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38. G.R. No. 181178July 26, 2010, AMELIA R. OBUSAN v.

PHILIPPINE Later, the PNB Board of Directors, through Resolution No. 30 dated December
NATIONAL BANK 22, 2000, as amended, approved the PNB Regular Retirement Plan [5] (PNB-RRP).
Section 1, Article VI of which provides
This petition for review on certiorari[1] under Rule 45 of the Rules of Court
seeks to annul and set aside the Decision[2] dated September 21, 2007 and the Normal Retirement. The normal retirement date of a Member shall be
Resolution[3] dated January 8, 2008 of the Court of Appeals (CA) in CA-G.R. SP No. the day he attains sixty (60) years of age, regardless of length of
96918. service or has rendered thirty (30) years of service, regardless of age,
whichever of the said conditions comes first. A Member who has
The antecedents that spawned this controversy are as follows reached the normal retirement date shall have to compulsor[il]y retire
and shall be entitled to receive the retirement benefits under the
Back in 1979, respondent Philippine National Bank (PNB) hired petitioner Plan.[6]
Amelia R. Obusan (Obusan), who eventually became the Manager of the PNB Medical
Office. At that time, PNB was a government-owned or controlled corporation, whose In a Memorandum[7] dated February 21, 2001, PNB informed its officers and
retirement program for its employees was administered by the Government Service employees of the terms and conditions of the PNB-RRP, along with its
Insurance System (GSIS), pursuant to the Revised Government Service Insurance Act implementing guidelines.
of 1977 (Presidential Decree No. 1146).
Subsequently, the PNB-RRP was registered with the Bureau of Internal
On May 27, 1996, PNB was privatized. Section 6 of the Revised Charter of the Revenue, per its letter[8] dated June 27, 2001. Later, the Philnabank Employees
PNB (Executive Order No. 80, December 3, 1986), with respect to the effect of Association, the union of PNB rank-and-file employees, recognized the PNB-RRP in
privatization of PNB, provides the Collective Bargaining Agreement (CBA) it entered with PNB.[9]

Change in Ownership of the Majority of the Voting Equity of the In a Memorandum[10] dated February 11, 2002, PNB informed Obusan that
Bank. When the ownership of the majority of the issued common her last day of employment would be on March 3, 2002, as she would reach the
voting shares passes to private investors, the stockholders shall cause mandatory retirement age of 60 years on March 4, 2002. In her counsels
the adoption and registration with the Securities and Exchange letter[11] dated February 26, 2002, Obusan questioned her compulsory retirement
Commission of the appropriate Articles of Incorporation and revised and even threatened to take legal action against PNB for illegal dismissal and unfair
by-laws within three (3) months from such transfer of labor practice in the form of union busting, Obusan being then the President of the
ownership. Upon the issuance of the certificate of incorporation under PNB Supervisors and Officers Association.
the provisions of the Corporation Code, this Charter shall cease to
have force and effect, and shall be deemed repealed. Any special In a letter[12] dated March 1, 2002, PNB replied to Obusan, explaining that
privileges granted to the Bank such as the authority to act as official compulsory retirement under the PNB-RRP is not contrary to law and does not
government depository, or restrictions imposed upon the Bank, shall constitute union busting. Dissatisfied with PNBs explanation, Obusan filed before
be withdrawn, and the Bank shall thereafter be considered a privately the Labor Arbiter a complaint for illegal dismissal and unfair labor practice, claiming
organized bank subject to the laws and regulations generally that PNB could not compulsorily retire her at the age of 60 years, with her having a
applicable to private banks. The bank shall likewise cease to be a vested right to be retired only at 65 years old pursuant to civil service regulations.
government owned or controlled corporation subject to the
coverage of service-wide agencies such as the Commission on Audit On April 25, 2003, the Labor Arbiter rendered a decision, [13] dismissing
and the Civil Service Commission. (Emphasis supplied.) Obusans complaint as he upheld the validity of the PNB-RRP and its provisions on
compulsory retirement upon reaching the age of 60 years. The Labor Arbiter found
Consequent to the privatization, all PNB employees, including Obusan, were
deemed retired from the government service. The GSIS, in its letter[4] dated February Complainant posits that she has a vested right to be retired at
3, 1997, confirmed Obusans retirement from the government service, and 65 years since this was the retirement age at the time she was
accordingly paid her retirement gratuity in the net amount hired. However, there is neither jurisprudence nor law which supports
of P390,633.76. Thereafter, Obusan continued to be an employee of PNB. this contention.Undisputed is the fact that, when complainant was
hired, PNB was still a government owned and controlled
corporation. Accordingly, the Revised Government Service Insurance
Act [RGSI] of 1977 (Presidential Decree No. 1146), which established was an enforceable vested interest in the retirement fund. The Supreme
that the compulsory retirement age for government employees to be 65 Court did not hold that the private respondent has a vested right to
years governs the employment of PNB employees. The PNB then did his retirement age. x x x.
not have any participation in establishing the compulsory retirement
age but the RGSI Act which is the law itself. But the same may apply x x x A vested right or a vested interest may be held to mean
only as long as PNB remains a government owned and controlled some right or interest in property that has become fixed or
corporation. From the time PNB ceased to be such, it cannot be said established, and is no longer open to doubt or controversy. Retirement
that [the] RGSI Act of 1977 still applies. Thus negating the claim of age is not a property.It cannot be also fixed or permanent. Laws,
complainant to retire at age 65 under the said law. contracts, and collective bargaining agreements may amend or alter
When PNB ceased to be a government owned or controlled the retirement age of an employee. Complainant may have had a
corporation, the law now applicable to the Bank is the Labor Code vested right to the retirement funds under the old retirement plan of
which allows PNB to establish its own retirement plan. As such, PNB the bank, but as held in Razon, this right could be withheld upon a
is empowered to formulate its Regular Retirement Plan provided it is clear showing of good and compelling reasons. The privatization of
within the bounds of the Labor Code. We find no cogent reason to PNB and the consequent severance of its employees from government
invalidate the Regular Retirement Plan as it is in accord with the law. service is the reason why complainant lost her right to the government
retirement plan. These are causes which are persuasive and
Indeed, this Office cannot see how complainant can assert that compelling.[17]
her right to be retired at the age of 65 years has been vested at the
time of her hiring when, in fact, such right can only be vested at the Undaunted, Obusan filed a petition for certiorari before the CA, ascribing
time of her retirement. Necessarily, complainant can only avail a grave abuse of discretion to the NLRC when it affirmed the decision of the Labor
retirement plan that is in effect at the time of her retirement. In this Arbiter. The CA, however, dismissed the petition in its assailed Decision dated
case, the retirement plan she insists on applying is no longer existent September 21, 2007, ratiocinating that the PNB-RRPs lowering the compulsory
and instead it was replaced by the PNB Regular Retirement Plan retirement age to 60 years is not violative of Article 287 of the Labor Code of
which, by its terms, complies with the pertinent provisions of the the Philippines, as amended, despite the issuance of the plan years after Obusan
Labor Code on retirement plans.[14] was hired. Obusans motion for reconsideration of this Decision was subsequently
denied by the CA in its Resolution dated January 8, 2008.
Obusan then appealed to the National Labor Relations Commission
(NLRC). In a resolution[15] dated May 31, 2004, the NLRC dismissed Obusans appeal, Hence, this petition anchored on the argument that PNB cannot unilaterally
and affirmed the assailed decision in toto. Obusans motion for reconsideration of this lower the compulsory retirement age to 60 years without violating Article 287 of the
resolution was later denied in an NLRC resolution[16] dated August 28, 2006. The Labor Code and Obusans alleged right to retire at the age of 65 years.
NLRC held
According to Obusan, the PNB-RRP should only apply to employees hired on
Movant invokes the ruling of the Supreme Court in Razon, Jr. and after February 21, 2001, the date of its adoption. She insists that if the lowering
v. NLRC (185 SCRA 44), where the Supreme Court held: of the compulsory retirement age to 60 years under the PNB-RRP was the product of
an agreement between PNB and its employees, she would definitely accede to be
We believe that upon acceptance of employment, bound by it. She points out that the questioned provision on retirement age was a
a contractual relationship was established giving unilateral act of PNB, to which she did not give her consent. In her Supplement to
private respondent an enforceable vested interest in the Petition for Review on Certiorari,[18] Obusan invoked Jaculbe v. Silliman
retirement fund. Verily, the retirement scheme became University,[19] where this Court held
an integral part of his employment package and the
benefits to be derived therefrom constituted as it were a Retirement is the result of a bilateral act of the parties, a
continuing consideration for services rendered, as well voluntary agreement between the employer and the employee whereby
as an effective inducement for remaining with the firm. the latter, after reaching a certain age agrees to sever his or her
employment with the former. In Pantranco North Express, Inc. v. NLRC,
It is clear that the contractual relationship established between the to which both the CA and respondent refer, the imposition of a
employer and employee upon the latters acceptance of employment
retirement age below the compulsory age of 65 was deemed acceptable In case of retirement, the employee shall be entitled to receive such
because this was part of the CBA between the employer and the retirement benefits as he may have earned under existing laws and
employees. The consent of the employees, as represented by their any collective bargaining agreement and other agreements: Provided,
bargaining unit, to be retired even before the statutory retirement age however, That an employees retirement benefits under any collective
of 65 was laid out clearly in black and white and was therefore in bargaining agreement and other agreements shall not be less than
accord with Article 287. those provided herein.

In this case, neither the CA nor the respondent cited any In the absence of a retirement plan or agreement providing for
agreement, collective or otherwise, to justify the latters imposition of retirement benefits of employees in the establishment, an employee
the early retirement age in its retirement plan, opting instead to harp upon reaching the age of sixty (60) years or more, but not beyond
on petitioners alleged voluntary contributions to the plan, which was sixty-five (65) years which is hereby declared the compulsory
simply untrue. The truth was that petitioner had no choice but to retirement age, who has served at least five (5) years in the said
participate in the plan, given that the only way she could refrain from establishment, may retire and shall be entitled to retirement pay
doing so was to resign or lose her job. It is axiomatic that employer equivalent to at least one-half (1/2) month salary for every year of
and employee do not stand on equal footing, a situation which often service, a fraction of at least six (6) months being considered as one
causes an employee to act out of need instead of any genuine whole year.
acquiescence to the employer. This was clearly just such an instance.
Unless the parties provide for broader inclusions, the term
xxxx one-half (1/2) month salary shall mean fifteen (15) days plus one-
twelfth (1/12) of the 13th month pay and the cash equivalent of not
As already stated, an employer is free to impose a retirement more than five (5) days of service incentive leaves.
age less than 65 for as long as it has the employees consent. Stated
conversely, employees are free to accept the employers offer to lower Undoubtedly, under this provision, the retirement age is primarily determined
the retirement age if they feel they can get a better deal with the by the existing agreement or employment contract. Absent such an agreement,
retirement plan presented by the employer. Thus, having terminated the retirement age shall be fixed by law. The above-cited law mandates that
petitioner solely on the basis of a provision of a retirement plan which the compulsory retirement age is at 65 years, while the minimum age for optional
was not freely assented to by her, respondent was guilty of illegal retirement is set at 60 years. Moreover, Article 287 of the Labor Code, as amended,
dismissal.[20] applies only to a situation where (1) there is no CBA or other applicable employment
contract providing for retirement benefits for an employee; or (2) there is a collective
Put differently, Obusan posits that the severance of her employment from PNB bargaining agreement or other applicable employment contract providing for
constituted illegal dismissal. She claims that the PNB-RRP, which compulsorily retirement benefits for an employee, but it is below the requirement set by law. The
retired her at the age of 60 years without her consent, runs afoul of her right to rationale for the first situation is to prevent the absurd situation where an employee,
security of tenure as guaranteed by the Constitution. She further argues that since deserving to receive retirement benefits, is denied them through the nefarious
PNB-RRP cannot be made to apply to her, Article 287 of the Labor Code should scheme of employers to deprive employees of the benefits due them under existing
prevail, giving her the right to compulsorily retire at the age of 65 years. labor laws. The rationale for the second situation is to prevent private contracts from
derogating from the public law.[21]
We disagree.
In this case, Obusan was initially hired in 1979 as a government employee,
The pertinent law on this matter, Article 287 of the Labor Code, as amended by PNB then being a government-owned and controlled corporation. As such, she was
Republic Act No. 7641, which took effect on January 7, 1993, provides governed by civil service laws, and the compulsory retirement age, as imposed by
law, was at 65 years. Peculiar to her situation, however, was that the corporate entity
ART. 287. Retirement. Any employee may be retired upon reaching the that hired her ceased to be government-owned and controlled when it was privatized
retirement age established in the collective bargaining agreement or in 1996. As a result of the privatization of PNB, all of its officers and employees were
other applicable employment contract. deemed retired from the government service. Consequently, many of them, Obusan
included, received their respective retirement gratuities.
It cannot be said that the PNB-RRP is a retirement plan providing retirement Section 1. Membership. Membership in the Plan shall be automatic for
benefits less than what the law requires. In fact, in the computation of the employees all full-time regular and permanent officers and employees of the Bank
retirement pay, the plan factored what Article 287 requires. Thus the plan provides: as of the effectivity date of the Plan. For employees hired after the
effectivity of this Plan, their membership shall be effective on Date
3. For service rendered after privatization, a Member, regardless Entered Bank.[27]
whether or not he received GSIS Retirement Gratuity Benefits,
shall be entitled to one hundred twelve (112%) percent of his The records show that the PNB Board of Directors approved the PNB-RRP on
Latest Monthly Plan Salary[22] for every year of service rendered, a December 22, 2000. On February 21, 2001, PNB informed all of its officers and
fraction of at least six (6) months being considered as one (1) employees about it, complete with its terms and conditions and the guidelines for its
whole year. implementation. Then, the PNB-RRP was registered with the BIR and, later, was
recognized by the Philnabank Employees Association in the CBA it entered with PNB.
The vesting multiple of one hundred twelve (112%) percent that is
applied to the Latest Monthly Plan Salary is derived as the sum of With the information properly disseminated to all of PNBs officers and employees, the
fifteen (15) days of the Latest Daily Plan Salary plus five (5) days of PNB-RRP was then opened for scrutiny. The employees had every opportunity to
the service incentive leave (based on Latest Daily Plan Salary) plus question the plan if, indeed, it would not be beneficial to the employees, as compared
one-twelfth (1/12) of the Latest Monthly Plan Salary. The Daily to what was mandated by Article 287 of the Labor Code. Consequently, the union of
Plan Salary used is computed as Latest Monthly Plan Salary PNBs rank-and-file employees recognized it as a legally-compliant and reasonable
multiplied by thirteen (13) months and divided by two hundred retirement plan by the act of incorporating it in their CBA with PNB.
fifty-one (251) days.[23]
With respect to Obusan and the PNB Supervisors and Officers Association, of which
Moreover, the PNB-RRP also considered the effects of PNBs privatization, as it also she was the President when she was compulsorily retired, there is nothing on record
provided for additional benefits to those employees who were not qualified to receive to show that they expressed their dissent to the PNB-RRP. This deafening silence
the GSIS Retirement Gratuity Benefits, viz. eloquently speaks of their lack of disagreement with its provisions. It was only at the
time that she was to be compulsorily retired that Obusan questioned the PNB-RRPs
2. A Member who failed to qualify to receive GSIS Retirement Gratuity provision on compulsory retirement age.
Benefits shall be entitled [to] one Month Basic Salary (as of May
26, 1996) for every year of service rendered before privatization. [24] Besides, we already had the occasion to strike down the added requirement that an
employer must first consult its employee prior to retiring him, as this requirement
Retirement plans allowing employers to retire employees who have not yet unduly constricts the exercise by management of its option to retire the said
reached the compulsory retirement age of 65 years are not per se repugnant to the employee. Due process only requires that notice of the employers decision to retire
constitutional guaranty of security of tenure. By its express language, the Labor an employee be given to the employee.[28]
Code permits employers and employees to fix the applicable retirement age at 60
years or below, provided that the employees retirement benefits under any CBA and
other agreements shall not be less than those provided therein.[25] By this yardstick, Finally, it is also worthy to mention that, unlike in Jaculbe, the PNB-RRP is solely
the PNB-RRP complies. and exclusively funded by PNB,[29] and no financial burden is imposed on the
employees for their retirement benefits.
However, company retirement plans must not only comply with the standards
set by existing labor laws, but they should also be accepted by the employees to be All told, we hold that the PNB-RRP is a valid exercise of PNBs prerogative to provide a
commensurate to their faithful service to the employer within the requisite period. [26] retirement plan for all its employees.

To our mind, Obusans invocation of Jaculbe on account of her lack of consent WHEREFORE, the petition is DENIED. The assailed Decision dated September 21,
to the PNB-RRP, particularly as regards the provision on compulsory retirement age, 2007 and the Resolution dated January 8, 2008 of the Court of Appeals in CA-G.R.
is rather misplaced. SP No. 96918 are AFFIRMED. No costs.

It is true that her membership in the PNB-RRP was made automatic, to wit SO ORDERED.
37. [G.R. No. 150915. April 11, 2005] In a Decision dated October 25, 1999, Labor Arbiter Amado Solamo granted the
MARIO MANABAN, et al , petitioners, vs. SARPHIL CORPORATION/APOKON petitioners monetary claims. He held that the complaints for illegal dismissal were
FRUITS, INC., LORENZO SARMIENTO, JR., and SALVADOR T. filed within the four-year reglementary period. He likewise ruled that by not
BALBUENA, respondents. submitting their position paper, the respondents were deemed to have waived their
This is a petition for review of the Decision[1] of the Court of Appeals (CA) in CA- right to adduce evidence. According to the Labor Arbiter, since the allegations and
G.R. SP No. 61598 and its Resolution dated November 5, 2001 denying the motion arguments interposed by the petitioners, as complainants, remained unrebutted and
for reconsideration thereof. The assailed decision denied the petition for certiorari of were deemed unqualifiedly admitted, he had no other alternative except to grant the
the decision of the National Labor Relations Commission (NLRC) in NLRC CA No. M- complainants monetary claims.[4] The dispositive portion of the decision reads:
005284-99. WHEREFORE, judgment is hereby rendered ordering respondents jointly and
Respondents Sarphil Corporation and Apokon Fruits, Inc. are domestic severally to pay complainants the following:
corporations duly registered under Philippines laws and engaged in the planting and a.) Separation pay computed at one-month pay for every year of service.
culture of rubber and banana at Barangay Tubo-tuboMonkayo, Compostela Valley b.) Salary differentials, 13th month pay, service incentive leave pay and
Province, Davao City. Respondents Lorenzo Sarmiento and Salvador T. Balbuena are COLA (Wage Order No. 3) subject to the computation at execution
the President and Executive Vice-President, respectively, of the respondent stage.
corporations. c.) 10% of the total award as Union Service Fee.
The individual petitioners were regular workers in the plantations of the SO ORDERED.[5]
respondent corporations. They are all members of the petitioner Trade Union of the The respondents received a copy of the decision on November 4, 1999. On
Philippines and Allied Services, a labor federation duly registered with the November 12, 1999, they filed a Motion for Reconsideration/Appellants Appeal
Department of Labor and Employment. Memorandum.[6] However, they failed to post a cash or surety bond.
The Antecedents Thereafter, the petitioners filed a Motion to Dismiss[7] the appeal for failure to
On January 15, 1996, the respondents terminated the employment of all their post an appeal bond within the reglementary period. When such motion to dismiss
workers, including the individual petitioners, after their rubber and banana remained unacted upon by the NLRC, they again filed a Second Motion to
plantations were taken over by the Department of Agrarian Reform (DAR), pursuant Dismiss,[8] reiterating the grounds in the first one.
to the governments Comprehensive Agrarian Reform Program (CARP). As required by On February 28, 2000, the respondents filed a Manifestation/Motion to Admit
Republic Act No. 6657, the Comprehensive Agrarian Reform Law (CARL), the Bond/Opposition to Motion to Dismiss. They alleged therein that it took sometime for
petitioners formed the Sarphil CARP Beneficiaries Multi-Purpose Cooperative. The them to secure an appeal bond because of the huge amount involved, and initially,
ownership and management of respondents lands were then turned over to the said no bonding company was willing to post the same. They averred that they had no
cooperative. Thereafter, the respondents submitted the names of their regular cash sufficient to put up the appeal bond since they have no more assets except their
workers to the DAR; the latter, in turn, listed the petitioners as CARP beneficiaries. name and integrity, and that it was fortunate that they were able to negotiate a loan
On December 10, 1997, the DAR Secretary issued Certificates of Land Ownership with the Land Bank of the Philippines.[9]
Award to these beneficiaries. The NLRC allowed the appeal. On June 30, 2000, it rendered a decision, the
As a result of the termination of their employment, the petitioners demanded dispositive portion of which reads:
from the respondents the payment of separation pay, salary differentials, 13 th month WHEREFORE, the judgment appealed from is hereby SET ASIDE. A new one is
pay, service incentive leave pay, and holiday pay. When the respondents failed to entered declaring that complainants, as former employees of respondents and who
accede to their demands, the petitioners filed separate complaints for illegal became beneficiaries of the CAR Law are NOT entitled to separation pay because the
dismissal, separation pay and other money claims before the NLRC, Regional severance of their employment was compelled by an act of LAW and not by the
Arbitration Branch XI, Davao City. The earliest of the said complaints was filed on decision of respondents. Consequently, the award of separation pay to complainants
January 26, 1999; the others were filed on March 9, 15, 29 and 30, 1999; April 5 is SET ASIDE for being contrary to law and settled jurisprudence.
and 18, 1999; and May 3, 1999.[2] For being TIME BARRED brought about by PRESCRIPTION, the money claims
During the conciliation proceedings, the parties were not able to arrive at a award, such as salary differentials, 13th month pay, service incentive leave pay and
settlement. Thus, the Labor Arbiter directed the parties to submit their respective COLA, as well as attorneys fees are DELETED and SET ASIDE.
position papers together with supporting documents. SO ORDERED.[10]
The petitioners submitted their position paper on July 8, 1999. Instead of filing a On August 22, 2000, the NLRC denied the petitioners motion for reconsideration
position paper, however, the respondents filed a Motion to Dismiss the Complaint on for lack of merit.[11] Dissatisfied, the petitioners filed a petition for certiorari with the
July 19, 1999, on the ground that the petitioners cause of action had long CA. They submitted the following issues:
prescribed.[3] I.
WHETHER OR NOT THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION the surety bond and so, the respondents did not have to produce the full amount of
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN GIVING DUE COURSE TO the award but only that amount sufficient to cover the premium payments for the
REGLEMENTARY PERIOD. Further, the petitioners contend that the delay in this case cannot be compared
II. to the delays incurred in the cases cited by the NLRC in support of its decision which
WHETHER OR NOT THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION was only for several days. They maintain that the respondents remedy should have
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN LATER ANNULING AND been to file a motion for reduction of the bond.[20]
SETTING ASIDE THE DECISION OF THE LABOR ARBITER GRANTING For their part, the respondents assert that they had no intent to delay or prolong
PETITIONERS SEPARATION PAY.[12] the resolution of the case. Neither did they intend to evade their obligation to the
The Court of Appeals Decision petitioners because, in the first place, under the law and settled jurisprudence, there
On July 31, 2001, the CA rendered a Decision[13] denying the petition is no such obligation to speak of. They stress that both the NLRC and the CA have
for certiorari and affirming the ruling of the NLRC. It held that the petitioners failed held that the petitioners are not entitled to separation pay or to the other monetary
to demonstrate any grave abuse of discretion or lack or excess of jurisdiction on the claims. The respondents explain that, although the bond posted was a surety bond,
part of the NLRC in issuing the assailed resolutions. The CA noted that the NLRC the bonding company required a security deposit of an equal amount which almost
gave due course to the respondents appeal despite the delay in posting the appeal reached P4 million. Hence, they had to procure a loan from the Land Bank of the
bond, on the fundamental consideration of substantial justice, that is, to prevent Philippines in order to raise the amount.[21] Finally, the respondents submit that the
unjust enrichment on the part of any party and to ensure adherence to the justness rationale in allowing tardy appeals, in general, does not lie in the number of days of
and legality of the payment of separation pay.[14] delay or tardiness in perfecting the appeal, but rather, in the intent to promote
The CA affirmed the NLRCs finding that the cases were filed beyond the three- substantial justice.[22]
year prescriptive period for filing money claims, which commenced on January 15, The petitioners retort that the four-month delay in filing the appeal bond cannot
1996, the date when the petitioners were terminated. It ruled that the NLRC was be considered a slight delay, and that to allow such a tardy appeal will have far-
correct in holding that the termination of employment due to the implementation of reaching repercussions in labor justice. They aver that the respondents should have,
the CARL did not amount to illegal dismissal, or termination due to an authorized at least, informed the NLRC about their difficulty in raising the bond, or they could
cause under Art. 283[15] of the Labor Code, which would warrant the payment of have filed a motion to reduce the bond. The petitioners claim that the decision of the
separation pay. Citing the case of National Federation of Labor vs. NLRC,[16] the CA Labor Arbiter had already become final and executory, and the appellate court had
pronounced that the closure of business operations contemplated under Art. 283 no jurisdiction to alter it. They assert that the immutability of judgments has to be
refers to a voluntary act or decision on the part of the employer, not one forced upon adhered to regardless of occasional injustice, for the equity of a particular case must
it, as in this case, by an act of law or state to benefit petitioners by making them yield to the over-mastering need of certainty and unalterability of judicial
agrarian lot beneficiaries. [17] pronouncements.[23]
The petitioners filed a motion for reconsideration of the CA decision which was The Ruling of the Court
likewise denied on November 5, 2001.[18] There is no doubt that the appeal was perfected beyond the 10-day period
The Instant Petition prescribed under Art. 223[24] of the Labor Code of the Philippines. The respondents
The petitioners interposed this petition for review on the sole assignment of received the decision of the Labor Arbiter on November 4, 1999; hence, they had
error: until November 14, 1999 to perfect the appeal. Although they filed their Appeal
The Court of Appeals committed a reversible error when it sustained the NLRCs Memorandum on November 12, 1999, they, however, posted their surety bond only
admission of the respondents appeal despite the fact that the respondents posted on February 28, 2000.
their appeal bond about four (4) months after their receipt of the appealed It is axiomatic that an appeal is only a statutory privilege and it may only be
decision.[19] exercised in the manner provided by law.[25] The timely perfection of an appeal is a
The petitioners argue that the decision of the Labor Arbiter became final and mandatory requirement, which cannot be trifled with as a mere technicality to suit
executory upon the respondents failure to file their appeal bond and to perfect their the interest of a party.[26] However, in some instances, the Court has allowed a liberal
appeal within the 10-day reglementary period. They maintain that the filing of the application of the rules of procedure. After all, they are mere tools designed to
bond on time is not a mere formality. They contend that the reason given by the expedite the decision or resolution of cases and other matters pending in court a
respondents for the delay in the posting of the bond is clearly self-serving, and strict and rigid application of technicalities that tend to frustrate rather than
without any evidentiary support. The records belie the alleged procurement of a loan promote substantial justice must be avoided.[27]
with the Land Bank of the Philippines, or that it was the latter which posted the In the present case, we rule that the NLRC did not commit grave abuse of
bond in favor of the respondents. In fact, it was Intra Strata Insurance which posted discretion in allowing the respondents appeal. We agree with the NLRC that
substantial justice is best served by allowing the appeal despite the procedural defect x xx The resulting severance of employment relation between the parties does not
and by considering the case on the merits. It must be stressed that the case involves make out a case of illegal dismissal nor of termination due to cessation of business
the implementation of the CARP which is aimed at promoting social justice by giving operation or undertaking under Article 283 of the Labor Code warranting payment of
primary consideration to the welfare of landless farmers through a more equitable separation pay, primarily because dismissal presupposes a unilateral act by the
distribution and ownership of land. As it is, the CARP is more favorable to the worker employer in terminating the employment of its workers. The resulting severance of
than the landowner. In light of this and the governments policy to equally protect employment relationship between the parties came about INVOLUNTARILY. If the
and respect not only the laborers interest but also that of the employer, we deem it landowners ceased their operation, it was not because they wanted to. Rather, it was
more equitable to admit the respondents appeal. something forced upon them by an act of law or the State. It would be the height of
We quote with approval the NLRCs rationale in allowing the appeal, thus: injustice and inequity if the workers who benefited from the takeover of the lands
In the case at bench, what is involved is a fundamental consideration of and becoming new owners in the process would still be allowed to exact payment
SUBSTANTIAL JUSTICE on whether or not complainants, as former employees of from their former employer-landowner in the form of separation pay benefit. Such
respondents, working on their lands and subsequently becoming the new owners would be tantamount to dealing a DOUBLE WHAMMY against the landowner who
thereof by virtue of the implementation by the Government of the Comprehensive was forced to relinquish or part with the ownership of his land by an act of the State.
Agrarian Reform Law, would still be entitled to separation pay. Additionally, whether (Emphasis supplied)
or not the money claims of complainants could still be passed upon by the Labor The ruling in the parallel case of National Federation of Labor vs. NLRC, is apropos.
Arbiter below considering the fact that the said money claims were filed past the 3- There, the Supreme Court categorically held that former employees who became
year prescriptive period for money claims under the Labor Code. beneficiaries of the Comprehensive Agrarian Reform Program are not entitled to
Thus, to insure faithful adherence by the Commission to the justness and legality of separation pay because the closure of the business of their employer is compelled by
payment of separation pay to herein complainants by way of law and jurisprudence law and not by the decision of its management. Said the High Court.
and in order to address the issue of a possible miscarriage of justice or of unjust As earlier stated, the Patalon Coconut Estate was closed down because a large
enrichment on the part of any party, the Commission has opted to adopt the liberal portion of the said estate was acquired by the DAR pursuant to the CARP. Hence, the
view by giving due course to respondents appeal despite the little delay involved in closure of the Patalon Coconut Estate was not effected voluntarily by private
the posting of the entire amount of the appeal bond. After all, the facts and respondents who even filed a petition to have said estate exempted from the coverage
circumstances obtaining in the case at bench warrant liberality in view of the of RA 6657. Unfortunately, their petition was denied by the Department of Agrarian
amount involved and the legal issues raised for resolution by the Commission (See Reform. Since the closure was due to the act of the government to benefit the
Phil. Airlines, Inc. vs. NLRC, G.R. No. 120501, October 26, 1996; Paramount Vinyl petitioners, as members of the Patalon Estate Agrarian Reform Association, by
Products Corp. vs. NLRC, 190 SCRA 527, October 17, 1990; Kathy-O Enterprises vs. making them agrarian lot beneficiaries of said estate, the petitioners are not entitled
NLRC, 286 SCRA 729 (1998). [28] to separation pay. The termination of their employment was not caused by the
Moreover, we have ruled in one case[29] that where the supersedeas bond had private respondents. The blame, if any, for the termination of petitioners employment
been paid although payment was delayed, the broader interests of justice and the can even be laid upon the petitioner-employees themselves inasmuch as they formed
desired objective of resolving controversies on the merits demands that the appeal be themselves into a cooperative, PEARA, ultimately to take over, as agrarian lot
given due course.[30] beneficiaries, private respondents landed estate pursuant to RA 6657. The resulting
Another consideration that militates against the contentions of the petitioner is closure of the business establishment, Patalon Coconut Estate, when it was placed
the ruling of the CA affirming the ruling of the NLRC, thus: under CARP, occurred through no fault of the private respondents.
Anent the legality of the Labor Arbiters award of separation pay in favor of While the Constitution provides that the the State x xx shall protect the rights of
petitioners, respondent NLRC correctly ruled that the termination of employer- workers and promote their welfare, that constitutional policy of providing full
employee relationship as a result of the implementation of the Comprehensive protection to labor is not intended to oppress or destroy capital and management.
Agrarian Reform Law does not make out a case for illegal dismissal or termination Thus, the capital and management sectors must also be protected under a regime of
due to authorized cause under Article 283 of the Labor Code as to warrant the justice and the rule of law.
payment of separation pay. The closure of business operations contemplated under From all the foregoing, We hold that respondent NLRC did not commit grave abuse of
Article 283 refers to a voluntary act or decision on the part of the employer, not one discretion nor acted without or in excess of jurisdiction in giving due course to
forced upon it, as in this case, by an act of the Law or State to benefit petitioners by private respondents appeal and setting aside the Labor Arbiters decision awarding
making them agrarian lot beneficiaries. Thus, We quote with approval the following separation pay and other money claims in favor of petitioners. [31]
disquisitions of public respondent which We have found to be substantiated by the IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit.
evidence, viz: The assailed decision of the Court of Appeals in CA-G.R. SP No. 61598 is AFFIRMED.
Costs against the petitioners. SO ORDERED.