory conference, he even told the latter that he could
go back to work anytime but petitioner clearly manifested that he was no
longer interested in returning to work and instead asked for separation pay.

ISSUE: 

(1) Can the employer validly terminate an employee by reason of his illness?
(2) Will he be entitled to separation pay?

YES, Article 284 of the Labor Code reads:

An employer may terminate the services of an employee who has been found


to be suffering from any disease and whose continued employment is
prohibited by law or is prejudicial to his health as well as to the health of his
co-employees: Provided, That he is paid separation pay equivalent to at least
1 month salary or to ½ month salary for every year of service whichever is
greater, a fraction of at least six months being considered as 1 whole year.
But it must be the employer who terminates the services of the employee, and
that such employee is found to be:

1. suffering from any disease 


2. His continued employment is prohibited by law or is prejudicial to his health
as well as to the health of his co-employees.

 It does not contemplate a situation where it is the employee who severs his
or her employment ties.

IN VILLARUEL’s CASE :

the Court finds that petitioner was the one who initiated the severance of his
employment based on the petitioner’s pleading he never intended to return to
his employment because of his illness. In fact, he rejected respondent's offer
for him to return to work. This is tantamount to resignation.

Resignation 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 exigency of the service and he has no other choice but to
disassociate himself from his employment

However, there is no provision in the Labor Code which grants separation pay
to voluntarily resigning employees. In fact, the rule is that an employee who
voluntarily resigns from employment is not entitled to separation pay, except
when it is stipulated in the employment contract or CBA, or it is sanctioned by
established employer practice or policy.

Since petitioner was not terminated from his employment and, instead, is
deemed to have resigned therefrom, he is not entitled to separation pay
under the provisions of the Labor Code.

BUT!!!! the court granted financial assistance in lieu of retirement benefits,


employing the principle of compassionate justice applied taking into
consideration that Villaruel worked for the employer for more than 35 years.

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