Case Digest (G.R. No. 92772)
Case Digest (G.R. No. 92772)
Facts:
San Miguel Jeepney Service and Mamerto Galace v. National Labor Relations Commission, Edelberto Padua and 23 Others, G.R. No. 92772, November 28, 1996, the Supreme Court Third Division, Panganiban, J., writing for the Court.The petitioners are San Miguel Jeepney Service (SMJS) and its owner/general manager Mamerto Galace; the respondents are the National Labor Relations Commission (NLRC) and twenty-three former employees (drivers, two dispatchers and a mechanic), hereafter the private respondents. The private respondents had rendered services to SMJS from two to eight years under a transportation contract between SMJS and the U.S. Naval Base Facility in San Miguel, Zambales.
When the contract expired on May 2, 1988, Galace elected not to renew or bid on the new contract, citing financial difficulties and a net loss in 1987, and the private respondents’ services ceased. Prior to termination they had filed a complaint alleging underpayment of minimum wage (from 1980 onward), nonpayment of 13th month pay, legal holiday pay, overtime, service incentive leave pay, and separation pay. Petitioners defended mainly on the ground that the workers were paid on a commission basis, controlled their own collections and time, and thus were not wage earners entitled to many statutory benefits.
The Labor Arbiter ruled that most claims (holiday pay, 13th month pay, service incentive pay, overtime, and minimum wage for drivers) were not meritorious because the drivers were paid purely on commission; he awarded only three employees differentials and separation pay, and granted P1,000 each as financial assistance to the drivers. The NLRC (Third Division, Comm. Rogelio I. Rayala, ponente) modified the arbiter’s decision: it found all complainants to be regular employees under Article 280 of the Labor Code, deleted the P1,000 assistance award, and ordered separation pay of one-half month pay for every year of service for all complainants. Petitioners filed a petition for certiorari under Rule 65 of the Rules of Court (April 19, 1990) alleging grave abuse of discretion by the NLRC in awarding separation pay and in doing so without requisite factual basis, particularly arguing that SMJS suffered financial reverses that excused payment.
Issues:
- Did the NLRC act in grave abuse of discretion in awarding separation pay to the private respondents?
- Assuming the award of separation pay was legally warranted, did the NLRC nonetheless commit grave abuse of discretion by ordering separation pay without the requisite factual basis (i.e., absent proof that the cessation was not due to serious business losses and absent a factual basis for computation)?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)