Abella v. National Labor Relations Commission

G.R. No. 71812, July 20, 1987

P- Rosalina Abella/ Hacianda Danao-Ramona

R- Romeo Quitco & Ricardo Dionele Sr.

Labor Code, Article 4 – Construction in favor of Labor

Facts:

·         Abella leased a farm land known as Hacienda Danao-Ramona, for a period of ten (10) years, renewable, at her option, for another ten (10) years.
·         After 10 yrs, she opted to extend the lease contract for another ten (10) years.
·         She employed Quitco & Dionele as farm workers.
·         When her leasehold rights expired, she dismissed the two and turned over the hacienda to the land owners.
·         Quitco & Dionele filed a complaint against Abella for overtime pay, illegal dismissal and reinstatement with backwages.
·         The Labor Arbiter ruled that the dismissal is warranted by the cessation of business, but granted the private respondents separation pay.
·         On appeal, the NLRC affirmed the decision and dismissed the appeal for lack of merit.
·         Abella claimed that since her lease agreement had already expired, she is not liable for payment of separation pay.  She invoked Article 272 of the Labor Code, which pertains to the just causes of termination.
·         The Labor Arbiter does not argue the justification of the termination of employment but applied Article 284 as amended by BP 130, which provides for the rights of the employees under the circumstances of termination.
·         She contended that the provision quoted by the LA violates the constitutional guarantee against impairment of obligations and contracts, because when she leased Hacienda Danao-Ramona, neither she nor the lessor contemplated the creation of the obligation to pay separation pay to workers at the end of the lease.

Issue:

            WoN the respondents are entitled to separation pay.

Ruling:

            Yes. The purpose of Article 284 as amended is the protection of the workers whose employment is terminated because of the closure of establishment and reduction of personnel.

It is well-settled that in the implementation and interpretation of the provisions of the Labor Code and its implementing regulations, the working man's welfare should be the primordial and paramount consideration.

Under Article 4 of the New Labor Code, "all doubts in the implementation and interpretation of the provisions of this Code including its implementing rules and regulations shall be resolved in favor of labor."

            Thus, the petition is DISMISSED.