Perez v. Central Azucarera Don Pedro
REITERATIONFacts
The Antecedents: Appellant Dionisio Perez was employed by appellee Central Azucarera Don Pedro since 1931, holding the position of Chief Clerk, Supply and Warehousing, as a permanent and regular employee with a salary of P230.00 a month, plus fringe benefits. He was also covered by the company's voluntary non-contributory gratuity and retirement plan. On January 31, 1959, he was dismissed for "loss of confidence." Procedural History: On June 8, 1959, appellant filed a complaint seeking reinstatement, backwages, and damages. Appellee moved for dismissal, asserting lack of jurisdiction. The trial court denied the motion. Parties filed a stipulation of facts and memoranda, focusing on appellee's third affirmative defense: that the employer has the right to separate the employee even without cause, with the employee only entitled to separation pay. The Petition: On October 1, 1959, the trial court dismissed the complaint. Appellant moved for reconsideration and submitted an amended complaint, which was denied. The trial court denied the motion for reconsideration and the admission of the amended complaint on September 20, 1960. Appellant appealed, assigning errors regarding the period of employment, jurisdiction over separation pay, and the dismissal of the complaint and amended complaint.
Issue(s)
Whether the employment of the plaintiff with the defendant corporation is without a definite period as stated under Section 1, Republic Act No. 1052, as amended by Republic Act No. 1787. Whether the right to separation pay is within the exclusive and original jurisdiction of the regional office of the Department of Labor. Whether the trial court erred in dismissing the complaint and in denying the admission of the amended complaint.
Ruling
The order of dismissal is set aside, and the case is remanded for trial and judgment with respect to the issue of whether the separation of plaintiff-appellant was with or without cause, and in the latter case, with respect to the amount of separation pay due to him. No pronouncement as to costs.
Ratio Decidendi
On whether the employment was without a definite period: The Court held that the employment was without a definite period. The original and subsequent appointments were not in writing, and no evidence was presented to show a definite period. The fact that appellant was considered a permanent employee does not, by itself, establish a hiring for a definite term. Furthermore, the voluntary non-contributory retirement plan, while providing retirement benefits, did not fix any definite period of employment; it merely served as a basis for computing retirement benefits based on length of service, age, and salary at the time of separation. This aligns with the principle that in the absence of a contract for a specific period, an employer can dismiss an employee at any time with or without cause, as provided by Republic Act No. 1052, as amended by Republic Act No. 1787. On the jurisdiction over separation pay: The Court ruled that the matter of separation pay is within the jurisdiction of the trial court, not exclusively of the Regional Office of the Department of Labor. This was supported by previous rulings, such as Stoll, et al. vs. Mardo, et al., which affirmed the trial court's competence to handle such claims. The Court noted that the right to separation pay was inherent in the affirmative defense raised by the defendant, and its resolution would automatically result from the trial court's decision on the cause of separation. Therefore, the trial court should have provided an opportunity for the plaintiff to prove the amount of separation pay due. On the dismissal of the complaint and denial of the amended complaint: The Court found that the dismissal of the complaint and the denial of the amended complaint were erroneous. While the original and amended complaints did not explicitly pray for separation pay, the defendant's third affirmative defense acknowledged the possibility of separation pay if the dismissal was without just cause. This defense, coupled with the statutory provisions governing termination of employment without a definite period, necessitated a trial to determine the cause of separation and, if without cause, the corresponding separation pay. The amended complaint's allegation regarding a 35-year or until age 65 employment period, based on the retirement plan, was correctly deemed by the trial court as not establishing a definite term under the law.
Main Doctrine
In cases of employment without a definite period, an employer may terminate the employment without just cause by serving written notice to the employee at least one month in advance or one-half month for every year of service, whichever is longer. The employee, upon whom no such notice was served in case of termination of employment without just cause, shall be entitled to compensation equivalent to salaries or wages corresponding to the required period of notice. A voluntary retirement plan does not establish a definite term of employment.