CEBU STEVEDORING vs.

REGIONAL DIRECTOR
Cebu Stevedoring Co., Inc. vs. The Honorable Regional Director/Minister of Labor Arsenio Gelig and Maria Luz Quijano

December 8, 1988
Regalado, J.
FACTS

Arsenio Gelig and Maria Luz Quijano were former employees of the Cebu Customs Arrastre Service (CCAS).
May 2, 1977 Pursuant to Customs Administrative Order No. 21-77 of Acting Commissioner of Customs and Acting
Secretary of Finance, the CCAS was abolished for the reason that the objectives for which it was created had already been
attained. As a consequence, all the employees of CCAS, including Gelig and Quijano, were given their termination and/or
separation pay by the Bureau of Customs, Cebu City, computed up to April 30, 1977.
May 3, 1977 all the employees of CCAS, including Gelig and Quijano, were absorbed by Cebu Stevedoring Co., Inc.
(CSCI), with the same positions that they held in CCAS.
October 17, 1977 Gelig and Quijano were dismissed by CSCI without prior clearance, allegedly for redundancy.
Gelig and Quijano filed a complaint for reinstatement with backwages.
Regional Office of Ministry of Labor:
Gelig and Quijano were employed by CCAS and their functions were carried over when they were absorbed by CSCI. There
was no need to employ them as probationary because they were already well-trained in their functions. A probationary
period of employment means that an employee is hired for training for a certain period in order to determine whether they
qualify for the position or not. Here, Gelig and Quijano cannot be considered probationary.
Minister of Labor affirmed. CSCI elevated the case to the Office of the President which, through Presidential Executive
Assistant Jacobo Clave, issued a resolution dismissing the appeal as there was no law expressly recognizing the parties
right to appeal to the Office of the Pres and there was no exceptionally meritorious cause for the exercise of the
constitutional power of review of the President/Prime Minister.
CSCIs position:
1. Upon abolition of CCAS, all its employees were given separation pay. Thus, when the employees were absorbed by
CSCI when it took over the arrastre operations, they were all employed as casuals.
2. As casuals, Gelig and Quijano can be terminated within the 6-month period without need of clearance from
Ministry of Labor and neither is the employer obligated to pay them termination pay. Gelig and Quijano were
terminated on October 18, 1977 or within 5 months from employment.
3. The positions occupied by Gelig and Quijano with CCAS were identical with the positions already filled up and
with the same functions being discharged in the main office of CSCI. Thus, they may be terminated for
redundancy and financial losses incurred by CSCI justify the retrenchment of employees.
ISSUE: Whether the termination of Gelig and Quijano (and 52 others) was valid (NO)
REASONING
Gelig and Quijano could not be considered probationary employees because they were already well-trained in their
respective functions. Gelig had been a clerk for CCAS for more than 10 years, while Quijano had slightly less than 10 years
of service.
Findings of quasi-judicial agencies (pertaining to Ministry of Labor here) which have acquired expertise because their
jurisdiction is confined to specific matters are generally accorded not only respect but, at times, even finality where such
findings are supported by substantial evidence.
It is true that Article 283 of the Labor Code provides that an employer may also terminate the employment of any
employee due to the installation of labor-serving devices, redundancy, retrenchment to prevent losses or the closing or
cessation of operation of the establishment or undertaking.
BUT:
1.

Records failed to establish that the positions occupied by Gelig and Quijano with CCAS are identical with those
presently existing in CSCIs office.
2. CSCI kept them in its employ for almost 6 months without raising issue of redundancy.

3. CSCIs submission that it is suffering financial losses is untenable since it absorbed and employed for almost 6
months, without any intimation of supposed financial distress, the majority of the former employees of CCAS. It
never advised Gelig and Quijano of a company retrenchment program. The first time this supposed program was
mentioned was when CSCI was trying to justify the dismissal of Gelig and Quijano before the labor arbiter.
The constitutional duty of the State to protect the right of laborers to security of tenure demands than an employer may be
permitted to terminate the services of an employee only under conditions allowed by and with due process of law.
DISPOSITIVE
Termination of Gelig and Quijano was unjust and illegal. CSCI is ordered to reinstate Gelig and Quijano to their fromer
positions at the time of dismissal, or if such reinstatement is not possible, to substantially equivalent positions, without
loss of seniority rights and other privileges appertaining thereto and to pay them 3 years backwards, from Octber 18, 1977
without qualification or deduction. If reinstatement is not possible due to supervenience of events which prevent the same,
CSCI is ordered to pay them, more as a vindication of a right and less as indemnification of a loss, separation pay
equivalent to 1 months salary based on their monthly salaries as of October 17, 1977.