Case Summary (G.R. No. 226064)
Applicable Law
The primary laws applicable in this case include Article 283 of the Labor Code of the Philippines, which governs separations due to redundancy, and Section 32(B)(6)(b) of the National Internal Revenue Code (NIRC) of 1997, concerning the tax treatment of retirement benefits, specifically the exclusion from gross income for amounts received as separation pay.
Factual Background
Anna Mae B. Mateo was previously employed at Philippine Beverage Partners, Inc. (PhilBev) where she served as a Sales Supervisor. Following PhilBev's cessation of operations in 2007, she received separation benefits. Subsequently, she was hired by Coca-Cola Bottlers Phils. Inc. and held the position of District Team Leader until her employment was terminated due to redundancy related to a new Route to Market strategy on March 31, 2012. Upon her dismissal, respondent provided her with partial payment of her separation benefits but deducted withholding tax and outstanding loans from the computed amount.
Procedural History
Initially, the Labor Arbiter ruled in favor of the petitioner, finding the tax deduction on her separation pay as erroneous and ordering the respondent to pay the full separation amount plus attorney's fees. The National Labor Relations Commission (NLRC) affirmed a part of the ruling regarding the separation pay but deleted the award for attorney's fees. Dissatisfied, Coca-Cola Bottlers filed a certiorari petition before the Court of Appeals, which subsequently reversed the NLRC's ruling and dismissed the complaint, leading to the present petition for review.
Issue
The primary issue before the court is whether the respondent, Coca-Cola Bottlers, is liable for the illegal deduction from the petitioner’s separation pay by withholding tax from the amount received due to her involuntary separation from service attributable to redundancy.
Court's Ruling
The court determined that the amount received by the petitioner was classified as separation pay resulting from redundancy and not retirement pay. Given this classification, the court referenced Article 283 of the Labor Code, which establishes that employees separated due to redundancy are entitled to separation pay that is exempt from taxation according to Section 32(B)(6)(b) of the NIRC. The court clarified that despite the employer's retirement plan being implicated i
...continue readingCase Syllabus (G.R. No. 226064)
Case Overview
- This case concerns a Petition for Review filed by Anna Mae B. Mateo against Coca-Cola Bottlers Phils. Inc., challenging the Decision of the Court of Appeals (CA) dated November 25, 2015, and the Resolution dated June 13, 2016.
- The CA's Decision reversed the earlier rulings of the National Labor Relations Commission (NLRC) and the Labor Arbiter, effectively dismissing Mateo's complaints for illegal deductions, underpayment of separation pay, non-payment of salaries, and claims for damages.
Facts of the Case
- Anna Mae B. Mateo was employed as a Sales Supervisor by Philippine Beverage Partners, Inc. (PhilBev) until its cessation of operations in 2007, which led to her separation from service.
- Following her separation from PhilBev, Mateo was hired by Coca-Cola Bottlers Phils. Inc. (the respondent) and was later promoted to District Team Leader.
- In February 2012, due to a restructuring strategy termed Route to Market (RTM), Mateo was informed that her position was deemed redundant, with her employment terminated effective March 31, 2012.
- Upon her termination, she was promised separation benefits amounting to approximately P676,657.15. However, only P402,571.85 was eventually disbursed after deductions, including a withholding tax of P134,064.95.
- Mateo contested the withholding of the tax, arguing that her separation benefits should not be taxable, as they were derived from redundancy.
- After receiving no satisfactory response from the respondent