G.R. No. 87051 - Esco Hale Shoe Co., Inc. vs. National Labor Relations Commission

The private respondent, Casimira B. Pedrosa, was employed by petitioner Esco Hale Shoe Company, Inc. for 49 years, beginning in 1937.
Her job responsibilities evolved from working as a shoe box maker to performing as a heel pad attacher until her separation in 1986.

In 1982, upon reaching the age of 65, Pedrosa applied for and received retirement benefits from the Social Security Commission (SSS).
Despite receiving SSS benefits, she continued to work for the company until November 1, 1986, when she was excluded from the regular work schedule.
Following her exclusion, Pedrosa demanded that she be formally retired from employment and/or be paid separation pay.

On February 12, 1987, Pedrosa initiated a complaint alleging a violation of Presidential Decree No. 851.
The relief sought included retirement benefits, separation pay, unpaid vacation/sick leave benefits, and 13th month pay for 1986.

The petitioner argued that the respondent had already effectively retired when she started receiving SSS retirement benefits.
It contended that there was no separate or bona-fide retirement or private benefit plan, as all employees were covered by the SSS.
The petitioner further maintained that the claim for additional retirement benefits was baseless and amounted to a redundant demand for benefits already paid, except for a minor admission regarding vacation/sick leave benefits.

The Labor Arbiter ruled in favor of Pedrosa, ordering Esco Hale Shoe Company, Inc. to pay her a total of P23,534.83 which covered:

The Labor Arbiter’s decision was based on Sections 13 and 14 of Rule I, Book VI of the Omnibus Rules Implementing the Labor Code.
The National Labor Relations Commission (NLRC) later affirmed the Labor Arbiter’s decision on appeal.

The separation pay was computed on the basis of 45 years of service, not the full 49 years, to account for the period when the country was at war with Japan and under occupation (December 1941 to 1945).
The calculation used the minimum wage rate in 1986 of P37.00 per day and was based on 13 days of pay per year of service, resulting in a computed amount of P21,645.00 for separation pay.
This amount, when added to the other unpaid benefits, brought the total to P23,534.83.

Whether the respondent is entitled to receive separation or retirement benefits from the petitioner despite having already received SSS retirement benefits.
Whether granting additional benefits constitutes a duplication or double payment of retirement benefits.

Whether Sections 13 and 14 of Rule I, Book VI of the Omnibus Rules Implementing the Labor Code are applicable in the absence of a bona-fide retirement plan or collective bargaining agreement.
How Article 287 of the Labor Code should be interpreted in awarding retirement or separation benefits.

Determining whether the calculation of benefits should be based on the full 49 years of service or be adjusted to 45 years in consideration of historical disruptions (war and occupation).
Whether the method of computing separation pay using a fixed daily wage multiplied by 13 days per year of service is appropriate for daily-paid employees.