G.R. No. 172342 6 of 11 http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/172342.htm as severance pay. Notably, the Labor Arbiter was unable to specify any law to support his [18] award of longevity pay. He anchored the award on his finding that respondents allegations were more credible because his seven-year employment at MMG had sufficiently oriented him on the benefits given to workers. To the NLRC, respondent is entitled to service award or longevity pay under Article 87 and that longevity pay is different from severance pay. The Court of Appeals agreed. Considering that Article 87 expressly grants a service award, why is it correct to agree with respondent that service award is the same as longevity pay, and wrong to agree with petitioner that service award is the same as severance pay? And why would it be correct to say that service award is severance pay, and wrong to call service award as longevity pay? We found the answer in the pleadings and evidence presented. Respondents position paper mentioned how his long service award or longevity pay is computed: half-months pay per year of service and one-months pay per year after five years of service. Article 87 has the same formula to compute the service award. The payroll submitted by petitioner showed that respondent received severance pay of SR2,786 for his sixth employment contract covering the period April 21, 1998 to April 29, [19] 1999. The computation below shows that respondents severance pay of SR2,786 was his service award under Article 87. Service Award = (SR5,438) Service Award = SR2,786.04 [20] + (9 days/365 days) [21] x (SR5,438) Respondents service award for the sixth contract is equivalent only to half-months pay plus the proportionate amount for the additional nine days of service he rendered after one year. Respondents employment contracts expressly stated that his employment ended upon his departure from work. Each year he departed from work and successively new contracts were executed before he reported for work anew. His service was not cumulative. [22] Pertinently, in Brent School, Inc. v. Zamora, we said that a fixed term is an essential [23] and natural appurtenance of overseas employment contracts, as in this case. We also said in that case that under American law, [w]here a contract specifies the period of its duration, it terminates on the expiration of such period. A contract of employment for a 1/28/2016 11:55 AM