GR 147993; (July, 2006) (Digest)
G.R. No. 147993 ; July 21, 2006
ENRIQUEZ SECURITY SERVICES, INC., petitioner, vs. VICTOR A. CABOTAJE, respondent.
FACTS
Respondent Victor Cabotaje was employed as a security guard by Enriquez Security and Investigation Agency (ESIA) in January 1979. Petitioner Enriquez Security Services, Inc. (ESSI) was incorporated on November 13, 1985, and respondent continued his employment without interruption. Upon reaching age 60 in July 1997, respondent applied for retirement. Petitioner acknowledged his entitlement but contested the computation period, arguing benefits should be reckoned only from ESSI’s incorporation in 1985, not from his original hiring in 1979.
The labor arbiter ruled for respondent, ordering payment computed from 1979. The NLRC modified the computation to one-half month salary per year of service as mandated by Republic Act No. 7641 (Retirement Pay Law). The Court of Appeals affirmed the NLRC. Petitioner elevated the case to the Supreme Court, raising issues on the retroactivity of RA 7641, the proper computation of the “one-half month salary” component, and the inclusion of prior service with the predecessor agency.
ISSUE
The primary issues were: (1) whether RA 7641 applies retroactively to service rendered before its effectivity; (2) whether the full cash equivalent of five days service incentive leave is included in the “one-half month salary” for computation; and (3) whether respondent’s service with the dissolved ESIA should be included in computing his total length of service with petitioner ESSI.
RULING
The Supreme Court denied the petition and affirmed the appellate court’s decision. On the first issue, the Court held that RA 7641, as social legislation, applies to labor contracts existing at its effectivity and benefits can be reckoned retroactively from the start of employment. Department of Labor guidelines and jurisprudence confirm inclusion of pre-1993 service.
On the second issue, the Court ruled that the “one-half month salary” under RA 7641 expressly includes the cash equivalent of not more than five days of service incentive leave in full, not merely a 1/12 portion, as clarified by the implementing rules.
On the third issue, the Court sustained the factual findings of the lower tribunals, which are generally binding in a Rule 45 petition. The uncontroverted facts showed continuous employment, common ownership by the Enriquez family, and the same office location for both agencies. Piercing the corporate veil was justified, as the setup was a device to evade legal obligations. Thus, petitioner was liable for retirement pay computed from respondent’s uninterrupted service commencing in January 1979.