G.R. No. L-20215 April 24, 1967
DIONISIO PEREZ, plaintiff-appellant, vs. CENTRAL AZUCARERA DON PEDRO, defendant-appellee.

FACTS

Plaintiff-appellant Dionisio Perez had been employed by defendant-appellee Central Azucarera Don Pedro since 1931, rendering continuous service until his dismissal on January 31, 1959, for “loss of confidence.” At the time of his discharge, he held the position of Chief Clerk, Supply and Warehousing, was a permanent and regular employee with a monthly salary of P230.00 plus fringe benefits, and was covered by the company’s voluntary non-contributory gratuity and retirement plan. On June 8, 1959, Perez filed a complaint in the Court of First Instance of Batangas seeking reinstatement, backwages, and damages. The appellee moved to dismiss the complaint on jurisdictional grounds, which was denied. The parties subsequently stipulated facts and submitted memoranda on the appellee’s third affirmative defense, which asserted that the employer had the right to separate the employee even without cause by serving notice or paying separation pay, and that the employee’s only right in such a case was to claim separation pay, not reinstatement or backwages. The trial court dismissed the complaint. Perez moved for reconsideration and submitted an amended complaint, which was denied admission. Perez appealed, arguing the trial court erred in concluding his employment was without a definite period under Republic Act No. 1052 , as amended; in holding jurisdiction over separation pay lay with the Department of Labor; and in dismissing the complaint and denying the amended complaint.

ISSUE

The primary issues were: (1) whether Perez’s employment was for a definite period, thereby affecting the validity of his dismissal; (2) whether the right to separation pay fell under the jurisdiction of the trial court or the Regional Office of the Department of Labor; and (3) whether the trial court erred in dismissing the complaint and denying the admission of the amended complaint.

RULING

The Supreme Court set aside the order of dismissal and remanded the case for trial. The Court ruled that Perez’s employment was without a definite period. His original and promotional appointments were never reduced to writing, and no evidence showed a definite term. His status as a “permanent employee” and coverage under the retirement plan, which provided benefits upon retirement at age 65 or after 35 years of service, did not establish a fixed period of employment within the meaning of Republic Act No. 1052 , as amended. The retirement plan was merely a schedule for computing benefits. Citing Ricardo Gutierrez vs. Bachrach Motor Co., Inc., the Court reiterated that in the absence of a contract for a specific period, an employer may dismiss an employee at any time with or without cause, subject to the requirement of notice or payment of separation pay under the law. The amended complaint, which alleged employment for 35 years or until age 65 based on custom and the retirement plan, presented nothing new and was correctly denied admission as it had already been substantively passed upon. However, the Court found merit in Perez’s claim for an opportunity to prove his right to separation pay. Although his complaints prayed for reinstatement and damages, the appellee’s third affirmative defense inherently raised the issue of separation pay. The resolution of that defense in appellee’s favor automatically implicated the right to separation pay if the dismissal was without cause. Therefore, Perez should be allowed to prove whether his separation was with or without cause and, if without cause, the amount of separation pay due. This matter was within the jurisdiction of the trial court, not the Regional Office of the Department of Labor, as established in Stoll, et al. vs. Mardo, et al.