FACTS: Petitioner, a Filipino citizen, was a Singapore Airlines pilot, hired by the latter as an expatriate pilot with a fixed term contract through its Manila Area Manager. Due to a recession that hit the airline industry, Singapore Airlines retrenched several pilots, including petitioner, giving him three months salary in lieu of notice. The plaintiff, needing more time to relocate his family, asked for three months notice. He was given two months notice and one month’s salary. He then filed an illegal dismissal complaint against the airline.
ISSUES:
1. Can an employee with a fixed period of employment be retrenched?
2. Can retrenchment be valid if the employer merely fails to realize the expected profits, even if it is not suffering actual losses?
HELD:
1. Yes.The petitioner’s employment contract allowed for pre-termination of employment. Since he agreed to the employment terms and conditions of Singapore Airlines, he was bound by such a clause.
2. No. There must be actual losses (expenses are greater that income on the balance sheet). However, in this case, Singapore Airlines proved that it suffered actual losses.
Hence, the petitioner’s termination was for an authorized cause.
ISSUES:
1. Can an employee with a fixed period of employment be retrenched?
2. Can retrenchment be valid if the employer merely fails to realize the expected profits, even if it is not suffering actual losses?
HELD:
1. Yes.The petitioner’s employment contract allowed for pre-termination of employment. Since he agreed to the employment terms and conditions of Singapore Airlines, he was bound by such a clause.
2. No. There must be actual losses (expenses are greater that income on the balance sheet). However, in this case, Singapore Airlines proved that it suffered actual losses.
Hence, the petitioner’s termination was for an authorized cause.
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