MARCOPPER MINING CORPORATION V NLRC

G.R. No. 83207

5 August 1991.

Cruz, J.:

FACTS:

Calixto Gamboa, Petronio Robles and Alfredo Rances, employees of

petitioner Marcopper Mining Corp. died. Pursuant to the collecting bargaining
agreement, petitioner paid the heirs of the deceased employees cash value of the
life insurance plan and the unused vacation and sick leave. Then, the heirs
executed quitclaims in favor of petitioner and the National Mines and Allied
Workers Union (NAMAWU) filed a case before the labor arbiter demanding
petitioner the payment of severance pay as provided under the CBA. Labor arbiter
Cornelio Linsangan ruled against the Marcopper holding that Art. 4 of the Labor
Code provides that in case of doubt regarding labor provisions, the same should be
interpreted in favor of labor. The petitioner appealed and filed motion for
reconsideration before the NLRC but were both futile. Hence this petition before
the Court.

ISSUE:

Whether or not the heirs of the deceased employees are entitled to severance
pay.

HELD:

Yes. The heirs of the decease employees are entitled to severance pay. The
Supreme Court held that severance is the termination of employment and
severance pay is the allowance usually based on length of service that is payable to
an employee on severance.
The contention of the petitioner would have been correct were it not for the
exception expressly stated in their collective bargaining agreement which provides
that “except that where an employee who has rendered 10 or more years of service
to the company shall be entitled to the above benefit in lieu of what is provided for
under the Labor Code.” Such exception is intended to provide some measure of
relief to the dismissed employee, on the justification that it is not his fault that he is
ill and he needs some financial assistance for his cure and treatment. The Court
will concede that without this exception, the general rule preceding it would have
defeated the private respondents’ claim for severance pay. As the petitioner itself
correctly contends, the section must be read in its entirety and in relation to the rest
of the CBA.
Hence, severance pay will be given.