Case Digest: Jiao v. Global Business Bank

G.R. No. 182331: April 18, 2012

Ma. Corina C. Jiao, et al., Petitioners, v. Global Business Bank, Inc., et al. Respondents.



The petitioners were regular employees of the Philippine Banking Corporation (Philbank), each with at least ten years of service in the company. The old gratuity plan (old plan) of Philbank provides:

Any employee who has reached the compulsory retirement age of 60 years, or who wishes to retire or resign prior to the attainment of such age or who is separated from service by reason of death, sickness or other causes beyond his/her control shall for himself or thru his/her heirs file with the personnel office an application for the payment of benefits under the plan.

Philbank implemented a new Gratuity Pay Plan (New Gratuity Plan). In particular, the New Gratuity Plan stated thus:

An Employee who is involuntarily separated from the service by reason of death, sickness or physical disability, or for any authorized cause under the law such as redundancy, or other causes not due to his own fault, misconduct or voluntary resignation, shall be entitled to either one hundred percent (100%) of his accrued gratuity benefit or the actual benefit due him under the Plan, whichever is greater.

In February 2000, Philbank merged with Global Business Bank, Inc. (Globalbank), with the former as the surviving corporation and the latter as the absorbed corporation, but the bank operated under the name Global Business Bank, Inc. As a result of the merger, complainants respective positions became redundant. A Special Separation Program (SSP) was implemented and the petitioners were granted a separation package equivalent to one and a half months pay (or 150% of one months salary) for every year of service based on their current salary. Before the petitioners could avail of this program, they were required to sign two documents, namely, an Acceptance Letter and a Release, Waiver, Quitclaim.

In August 2002, respondent Metropolitan Bank and Trust Company (Metrobank) acquired the assets and liabilities of Globalbank through a Deed of Assignment of Assets and Assumption of Liabilities. Subsequently, the petitioners filed separate complaints for non-payment of separation pay with prayer for damages and attorneys fees before the National Labor Relations Commission (NLRC). The petitioners asserted that, under the Old Plan, they were entitled to an additional 50% of their gratuity pay on top of 150% of one months salary for every year of service they had already received. They insisted that 100% of the 150% rightfully belongs to them as their separation pay. Thus, the remaining 50% was only half of the gratuity pay that they are entitled to under the Old Plan.

The LA dismissed the complaint and ruled that petitioners are not entitled to the additional 50%. The NLRC affirmed the LA decision. The petitioners elevated the case to the CA via a Petition for Certiorari under Rule 65. CA ruled that the petition was dismissible outright for failure of the petitioners to file a motion for reconsideration of the decision under review before resorting to certiorari.

ISSUE: Whether or not the CA erred in dismissing the appeal.


Remedial Law

He who seeks a writ of certiorari must apply for it only in the manner and strictly in accordance with the provisions of the law and the Rules.

The petitioners may not arrogate to themselves the determination of whether a motion for reconsideration is necessary or not. To dispense with the requirement of filing a motion for reconsideration, the petitioners must show a concrete, compelling, and valid reason for doing so.

As the CA correctly noted, the petitioners did not bother to explain their omission and only did so in their motion for reconsideration of the dismissal of their petition. Aside from the fact that such belated effort will not resurrect their application for a writ of certiorari, the reason proffered by the petitioners does not fall under any of the recognized instances when the filing of a motion for reconsideration may be dispensed with. Whimsical and arbitrary deviations from the rules cannot be condoned in the guise of a plea for a liberal interpretation thereof. We cannot respond with alacrity to every claim of injustice and bend the rules to placate vociferous protestors crying and claiming to be victims of a wrong.

Labor Law

For as long as the minimum requirements of the Labor Code are met, it is within the management prerogatives of employers to come up with separation packages that will be given in lieu of what is provided under the Labor Code

Globalbanks right to replace the Old Plan and the New Gratuity Plan is within legal bounds as the terms thereof are in accordance with the provisions of the Labor Code and complies with the minimum requirements thereof.

Contrary to the petitioners claim, they had no vested right over the benefits under the Old Plan considering that none of the events contemplated thereunder occurred prior to the repeal thereof by the adoption of the New Gratuity Plan. Such right accrues only upon their separation from service for causes contemplated under the Old Plan and the petitioners can only avail the benefits under the plan that is effective at the time of their dismissal. In this case, when the merger and the redundancy program were implemented, what was in effect were the New Gratuity Plan and the SSP; the petitioners cannot, thus, insist on the provisions of the Old Plan which is no longer existent.

On the other hand, the issuance of the SSP did not result to the repeal of the New Gratuity Plan. The SSP was not intended to supersede the New Gratuity Plan. On the contrary, the SSP was issued to make the benefits under the New Gratuity Plan available to employees whose positions had become redundant because of the merger between Philbank and Globalbank, subject to compliance with certain requirements such as age and length of service, and to improve such benefits by increasing or rounding it up to an amount equivalent to the affected employees one and a half monthly salary for every year of service. In other words, the benefits to which the redundated employees are entitled to, including the petitioners, are the benefits under the New Gratuity Plan, albeit increased by the SSP.

Article 283 of the Labor Codeprovides only the required minimum amount of separation pay, which employees dismissed for any of the authorized causes are entitled to receive. Employers, therefore, have the right to create plans, providing for separation pay in an amount over and above what is imposed by Article 283. There is nothing therein that prohibits employers and employees from contracting on the terms of employment, or from entering into agreements on employee benefits, so long as they do not violate the Labor Code or any other law, and are not contrary to morals, good customs, public order, or public policy.

Consequently, if the petitioners were allowed to receive separation pay from both the Labor Code, on the one hand, and the New Gratuity Plan and the SSP, on the other, they would receive double compensation for the same cause (i.e., separation from the service due to redundancy) even if such is contrary to the provisions of the New Gratuity Plan. The petitioners claim of being shortchanged is certainly unfounded. They have recognized the validity of the SSP and the New Gratuity Plan as evidenced by the acceptance letters and quitclaims they executed; and the benefits they received under the SSP and the New Gratuity Plan are more than what is required by the Labor Code.

Labor Law

The Court, in other cases, has upheld quitclaims if found to comply with the following requisites: (1) the employee executes a deed of quitclaim voluntarily; (2) there is no fraud or deceit on the part of any of the parties; (3) the consideration of the quitclaim is credible and reasonable; and (4) the contract is not contrary to law, public order, public policy, morals or good customs or prejudicial to a third person with a right recognized by law.

In this case, there is no allegation of fraud or deceit employed by the respondents in making the petitioners sign the acceptance letters and quitclaims. Neither was there any claim of force or duress exerted upon the petitioners to compel them to sign the acceptance letters and quitclaims. Likewise, the consideration is credible and reasonable since the petitioners are getting more than the amount required under the law. Thus, the acceptance letters and quitclaims executed by the petitioners are valid and binding.

Considering that the petitioners have already waived their right to file an action for any of their claims in relation to their employment with Globalbank, the question of whether Metrobank can be held liable for these claims is now academic. However, in order to put to rest any doubt in the petitioners minds as to Metrobanks liabilities, we shall proceed to discuss this issue.