G.R. No. 199554 - Paz vs. Northern Tobacco Redrying Co., Inc.

Zenaida Paz was employed by Northern Tobacco Redrying Co., Inc. (NTRCI), a company engaged in flue-curing and redrying tobacco leaves, since 1974 as a seasonal sorter.
Her employment was characterized by a seasonal contract, with her being regularly re-hired during the tobacco season (March to September) for almost three decades.
She was paid an alleged daily salary of ₱185.00 and was required to sign a seasonal job contract and a pro-forma application letter to qualify for re-employment each season.

On May 18, 2003, when Paz was 63 years old, NTRCI informed her that she was being “retired” under a company policy that purportedly required compulsory retirement either upon reaching 60 years of age or after accumulating 30 years of service.
Despite her long service (29 years), the company’s internal policy (which was not supported by a presented Collective Bargaining Agreement) led to her premature retirement announcement before reaching the compulsory retirement age of 65 as provided under Article 287 (as amended).
One year later, NTRCI offered her a retirement pay of only ₱12,000.00, which Paz contended was inadequate given her decades of service.

Paz initiated legal proceedings by filing a Petition for illegal dismissal on March 4, 2004, which she later amended on April 27, 2004, to include a claim for payment of retirement benefits, damages, and attorney’s fees.
The Complaint was consolidated with others from 17 NTRCI workers, highlighting issues of both termination and retirement benefits.
NTRCI maintained that no Collective Bargaining Agreement existed to alter the computation of benefits and relied on Article 287 of the Labor Code, which mandates that only years in which the employee worked for at least six months should be counted—asserting that Paz had achieved this requirement in only three specific years (1995, 1999, and 2000).

The Labor Arbiter, in a decision dated July 26, 2005, confirmed the computation of retirement pay at ₱12,487.50 based on the three qualifying years.
The National Labor Relations Commission (NLRC), in its December 8, 2008 decision, modified the Arbiter’s ruling by instructing that the computation be based on all months of service over 28 years, dividing the sum by six, though it denied reconsideration in substance.
The Court of Appeals (May 25, 2011) modified the NLRC decision further by awarding financial assistance to Paz calculated as one–half-month pay multiplied by her 29 years of service and then divided by 2, resulting in ₱60,356.25. Additionally, the CA addressed issues of illegal dismissal and due process violations.

Although Paz’s work was seasonal, her long and repeated engagement rendered her a “regular seasonal employee,” making her eligible for the benefits and protections under Article 279 (regarding illegal dismissal) and Article 287 (regarding retirement pay).
Questions arose regarding whether the company's practice of considering only years when the employee rendered at least six months of service was appropriate, given that seasonal employees often render service continuously throughout many years even if intermittently throughout each calendar year.

Paz’s case involved an inherent procedural controversy in that she was deemed retired without the requisite due process, notably without proper notice and opportunity to be heard, resulting in claims for nominal damages.
The court’s discussion further extended to the principle of “compassionate justice” and equitable concessions, citing that her advanced age and infirmity warranted more favorable treatment through an award of financial assistance, given the inadequacy of the computed retirement pay.

Whether Zenaida Paz, though employed as a seasonal worker, should be classified as a regular seasonal employee entitled to full employment benefits due to her long, repetitive engagement over nearly 29 years.
Whether the company’s practice of computing retirement pay based solely on the years when the employee rendered at least six months of service (in this case only three years: 1995, 1999, and 2000) is legally tenable.

Whether retirement benefits under Article 287 (as amended by RA 7641) should be calculated by strictly applying the six-month rule on a per-season basis or by incorporating all months of service rendered over the employee’s long tenure.
The issue of whether applying a computation analogous to that used in the separation pay cases (where a fraction of six months counts as one whole year) is appropriate for retirement pay.

Whether NTRCI complied with the procedural due process requirements in effecting Paz’s retirement, considering that she was informed of her “retirement” without proper notice, hearing, or opportunity to rebut the charges.
Whether the alleged lack of clear intent on her part for voluntary retirement implicates a wrongful or illegal dismissal, thereby warranting full backwages.

Whether, under circumstances of advanced age, extensive service, and the inadequate nature of the computed retirement pay, the award of financial assistance (calculated by an alternative equitable formula) is justified.
How the principles of compassionate justice and equitable concession apply to seasonal workers facing involuntary retirement.