Republic of the Philippines

SUPREME COURT
SECOND DIVISION
G.R. No. 151966 July 8, 2005
JPL MARKETING PROMOTIONS, Petitioner,
vs.
COURT OF APPEALS, NATIONAL LAOR RELATIONS COMMISSION, NOEL
GON!ALES, RAMON AESA III "#$ FAUSTINO ANINIPOT, Respondents.
D E C I S I O N
T%#&", J.'
This is a petition for revie of the Decision
!
of the Court of "ppeals in C"#$.R. SP No.
%&%'! dated (' October &((! and its Resolution
&
dated &) *anuar+ &((& den+in,
petitioner-s Motion for Reconsideration, affir.in, the Resolution of the National /abor
Relations Co..ission 0N/RC1, Second Division, dated &2 *ul+ &(((, aardin,
separation pa+, service incentive leave pa+, and !'th .onth pa+ to private respondents.
*P/ 3ar4etin, and Pro.otions 0hereinafter referred to as 5*P/51 is a do.estic
corporation en,a,ed in the business of recruit.ent and place.ent of or4ers. On the
other hand, private respondents Noel $on6ales, Ra.on "besa III and 7austino "ninipot
ere e.plo+ed b+ *P/ as .erchandisers on separate dates and assi,ned at different
establish.ents in Na,a Cit+ and Daet, Ca.arines Norte as attendants to the displa+ of
California 3ar4etin, Corporation 0C3C1, one of petitioner-s clients.
On !' "u,ust !88%, *P/ notified private respondents that C3C ould stop its direct
.erchandisin, activit+ in the 9icol Re,ion, Isabela, and Ca,a+an Valle+ effective !)
"u,ust !88%.
'
The+ ere advised to ait for further notice as the+ ould be transferred
to other clients. :oever, on !2 October !88%,
;
private respondents "besa and
$on6ales filed before the National /abor Relations Co..ission Re,ional "rbitration
9ranch 0N/RC1 Sub V co.plaints for ille,al dis.issal, pra+in, for separation pa+, !'th
.onth pa+, service incentive leave pa+ and pa+.ent for .oral da.a,es.
)
"ninipot filed
a si.ilar case thereafter.
"fter the sub.ission of pertinent pleadin,s b+ all of the parties and after so.e
clarificator+ hearin,s, the co.plaints ere consolidated and sub.itted for resolution.
E<ecutive /abor "rbiter $elacio /. Rivera, *r. dis.issed the co.plaints for lac4 of
.erit.
%
The /abor "rbiter found that $on6ales and "besa applied ith and ere
e.plo+ed b+ the store here the+ ere ori,inall+ assi,ned b+ *P/ even before the
lapse of the si< 0%1#.onth period ,iven b+ la to *P/ to provide private respondents a
ne assi,n.ent. Thus, the+ .a+ be considered to have unilaterall+ severed their
relation ith *P/, and cannot char,e *P/ ith ille,al dis.issal.
2
The /abor "rbiter held
that it as incu.bent upon private respondents to ait until the+ ere reassi,ned b+
*P/, and if after si< .onths the+ ere not reassi,ned, the+ can file an action for
separation pa+ but not for ille,al dis.issal.
=
The clai.s for !'th .onth pa+ and service
incentive leave pa+ as also denied since private respondents ere paid a+ above the
applicable .ini.u. a,e durin, their e.plo+.ent.
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Private respondents appealed to the N/RC. In its Resolution,
!(
the Second Division of
the N/RC a,reed ith the /abor "rbiter-s findin, that hen private respondents filed
their co.plaints, the si<#.onth period had not +et e<pired, and that C3C-s decision to
stop its operations in the areas as be+ond the control of *P/, thus, the+ ere not
ille,all+ dis.issed. :oever, it found that despite *P/-s effort to loo4 for clients to hich
private respondents .a+ be reassi,ned it as unable to do so, and hence the+ are
entitled to separation pa+.
!!
Settin, aside the /abor "rbiter-s decision, the N/RC
ordered the pa+.ent of>
!. Separation pa+, based on their last salar+ rate and counted fro. the first da+ of their
e.plo+.ent ith the respondent *P/ up to the finalit+ of this ?ud,.ent@
&. Service Incentive /eave pa+, and !'th .onth pa+, co.puted as in No.! hereof.
!&
",,rieved, *P/ filed a petition for certiorari under Rule %) of the Rules of Court ith the
Court of "ppeals, i.putin, ,rave abuse of discretion on the part of the N/RC. It clai.ed
that private respondents are not b+ la entitled to separation pa+, service incentive
leave pa+ and !'th .onth pa+.
The Court of "ppeals dis.issed the petition and affir.ed in toto the N/RC resolution.
Ahile concedin, that there as no ille,al dis.issal, it ?ustified the aard of separation
pa+ on the ,rounds of eBuit+ and social ?ustice.
!'
The Court of "ppeals re?ected *P/-s
ar,u.ent that the difference in the a.ounts of private respondents- salaries and the
.ini.u. a,e in the re,ion should be considered as pa+.ent for their service
incentive leave and !'th .onth pa+.
!;
Notithstandin, the absence of a contractual
a,ree.ent on the ,rant of !'th .onth pa+, co.pliance ith the sa.e is .andator+
under the la. 3oreover, *P/ failed to sho that it as e<e.pt fro. pa+in, service
incentive leave pa+. *P/ filed a .otion for reconsideration of the said resolution, but the
sa.e as denied on &) *anuar+ &((&.
!)
In the instant petition for revie, *P/ clai.s that the Court of "ppeals co..itted
reversible error in renderin, the assailed Decision and Resolution.
!%
The instant case
does not fall under an+ of the instances here separation pa+ is due, to it> installation
1
of labor#savin, devices, redundanc+, retrench.ent or closin, or cessation of business
operation,
!2
or disease of an e.plo+ee hose continued e.plo+.ent is pre?udicial to
hi. or co#e.plo+ees,
!=
or ille,al dis.issal of an e.plo+ee but reinstate.ent is no
lon,er feasible.
!8
3eanhile, an e.plo+ee ho voluntaril+ resi,ns is not entitled to
separation unless stipulated in the e.plo+.ent contract, or the collective bar,ainin,
a,ree.ent, or is sanctioned b+ established practice or polic+ of the e.plo+er.
&(
It
ar,ues that private respondents- ,ood record and len,th of service, as ell as the social
?ustice precept, are not enou,h to arrant the aard of separation pa+. $on6ales and
"ninipot ere e.plo+ed b+ *P/ for .ore than four 0;1 +ears, hile "besa rendered his
services for .ore than to 0&1 +ears, hence, *P/ clai.s that such short period could not
have shon their orth to *P/ so as to reard the. ith pa+.ent of separation pa+.
&!

In addition, even assu.in, arguendo that private respondents are entitled to the
benefits aarded, the co.putation thereof should onl+ be fro. their first da+ of
e.plo+.ent ith *P/ up to !) "u,ust !88%, the date of ter.ination of C3C-s contract,
and not up to the finalit+ of the &2 *ul+ &((( resolution of the N/RC.
&&
To co.pute
separation pa+, !'th .onth pa+, and service incentive leave pa+ up to &2 *ul+ &(((
ould ne,ate the findin,s of both the Court of "ppeals and the N/RC that private
respondents ere not unlafull+ ter.inated.
&'
"dditionall+, it ould be erroneous to
co.pute service incentive leave pa+ fro. the first da+ of their e.plo+.ent up to the
finalit+ of the N/RC resolution since an e.plo+ee has to render at least one 0!1 +ear of
service before he is entitled to the sa.e. Thus, service incentive leave pa+ should be
counted fro. the second +ear of service.
&;
On the other hand, private respondents .aintain that the+ are entitled to the benefits
bein, clai.ed as per the rulin, of this Court in Serrano v. NLRC, et al.
&)
The+ clai. that
their dis.issal, hile not ille,al, as tainted ith bad faith.
&%
The+ alle,e that the+ ere
deprived of due process because the notice of ter.ination as sent to the. onl+ to 0&1
da+s before the actual ter.ination.
&2
/i4eise, the .ost that *P/ offered to the. b+ a+
of settle.ent as the pa+.ent of separation pa+ of seven 021 da+s for ever+ +ear of
service.
&=

Repl+in, to private respondents- alle,ations, *P/ disa,rees that the notice it sent to
the. as a notice of actual ter.ination. The said .e.o .erel+ notified the. of the end
of .erchandisin, for C3C, and that the+ ill be transferred to other clients.
&8
3oreover,
*P/ is not bound to observe the thirt+ 0'(1#da+ notice rule as there as no dis.issal to
spea4 of. *P/ counters that it as private respondents ho acted in bad faith hen the+
sou,ht e.plo+.ent ith another establish.ent, ithout even the courtes+ of infor.in,
*P/ that the+ ere leavin, for ,ood, .uch less tender their resi,nation.
'(
In addition, the
offer of seven 021 da+s per +ear of service as separation pa+ as .erel+ an act of
.a,nani.it+ on its part, even if private respondents are not entitled to a sin,le centavo
of separation pa+.
'!
The case thus presents to .a?or issues, to it> hether or not private respondents are
entitled to separation pa+, !'th .onth pa+ and service incentive leave pa+, and ,rantin,
that the+ are so entitled, hat should be the rec4onin, point for co.putin, said aards.
Cnder "rts. &=' and &=; of the /abor Code, separation pa+ is authori6ed onl+ in cases
of dis.issals due to an+ of these reasons> 0a1 installation of labor savin, devices@ 0b1
redundanc+@ 0c1 retrench.ent@ 0d1 cessation of the e.plo+erDs business@ and 0e1 hen
the e.plo+ee is sufferin, fro. a disease and his continued e.plo+.ent is prohibited b+
la or is pre?udicial to his health and to the health of his co#e.plo+ees. :oever,
separation pa+ shall be alloed as a .easure of social ?ustice in those cases here the
e.plo+ee is validl+ dis.issed for causes other than serious .isconduct or those
reflectin, on his .oral character, but onl+ hen he as ille,all+ dis.issed.
'&
In addition,
Sec. ;0b1, Rule I, 9oo4 VI of the I.ple.entin, Rules to I.ple.ent the /abor Code
provides for the pa+.ent of separation pa+ to an e.plo+ee entitled to reinstate.ent but
the establish.ent here he is to be reinstated has closed or has ceased operations or
his present position no lon,er e<ists at the ti.e of reinstate.ent for reasons not
attributable to the e.plo+er.
The co..on deno.inator of the instances here pa+.ent of separation pa+ is
arranted is that the e.plo+ee as dis.issed b+ the e.plo+er.
''
In the instant case,
there as no dis.issal to spea4 of. Private respondents ere si.pl+ not dis.issed at
all, hether le,all+ or ille,all+. Ahat the+ received fro. *P/ as not a notice of
ter.ination of e.plo+.ent, but a .e.o infor.in, the. of the ter.ination of C3C-s
contract ith *P/. 3ore i.portantl+, the+ ere advised that the+ ere to be reassi,ned.
"t that ti.e, there as no severance of e.plo+.ent to spea4 of.
7urther.ore, "rt. &=% of the /abor Code allos the bona fide suspension of the
operation of a business or underta4in, for a period not e<ceedin, si< 0%1 .onths,
herein an e.plo+eeEe.plo+ees are placed on the so#called 5floatin, status.5 Ahen
that 5floatin, status5 of an e.plo+ee lasts for .ore than si< .onths, he .a+ be
considered to have been ille,all+ dis.issed fro. the service. Thus, he is entitled to the
correspondin, benefits for his separation, and this ould appl+ to suspension either of
the entire business or of a specific co.ponent thereof.
';
"s clearl+ borne out b+ the records of this case, private respondents sou,ht
e.plo+.ent fro. other establish.ents even before the e<piration of the si< 0%1#.onth
period provided b+ la. "s the+ ad.itted in their co..ent, all three of the. applied for
and ere e.plo+ed b+ another establish.ent after the+ received the notice fro. *P/.
')

*P/ did not ter.inate their e.plo+.ent@ the+ the.selves severed their relations ith
*P/. Thus, the+ are not entitled to separation pa+.
The Court is not inclined in this case to aard separation pa+ even on the ,round of
co.passionate ?ustice. The Court of "ppeals relied on the cases
'%
herein the Court
2
aarded separation pa+ to le,all+ dis.issed e.plo+ees on the ,rounds of eBuit+ and
social consideration. Said cases involved e.plo+ees ho ere actuall+ dis.issed b+
their e.plo+ers, hether for cause or not. Clearl+, the principle applies onl+ hen the
e.plo+ee is dis.issed b+ the e.plo+er, hich is not the case in this instance. In
see4in, and obtainin, e.plo+.ent elsehere, private respondents effectivel+
ter.inated their e.plo+.ent ith *P/.
In addition, the doctrine enunciated in the case of Serrano
'2
cited b+ private
respondents has alread+ been abandoned b+ our rulin, in Agabon v. National Labor
Relations Commission.
'=
There e ruled that an e.plo+er is liable to pa+ inde.nit+ in
the for. of no.inal da.a,es to a dis.issed e.plo+ee if, in effectin, such dis.issal,
the e.plo+er failed to co.pl+ ith the reBuire.ents of due process. :oever, private
respondents are not entitled to the pa+.ent of da.a,es considerin, that there as no
violation of due process in this case. *P/-s .e.o dated !' "u,ust !88% to private
respondents is not a notice of ter.ination, but a .ere note infor.in, private
respondents of the ter.ination of C3C-s contract and their re#assi,n.ent to other
clients. The thirt+ 0'(1#da+ notice rule does not appl+.
Nonetheless, *P/ cannot escape the pa+.ent of !'th .onth pa+ and service incentive
leave pa+ to private respondents. Said benefits are .andated b+ la and should be
,iven to e.plo+ees as a .atter of ri,ht.
Presidential Decree No. =)!, as a.ended, reBuires an e.plo+er to pa+ its ran4 and file
e.plo+ees a !'th .onth pa+ not later than &; Dece.ber of ever+ +ear. :oever,
e.plo+ers not pa+in, their e.plo+ees a !'th .onth pa+ or its eBuivalent are not
covered b+ said la.
'8
The ter. 5its eBuivalent5 as defined b+ the la-s i.ple.entin,
,uidelines as includin, Christ.as bonus, .id#+ear bonus, cash bonuses and other
pa+.ent a.ountin, to not less than !E!& of the basic salar+ but shall not include cash
and stoc4 dividends, cost#of#livin,#alloances and all other alloances re,ularl+
en?o+ed b+ the e.plo+ee, as ell as non#.onetar+ benefits.
;(
On the other hand, service incentive leave, as provided in "rt. 8) of the /abor Code, is
a +earl+ leave benefit of five 0)1 da+s ith pa+, en?o+ed b+ an e.plo+ee ho has
rendered at least one +ear of service. Cnless specificall+ e<cepted, all establish.ents
are reBuired to ,rant service incentive leave to their e.plo+ees. The ter. 5at least one
+ear of service5 shall .ean service ithin telve 0!&1 .onths, hether continuous or
bro4en rec4oned fro. the date the e.plo+ee started or4in,.
;!
The Court has held in
several instances that 5service incentive leave is clearl+ de.andable after one +ear of
service.5
;&

"d.ittedl+, private respondents ere not ,iven their !'th .onth pa+ and service
incentive leave pa+ hile the+ ere under the e.plo+ of *P/. Instead, *P/ provided
salaries hich ere over and above the .ini.u. a,e. The Court rules that the
difference beteen the .ini.u. a,e and the actual salar+ received b+ private
respondents cannot be dee.ed as their !'th .onth pa+ and service incentive leave pa+
as such difference is not eBuivalent to or of the sa.e i.port as the said benefits
conte.plated b+ la. Thus, as properl+ held b+ the Court of "ppeals and b+ the N/RC,
private respondents are entitled to the !'th .onth pa+ and service incentive leave pa+.
:oever, the Court disa,rees ith the Court of "ppeals- rulin, that the !'th .onth pa+
and service incentive leave pa+ should be co.puted fro. the start of e.plo+.ent up to
the finalit+ of the N/RC resolution. Ahile co.putation for the !'th .onth pa+ should
properl+ be,in fro. the first da+ of e.plo+.ent, the service incentive leave pa+ should
start a +ear after co..ence.ent of service, for it is onl+ then that the e.plo+ee is
entitled to said benefit. On the other hand, the co.putation for both benefits should onl+
be up to !) "u,ust !88%, or the last da+ that private respondents or4ed for *P/. To
e<tend the period to the date of finalit+ of the N/RC resolution ould ne,ate the
absence of ille,al dis.issal, or to be .ore precise, the ant of dis.issal in this case.
9esides, it ould be unfair to reBuire *P/ to pa+ private respondents the said benefits
be+ond !) "u,ust !88% hen the+ did not render an+ service to *P/ be+ond that date.
These benefits are ,iven b+ la on the basis of the service actuall+ rendered b+ the
e.plo+ee, and in the particular case of the service incentive leave, is ,ranted as a
.otivation for the e.plo+ee to sta+ lon,er ith the e.plo+er. There is no cause for
,rantin, said incentive to one ho has alread+ ter.inated his relationship ith the
e.plo+er.
The la in protectin, the ri,hts of the e.plo+ees authori6es neither oppression nor self#
destruction of the e.plo+er. It should be .ade clear that hen the la tilts the scale of
?ustice in favor of labor, it is but reco,nition of the inherent econo.ic ineBualit+ beteen
labor and .ana,e.ent. The intent is to balance the scale of ?ustice@ to put the to
parties on relativel+ eBual positions. There .a+ be cases here the circu.stances
arrant favorin, labor over the interests of .ana,e.ent but never should the scale be
so tilted if the result is an in?ustice to the e.plo+er. Justitia nemini neganda est 0*ustice
is to be denied to none1.
;'
A:ERE7ORE, the petition is $R"NTED IN P"RT. The Decision and Resolution of the
Court of "ppeals in C"#$.R. SP No. %&%'! are hereb+ 3ODI7IED. The aard of
separation pa+ is deleted. Petitioner is ordered to pa+ private respondents their !'th
.onth pa+ co..encin, fro. the date of e.plo+.ent up to !) "u,ust !88%, as ell as
service incentive leave pa+ fro. the second +ear of e.plo+.ent up to !) "u,ust !88%.
No pronounce.ent as to costs.
SO ORDERED.
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