GR L 52325; (November, 1982) (Digest)
G.R. No. L-52325 November 15, 1982
CANLUBANG SUGAR ESTATE, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and TRANQUILINO O. NICDAO, respondents.
FACTS
Petitioner Canlubang Sugar Estate hired Tranquilino O. Nicdao as a pilot for its Cessna plane in December 1974. After the plane was sent to Singapore for repairs and grounded for over five months, the company decided to sell the aircraft. In August 1976, Nicdao was notified that his services were no longer needed due to the sale, with his termination effective one month later. The company subsequently filed an application for clearance to terminate his services with the Department of Labor. Nicdao initially did not oppose this but later filed a complaint for illegal dismissal.
The Labor Arbiter found the dismissal justified, citing alleged loss of trust and confidence due to Nicdao’s purported errors and the plane’s sale. However, as compassionate justice, the Arbiter awarded Nicdao one month’s separation pay of P3,500. On appeal, the NLRC reversed, ruling the dismissal unjustified and awarding Nicdao backwages equivalent to eighteen months’ salary (P63,000), as reinstatement was deemed not viable due to strained relations.
ISSUE
Whether Nicdao’s dismissal was lawful and, if so, the proper amount of termination compensation due to him.
RULING
The Supreme Court ruled that the dismissal was lawful. The company’s bona fide business decision to sell the aircraft, after it had been grounded for an extended period rendering Nicdao idle, constituted an authorized cause for termination analogous to the closure or cessation of operation under the Labor Code. An employer cannot be compelled to continue operating a business or maintaining equipment solely to preserve an employee’s position. The Court rejected the NLRC’s finding of illegal dismissal and its consequent award of backwages, as Nicdao rendered no service during the claimed period.
However, the Court noted the company’s procedural lapse in filing its application for termination clearance after the effective date of dismissal. Consequently, while the dismissal was for a lawful cause, Nicdao was entitled to separation pay as a measure of equitable relief. The Supreme Court affirmed the Labor Arbiter’s award of one month’s salary (P3,500) as separation pay, setting aside the NLRC’s decision for lack of legal and factual basis.