Case Digest: MTBS vs. Nagkahiusang Mamumuo

G.R. No. 174300 : December 5, 2012

MINDANAO TERMINAL AND BROKERAGE SERVICE, INC. and/or FORTUNATO V. DE CASTRO, Petitioners, v. NAGKAHIUSANG MAMUMUO SA MINTERBRO-SOUTHERN PHILIPPINES FEDERATION OF LABOR and/or MANUEL ABELLANA, ET AL., Respondents.

LEONARDO-DE CASTRO, J.:


FACTS:

Petitioner Mindanao Terminal and Brokerage Service Inc. (Minterbro) is a domestic corporation managed by Fortunato De Castro (De Castro) and engaged in the business of providing arrastre and stevedoring services to its clientele. However, due to abnormal vibration of the pier everytime a ship docks due to weak posts at the underwater portion, Minterbro brought up the matter to the Philippine Ports Authority (PPA). On the basis of PPAs ocular inspection, the PPA advised Minterbro to conduct a thorough investigation of the underdeck and underwater structures of the pier and initiate corrective measures if necessary.

In the meantime, the union members/employees were forced to be laid off. The union members/employees were not given work starting April 14, 1997, the day no more vessel was serviced at Minterbros pier after the last vessel was serviced on April 11 to 13, 1997. Subsequently, Minterbro decided to rehabilitate the pier on August 1, 1997 and, on the same day, sent a letter to the Department of Labor and Employment (DOLE) to inform DOLE of Minterbros intention to temporarily suspend its operations. The next vessel serviced by Minterbro was on December 22-28, 1997.

Respondent Nagkahiusang Mamumuo sa Minterbro-Southern Philippines Federation of Labor composed of respondents Manuel Abellana, et al. (union members/ employees), employees of Minterbro, filed a complaint for payment of separation pay against Minterbro and De Castro. The Labor Arbiter dismissed the complaint. The NLRC reversed the said decision which is affirmed by CA.

ISSUE: Whether or not the union members/employees are entitled to separation pay.

HELD: The petition lacks merit.

LABOR LAW: lay-off

The resolution of the issue as to the truth regarding the date when the union members/employees were laid off will determine whether Minterbro are liable for separation pay.

The NLRC and the CA found that the union members/employees were not given work starting April 14, 1997 and that more than six months have elapsed after the union members/employees were laid off when the next vessel was serviced at the Minterbro pier on December 22 to 28, 1997. When Minterbro failed to make work available to the union members/employees for a period of more than six months starting April 14, 1997 until December 22, 1997, they are deemed to have constructively dismissed the union members/employees.

As Minterbro and De Castro were responsible for the lack of work at the pier and, consequently, the layoff of the union members/employees, they are liable for the separation from employment of the union members/employees on a ground similar to retrenchment. Lay-off is essentially retrenchment and under Article 283 of the Labor Code a retrenched employee is entitled to separation pay equivalent to one (1) month salary or one-half (12) month salary per year of service, whichever is higher.

Petition is DENIED.

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