Emco Plywood Corp v. Abelgas : 148532 : April 14, 2004 : J. Panganiban :
First Division : Decision
[G.R. NO. 148532 : April
EMCO PLYWOOD CORPORATION and JIMMY LIM,
ABELGAS, ARTURO ABELLANA, FLORENCIO ABEQUIBEL,
FELIZARDO AGUELO,NECERATO ALCALA, PEDRO ALIVIO JR.,
ABELARDO AMANTE, NELSON ANGAC, ALEJO ANTOLIJAO, JOHN ALEX ARABEJO, REYNALDO ARBOLONIO, RODRIGO ARSILUM, RONALDO
BABAYLAN, LEOPOLDO BAGA, AGRIPINO BARON, FELIPE BAHIAN, JOEL BADILLA, NARCISO
BANTILLAN, FELIPE BANDIBAS,ERNESTO BEDRA, ROGELIO BONGATO, ADOLFO
BUCAL, DOMINADOR BUSTILLO, PLUTARCO CABREROS, FELIPE CAMBARIHAN, PABLO CASANIA,
PERFECTO CASTANES, FERDINAND CASTILLO, ISIDRO CERRO, MARCEDINO CELOCIA,
LEODEGARIO CLARO, ALFREDO CLAVANO, EDILBRETO CUABO, EDILBERTO CURILAN, ANGELA DATIG, EDDIE DE LA CRUZ,DOMINO DELA
CRUZ, SEGUNDO DELIGERO, RAYMUNDO DESAMPARADO, GAUDISIO DEVEYRA, HENRY ENERIO,
ANTONIO ENCISO, ANSELMO FELIAS JR.,
GANZAN, ALLANHONCULADA, BIENVENIDO IBALANG, FREDERICK JANOPOL, SAMUEL
JUMAMOY, ISABELO LOREN, PROCORIO LOLOR,
RESTITUTO LOMOCSO, PEDRO LOZADA, PEDRO LOZAGA, PASTOR MAGARO, ALLAN MANAGA,
SIMPLICIO MANDAS, SATURNINOMANISAN, DIOSDADO MATA, EMMANUEL MATUTOD, MAXIMO MEDALLE, MARCELINO
MINOZA, NORBERTO MORDEN, ARNOLD MORDEN, WILLIAM MORADA, RAYMUNDO MORAGAS,
RODRIGO MOSQUIDA, BENITO NEMENO JR.,
RICO OGCANG, EMELIANO ONDAP, FRANCISCO PANDAWATAN, ALFREDO PAIGAN, VENANCIO PAJO, ELY
QUINONES, ALEJANDRO QUIPET, BENIGNO REPOLIDO, PABLO SUMIDO, JOSE
SUMALINOG, SAMUEL TABLA, OSCAR TABANAO,
MARIOTELIN, MANOLITO TIMTIM, FELIX TINDUGAN, DANILO VELUESTO, ALEJANDRO
VILVESTRE, TEOFILO ZAPANTA, RODULFO ALCALA,
PERCY ALIPIN, ANGELO AMADA, PAQUITO ANCAJAS,EDGARD ARBISO, PERFECTO
ARABACA, JUDITH BALMORIA, JOHANNES BONGATO, NARCISO BULLECER JR.,
BURDEOS, WENCESLAO BUSA, RODRIGO CABAL, DONALD CADILINA, JOSE CAINGHOG, RODOLFO
CATUBIG, GADIOSO CASTRODES, VIRGINIA CERRO, FORTUNATO CELETONA, JUAN CELLO,
MARCIANO CORTEZ, ROLANDO CUMBA, ALMAR DAPAR, MARISA DELA CRUZ, SIMEON DELIGERO, DIOSDADODOMINISE,
FLORENTINO DUNCANO, CLAUDIO DUMO, MARIDEL EFREN, ROMUALDO ESTRETO, JAIME
FLORES, ESMERALDO GALOPE, PROCESSOHERNANDO,
ALFREDO JAVIER, CRISPINO JUGARAP, DANIEL LABRICA, ERNESTO LABADAN, AURELIO
LINOGAO, BENALDO LOPEZ, AMADOR LUMONGSOD, FRESCO LUNOY, FLORENCIO MAGLASANG,
EUTIQUEO MAJAIT, ALBINO MANLA, FELIPE MANTILLA, CASIANO MELICOR, ANECITA
MENDOZA, NEMERIANO NACA, ZACARIAS NALAM, SIXTO NAPAL JR.,
GODOFREDO OLAIZ, VIRGILIA OSORIO, ELEUTRIO PAGADOR, ARDEN PASILANG, DIONESIO
PASILANG, ADELAIDO PAQUIPOT, FERNANDO PATINDOL, VIRGILIO PENDICA, FRANKLIN
PILOTON, GIL PILOTON, CHARLITA PLAZA, EUFRACIA PLAZA, TORIBEO PUSA, FRANCISCO
RAMIRA, BELEN ROJAS, ALFONSO SABANDAL,
CARMEN SABELLANO,ROGELIO SIMPRON, CENIA SUMILE, ESPEREDION TABIQUE, ARECIO TAGHOY, SILVANA TAPALES,
JEMCIE TIMTIM, ELENO TORILLO, THOMAS TERRECAMPO,
FE VALENZUELA, FLORENCIO ABEQUIBEL, EFRENLUMINARIO, JULITO ONDAP, Respondents.
D E C I S I O N
Not every loss incurred or expected to be incurred by employers
can justify retrenchment.
They must prove, among others, that the
losses are substantial and that the retrenchment is reasonably necessary to
avert those losses.
Before us is a Petition for Review1 under Rule 45 of the Rules of Court, challenging the December
21, 2000Decision2 and the June 20, 2001Resolution3 of the Court of Appeals4 (CA) in CA-GR SP No. 51967.
assailed Decision disposed as follows:chanroblesvirtua1awlibrary
WHEREFORE, the petition
for certiorari is
GRANTEDand the challenged Orders of the National Labor Relations
Commission are hereby declared NULLand VOID.
Considering that, as borne out of the records, EMCOs attempted
retrenchment of the [respondents] was legally ineffective, EMCO is ordered to REINSTATE[respondents] with full backwages, inclusive of allowances and
other benefits or their monetary equivalent, computed from the time their
compensation was withheld from them up to
the time of their actual reinstatement.
Where reinstatement is no longer possible because the position they had
previously filled are no longer in existence, EMCO shall pay backwages, inclusive of allowances and
other benefits, computed from the time their employment was terminated up to the time the decision herein becomes
final, and, in lieuof
reinstatement, separation payequivalent to one-months pay for every year of service including the putative
period for which backwages are payable.
In all these cases, the payments received by [respondents] and for which
they executed quitclaims shall be deducted from the backwages and separation
pay due to them.
Costs against the
The assailed Resolution denied petitioners Motion for Partial
The factual antecedents of the case are summarized by the CA as
Respondents], the retrenched employees of [petitioner] seek the
review and reversal of the resolutions of the National Labor Relations Commission (NLRC), dated February
11, 1997and March 25, 1997,
The first resolution dismissed [respondents] appeal for lack of
merit and affirmed the decision of the Labor Arbiter, dated July 24, 1996,
which, in turn, dismissed [respondents] complaint against EMCO and the
latters general manager, [petitioner] Jimmy
N. Lim (Lim),
for illegal dismissal, damages and attorneys fees.
The second resolution assailed by the
[respondents] consists of the NLRCs denial of their motion for reconsideration
of the earlier mentioned February 11,
EMCO is a domestic corporation engaged in the business of wood
processing, operating through its sawmill and plymill sections where
[respondents] used to be assigned as regular workers.
On January 20, 1993and of March 2, 1993, EMCO,
represented by Lim, informed the Department
of Labor and Employment (DOLE) of its intention to retrench some of its
The intended retrenchment was
grounded on purported financial difficulties occasioned by alleged lack of raw materials, frequent machinery
breakdown, low market demand and expiration of permit to operate its sawmill
A memorandum was
thereafter issued by EMCO, addressed to all its foremen, section heads,
supervisors and department heads, with the following instructions:chanroblesvirtua1awlibrary
1) Retrench some
of your workers based on the following guidelines:
a) Old Age (58 years and above except
positions that are really skilled);
b) Performance (Attitude, Attendance,
Quality/ Quantity of Work[)];chanroblesvirtuallawlibrary
2) Schedule the
unspent VL/SL of your men without
necessary replacements. x x x
Per EMCOs notice to the DOLE, one hundred four (104) workers were
proposed for inclusion in its retrenchment program. As it turned out, though, EMCO terminated two hundred fifty (250)
Among them were herein
Respondents] received their separation pay in the amount of four
thousand eight hundred fifteen pesos (
P4,815. 00) each.
Deductions were, nevertheless, made by EMCO
purportedly for the attorneys fees payable to [respondents] lawyer, for the
latters effort in purportedly renegotiating, sometime in 1993, the three peso
( P3. 00) increase in the wages of [respondents], as now contained in the
Collective Bargaining Agreement.
Upon receipt of their separation pay, [respondents] were made to
sign quitclaims, which read:chanroblesvirtua1awlibrary
TO WHOM IT MAY CONCERN:chanroblesvirtua1awlibrary
I, ___________ of legal age and a resident of _______________, for
and in consideration of the amount of (
the receipt of which, in
full, is hereby acknowledged, forever discharge and release x x x EMCO PLYWOOD
CORPORATION and all its officers men agents and corporate assigns from any and
all forms of actions/suits, debts, sums of money, unpaid wages, overtime pay
allowances, overtime pay or an other liability of any nature by reason of my
employment which has ceased by this date.
Done this ______________, at Magallanes, Agusan del Norte.
About two (2) years later, [respondents], through their labor
union, lodged a compliant against EMCO for illegal dismissal, damages and
In the main, [respondents] questioned the validity of their
retrenchment and the sufficiency of the separation pay received by them.
EMCO countered by interposing the defense of lack of cause of
action, contending that [respondents], by signing the quitclaims in favor of
EMCO, had, in fact, waived whatever claims they may have against the latter.
Finding for EMCO, the Labor Arbiter dismissed [respondents]
Respondents] subsequent appeal to the NLRC was dismissed for
lack of merit and the decision of the Labor Arbiter was affirmed.
Notably, the NLRC glossed over the issue of
whether [respondents] were validly retrenched, and anchored its dismissal of
the appeal on the effect of [respondents] waivers or quitclaims, to quote:chanroblesvirtua1awlibrary
The pivotal issue brought to fore is whether or not the
quitclaims/waivers executed by [respondents] are valid and binding.
The other issues raised by [respondents] are
either related to mere technicality, or are merely ancillary or dependent on
the main issue.
x x x
There is no doubt that the [respondents] voluntarily executed
their quitclaims/waivers as manifested by the fact that they did not promptly
question their validity within a reasonable time. It took them two (2) years to challenge and dispute the validity
of the waivers by claiming belatedly that they were either forced or misled
into signing the same.
case was instituted by [respondents] to unduly exact more payment of separation
benefits from [petitioner] at the expense of fairness and justice.
In passing, the NLRC likewise affirmed EMCOs deductions of
attorneys fees from the separation pay received by the [respondents].
A motion for reconsideration of the afore-quoted resolution was
filed by [respondents] on March 10, 1997, but was denied by the NLRC,
purportedly, for lack of merit and for having been filed out of time.6 (Citations omitted) chanroblesvirtuallawlibrary
Ruling of the Court of Appeals
The CA held that the evidence was insufficient to justify a
ruling in favor of EMCO, which had not complied with the one-month prior notice
requirement under the Labor Code.
appellate court added that the corporation had not served on the employees the
required notice of termination.
opined that the Memorandum, having merely provided the guidelines on the
conduct of the intended lay-off, did not constitute such notice.
Furthermore, the Memorandum was not
addressed to the workers, but to the foremen, the department supervisors and
the section heads.
Moreover, there was
no proper notice to DOLE.
corporation terminated the services of 250 employees but included only 104 of
them in the list it filed with DOLE.
EMCOs argument that the 146 unlisted employees had voluntarily resigned
was brushed aside by the appellate court.
The CA also held that before EMCO resorted to retrenchment, the
latter had failed to adduce evidence of its losses and to prove that it had
undertaken measures to prevent the occurrence of its alleged actual or
Moreover, the CA ruled that the corporation had not paid the
legally prescribed separation pay, which was equal to one-month pay or at least
one-half month pay for every year of service, whichever was higher.
Deducting attorneys fees from the supposed
separation pay of the employees was held to be in clear violation of the law.
Such fees should have been charged against
the funds of their union.
The appellate court further held that the cause of action of the
employees had not yet prescribed when the case was filed, because an action for
illegal dismissal constituted an injury to their rights.
The CA added that the provision applicable
to the case was Article 1146 of the New Civil Code, according to which the
prescriptive period for such causes of action was four (4) years.
The Complaint, having been filed by the
employees only two years after their dismissal, had not prescribed.
All in all, the appellate court concluded that the retrenchment
was illegal, because of EMCOs failure to comply with the legal requirements.
Hence, this Petition.7
In their Memorandum, petitioners raise these issues for our
Whether or not respondent Court of Appeals seriously erred in
reversing the factual findings of both the Labor Arbiter and the NLRC that
petitioners had substantially complied with the requisites for a valid
Whether or not respondent Court manifestly erred in reversing the
factual findings of both the Labor Arbiter and the NLRC that private
respondents had voluntarily executed their respective Quitclaims?
Whether or not respondent Court may, in a petition for certiorari under Rule 65 of the Rules of Court, correct the evaluation of evidence made by
both the Labor Arbiter and the NLRC, and thereafter substitute its own findings
for those of the Labor Arbiter and the NLRC?8 cralawred
Simply put, petitioners are insisting on the validity of the
retrenchment and the enforceability of the Quitclaims.
They are also questioning whether or not the
appellate court may disturb the findings of the labor arbiter and the NLRC.
This Courts Ruling
The Petition has no merit.
Retrenchment is one of the authorized causes for the dismissal of
Resorted to by employers to
avoid or minimize business losses,9 it is recognized under Article 283 of the Labor Code.10 cralawred
The loss referred to in this provision cannot be of just any
kind or amount; otherwise, a company could easily feign excuses to suit its
whims and prejudices or to rid itself of unwanted employees.
The Court has laid down the following
standards that a company must meet to justify retrenchment and to guard against
x x x Firstly, the losses expected should be substantial and not
merely de minimisin extent.
If the loss purportedly sought to be
forestalled by retrenchment is clearly shown to be insubstantial and
inconsequential in character, the bonafidenature of the retrenchment would appear to be seriously in question.
Secondly, the substantial loss apprehended
must be reasonably imminent, as such imminence can be perceived objectively and
in good faith by the employer.
should, in other words, be a certain degree of urgency for the retrenchment,
which is after all a drastic recourse with serious consequences for the
livelihood of the employees retired or otherwise laid-off.
Because of the consequential nature of
retrenchment, it must, thirdly, be reasonably necessary and likely to
effectively prevent the expected losses.
The employer should have taken other measures prior or parallel to
retrenchment to forestall losses, i. e.,
cut other costs other than labor costs.
An employer who, for instance, lays off substantial numbers of workers
while continuing to dispense fat executive bonuses and perquisites or so-called
golden parachutes, can scarcely claim to be retrenching in good faith to
To impart operational
meaning to the constitutional policy of providing full protection to labor,
the employers prerogative to bring down labor costs by retrenching must be
exercised essentially as a measure of last resort, after less drastic means
reduction of both management and rank-and-file bonuses and salaries,
going on reduced time, improving manufacturing efficiencies, trimming of
marketing and advertising costs, etc. have been tried and found wanting.
Lastly, but certainly not the least important, alleged losses if
already realized, and the expected imminent losses sought to be forestalled,
must be proved by sufficient and convincing evidence. The reason for requiring this quantum of proof is readily
apparent: any less exacting standard of proof would render too easy the abuse of
this ground for termination of services of employees. x x x.11 cralawred
Retrenchment is only a measure of last resort when other less
drastic means have been tried and found to be inadequate.12 cralawred
To prove that the retrenchment was necessary to prevent
substantial losses, petitioners present their audited financial statements for
the years 1991 and 1992.[13 These statements show that EMCOs net income of
P1,052,817. 00 for 1991
decreased to P880,407. 85 in 1992.
They allege that this decrease was due to low market demand, lack of raw
materials, frequent breakdown of old equipment and high cost of
The financial statements
also demonstrate that EMCOs liability then increased from P106,507,214. 14
to P123,901,838. 30.
cite several cases in which this Court has held that audited financial
statements constitute the normal method of proof of the profit-and-loss
performance of a company.
statements allegedly partake the nature of public documents, because they have
been audited and duly filed with the Bureau of Internal Revenue.
As such, they enjoy the presumption of
regularity and validity.
Petitioners further argue that EMCO undertook preventive measures
to prevent the occurrence of imminent losses.14 To accommodate and save all its employees, it allegedly implemented a scheme in
which they would work on a rotation basis -- on at least a three-day-work per
employee per week schedule.15 This arrangement was, however, short-lived to prevent a strike that the union
and its members then threatened to stage.16 cralawred
Petitioners also contend that the 146 employees not included in
the list submitted to DOLE voluntarily resigned, not solely on the ground that
the companys permit to operate its sawmill department had expired, but also
because of a period of uncertainty brought about by the aforementioned factors
that allegedly justified the retrenchment program.17 cralawred
The Court is not persuaded. Not every loss incurred or expected
to be incurred by a company will justify retrenchment.
The losses must be substantial and the
retrenchment must be reasonably necessary to avert such losses.18 The employer bears the burden of proving the existence or the imminence of
substantial losses with clear and satisfactory evidence that there are
legitimate business reasons justifying a retrenchment.19 Should the employer fail to do so, the dismissal shall be deemed unjustified.20 cralawred
In the present case, petitioners have presented only EMCOs
audited financial statements for the years 1991 and 1992.
As already stated, these show that their net
P1,052,817. 00 for 1991 decreased to P880,407. 85 in
Somerville Stainless Steel Corporation v. NLRC21 held that the presentation of the
companys financial statements for a particular year was inadequate to overcome
the stringent requirement of the law.
According to the Court, [t]he failure of petitioner to show its income
or loss for the immediately preceding years or to prove that it expected no
abatement of such losses in the coming years bespeaks the weakness of its
The financial statement for
1992, by itself, x x x does not show whether its losses increased or
Although [the employer]
posted a loss for 1992, it is also possible that such loss was considerably
less than those previously incurred, thereby indicating the companys improving
The Court further held therein that [i]n the analysis of
financial statements, (o) ne particular percentage of relationship may not be
too significant in itself; that is, it may not suffice to point out those
unfavorable characteristics of the company that would require immediate or even
drastic action.23 Petitioners have failed to prove that their alleged losses were substantial,
continuing and without any immediate prospect of abating; hence, the nature of
the retrenchment is seriously disputable.
Retrenchment is a management prerogative consistently recognized
and affirmed by this Court.
however, subject to faithful compliance with the substantive and the procedural
requirements laid down by law and jurisprudence.24 It must be exercised essentially as a measure of last resort, after less
drastic means have been tried and found wanting.
The only less drastic measure that EMCO undertook was the
rotation work scheme: the three-day-work per employee per week schedule.
It did not try other measures, such as cost
reduction, lesser investment on raw materials, adjustment of the work routine
to avoid the scheduled power failure, reduction of the bonuses and salaries of
both management and rank-and-file, improvement of manufacturing efficiency,
trimming of marketing and advertising costs, and so on.
The fact that petitioners did not resort to
other such measures seriously belies their claim that retrenchment was done in
good faith to avoid losses.
For a valid termination due to retrenchment, the law requires
that written notices of the intended retrenchment be served by the employer on
the worker and on the Department of Labor and Employment at least one (1) month
before the actual date of the retrenchment.25 The purpose of this requirement is to give employees some time to prepare for
the eventual loss of their jobs, as well as to give DOLE the opportunity to
ascertain the verity of the alleged cause of termination.26 cralawred
There is no showing that such notice was served on the employees
in the present case.
that on January 20, 1993,
Petitioner Jimmy Lim gave the DOLE a formal notice of the intended retrenchment
and furnished the EMCO Labor Association and its general membership copies of
the notice by posting it on the bulletin boards of their respective
2, 1993, EMCO sent DOLE another written notice.
The next day, Lim sent a Memorandum to the
foremen, the section heads, the supervisors and the department heads instructing
them to retrench some of the workers based on certain guidelines.
Petitioners aver that the Memorandum also
served as a written notice to all the employees concerned.
Clearly, it is not the notice contemplated
The written notice should have
been served on the employees themselves, not on their supervisors.
The Notice sent to DOLE was defective, because it stated that
EMCO would terminate the services of 104 of its workers.
The corporation, however, actually dismissed
Petitioners aver that the 146
employees not listed in the Notice sent to DOLE voluntarily resigned; hence,
the latter were not retrenched.
assertion does not deserve any consideration.
Petitioners reiterate that those workers voluntarily resigned because of
the atmosphere of uncertainty, which occurred after the Sawmill Department had
been temporarily shut off in February 1993.
The renewal of the permit on March
31, 1993, however, removed the alleged shroud of uncertainty.
Moreover, resignation is the voluntary act of employees who are
compelled by personal reasons to dissociate themselves from their
It must be done with the
intention of relinquishing an office, accompanied by the act of abandonment.27 Therefore, it would have been illogical for respondents to resign and then file
a Complaint for illegal dismissal.
Resignation is inconsistent with the filing of the Complaint.28 cralawred
Propriety of Separation Benefits
Article 283 of the Labor Code provides for the proper separation
benefits in this wise:chanroblesvirtua1awlibrary
x x x In case
of retrenchment to prevent losses x x x, the separation pay shall be equivalent
to one (1) month pay or at least one half (1/2) month pay for every year of
service, whichever is higher.
fraction of at least six (6) months shall be considered one (1) whole year.
The appellate court aptly ruled that petitioners had not complied
with this statutory requirement.
deducted the amount of attorneys fees that had allegedly accrued as a result
of the renegotiations for a new collective bargaining agreement.29 Without denying that they deducted those fees, petitioners argue that the
deduction was made with the prior approval of respondents.30 cralawred
This contention is untenable.
The Labor Code prohibits such arrangement in this wise:chanroblesvirtua1awlibrary
Article 222. APPEARANCES AND FEES. x x x
x x x
(b) No attorneys fees, negotiation fees or similar charges of any
kind arising from any collective bargaining negotiations or conclusion of the
collective bargaining agreement shall be imposed on any individual member of
the contracting union: Provided, however,
That attorneys fees may be charged against union funds in an amount to be
agreed upon by the parties.
contract, agreement or arrangement of any sort to the contrary shall be null
The obligation to pay attorneys fees belongs to the union and
cannot be shunted to the individual workers as their direct
The law has made clear
that any agreement to the contrary shall be null and void ab initio.31 Thus, petitioners deduction of attorneys fees from respondents separation
pay has no basis in law.
Validity of the Quitclaims
Petitioners argue that the Quitclaims signed by respondents enjoy
the presumption of regularity, and that the latter had the burden of proving
that their consent had been vitiated.32 They further maintain that aside from Eddie de la Cruz, the other respondents
did not submit their respective supporting affidavits detailing how their
individual consents had been obtained.
Allegedly, such documents do not constitute the clear and convincing
evidence required under the law to overturn the validity of quitclaims.33 cralawred
We hold that the labor arbiter and the NLRC erred in concluding
that respondents had voluntarily signed the Waivers and Quitclaim Deeds.
Contrary to this assumption, the mere fact
that respondents were not physically coerced or intimidated does not
necessarily imply that they freely or voluntarily consented to the terms
thereof.34 Moreover, Petitioners, not respondents, have the burden of proving that the
Quitclaims were voluntarily entered into.35 cralawred
Furthermore, in Trendline Employees Association-Southern
Philippines Federation of Labor (TEA-SPFL) v. NLRC36 and Philippine Carpet Employees Association v. Philippine Carpet Manufacturing
Corporation,37 similar retrenchments were found to be illegal, as the employers had failed to
prove that they were actually suffering from poor financial conditions.
In these cases, the Quitclaims were deemed
illegal, as the employees consents had been vitiated by mistake or fraud.
These rulings are applicable to the case at bar.
Because the retrenchment was illegal and of
no effect, the Quitclaims were therefore not voluntarily entered into by
Their consent was
similarly vitiated by mistake or fraud.
The law looks with disfavor upon quitclaims and releases by employees
pressured into signing by unscrupulous employers minded to evade legal
As a rule, deeds of release or quitclaim cannot bar employees
from demanding benefits to which they are legally entitled or from contesting
the legality of their dismissal.
acceptance of those benefits would not amount to estoppel.39 The amounts already received by the present respondents as consideration for
signing the Quitclaims should, however, be deducted from their respective
The Office of Certiorari
Petitioners aver that in a special civil action for certiorari ,
the appellate court is limited to reviewing only questions related to
jurisdiction or grave abuse of discretion.
As in the present case, however, the lower tribunals factual findings
will not be upheld where there is a showing that such findings were totally
devoid of support, or that the judgment was based on a misapprehension of
Petition is DENIED, and the assailed
Decision and Resolution AFFIRMED.
Costs against petitioners.
(Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ., concur.
Penned by Justice
Eriberto U. Rosario Jr.,
with the concurrence of Justices Ramon Mabutas Jr.
(Division chairman) and Roberto A. Barrios (member).
Assailed Decision, p. 15; rollo
, p. 60.
Assailed Decision, pp. 4-8; id
The case was deemed submitted for decision on October
9, 2002, upon this Courts receipt of respondents Memorandum, which
was signed by Atty. Danilo P. Rubio. Petitioners Memorandum, signed by Attys.
Gregorio M. Batiller Jr. and Gavino F. Reyes, was received by the Court on September
Petitioners Memorandum, pp. 12-13; rollo
, pp. 173-174.
9 AG & P United Rank and File
Association v. NLRC
, 332 Phil. 937, 944, November 29, 1996; citing Precision Electronics Corporation v. NLRC
178 SCRA 667, October 23, 1989.
CLOSURE OF ESTABLISHMENT AND
REDUCTION OF PERSONNEL.
may also terminate the employment of any employee due to the installation of
labor saving devices, redundancy, retrenchment to prevent losses or the closing
or cessation of operation of the establishment or undertaking unless the
closing is for the purpose of circumventing the provisions of this Title, by
serving a written notice on the worker and the Ministry of Labor and Employment
at least one (1) month before the intended date thereof.
In case of termination due to the
installation of labor saving devices or redundancy, the worker affected thereby
shall be entitled to a separation pay equivalent to at least his one (1) month
pay or at least one (1) month pay for every year of service, whichever is
In case of retrenchment to
prevent losses and in cases of closure or cessation of operations of
establishment or undertaking not due to serious business losses or financial
reverses, the separation pay shall be equivalent to one (1) month pay or at
least one-half (1/2) month pay for every year of service, whichever is
A fraction of at least six (6)
months shall be considered as one (1) whole year.
11 Saballa v. NLRC
, 329 Phil. 511,
526-527, August 22, 1996, per Panganiban, J.;
citing Lopez Sugar Corporation v. Federation of Free Workers
, 189 SCRA 179, 186-187, August 30, 1990, per
12 Edge Apparel, Inc. v. NLRC,
972, 983, February 12, 1998,
per Vitug, J.
; citing Guerrero v. NLRC,
329 Phil. 1069, 1076, August
30, 1996, per Puno, J.
Audited financial statements for 1991-1992 (See petitioners Memorandum, p. 15;
rollo, p. 176) :chanroblesvirtua1awlibrary
|P 127,587,597. 21 |
|P 178,049,527. 00
COST OF SALES
| INCOME FROM
|| 1,354,412. 08
|| 1,585,598. 00
PROVISION FOR INCOME TAX
| NET INCOME
|P 880,407. 85 |
|P 1,052,817. 00
Petitioners Memorandum, p. 20; rollo
, p. 181.
pp. 21-22 &
18 Guerrero v. NLRC, supra
, p. 1075.
19 Somerville Stainless Steel Corporation v. NLRC
, 350 Phil. 859, 872, March 11, 1998; citing San Miguel Jeepney Service v. NLRC
, 332 Phil. 804, 851, November
citing Sebuguero v. NLRC
, 248 SCRA 532, 544, September
p. 873, per
; citing Philippine Schoolof Business Administration(PSBA Manila) v. NLRC
, 223 SRCA 305, June 8, 1993,
per Romero, J.
23 Somerville Stainless Steel Corporation v. NLRC
, p. 874, per Panganiban, J.
; citing Moore, Carl L. and Jaedicke, Robert K.,
24 Lopez Sugar Corporation v. Federation of
; Anino v. NLRC
, 352 Phil. 1098, May 21, 1998; Edge
Apparel, Inc. v. NLRC
Tuberculosis Society, Inc. v. NLU & NLRC
, 356 Phil. 63, August 25,
Article 283 of the Labor Code of the Philippines;
Fuentes v. NLRC
, 334 Phil. 22, January
26 Serrano v. NLRC
, 380 Phil. 416, 445, January
27 Dosch v. NLRC,
123 SCRA 296, July 5,
1983; Magtoto v. NLRC,
140 SCRA 58,
November 18, 1985; Molave Tours
Corporation v. NLRC,
250 SCRA 325, November 24, 1995, citing Intertrod Maritime, Inc. v. NLRC,
SCRA 318, June 19, 1991.
28 Valdez v. NLRC
, 349 Phil. 760, 767,
February 9, 1998; Santos v. NLRC,
SCRA 759, October 28, 1988; Hua Bee Shirt
Factory, v. NLRC
, 186 SCRA 586, June 18, 1990; Dagupan Bus Company, Inc. v. NLRC,
191 SCRA 328, November 9, 1990.
Petitioners Memorandum, p. 28; rollo
, p. 189.
31 Bank of the Philippine IslandsEmployees Union-ALU v. NLRC,
171 SCRA 556, March
Petitioners Memorandum, p. 30; rollo
, p. 191.
35 Salonga v. NLRC
, 324 Phil. 330, February
338 Phil. 681, May 5, 1997.
citing Talla v. NLRC
175 SCRA 479, 480-481, July 19, 1989.
39 Villar v. NLRC
, 387 Phil. 706, 717,
May 11, 2000; Olacao v. NLRC
SCRA 38, August 29, 1989; Lopez Sugar
Corporation v. Federation of Free Workers
40 Sarao v. CA
, 343 Phil. 774, 780,
August 21, 1997;Reyes v.
Phil. 171, 180-181, July 11, 1996;Lagon v. Hooven Comalco Industries, Inc.,
349 SCRA 451, 371, January 17, 2001; Imperial v. CA
, 328 Phil. 366, 373, July
17, 1996; Atlantic Gulf and Pacific
Company of Manila, Inc. v. CA,
317 Phil. 707, 714, August 23, 1995; Cormero v. CA
, 317 Phil. 348, August 14,
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