[WITH RESOLUTION OF FEBRUARY 27, 1961]

In a complaint, twice amended and. supplemented, filed against Foster Wheeler
Corporation and Caltex (Phil.) Inc., in the Municipal Court of Manila (Civil
Case No. 40789), Felix Abe and 393 others (pp. 97-111; 118-120, Record on
Appeal) claiming to have been employed by the named defendants on various
occasions from 1952 to 1954 in the “Batangas Refinery Construction Project” at
Danglaya, Bauan, Batangas, and discharged from employment in 1954 without
notice, each demanded recovery of separation pay, value of sick and vacation
leaves, and overtime compensation, allegedly due them, computed at the rate
ranging from P4.00 to P16.80 daily, with interest thereon.

Defendant Foster Wheeler Corporation, in its answer, alleged among others,
that the action was improper for a class suit, the claim of each plaintiff being
separate and distinct from the others; that under their written contract of
employment, plaintiffs could be separated from the service without notice or
separation pay; that plaintiffs were, fully compensated for any overtime service
rendered; and that it was not obliged, under the law, to grant vacation and sick
leave privileges to its employees. As counterclaim, defendant demanded from each
of them the sum of at least P100.00 for attorney’s fees and costs. For its part,
Caltex (Phil.) Inc., disclaimed having anything to do with the employment of any
worker in said project, although it also advanced the same defenses as those set
up by its co-defendant.

Thereafter, defendants moved for the dismissal of the complaint for lack of
cause of action, it being claimed that plaintiffs were employed after Article
302 of the Code of Commerce on “mesada” was repealed, .and they were separated
from the service before Republic Act 1052,^[1] reviving the said privilege, went into
effect. It was thus contended that for the duration of plaintiffs’ employment,
there was no law imposing on the employer the duty to give 1-month advance
notice or payment of the separation pay before terminating the services of an
employee. Defendants also cited the opinion of the Chief of the Wage
Administration Service, dated June 21, 1954, issued in answer to their query, to
the effect that Republic Act 1052 is not applicable to construction workers as
the ones involved herein. These motions were opposed by plaintiffs.

Allegedly for failure to prove their respective allegations, the Municipal
Court dismissed plaintiffs’ complaint as well as defendants’ counterclaim.
Plaintiffs appealed to the Court of First Instance of Manila (Civil Case No.
34601), wherein both parties reiterated their respective allegations presented
in the inferior court.

In its decision of September 11, 1958, copy of which was received by counsel
for plaintiffs on September 15, 1958, the court said.

“* * * What the Court has found very difficult to resolve is the debate on
the termination pay. All the contracts were executed prior to June 12, 1954,
when Republic Act 1052 was approved; and by decision of the Supreme Court in the
case of Lara vs. Del Rosario, 94 Phil., 778; 50 Off., Gaz., 1975, which
was promulgated less than two months before the approval of that law, it was
held that the right of employees to the Mesada provided by Article 302
of the Code of Commerce had been repealed by the New Civil Code; and as the New
Civil Code became effective on August 30, 1950, technically from August 30,
1950, up to June 12, 1954, there was no law on mesada existing in the
Philippines; * * *. It is contended for the defendants that since all the
contracts entered into with plaintiffs were executed before June 12, 1954, when
Republic Act 1052 became effective, said Act cannot be given such effect as to
make it applicable even to contracts already existing upon its approval as were
the contracts here for if that were the case, the law would become
unconstitutional under the rule prohibiting impairment of contract. The trouble,
however, is that the law, Republic Act 1052, makes it clearly effective
beginning June 12, 1964; that was an indication of the Legislative will that it
was to be made effective even as to contracts executed before but not yet
terminated at the time of its approval; and the presumption is always in favor
of constitutionality.”

And holding that plaintiffs’ employment was not for a definite period, the
court declared them^[2] entitled to
separation pay on the basis of their daily salaries, computed at 26 working days
a month, plus intereat thereon from the date of the filing of the complaint, and
costs. Defendants Foster Wheeler Corporation and Caltex (Phil) Inc. perfected an
appeal to this Court, docketed as G.R. No. L-14785. On the other hand, the
twenty (20) plaintiffs excluded from the decision for having, according to the
trial judge, been already paid their “mesada”, likewise, interposed an appeal
docketed as G. R. No. L-14923.

Prior to August 30, 1950^[3] the
workers’ right to separation pay or “mesada” was secured by Article 302 of the
Code of Commerce. However, in a decision promulgated on April 20, 1954, this
Court declared:

“As to the month’s pay (mesada) under Article 302 of the Code of Commerce,
Article 2270 of the new Civil Code (Republic Act 386) appears to have repealed
said Code of Commerce governing Agency. This repeal took place on August 30,
1950, when the new Civil Code went into effect, that is, one year after its
publication in the Official Gazette.”

As a consequence thereof,^[4] the
legislature enacted Republic Act 1052 which, in full, reads:

“AN ACT TO PROVIDE FOR THE MANNER OF TERMINATING EMPLOYMENT WITHOUT A
DEFINITE PERIOD IN A COMMERCIAL, INDUSTRIAL, OR AGRICULTURAL ESTABLISHMENT OR
ENTERPRISE.

* * * * * * *

“SECTION 1. In cases of employment, without a definite period, in a
commercial, industrial or agricultural establishment or enterprise, neither the
employer nor the employee shall terminate the employment without serving notice
on the other at least one month in advance.

“The employee, upon whom no such notice was served, shall he entitled to one
month’s compensation from the date of termination of his employment.

“Sec. 2. Any contract or agreement contrary to the provisions of section one
of this Act shall be null and void.

“Sec. 3. This Act shall take effect upon its approval.

“Approved, June 12, 1954.”

There is no controversy as to the fact that herein appellees were employed
after the repeal of Article 302 of the Code of Commerce and before the
effectivity of Republic Act 1052. But, it is not also denied that they were
separated from the service (with the exception of a few) “after said Act went
into operation. Appellants, however, in contesting the decision of the lower
court ordering them to give the employees separation pay, contend that as the
contracts of employment were entered into at a time when there was no law
granting the workers said right, the application as to them of the subsequent
enactment restoring the same right constitutes an impairment of their
contractual obligations. We incline to the contrary view.

The freedom of contract, under our system of government, is not meant to be
absolute.^[5] The same is understood to be
subject to reasonable legislative regulation aimed at the promotion of public
health, moral, safety and welfare^[6]. In
other words, the constitutional guaranty of non-impairment of obligations of
contract is limited by the exercise of the police power of the State, in the
interest of public health, safety, moral and general welfare.

By its very nature, Republic Act 1052 is a measure intended to provide
protection to the workingmen, and, in a way, the employers as well, specifically
in cases of employments with indefinite period or duration, by requiring the
employer or employee, as the case may be, before terminating the employment, to
give unto the other notice thereof 30 days in advance, non-observance of which
by the employer, subjects him to payment (to the employee concerned) of a sum
equivalent to the latter’s compensation for one month. The logical question that
may be raised concerns the nature of Republic Act 1052, i.e., whether it is a
regulatory measure, not a substantive law so that its enactment may properly be
considered a valid exercise of the police power of the State. The answer is in
the affirmative.

It may be observed that the Act prescribes the manner of terminating
employment without a fixed or definite period, by requiring the employer or
employee, before terminating such employment, to notify the other party of such
fact. Evidently, the purpose of the regulation is to give the other party
opportunity to find replacement or substitute, in the case of the employer, and
other place of employment or source of livelihood, in the case of the employee.
The right to be thus notified can hardly be considered substantive, nor does the
provision requiring the employer to give the employee, dismissed without such
advance notification, the equivalent salary of the latter for 1 month, bestow
upon said employee any substantive right or interest immediately upon execution
of the contract of employment. Actually, the enactment of the law merely makes
an employment subject to the requirement that the same would not be terminated
without notifying the other party of the impending termination, 30 days in f
advance. And, in case of non-compliance therewith, the employer shall be liable
for payment to the employee of an amount Equivalent to the latter’s compensation
for 1 month. It is clear therefrom that this provision on payment may only be
availed of in case of failure to comply with the regulation on the giving of 30
day advance notice; that it partakes more of a penalty for violation of the
requirement which is within the power of the legislature to impose (See Thorpe
vs. Ruthland & Burlington R.R. Co., 27 Vt. 140). The application,
therefore, of Republic Act 1052, which was enacted in the exercise of the police
power of the State, to dismissal effected after June 12, 1954, is with legal
sanction.

Neither can it be successfully argued that ine herein involved workers do not
fall within the ambit of operation of the law (Rep. Act 1052) in view of the
condition contained in their contract, thus worded:

“2. The refinery construction is a project of temporary duration and, hence
your employment term shall also be temporary dependent upon the needs and
requirements, as determined by this Company, of the particular phase of the
construction work to which you may presently or hereafter be assigned. The
necessary consequences of your temporary employment term are:

“(a) Your employment may be terminated at any time without obligation to the
Company, upon-payment of wages earned through the date of such
termination.”

As observed by the trial court, it appears from the stipulation of facts
entered into between the parties that almost all of the employees hired under
the uniform contract containing the above condition, were employed in 1952 and
worked continuously until their dismissal in 1954. The work can not thus be
considered of temporary duration, but more or less permanent. It would not then
be difficult for the employers (herein appellants) to know the approximate date
when the services of the employees would no longer be necessary for the purpose
of giving them the necessary 30 day advance notice of dismissal. Under the
circumstances, the aforequoted condition in the contract, while probably proper
when the contract was executed, became, nevertheless, inoperative upon the
enactment ef Republic Act 1052.

Defendants-appellants similarly raise the jurisdictional question regarding
the sufficiency of the allegations of the complaint to vest original
jurisdiction in the Municipal Court and appellate jurisdiction in the Court of
First Instance. The pertinent part of the second amended complaint (R. A. p. 55)
states:

“3-a. That a substantial compliance with the desire of this Honorable Court,
as can be gleaned from the order of dismissal, plaintiffs hereby attached Annex
‘A’; and made an Integral part of this second amended complaint, showing the
dates plaintiffs were hired, the dates they were discharged without previous
notice, the agreed salary computed so much daily; and that the separation
pay, amounting to one month or thirty-days at leant together ivith the claims
for vacation and sick leaves and overtime as the case may be, of each, and every
one mentioned in Annex ‘A’, and which each and every one claims, will not exceed
ranging from P120.00 to P1500.00, * * *.” (Italics
supplied.)

There is no question that a complaint must contain the ultimate facts
constituting plaintiff’s cause or causes of action (Sec. 1, Rule 6, Rules of
Court). For purposes of said Rule, however, it was said that a complaint would
be sufficient if it contains sufficient notice of the cause of action even
though the allegations may be vague or indefinite, or in the form of
conclusions, in which event, the proper recourse would be, not a motion to
dismiss, but a motion for a bill of particulars.^[7] In the case at bar, the allegations of the
complaint, taken with Annex “A”, to our mind, give the necessary information
sufficient enough to enable defendants to plead and prepare for trial,
considering that they are the ones keeping record of the facts of the appellees’
employment and are in the best position to know the extent of the latter’s
claims. And, even assuming that they have no such records, defendants should
have moved for a bill of particulars. Failing to do so, they can not now be
heard to complain against the alleged insufficiency or ambiguity of the
complaint.

G.R. No. L-14923

With respect to the appeal of the twenty (20) employees who were excluded
from the judgment, it is contended that the lower court gravely abused its
discretion in disapproving their record on appeal and denying their motion for
relief. The facts regarding this incident are not disputed.

Herein appellants received copy of the decision on September 15, 1958. Their
motion for partial reconsideration of the decision, praying for their inclusion
therein and filed on October 9, was denied on October 18, of which counsel for
plaintiffs was notified on October 21. From September 15 to October 9, 24 days
had elapsed. The remaining 6 days started to run again from October 21 and would
end on October 27, when the decision should become final.

On October 24, counsel for plaintiffs filed a motion for extension of time
within which to perfect an appeal, mentioning therein the fact that they were
still trying to raise the necessary amount to cover the appeal bond and
incidental expenses. By order of October 25, 1958, copy of which was received by
plaintiffs on October 31 (after the 30-day period had already expired on October
27), the court granted them up to November 8, 1958, within which to file the
record on appeal only, but denied the extension with respect to the filing of
the bond. Although the said record on appeal as well as the bond were actually
filed on November 7, the lower court, nonetheless, disapproved the appeal in its
order of November 12, 1958, by reason of their alleged failure to pay the appeal
bond on time. Plaintiffs did not appeal from this order of denial. However, on
November 25, 1958, counsel for plaintiff’s filed a motion for relief from the
judgment, under Rule 38, which was denied. It is this order, as well as that
disapproving their appeal, that plaintiffs-appellants want us to nullify and set
aside.

We see nothing abusive or irregular in the actions taken by the lower court.
It is true that the motion for extension of time to perfect the appeal was filed
before the expiration of the reglementary period, and that, although the order
extending the period to file the record on appeal was issued on October 25, copy
thereof was received by counsel for the plaintiffs only on October 31, or after
the original period had already lapsed. However, we can not subscribe to the
proposition that the payment of the appeal bond on November 7 constitutes
substantial compliance with the Rules.

Admittedly, the granting or denial of a motion for extension of time is
discretionary on the court. Counsel for the plaintiffs, therefore, should not
have presumed that his motion for extension of the period to file the record on
appeal and pay the appeal bond would be granted, but should have taken upon
himself the duty to inquire, before the original period has lapsed, what action
the court took on his said motion. In this case, the order partly denying
the-requested extension was issued on October 25, or the day after the motion
was filed. Counsel could have easily informed himself of such fact, had he only
tried to do so, considering that his office (in the Dona Mercedes building,
Plaza Miranda, Quiapo, Manila) is practically only a few blocks away from where
the court is housed. This he could have done before the deadline, October 27.
Instead, he waited for the delivery of the notice to him on October 31, which is
too late. Even then, it took him another seven (7) days before he filed his
appeal bond on November 7.

There is, similarly, no basis for the granting of the relief prayed for by
the plaintiffs-appellants. The motion for relief was based on the alleged
excusable negligence of counsel, consisting of the latter’s failure to know of
the existence of the Opinion of the Secertary of Justice, dated July 28, 1958
(Op. No. 149, series of 1958), interpreting the 1-month salary provided under
Republic Act 1052 to mean 30 working days. The finding of the aforecited Opinion
by chance, to our mind, does not partake of the nature of “discovery” of
evidence as contemplated under Rule 38 of the Rules of Court. It must be
remembered that aside from the acknowledged doctrine that the Opinion of the
Secretary of Justice is not binding upon the Courts, the matters expressed
therein are not evidentiary facts, but dissertations or discussion of
the nature, extent and effect of a given legal issue.

Wherefore, the main decision, insofar as it relates to those of the
plaintiffs-employees who were dismissed after June 12, 1954, is hereby affirmed,
as well as the orders of November 12, and 27, 1958, appealed from. Costs are
taxed in G.R. No. L-14785 against appellants Foster Wheeler Corporation and
Caltex (Phil.) Inc., and in G.R. No. L—14923, against appellants Felix Abe, et
al. So ordered.

Paras, C.J., Bengzon, Labrador, Reyes, J.B.L., Paredes, and
Dizon, JJ., concur.

Judgment affirmed.

---

^[1] Approved on June 12, 1954.

^[2] With the exception of the
employees, numbering 20, who, the Court found, have already been given their
corresponding 1-month separation pay.

^[3] Date of effectivity of the New
Civil Code.

^[4] In the language of the sponsor of
Senate Bill No. 17, series of 1954, that ultimately became Republic Act 1052,
the same was proposed to “fill the void left by the enforcement of the aforesaid
(Civil) Code.”

^[5] “Art. 1700. The relations between
capital and labor are not merely contractual. They are so impressed with public
interest that labor contracts must yield to the common good. * * *.” (New Civil
Code)

^[6] St. Louis, etc. R. Co.
vs. Paul, 173 US 404, 43 L ed 746; 19 Sup Ct Rep 419, and others, cited
in II Cooley’s Constitutional Limitations, p. 1236.

^[7] I Moran, Comments on the Rules of
Court, 1957 Ed., p. 111.

---

R E S O L U T I O N

February 27, 1961

BARRERA, J.:

In case G.R. No. L-14785 (Felix Abe, et al vs. Foster Wheeler Corp., et al.),
defendants-appellants filed separate motions for reconsiderations of the
decision herein rendered, on the ground that (1) the employment of the workers
involved in this case was for a definite period, and (2) Republic Act No. 1052
should not be given retroactive effect.

There is no question that the Batangas Refinery Project is for a specific
duration, which is, until it is completed. Too, the different phases of the
construction work, e.g., masonry, painting, plumbing, etc., may also be
considered with definite duration, which is, until they are finished. Still
under the terms of the contract entered into by the workers, the period or
duration of their employment was indefinite. As far as pertinent, the contract
provides:

“2. The refinery construction is a project of temporary duration and hence,
your employment terms shall also be temporary dependent upon the needs and
requirements, as determined by this Company, of the particular phase of the
construction work to which you may be presently or hereafter be assigned . .
.”

Under the aforequoted provision of the contract, the worker’s term of
employment is made subject to two conditions: (1) upon the needs and
requirements (not duration) of the particular work to which he (the
worker) is assigned and (2) that such needs and requirements are to be as so
determined by the employer. In other words, the duration of the employment of a
worker assigned to a particular kind of work is not necessarily co-existent with
the duration of such work, because the employer could, at any stage of the work,
determine whether his services are needed or not. Likewise, the employer could,
even after the termination of a particular work, assign the employee to another
phase of the construction work, if the employer determines that the needs of the
work so require. Clearly, the worker is without any means to know when his
services would be considered by his employer still necessary or not.

As to the other ground relied upon in the motion, the same was already fully
discussed in the decision.

Plaintiffs-appellants in case G. R. No. L-14923 (Abe, et al. vs.
Foster Wheeler Corp., et al.,) also filed a motion for reconsideration raising
issues which are already fully considered in the decision.

The motions filed in both cases are, therefore, denied for lack of merit.

Bengzon, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L.,
Paredes and Dizon, JJ., concur.

Motions denied.