G.R. No. 82895 . November 7, 1989.
LLORA MOTORS, INC. and/or CONSTANTINO CARLOTA, JR., petitioners, vs. HON. FRANKLIN DRILON, et al., and PRIMITIVO ALVIAR, respondents.

FACTS

Primitivo Alviar, a truck driver for Llora Motors, Inc. since 1968, ceased working in April 1985 at age 65. He filed a complaint for unpaid Emergency Cost of Living Allowance (ECOLA) differentials and retirement benefits. The petitioners opposed, contending all benefits had been paid and asserting that Alviar had abandoned his work, as he refused to act as a relief driver when his assigned truck was under repair, and was not dismissed or retired by the company, which lacked a retirement plan. They also noted Alviar had received Social Security System (SSS) retirement benefits in 1983. Alviar, in his pleadings, did not refute the abandonment claim but simply stated he “retired from the service due to his old age.”
The Labor Arbiter ruled in Alviar’s favor, awarding unpaid ECOLA differentials and retirement benefits computed at one-half month’s pay per year of service, plus attorney’s fees. The National Labor Relations Commission (NLRC) affirmed the decision. Petitioners elevated the case to the Supreme Court via certiorari, arguing denial of due process due to the lack of a formal hearing and contesting the award of retirement benefits.

ISSUE

1. Were the petitioners denied due process by the Labor Arbiter’s failure to conduct a formal hearing?
2. Is private respondent Alviar legally entitled to retirement benefits from petitioners?

RULING

1. No denial of due process. The Supreme Court held that a formal or trial-type hearing is not indispensable to due process in labor cases. The essence of due process is simply an opportunity to be heard. Petitioners were afforded this reasonable opportunity as they had submitted a Position Paper with annexes, and later a Memorandum and Motion for Reconsideration before the NLRC, fully setting forth their defenses. Their submissions were considered by the labor tribunals.
2. No entitlement to retirement benefits. The Court ruled that Alviar was not legally entitled to the awarded retirement benefits. The grant was unjustified because: (a) there was no finding of illegal dismissal; (b) the company had no retirement plan or collective bargaining agreement providing for such benefits; and (c) the Labor Code (Articles 283 and 284) only mandates separation pay in specific instances like installation of labor-saving devices, redundancy, retrenchment, closure, disease, or when reinstatement is not possible—none of which were present. Retirement benefits under the Social Security Act (SSS) are distinct and separate from employer-liable separation pay. Since Alviar voluntarily stopped working and was not dismissed for any authorized cause, the award constituted an act in excess of jurisdiction.
The Supreme Court SET ASIDE the challenged Decision and Resolution. A new judgment was entered ordering petitioners to pay only the unpaid ECOLA differentials of P4,709.54, plus 10% attorney’s fees and legal interest.