Separation Pay Cannot be Awarded to Employee Dismissed for Gross and Habitual Neglect of Duty; Other issues on this ground
Gross and habitual neglect of duty is one of the grounds for dismissal under Article 297 of the Labor Code, as amended.
In certain termination, employee is entitled to payment of separation pay. This applies to grounds found under Article 298 of the Labor Code such as installation of labor saving devices, redundancy, retrenchment, and closure.
But this does not apply to dismissal due to the fault of the employee like those grounds in Article 297.
In one case, in view of the attendant circumstances, the Supreme Court was constrained to deny employee’s separation pay since the cause for the termination of his employment amounts to gross and habitual neglect of his duties.
For dismissals based on other grounds under Art. 297, like willful disobedience, gross and habitual neglect of duty, fraud or willful breach of trust, and commission of a crime against the employer or his family, separation pay should not be conceded to the dismissed employee.
As consistently held in several cases, the performance awards of an employee are inconsistent with the claim that he is negligent of his duties.
Acquire Mastery of HR/Labor Doctrines, Rules and Principles with Atty. Elvin’s HR Bundle Books at Discounted Rate
In its decision, the Supreme Court took into account the employee’s unblemished record in belying the claim that the employee has incurred gross and habitual neglect of duty. The Court cited the employer’s own recognition of the employee’s dedication to his job as evidenced by the latter’s awards.
As a general concept, poor performance is equivalent to inefficiency and incompetence in the performance of official duties.
Gross inefficiency and unsatisfactory rating can be a just cause for dismissal only if it amounts to gross and habitual neglect of duties.
The fact that an employee’s performance is found to be poor or unsatisfactory does not necessarily mean that the employee is grossly and habitually negligent of his duties since gross negligence implies a want or absence of or failure to exercise slight care or diligence, or the entire absence of care. The employer should be able to present substantial evidence that would substantiate the cause of the employee’s dismissal.
Learn how to Validly Terminate Employee in the Philippines with this Tutorial Video of Atty. Elvin 
Read more on procedural due process discussion by Atty. Elvin:
Read more on procedural due process by Atty. Villanueva:
Twin Requirements of Notice and Hearing