G.R. No. 135222 - Andrada vs. People

The Lubat Group – seasonal workers who were not rehired for the 1994 tobacco season.
The Luris Group – seasonal workers who performed during the 1994 season but disputed the computation of their separation pay.

The employees were former workers of the petitioner, Philippine Tobacco Flue-Curing & Redrying Corporation, employed at its Balintawak plant.
Their periods of employment, job statuses, and varying seasonal work arrangements were central to the claims.

On August 1, 1994, the petitioner served notice of the permanent closure of its redrying operations at Balintawak and the transfer of these operations to Candon, Ilocos Sur.
The petitioner notified the Department of Labor and Employment (DOLE) and, on August 3, 1994, directly informed the employees of the decision to close and transfer operations.
Although separation benefits were provided, the method of computation and the eligibility of the employees became points of dispute.

The Lubat Group alleged they were illegally dismissed because they were not rehired for the 1994 season even though they had previously worked during the seasonal periods; they claimed that being left off the payroll amounted to an unlawful termination.
The Luris Group contended that the method of computing their separation pay was erroneous. They further claimed illegal dismissal and sought back wages, additional separation pay differentials, and damages including attorney’s fees.
The petitioner argued that:

The closure was necessitated by serious business losses as defined by Article 283 of the Labor Code, thus exempting them from paying separation benefits.
For the Lubat Group, since they were not employed at the time of the closure, they were not eligible for separation pay.
The computed formula for the seasonal workers’ separation pay (based on actual days worked versus a full year) was fair and in accordance with legal provisions.

The Labor Arbiter initially ruled in favor of the employees by ordering the petitioner to pay separation pay and attorney’s fees based on detailed computations.
The National Labor Relations Commission (NLRC) affirmed the Labor Arbiter’s decision, noting that both groups were entitled to separation pay under the applicable provisions of the Labor Code.
Petitioner then elevated the case by filing a petition for certiorari with the Court to challenge the findings and the application of Article 283.

Whether the petitioner has proven that the closure of its Balintawak operations was due to serious business losses or financial reverses sufficient to justify terminating employment without separation pay.
The adequacy and credibility of the financial statements submitted by the petitioner, including the recasted version, in demonstrating actual losses.

Whether the dismissal of the Lubat Group was valid, given that seasonal employment does not automatically equate to a severed employment relationship, but rather a temporary layoff or leave during the off-season.
Whether seasonal workers, by virtue of their continuous pattern of employment across seasons, should be considered as having an ongoing employer-employee relationship resulting in entitlement to separation benefits.

Whether separation pay for seasonal employees should be based on the total number of days actually worked (i.e. using the fraction of 303 working days per year) or on the actual number of years of service, with any fraction of at least six months treated as one whole year.
Which computation method is more consistent with the provisions of Articles 283 and 284 of the Labor Code and relevant case precedents.

Whether the employees, particularly the Luris Group, are entitled to back wages and damages by reason of illegal dismissal, despite the petitioner’s contention that the closure was legally justified.
The proper allowance and extent of attorney’s fees in relation to the separation pay calculation and the overall award made by the NLRC and the Labor Arbiter.