Rosalina Perez Abella/HAD.

Danao Romano, petitioners, v The Honorable Labor Relations

Commission (NLRC), Romeo Quitto and Ricardo Dionele, Sr., respondents. G.R. No. 71813,
July 20, 1987.
Statement of issue/s: The issue of whether the respondents Romeo Quitto and Ricardo Dionele,
Sr. are entitled to separation pay, arises after petitioner Rosalina Perez Abella terminated the
respondents after she did not renew her lease of the farm land she rented and turn over the
management of the land to its real owner. On November 20, 1981, private respondents filed a
complaint against the petitioner at the Ministry of Labor and Employment, Bacolod City District
Office, for overtime pay, illegal dismissal and reinstatement with back wages. "In the instant
case, the respondent closed its business operation not by reason of business reverses or losses.
Accordingly, the award of termination pay in complainants’ favor is warranted. “Wherefore, the
respondent is hereby ordered to pay the complainants separation pay at the rate of half-month
salary for every year of service, a fraction of six (6) months being considered one (1) year."
Petitioner’s argument/s: Petitioner claims that since her lease agreement had already expired, she
is not liable for payment of separation pay. Neither could she reinstate the complainants in the
farm as this is a complete cessation or closure of a business operation, a just cause for
employment termination under Article 272 of the Labor Code.
Respondents argument/s: On the other hand, the legal basis of the Labor Arbiter in granting
separation pay to the private respondents Is Batas Pambansa Blg. 130, amending the Labor Code,
Section 15 of which, specifically provides: “Art. 284. Closure of establishment and reduction of
personnel. — The employer may also terminate the employment of any employee due to the
installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or
cessation of operation of the establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this title, by serving a written notice on the workers and the
Ministry of Labor and Employment at least one (1) month before the intended date thereof. In
case of termination due to the installation of labor-saving devices or redundancy, the worker
affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay
or to at least one (1) month pay for every year of service, whichever is higher. In case of
retrenchment to prevent losses and in cases of closure or cessation of operations of establishment
or undertaking not due to serious business losses or financial reverses, the separation pay shall be
equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service
whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year."
Lecture learn: Article 272 of the same Code invoked by the petitioner to just causes of
termination. The Labor Arbiter does not argue the justification of the termination of employment
but applied Article 284 as amended, which provides for the rights of the employees under the
circumstances of termination.
Decision: As correctly observed by the Solicitor General, Article 284 as amended refers to
employment benefits to farm hands who were not parties to petitioner’s lease contract with the
owner of Hacienda Danao-Ramona. That contract cannot have the effect of annulling subsequent
legislation designed to protect the interest of the working class. In any event, it is well-settled
that in the implementation and interpretation of the provisions of the Labor Code and its
implementing regulations, the workingman’s welfare should be the primordial and paramount
consideration. (Volshel Labor Union v. Bureau of Labor Relations, 137 SCRA 43 [1985]). It is
the kind of interpretation which gives meaning and substance to the liberal and compassionate
spirit of the law as provided for in Article 4 of the New Labor Code which states that `all doubts
in the implementation and interpretation of the provisions of this Code including its
implementing rules and regulations shall be resolved in favor of labor." The policy is to extend
the applicability of the decree to a greater number of employees who can avail of the benefits
under the law, which is in consonance with the avowed policy of the State to give maximum aid
and protection to labor. Premises considered, the instant petition is hereby DISMISSED and the
July 16, 1982 Decision of the Labor Arbiter and the April 8, 1985 Resolution of the Ministry of
Labor and Employment are hereby. So, ordered.
Ratio: As stated in Article 284, notice should be serve to the employees when termination
happens, although the termination of the private respondents are unavoidable due to petitioner
not renewing her lease, and reinstatement is impossible as petitioner no longer manage the
business nor the land. The right of the private respondents to receive separation pays ultimately
help formulate the Court’s decision.