San Miguel Corporation v. Ernesto Javate, Jr.
REITERATIONFacts
The Antecedents: Private respondent Ernesto Javate, Jr., a casual employee of petitioner San Miguel Corporation, figured in an accident and was on sick leave for fifty-six (56) days. Upon discharge on August 16, 1974, his physician found him fit for work. He was supposed to return on August 17, 1974, but was prevented by typhoon "Norming." He filed for vacation leave from August 17-27, 1974, which was disapproved for not meeting the six-day prior filing requirement. His absences were charged to his sick leave benefits. He then filed for an additional vacation leave without pay from August 29 to September 12, 1974, which was also disapproved. On September 1, 1974, petitioner "compulsorily retired" Javate, citing exhaustion of sick leave benefits and alleged unfitness to work, pursuant to its 1971 Health, Welfare and Retirement Plan. Procedural History: Private respondent filed a complaint for illegal dismissal with the Department of Labor. The Labor Arbiter ruled in favor of private respondent, ordering reinstatement with back wages limited to one year, citing lack of basis and failure to secure clearance to terminate. Petitioner appealed to the National Labor Relations Commission (NLRC), which affirmed the decision. The Secretary of Labor also sustained the NLRC resolution. Petitioner's motion for reconsideration was denied, leading to the filing of the instant petition for certiorari. The Petition: Petitioner alleged grave abuse of discretion by the Department of Labor in disregarding the company's retirement plan and rules on leave applications, and in considering the retirement as a dismissal requiring prior clearance. Petitioner argued that Javate was retired pursuant to the plan, not dismissed, and thus only a report, not prior clearance, was necessary.
Issue(s)
Whether the compulsory retirement of private respondent was valid under the company's Health, Welfare and Retirement Plan, and whether the private respondent was compulsorily retired or illegally dismissed. Whether the requirement of prior clearance from the Department of Labor was applicable. Whether the private respondent is estopped from assailing his retirement by accepting benefits.
Ruling
The petition for certiorari is dismissed for lack of merit. The compulsory retirement was deemed an illegal dismissal. The decision of the Department of Labor is affirmed.
Ratio Decidendi
On the validity of compulsory retirement and illegal dismissal: The Court held that the compulsory retirement of private respondent was not valid under the company's Health, Welfare and Retirement Plan. The plan required two conditions for compulsory retirement: (a) exhaustion of all sick leave with pay benefits, and (b) certification by the company physician of incapacity to discharge duties without impairing health or endangering others. Petitioner failed to discharge its burden of proving these conditions. The evidence presented by private respondent sufficiently showed his fitness to resume work, making his termination illegal. The labor arbiter's finding of injustice committed against the complainant was affirmed by the NLRC and the Department of Labor. Therefore, private respondent was dismissed, not retired within the meaning of the plan, and such dismissal could not be validly done without clearance from the Department of Labor. On the applicability of the clearance requirement: The Court found no merit in petitioner's contention that the private respondent was compulsorily retired, thereby rendering the requirement of a clearance to terminate inapplicable. Given the finding that the private respondent was illegally dismissed, the requirement of prior clearance from the Department of Labor was indeed applicable. The petitioner's act of unilaterally "compulsorily retiring" the private respondent was treated as a dismissal requiring the necessary authorization. On estoppel: The Court rejected the petitioner's contention that the private respondent was estopped from assailing his retirement due to acceptance of benefits. The private respondent vehemently denied accepting benefits, and his filing of a complaint for illegal dismissal strengthened this denial. Furthermore, even assuming acceptance, the Court reiterated the ruling in De Leon vs. NLRC and Mercury Drug Co. vs. CIR, stating that employees forced to retire and who accept separation pay are not barred from contesting the legality of their dismissal, as such acceptance does not amount to estoppel.
Main Doctrine
A compulsory retirement based on alleged exhaustion of sick leave benefits and unfitness to work is considered an illegal dismissal if the employer fails to prove the employee's incapacity and the employee was not certified by the company physician as incapable of discharging duties without impairing health or endangering others. The burden of proof rests on the employer.