38. G.R. No. 181178July 26, 2010, AMELIA R. OBUSAN v.
PHILIPPINE Later, the PNB Board of Directors, through Resolution No. 30 dated December
NATIONAL BANK
This petition for review on certiorari[1] under Rule 45 of the Rules of Court
seeks to annul and set aside the Decision[2] dated September 21, 2007 and the
Resolution[3] dated January 8, 2008 of the Court of Appeals (CA) in CA-G.R. SP No.
96918.
The antecedents that spawned this controversy are as follows
Back in 1979, respondent Philippine National Bank (PNB) hired petitioner
Amelia R. Obusan (Obusan), who eventually became the Manager of the PNB Medical
Office. At that time, PNB was a government-owned or controlled corporation, whose
retirement program for its employees was administered by the Government Service
Insurance System (GSIS), pursuant to the Revised Government Service Insurance Act
of 1977 (Presidential Decree No. 1146).
On May 27, 1996, PNB was privatized. Section 6 of the Revised Charter of the
PNB (Executive Order No. 80, December 3, 1986), with respect to the effect of
privatization of PNB, provides
Change in Ownership of the Majority of the Voting Equity of the
Bank. When the ownership of the majority of the issued common
voting shares passes to private investors, the stockholders shall cause
the adoption and registration with the Securities and Exchange
Commission of the appropriate Articles of Incorporation and revised
by-laws within three (3) months from such transfer of
ownership. Upon the issuance of the certificate of incorporation under
the provisions of the Corporation Code, this Charter shall cease to
have force and effect, and shall be deemed repealed. Any special
privileges granted to the Bank such as the authority to act as official
government depository, or restrictions imposed upon the Bank, shall
be withdrawn, and the Bank shall thereafter be considered a privately
organized bank subject to the laws and regulations generally
applicable to private banks. The bank shall likewise cease to be a
government owned or controlled corporation subject to the
coverage of service-wide agencies such as the Commission on Audit
and the Civil Service Commission. (Emphasis supplied.)
Consequent to the privatization, all PNB employees, including Obusan, were
deemed retired from the government service. The GSIS, in its letter[4] dated February
3, 1997, confirmed Obusans retirement from the government service, and
accordingly paid her retirement gratuity in the net amount
of P390,633.76. Thereafter, Obusan continued to be an employee of PNB.
22, 2000, as amended, approved the PNB Regular Retirement Plan [5] (PNB-RRP).
Section 1, Article VI of which provides
Normal Retirement. The normal retirement date of a Member shall be
the day he attains sixty (60) years of age, regardless of length of
service or has rendered thirty (30) years of service, regardless of age,
whichever of the said conditions comes first. A Member who has
reached the normal retirement date shall have to compulsor[il]y retire
and shall be entitled to receive the retirement benefits under the
Plan.[6]
In a Memorandum[7] dated February 21, 2001, PNB informed its officers and
employees of the terms and conditions of the PNB-RRP, along with its
implementing guidelines.
Subsequently, the PNB-RRP was registered with the Bureau of Internal
Revenue, per its letter[8] dated June 27, 2001. Later, the Philnabank Employees
Association, the union of PNB rank-and-file employees, recognized the PNB-RRP in
the Collective Bargaining Agreement (CBA) it entered with PNB.[9]
In a Memorandum[10] dated February 11, 2002, PNB informed Obusan that
her last day of employment would be on March 3, 2002, as she would reach the
mandatory retirement age of 60 years on March 4, 2002. In her counsels
letter[11] dated February 26, 2002, Obusan questioned her compulsory retirement
and even threatened to take legal action against PNB for illegal dismissal and unfair
labor practice in the form of union busting, Obusan being then the President of the
PNB Supervisors and Officers Association.
In a letter[12] dated March 1, 2002, PNB replied to Obusan, explaining that
compulsory retirement under the PNB-RRP is not contrary to law and does not
constitute union busting. Dissatisfied with PNBs explanation, Obusan filed before
the Labor Arbiter a complaint for illegal dismissal and unfair labor practice, claiming
that PNB could not compulsorily retire her at the age of 60 years, with her having a
vested right to be retired only at 65 years old pursuant to civil service regulations.
On April 25, 2003, the Labor Arbiter rendered a decision, [13] dismissing
Obusans complaint as he upheld the validity of the PNB-RRP and its provisions on
compulsory retirement upon reaching the age of 60 years. The Labor Arbiter found
Complainant posits that she has a vested right to be retired at
65 years since this was the retirement age at the time she was
hired. However, there is neither jurisprudence nor law which supports
this contention.Undisputed is the fact that, when complainant was
hired, PNB was still a government owned and controlled
corporation. Accordingly, the Revised Government Service Insurance
 Act [RGSI] of 1977 (Presidential Decree No. 1146), which established
that the compulsory retirement age for government employees to be 65
years governs the employment of PNB employees. The PNB then did
not have any participation in establishing the compulsory retirement
age but the RGSI Act which is the law itself. But the same may apply
only as long as PNB remains a government owned and controlled
corporation. From the time PNB ceased to be such, it cannot be said
that [the] RGSI Act of 1977 still applies. Thus negating the claim of
complainant to retire at age 65 under the said law.
When PNB ceased to be a government owned or controlled
corporation, the law now applicable to the Bank is the Labor Code
which allows PNB to establish its own retirement plan. As such, PNB
is empowered to formulate its Regular Retirement Plan provided it is
within the bounds of the Labor Code. We find no cogent reason to
invalidate the Regular Retirement Plan as it is in accord with the law.
Indeed, this Office cannot see how complainant can assert that
her right to be retired at the age of 65 years has been vested at the
time of her hiring when, in fact, such right can only be vested at the
time of her retirement. Necessarily, complainant can only avail a
retirement plan that is in effect at the time of her retirement. In this
case, the retirement plan she insists on applying is no longer existent
and instead it was replaced by the PNB Regular Retirement Plan
which, by its terms, complies with the pertinent provisions of the
Labor Code on retirement plans.[14]
Obusan then appealed to the National Labor Relations Commission
(NLRC). In a resolution[15] dated May 31, 2004, the NLRC dismissed Obusans appeal,
and affirmed the assailed decision in toto. Obusans motion for reconsideration of this
resolution was later denied in an NLRC resolution[16] dated August 28, 2006. The
NLRC held
Movant invokes the ruling of the Supreme Court in Razon, Jr.
v. NLRC (185 SCRA 44), where the Supreme Court held:
We believe that upon acceptance of employment,
a contractual relationship was established giving
private respondent an enforceable vested interest in the
retirement fund. Verily, the retirement scheme became
an integral part of his employment package and the
benefits to be derived therefrom constituted as it were a
continuing consideration for services rendered, as well
as an effective inducement for remaining with the firm.
It is clear that the contractual relationship established between the
employer and employee upon the latters acceptance of employment
was an enforceable vested interest in the retirement fund. The Supreme
Court did not hold that the private respondent has a vested right to
his retirement age. x x x.
x x x A vested right or a vested interest may be held to mean
some right or interest in property that has become fixed or
established, and is no longer open to doubt or controversy. Retirement
age is not a property.It cannot be also fixed or permanent. Laws,
contracts, and collective bargaining agreements may amend or alter
the retirement age of an employee. Complainant may have had a
vested right to the retirement funds under the old retirement plan of
the bank, but as held in Razon, this right could be withheld upon a
clear showing of good and compelling reasons. The privatization of
PNB and the consequent severance of its employees from government
service is the reason why complainant lost her right to the government
retirement plan. These are causes which are persuasive and
compelling.[17]
Undaunted, Obusan filed a petition for certiorari before the CA, ascribing
grave abuse of discretion to the NLRC when it affirmed the decision of the Labor
Arbiter. The CA, however, dismissed the petition in its assailed Decision dated
September 21, 2007, ratiocinating that the PNB-RRPs lowering the compulsory
retirement age to 60 years is not violative of Article 287 of the Labor Code of
the Philippines, as amended, despite the issuance of the plan years after Obusan
was hired. Obusans motion for reconsideration of this Decision was subsequently
denied by the CA in its Resolution dated January 8, 2008.
Hence, this petition anchored on the argument that PNB cannot unilaterally
lower the compulsory retirement age to 60 years without violating Article 287 of the
Labor Code and Obusans alleged right to retire at the age of 65 years.
According to Obusan, the PNB-RRP should only apply to employees hired on
and after February 21, 2001, the date of its adoption. She insists that if the lowering
of the compulsory retirement age to 60 years under the PNB-RRP was the product of
an agreement between PNB and its employees, she would definitely accede to be
bound by it. She points out that the questioned provision on retirement age was a
unilateral act of PNB, to which she did not give her consent. In her Supplement to
Petition for Review on Certiorari,[18] Obusan invoked Jaculbe v. Silliman
University,[19] where this Court held
Retirement is the result of a bilateral act of the parties, a
voluntary agreement between the employer and the employee whereby
the latter, after reaching a certain age agrees to sever his or her
employment with the former. In Pantranco North Express, Inc. v. NLRC,
to which both the CA and respondent refer, the imposition of a
 retirement age below the compulsory age of 65 was deemed acceptable
because this was part of the CBA between the employer and the
employees. The consent of the employees, as represented by their
bargaining unit, to be retired even before the statutory retirement age
of 65 was laid out clearly in black and white and was therefore in
accord with Article 287.
In this case, neither the CA nor the respondent cited any
agreement, collective or otherwise, to justify the latters imposition of
the early retirement age in its retirement plan, opting instead to harp
on petitioners alleged voluntary contributions to the plan, which was
simply untrue. The truth was that petitioner had no choice but to
participate in the plan, given that the only way she could refrain from
doing so was to resign or lose her job. It is axiomatic that employer
and employee do not stand on equal footing, a situation which often
causes an employee to act out of need instead of any genuine
acquiescence to the employer. This was clearly just such an instance.
xxxx
As already stated, an employer is free to impose a retirement
age less than 65 for as long as it has the employees consent. Stated
conversely, employees are free to accept the employers offer to lower
the retirement age if they feel they can get a better deal with the
retirement plan presented by the employer. Thus, having terminated
petitioner solely on the basis of a provision of a retirement plan which
was not freely assented to by her, respondent was guilty of illegal
dismissal.[20]
Put differently, Obusan posits that the severance of her employment from PNB
constituted illegal dismissal. She claims that the PNB-RRP, which compulsorily
retired her at the age of 60 years without her consent, runs afoul of her right to
security of tenure as guaranteed by the Constitution. She further argues that since
PNB-RRP cannot be made to apply to her, Article 287 of the Labor Code should
prevail, giving her the right to compulsorily retire at the age of 65 years.
We disagree.
The pertinent law on this matter, Article 287 of the Labor Code, as amended by
Republic Act No. 7641, which took effect on January 7, 1993, provides
ART. 287. Retirement. Any employee may be retired upon reaching the
retirement age established in the collective bargaining agreement or
other applicable employment contract.
In case of retirement, the employee shall be entitled to receive such
retirement benefits as he may have earned under existing laws and
any collective bargaining agreement and other agreements: Provided,
however, That an employees retirement benefits under any collective
bargaining agreement and other agreements shall not be less than
those provided herein.
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.
Undoubtedly, under this provision, the retirement age is primarily determined
by the existing agreement or employment contract. Absent such an agreement,
the retirement age shall be fixed by law. The above-cited law mandates that
the compulsory retirement age is at 65 years, while the minimum age for optional
retirement is set at 60 years. Moreover, Article 287 of the Labor Code, as amended,
applies only to a situation where (1) there is no CBA or other applicable employment
contract providing for retirement benefits for an employee; or (2) there is a collective
bargaining agreement or other applicable employment contract providing for
retirement benefits for an employee, but it is below the requirement set by law. The
rationale for the first situation is to prevent the absurd situation where an employee,
deserving to receive retirement benefits, is denied them through the nefarious
scheme of employers to deprive employees of the benefits due them under existing
labor laws. The rationale for the second situation is to prevent private contracts from
derogating from the public law.[21]
In this case, Obusan was initially hired in 1979 as a government employee,
PNB then being a government-owned and controlled corporation. As such, she was
governed by civil service laws, and the compulsory retirement age, as imposed by
law, was at 65 years. Peculiar to her situation, however, was that the corporate entity
that hired her ceased to be government-owned and controlled when it was privatized
in 1996. As a result of the privatization of PNB, all of its officers and employees were
deemed retired from the government service. Consequently, many of them, Obusan
included, received their respective retirement gratuities.
 It cannot be said that the PNB-RRP is a retirement plan providing retirement
benefits less than what the law requires. In fact, in the computation of the employees
retirement pay, the plan factored what Article 287 requires. Thus the plan provides:
3. For service rendered after privatization, a Member, regardless
whether or not he received GSIS Retirement Gratuity Benefits,
shall be entitled to one hundred twelve (112%) percent of his
Latest Monthly Plan Salary[22] for every year of service rendered, a
fraction of at least six (6) months being considered as one (1)
whole year.
The vesting multiple of one hundred twelve (112%) percent that is
applied to the Latest Monthly Plan Salary is derived as the sum of
fifteen (15) days of the Latest Daily Plan Salary plus five (5) days of
the service incentive leave (based on Latest Daily Plan Salary) plus
one-twelfth (1/12) of the Latest Monthly Plan Salary. The Daily
Plan Salary used is computed as Latest Monthly Plan Salary
multiplied by thirteen (13) months and divided by two hundred
fifty-one (251) days.[23]
Moreover, the PNB-RRP also considered the effects of PNBs privatization, as it also
provided for additional benefits to those employees who were not qualified to receive
the GSIS Retirement Gratuity Benefits, viz.
2. A Member who failed to qualify to receive GSIS Retirement Gratuity
Benefits shall be entitled [to] one Month Basic Salary (as of May
26, 1996) for every year of service rendered before privatization. [24]
Retirement plans allowing employers to retire employees who have not yet
reached the compulsory retirement age of 65 years are not per se repugnant to the
constitutional guaranty of security of tenure. By its express language, the Labor
Code permits employers and employees to fix the applicable retirement age at 60
years or below, provided that the employees retirement benefits under any CBA and
other agreements shall not be less than those provided therein.[25] By this yardstick,
the PNB-RRP complies.
However, company retirement plans must not only comply with the standards
set by existing labor laws, but they should also be accepted by the employees to be
commensurate to their faithful service to the employer within the requisite period. [26]
To our mind, Obusans invocation of Jaculbe on account of her lack of consent
to the PNB-RRP, particularly as regards the provision on compulsory retirement age,
is rather misplaced.
It is true that her membership in the PNB-RRP was made automatic, to wit
Section 1. Membership. Membership in the Plan shall be automatic for
all full-time regular and permanent officers and employees of the Bank
as of the effectivity date of the Plan. For employees hired after the
effectivity of this Plan, their membership shall be effective on Date
Entered Bank.[27]
The records show that the PNB Board of Directors approved the PNB-RRP on
December 22, 2000. On February 21, 2001, PNB informed all of its officers and
employees about it, complete with its terms and conditions and the guidelines for its
implementation. Then, the PNB-RRP was registered with the BIR and, later, was
recognized by the Philnabank Employees Association in the CBA it entered with PNB.
With the information properly disseminated to all of PNBs officers and employees, the
PNB-RRP was then opened for scrutiny. The employees had every opportunity to
question the plan if, indeed, it would not be beneficial to the employees, as compared
to what was mandated by Article 287 of the Labor Code. Consequently, the union of
PNBs rank-and-file employees recognized it as a legally-compliant and reasonable
retirement plan by the act of incorporating it in their CBA with PNB.
With respect to Obusan and the PNB Supervisors and Officers Association, of which
she was the President when she was compulsorily retired, there is nothing on record
to show that they expressed their dissent to the PNB-RRP. This deafening silence
eloquently speaks of their lack of disagreement with its provisions. It was only at the
time that she was to be compulsorily retired that Obusan questioned the PNB-RRPs
provision on compulsory retirement age.
Besides, we already had the occasion to strike down the added requirement that an
employer must first consult its employee prior to retiring him, as this requirement
unduly constricts the exercise by management of its option to retire the said
employee. Due process only requires that notice of the employers decision to retire
an employee be given to the employee.[28]
Finally, it is also worthy to mention that, unlike in Jaculbe, the PNB-RRP is solely
and exclusively funded by PNB,[29] and no financial burden is imposed on the
employees for their retirement benefits.
All told, we hold that the PNB-RRP is a valid exercise of PNBs prerogative to provide a
retirement plan for all its employees.
WHEREFORE, the petition is DENIED. The assailed Decision dated September 21,
2007 and the Resolution dated January 8, 2008 of the Court of Appeals in CA-G.R.
SP No. 96918 are AFFIRMED. No costs.
SO ORDERED.
37. [G.R. No. 150915. April 11, 2005]
MARIO MANABAN, et al , petitioners, vs. SARPHIL CORPORATION/APOKON
FRUITS, INC., LORENZO SARMIENTO, JR., and SALVADOR T.
BALBUENA, respondents.
This is a petition for review of the Decision[1] of the Court of Appeals (CA) in CA-
G.R. SP No. 61598 and its Resolution dated November 5, 2001 denying the motion
for reconsideration thereof. The assailed decision denied the petition for certiorari of
the decision of the National Labor Relations Commission (NLRC) in NLRC CA No. M-
005284-99.
Respondents Sarphil Corporation and Apokon Fruits, Inc. are domestic
corporations duly registered under Philippines laws and engaged in the planting and
culture of rubber and banana at Barangay Tubo-tuboMonkayo, Compostela Valley
Province, Davao City. Respondents Lorenzo Sarmiento and Salvador T. Balbuena are
the President and Executive Vice-President, respectively, of the respondent
corporations.
The individual petitioners were regular workers in the plantations of the
respondent corporations. They are all members of the petitioner Trade Union of the
Philippines and Allied Services, a labor federation duly registered with the
Department of Labor and Employment.
The Antecedents
On January 15, 1996, the respondents terminated the employment of all their
workers, including the individual petitioners, after their rubber and banana
plantations were taken over by the Department of Agrarian Reform (DAR), pursuant
to the governments Comprehensive Agrarian Reform Program (CARP). As required by
Republic Act No. 6657, the Comprehensive Agrarian Reform Law (CARL), the
petitioners formed the Sarphil CARP Beneficiaries Multi-Purpose Cooperative. The
ownership and management of respondents lands were then turned over to the said
cooperative. Thereafter, the respondents submitted the names of their regular
workers to the DAR; the latter, in turn, listed the petitioners as CARP beneficiaries.
On December 10, 1997, the DAR Secretary issued Certificates of Land Ownership
Award to these beneficiaries.
As a result of the termination of their employment, the petitioners demanded
from the respondents the payment of separation pay, salary differentials, 13 th month
pay, service incentive leave pay, and holiday pay. When the respondents failed to
accede to their demands, the petitioners filed separate complaints for illegal
dismissal, separation pay and other money claims before the NLRC, Regional
Arbitration Branch XI, Davao City. The earliest of the said complaints was filed on
January 26, 1999; the others were filed on March 9, 15, 29 and 30, 1999; April 5
and 18, 1999; and May 3, 1999.[2]
During the conciliation proceedings, the parties were not able to arrive at a
settlement. Thus, the Labor Arbiter directed the parties to submit their respective
position papers together with supporting documents.
The petitioners submitted their position paper on July 8, 1999. Instead of filing a
position paper, however, the respondents filed a Motion to Dismiss the Complaint on
July 19, 1999, on the ground that the petitioners cause of action had long
prescribed.[3]
In a Decision dated October 25, 1999, Labor Arbiter Amado Solamo granted the
petitioners monetary claims. He held that the complaints for illegal dismissal were
filed within the four-year reglementary period. He likewise ruled that by not
submitting their position paper, the respondents were deemed to have waived their
right to adduce evidence. According to the Labor Arbiter, since the allegations and
arguments interposed by the petitioners, as complainants, remained unrebutted and
were deemed unqualifiedly admitted, he had no other alternative except to grant the
complainants monetary claims.[4] The dispositive portion of the decision reads:
WHEREFORE, judgment is hereby rendered ordering respondents jointly and
severally to pay complainants the following:
a.) Separation pay computed at one-month pay for every year of service.
b.) Salary differentials, 13th month pay, service incentive leave pay and
COLA (Wage Order No. 3) subject to the computation at execution
stage.
c.) 10% of the total award as Union Service Fee.
SO ORDERED.[5]
The respondents received a copy of the decision on November 4, 1999. On
November 12, 1999, they filed a Motion for Reconsideration/Appellants Appeal
Memorandum.[6] However, they failed to post a cash or surety bond.
Thereafter, the petitioners filed a Motion to Dismiss[7] the appeal for failure to
post an appeal bond within the reglementary period. When such motion to dismiss
remained unacted upon by the NLRC, they again filed a Second Motion to
Dismiss,[8] reiterating the grounds in the first one.
On February 28, 2000, the respondents filed a Manifestation/Motion to Admit
Bond/Opposition to Motion to Dismiss. They alleged therein that it took sometime for
them to secure an appeal bond because of the huge amount involved, and initially,
no bonding company was willing to post the same. They averred that they had no
cash sufficient to put up the appeal bond since they have no more assets except their
name and integrity, and that it was fortunate that they were able to negotiate a loan
with the Land Bank of the Philippines.[9]
The NLRC allowed the appeal. On June 30, 2000, it rendered a decision, the
dispositive portion of which reads:
WHEREFORE, the judgment appealed from is hereby SET ASIDE. A new one is
entered declaring that complainants, as former employees of respondents and who
became beneficiaries of the CAR Law are NOT entitled to separation pay because the
severance of their employment was compelled by an act of LAW and not by the
decision of respondents. Consequently, the award of separation pay to complainants
is SET ASIDE for being contrary to law and settled jurisprudence.
For being TIME BARRED brought about by PRESCRIPTION, the money claims
award, such as salary differentials, 13th month pay, service incentive leave pay and
COLA, as well as attorneys fees are DELETED and SET ASIDE.
SO ORDERED.[10]
On August 22, 2000, the NLRC denied the petitioners motion for reconsideration
for lack of merit.[11] Dissatisfied, the petitioners filed a petition for certiorari with the
CA. They submitted the following issues:
I.
WHETHER OR NOT THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN GIVING DUE COURSE TO
RESPONDENTS APPEAL DESPITE THE POSTING OF APPEAL BOND BEYOND THE
REGLEMENTARY PERIOD.
II.
WHETHER OR NOT THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN LATER ANNULING AND
SETTING ASIDE THE DECISION OF THE LABOR ARBITER GRANTING
PETITIONERS SEPARATION PAY.[12]
The Court of Appeals Decision
On July 31, 2001, the CA rendered a Decision[13] denying the petition
for certiorari and affirming the ruling of the NLRC. It held that the petitioners failed
to demonstrate any grave abuse of discretion or lack or excess of jurisdiction on the
part of the NLRC in issuing the assailed resolutions. The CA noted that the NLRC
gave due course to the respondents appeal despite the delay in posting the appeal
bond, on the fundamental consideration of substantial justice, that is, to prevent
unjust enrichment on the part of any party and to ensure adherence to the justness
and legality of the payment of separation pay.[14]
The CA affirmed the NLRCs finding that the cases were filed beyond the three-
year prescriptive period for filing money claims, which commenced on January 15,
1996, the date when the petitioners were terminated. It ruled that the NLRC was
correct in holding that the termination of employment due to the implementation of
the CARL did not amount to illegal dismissal, or termination due to an authorized
cause under Art. 283[15] of the Labor Code, which would warrant the payment of
separation pay. Citing the case of National Federation of Labor vs. NLRC,[16] the CA
pronounced that the closure of business operations contemplated under Art. 283
refers to a voluntary act or decision on the part of the employer, not one forced upon
it, as in this case, by an act of law or state to benefit petitioners by making them
agrarian lot beneficiaries. [17]
The petitioners filed a motion for reconsideration of the CA decision which was
likewise denied on November 5, 2001.[18]
The Instant Petition
The petitioners interposed this petition for review on the sole assignment of
error:
The Court of Appeals committed a reversible error when it sustained the NLRCs
admission of the respondents appeal despite the fact that the respondents posted
their appeal bond about four (4) months after their receipt of the appealed
decision.[19]
The petitioners argue that the decision of the Labor Arbiter became final and
executory upon the respondents failure to file their appeal bond and to perfect their
appeal within the 10-day reglementary period. They maintain that the filing of the
bond on time is not a mere formality. They contend that the reason given by the
respondents for the delay in the posting of the bond is clearly self-serving, and
without any evidentiary support. The records belie the alleged procurement of a loan
with the Land Bank of the Philippines, or that it was the latter which posted the
bond in favor of the respondents. In fact, it was Intra Strata Insurance which posted
the surety bond and so, the respondents did not have to produce the full amount of
the award but only that amount sufficient to cover the premium payments for the
bond.
Further, the petitioners contend that the delay in this case cannot be compared
to the delays incurred in the cases cited by the NLRC in support of its decision which
was only for several days. They maintain that the respondents remedy should have
been to file a motion for reduction of the bond.[20]
For their part, the respondents assert that they had no intent to delay or prolong
the resolution of the case. Neither did they intend to evade their obligation to the
petitioners because, in the first place, under the law and settled jurisprudence, there
is no such obligation to speak of. They stress that both the NLRC and the CA have
held that the petitioners are not entitled to separation pay or to the other monetary
claims. The respondents explain that, although the bond posted was a surety bond,
the bonding company required a security deposit of an equal amount which almost
reached P4 million. Hence, they had to procure a loan from the Land Bank of the
Philippines in order to raise the amount.[21] Finally, the respondents submit that the
rationale in allowing tardy appeals, in general, does not lie in the number of days of
delay or tardiness in perfecting the appeal, but rather, in the intent to promote
substantial justice.[22]
The petitioners retort that the four-month delay in filing the appeal bond cannot
be considered a slight delay, and that to allow such a tardy appeal will have far-
reaching repercussions in labor justice. They aver that the respondents should have,
at least, informed the NLRC about their difficulty in raising the bond, or they could
have filed a motion to reduce the bond. The petitioners claim that the decision of the
Labor Arbiter had already become final and executory, and the appellate court had
no jurisdiction to alter it. They assert that the immutability of judgments has to be
adhered to regardless of occasional injustice, for the equity of a particular case must
yield to the over-mastering need of certainty and unalterability of judicial
pronouncements.[23]
The Ruling of the Court
There is no doubt that the appeal was perfected beyond the 10-day period
prescribed under Art. 223[24] of the Labor Code of the Philippines. The respondents
received the decision of the Labor Arbiter on November 4, 1999; hence, they had
until November 14, 1999 to perfect the appeal. Although they filed their Appeal
Memorandum on November 12, 1999, they, however, posted their surety bond only
on February 28, 2000.
It is axiomatic that an appeal is only a statutory privilege and it may only be
exercised in the manner provided by law.[25] The timely perfection of an appeal is a
mandatory requirement, which cannot be trifled with as a mere technicality to suit
the interest of a party.[26] However, in some instances, the Court has allowed a liberal
application of the rules of procedure. After all, they are mere tools designed to
expedite the decision or resolution of cases and other matters pending in court a
strict and rigid application of technicalities that tend to frustrate rather than
promote substantial justice must be avoided.[27]
In the present case, we rule that the NLRC did not commit grave abuse of
discretion in allowing the respondents appeal. We agree with the NLRC that
substantial justice is best served by allowing the appeal despite the procedural defect
and by considering the case on the merits. It must be stressed that the case involves
the implementation of the CARP which is aimed at promoting social justice by giving
primary consideration to the welfare of landless farmers through a more equitable
distribution and ownership of land. As it is, the CARP is more favorable to the worker
than the landowner. In light of this and the governments policy to equally protect
and respect not only the laborers interest but also that of the employer, we deem it
more equitable to admit the respondents appeal.
We quote with approval the NLRCs rationale in allowing the appeal, thus:
In the case at bench, what is involved is a fundamental consideration of
SUBSTANTIAL JUSTICE on whether or not complainants, as former employees of
respondents, working on their lands and subsequently becoming the new owners
thereof by virtue of the implementation by the Government of the Comprehensive
Agrarian Reform Law, would still be entitled to separation pay. Additionally, whether
or not the money claims of complainants could still be passed upon by the Labor
Arbiter below considering the fact that the said money claims were filed past the 3-
year prescriptive period for money claims under the Labor Code.
Thus, to insure faithful adherence by the Commission to the justness and legality of
payment of separation pay to herein complainants by way of law and jurisprudence
and in order to address the issue of a possible miscarriage of justice or of unjust
enrichment on the part of any party, the Commission has opted to adopt the liberal
view by giving due course to respondents appeal despite the little delay involved in
the posting of the entire amount of the appeal bond. After all, the facts and
circumstances obtaining in the case at bench warrant liberality in view of the
amount involved and the legal issues raised for resolution by the Commission (See
Phil. Airlines, Inc. vs. NLRC, G.R. No. 120501, October 26, 1996; Paramount Vinyl
Products Corp. vs. NLRC, 190 SCRA 527, October 17, 1990; Kathy-O Enterprises vs.
NLRC, 286 SCRA 729 (1998). [28]
Moreover, we have ruled in one case[29] that where the supersedeas bond had
been paid although payment was delayed, the broader interests of justice and the
desired objective of resolving controversies on the merits demands that the appeal be
given due course.[30]
Another consideration that militates against the contentions of the petitioner is
the ruling of the CA affirming the ruling of the NLRC, thus:
Anent the legality of the Labor Arbiters award of separation pay in favor of
petitioners, respondent NLRC correctly ruled that the termination of employer-
employee relationship as a result of the implementation of the Comprehensive
Agrarian Reform Law does not make out a case for illegal dismissal or termination
due to authorized cause under Article 283 of the Labor Code as to warrant the
payment of separation pay. The closure of business operations contemplated under
Article 283 refers to a voluntary act or decision on the part of the employer, not one
forced upon it, as in this case, by an act of the Law or State to benefit petitioners by
making them agrarian lot beneficiaries. Thus, We quote with approval the following
disquisitions of public respondent which We have found to be substantiated by the
evidence, viz:
x xx The resulting severance of employment relation between the parties does not
make out a case of illegal dismissal nor of termination due to cessation of business
operation or undertaking under Article 283 of the Labor Code warranting payment of
separation pay, primarily because dismissal presupposes a unilateral act by the
employer in terminating the employment of its workers. The resulting severance of
employment relationship between the parties came about INVOLUNTARILY. If the
landowners ceased their operation, it was not because they wanted to. Rather, it was
something forced upon them by an act of law or the State. It would be the height of
injustice and inequity if the workers who benefited from the takeover of the lands
and becoming new owners in the process would still be allowed to exact payment
from their former employer-landowner in the form of separation pay benefit. Such
would be tantamount to dealing a DOUBLE WHAMMY against the landowner who
was forced to relinquish or part with the ownership of his land by an act of the State.
(Emphasis supplied)
The ruling in the parallel case of National Federation of Labor vs. NLRC, is apropos.
There, the Supreme Court categorically held that former employees who became
beneficiaries of the Comprehensive Agrarian Reform Program are not entitled to
separation pay because the closure of the business of their employer is compelled by
law and not by the decision of its management. Said the High Court.
As earlier stated, the Patalon Coconut Estate was closed down because a large
portion of the said estate was acquired by the DAR pursuant to the CARP. Hence, the
closure of the Patalon Coconut Estate was not effected voluntarily by private
respondents who even filed a petition to have said estate exempted from the coverage
of RA 6657. Unfortunately, their petition was denied by the Department of Agrarian
Reform. Since the closure was due to the act of the government to benefit the
petitioners, as members of the Patalon Estate Agrarian Reform Association, by
making them agrarian lot beneficiaries of said estate, the petitioners are not entitled
to separation pay. The termination of their employment was not caused by the
private respondents. The blame, if any, for the termination of petitioners employment
can even be laid upon the petitioner-employees themselves inasmuch as they formed
themselves into a cooperative, PEARA, ultimately to take over, as agrarian lot
beneficiaries, private respondents landed estate pursuant to RA 6657. The resulting
closure of the business establishment, Patalon Coconut Estate, when it was placed
under CARP, occurred through no fault of the private respondents.
While the Constitution provides that the the State x xx shall protect the rights of
workers and promote their welfare, that constitutional policy of providing full
protection to labor is not intended to oppress or destroy capital and management.
Thus, the capital and management sectors must also be protected under a regime of
justice and the rule of law.
From all the foregoing, We hold that respondent NLRC did not commit grave abuse of
discretion nor acted without or in excess of jurisdiction in giving due course to
private respondents appeal and setting aside the Labor Arbiters decision awarding
separation pay and other money claims in favor of petitioners. [31]
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit.
The assailed decision of the Court of Appeals in CA-G.R. SP No. 61598 is AFFIRMED.
Costs against the petitioners. SO ORDERED.