Facts:

The case Felix Abe, et al. vs. Foster Wheeler Corporation and Caltex (Phil.) Inc. revolves around the claims filed by Felix Abe and 393 other workers against their former employers, Foster Wheeler Corporation and Caltex (Phil.) Inc. The complaint, submitted on various occasions from 1952 to 1954, stemmed from the employees' integration into the "Batangas Refinery Construction Project" in Bauan, Batangas. The plaintiffs alleged that they were unjustly terminated from employment in 1954 without notice and sought recovery of separation pay, vacation leave, sick leave values, and overtime compensation, which amounted between P4.00 to P16.80 daily, plus interest.

In defense, Foster Wheeler Corporation contended that the action was not appropriate as a class suit since each employee's claim was separate and distinct. They also claimed that the employment contracts allowed for termination without notice or separation pay and that the employees were compensated for ov

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Facts:

Employment and Project Background

• Plaintiffs (Felix Abe et al. and 393 others) claimed employment by Foster Wheeler Corporation and Caltex (Phil.) Inc. on the Batangas Refinery Construction Project at Danglaya, Bauan, Batangas.
• The alleged period of employment spanned various occasions from 1952 to 1954.
• All employees were discharged in 1954 without any prior notice and without separation pay.

Claims and Relief Sought by Plaintiffs

• Plaintiffs demanded recovery of separation pay, the value of sick and vacation leaves, and overtime compensation computed at rates ranging from ₱4.00 to ₱16.80 daily.
• The computation basis was set on the premise of 26 working days per month.
• Plaintiffs sought payment of interest and costs in addition to the separation pay due.

Defendants’ Position and Alleged Contractual Provisions

• Foster Wheeler Corporation argued that:
• The action was improper as a class suit, emphasizing that each plaintiff’s claim was separate and distinct.
• Under the employment contract, termination could be effected without prior notice or separation pay.
• Employees were fully compensated for any overtime service rendered.
• There was no statutory obligation to grant vacation and sick leave privileges.
• Similarly, Caltex (Phil.) Inc. disclaimed any connection with the employment of the workers and advanced defenses parallel to those of its co-defendant.
• Both defendants also moved for the dismissal of the complaint based on:
• The argument that the employment occurred after the repeal of Article 302 of the Code of Commerce.
• The claim that employees were separated before the effectivity of Republic Act (RA) 1052, which would have reinstated the right to mesada (one-month notice pay).

Procedural History and Court Proceedings

• The complaint was initially filed in the Municipal Court of Manila (Civil Case No. 40789) and was eventually dismissed along with the counterclaim for failure to prove allegations.
• Plaintiffs appealed to the Court of First Instance of Manila (Civil Case No. 34601) where:
• Both parties reiterated their positions with the trial decision highlighting the employment as not being for a definite period.
• The lower court ruled in favor of plaintiffs granting them separation pay computed based on their daily salaries.
• Defendants (Foster Wheeler Corporation and Caltex (Phil.) Inc.) appealed to the Supreme Court in G.R. No. L-14785.
• Separately, 20 plaintiffs, excluded by the trial court on the ground of having already received their mesada, appealed in G.R. No. L-14923.
• Disputed procedural issues arose regarding:
• The sufficiency of the complaint’s allegations to establish jurisdiction.
• The timeliness and adequacy of motions for extension of time for filing the appeal and appeal bond.
• Allegations against the counsel’s failure to secure the required extension within the reglementary period.

Contractual and Legal Framework

• The dispute centered on the application of RA 1052, enacted on June 12, 1954, which mandates a 30-day prior notice before termination in employment without a definite period.
• Prior to the effective operation of RA 1052, the mesada principle was governed by Article 302 of the Code of Commerce, later effectively repealed by the New Civil Code on August 30, 1950.
• The trial court noted that although the employment contracts contained clauses for temporary (or indefinite) nature of employment, the actual conditions rendered the employment more or less continuous.
• Defendants contended that applying RA 1052 retroactively would be an impairment of contract; however, the lower court and ultimately the Supreme Court found that public policy considerations prevailed.

Issue:

Retroactive Application of Republic Act 1052

• Whether RA 1052, which mandates a 30-day notice before termination and the payment of one-month separation pay, can be applied to contracts executed prior to its enactment but terminated after its effectivity.
• Whether the retroactive application of RA 1052 amounts to an impairment of the parties' contractual obligations given the contractual stipulations at the time of employment.

Interpretation of Contractual Provisions Versus Statutory Requirement

• Whether the contractual clause that allowed termination “without obligation” would override the statutory requirement of advance notice and separation pay under RA 1052.
• The extent to which the temporary clause in the employment contract renders the employment definite or indefinite for the purposes of applying RA 1052.

Sufficiency and Procedural Adequacy of the Complaint

• Whether the complaint, including attached Annex “A”, sufficiently stated the cause of action to properly establish the claim for separation pay.
• Whether the allegations, though possibly vague, were substantial enough to put defendants on notice to prepare their defense, in compliance with procedural rules.

Timeliness and Diligence in Filing Appeals and Motions

• Whether the failure of plaintiffs’ counsel to timely file for an extension of the appeal period and the appeal bond constitutes excusable negligence.
• Whether the actions of the lower courts in denying motions for extension and relief from judgment were justified based on procedural rules and the counsel’s lack of exercise of due diligence.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)