Cruz v. Phil Global Communication Inc : 141868 : May 28, 2004 : J.
Sandoval-Gutierrez : Third Division : Decision
[G.R. NO. 141868 : May 28, 2004]
JOSE B. CRUZ, RODOLFO C. DELOS SANTOS, VICENTE A. RIGOS,
GREGORIO A. LINGAL AND ALICIA P. FRANCISCO, Petitioners, v. PHILIPPINE GLOBAL COMMUNICATIONS,
INC. AND/OR ALFREDO PARUNGAO, Respondents.
D E C I S I O N
May a retrenched employee still claim his retirement benefits
after receiving his separation pay?This
is the basic issue for our resolution in the instant case.
At bar is a Petition for Review on Certiorari under Rule
45 of the 1997 Rules of Civil Procedure, as amended, assailing the Decision1 dated July 30, 1999 and Resolution2 dated February 4, 2000 rendered by the Court of Appeals in CA-G.R. SP No.
50654, entitled Jose B. Cruz, Rodolfo C. Delos Santos, Vicente A. Rigos,
Gregorio A. Lingal, and Alicia P. Francisco v. National Labor Relations
Commission (Second Division),
Philippine Global Communications, Inc. and/or
The facts as borne by the records are:chanroblesvirtua1awlibrary
Philippine Global Communications, Inc., respondent,is a corporation engaged in the principal business
of communications through telex and telegram, with various branches nationwide.
As a result of a decline in the volume of recorded messages sent
via telex and telegram, respondent suffered substantial financial losses
P2,221,804.00 in 1993 and P4,536,626.00 in 1994.
With this development, respondent adopted an organizational
streamlining program that resulted in the closure of its branches and
termination from the service of forty-two (42) workers.Among them were Jose B. Cruz, Rodolfo C. Delos Santos, Vicente A. Rigos, Gregorio A.
Lingal and Alicia P. Francisco, Petitioners, who occupiedmanagerial,
supervisory and confidential positions.
In separate letters dated January
30, 1995, respondent terminated petitioners services effective March 1, 1995.
Eventually, respondent paid petitioners their separation pay at
the rate of 1 months salary per year of service.3 cralawred
Then after having been paid their separation pay, they executed
and signed a Release, Waiver and Quitclaim.
However, on October 17, 1995, petitioners filed with the Labor
Arbiter a complaint for payment of retirement benefits, damages and attorneys
fees against respondent and its president, Alfredo Parungao, docketed as NLRC
NCR Case No. 00-10-06979-95.
On July 31, 1997,
the Labor Arbiter rendered a Decision sustaining petitioners claim for
retirement benefits under respondents Retirement Plan.The dispositive portion of the Decision
WHEREFORE, judgment is hereby rendered finding merit in
complainants claim for retirement benefits, and orders respondents to pay each
of the complainants, one and a half month salary for every year of service, as
provided by respondents Retirement Plan, to wit:chanroblesvirtua1awlibrary
1.Jose B. Cruz - 35
years in service x one and half month salary for every year of service
2.Rodolfo C. delos Santos
29 years in service x one and half month salary for every year of service
3.Vicente A. Rigo 27
years in service x one and a half month salary for every year of service
4.Gregorio A. Lingal
31 years in service x one and a half month salary for every year of service
5.Alicia P. Francisco
13 years in service x one and a half month salary for every year of service
Or the total sum of
P 6,151,606.84 plus ten (10%) percent of
the total money claims awarded as attorneys fees.
All other claims are dismissed for lack of merit.
Upon appeal by the parties, the National Labor Relations
in a Decision dated March
2, 1998, reversed the Labor Arbiters Decision and dismissed
petitioners complaint for payment of retirement benefits.
On March 23, 1998,
petitioners filed a motion for reconsideration but was denied.
Hence, petitioners filed with this Court a petition for certiorari which we referred to the Court of Appeals pursuant to our ruling in St. Martins Funeral Home v. NLRC .4 cralawred
On July 30, 1999,
the Appellate Court promulgated its Decision affirming the assailed Decision of
the NLRC.In denying petitioners claim
for retirement benefits, the Appellate Court ratiocinated:chanroblesvirtua1awlibrary
x x x,
the pivotal issue at bar is whether or not the National
Labor Relations Commission acted withoutin excess of jurisdiction or with grave abuse of discretion in declaring
that petitioners are not entitled to retirement benefits under PHILCOMs Retirement
Plan in addition to their separation pay. The answer must inevitably be in the
negative as we find said decision and resolution to be in accord with law and
Petitioners contend that the public respondent erred when it
adopted the ruling in the case of Cipriano v. San Miguel, 24 SCRA 703 where the employees claims for retirement
benefits in addition to separation pay were denied in view of a stipulation in
the retirement plan that employees who are separated from the service for any reason
other than misconduct or voluntary resignation shall be entitled to the
benefits under the said retirement plan or to the severance pay provided by
law. They also contend that the applicable provision should be Section 4,
Article VI of the PHILCOMs Retirement Plan which reads:chanroblesvirtua1awlibrary
Section 4 Involuntary Separation
A member whose services may be terminated by the Company for any
reason other than just cause or voluntary resignation shall be entitled to
benefit determined in accordance with the retirement benefit formula provided
in Article V hereof. However, if the termination is due to redundancy, the
employee will be paid one and one-half months pay for every year of service (as
amended on July 1, 1988).
Petitioners contention holds no water. The above quoted provision
should not be interpreted singly but should be read together with the other
provisions of the Retirement Plan in question to determine the intent of he
Plan. Thus, the meaning to be gathered from the agreement as a whole will
control rather than that to be obtained from a particular part, and effect must
be given to every part of the instrument if possible (Badayos v. Court of Appeals, 207 SCRA 209).
Under Section 6, Article XI of PHILCOMs Retirement Plan which
Section 6 Effect of Social
a) Social Security
and Workmens Compensation The benefits payable under this Plan shall be in
addition to such benefits which the Member shall be entitled under the Social
Security and Workmens Compensation Acts.
b) Adjustment of
Benefits payments Except only as provided in paragraph (a) of this Section,
in the event the company is required under the law or by lawful order of
competent authority, to pay to the Member benefits or emoluments similar or
analogous to those already provided in the Plan, the member concerned shall not
be entitled to both what the law or the lawful order of competent authority
requires the company to give and the benefits provided by the Plan, but shall
only be entitled to whichever is the greatest among them, it being understood
however that for the purpose of determining whichever benefits is greatest, it
is the total benefits required to be paid under the law or lawful order of
competent authority or the Plan that shall be reckoned. The benefit provided by
this Plan may be reduced or amended in an equitable manner by the company by
the value of any present or future contract such as collective bargaining, law,
e.g. termination pay provisions or lawful order of competent authority.
The aforesaid Section 6(b) Article XI, of the Retirement
Planis explicit and leaves
no doubt as to the intention to prohibit the recovery of both separation pay
and retirement benefits. The public respondent NLRC thus correctly pointed out that
there is no further doubt that the
payment of separation pay is a requirement of the law, i.e. the Labor Code,
which is a social legislation. The clear intent of Article XI, section 6 is to
input the effects of social legislation in the circulation of Retirement
benefits due to retiring employees (p. 238, Rollo). The Retirement Plan itself clearly sets forth the intention of the
parties to entitle employees only to whatever is greater between the Retirement
Benefits then due and that which the law requires to be given by way of
separation pay.To give way to
complainants demands would be to totally ignore the contractual obligations of
the parties in the Retirement Plan, and to distort the clear intent of the parties
as expressed in the terms and conditions contained in such plan (Ibid., p.
x x x
After a judicious review of the case at bench, We find that the
conclusions reached by respondent NLRC in its questioned decision and
resolution are supported by substantial evidence, or that amount of evidence
which a reasonable mind may accept as adequate to justify a conclusion.
Succinctly put, with no showing that the public respondent NLRC gravely abused
its discretion, or otherwise acted without jurisdiction or in excess the same,
We are bound by its findings.
considered, the instant petition is hereby DENIED
DUE COURSE and DISMISSED for
lack of merit. The decision dated March 2, 1998, as well as
the resolution dated April 16, 1998 of the
respondent National Labor Relations Commission are AFFIRMED in toto.
On February 4, 2000,
the Court of Appeals issued a Resolution denying petitioners motion for
Petitioners, in the instant Petition for Review on Certiorari ,
contend that the Court of Appeals erred in relying upon our ruling in Cipriano v. San Miguel 5 that the employee separated from the service is entitled to either the
amount prescribed in the retirement plan or the separation pay provided by law,
whichever is higher.Petitioners invoke Section 4, Article VI of
respondents Retirement Plan (of which they are members) expressly providing
that retirement benefits may be granted to them in addition to their separation
pay.They likewise call our attention to
Aquino v. NLRC6 holding that payment of separation benefits does
not exclude payment of retirement benefits.
For its part, respondent
maintains that payment of both separation pay and retirement benefits is
proscribed under Section 6(b),
Article XI of its Retirement Plan.Thus, the NLRCs and the Court of Appeals
reliance on Cipriano v. San Miguel 7 is in order.
In Cipriano,8 this
Court, through Mr. Chief Justice Concepcion, ruled that regular employees who
were separated from the service are entitled either to the amount
prescribed in the retirement plan or the separation pay provided by law,
whichever is higher.This is pursuant
to the agreement between the company and the labor union, of which plaintiff is
a member, thus:chanroblesvirtua1awlibrary
Plaintiffs contention is
manifestly devoid of merit. His right to the benefits of the aforementioned
plan came into existence by virtue of the agreement between the defendant and
the labor union, of which plaintiff is a member. Admittedly, said right is
subject to the limitations prescribed in the agreement, Article X of which
Regular employees who are
separated from the service of the company for any reason other than misconduct
or voluntary resignation shall be entitled to either 100% of the benefits provided in Section 2, Article VIII
hereof, regardless of their length of service in the company or to the
severance pay provided by law, which ever
is the greater amount.
Pursuant thereto, plaintiff was
entitled to either the amount prescribed in the plan or the severance pay
provided by law, whichever is the greater amount. In other words, he had a
right to one of the two benefits, not to both, at the same time. The
exclusion of one by the other is clearly deducible, not only from the terms
either andor used in the agreement,
but, also, by the qualifying phrase whichever is the greater amount. x x x.
In Aquino v. NLRC,9 citing University of the East v. Minister of
Batangas Laguna Tayabas Bus Co. v. Court of Appeals,11 we ruled that if there is no prohibition both in
the Retirement Plan and the Collective Bargaining Agreement, the employee has
the right to recover from the employer his separation pay and retirement
The Court feels that if the
private respondent really intended to make the separation pay and the retirement
benefits mutually exclusive, it should have sought inclusion of the
corresponding provision in the Retirement Plan and the Collective Bargaining
Agreement so as to remove all possible ambiguity regarding this matter.
x x x. Knowing this, he should
have made it a point to categorically provide in the Retirement Plan and the
CBA that an employee who had received separation pay would no longer be
entitled to retirement benefits. Or to put it more plainly, collection of
retirement benefits was prohibited if the employee had already received
Clearly, under the above
cases, the right of the concerned employees to receive both retirement benefits
and separation pay depends upon the provisions in the Retirement Plan.
Does respondents Retirement Plan
provide that petitioners are entitled to both separation pay and retirement
Section 6 (b),
Article XI of
the Retirement Plan provides:chanroblesvirtua1awlibrary
x x x
Sec. 6.Effect of Social
x x x
b) Adjustment of Benefits Payments.- x x x, in the event the
Company is required under the law or by lawful order of competent authority to
pay to the Member benefits or emoluments similar or analogous to those already
provided in the Plan, the Member concerned shall no be entitled to both what
the law or the lawful order of competent authority requires the Company to give
and the benefits provided by the Plan, but shall only be entitled to whichever
is the greatest among them, x x x.
Thus, 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 at least month pay for every year of service, whichever is
Under Section 4, Article VI12 of respondents Retirement Plan, the employees
are entitled to a retirement pay equivalent to one and a half (1) months 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.
As we held in Cipriano
and Aquino, the employees right to payment of retirement benefits
and/or separation pay is governed by the Retirement Plan of the parties.Under the Retirement Plan before us,
petitioners are not entitled to both separation pay and retirement benefits.
We, therefore, rule that the
Court of Appeals did not err in concluding that Petitioners, having received
from respondent their separation pay, are no longer entitled to retirement
WHEREFORE, the petition is DENIED.The assailed Decision dated July 30, 1999 and Resolution dated February
4, 2000 of the
Court of Appeals in CA-G.R. SP No. 50654 are hereby AFFIRMED.
Vitug, (Chairman), Corona, and Carpio-Morales, JJ., concur.
1 Annex E of the Petition for Review, Rollo at 330-342.
2 Annex I, id. at 394-396.
3 Petitioner Cruz served the respondent company for thirty-five (35) years with a
monthly salary of
P37,960.00.Petitioner Delos Santos, on the other hand, was employed with the
respondent company for twenty-nine (29) years with a monthly salary of P24,875.00.
While petitioner Rigos commenced his twenty-seven (27) years of employment on September 1, 1968 with a monthly
salary rate at P30,125.00. Petitioner Lingal was employed on April 13, 1964 and has served the
respondent company for thirty-one (31) years with a monthly salary of P 33,287.50. Finally, petitioner Francisco was employed for thirteen (13) years
(since March 18, 1982) with
a monthly salary at P17,025.00.
4 G.R. No. 130866, September 16, 1998,
295 SCRA 494.In this case, we held that
appeal from the NLRC should be initially filed with the Court of Appeals, no
longer with this Court, pursuant to the doctrine of hierarchy of courts.
5 G.R No. L-24774, August 21, 1968,
24 SCRA 703.
6 G.R No. 87653, February 11, 1992,
206 SCRA 118.
9 G.R. No. 87653, February 11, 1992,
206 SCRA 118, 123.
10 G.R. No. L-74007, June 31, 1987,
152 SCRA 676.
11 G.R. No L-38482, June 18, 1976,
71 SCRA 470.
12 Section 4, Article VI
of the said Retirement Plan provides:
Section 4 Involuntary
A member whose services may be terminated by the Company for any reason
other than just cause or voluntary resignation shall be entitled to benefit
determined in accordance with the retirement benefit formula provided in
Article V hereof. However, if
the termination is due to redundancy, the employee will be paid one and one
half months pay for every year of service. (as amended on July 1, 1988)
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