READ-RITE PHILIPPINES, INC.

VS
GINA G. FRANCISCO
G.R. No. 195457 | August 16, 2017
Dulay, Maniell Dymna B.

FACTS: Read-Rite was a duly registered domestic corporation engaged in manufacturing magnetic heads
for computer hard disks. Read-Rite had a Compensation and Benefits Manual that outlined employee
benefits, including Voluntary Separation Benefit and Involuntary Separation Benefit.

Voluntary Separation Benefit: Employees with at least 20 years of continuous service were entitled to a
lump sum benefit equal to their full retirement benefit with salary and service calculated as of the date
of voluntary separation. The benefit percentage increased with the number of years of service, reaching
100% after 20 years.

Involuntary Separation Benefit: Employees terminated involuntarily for reasons beyond their control,
including retrenchment or redundancy, were entitled to receive the applicable minimum benefit
prescribed by law.

Read-Rite also had a Retirement Plan that included provisions related to voluntary and involuntary
separation benefits:

Voluntary Separation Benefit: Employees with at least 10 years of continuous service were entitled to a
lump sum benefit based on a factor that increased with years of service.

Involuntary Separation Benefit: Employees terminated involuntarily for reasons beyond their control
(except for just cause) were entitled to receive either the applicable minimum benefit prescribed by law
on involuntary separation or the benefit calculated under the Retirement Plan, whichever was greater.

In April 1999, Read-Rite implemented a retrenchment program due to business losses and terminated
around 200 employees, providing them with involuntary separation benefits. Eight employees who had
served at least ten years received additional voluntary separation benefits due to apparent
administrative error.

In the last quarter of 1999, Read-Rite initiated another round of retrenchments, affecting most of the 49
respondents in this case. All respondents received involuntary separation benefits, and they signed
Release, Waiver, and Quitclaim documents, acknowledging full payment of compensation, benefits, and
privileges and waiving any further claims against the company.

In July 2003, Read-Rite notified government agencies of its cessation of manufacturing operations.

In February 2002 and February 2003, respondents filed complaints against Read-Rite, seeking additional
voluntary separation benefits, legal interest, and attorney's fees, arguing that the denial of benefits
constituted discrimination as such benefits had become company policy.

In a decision dated July 1, 2005, the Labor Arbiter dismissed respondents' complaints. The Labor Arbiter
held that voluntary and involuntary separation benefits were distinct. The isolated payment of additional
voluntary separation benefits to eight retrenched employees in April 1999 did not establish a company
practice. The Labor Arbiter also found that the quitclaims were valid and voluntarily executed.
On appeal, the National Labor Relations Commission (NLRC) affirmed the Labor Arbiter's decision in a
resolution dated December 21, 2007. The NLRC ruled that respondents were not entitled to additional
voluntary separation benefits, as these benefits were for employees who resigned voluntarily with at
least ten years of service. The NLRC also upheld the validity of the quitclaims and found no evidence of
duress or intimidation.

Respondents filed a petition for certiorari before the Court of Appeals, which granted the petition in a
decision dated June 17, 2010. The Court of Appeals noted that similar cases involving Read-Rite
employees had been decided in favor of additional voluntary separation benefits. It found that Read-Rite
had discriminated against respondents by not granting them the same benefits. The Court of Appeals
ordered Read-Rite to pay respondents the benefits and legal interest.

ISSUE: WON Read-Rite is required to pay additional voluntary separation benefits to respondents, who
had already received involuntary separation benefits.

RULING: NO. The Supreme Court ruled in favor of Read-Rite. The Court held that respondents were
entitled only to involuntary separation benefits, as their termination was due to retrenchment. The
Court emphasized that voluntary and involuntary separation benefits were distinct and governed by
different provisions in the Compensation and Benefits Manual and the Retirement Plan.

The Court found that the payment of additional voluntary separation benefits to eight retrenched
employees in April 1999 was a mistake and did not establish a company practice. The Court also upheld
the validity of respondents' quitclaims, as there was no proof of coercion or deception.

The Court rejected respondents' reliance on final rulings in other cases, as those cases involved different
issues and parties. The Court reinstated the Labor Arbiter's decision, which awarded respondents
involuntary separation benefits.

In summary, the Supreme Court ruled that Read-Rite was not required to pay additional voluntary
separation benefits to respondents, who had already received involuntary separation benefits due to
retrenchment. The Court emphasized the distinction between voluntary and involuntary separation
benefits and upheld the validity of respondents' quitclaims. The Court also rejected respondents'
reliance on other cases with different issues and parties.