G.R. No. 151966 - JPL Marketing Promotions vs. Court of Appeals

Petitioner: JPL Marketing Promotions, a domestic corporation engaged in the recruitment and placement of workers.
Respondents: Noel Gonzales, Ramon Abesa III, and Faustino Aninipot, who were employed as merchandisers and assigned to display products for California Marketing Corporation (CMC), one of JPL’s clients.

On 13 August 1996, JPL notified the respondents that CMC would terminate its direct merchandising activity in the Bicol Region, Isabela, and Cagayan Valley effective 15 August 1996.
The respondents were advised to await further notice as they were expected to be transferred to other clients.

Despite the notice, respondents (Abesa and Gonzales on 17 October 1996, with Aninipot filing a similar case thereafter) initiated complaints before the NLRC Regional Arbitration Branch alleging illegal dismissal and seeking separation pay, service incentive leave pay, and 13th month pay.
The complaints were consolidated and subjected to clarity and evidentiary hearings before Executive Labor Arbiter Gelacio L. Rivera, Jr.

The Labor Arbiter dismissed the complaints on the ground that the respondents, having applied and been employed at the store where they were initially assigned, had unilaterally severed their relationship with JPL by not waiting for the statutory six‐month period for reassignment.
The Labor Arbiter emphasized that employees who voluntarily leave their employment cannot claim illegal dismissal though they might be entitled to separation pay after the lapse of the six-month period if no reassignment occurred.
The NLRC Second Division, while concurring with the non-illegal nature of the respondents’ separation, reversed the Labor Arbiter’s decision on separation pay by finding that despite JPL’s effort to reassign, the respondents were entitled to separation pay. It further ordered payment of:

Separation pay (computed from the first day of employment up to the final judgment).
Service incentive leave pay and 13th month pay computed according to the applicable formulas.

JPL petitioned for certiorari under Rule 65 before the Court of Appeals, contesting the NLRC’s finding and asserting that:

The respondents were not entitled to the benefits because there was no legal ground for separation pay.
The memorandum dispatched on 13 August 1996 was not a notice of termination but merely informed of CMC’s cessation of operations, coupled with the promise of reassignment.

The computation of benefits, particularly separation pay, should only cover the period up to 15 August 1996, when CMC’s contract terminated, rather than extending to the finality of the NLRC resolution.
The respondents’ good record and length of service did not justify an award of separation pay under the prevailing statutory instances for such payment, as these require employer-initiated dismissal or other specific conditions.

The dispute centered on whether the respondents were entitled to separation pay, service incentive leave pay, and 13th month pay.
The issue of how to properly compute these benefits was also raised, in light of the contention that extending the period beyond 15 August 1996 would contradict the absence of a lawful dismissal.
Respondents contended that their termination, though not illegal, was tainted by bad faith and a denial of due process, as the notice was allegedly given too shortly before actual termination and was accompanied by a paltry settlement offer.

Are the respondents entitled to separation pay, the 13th month pay, and service incentive leave pay, given the circumstances of their “termination” and reassignment memo?
Does the mere cessation of CMC’s operations, without an actual dismissal by JPL, ground the claim for separation pay?

If the respondents are entitled to any of the benefits, from what date should the computation commence?

Should the computation of 13th month pay begin from the first day of employment, and should service incentive leave pay only count after one year of service?
What is the proper reckoning period for these benefits on the basis that the respondents effectively ceased working for JPL on 15 August 1996?

Does the memorandum issued by JPL on 13 August 1996 amount to a notice of termination, or is it merely an informational notice regarding the cessation of CMC’s activities with a promise of reassignment?

Considering that the respondents sought employment elsewhere before the lapse of the statutory six-month period, does their action amount to a voluntary severance of the employment relationship, thereby nullifying their claim for separation pay?