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CD2 - Lao Sok vs. Sabaysabay G.R. 61898 Aug. 9, 1985

In the case of Lao Sok vs Sabaysabay, Lao Sok failed to fulfill his promise to pay separation pay and benefits to six salesladies after their jobs were lost due to the fire that destroyed his store. The court ruled that Lao Sok is obligated to pay the salesladies their separation pay based on a valid contract formed by his promise, as well as Article 284 of the Labor Code. The decision of the National Labor Relations Commission to uphold the Labor Arbiter's ruling for payment was affirmed.

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Christy Canete
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14 views1 page

CD2 - Lao Sok vs. Sabaysabay G.R. 61898 Aug. 9, 1985

In the case of Lao Sok vs Sabaysabay, Lao Sok failed to fulfill his promise to pay separation pay and benefits to six salesladies after their jobs were lost due to the fire that destroyed his store. The court ruled that Lao Sok is obligated to pay the salesladies their separation pay based on a valid contract formed by his promise, as well as Article 284 of the Labor Code. The decision of the National Labor Relations Commission to uphold the Labor Arbiter's ruling for payment was affirmed.

Uploaded by

Christy Canete
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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CAÑETE, Christy Mae, B.

/ Obligations and Contracts April 26, 2023

Lao Sok vs Sabaysabay


(G.R. No. L-61898 August 9, 1985)

Facts:

Lao Sok owned and operated the Shelton Department Store in Manila. The store was
destroyed by fire on October 12, 1980, resulting in the loss of jobs of six salesladies
who worked at the store. Although he did not report the loss of jobs to the Ministry of
Labor, Lao Sok promised to transfer the salesladies to his other department stores
and to pay them their separation pay and other benefits as soon as he collected the
insurance proceeds arising from the fire. The salesladies accepted his offer, but Lao
Sok failed to fulfill his promise despite collecting the insurance proceeds. The
salesladies filed a complaint with the Ministry of Labor and Employment for illegal
dismissal and non-payment of their separation pay, allowance, and incentive leave
pay.

Issue:

Whether or not petitioner Lao Sok is obligated to pay the private respondents'
separation pay and other benefits.

Ruling:

Yes. Lao Sok's obligation to pay severance compensation is not based on his failure
to report or ask for prior clearance, but on Article 284 of the Labor Code which provides
for separation pay whenever there is a reduction of personnel caused by the closure
of an establishment which is not intended to circumvent the provisions of the law. Lao
Sok promised to give his employees their separation pay, as soon as he received the
insurance proceeds for his burned building, and this promise was not rebutted. The
agreement between Lao Sok and the salesladies was a valid contract, as all the
essential requisites of a valid contract were present, namely: consent was freely given
by the parties, there was a subject matter, which is the payment of the separation pay
of the salesladies, and a cause, which is the loss of job of the salesladies. Lao Sok
made an offer which was duly accepted by the salesladies, and there was a meeting
of the minds between the two parties. The requirement of writing for the offer made by
Lao Sok is only for convenience and not enforceability. Lao Sok voluntarily agreed to
compensate the salesladies for the loss of their jobs, and the validity of that agreement
must be sustained. Therefore, the National Labor Relations Commission's decision
affirming the Labor Arbiter's ruling that Lao Sok should pay the salesladies their
separation pay is upheld.

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