DIONISIO PEREZ, PLAINTIFF-APPELLANT, VS. CENTRAL AZUCARERA DON PEDRO, DEFENDANT-APPELLEE.

This is an appeal from the decision of the Court of First Instance
of Batangas dismissing the com­plaint of herein
appellant Dionisio Perez.

The record shows that
appellant had been employed with appellee since 1931,
rendering continuous service until January 31, 1959, when he was dismissed for “loss of
confidence.” On the date of his discharge he was holding the position of
Chief Clerk, Supply and Ware­housing, of appellee and
was carried on the payrolls as a permanent and regular employee with a
salary of P230.00 a month, plus other fringe benefits.  He was also covered by the voluntary
non-contributory gratuity and retire­ment plan for the personnel of appellee.

On June 8, 1959 appellant filed a complaint in the trial
court seeking reinstatement, backwages and damages.

On June 17, 1959
appellee moved for the dis­missal of the complaint on
the ground that the trial court had no jurisdiction over the subject-matter of
the case.

On July 16, 1959
the trial court denied the motion to dismiss and on July 27, 1959 appellee
filed its answer denying each and every material averment of the complaint and
setting up several affirmative defenses. 
When the case was called for hearing, the parties made a stipulation of
facts at the preliminary conference held in chambers.  Thereafter, the parties filed their res­pective
memoranda solely on the question raised on the third affirmative defense, which
we quote:

“(3) That by law, defendant has the right to separate
plaintiff from its service even without cause by serving on the latter a
previous notice of separation, or in lieu thereof, payment to him of the legal
separation pay.  Consequently, even
granting, arguendo, that plaintiff’s
separation from the service was not for just cause, he has no right for
reinstatement and back wages, but only to ask for payment of the said separation
pay.”

On October 1, 1959
the trial court issued an order dismissing the complaint, with costs against
appellant.  He moved to reconsider and
later submitted, with leave of court, an amended complaint.

On September 20, 1960
the trial court denied the motion for reconsideration as well as the admission
of the amended complaint.

In this appeal appellant avers that the trial court erred:  “(1) in concluding that the employment
of the plaintiff with the defendant corporation is without a definite period as stated under Section 1,
Republic Act No. 1052, as amended
by Republic Act No. 1787; (2) in holding that the right to
separation pay is within the exclusive and original jurisdiction of the
regional office of the Department of Labor; and (3) in dismissing the complaint
and in denying the admission of the amended com­plaint.”

The original appointment as well as all the sub­sequent promotional appointments
of appellant were never reduced to writing.  No evidence was presented
to show that his employment with appellee was
for a definite period.  Indeed, all that
appellant claims is that he was a per­manent employee, but as correctly stated
by the trial court, the fact that he was considered a permanent employee does
not itself show that he had been hired for a definite term.

Appellant stresses the
fact that he was covered by defendant’s “Voluntary Non-Contributory
Retirement Gratuity Plan” for its personnel.  The said plan, he says, gives certain
retirement benefits to employees upon retire­ment at age 65, irrespective of
length of service, or after completing 35 years in appellee’s
employ, irrespective of age.  But as
pointed out by appellee, the plan does not fix any
definite period of employment.  It is
nothing more than a schedule of rates which serves as a basis in com­puting the
amount an employee would receive upon
his retirement, depending on his length of
service, age, salary and other conditions, at the time of his
separation.

Section 1 of Republic Act
No. 1052, as amended by Republic Act No. 1787, governs this case.  It provides:

“Section 1.  In cases of employment, without a definite
period, in a commercial, industrial or agricultural establishment or
enterprise, the employer or the employee may terminate at any time the
employment with just cause; or without just cause in the case of the employee
by serving written notice on the employer at least one month in advance, or in
the case of an employer, by serving such notice to the employee at least one
month in advance or one-half month for every year of service of the employee,
whichever is longer x x x x“

“x
x x x
x“

“The
employee, upon whom no such notice was served in case of termination of employment without just cause shall be entitled to compensation from
the date of termination of his employment in an amount equivalent to his salaries or wages corresponding
to the required period of notice.”

Interpreting the
foregoing provision, this Court said in Ricardo Gutierrez vs. Bachrach Motor Co., Inc., G. R. No. L-11298, 11586 and
11603, January 19, 1959:

“x x x x x was the company justified in
dismissing him without cause?  For the
reason that the contract of em­ployment of plaintiff was not for any period or
term, the answer must have to be in affirmative x x x“

“x x x x

“Whatever the courts, including this Tribunal may in the past
have said about the validity or impro­priety of dismissals of employees by
their employers, the law or rule is and
has always been that in the absence of a contract of employment for a specific
period, just as an employee in a commercial or industrial establishment may quit at any time singly or
collectively, with or without cause, so the employer can dismiss any employee
at any time with or without cause.  This right of the employer is commonly referred to as his right to hire and
fire his employee in the same way that the employee can stop working by himself
or go on strike with his fellow employees.”

Appellant calls attention
to his amended complaint, filed after the order of dismissal was issued by the trial
court, and denied admission
subsequently.  The amendment consists in
the allegation that appellant “was hired by defendant according
to the prevailing customs existing in the locality and the general business
policy of the latter, for a
definite period of thirty-five
(35) years or until the herein plaintiff reaches the age of sixty-five (65)
years in accordance with the existing voluntary non-contributory gratuity and
retirement plan being enforced by the herein defendant.” Obviously this
amendment was nothing new, and had already been passed upon by the trial court
in its order of dismissal, when it ruled that the retirement plan did not
establish any definite term of employment within the meaning of Republic Act
No. 1052, as amended.

In his brief on appeal appellant makes reference to his right to
receive separation pay if his dismissal was without cause, and consequently he
should be given an op­portunity to prove the factual basis of that right.  The point appears to us well-taken.  Although it is true that neither the original
complaint nor the amended complaint contains a prayer for separation pay –
presumably for the reason that appellant’s cause of action was for reinstatement,
back salaries and damages – it is also true that in the third affirmative
defense in the answer, which was submitted to the trial court for preliminary
hearing, appellee avers that even if appellant’s
separation was with­out just cause his only claim would be for separation
pay.  The right to separation pay is
inherent in this defense put up by defendant, and results automatically from
the resolution of the trial court upholding the same.  Plain­tiff should therefore be given an
opportunity to prove the amount to which he is entitled.  The matter is within the jurisdiction of the
trial court and not of the Regional Office of the Department of Labor (Stoll et
al., vs. Mardo et al., G. R. No. L-17241, June
29, 1962 and cases cited.)

WHEREFORE, the order of dismissal is set aside and the
case is remanded for trial and judgment with respect to the issue of whether
the separation of plaintiff-appellant was with or without cause, and in the latter case, with respect to
the amount of separation pay due to him. 
No pronouncement as to costs.

Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Bengzon, J.P., Zaldivar, Sanchez,
and Castro, JJ.,
concur.