FIRST DIVISION
EMCO PLYWOOD
CORPORATION
AND JIMMY LIM,
Petitioners,
G.R.
No.
148532
April 14, 2004
-versus-
PERFERIO
ABELGAS,
ARTURO ABELLANA, FLORENCIO ABEQUIBEL, FELIZARDO AGUELO, NECERATO
ALCALA,
PEDRO ALIVIO JR., RODOLFO ALDAYA, 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., JULIAN GANZAN, ALLAN HONCULADA, BIENVENIDO IBALANG, FREDERICK
JANOPOL,
SAMUEL JUMAMOY, ISABELO LOREN, PROCORIO LOLOR, RESTITUTO LOMOCSO, PEDRO
LOZADA, PEDRO LOZAGA, PASTOR MAGARO, ALLAN MANAGA, SIMPLICIO MANDAS,
SATURNINO
MANISAN, 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,
MARIO
TELIN, 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., BERNADITA 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, DIOSDADO DOMINISE, FLORENTINO
DUNCANO,
CLAUDIO DUMO, MARIDEL EFREN, ROMUALDO ESTRETO, JAIME FLORES, ESMERALDO
GALOPE, PROCESSO HERNANDO, 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., ALMAQUIO OBEDENCIO, 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, EFREN LUMINARIO, AND JULITO
ONDAP,
Respondents.
|
D E C I S I O N
PANGANIBAN,
J.:chanroblesvirtuallawlibrary
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. The Case
Before us is a Petition
for Review[1]
under Rule 45 of the Rules of Court, challenging the December 21, 2000
Decision[2]
and the June 20, 2001 Resolution[3]
of the Court of Appeals[4]
(CA) in CA-GR SP No. 51967. The assailed Decision disposed as
follows:
“WHEREFORE, the petition
for certiorari is GRANTED and the challenged Orders of the National
Labor
Relations Commission are hereby declared NULL and VOID.cralaw:red
“Considering that, as
borne out of the records, EMCO’s 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 lieu of
reinstatement,
separation pay equivalent to one-month’s 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 [petitioners].”[5]
The assailed Resolution
denied petitioners’ Motion for Partial Reconsideration.
The Facts
The factual antecedents
of the case are summarized by the CA as follows:
“[Respondents], the
retrenched employees of [petitioner] seek the review and reversal of
the
resolutions of the National Labor Relations Commission (‘NLRC’), dated
February 11, 1997 and March 25, 1997, respectively.cralaw:red
“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 latter’s general manager, [petitioner]
Jimmy
N. Lim (‘Lim’), for illegal dismissal, damages and attorney’s
fees.
The second resolution assailed by the [respondents] consists of the
NLRC’s
denial of their motion for reconsideration of the earlier mentioned
February
11, 1997 resolution.cralaw:red
“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.cralaw:red
“On January 20, 1993
and of March 2, 1993, EMCO, represented by Lim, informed the Department
of Labor and Employment (‘DOLE’) of its intention to retrench some of
its
workers. 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
department. A memorandum was thereafter issued by EMCO, addressed
to all its foremen, section heads, supervisors and department heads,
with
the following instructions:
‘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[)];
‘2) Schedule the
unspent
VL/SL of your men without necessary replacements. x x x’
“Per EMCO’s 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) workers. Among them were herein [respondents].
“[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 attorney’s fees payable to [respondents’] lawyer,
for
the latter’s 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.cralaw:red
“Upon receipt of their
separation pay, [respondents] were made to sign quitclaims, which read:
‘TO WHOM IT MAY CONCERN:
‘I, ___________ of legal
age and a resident of _______________, for and in consideration of the
amount of (P____), 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.cralaw:red
‘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 attorney’s fees.cralaw:red
“In the main, [respondents]
questioned the validity of their retrenchment and the sufficiency of
the
separation pay received by them.cralaw:red
“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.cralaw:red
“Finding for EMCO, the
Labor Arbiter dismissed [respondents’] complaint.cralaw:red
“[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:
’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.cralaw:red
‘x x
x
x x
x
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. Clearly, this 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 EMCO’s deductions of attorney’s fees from the
separation
pay received by the [respondents].cralaw:red
“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)
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. The appellate court added that the corporation had not
served
on the employees the required notice of termination. It 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. The corporation terminated the services
of 250 employees but included only 104 of them in the list it filed
with
DOLE. EMCO’s argument that the 146 unlisted employees had
voluntarily
resigned was brushed aside by the appellate court.cralaw:red
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 impending losses.cralaw:red
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 attorney’s 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.cralaw:red
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.cralaw:red
All in all, the appellate
court concluded that the retrenchment was illegal, because of EMCO’s
failure
to comply with the legal requirements.cralaw:red
Hence, this Petition.[7]
The Issues
In their Memorandum,
petitioners raise these issues for our consideration:
“I.
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 retrenchment?
“II.
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?
“III.
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]
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 Court’s
Ruling
The Petition has no
merit.cralaw:red
Main Issue: Retrenchment
Retrenchment is one
of the authorized causes for the dismissal of employees. Resorted
to by employers to avoid or minimize business losses,[9]
it is recognized under Article 283 of the Labor Code.[10]
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 abuse:
“x x x Firstly, the
losses expected should be substantial and not merely de minimis in
extent.
If the loss purportedly sought to be forestalled by retrenchment is
clearly
shown to be insubstantial and inconsequential in character, the
bonafide
nature 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. There 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 avoid losses. To impart operational meaning to
the
constitutional policy of providing ‘full protection’ to labor, the
employer’s
prerogative to bring down labor costs by retrenching must be exercised
essentially as a measure of last resort, after less drastic means –
e.g.,
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.cralaw:red
“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]
Retrenchment is only
“a measure of last resort when other less drastic means have been tried
and found to be inadequate.”[12]
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 EMCO’s 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 operations. The financial
statements
also demonstrate that EMCO’s liability then increased from
P106,507,214.14
to P123,901,838.30. Petitioners 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.
These 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.cralaw:red
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]
Petitioners also contend
that the 146 employees not included in the list submitted to DOLE
voluntarily
resigned, not solely on the ground that the company’s 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]
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]
In the present case,
petitioners have presented only EMCO’s audited financial statements for
the years 1991 and 1992. As already stated, these show that their
net income of P1,052,817.00 for 1991 decreased to P880,407.85 in
1992.
Somerville Stainless Steel Corporation v. NLRC[21]
held that the presentation of the company’s 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 cause. The financial statement for 1992, by
itself,
x x x does not show whether its losses increased or decreased.
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 company’s improving condition.”[22]
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.cralaw:red
Retrenchment is a management
prerogative consistently recognized and affirmed by this Court.
It
is, 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.cralaw:red
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.cralaw:red
Defective Notice
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]
There is no showing
that such notice was served on the employees in the present case.
Petitioners argue 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 departments. On
March
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 by law. The written notice
should
have been served on the employees themselves, not on their supervisors.cralaw:red
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
250. Petitioners aver that the 146 employees not listed in the
Notice
sent to DOLE voluntarily resigned; hence, the latter were not
retrenched.
This 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.cralaw:red
Moreover, resignation
is the voluntary act of employees who are compelled by personal reasons
to dissociate themselves from their employment. 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]
Propriety of Separation
Benefits
Article 283 of the Labor
Code provides for the proper separation benefits in this wise:
“Article 283.
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. A 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.
They deducted the amount of attorney’s 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]
This contention is untenable.
The Labor Code prohibits such arrangement in this wise:
“Article 222. APPEARANCES
AND FEES. – x x x
x x
x
x x
x
x x x
(b) No attorney’s 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 attorney’s fees may be charged against union funds in an
amount to be agreed upon by the parties. Any contract, agreement
or arrangement of any sort to the contrary shall be null and void.”
The obligation to pay
attorney’s fees belongs to the union and cannot be shunted to the
individual
workers as their direct responsibility. The law has made clear
that
any agreement to the contrary shall be null and void ab initio.[31]
Thus, petitioners’ deduction of attorney’s fees from respondents’
separation
pay has no basis in law.cralaw:red
Second Issue:
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]
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]
Furthermore, in Trendline
Employees Association-Southern Philippines Federation of Labor
(TEA-SPFL)
v. NLRC[36]
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.cralaw:red
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
respondents.
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
responsibilities.[38]
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.
The 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
monetary awards.cralaw:red
Third Issue:
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 facts.[40]
WHEREFORE, the Petition
is DENIED, and the assailed Decision and Resolution AFFIRMED.
Costs
against petitioners.cralaw:red
SO ORDERED.cralaw:red
Davide, Jr., C.J., (Chairman),
Ynares-Santiago, Carpio, and Azcuna, JJ.,
concur.
____________________________
Endnotes:
[1]
Rollo, pp. 9-47.
[2]
Id., pp. 49-60.
[3]
Id., p. 62.
[4]
Eighth Division. Penned by Justice Eriberto U. Rosario Jr., with
the concurrence of Justices Ramon Mabutas Jr. (Division chairman) and
Roberto
A. Barrios (member).
[5]
Assailed Decision, p. 15; rollo, p. 60.
[6]
Assailed Decision, pp. 4-8; id., pp. 52-56.
[7]
The case was deemed submitted for decision on October 9, 2002, upon
this
Court’s 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 12,
2002.
[8]
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.
[10]
ART. 283. CLOSURE OF ESTABLISHMENT AND REDUCTION OF PERSONNEL.
–
The employer 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 higher. 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 higher. 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 Feliciano, J.
[12]
Edge Apparel, Inc. v. NLRC, 349 Phil. 972, 983, February 12, 1998, per
Vitug, J.; citing Guerrero v. NLRC, 329 Phil. 1069, 1076, August 30,
1996,
per Puno, J.
[13]
Audited financial statements for 1991-1992 (See petitioners’
Memorandum,
p. 15; rollo, p. 176):chanroblesvirtuallawlibrary
EMCO
PLYWOOD CORPORATION
STATEMENT
OF INCOME FOR THE YEARS ENDED DECEMBER 31, 1992 AND 1991
1992
1991
SALES
P
127,587,597.21
P 178,049,527.00
COST
OF SALES
99,233,805.52
140,459,417.00
GROSS
PROFIT
28,353,791.69
37,590,110.00
OPERATING
EXPENSES
26,999,379.61
36,004,512.00
INCOME
FROM OPERATIONS
1,354,412.08
1,585,598.00
PROVISION
FOR INCOME TAX
474,004.23
532,781.00
NET
INCOME
P
880,407.85
P 1,052,817.00
[14]
Petitioners’ Memorandum, p. 20; rollo, p. 181.
[15]
Id., pp. 21 & 182.
[16]
Ibid.
[17]
Id., pp. 21-22 & 182-183.
[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 28, 1996.
[20]
Id., citing Sebuguero v. NLRC, 248 SCRA 532, 544, September 27, 1995.
[21]
Supra at note 19.
[22]
Id., p. 873, per Panganiban, J.; citing Philippine School of Business
Administration
(PSBA Manila) v. NLRC, 223 SRCA 305, June 8, 1993, per Romero, J.
[23]
Somerville Stainless Steel Corporation v. NLRC, supra, p. 874, per
Panganiban,
J.; citing Moore, Carl L. and Jaedicke, Robert K., Managerial
Accounting
(1967), p. 169.
[24]
Lopez Sugar Corporation v. Federation of Free Workers, supra; Anino v.
NLRC, 352 Phil. 1098, May 21, 1998; Edge Apparel, Inc. v. NLRC, supra;
Philippine Tuberculosis Society, Inc. v. NLU & NLRC, 356 Phil. 63,
August 25, 1998.
[25]
Article 283 of the Labor Code of the Philippines; Fuentes v. NLRC, 334
Phil. 22, January 2, 1997.
[26]
Serrano v. NLRC, 380 Phil. 416, 445, January 27, 2000
[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, 198 SCRA 318, June
19,
1991.
[28]
Valdez v. NLRC, 349 Phil. 760, 767, February 9, 1998; Santos v. NLRC,
166
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.
[29]
Petitioners’ Memorandum, p. 28; rollo, p. 189.
[30]
Ibid.
[31]
Bank of the Philippine Islands Employees Union-ALU v. NLRC, 171 SCRA
556,
March 31, 1989.
[32]
Petitioners’ Memorandum, p. 30; rollo, p. 191.
[33]
Ibid.
[34]
Philippine Carpet Employees Association v. Philippine Carpet
Manufacturing
Corporation, 340 SCRA 383, 394, September 14, 2000.
[35]
Salonga v. NLRC, 324 Phil. 330, February 23, 1996.
[36]
338 Phil. 681, May 5, 1997.
[37]
Supra at note 34.
[38]
Ibid., 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, 177
SCRA
38, August 29, 1989; Lopez Sugar Corporation v. Federation of Free
Workers,
supra.
[40]
Sarao v. CA, 343 Phil. 774, 780, August 21, 1997; Reyes v. CA, 328
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, 1995 |