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Separation Pay in lieu of Reinstatement

Posted by lexforiphilippines on July 12, 2010

An illegally dismissed employee is entitled to two reliefs: backwages and reinstatement.  The two reliefs are separate and distinct.  When reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay equivalent to one (1) month salary for every year of service should be awarded as an alternative.  The payment of separation pay is in addition to payment of backwages.  In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and backwages.  Strained relations must be demonstrated as a fact and must be supported by substantial evidence showing that the relationship between the employer and the employee is indeed strained as a necessary consequence of the judicial controversy. So said the Supreme Court in the case of Golden Ace Builders and Arnold Azul vs. Jose A. Talde, G.R. No. 187200; 5 May 2010.

(For a digest of the case of Golden Ace Builders and Arnold Azul vs. Jose A. Talde, G.R. No. 187200; 5 May 2010, click on Digested Cases under Tools.)

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