The National Labor Relations Commission dismissed a complaint filed by three retrenched employees of the Film Academy of the Philippines alleging illegal dismissal and underpayment of their separation pay.
NLRC labor arbiter Pablo C. Espiritu, Jr. ruled that the retrenchment or dismissal of the complainants cannot be reviewed nor validated by the Arbitration Branch of the Commission for want of jurisdiction.
In the six-page decision of September 27, 2007, Arbiter Espiritu pointed out that the Film Academy is a government entity or agency attached to the Office of the President and not a corporation created by the Corporation Code nor a government-owned corporation. Thus, the NLRC took judicial cognizance of the fact that FAP is a government entity beyond the scope of the Labor Code as amended.
The complainants included Lea Maria Bernardez, Marcelo Vivero Jr. and Rolando Calanog, former bookkeeper, driver and liaison officer of the academy. They were three of a total of six employees who were terminated on December 30, 2006 and were paid separation pay of a half month salary for every year of service plus an earned 13th month pay.
The Academy reasoned out that the retrenchment was due to serious business and financial reverses brought about by the decrease of its budget allocation by the national and local governments.
The complainants questioned the legality of their retrenchment and claimed underpayment of separation pay and their unused vacation leave credits before the NLRC on March 16, 2007.
Complainants claimed that the retrenchment was illegal and had no legal basis and the Academy must, therefore, pay back wages, separation pay in lieu of reinstatement by paying the balance of fifty percent of their monthly salary corresponding to the number of years in the service plus unpaid unused vacation leave credits, moral and exemplary damages, the decision stressed.
The Academy claimed that the complainant were not illegally dismissed but were validly retrenched in accordance with law on account of the drastic reduction of its share from the Metro Manila Film Festival amusement taxes, saying that this reduced the Academy’s budget from P7.5 million to P1.35 million annually.
The decision further stated: “Before ruling on the issues in this case, it is imperative that the issue of jurisdiction of this Labor Court should be addressed, given the admissions by both litigants that the Film Academy of the Philippines was created under Executive Order No. 640-A by the then President Ferdinand E. Marcos on January 5, 1981 and was given an appropriation from the General Fund.
“Since the funds and/or appropriation of the Film Academy of the Philippines comes from the Office of the President (President’s Social Fund) and a percentage share in the revenue (amusement Tax) of the Metro Manila Film Festival, this Arbitration Court has no jurisdiction to rule on the validity or propriety of the retrenchment since the Film Academy of the Philippines was created under an Executive fiat by the President of the Republic of the Philippines.
“An executive order, unless repealed, forms part of the law of the land,” the decision concluded.
The notice of judgment/decision was issued on October 11, 2007 and was forwarded to the Academy, specifically Director General Leo G. Martinez and the counsel for the respondents, Atty. Geronimo R. L. Recinto of the Baizas Magsino Recinto Law Offices.