Pantranco v. NLRC
G.R. No. 114333 (January 24, 1996)
Facts:
Reynaldo Rueda was initially employed by Pantranaco North Express, Inc. (the petitioner) as a bus conductor on May 14, 1956, and was later promoted to Line Inspector-I. Due to financial difficulties, the company retrenched several employees, including Rueda, on September 16, 1978, for which he received separation pay of P9,000.00. Rueda was re-hired on February 9, 1981, and became a permanent line inspector after completing a six-month probationary period.
On June 29, 1987, Rueda was involved in a violent altercation with a co-employee, bus driver Bonifacio Bartolome, during which he stabbed Bartolome. Although the criminal case for frustrated homicide was amicably settled, the company conducted its own investigation. Rueda claimed self-defense, but the legal department recommended his dismissal. Rueda requested a reinvestigation, arguing that he was not properly investigated, but this request was denied.
On May 4, 1988, Rueda suffered a vehicular accident, resulting in back injuries that led to a sick leave from May 5, 1988, to August 9, 1989. Despite his medical issues, the company decided to retire him due to health reasons rather than proceed with dismissal for the stabbing incident. Rueda contested this retirement, seeking to have his service computed from his original employment date in 1956 rather than from his re-hiring in 1981. His request was denied, and he was informed that his retirement benefits would be calculated based on his re-employment date.
On October 29, 1990, Rueda filed a complaint for illegal dismissal, reinstatement, back wages, damages, and attorney's fees against the petitioner. The Labor Arbiter dismissed the complaint for lack of merit but ordered the company to pay Rueda retirement pay based on its policy.
Rueda appealed to the National Labor Relations Commission (NLRC), which reversed the Labor Arbiter's decision, ruling that Rueda's dismissal was illegal and ordering the company to pay him back wages, separation pay, and attorney's fees.
Legal Issues:
- Was Rueda's dismissal illegal?
- Should Rueda's length of service be computed from his original employment date in 1956 or from his re-hiring in 1981 for the purpose of calculating separation pay?
Arguments:
Petitioner’s Argument: The petitioner argued that Rueda's dismissal was justified due to serious misconduct stemming from the stabbing incident. They contended that the act constituted a valid ground for termination under Article 282 of the Labor Code.
Rueda’s Argument: Rueda contended that his dismissal was illegal, as the company had opted to retire him due to medical reasons rather than pursue dismissal for misconduct. He also argued that his service should be computed from his original employment date in 1956, as he had not formally protested his retrenchment in 1978.
Court’s Decision and Legal Reasoning:
The Supreme Court affirmed the NLRC's decision, holding that Rueda's dismissal was indeed illegal. The Court reasoned that the petitioner abandoned the ground of serious misconduct when it chose to retire Rueda due to health issues. The Court emphasized that dismissal must be based on clear grounds, and any ambiguity in the reasons for termination denies the employee the right to contest its legality.
Furthermore, the Court found that the petitioner failed to provide the necessary certification from a public health authority to justify Rueda's retirement due to illness, as required by the implementing rules of the Labor Code. Without such certification, the retirement was deemed invalid.
Regarding the computation of Rueda's separation pay, the Court ruled that the NLRC erred in considering Rueda's entire length of service from 1956. The Court noted that Rueda had accepted his retrenchment in 1978 without protest and that the period of his absence from work should not be counted towards his service for separation pay purposes. Thus, Rueda's length of service for the computation of separation pay was determined to be from his re-hiring in 1981 until the end of his sick leave in 1989.
Significant Legal Principles Established:
- Ambiguity in Grounds for Dismissal: Employers must provide clear and unambiguous grounds for termination; otherwise, the dismissal may be deemed illegal.
- Retirement Due to Illness: Employers must secure a certification from a competent public health authority to justify the retirement of an employee due to illness.
- Computation of Length of Service: An employee's length of service for purposes of separation pay should be computed from the date of re-employment, excluding any periods of retrenchment unless formally contested.