SECOND DIVISION
G.R. No. 199554, February 18, 2015
ZENAIDA PAZ, Petitioner, v. NORTHERN TOBACCO REDRYING CO., INC., AND/OR ANGELO ANG, Respondents.
D E C I S I O N
LEONEN, J.:
Zenaida Paz filed this Petition1 praying that “the computation of Petitioner’s Retirement Pay as determined by the National Labor Relations Commission in its Decision dated 08 December 2008 be reinstated.”2cralawred
Northern Tobacco Redrying Co., Inc. (NTRCI), a flue-curing and redrying of tobacco leaves business,3 employs approximately 100 employees with seasonal workers “tasked to sort, process, store and transport tobacco leaves during the tobacco season of March to September.”4cralawred
NTRCI hired Zenaida Paz (Paz) sometime in 1974 as a seasonal sorter, paid P185.00 daily. NTRCI regularly re-hired her every tobacco season since then. She signed a seasonal job contract at the start of her employment and a pro-forma application letter prepared by NTRCI in order to qualify for the next season.5cralawred
On May 18, 2003,6 Paz was 63 years old when NTRCI informed her that she was considered retired under company policy.7 A year later, NTRCI told her she would receive P12,000.00 as retirement pay.8cralawred
Paz, with two other complainants, filed a Complaint for illegal dismissal against NTRCI on March 4, 2004.9 She amended her Complaint on April 27, 2004 into a Complaint for payment of retirement benefits, damages, and attorney’s fees10 as P12,000.00 seemed inadequate for her 29 years of service.11 The Complaint impleaded NTRCI’s Plant Manager, Angelo Ang, as respondent.12 The Complaint was part of the consolidated Complaints of 17 NTRCI workers.13cralawred
NTRCI countered that no Collective Bargaining Agreement (CBA) existed between NTRCI and its workers. Thus, it computed the retirement pay of its seasonal workers based on Article 287 of the Labor Code.14cralawred
NTRCI raised the requirement of at least six months of service a year for that year to be considered in the retirement pay computation. It claimed that Paz only worked for at least six months in 1995, 1999, and 2000 out of the 29 years she rendered service. Thus, Paz’s retirement pay amounted to P12,487.50 after multiplying her ?185.00 daily salary by 22½ working days in a month, for three years.15cralawred
The Labor Arbiter in his Decision16 dated July 26, 2005 “[c]onfirm[ed] that the correct retirement pay of Zenaida M. Paz [was] ?12,487.50.”17cralawred
The National Labor Relations Commission in its Decision18 dated December 8, 2008 modified the Labor Arbiter’s Decision. It likewise denied reconsideration. The Decision’s dispositive portion reads:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, the decision of the labor arbiter is hereby MODIFIED. Complainant Appellant Zenaida Paz[’s] retirement pay should be computed pursuant to RA 7641 and that all the months she was engaged to work for respondent for the last twenty eight (28) years should be added and divide[d] by six (for a fraction of six months is considered as one year) to get the number of years [for] her retirement pay[.] Complainant Teresa Lopez is hereby entitled to her separation pay computed at one half month pay for every year of service, a fraction of six months shall be considered as one year, plus backwages from the time she was illegally dismissed up to the filing of her complaint.
The rest of the decision stays.
SO ORDERED.19cralawlawlibrary
WHEREFORE, the Petition is hereby DISMISSED. The Decision dated 8 December 2008 and Resolution dated 16 September 2009 of the National Labor Relations Commission in NLRC CA No. 046642-05(5) are MODIFIED in that (1) financial assistance is awarded to private respondent Zenaida Paz in the amount of P60,356.25; and (2) the dismissal of private respondent Teresa Lopez is declared illegal, and thus, she is awarded backwages and separation pay, in accordance with the foregoing discussion.
SO ORDERED.22cralawlawlibrary
[T]he test of whether or not an employee is a regular employee has been laid down in De Leon v. NLRC, in which this Court held:The primary standard, therefore, of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. Also if the employee has been performing the job for at least a year, even if the performance is not continuous and merely intermittent, the law deems repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the employment is considered regular, but only with respect to such activity, and while such activity exists.Thus, the nature of one’s employment does not depend solely on the will or word of the employer. Nor on the procedure for hiring and the manner of designating the employee, but on the nature of the activities to be performed by the employee, considering the employer's nature of business and the duration and scope of work to be done.
In the case at bar, while it may appear that the work of petitioners is seasonal, inasmuch as petitioners have served the company for many years, some for over 20 years, performing services necessary and indispensable to LUTORCO’s business, serve as badges of regular employment. Moreover, the fact that petitioners do not work continuously for one whole year but only for the duration of the tobacco season does not detract from considering them in regular employment since in a litany of cases this Court has already settled that seasonal workers who are called to work from time to time and are temporarily laid off during off-season are not separated from service in said period, but are merely considered on leave until re-employed.
Private respondent's reliance on the case of Mercado v. NLRC is misplaced considering that since in said case of Mercado, although the respondent company therein consistently availed of the services of the petitioners therein from year to year, it was clear that petitioners therein were not in respondent company's regular employ. Petitioners therein performed different phases of agricultural work in a given year. However, during that period, they were free to contract their services to work for other farm owners, as in fact they did. Thus, the Court ruled in that case that their employment would naturally end upon the completion of each project or phase of farm work for which they have been contracted.47 (Emphasis supplied, citations omitted)cralawlawlibrary
For respondents to be excluded from those classified as regular employees, it is not enough that they perform work or services that are seasonal in nature. They must have also been employed only for the duration of one season. . . . Evidently, petitioners employed respondents for more than one season. Therefore, the general rule of regular employment is applicable.
. . . .
The CA did not err when it ruled that Mercado v. NLRC was not applicable to the case at bar. In the earlier case, the workers were required to perform phases of agricultural work for a definite period of time, after which their services would be available to any other farm owner. They were not hired regularly and repeatedly for the same phase/s of agricultural work, but on and off for any single phase thereof. On the other hand, herein respondents, having performed the same tasks for petitioners every season for several years, are considered the latter’s regular employees for their respective tasks. Petitioners’ eventual refusal to use their services — even if they were ready, able and willing to perform their usual duties whenever these were available — and hiring of other workers to perform the tasks originally assigned to respondents amounted to illegal dismissal of the latter.49 (Emphasis supplied, citation omitted)cralawlawlibrary
Art. 279. Security of Tenure. In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.cralawlawlibrary
Dismissals based on just causes contemplate acts or omissions attributable to the employee while dismissals based on authorized causes involve grounds under the Labor Code which allow the employer to terminate employees. A termination for an authorized cause requires payment of separation pay. When the termination of employment is declared illegal, reinstatement and full backwages are mandated under Article 279. If reinstatement is no longer possible where the dismissal was unjust, separation pay may be granted.
Procedurally, (1) if the dismissal is based on a just cause under Article 282, the employer must give the employee two written notices and a hearing or opportunity to be heard if requested by the employee before terminating the employment: a notice specifying the grounds for which dismissal is sought a hearing or an opportunity to be heard and after hearing or opportunity to be heard, a notice of the decision to dismiss; and (2) if the dismissal is based on authorized causes under Articles 283 and 284, the employer must give the employee and the Department of Labor and Employment written notices 30 days prior to the effectivity of his separation.
From the foregoing rules four possible situations may be derived: (1) the dismissal is for a just cause under Article 282 of the Labor Code, for an authorized cause under Article 283, or for health reasons under Article 284, and due process was observed; (2) the dismissal is without just or authorized cause but due process was observed; (3) the dismissal is without just or authorized cause and there was no due process; and (4) the dismissal is for just or authorized cause but due process was not observed.
In the first situation, the dismissal is undoubtedly valid and the employer will not suffer any liability.
In the second and third situations where the dismissals are illegal, Article 279 mandates that the employee is entitled to reinstatement without loss of seniority rights and other privileges and full backwages, inclusive of allowances, and other benefits or their monetary equivalent computed from the time the compensation was not paid up to the time of actual reinstatement.
In the fourth situation, the dismissal should be upheld. While the procedural infirmity cannot be cured, it should not invalidate the dismissal. However, the employer should be held liable for non-compliance with the procedural requirements of due process.70 (Emphasis in the original)cralawlawlibrary
Section 2. Standard of due process: requirements of notice. – In all cases of termination of employment, the following standards of due process shall be substantially observed.
I. For termination of employment based on just causes as defined in Article 282 of the Code:(a) A written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to explain his side;ChanRoblesVirtualawlibrarycralawlawlibrary
(b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him; and
(c) A written notice [of] termination served on the employee indicating that upon due consideration of all the circumstance, grounds have been established to justify his termination. . . .79
In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year.
Unless the parties provide for broader inclusions, the term ‘one-half (1/2) month salary’ shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves.83 (Emphasis supplied)cralawlawlibrary
The amount of separation pay is based on two factors: the amount of monthly salary and the number of years of service. Although the Labor Code provides different definitions as to what constitutes “one year of service,” Book Six does not specifically define “one year of service” for purposes of computing separation pay. However, Articles 283 and 284 both state in connection with separation pay that a fraction of at least six months shall be considered one whole year. Applying this to the case at bar, we hold that the amount of separation pay which respondent members of the Lubat and Luris groups should receive is one-half (1/2) their respective average monthly pay during the last season they worked multiplied by the number of years they actually rendered service, provided that they worked for at least six months during a given year.
The formula that petitioner proposes, wherein a year of work is equivalent to actual work rendered for 303 days, is both unfair and inapplicable, considering that Articles 283 and 284 provide that in connection with separation pay, a fraction of at least six months shall be considered one whole year. Under these provisions, an employee who worked for only six months in a given year — which is certainly less than 303 days — is considered to have worked for one whole year.
. . . . Finally, Manila Hotel Company v. CIR did not rule that seasonal workers are considered at work during off-season with regard to the computation of separation pay. Said case merely held that, in regard to seasonal workers, the employer-employee relationship is not severed during off-season but merely suspended.92 (Citations omitted)cralawlawlibrary
Private respondent Paz rendered almost three decades of dedicated service to petitioner, and to that, she gave away the prime of her life. In those long years of hard work, not a single transgression or malfeasance of any company rule or regulation was ever reported against her. Old age and infirmity now weaken her chances of employment. Veritably, We can call upon the same “social and compassionate justice” allowing financial assistance in special circumstances. These circumstances indubitably merit equitable concessions, via the principle of “compassionate justice” for the working class.
In awarding retirement benefits, the NLRC deemed it proper to add all the months of service rendered by private respondent Paz, then divide it by six to arrive at the number of years of service. We cannot, however, subscribe to this computation because there is no positive proof of the total number of months that she actually rendered work.103 (Emphasis supplied, citations omitted)cralawlawlibrary
We are not unmindful of the rule that financial assistance is allowed only in instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Neither are we unmindful of this Court’s pronouncements in Arc-Men Food Industries Corporation v. NLRC, and Lemery Savings and Loan Bank v. NLRC, where the Court ruled that when there is no dismissal to speak of, an award of financial assistance is not in order.
But we must stress that this Court did allow, in several instances, the grant of financial assistance. In the words of Justice Sabino de Leon, Jr., now deceased, financial assistance may be allowed as a measure of social justice and exceptional circumstances, and as an equitable concession. The instant case equally calls for balancing the interests of the employer with those of the worker, if only to approximate what Justice Laurel calls justice in its secular sense.
In this instance, our attention has been called to the following circumstances: that private respondent joined the company when he was a young man of 25 years and stayed on until he was 48 years old; that he had given to the company the best years of his youth, working on board ship for almost 24 years; that in those years there was not a single report of him transgressing any of the company rules and regulations; that he applied for optional retirement under the company’s non-contributory plan when his daughter died and for his own health reasons; and that it would appear that he had served the company well, since even the company said that the reason it refused his application for optional retirement was that it still needed his services; that he denies receiving the telegram asking him to report back to work; but that considering his age and health, he preferred to stay home rather than risk further working in a ship at sea.cralawlawlibrary
Endnotes:
* Designated acting member per S.O. No. 1910 dated January 12, 2015.
1Rollo, pp. 8–24. The Petition was filed pursuant to Rule 45 of the Rules of Court.
2 Id. at 21.
3 Id. at 53.
4 Id. at 35.
5 Id.
6 Id. at 99.
7 Id. at 35.
8 Id.
9 Id. at 35 and 97.
10 Id. at 35, 54, and 99.
11 Id. at 35.
12 Id. at 36.
13 Id. at 35.
14 Id. at 36.
15 Id.
16 Id. at 52–70. The Decision was penned by Executive Labor Arbiter Irenarco R. Rimando.
17 Id. at 69.
18 Id. at 87–114. The Decision was penned by Commissioner Victoriano R. Calaycay and concurred in by Presiding Commissioner Raul T. Aquino of the Second Division. Commissioner Angelita A. Gacutan took no part.
19 Id. at 113.
20 Id. at 34–48. The Decision was penned by Associate Justice Japar B. Dimaampao and concurred in by Presiding Justice Andres B. Reyes, Jr. and Associate Justice Jane Aurora C. Lantion of the First Division.
21 Id. at 47.
22 Id.
23 Id. at 41.
24 Id. at 43–44.
25 Id. at 21.
26 Id. at 117–128.
27 Id. at 150.
28 Id. at 17–18.
29 Otherwise known as “An Act Amending Article 287 of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines, by Providing for Retirement Pay to Qualified Private Sector Employees in the Absence of Any Retirement Plan in the Establishment.”
30Rollo, p. 18.
31 Id.
32 360 Phil. 218 (1998) [Per J. Panganiban, First Division].
33Rollo, p. 19.
34 Id. at 20.
35 Id.
36 Id. at 124.
37 Id. at 125.
38 LABOR CODE, art. 280 provides:
Art. 280. Regular and casual employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.
39Benares v. Pancho, 497 Phil. 181, 189–190 (2005) [Per J. Tinga, Second Division], citing Perpetual Help Credit Cooperative, Inc. v. Faburada, 419 Phil. 147, 155 (2001) [Per J. Sandoval-Gutierrez, Third Division]. See also Gapayao v. Fulo, G.R. No. 193493, June 13, 2013, 698 SCRA 485, 498–499 [Per C.J. Sereno, First Division].
40Gapayao v. Fulo, G.R. No. 193493, June 13, 2013, 698 SCRA 485, 499 [Per CJ. Sereno, First Division], citing AAG Trucking v. Yuag, G.R. No. 195033, October 12, 2011, 659 SCRA 91, 102 [Per J. Sereno (now C.J.), Second Division].
41 278 Phil. 345 (1991) [Per J. Padilla, Second Division].
42 Id. at 354.
43 Id. at 357.
44 400 Phil. 86 (2000) [Per J. De Leon, Jr., Second Division].
45 Id. at 103–104.
46 257 Phil. 626, 632–633 (1989) [Per C.J. Fernan, Third Division].
47Abasolo v. National Labor Relations Commission, 400 Phil. 86, 103–104 (2000) [Per J. De Leon, Jr., Second Division].
48 444 Phil. 587 (2003) [Per J. Panganiban, Third Division].
49 Id. at 596–597.
50Rollo, pp. 35 and 54.
51 Id. at 35.
52 Id. at 35 and 99.
53 As amended by Rep. Act No. 6715 (1989), sec. 34.
54Rollo, pp. 54 and 108.
55 Id. at 18, 37, 59, and 99.
56 Id. at 14 and 98–99.
57 Id. at 99.
58 Id. at 15 and 99.
59 Id. at 108.
60 Id. at 111.
61 Id. at 40.
62Universal Robina Sugar Milling Corporation (URSUMCO) v. Caballeda, 582 Phil. 118, 133 (2008) [Per J. Nachura, Third Division].
63 Ariola v. Philex Mining Corporation, 503 Phil. 765, 783 (2005) [Per J. Carpio, First Division], citing De Leon v. National Labor Relations Commission, 188 Phil. 666, 674 (1980) [Per J. De Castro, First Division].
64Rollo, pp. 109–110.
65See Bustamante v. National Labor Relations Commission, 332 Phil. 833, 843 (1996) [Per J. Padilla, En Banc].
66 CIVIL CODE, art. 2199.
67Rollo, p. 43.
68 Id. at 14 and 97.
69 485 Phil. 248 (2004) [Per J. Ynares-Santiago, En Banc].
70 Id. at 280–281.
71 Id. at 286.
72 Id. at 291. See also Bughaw, Jr. v. Treasure Island Industrial Corporation, 573 Phil. 435, 450 (2008) [Per J. Chico-Nazario, Third Division].
73 494 Phil. 114 (2005) [Per J. Garcia, En Banc].
74 Id. at 122–123.
75Mantle Trading Services, Inc. v. National Labor Relations Commission, 611 Phil. 570, 580 (2009) [Per C.J. Puno, First Division].
76Agabon v. National Labor Relations Commission, 485 Phil. 248, 288 (2004) [Per J. Ynares-Santiago, En Banc], citing Savellano v. Northwest Airlines, 453 Phil. 342, 360 (2003) [Per J. Panganiban, Third Division].
77 G.R. No. 164662, February 18, 2013, 691 SCRA 71 [Per J. Bersamin, First Division].
78 Id. at 90–91.
79 Omnibus Rules Implementing the Labor Code, book V, rule XXIII, sec. 2(III) as quoted in Aliling v. Feliciano, G.R. No. 185829, April 25, 2012, 671 SCRA 186, 209 [Per J. Velasco, Jr., Third Division].
80See Aliling v. Feliciano, G.R. No. 185829, April 25, 2012, 671 SCRA 186, 216 [Per J. Velasco, Jr., Third Division].
81 Rollo, pp. 40 and 111.
82See Banco Filipino Savings and Mortgage Bank v. Lazaro, G.R. No. 185346, June 27, 2012, 675 SCRA 307, 317–318 [Per J. Sereno (now C.J.), Second Division], citing Guidelines for the Effective Implementation of Rep. Act No. 7641, The Retirement Pay Law (1996) and Salafranca v. Philamlife Village Homeowners Association, Inc., 360 Phil. 652, 667–668 (1998) [Per J. Romero, Third Division].
83 LABOR CODE, art. 287, pars. 3 and 4.
84 The sum of petitioner’s one-half-month salary (P185.00 daily salary x 15 days) = P2,775.00, plus 1/12 of 13th month pay (P462.50), plus 5 days service incentive leave pay (P185.00 x 5 = P925.00) multiplied by 3 years.
85Rollo, pp. 40–41.
86 Id. at 41, 67, and 69.
87 Id. at 108.
88 Id. at 109.
89 Id. at 110.
90 Id. at 111.
91 Rollo, p. 109.
92 360 Phil. 218, 244–245 (1998) [Per J. Panganiban, First Division].
93 RULES OF COURT, Rule 45, sec. 1.
94Universal Robina Sugar Milling Corporation (URSUMCO) v. Caballeda, 582 Phil. 118, 133 (2008) [Per J. Nachura, Third Division].
95Rollo, p. 43.
96 Id. at 41 and 67.
97 Id. at 47.
98 This means salary for 15 days plus 1/12 of 13th month pay and the cash equivalent of not more than 5 days of service incentive leave.
99Rollo, p. 44.
100 Id. at 41.
101Universal Robina Sugar Milling Corporation (URSUMCO) v. Caballeda, 582 Phil. 118, 131 (2008) [Per J. Nachura, Third Division], citing Enriquez Security Services, Inc. v. Cabotaje, 528 Phil. 603, 607 (2006) [Per J. Corona, Second Division].
102Philippine Scout Veterans Security & Investigation Agency, Inc. v. National Labor Relations Commission, 330 Phil. 665, 677 (1996) [Per J. Panganiban, Third Division].
103Rollo, p. 43.
104 Id. at 14.
105 Eastern Shipping Lines, Inc. v. Sedan, 521 Phil. 61, 70 (2006) [Per J. Quisumbing, Third Division], citing Telefunken Semiconductors Employees Union-FFW v. Court of Appeals, 401 Phil. 776, 804 (2000) [Per J. De Leon, Jr., Second Division].
106 521 Phil. 61 (2006) [Per J. Quisumbing, Third Division].
107 Id. at 72.
108 Id. at 70–71.
109Rollo, p. 43.
110 Id.
111 Eastern Shipping Lines, Inc. v. Sedan, 521 Phil. 61, 63 (2006) [Per J. Quisumbing, Third Division]
112 Rollo, p. 14.
113 Piñero v. National Labor Relations Commission, 480 Phil. 534, 544 (2004) [Per J. Ynares-Santiago, First Division], citing Almira v. B. F. Goodrich Philippines, Inc., 157 Phil. 110, 122 (1974) [Per J. Fernando, Second Division].
114 The amount was reached by multiplying the full backwages (P22,200.00) by 6% legal interest rate and then multiplied by 2 years.