Case Digest (G.R. No. 86026)
Facts:
Prior to February 16, 1977, DAMASTICOR and other cargo handling operators served the Port of Davao. Josefino Silva was employed by DAMASTICOR until his retirement on June 29, 1987.
After the government policy adopting a single cargo handling operator per port, the operators merged to form Davao Dockhandlers, Inc., later renamed Filipinas Port Services, Inc. (FILPORT), which began operating on February 16, 1977. Pursuant to PPA Administrative Order No. 13-77, FILPORT absorbed the personnel complement of the merging operators, including Silva. Upon retirement, Silva received retirement pay computed only from the period he actually worked with FILPORT, excluding his service with DAMASTICOR. After filing a complaint in DOLE, the Labor Arbiter ordered FILPORT as the “survivor-employer” to pay retirement pay including Silva’s earlier employment with DAMASTICOR; the NLRC affirmed.
Issues:
- Whether FILPORT was liable as successor-in-interest for the differential retirement pay attributable to Silva’s employment with DAMASTICOR.
Ruling:
The petition was granted. The NLRC decision was reversed and set aside, and the complaint against FILPORT was dismissed.
The Court held that FILPORT could not be treated as liable for retirement pay corresponding to the period Silva worked for DAMASTICOR because the applicable labor obligation remained personal to the transferor, and the PPA memorandum did not impose liability for prior length of service.
Ratio:
The Court recognized that FILPORT came into existence as a result of a merger and that PPA General Guidelines required absorption of the labor force from the merging operators. However, it ruled that the PPA memorandum clarifying the limits of the new organization’s liability was determinative: the new organization’s liability was for salaries, benefits, and other monies due from the date of service in the newly integrated organization, and absorption did not carry over prior length of service.
Applying the principle that labor contracts are generally in personam and thus not enforceable against a transferee of an enterprise unless expressly assumed, the Court concluded that Silva’s labor contract with DAMASTICOR did not automatically bind FILPORT for retirement computation covering the DAMASTICOR period.
Doctrine:
- Labor contracts are in personam and are not enforceable against a transferee of an enterprise unless expressly assumed.
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