Sosito v. Aguinaldo Development Corporation
REITERATIONFacts
The Antecedents: Petitioner Manuel Sosito was employed by respondent Aguinaldo Development Corporation, a logging company, in 1964. He went on indefinite leave with the company's consent on January 16, 1976. On July 20, 1976, the company announced a retrenchment program offering separation pay to employees in active service as of June 30, 1976, who would resign by July 31, 1976. Petitioner accepted this offer by resigning on July 29, 1976, to avail himself of the promised benefits. However, his resignation was not acted upon, and he did not receive the separation pay. Procedural History: Petitioner filed a complaint with the Department of Labor, and the labor arbiter ruled in his favor, ordering the company to pay him P 4,387.50. The National Labor Relations Commission (NLRC) reversed this decision, holding that petitioner was not covered by the retrenchment program. The Petition: Petitioner appealed to the Supreme Court, questioning his exclusion from the retrenchment program and entitlement to separation pay.
Issue(s)
Whether petitioner Manuel Sosito is entitled to separation pay under the retrenchment program of respondent Aguinaldo Development Corporation. Whether an employee on indefinite leave of absence is considered in "active service" for purposes of a retrenchment program.
Ruling
The petition is DISMISSED, and the challenged decision of the National Labor Relations Commission is AFFIRMED, with costs against the petitioner.
Ratio Decidendi
On whether petitioner is entitled to separation pay under the retrenchment program: The Court held that the petitioner is not entitled to separation pay because the company's memorandum clearly stated that the offer of separation pay was extended only to employees who were in the "active service" as of June 30, 1976, and the petitioner, being on indefinite leave, was not in active service on that date, although he remained technically in the company's employ. During his indefinite leave, he was not entitled to receive salary or other benefits available to those in active service. The Court found that petitioner sought to benefit from both insulating himself from the company's risks and demanding benefits offered to active employees. On whether an employee on indefinite leave of absence is considered in "active service" for purposes of a retrenchment program: The Court clarified that being on indefinite leave means the employee is not in active service. While the petitioner was still technically employed, he was not actively working and thus not eligible for benefits tied to active service. The Court noted that the leave was voluntarily sought by the petitioner and granted by the company, an arrangement that was unusual and one-sided, as it would prevent the company from replacing him while allowing him to return at his convenience. The Court emphasized that the company's retrenchment program, while a compassionate measure, was intended only for qualified employees, and petitioner did not meet the eligibility criteria.
Main Doctrine
An employee on indefinite leave of absence, who voluntarily sought such leave and was not in active service as of the cut-off date specified in a retrenchment program, is not entitled to separation pay offered under said program, even if the company could have legally terminated services due to financial reverses without such pay.