GR 127395; (December, 1998) (Digest)
G.R. No. 127395 December 10, 1998
PHILIPPINE TOBACCO FLUE-CURING & REDRYING CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, LIGAYA LUBAT, ET AL., respondents.
FACTS
Petitioner Philippine Tobacco Flue-Curing & Redrying Corporation closed its Balintawak tobacco processing plant and transferred operations to Candon, Ilocos Sur. Two groups of seasonal workers, the Lubat group and the Luris group, claimed separation benefits. The petitioner refused to grant separation pay to the Lubat group, contending they were no longer in its employ as they had not been given work in the preceding year. It also denied separation pay to the Luris group, asserting that the plant closure was due to “serious business losses” as defined under Article 283 of the Labor Code, which exempts an employer from such payment.
The Labor Arbiter and the National Labor Relations Commission (NLRC) ruled in favor of the workers, ordering the petitioner to pay separation benefits. The NLRC dismissed the petitioner’s appeal, prompting the latter to file this Petition for Certiorari before the Supreme Court.
ISSUE
The primary issues were: (1) whether the Lubat group, not rehired in the season preceding the closure, were illegally dismissed and entitled to separation pay; and (2) whether the Luris group were entitled to separation pay despite the petitioner’s claim of closure due to serious business losses.
RULING
The Supreme Court denied the petition and affirmed the NLRC decision with modification. On the first issue, the Court ruled that the petitioner’s refusal to rehire the Lubat group constituted illegal dismissal. As seasonal workers, their employment relationship was not severed but merely suspended during the off-season. The employer’s failure to recall them for the next season without valid cause was an unlawful termination, entitling them to separation pay.
On the second issue, the Court held that the petitioner failed to prove that the closure was due to “serious business losses” sufficient to exempt it from paying separation benefits under Article 283. The financial statements presented were “recasted” and did not constitute clear and convincing evidence of serious financial reverses. Consequently, the Luris group was entitled to separation pay for closure not due to serious business losses.
The Court modified the award, granting separation pay equivalent to one month pay or one-half month pay for every year of service, whichever is higher, provided the worker rendered service for at least six months in a given year. The separation pay for the Luris group was to be taken from the amount already awarded to them by the petitioner, with any excess not required to be refunded. Attorney’s fees were also affirmed.