Entitlement to separation pay of a resigned employee

Dear PAO,

I am an employee of a bank in Manila. Due to personal reasons, I was forced to move back to my hometown, so I decided to resign from my job. I have been an employee of that bank for several years now, and all the previous employees who resigned were given a separation pay in the amount of Twenty Thousand Pesos (Php 20,000.00). However, when I inquired as to my entitlement thereto, the management said that the payment of separation pay to resigned employees is part of management prerogative, and that they decided not to extend the same benefit to me. I'd like to know if this practice is valid.

Christa

Dear Christa,

Please be informed that Article 100 of Presidential Decree No. 442, as amended, otherwise known as the «Labor Code of the Philippines,» provides:

«Art. 100. Prohibition against elimination or diminution of benefits. Nothing in this Book shall be construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of promulgation of this Code.»

Relatedly, the Honorable Supreme Court ruled in the case of Italkarat 18, Inc. v. Juraldine N. Gerasmio (G.R. No. 221411, September 28, 2020, Ponente: Honorable Associate Justice Ramon Paul Hernando) that:

«As a general rule, the law does not require employers to pay employees that have resigned any separation pay, unless there is a contract that provides otherwise or there exists a company practice of giving separation pay to resignees.

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»We have ruled that a company's practice of paying separation pay to resignees must be proven to exist as this is an exception to the general rule that employees who voluntarily resign are not entitled to separation pay." (Emphasis supplied)

Further, in the case of Vergara, Jr. v. Coca-Cola Bottlers Philippines, Inc. (G.R. No. 176985, April 1, 2013, Ponente: Honorable Chief Justice Diosdado M. Peralta), the Honorable Supreme Court ruled that:

«To be considered as a regular company practice, the employee must prove by substantial evidence that the giving of the benefit is done over a long period of time, and that it has been made consistently and deliberately. Jurisprudence has not laid down any hard-and-fast rule as to the length