Security Bank Savings Corporation v. Singson G.R. No. 214230, February 10, 2016

 CASE DIGEST

Security Bank Savings Corporation v. Singson

G.R. No. 214230, February 10, 2016

FIRST DIVISION, PERLAS-BERNABE, J.

 

Separation pay a form of Financial Assistance 

A separation pay may be awarded as a form of financial assistance based given in light of social justice be allowed only when the dismissal: (a) was not for serious misconduct; and (b) does not reflect on the moral character of the employee or would involve moral turpitude.

 

Charles M. Singson was employed by Security Bank Savings Corporation (formerly Premiere Development Bank) for over 23 years, rising to the position of Customer Service Operations Head (CSOH) at the Quezon Avenue Branch. He was responsible for the safekeeping of checkbooks and other bank forms. In 2008, he was charged with violating the bank’s Code of Conduct after mishandling 41 pre-encoded checkbooks, allowing his Branch Manager to take them out of the bank without authorization. Despite his claims that this was a marketing strategy, the bank found him grossly negligent and dismissed him for habitual neglect of duty. 

Singson challenged his dismissal, and while the Labor Arbiter (LA) upheld the validity of his termination, it still awarded him separation pay as financial assistance. The NLRC and Court of Appeals (CA) affirmed, ruling that his dismissal was not due to serious misconduct or moral turpitude, and thus, he was entitled to separation pay under social justice principles. The bank contested this, arguing that gross negligence is a serious offense that disqualifies an employee from separation pay. 

 

Whether an employee dismissed for gross neglect of duty is entitled to separation pay as financial assistance under social justice principles. 

No. The Supreme Court ruled in favor of the bank, holding that Singson was not entitled to separation pay because his dismissal was due to gross and habitual neglect of duty, a just cause under Article 297 (formerly Article 282) of the Labor Code. The Court emphasized:

1. Separation pay is generally not awarded when dismissal is due to the employee’s fault – Employees dismissed for serious misconduct, willful disobedience, gross neglect, fraud, or crimes against the employer are not entitled to separation pay, as this would reward wrongful conduct.
2. Exception under social justice principles – Separation pay may be granted only if the dismissal was for reasons other than serious misconduct or moral turpitude. However, habitual neglect of duty is a serious offense that reflects poor moral character and a disregard for responsibilities, thus disqualifying Singson from receiving financial assistance.
3. Banks require extraordinary diligence – Given the fiduciary nature of banking, employees like Singson—who are entrusted with sensitive financial documents—must exercise the highest degree of care. His failure to safeguard checkbooks and repeated violations posed a risk to the bank’s credibility, justifying his dismissal without separation pay.

 

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