Title
Philippine Long Distance Telephone Company vs. Crispin Jeturian et al.
Case
G.R. No. L-7756
Decision Date
Jul 30, 1955
Employees sued PLDT over discontinued pension plan; Supreme Court ruled it was a binding contract, not a gratuity, and war did not terminate obligations.

Case Digest (G.R. No. L-7756)
Expanded Legal Reasoning Model

Facts:

  • Parties and Proceedings
    • In 1951, Crispin Jeturian and about sixty co-employees (respondents) filed Petition No. 639-V in the Court of Industrial Relations against Philippine Long Distance Telephone Company (PLDT) seeking:
      • Monetary benefits under the “Plan for Employees’ Pensions” established September 18, 1923 by the predecessor Philippine Telephone and Telegraph Co. and later adopted by PLDT.
      • Unpaid salaries from January 1946.
    • PLDT moved to dismiss on the ground that World War II terminated employer–employee relations; motion denied. PLDT’s certiorari petition (G.R. L-5697) was dismissed by the Supreme Court on June 10, 1952.
  • Pension Plan and War Events
    • The 1923 plan provided that male employees aged 50 (female 45) with ≥20 years’ service could retire and receive 1.5% of average annual pay for each year of service as pension, subject to directors’ discretion and conditions on assignment, suspension for misconduct, and service continuity.
    • By October 31, 1941, a “Provident Reserve” of ~₱221,074.14 existed. On November 6, 1945, PLDT’s board retroactively discontinued the plan effective January 1, 1942, citing lack of jurisdictional operations and revenue during the war.
    • During the Japanese occupation, management urged employees to remain; they worked under occupation administration but were not recalled when PLDT resumed postwar operations in 1946.
  • Court of Industrial Relations Decision
    • The CIR held the pension plan was a binding contract, not a mere gratuity, and that the war only suspended, not terminated, employment relations.
    • Equity required liquidation: prewar employees were to receive proportionate pension benefits based on age and length of service as of October 31, 1941, and one month’s severance pay for non-recalled employees, excluding those who died, obtained other employment, or refused reinstatement.

Issues:

  • Whether the 1923 pension plan constituted a binding contractual obligation or a revocable gratuity.
  • The legal effect of PLDT’s retroactive discontinuance of the plan as of January 1, 1942, and of World War II on employer–employee relations and on the employees’ pension rights.
  • The appropriate remedy and measure of damages for prewar employees who were not reinstated postwar.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)

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