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Saturday, June 24, 2006
Dominador A. Almirante Labor case digest
As a result of the decline in volume of recorded messages sent via telex and telegram, respondent Philippine Global Communications Inc. suffered substantial financial losses. It adopted an organizational streamlining program that resulted in the closure of its branches and termination from service of 42 workers including the petitioners.
Petitioners were paid their separation pay at the rate of one and a half month’s salary per year of service. Subsequently, they filed a complaint for payment of retirement benefits, among others, under respondent’s retirement plan, which prohibits the entitlement of both. Can the case prosper?
Ruling: No.
Petitioners are entitled only to either the separation pay provided under Article 283 of the Labor Code, as amended, or retirement benefits prescribed by the retirement plan, whichever is higher.
Under Article 283 of the Labor Code, as amended, affected employees, in case of retrenchment or cessation of operations, are always given termination or separation pay equivalent to one month pay or half of a month’s pay for every year of service, whichever is higher.
Under Section 4, Article VI of the respondent’s retirement plan, the employees are entitled to a retirement pay equivalent to one and a half month’s pay for every year of service, computed on the basis of their basic monthly salary at the time of retirement.
Here, respondent opted to pay petitioners separation benefits computed under the retirement plan, the same being higher than what Article 283 of the Labor Code, as amended, provides. (Jose B. Cruz, et. al. versus Philippine Global Communications Inc., et al., G.R. No. 141868, May 28, 2004)
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