Jaka Food Processing vs. Pacot, March 28, 2005

Facts:
Since the petitioners, JAKA Foods Processing Corporation, was in dire financial straits, the corporation decided to terminate the employment of Pacot, et al. However, JAKA did not comply with the requirement of issuing a written notice at least one month before the termination of the employees. With this, Pacot, at al., filed a complaint for illegal dismissal, underpayment of wages, nonpayment of SIL and 13th month pay against JAKA and its HRD Manager.

Issue:
Whether or not full backwages and separation pay be awarded to respondents when employers effected termination without complying with the twin notice rule.

​Held:
On another breath, a dismissal for an authorized cause under Article 283 does not necessarily imply delinquency or culpability on the part of the employee.  Instead, the dismissal process is initiated by the employer’s exercise of his management prerogative, i.e. when the employer opts to install labor saving devices, when he decides to cease business operations or when, as in this case, he undertakes to implement a retrenchment program.
 
The clear-cut distinction between a dismissal for just cause under Article 282 and a dismissal for authorized cause under Article 283 is further reinforced by the fact that in the first, payment of separation pay, as a rule, is not required, while in the second, the law requires payment of separation pay.