Philippine Tobacco Flue-Curing & Redrying Corporation v. NLRC

Summary

This landmark labor law case involved Philippine Tobacco's closure of its Balintawak plant and transfer to Ilocos Sur, affecting two groups of seasonal workers. The Lubat group was not rehired for the 1994 season, while the Luris group worked that season but was terminated upon plant closure. The Supreme Court established important precedents: (1) Article 283 of the Labor Code applies to partial business closures; (2) employers must prove serious business losses with credible financial evidence, not misleading recasted statements; (3) seasonal workers maintain employment relationships during off-seasons and cannot be arbitrarily refused rehiring; (4) separation pay for seasonal workers should be computed as one month or one-half month pay per year of service, whichever is higher, provided they worked at least six months in a given year. The decision strengthened protection for seasonal workers and clarified computation standards for separation pay, affirming the lower tribunals' awards totaling over P3 million with modifications to the computation formula.