REYES V. CA, PHIL. MALAY POULTRY BREEDERS INC.

, LEONG HUP AUTHOR: ADRE

POULTRY FARM SDN. NOTES: included other details just in case 
[G.R. No. 154448 AUG. 15, 2003]
TOPIC: CONSTRUCTION IN FAVOR OF LABOR
PONENTE: YNARES-SANTIAGO
CASE LAW/ DOCTRINE:
In carrying out and interpreting the Labor Code’s provisions and its implementing regulations, the employee’s welfare should be the primordial and
paramount consideration.
This kind of interpretation gives meaning and substance to the liberal and compassionate spirit of the law as provided in Article 4 of the Labor Code which
states that “[a]ll doubts in the implementation and interpretation of the provisions of [the Labor] Code including its implementing rules and regulations, shall
be resolved in favor of labor”, and Article 1702 of the Civil Code which provides that “[i]n case of doubt, all labor legislation and all labor contracts shall be
construed in favor of the safety and decent living for the laborer.

APPLICATION: In the case at bar, what was withheld from Reyes was not only his salary, vacation and sick leave pay, and 13th month pay differential, but
also his separation pay. Hence, pursuant to current jurisprudence, separation pay must be included in the basis for the computation of attorney’s fees.
FACTS:
 Pedrito Reyes was appointed by respondent, Leong Hup Poultry Farms SD as Technical and Sales Manager with a net salary of US$ 4,500/mo.
o Duties include: selling parent stock day-old chicks and providing technical assistance to clients of the company in Malaysia and other
Asian countries
 1992: Leong Hup Farms formed Philippine Malay Poultry Breeders, Inc. (Philmalay) in the Philippines and Reyes was appointed General Manager
with a monthly pay of USD 5,500.
 From 1996-97, respondents suffered losses which caused them to reduce production and retrench employees.
 On June 30, 1997, Reyes gave verbal notice of resignation effective Jan. 1, 1998.
 In a letter dated Jan. 12, 1998, Reyes confirmed his verbal notice of resignation and requested the same benefits as those granted to retrenched and
resigned employees of the company.
 In a letter dated Jan. 19, 1998, Philmalay retrenched him effective Jan. 20, 1989 and promised him separation pay according to the Labor Code.
However, petitioner was offered separation pay equivalent to four months only. This was rejected by Reyes.
 He filed with Labor Arbiter for underpayment of wages and non-payment of separation pay, sick leave, vacation leave and other benefits.
 Labor Arbiter ruled in favor of petitioner.
 On appeal by respondents at NLRC, decision was modified to delete USD 3,370 as unpaid salary, USD 28,600 as vacation leave, brand new car or its
equivalent life insurance and moral and exemplary damages and reducing separation pay to USD 44,400 by lowering length of service from 9 to 8
years only and finally limiting attorney’s fees to 10% of total awards.
 Motion for reconsideration of petitioner was denied and on appeal with CA it was dismissed for failure to attach pertinent papers. On motion for
reconsideration with attachment of pertinent papers the same was denied again by the CA.
ISSUE(S): (1) WON Reyes’ termination was caused by retrenchment or by voluntary resignation?
(2) Did the CA err in dismissing the petition for technicalities?
(3) Should the Labor Arbiter’s decision be reinstated?

HELD: 1. It was retrenchment evident by the termination letter sent by Philmalay.

2. YES
3. NO.
RATIO:
Question 1:
Reyes tendered his resignation letter to respondents where he requested that he be given the same benefits however there was no showing that
respondents accepted his resignation. Acceptance of a resignation tendered by an employee is necessary to make the resignation effective. No such
acceptance was shown in the case.

What appears in the record is a letter terminating the services of petitioner due to retrenchment effective January 20, 1998. VThe said letter should be
interpreted as a non-acceptance of petitioner’s resignation effective December 31, 1997. As correctly pointed out by the Labor Arbiter, if respondents
considered petitioner resigned as of December 31, 1997, and then there would be no need to retrench him. Also, petitioner is estopped from claiming that
he was illegally dismissed and that his retrenchment was without basis. His request for benefits granted to retrenched employees during such time when
respondent was in the process of retrenching its employees is tantamount to a recognition of the existence of a valid cause for retrenchment.

Question 2: Rules of procedure should not be applied in a very technical sense, for they are adopted to help secure, not override, substantial justice. In
Ramos vs. CA, a dismissal should be reconsidered once petitioner complies with the required attachments. In Jaro vs. CA, substantial compliance of an
appellant may call for relaxation of the rules of procedure. The same leniency should be applied in the case at bar since petitioner demonstrated
willingness to comply with the requirements set by the rules, otherwise, application of the rules of procedure in a very rigid and technical sense would
defeat the ends of justice.

Question 3: No, modifications were needed such as reducing, as the NLRC correctly determined, of the length of employment to 8 years from 9, that
petitioner is not entitled to compensation from Jan. 1 to 19, 1998 since he did not prove he rendered services during said period, that car and insurance
benefits are only granted during course of employment and should not be part of the separation package, and demand for rental payment of his house as
office of Philmalay from Dec. 1, 1989 to July 1996 is not within the jurisdiction of the NLRC but the regular courts. And being that respondents did not
appeal the decision of the NLRC, then said decision is deemed satisfactory to said respondents including the order of the NLRC to provide petitioner with
legal services in the illegal recruitment case filed against the former in his stint as head of Philmalay. Petitioner is also entitled to sick leave and vacation
leave computed based on 8 years of service, separation pay, 13th month pay and salary and attorney’s fees at 10% of total monetary award.