SAN MIGUEL JEEPNEY SERVICE V. NLRC (LABOR)

FACTS: San Miguel had a contract with the US Naval Base in Zambales to provide transportation services to personnel and dependents inside the base facility. When said contract expired, San Miguel opted not to renew the existing contract nor bid on the new contract due to financial difficulties, it having suffered a net loss the previous year. As a consequence, the services of the complainants were terminated.

HELD: Apparently, San Miguel did not renew its contract because of sliding incomes and not because of serious business losses, thus, it cannot justify the non-payment of separation pay.

As San Miguel admitted, what they suffered were sliding incomes in other words, decreasing revenues. What the law speaks of is serious business losses or financial reverses. Clearly, sliding incomes are not necessarily losses, much less serious business losses within the meaning of the law.