G.R. No. L-55062 February 26, 1988
SAN MIGUEL CORPORATION, petitioner-appellee, vs. THE NATIONAL LABOR RELATIONS COMMISSION, THE ARBITRATION BRANCH OF REGION NO. IV and ALFONSO GARCIA, JR., respondents-appellants.

FACTS

Respondent Alfonso Garcia, Jr. was an employee of San Miguel Corporation (SMC) from 1968, eventually promoted to Shift Head. After his promotion, he incurred fourteen days of unauthorized absences in 1977 due to serious and documented health issues, including hypertension, hemorrhoids, and hospitalizations. His subsequent leave applications for these periods were disapproved by SMC. Upon advice of a company personnel officer, Garcia filed an application for voluntary retirement on January 10, 1978, citing need for medical treatment and children’s education. Instead of acting on this retirement application, SMC filed on January 27, 1978, an application for clearance to terminate his services, citing company rules that nine unauthorized absences in a year is a ground for dismissal.
The Labor Arbiter dismissed Garcia’s opposition to the termination but ordered SMC to grant him financial assistance equivalent to half-month pay per year of service (P5,800.00). Both parties appealed to the NLRC, which affirmed the Labor Arbiter’s decision. SMC then filed this petition, arguing it was grave abuse of discretion to award financial assistance after a finding of dismissal for cause. Garcia, in turn, sought an increased award based on the company’s Retirement Plan.

ISSUE

Whether the National Labor Relations Commission committed grave abuse of discretion in affirming the award of financial assistance to an employee dismissed for cause.

RULING

The Supreme Court dismissed SMC’s petition, finding no grave abuse of discretion. The legal logic centers on the NLRC’s equitable discretion and the specific circumstances of the case. The Court clarified that the NLRC did not justify the award under Article 285 (Disease as a ground for termination) of the Labor Code, as argued by SMC. Instead, the NLRC found that a strict implementation of company rules would not serve labor justice, as Garcia’s absences were due to illness beyond his control. The NLRC emphasized that SMC could have liberally implemented its rules, acted favorably on Garcia’s voluntary retirement application, or separated him under Article 285, all of which would have entailed some form of monetary benefit.
The Court held that the award of financial assistance was a valid exercise of equitable discretion, sustainable on grounds of fairness given Garcia’s long service and the medical causes of his absences. It was not an arbitrary grant but a measured response to prevent a harsh outcome. Furthermore, the Court modified the award, increasing it to P13,050.00 as requested by Garcia, finding him entitled to higher benefits under the company’s Collective Bargaining Agreement, which provided one month’s salary per year of service for separation due to causes other than misconduct or voluntary resignation. The temporary restraining order was lifted.