Dear PAO,
I served as vice president of a prominent company that ceased operations during the Covid-19 pandemic due to severe financial losses. As a result, the management opted to cease operation and pay the workers what was due to them. For six (6) months following the cessation of operations, the company president and I continued to oversee the company’s liquidation and closure activities, despite no longer receiving our respective salaries. During this period, the president, who is also a personal friend, assured me that I would receive my separation pay and a gratuity package, provided that I tender my resignation. He explained he will pay these benefits after all rank-and-file employees had been fully paid. Relying on this assurance, I resigned from my position. After the company had settled all obligations to the rank-and-file employees, I inquired about the status of my separation and gratuity pay. The president informed me that no assets remained and that he had even incurred personal loans to ensure payment to the rank-and-file employees. I dedicated twenty (20) years of my professional life to the company, and rose from the ranks. Had it not been for the president’s explicit promise that I would be compensated upon resignation, I would have elected to remain employed and wait for the payment of my separation pay like the other employees. Can I still recover my separation pay and gratuity pay, as promised and my salary for six months? Thank you.
Jesse

Dear Jesse,
The principle of promissory estoppel may be applicable to your case. In Accessories Specialist Inc., a.k.a. Arts 21 Corporation vs. Erlinda B. Alabanza (G.R. No. 168985, July 23, 2008), the Supreme Court, through Honorable Associate Justice Antonio Eduardo B. Nachura, held that:

“Promissory estoppel may arise from the making of a promise, even though without consideration, if it was intended that the promise should be relied upon, as in fact it was relied upon, and if a refusal to enforce it would virtually sanction the perpetration of fraud or would result in other injustice. Promissory estoppel presupposes the existence of a promise on the part of one against whom estoppel is claimed. The promise must be plain and unambiguous and sufficiently specific so that the court can understand the obligation assumed and enforce the promise according to its terms. In order to make out a claim of promissory estoppel, a party bears the burden of establishing the following elements: (1) a promise was reasonably expected to induce action or forbearance; (2) such promise did, in fact, induce such action or forbearance; and (3) the party suffered detriment as a result.”
In your case, all the requisites of promissory estoppel can be said to be present. First, the President made a clear and specific promise that you would receive your separation pay and gratuity pay upon your resignation as vice president. Second, relying on that promise, you voluntarily tendered your resignation. Third, despite the fact that all rank-and-file employees had already received their separation pay, you have not been paid the amount that you were promised. If the following can be proved, the refusal to honor the promise to you results in clear injustice and may give rise to a valid claim under the doctrine of promissory estoppel.

As to your salary for the six (6) months, the same should have been duly paid to you. Pursuant to Article 101 of the Labor Code, “[w]ages shall be paid at least once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days.” Furthermore, in accordance with the long-standing principle of “a fair day’s wage for a fair day’s labor,” you are legally entitled to recover your unpaid wages for the six months. Accordingly, the company can be compelled to pay your wages for said period.
Relative to your claims, namely, separation pay, gratuity pay, and unpaid wages, you may file a formal complaint before the National Labor Relations Commission (NLRC). Please be advised that monetary claims arising from employer-employee relationships are subject to a prescriptive period of three (3) years from the time the cause of action accrued.

We hope that we are able to answer your queries. This advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
We appreciate your trust and support.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to [email protected]