AND JIMMY LIM,
April 14, 2004
ARTURO ABELLANA, FLORENCIO ABEQUIBEL, FELIZARDO AGUELO, NECERATO
PEDRO ALIVIO JR., RODOLFO ALDAYA, ABELARDO AMANTE, NELSON ANGAC, ALEJO
ANTOLIJAO, JOHN ALEX ARABEJO, REYNALDO ARBOLONIO, RODRIGO ARSILUM,
BABAYLAN, LEOPOLDO BAGA, AGRIPINO BARON, FELIPE BAHIAN, JOEL BADILLA,
BANTILLAN, FELIPE BANDIBAS, ERNESTO BEDRA, ROGELIO BONGATO, ADOLFO
DOMINADOR BUSTILLO, PLUTARCO CABREROS, FELIPE CAMBARIHAN, PABLO
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,
DESAMPARADO, GAUDISIO DEVEYRA, HENRY ENERIO, ANTONIO ENCISO, ANSELMO
JR., JULIAN GANZAN, ALLAN HONCULADA, BIENVENIDO IBALANG, FREDERICK
SAMUEL JUMAMOY, ISABELO LOREN, PROCORIO LOLOR, RESTITUTO LOMOCSO, PEDRO
LOZADA, PEDRO LOZAGA, PASTOR MAGARO, ALLAN MANAGA, SIMPLICIO MANDAS,
MANISAN, DIOSDADO MATA, EMMANUEL MATUTOD, MAXIMO MEDALLE, MARCELINO
NORBERTO MORDEN, ARNOLD MORDEN, WILLIAM MORADA, RAYMUNDO MORAGAS,
MOSQUIDA, BENITO NEMENO JR., RICO OGCANG, EMELIANO ONDAP, FRANCISCO
ALFREDO PAIGAN, VENANCIO PAJO, ELY QUINONES, ALEJANDRO QUIPET, BENIGNO
REPOLIDO, PABLO SUMIDO, JOSE SUMALINOG, SAMUEL TABLA, OSCAR TABANAO,
TELIN, MANOLITO TIMTIM, FELIX TINDUGAN, DANILO VELUESTO, ALEJANDRO
TEOFILO ZAPANTA, RODULFO ALCALA, PERCY ALIPIN, ANGELO AMADA, PAQUITO
EDGARD ARBISO, PERFECTO ARABACA, JUDITH BALMORIA, JOHANNES BONGATO,
BULLECER JR., BERNADITA BURDEOS, WENCESLAO BUSA, RODRIGO CABAL, DONALD
CADILINA, JOSE CAINGHOG, RODOLFO CATUBIG, GADIOSO CASTRODES, VIRGINIA
FORTUNATO CELETONA, JUAN CELLO, MARCIANO CORTEZ, ROLANDO CUMBA, ALMAR
MARISA DELA CRUZ, SIMEON DELIGERO, DIOSDADO DOMINISE, FLORENTINO
CLAUDIO DUMO, MARIDEL EFREN, ROMUALDO ESTRETO, JAIME FLORES, ESMERALDO
GALOPE, PROCESSO HERNANDO, ALFREDO JAVIER, CRISPINO JUGARAP, DANIEL
ERNESTO LABADAN, AURELIO LINOGAO, BENALDO LOPEZ, AMADOR LUMONGSOD,
LUNOY, FLORENCIO MAGLASANG, EUTIQUEO MAJAIT, ALBINO MANLA, FELIPE
CASIANO MELICOR, ANECITA MENDOZA, NEMERIANO NACA, ZACARIAS NALAM, SIXTO
NAPAL JR., ALMAQUIO OBEDENCIO, GODOFREDO OLAIZ, VIRGILIA OSORIO,
PAGADOR, ARDEN PASILANG, DIONESIO PASILANG, ADELAIDO PAQUIPOT, FERNANDO
PATINDOL, VIRGILIO PENDICA, FRANKLIN PILOTON, GIL PILOTON, CHARLITA
EUFRACIA PLAZA, TORIBEO PUSA, FRANCISCO RAMIRA, BELEN ROJAS, ALFONSO
CARMEN SABELLANO, ROGELIO SIMPRON, CENIA SUMILE, ESPEREDION TABIQUE,
TAGHOY, SILVANA TAPALES, JEMCIE TIMTIM, ELENO TORILLO, THOMAS
FE VALENZUELA, FLORENCIO ABEQUIBEL, EFREN LUMINARIO, AND JULITO
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
under Rule 45 of the Rules of Court, challenging the December 21, 2000
and the June 20, 2001 Resolution
of the Court of Appeals
(CA) in CA-GR SP No. 51967. The assailed Decision disposed as
“WHEREFORE, the petition
for certiorari is GRANTED and the challenged Orders of the National
Relations Commission are hereby declared NULL and VOID.cralaw
“Considering that, as
borne out of the records, EMCO’s attempted retrenchment of the
was legally ineffective, EMCO is ordered to REINSTATE [respondents]
full backwages, inclusive of allowances and other benefits or their
equivalent, computed from the time their compensation was withheld from
them up to the time of their actual reinstatement. Where
is no longer possible because the position they had previously filled
no longer in existence, EMCO shall pay backwages, inclusive of
and other benefits, computed from the time their employment was
up to the time the decision herein becomes final, and, in lieu of
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
executed quitclaims shall be deducted from the backwages and separation
pay due to them. Costs against the [petitioners].”
The assailed Resolution
denied petitioners’ Motion for Partial Reconsideration.
The factual antecedents
of the case are summarized by the CA as follows:
retrenched employees of [petitioner] seek the review and reversal of
resolutions of the National Labor Relations Commission (‘NLRC’), dated
February 11, 1997 and March 25, 1997, respectively.cralaw
“The first resolution
dismissed [respondents’] appeal for lack of merit and affirmed the
of the Labor Arbiter, dated July 24, 1996, which, in turn, dismissed
complaint against EMCO and the latter’s general manager, [petitioner]
N. Lim (‘Lim’), for illegal dismissal, damages and attorney’s
The second resolution assailed by the [respondents] consists of the
denial of their motion for reconsideration of the earlier mentioned
11, 1997 resolution.cralaw
“EMCO is a domestic
corporation engaged in the business of wood processing, operating
its sawmill and plymill sections where [respondents] used to be
as regular workers.cralaw
“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
workers. The intended retrenchment was grounded on purported
difficulties occasioned by alleged lack of raw materials, frequent
breakdown, low market demand and expiration of permit to operate its
department. A memorandum was thereafter issued by EMCO, addressed
to all its foremen, section heads, supervisors and department heads,
the following instructions:
some of your workers based on the following guidelines:
(58 years and above except positions that are really skilled);
Attendance, Quality/ Quantity of Work[)];
‘2) Schedule the
VL/SL of your men without necessary replacements. x x x’
“Per EMCO’s notice to
DOLE, one hundred four (104) workers were proposed for inclusion in its
retrenchment program. As it turned out, though, EMCO terminated
hundred fifty (250) workers. Among them were herein [respondents].
their separation pay in the amount of four thousand eight hundred
pesos (P4,815.00) each. Deductions were, nevertheless, made by
purportedly for the attorney’s fees payable to [respondents’] lawyer,
the latter’s effort in purportedly renegotiating, sometime in 1993, the
three peso (P3.00) increase in the wages of [respondents], as now
in the Collective Bargaining Agreement.cralaw
“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
forever discharge and release x x x EMCO PLYWOOD CORPORATION and all
officers men agents and corporate assigns from any and all forms of
debts, sums of money, unpaid wages, overtime pay allowances, overtime
or an other liability of any nature by reason of my employment which
ceased by this date.cralaw
‘Done this ______________,
at Magallanes, Agusan del Norte.’
“About two (2) years
later, [respondents], through their labor union, lodged a compliant
EMCO for illegal dismissal, damages and attorney’s fees.cralaw
“In the main, [respondents]
questioned the validity of their retrenchment and the sufficiency of
separation pay received by them.cralaw
“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
claims they may have against the latter.cralaw
“Finding for EMCO, the
Labor Arbiter dismissed [respondents’] complaint.cralaw
appeal to the NLRC was dismissed for lack of merit and the decision of
the Labor Arbiter was affirmed. Notably, the NLRC glossed over
issue of whether [respondents] were validly retrenched, and anchored
dismissal of the appeal on the effect of [respondents’] waivers or
’The pivotal issue brought
to fore is whether or not the quitclaims/waivers executed by
are valid and binding. The other issues raised by [respondents]
either related to mere technicality, or are merely ancillary or
on the main issue.cralaw
x x x
‘There is no doubt that
the [respondents] voluntarily executed their quitclaims/waivers as
by the fact that they did not promptly question their validity within a
reasonable time. It took them two (2) years to challenge and
the validity of the waivers by claiming belatedly that they were either
forced or misled into signing the same. Clearly, this case was
by [respondents] to unduly exact more payment of separation benefits
[petitioner] at the expense of fairness and justice.’
“In passing, the NLRC
likewise affirmed EMCO’s deductions of attorney’s fees from the
pay received by the [respondents].cralaw
“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
having been filed out of time.”
Ruling of the
The CA held that the
evidence was insufficient to justify a ruling in favor of EMCO, which
not complied with the one-month prior notice requirement under the
Code. The appellate court added that the corporation had not
on the employees the required notice of termination. It opined
the Memorandum, having merely provided the guidelines on the conduct of
the intended lay-off, did not constitute such notice.
the Memorandum was not addressed to the workers, but to the foremen,
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
DOLE. EMCO’s argument that the 146 unlisted employees had
resigned was brushed aside by the appellate court.cralaw
The CA also held that
before EMCO resorted to retrenchment, the latter had failed to adduce
of its losses and to prove that it had undertaken measures to prevent
occurrence of its alleged actual or impending losses.cralaw
Moreover, the CA ruled
that the corporation had not paid the legally prescribed separation
which was equal to one-month pay or at least one-half month pay for
year of service, whichever was higher. Deducting attorney’s fees
from the supposed separation pay of the employees was held to be in
violation of the law. Such fees should have been charged against
the funds of their union.cralaw
The appellate court
further held that the cause of action of the employees had not yet
when the case was filed, because an action for illegal dismissal
an injury to their rights. The CA added that the provision
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)
The Complaint, having been filed by the employees only two years after
their dismissal, had not prescribed.cralaw
All in all, the appellate
court concluded that the retrenchment was illegal, because of EMCO’s
to comply with the legal requirements.cralaw
Hence, this Petition.
In their Memorandum,
petitioners raise these issues for our consideration:
Whether or not
Court of Appeals seriously erred in reversing the factual findings of
the Labor Arbiter and the NLRC that petitioners had substantially
with the requisites for a valid retrenchment?
Whether or not
Court manifestly erred in reversing the factual findings of both the
Arbiter and the NLRC that private respondents had voluntarily executed
their respective Quitclaims?
Whether or not
Court may, in a petition for certiorari under Rule 65 of the Rules of
correct the evaluation of evidence made by both the Labor Arbiter and
NLRC, and thereafter substitute its own findings for those of the Labor
Arbiter and the NLRC?”
Simply put, petitioners
are insisting on the validity of the retrenchment and the
of the Quitclaims. They are also questioning whether or not the
court may disturb the findings of the labor arbiter and the NLRC.
The Petition has no
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,
it is recognized under Article 283 of the Labor Code.
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
to guard against abuse:
“x x x Firstly, the
losses expected should be substantial and not merely de minimis in
If the loss purportedly sought to be forestalled by retrenchment is
shown to be insubstantial and inconsequential in character, the
nature of the retrenchment would appear to be seriously in
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
for the retrenchment, which is after all a drastic recourse with
consequences for the livelihood of the employees retired or otherwise
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
to retrenchment to forestall losses, i.e., cut other costs other than
costs. An employer who, for instance, lays off substantial
of workers while continuing to dispense fat executive bonuses and
or so-called ‘golden parachutes,’ can scarcely claim to be retrenching
in good faith to avoid losses. To impart operational meaning to
constitutional policy of providing ‘full protection’ to labor, the
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,
on reduced time, improving manufacturing efficiencies, trimming of
and advertising costs, etc. – have been tried and found wanting.cralaw
“Lastly, but certainly
not the least important, alleged losses if already realized, and the
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
too easy the abuse of this ground for termination of services of
x x x.”
Retrenchment is only
“a measure of last resort when other less drastic means have been tried
and found to be inadequate.”
To prove that the retrenchment
was necessary to prevent substantial losses, petitioners present their
audited financial statements for the years 1991 and 1992.
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
also demonstrate that EMCO’s liability then increased from
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,
they have been audited and duly filed with the Bureau of Internal
As such, they enjoy the presumption of regularity and validity.cralaw
argue that EMCO undertook preventive measures to prevent the occurrence
of imminent losses.
To accommodate and save all its employees, it allegedly implemented a
in which they would work on a rotation basis -- on at least a
per employee per week schedule.
This arrangement was, however, short-lived to prevent a strike that the
union and its members then threatened to stage.
Petitioners also contend
that the 146 employees not included in the list submitted to DOLE
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
about by the aforementioned factors that allegedly justified the
The Court is not persuaded.
“Not every loss incurred or expected to be incurred by a company will
retrenchment. The losses must be substantial and the retrenchment
must be reasonably necessary to avert such losses.”
The employer bears the burden of proving the existence or the imminence
of substantial losses with clear and satisfactory evidence that there
legitimate business reasons justifying a retrenchment.
Should the employer fail to do so, the dismissal shall be deemed
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
Somerville Stainless Steel Corporation v. NLRC
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
the weakness of its cause. The financial statement for 1992, by
x x x does not show whether its losses increased or decreased.
[the employer] posted a loss for 1992, it is also possible that such
was considerably less than those previously incurred, thereby
the company’s improving condition.”
The Court further held
therein that “[i]n the analysis of financial statements, ‘(o)ne
percentage of relationship may not be too significant in itself ’; that
is, it may not suffice to point out those unfavorable characteristics
the company that would require immediate or even drastic action.”
Petitioners have failed to prove that their alleged losses were
continuing and without any immediate prospect of abating; hence, the
of the retrenchment is seriously disputable.cralaw
Retrenchment is a management
prerogative consistently recognized and affirmed by this Court.
is, however, subject to faithful compliance with the substantive and
procedural requirements laid down by law and jurisprudence.
It must be exercised essentially as a measure of last resort, after
drastic means have been tried and found wanting.cralaw
The only less drastic
measure that EMCO undertook was the rotation work scheme: the
per employee per week schedule. It did not try other measures,
as cost reduction, lesser investment on raw materials, adjustment of
work routine to avoid the scheduled power failure, reduction of the
and salaries of both management and rank-and-file, improvement of
efficiency, trimming of marketing and advertising costs, and so
The fact that petitioners did not resort to other such measures
belies their claim that retrenchment was done in good faith to avoid
For a valid termination
due to retrenchment, the law requires that written notices of the
retrenchment be served by the employer on the worker and on the
of Labor and Employment at least one (1) month before the actual date
The purpose of this requirement is to give employees some time to
for the eventual loss of their jobs, as well as to give DOLE the
to ascertain the verity of the alleged cause of termination.
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
DOLE a formal notice of the intended retrenchment and furnished the
Labor Association and its general membership copies of the notice by
it on the bulletin boards of their respective departments. On
2, 1993, EMCO sent DOLE another written notice. The next day, Lim
sent a Memorandum to the foremen, the section heads, the supervisors
the department heads instructing them to retrench some of the workers
on certain guidelines. Petitioners aver that the Memorandum also
served as a written notice to all the employees concerned.
it is not the notice contemplated by law. The written notice
have been served on the employees themselves, not on their supervisors.cralaw
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
250. Petitioners aver that the 146 employees not listed in the
sent to DOLE voluntarily resigned; hence, the latter were not
This assertion does not deserve any consideration. Petitioners
that those workers voluntarily resigned because of the atmosphere of
which occurred after the Sawmill Department had been temporarily shut
in February 1993. The renewal of the permit on March 31, 1993,
removed the alleged shroud of uncertainty.cralaw
is the voluntary act of employees who are compelled by personal reasons
to dissociate themselves from their employment. It must be done
the intention of relinquishing an office, accompanied by the act of
Therefore, it would have been illogical for respondents to resign and
file a Complaint for illegal dismissal. Resignation is
with the filing of the Complaint.
Propriety of Separation
Article 283 of the Labor
Code provides for the proper separation benefits in this wise:
x x x In case of retrenchment to prevent losses x x x, the separation
shall be equivalent to one (1) month pay or at least one half (1/2)
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
They deducted the amount of attorney’s fees that had allegedly accrued
as a result of the renegotiations for a new collective bargaining
Without denying that they deducted those fees, petitioners argue that
deduction was made with the prior approval of respondents.
This contention is untenable.
The Labor Code prohibits such arrangement in this wise:
“Article 222. APPEARANCES
AND FEES. – x x x
x x x
(b) No attorney’s fees,
negotiation fees or similar charges of any kind arising from any
bargaining negotiations or conclusion of the collective bargaining
shall be imposed on any individual member of the contracting union:
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
workers as their direct responsibility. The law has made clear
any agreement to the contrary shall be null and void ab initio.
Thus, petitioners’ deduction of attorney’s fees from respondents’
pay has no basis in law.cralaw
Validity of the Quitclaims
Petitioners argue that
the Quitclaims signed by respondents enjoy the presumption of
and that the latter had the burden of proving that their consent had
They further maintain that aside from Eddie de la Cruz, the other
did not submit their respective supporting affidavits detailing how
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.
We hold that the labor
arbiter and the NLRC erred in concluding that respondents had
signed the Waivers and Quitclaim Deeds. Contrary to this
the mere fact that respondents were not physically coerced or
does not necessarily imply that they freely or voluntarily consented to
the terms thereof.
Moreover, petitioners, not respondents, have the burden of proving that
the Quitclaims were voluntarily entered into.
Furthermore, in Trendline
Employees Association-Southern Philippines Federation of Labor
and Philippine Carpet Employees Association v. Philippine Carpet
similar retrenchments were found to be illegal, as the employers had
to prove that they were actually suffering from poor financial
In these cases, the Quitclaims were deemed illegal, as the employees’
had been vitiated by mistake or fraud.cralaw
These rulings are applicable
to the case at bar. Because the retrenchment was illegal and of
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
they are legally entitled or from contesting the legality of their
The acceptance of those benefits would not amount to estoppel.
The amounts already received by the present respondents as
for signing the Quitclaims should, however, be deducted from their
The Office of Certiorari
Petitioners aver that
in a special civil action for certiorari, the appellate court is
to reviewing only questions related to jurisdiction or grave abuse of
As in the present case, however, the lower tribunals’ factual findings
will not be upheld where there is a showing that such findings were
devoid of support, or that the judgment was based on a misapprehension
WHEREFORE, the Petition
is DENIED, and the assailed Decision and Resolution AFFIRMED.
Davide, Jr., C.J., (Chairman),
Ynares-Santiago, Carpio, and Azcuna, JJ.,
Rollo, pp. 9-47.
Id., pp. 49-60.
Id., p. 62.
Eighth Division. Penned by Justice Eriberto U. Rosario Jr., with
the concurrence of Justices Ramon Mabutas Jr. (Division chairman) and
A. Barrios (member).
Assailed Decision, p. 15; rollo, p. 60.
Assailed Decision, pp. 4-8; id., pp. 52-56.
The case was deemed submitted for decision on October 9, 2002, upon
Court’s receipt of respondents’ Memorandum, which was signed by Atty.
P. Rubio. Petitioners’ Memorandum, signed by Attys. Gregorio M.
Jr. and Gavino F. Reyes, was received by the Court on September 12,
Petitioners’ Memorandum, pp. 12-13; rollo, pp. 173-174.
AG & P United Rank and File Association v. NLRC, 332 Phil. 937,
November 29, 1996; citing Precision Electronics Corporation v. NLRC,
SCRA 667, October 23, 1989.
ART. 283. CLOSURE OF ESTABLISHMENT AND REDUCTION OF PERSONNEL.
The employer may also terminate the employment of any employee due to
installation of labor saving devices, redundancy, retrenchment to
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
of labor saving devices or redundancy, the worker affected thereby
be entitled to a separation pay equivalent to at least his one (1)
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
due to serious business losses or financial reverses, the separation
shall be equivalent to one (1) month pay or at least one-half (1/2)
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.
Saballa v. NLRC, 329 Phil. 511, 526-527, August 22, 1996, per
J.; citing Lopez Sugar Corporation v. Federation of Free Workers, 189
179, 186-187, August 30, 1990, per Feliciano, J.
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,
per Puno, J.
Audited financial statements for 1991-1992 (See petitioners’
p. 15; rollo, p. 176):chanroblesvirtuallawlibrary
OF INCOME FOR THE YEARS ENDED DECEMBER 31, 1992 AND 1991
FOR INCOME TAX
Petitioners’ Memorandum, p. 20; rollo, p. 181.
Id., pp. 21 & 182.
Id., pp. 21-22 & 182-183.
v. NLRC, supra, p. 1075.
Somerville Stainless Steel Corporation v. NLRC, 350 Phil. 859, 872,
11, 1998; citing San Miguel Jeepney Service v. NLRC, 332 Phil. 804,
November 28, 1996.
Id., citing Sebuguero v. NLRC, 248 SCRA 532, 544, September 27, 1995.
Supra at note 19.
Id., p. 873, per Panganiban, J.; citing Philippine School of Business
(PSBA Manila) v. NLRC, 223 SRCA 305, June 8, 1993, per Romero, J.
Somerville Stainless Steel Corporation v. NLRC, supra, p. 874, per
J.; citing Moore, Carl L. and Jaedicke, Robert K., Managerial
(1967), p. 169.
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.
Article 283 of the Labor Code of the Philippines; Fuentes v. NLRC, 334
Phil. 22, January 2, 1997.
Serrano v. NLRC, 380 Phil. 416, 445, January 27, 2000
Dosch v. NLRC, 123 SCRA 296, July 5, 1983; Magtoto v. NLRC, 140 SCRA
November 18, 1985; Molave Tours Corporation v. NLRC, 250 SCRA 325,
24, 1995, citing Intertrod Maritime, Inc. v. NLRC, 198 SCRA 318, June
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
June 18, 1990; Dagupan Bus Company, Inc. v. NLRC, 191 SCRA 328,
Petitioners’ Memorandum, p. 28; rollo, p. 189.
Bank of the Philippine Islands Employees Union-ALU v. NLRC, 171 SCRA
March 31, 1989.
Petitioners’ Memorandum, p. 30; rollo, p. 191.
Philippine Carpet Employees Association v. Philippine Carpet
Corporation, 340 SCRA 383, 394, September 14, 2000.
Salonga v. NLRC, 324 Phil. 330, February 23, 1996.
338 Phil. 681, May 5, 1997.
Supra at note 34.
Ibid., citing Talla v. NLRC, 175 SCRA 479, 480-481, July 19, 1989.
Villar v. NLRC, 387 Phil. 706, 717, May 11, 2000; Olacao v. NLRC, 177
38, August 29, 1989; Lopez Sugar Corporation v. Federation of Free
Sarao v. CA, 343 Phil. 774, 780, August 21, 1997; Reyes v. CA, 328
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,