GR 149464; (October, 2004) (Digest)
G.R. No. 149464 ; October 19, 2004
NATIONAL FEDERATION OF LABOR (NFL), ET AL., Petitioners, vs. THE HON. COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION, EXECUTIVE LABOR ARBITER RHETT JULIUS J. PLAGATA, SIME DARBY PILIPINAS, INC., AMERICAN RUBBER COMPANY, INC., SEAN O’KELLEY and/or EXPEDITO DOQUILLO, SR., Respondents.
FACTS
Petitioners were employees of Sime Darby Pilipinas, Inc. (SDPI) at its Latuan rubber plantation, which it managed under a Farm Management Agreement (FMA) with American Rubber Company, Inc. (ARCI). The Comprehensive Agrarian Reform Law (CARL) mandated the compulsory acquisition of such agro-industrial lands. Prior to the law’s deadline, SDPI decided to terminate the FMA and cease plantation operations effective January 17, 1998. Consequently, SDPI served termination notices to all employees, including the petitioners, and computed their separation pay based on the Collective Bargaining Agreement (CBA) with the National Federation of Labor (NFL), the employees’ bargaining agent.
The petitioners, through their union, contested the computation, arguing that separation pay should be based on a purported company policy of thirty days’ pay per year of service, rather than the CBA formula. They also later challenged the legality of SDPI’s payment method, as their separation benefits and final wages from January 1-17, 1998, were paid via check. The Labor Arbiter dismissed their complaint, a decision affirmed by the NLRC and the Court of Appeals.
ISSUE
The core issues were: (1) whether separation pay should be computed based on an alleged company policy or the CBA; and (2) whether payment of final wages via check violated the Labor Code.
RULING
The Supreme Court denied the petition and affirmed the lower courts’ rulings. On the first issue, the Court held that the CBA, not an alleged unwritten company policy, governed the computation of separation benefits. A CBA, as a contract between the employer and the certified bargaining agent, is the law between the parties. The petitioners, as union members, were bound by its terms. Their claim of a separate, more favorable company policy was unsupported by credible evidence and could not override the explicit terms of the negotiated CBA.
On the second issue, the Court acknowledged that Article 102 of the Labor Code generally requires wages to be paid in legal tender, with payment by check allowed only under specific circumstances like written employee consent. Strictly speaking, including the final wages (Jan. 1-17) in the check payment was a technical violation. However, the Court ruled the petitioners were estopped from raising this objection, as it was only belatedly raised on appeal before the NLRC. Moreover, given the substantial total monetary benefits due, payment by check was deemed the most practical and convenient method for all parties involved. Thus, no grave abuse of discretion was found in the lower courts’ decisions.