ChanRobles Virtual law Library

chanrobles.com - PHILIPPINE SUPREME COURT RESOLUTIONS - ON-LINE

cralaw_scresolutions_separator.NHAD

[G.R. No. 143542. August 28, 2006]

SIME DARBY PILIPINAS, INC., et al. v. ALFREDO ARGUILLA, et al.

Special First Division

Sirs/Mesdames:

Quoted hereunder, for your information, is a resolution of this Court dated AUG. 28, 2006

G.R. No. 143542 (Sime Darby Pilipinas, Inc., et al. v. Alfredo Arguilla, et al.)

Before the Court is a Motion for Partial Reconsideration [1] cralaw filed by petitioners Sime Darby Pilipinas, Inc. (SDPI) and Larry C. Dubberly on July 17, 2006.

In a Decision [2] cralaw dated June 8, 2006, this Court affirmed the ruling of the Court of Appeals (CA) in CA-G.R. SP No. 50377, holding that respondents Alfredo Arguilla and Henry Pedrajas were illegally dismissed. However, petitioners' contention that reinstatement is no longer feasible was sustained, considering that SDPI had already sold its assets and that its Recapping Department had already been taken over by Goodyear Philippines, Inc. on April 24, 1996. The fallo of the decision reads:

IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY GRANTED. The Decision of the Court of Appeals, finding that the NLRC found no grave abuse of discretion in affirming in toto the Decision of the Labor Arbiter, is AFFIRMED. Considering that reinstatement is no longer feasible, the P18,884.03 received by respondent Alfredo Arguilla and the P18,887.80 received by respondent Henry C. Pedrajas on August 4, 1995 shall be deducted from the respective sums awarded to them. No costs.

SO ORDERED. [3] cralaw

Petitioners now move for a partial reconsideration of the said Decision on the following ground:

WITH ALL DUE RESPECT, THE HONORABLE COURT ERRED IN NOT RECOGNIZING THAT THE EXECUTION OF THE JUDGMENT AGAINST THE PETITIONERS WILL BE INEQUITABLE AND UNJUST, ESPECIALLY IN VIEW OF RESPONDENTS' HAVING RECEIVED SEPARATION BENEFITS ON TWO OCCASIONS. [4] cralaw

Petitioners point out that while the Court correctly ordered the deduction of the amounts received on August 4, 1995 by respondent Alfredo Arguilla (P18,884.03) and respondent Henry C. Pedrajas (P18,887.80) from their monetary awards, the Court failed to consider that upon their retrenchment in 1990, both respondents had also been paid P71,838.16 and P102,593.32, respectively. To avoid transgression of the principle against unjust enrichment, petitioners posit that the latter amounts should also be deducted from respondents' monetary awards.

Respondents, for their part, filed on July 17, 2006, a Motion for Leave to File the Herein Attached Clarificatory. [5] cralaw In their Clarificatory, [6] cralaw respondents argue that their backwages should be computed from the date of dismissal on June 30, 1990 up to the finality of the June 8, 2006 decision. Also, on their separation pay of one month per year of service, the length of service should be reckoned from the date of employment (for Arguilla, March 27, 1984; and for Pedrajas, June 1, 1981) up to the finality of the said decision. To be deducted, however, from their respective separation pays are all the amounts they had already received and the amounts paid to them during their 2 months of actual reinstatement.

On July 28, 2006, respondents also filed their Comment/Opposition [7] cralaw to petitioners' partial motion for reconsideration, pointing out that petitioners are not assailing the Court's finding of illegal retrenchment, and that it only concerns the deduction of the amounts paid to respondents in 1990. Respondents, thus, reiterated their contentions in their Clarificatory.

Simply, the Court is tasked to determine the following: (1) the period which would serve as basis for the computation of respondents' full backwages and separation pay; and (2) the amounts already received by respondents which are to be deducted from their monetary awards.

To resolve these issues, it is compelling to determine the significant dates in the relations of the parties. SDPI hired Arguilla on March 27, 1984, Pedrajas on June 1, 1981. [8] cralaw In 1990, respondents received separate letters notifying them that their services were considered terminated effective June 30, 1990. [9] cralaw On August 28, 1990, Arguilla and Pedrajas received from SDPI P71,838.16 and P102,593.32, respectively. [10] cralaw On July 5, 1995, respondents were reinstated to their former positions. [11] cralaw On August 4, 1995, SDPI paid Arguilla and Pedrajas P18,884.03 and P18,887.80, respectively, as separation pay as a result of the compulsory retrenchment program. [12] cralaw A few months later, on April 24, 1996, SDPI sold all its assets to Goodyear Philippines, Inc. [13] cralaw

On the first issue, the Court states and so rules that following Article 279 of the Labor Code, as amended, respondents' full backwages [14] cralaw should be computed, from the time they were illegally retrenched on June 30, 1990 up to the time of their actual reinstatement on July 5, 1995; and shall commence again from the time they were forced to leave the company on August 4, 1995 up to April 23, 1996, the day before SDPI sold its assets to Goodyear Philippines, Inc., thereby closing its business. During these periods, respondents were still considered as employees of SDPI.

The Court certainly cannot acquiesce to respondents' contention that they are to be paid full backwages up to the finality of the June 8, 2006 decision. An employer found guilty of illegally dismissing his employee may not be ordered so to pay backwages beyond the date of closure of business where such closure was due to legitimate business reasons and not merely an attempt to defeat the order of reinstatement. [15] cralaw Verily, it is neither the function of the law nor its intent to supplant the prerogative of management in running its business, such as, to compel the latter to operate at a continuing loss simply because it has to maintain its workers in employment. Such an act would be tantamount to the taking of property without due process of law. [16] cralaw

On the issue of separation pay in lieu of reinstatement, the Court holds that the same accrued at the time SDPI could no longer employ respondents as it closed its business. Thus, the basis for the length of service shall be reckoned from the date of the respective hiring of respondents (Arguilla on March 27, 1984; and Pedrajas on June 1, 1981) up to the closure of SDPI on April 24, 1996. The Court notes that the separation pay being awarded in the instant case is due to illegal dismissal; hence, it is different from the amount of separation pay provided for in Article 283 of the Labor Code in case of retrenchment to prevent losses or in case of closure or cessation of the employer's business, in either of which the separation pay is equivalent to at least one (1) month or one-half (1/2) month pay for every year of service, whichever is higher. [17] cralaw

As to the amounts already received by respondents from SDPI, the Court finds it just to deduct the same from their monetary benefits due. Thus, the P71,838.16 and P102,593.32 respectively received by Arguilla and Pedrajas on August 28, 1990, and the P18,884.03 and P18,887.80 respectively paid to them on August 4, 1995, shall be deducted from the monetary awards due them to prevent unjust enrichment.

WHEREFORE, the dispositive portion of the June 8, 2006 Decision is MODIFIED as follows:

"IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY GRANTED. The Decision of the Court of Appeals, finding that the NLRC found no grave abuse of discretion in affirming in toto the Decision of the Labor Arbiter, is AFFIRMED.

Petitioners SDPI and Larry Dubberly are ORDERED to pay respondents Alfredo Arguilla and Henry C. Pedrajas full backwages from the time they were illegally retrenched on June 30, 1990 up to the time of their actual reinstatement on July 5, 1995; and shall commence again from the time they were forced to leave the company on August 4, 1995 up to April 23, 1996, the day before SDPI sold its assets to Goodyear Philippines, Inc. Petitioners are further ordered to pay respondents separation pay reckoned from the date of their respective hires up to the closure of SDPI on April 24, 1996. The P71,838.16 and P102,593.32 respectively received by respondents Arguilla and Pedrajas on August 28, 1990, and the P18,884.03 and P18,887.80 respectively paid to them on August 4, 1995, shall be deducted from the monetary awards due them.

SO ORDERED."

Very truly yours,

(Sgd.) ENRIQUETA ESGUERRA-VIDAL
Clerk of Court

First Division


Endnotes:

[1] cralaw Rollo , pp. 423-430.

[2] cralaw Id. at 404-422.

[3] cralaw Id. at 421.

[4] cralaw Id. at 424.

[5] cralaw Id. at 431-433.

[6] cralaw Id. at 434-438.

[7] cralaw Id. at 439-445.

[8] cralaw Id. at 216.

[9] cralaw Id. at 198-199.

[10] cralaw Id. at 200-201.

[11] cralaw Id. at 410.

[12] cralaw Id. at 133-134.

[13] cralaw Id. at 61-125.

[14] cralaw The base figure to be used in the computation of backwages due to the employee should include not just the basic salary, but also the regular allowances that he had been receiving such as the emergency living allowances and the 13th-month pay mandated under the law. Paramount Vinyl Products Corporation v. National Labor Relations Commission, G.R. No. 81200, October 17, 1990, 190 SCRA 525, cited in F.F. Marine Corporation v. National Labor Relations Commission, Second Division, G.R. No. 152039, April 8, 2005, 455 SCRA 154, 173-174.

[15] cralaw Chronicle Securities Corporation v. National Labor Relations Commission, G.R. No. 157907, November 25, 2004, 444 SCRA 342, 353, citing Pizza Inn/Consolidated Foods Corporation v. NLRC, 162 SCRA 773 (1988).

[16] cralaw Casimiro v. Stern Real Estate, Inc., G.R. No. 162233, March 10, 2006, 484 SCRA 463, 484.

[17] cralaw Philippine Carpet Employees Association (PHILCEA) v. Sto. Tomas, G.R. No. 168719, February 22, 2006, 483 SCRA 128, 152.


Back to Home | Back to Main

 

CLICK HERE FOR THE LATEST SUPREME COURT JURISPRUDENCE

PHILIPPINE SUPREME COURT DECISIONS

QUICK SEARCH

cralaw

 







chanrobles.com

ChanRobles Legal Resources:

ChanRobles On-Line Bar Review

ChanRobles Internet Bar Review : www.chanroblesbar.com

ChanRobles MCLE On-line

ChanRobles Lawnet Inc. - ChanRobles MCLE On-line : www.chanroblesmcleonline.com