Manuel Sosito vs. Aguinaldo Development CorporationG.R. No. L-48926, December 14, 1987

FACTS: Petitioner Manuel Sosito was employed in 1964 by private respondent, being in charge of logging importation. On Jan. 16, 1976, petitioner went on indefinite leave with consent of the employer. On July 20, 1976, private respondent through its president announced a retrenchment program and offered separation pay to employees in the active service as of June 30, 1976 who would tender their resignations not later than July 31, 1976 due to financial losses suffered by the company in the past two years. Petitioner decided to accept this offer and filed a resignation letter on July 29, 1976 but the same was not acted upon and he did not receive the separation pay.

Petitioner complained to the Department of Labor who ordered the company to pay petitioner his salary for 6 and a half months. On appeal with the NLRC, decision was reversed and held petitioner was not covered by the retrenchment program.

ISSUE: Is petitioner covered by the retrenchment program?

RULING: No, it is clear from the Memorandum private respondent released on July 20, 1976 that only those who are in active service as of June 30, 1976 are eligible for the retrenchment program, and petitioner, being on indefinite leave since Jan. 16, 1976, is thereby not qualified to avail of the same.

It is noteworthy that although Art. 272 (a) of the Labor Code, then in force, did not grant separation pay if a company reduces its labor force due to financial reverses, herein respondent did in fact offer a separation pay. However, being that petitioner was on indefinite leave, and could therefore choose to come back or not, at his discretion, is lopsided in favor of petitioner in that he could choose the best of both worlds, seek another employment and yet avail of the benefits given by herein respondent. To grant petitioner’s request would not be in the interest of fair play and would in fact violate the rights of the employer.