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EMER MILAN v. NLRC

FACTS:

The petitioners in this case are former employees of Solid Mills, Inc. (Solid Mills) who filed complaints before the Labor Arbiter for the payment of their separation pay, 13th month pay, and accrued vacation and sick leaves. As part of their employment, they were allowed to occupy SMI Village, a property owned by Solid Mills, under the condition that they would vacate the premises whenever the company deems fit.

In September 2003, the employees were informed that Solid Mills would cease its operations due to serious business losses. A memorandum of agreement was entered into between Solid Mills and NAFLU, recognizing the closure and providing for the grant of separation pay and other benefits to the employees.

Before their benefits could be released, the employees were required to sign a memorandum of agreement with release and quitclaim, agreeing to vacate SMI Village and demolish the houses they had constructed inside. The employees refused to sign and demanded payment of their benefits and separation pay. They filed complaints before the Labor Arbiter for non-payment of their benefits.

The Labor Arbiter ruled in favor of the employees, stating that Solid Mills illegally withheld their benefits and separation pay because there was no condition in the memorandum of agreement that they must vacate the property before receiving their benefits. The possession of the property was not an accountability subject to clearance procedures and was not related to their employer-employee relationship.

Solid Mills appealed the decision to the NLRC, which affirmed the Labor Arbiter's decision with modifications. The NLRC held the claims for separation pay, 13th month pay, and accrued leaves in abeyance until the employees turned over the properties they occupied at Solid Mills.

The complainants filed a petition for certiorari before the CA, but the CA dismissed their petition. The CA ruled that Solid Mills' act of allowing its employees to occupy its property was a liberality, which it could revoke at any time. It also found that the employees' failure to vacate the property justified Solid Mills in withholding their benefits.

The complainants filed a motion for reconsideration, but it was denied by the CA.

The petitioners argued that the memorandum of agreement between Solid Mills and NAFLU, which did not state that benefits would be paid only upon the return of possession of Solid Mills' property, should not be interpreted to include such possession. They further argued that the fact that the majority of NAFLU's members were not occupants of Solid Mills' property is evidence that possession of the property was not a requirement.

ISSUES:

  1. Whether or not the Court of Appeals erred in ruling that the payment of the monetary claims of petitioners should be held in abeyance pending compliance of their accountabilities to respondent Solid Mills by returning the subject lots they occupy.

  2. Whether or not the Court of Appeals erred in upholding the deletion of 12% interest per annum imposed by the Labor Arbiter on the amount due from the date of filing until actual payment.

  3. Whether or not the Court of Appeals erred in denying the claim of Teodora Mahilom for retirement benefits despite the alleged lack of evidence that she received the same.

  4. Whether or not petitioner Carlito Damian is entitled to his monetary benefits from respondent Solid Mills despite claims that he already received his separation benefits.

RULING:

  1. No, the Court of Appeals did not err. The payment of monetary claims can be held pending compliance with the return of the employer's property. The term "accountabilities" included the return of the property provided to the employees by the employer.

  2. No, the Court of Appeals did not err in upholding the deletion of 12% interest per annum. Since the withholding of petitioners' benefits was justified due to their failure to vacate Solid Mills' property, interest on the withheld amounts was not warranted.

  3. No, the Court of Appeals did not err. There was sufficient finding that Teodora Mahilom had already retired and received her retirement benefits long before Solid Mills' closure.

  4. No, petitioner Carlito Damian is not entitled to additional monetary benefits as he had already received his separation pay and benefits.

PRINCIPLES:

  • Labor Relations Jurisdiction: Labor Arbiters and the National Labor Relations Commission (NLRC) can preliminarily determine issues related to checks on employee's accountabilities connected to their employment.

  • Employer's Right to Withhold Wages and Benefits: Employers can withhold separation benefits and final pay until properties and accountabilities are returned.

  • Clearance Procedures: Employers have the right to require clearance procedures to ensure the return of their properties.

  • Definition of "Accountabilities": Debts or obligations arising from the employer-employee relationship may include any property or liabilities tied to the employee's tenure, which must be settled before the release of final benefits.

  • Interest on Unpaid Benefits: No interest is due on benefits that were properly withheld due to an employee’s failure to return employer’s property.

  • Finding of Facts: Findings of fact by the NLRC, when affirmed by the Court of Appeals, are binding upon the Supreme Court unless shown to be erroneous.