FIRST DIVISION G.R. No.

168719 February 22, 2006

PHILIPPINE CARPET EMPLO EE! A!!OCIATION "PHILCEA#, $or a%& '% be(a)$ o$ '*+ 77 Me,ber+ A$$e-*e&,Petitioner, vs. HON. PATRICIA !TO. TOMA!, !ECRETAR OF LA.OR AN/ EMPLO MENT, PHILIPPINE CARPET MAN0FACT0RING COPORATION, PATRICIO LIM, E1EL N LIM FOR.E!, RAFAEL 1ILLAREAL a%& MAN0EL I2E /IA3, Respondents. DECISION CALLE4O, !R., J.: The Philippine Carpet Manufa turin! Corporation "Corporation for #revit$%, a orporation dul$ re!istered in the Philippines, is en!a!ed in the #usiness of &anufa turin! 'ool and $arn arpets and ru!s.( The Corporation also had ())* e+uit$ invest&ents in the follo'in! orporations, Pa ifi Carpet Mills Corporation "PCMC-.S/% 'hi h sold arpets and &ats on 'holesale #asis0 Pa ifi Carpet Manufa turin! Corporation "PCMC-Clar1% 'hi h &anufa tured hand-tufted and &a hine-tufted arpets and ru!s0 and the Philippine 2oolen Spinnin! Corporation "P2SC% 'hi h &anufa tured 'ool $arn. The Corporation also o'ned (3.45* of the shares of sto 1s in DI Se urit$ and 6eneral Servi es, In ., and 7.7)* of su h shares in the Manila Peninsula 8otel, In .7 The Corporation e&plo$ed 93: e&plo$ees, :55 of 'ho& 'ere &e&#ers of the sole #ar!ainin! unit of the e&plo$ees therein, the Philippine Carpet E&plo$ees /sso iation ".nion for #revit$%.: The 7))7-7))9 Colle tive ;ar!ainin! /!ree&ent "C;/% #et'een the Corporation and the .nion 'as to e<pire on Mar h (=, 7))9.9 In a letter dated Fe#ruar$ (), 7))9 addressed to the Corporation>s /ssistant Vi e President for /d&inistration, Manuel I1e Dia?, the .nion proposed the holdin! of a onferen e #et'een representatives of the .nion and the Corporation on Fe#ruar$ 79, 7))9, to o&&en e ne!otiations for the ne<t C;/. /ppended to the letter 'ere proposals on revisions of the previous C;/, 'hi h in luded 'a!e and #onus in rease, 'elfare allo'an es and hospitali?ation in entives, transportation, unifor&, and ri e su#sid$ au!&entation. The .nion also proposed the a&end&ent of the e<istin! retire&ent pro!ra& of the Corporation for its e&plo$ees.5 The Corporation did not respond to the letter. Conse+uentl$, the proposed onferen e failed to &ateriali?e.= On Mar h 4, 7))9, Dia? issued a Me&orandu& infor&in! all e&plo$ees that a o&prehensive ost redu tion pro!ra& 'ould #e i&ple&ented #$ the Corporation on /pril (5, 7))9, @on a ount of depressed #usiness onditions #rou!ht a#out #$ the urren $ risis in Southeast /sia, the Middle East 'ar and the 4A(( in ident in the .nited States of /&eri a.@ / ordin! to the Me&orandu&, the e&plo$ees on erned 'ould re eive the follo'in! #enefits, a% Separation pa$ #% Cash e+uivalent of earned #ut unused va ation and si 1 leave redits

% Pro-rata (:th &onth pa$3 Of the BB e&plo$ees 'ho 'ere ter&inated fro& e&plo$&ent, 33 'ere .nion &e&#ers,B in ludin! Ed!ardo Villanueva, 'ho 'as ele ted .nion offi er after the personnel redu tion pro!ra& o&&en ed. The (9 .nion &e&#ers 'ho 'ere retren hed re eived their separation pa$ and other #enefits fro& the Corporation.4 In a letter dated Mar h ((, 7))9, Dia? infor&ed the Depart&ent of Ca#or and E&plo$&ent "DOCE% of its retren h&ent pro!ra&, 'hi h 'as #ein! i&ple&ented @on a ount of a slu&p in the de&and of its produ ts due to their un o&petitiveness o&pared to si&ilar produ ts &ade else'here in /sia 'here ost of la#or is ver$ lo'.@ / ordin! to the letter, the Corporation de ided to retren h its personnel to save produ tion osts and to sta$ in #usiness.() The Corporation su#&itted the list of BB e&plo$ees 'ho 'ere to #e retren hed effe tive at the lose of 'or1in! hours on or a#out /pril (5, 7))9.(( In a letter(7 dated Mar h (B, 7))9 si!ned #$ Rafael 6. Villareal, / tin! /ssistant 6eneral Mana!er, the Corporation proposed a &oratoriu& on 'a!e in rease and additional #enefits, onsiderin! that #usiness, espe iall$ the e<port &anufa turin! se tor, had #een hard hit #$ @a series of e<ternall$ !enerated fa tors.@ It 'as pointed out that the pri es of the Corporation>s produ ts re&ained un o&petitive o&pared to those of China, Thailand, and Indonesia, and this drove prospe tive #u$ers a'a$. The Corporation 'as also onfronted 'ith stiff o&petition o&in! fro& traders 'ho #rou!ht in s&u!!led !oods and the fa t that the &ar1et trend had shifted to heap forei!n-produ ed arpet rolls. The letter also stressed that the ar arpet industr$ profits 'ere predo&inantl$ &ar!inal due to o&petition and usto&er re+uire&ents. The letter further stated that the Philippine e ono&$ in !eneral 'as in risis, and that the #i!!est pro#le& of all 'as the un ertaint$ of the ountr$>s politi al and e ono&i future. Conse+uentl$, the volu&e of #usiness !enerated #$ the Corporation had steadil$ de lined fro& 7))) to 7)):, su h that 'or1ers 'ere for ed to avail of their leaves as there 'as not enou!h 'or1load. The Corporation>s o#De tive 'as to 1eep the #usiness via#le #$ rationali?in! &anpo'er and redu in! produ tion and la#or ost, in ludin! the i&ple&entation of the voluntar$ retire&ent pro!ra&. The Corporation anti ipated a prolon!ed de&and slo'do'n and it 'as sur&ised that, #ased on reasona#le proDe tions, the #usiness 'ould re&ain at a standstill 'ith no i&prove&ent until after t'o or three $ears.(: Thus, !iven these ir u&stan es, the onl$ 'a$ to survive the risis 'as for the .nion to a!ree on a &oratoriu& on in rease in 'a!es and #enefits.(9 Frustrated at the Corporation>s response, the .nion filed a noti e of stri1e 'ith the DOCE on the sa&e da$. Ne!otiations #efore the National Con iliation and Mediation ;oard ensued,(5 #ut the Corporation stood pat on its stan e for a &oratoriu& on in reases in 'a!es and #enefits. The .nion reDe ted this and a used the Corporation of union #ustin!, as 33 of its &e&#ers 'ere dis&issed. On Mar h :(, 7))9, the .nion filed a petition(= 'ith the DOCE for the Se retar$ of Ca#or and E&plo$&ent "SOCE% to assu&e Durisdi tion over the la#or dispute involvin! the follo'in! issues,

/. ECONOMIC ISS.ES (. 2a!e In rease 7. ;enefits 7.( .nifor& 7.7 8MO "8ospitali?ation /ssistan e% 7.: Christ&as ;onus 7.9 Ri e Su#sid$ 7.5 Earl$ Retire&ent ;. NON-ECONOMIC ISS.ES (. S ope of the ;ar!ainin! .nit C. .NF/IR C/;OR PR/CTICE (. Ille!al dis&issal of 3= union &e&#ers0 7. C;/ violation0 and :. Refusal to #ar!ain.(3 In its Position Paper, the .nion alle!ed that its proposed C;/ pa 1a!e for three $ears "7))9 to 7))3% 'ould a&ount onl$ to P:5,B4),5)).)), or an avera!e of P((,4=:,5)).)) per C;/ $ear, hardl$ a dent on the Corporation>s a u&ulated net profit of P7(:,B5B,9)7.)) for the last si< $ears "(44B to 7)):%. It 'as pointed out that the Corporation earned a net in o&e of P:4,55:,)7B.)) in 7))7, and P(7,374,33=.)) in 7)):. The .nion lai&ed that there 'as no valid e ono&i reason to retren h e&plo$ees, and that a @slu&p@ in de&and of the Corporation>s produ ts 'as not a valid !round to dis&iss e&plo$ees. The .nion also har!ed the Corporation of resortin! to a sinister s he&e of re- hannelin! its arpet #usiness to its 'holl$ o'ned su#sidiar$, PCMC-Clar1, 'hile ne!otiations for a ne' C;/ 'ere on!oin!. / ordin! to the .nion, this 'as also to Dustif$ the dis&issal of the 33 .nion &e&#ers and #ust the .nion in the pro ess. The .nion insisted that the Corporation 'as !uilt$ of unfair la#or pra ti e.(B The .nion &aintained that in dis&issin! its e&plo$ees, the Corporation violated the &andator$ :)-da$ noti e rule #e ause su h e&plo$ees re eived the noti e of ter&ination on Mar h (:, 7))9 "Saturda$%, to ta1e effe t the follo'in! 'or1in! da$, Mar h (5, 7))9 "Monda$%. It stressed that the :)-da$ &andator$ noti e ould not #e su#stituted #$ pa$in! the affe ted e&plo$ees their respe tive one &onth salaries.(4

For its part, the Corporation alle!ed that #ased on the do u&ents su#&itted to the SOCE, it suffered a sharp de line in #usiness in ter&s of volu&e and in o&e derived sin e 7))(, aused #$ the /sian finan ial risis and later a!!ravated #$ the 4A(( in ident in the ..S. and the on!oin! 'ar in the Middle East. This 'as a!!ravated #$ hi!her produ tion and la#or osts as o&pared to its o&petitors in China, Thailand, and Indonesia0 as su h, the net in o&es of the Corporation drasti all$ de lined fro& 7))) to 7)):, as follo's, 7))) E P9(,4)5,37(.)) 7))( E P:7,4):,B)).)) 7))7 E P73,==(,7(:.)) 7)): E P((,(77,(97.))7) The Corporation 'ent on to e<plain that its in o&e fro& the do&esti &ar1et and e<port operations de lined sharpl$, fro& its e<port operations, its in o&e of P7B,B55,))).)) in 7))( dropped to P7:,473,))).)) in 7))70 and, thereafter, to P5,34=,))).)) in 7)):. Fro& its do&esti operations, it had a net loss of P(,9)=,))).)) in 7))( 'hi h in reased to P3,:=:,))).)) in 7))7, and to P=,=)5,))).)) in 7)):. The sharp de line in e<port sales and in o&e in 7)): 'as due to the fa t that it lost (= of its lients in the Middle East, ostin! the Corporation a total of .SF9,==B,4)B.7B in unreali?ed sales.7( It also lost 3) of its do&esti lients to its o&petitors, resultin! in unreali?ed sales of P=4,B==,=:B.=3.77 Due to the la 1 of orders, the volu&e of #usiness 'as drasti all$ redu ed, as sho'n in the 'or1load of the Corporation as of /pril 7))9, < < < the 'or1load for PPC 'as !ood for onl$ B da$s0 for Spinnin!, 9) da$s0 for D$ein!, 7 da$s0 for 6raphi /rts, B da$s0 for Sten ilin!, (5 da$s0 for 2eavin!, B da$s0 for Sa&ple, : da$s0 for Pass Ma hine, ( da$0 and for Car Carpet, (= da$s.7: /side fro& the BB affe ted e&plo$ees, even &ana!erial and supervisor$ e&plo$ees 'ere not spared, as si< of the& 'ere also retren hed. Seventeen .nion &e&#ers had a epted their separation pa$ and other #enefits, and as to the re&ainin! e&plo$ees, the Corporation averred that the$ re eived the follo'in!, aside fro& produ tivit$ in entive #onuses, /vera!e #asi 'a!e P:B7.(5 per da$ Transportation allo'an e B.)) per da$ Meal allo'an e 5.5) per da$ ECOC/ 7).7( per da$ (:th &onth pa$ :3.B9 per da$ /vera!e seniorit$ pa$ 9(.=7 per da$ /vera!e va ationAsi 1 leave onversion (B.47 per da$

Ri e su#sid$ (9.57 per da$79 On Gune 7:, 7))9, the SOCE rendered a De ision75 !rantin! 'a!e in reases totallin! PB,):4,::).)) to the e&plo$ees for the three $ears of the C;/, (st $ear E ten pesos per da$ "P().))Ada$% 7nd $ear E t'elve pesos per da$ "P(7.))Ada$% :rd $ear E thirteen pesos per da$ "P(:.))Ada$%7= Relative to in reased #enefits for unifor&, Christ&as pa 1a!e, ri e su#sid$, and earl$ retire&ent planAseparation pa$, the SOCE ordered the retention of the status +uo. 8o'ever, the SOCE denied the de&and of the .nion as to the s ope of the #ar!ainin! unit.73 The SOCE li1e'ise affir&ed the ter&ination of the BB e&plo$ees on the !round that, if not for the personnel redu tion pro!ra& i&ple&ented fro& 7))( to 7))9, the Corporation 'ould have lost P(7,)79,45B.)) in 7)):0 P77,B7),(5(.)) in 7))90P74,739,7((.)) in 7))50 and P7=,479,=)7.)) in 7))=.7B The SOCE also ruled that the Corporation 'as not !uilt$ of union-#ustin!.74 The .nion thereafter filed a petition for ertiorari 'ith the Court of /ppeals "C/%, assailin! the de ision of the SOCE on the follo'in! !rounds, I T8E 8ON. SECRET/RH OF C/;OR /ND EMPCOHMENT 6R/VECH /;.SED 8ER DISCRETION /MO.NTIN6 TO C/CI OF G.RISDICTION IN R.CIN6 T8/T T8ERE 2/S G.ST C/.SE FOR DISMISS/C. T8E /CCE6ED @SC.MP IN T8E DEM/ND FOR O.R PROD.CTS@ IS NOT / 6RO.ND FOR DISMISS/C /S R.CED IN T8E C/SE OF VIVI/N H. IM;.IDO VERS.S N/TION/C C/;OR REC/TIONS COMMISSION, INTERN/TION/C INFORM/TION SERVICES, INC. /ND 6/;RIEC CI;R/NDO. II T8E 8ON. SECRET/RH OF C/;OR /ND EMPCOHMENT 6R/VECH /;.SED ITS DISCRETION /MO.NTIN6 TO C/CI OF G.RISDICTION IN NOT FINDIN6 T8/T RESPONDENT P8ICIPPINE C/RPET M/N.F/CT.RIN6 CORP. /ND ITS OFFICERS /RE CI/;CE FOR .NF/IR C/;OR PR/CTICE. RESPONDENTS C/NNOT ;E /CCO2ED TO 8IDE ON ITS CORPOR/TE VEIC IN ORDER TO IMPCEMENT T8EIR @EVIC SC8EME@ /6/INST T8E .NION /ND ITS MEM;ERS. III T8E 8ON. SECRET/RH OF C/;OR /ND EMPCOHMENT 6R/VECH /;.SED ITS DISCRETION /MO.NTIN6 TO C/CI OF G.RISDICTION IN NOT FINDIN6 T8/T T8E :)D/H M/ND/TORH NOTICE 2/S S.;VERTED FOR V/CID DISMISS/C. :)

On Gune 7, 7))5, the .nion su#&itted a Manifestation dated Ma$ :), 7))5, statin! @that Philippine Carpet had &ore #usiness in 7))9 than the previous $ear there#$ ne!atin! its ver$ !round for Mass Dis&issal of 33 .nion &e&#ers on !round of lo' volu&e of #usiness.@:( The .nion averred that #ased on the Consolidated ;alan e Sheets of the Corporation and its su#sidiaries, there 'as a P5)9,5B),754.)) in rease in net sales in 7))9, o&pared to the P9=4,(74,3BB.)) net sales in 7)):. The$ alle!ed that the in o&e fro& their operations tripled toP=),949,4)B.)) in 7))9 'ith a net profit of P9B,(4:,9(=.)). /fter the retren h&ent pro!ra& 'as i&ple&ented, &ore than ()) ne' 'or1ers 'ere hired, in ludin! so&e of those 'ho had #een retren hed, and (7 &ana!ers and supervisors 'ere pro&oted. The .nion appended to its Manifestation an audit report of the Corporation dated Mar h (), 7))5 prepared #$ S6V J Co. 'hi h 'as filed 'ith the Se urities and E< han!e Co&&ission "SEC% on /pril (5, 7))5.:7 The Corporation replied that the ne'l$ hired and rehired e&plo$ees 'ere onl$ for fi<ed periods, a pra ti e it had adopted even #efore it dis&issed the BB e&plo$ees, in lusive of the 33 .nion &e&#ers. On /pril (4, 7))5, the C/ rendered Dud!&ent:: dis&issin! the petition for la 1 of &erit. The appellate ourt ruled that the Corporation failed to prove that the SOCE o&&itted !rave a#use of dis retion a&ountin! to e< ess or la 1 of Durisdi tion in issuin! the de ision. The appellate ourt affir&ed the findin! of the SOCE that there 'as a slu&p in the de&and of the Corporation>s produ ts, holdin! that 'hile lo' volu&e of 'or1 'as not listed as a valid !round for dis&issal under /rti les 7B7 and 7B: of the Ca#or Code of the Philippines, it nevertheless Dustified the dis&issal on the !round of redundan $. Citin! the rulin! of this Court in I&#uido v. National Ca#or Relations Co&&ission,:9 the C/ de lared that 'hile lo' volu&e of 'or1 and o&pletion of proDe t alone did not Dustif$ dis&issal under the Ca#or Code, if a o&panied #$ eviden e 'hi h sho' that ertain positions had #e o&e redundant, e&plo$ees ould #e validl$ dis&issed on su h !round. The C/ also de lared that a position is redundant 'hen it is superfluous, and &a$ #e aused #$ de rease in volu&e of #usiness. It e&phasi?ed that 'hat deter&ines the validit$ of the dis&issal #ased on redundan $ is the suffi ien $ of eviden e sho'in! the superfluit$ of the position and the su#stantial o&plian e 'ith the pro edure laid do'n under the aforesaid arti le.:5 The appellate ourt de lared that 'hile the orporation hired e&plo$ees after the retren h&ent, the ne' 'or1ers 'ere hired for fi<ed periods onl$. The Corporation had #een hirin! 'or1ers for fi<ed periods and @on a need #asis@ even #efore the retren h&ent pro!ra& 'as i&ple&ented. The C/ o#served that it even en!a!ed the servi es of independent ontra tors to perfor& arpet installation 'or1 to au!&ent its personnel o&ple&ent. Thus, ontrar$ to the position of the .nion, the hirin! of 'or1ers for a fi<ed period 'as not intended to fill up the positions left #$ the retren hed 33 .nion &e&#ers.:= The C/ also ruled that the Me&orandu& announ in! the retren h&ent to the e&plo$ees 'as ir ulated on Mar h 4, 7))9. It 'as even follo'ed #$ individual noti es of ter&ination on Mar h (:, 7))9 indi atin! that the intended ter&ination 'ould ta1e effe t onl$ on /pril (5, 7))9.

8en e, the e&plo$ees 'ere !iven prior noti es, &ore than one &onth #efore the intended ter&ination.:3 The .nion filed a &otion for re onsideration, 'hi h the appellate ourt denied.:B Thus, petitioner .nion see1s relief fro& this Court, alle!in! that the C/ erred in affir&in! the dis&issal of its .nion &e&#ers on the !round of retren h&ent or redundan $, and in dis&issin! its o&plaint for unfair la#or pra ti e a!ainst respondent Corporation. Petitioner avers that there 'as no fa tual #asis for the dis&issal of 33 of its &e&#ers due to retren h&ent or redundan $. Contrar$ to the findin!s of the C/ that there 'as a @slu&p@ in de&and for respondent>s produ ts and a de rease in volu&e of #usiness and profits, net sales in reased to P5)9,5B),754.)), !ross profit toP(95,5)3,))7.)), and net profit to P9B,(4:,9(=.)) in 7))9. Petitioner relies on the annual audited report of respondent Corporation filed 'ith the SEC on /pril (5, 7))5. Su h lai& of a slu&p in produ t de&and is li1e'ise #elied #$ the follo'in!, hirin! or rehirin! ()) ne' e&plo$ees, &ass pro&otions of (7 &ana!erial and supervisor$ e&plo$ees, ontra tin! Danitorial servi es, and authori?in! full #last overti&e 'or1 for = hours ever$ da$.:4 Petitioner posits that respondent Corporation transferred &ost of the Do#s of the 33 dis&issed .nion &e&#ers to its su#sidiar$, the PCMC-Clar1, to Dustif$ the &ass dis&issal. Petitioner insists that respondent Corporation should not #e allo'ed to evade its lia#ilities for unfair la#or pra ti es and hide #ehind the loa1 of the separate orporate entit$ of its 'holl$-o'ned su#sidiar$.9) Petitioner avers that respondent Corporation violated Se tion :"e%, /rti le IV of the C;/ #$ dis&issin! Ed!ardo Villanueva, an ele ted senior offi er. Moreover, in effe tin! the dis&issal of its 33 &e&#ers, respondent Corporation violated the :)-da$ &andator$ noti e rule under the e<istin! C;/.9( ;$ 'a$ of Co&&ent,97 respondent Corporation avers that the issues raised #$ petitioner are fa tual, and under Rule 95 of the Revised Rules of Court, su h issues are pros ri#ed. It insists that the eviden e relied on #$ petitioner in its Manifestation dated Ma$ :), 7))5 'as irrelevant, relatin! as it does to its finan ial status and those of its su#sidiaries 1no'n as @The 6roup.@ It further asserts that so&e &ana!ers and supervisors 'ere pro&oted in the ordinar$ ourse of personnel &ove&ent #ased on &erits. It reiterates that the servi es of the 33 .nion &e&#ers 'ere ter&inated due to redundan $, a result of a radi al redu tion in volu&e of #usiness, and i&ple&ented in the le!iti&ate e<er ise of its &ana!e&ent prero!ative. Respondent Corporation ites the rulin! of the SOCE as #asis to reDe t petitioner>s plea to pier e the separate orporate entit$ of the PCMC-Clar1 and find respondent !uilt$ of union #ustin!. In repl$,9: petitioner avers that the do u&ents appended to its Manifestation dated Ma$ :), 7))5 #efore the C/ pertained to respondent Corporation, and 'ere filed 'ith the SEC on /pril (5, 7))5. The petition is &eritorious.

Retren h&ent is an authori?ed ause for the ter&ination of e&plo$&ent under /rti le 7B: of the Ca#or Code, 'hi h reads, /rt. 7B:. Closure of esta#lish&ent and redu tion of personnel. E The e&plo$er &a$ also ter&inate the e&plo$&ent of an$ e&plo$ee due to the installation of la#or savin! devi es, redundan $, retren h&ent to prevent losses or the losin! or essation of operation of the esta#lish&ent or underta1in! unless the losin! is for the purpose of ir u&ventin! the provisions of this Title, #$ servin! a 'ritten noti e on the 'or1ers and the Ministr$ of Ca#or and E&plo$&ent at least one "(% &onth #efore the intended date thereof. In ase of ter&ination due to the installation of la#or savin! devi es or redundan $, the 'or1er affe ted there#$ shall #e entitled to a separation pa$ e+uivalent to at least his one "(% &onth pa$ or to at least one "(% &onth pa$ for ever$ $ear of servi e, 'hi hever is hi!her. In ase of retren h&ent to prevent losses and in ases of losures or essation of operations of esta#lish&ent or underta1in! not due to serious #usiness losses or finan ial reverses, the separation pa$ shall #e e+uivalent to one "(% &onth pa$ or at least one-half "(A7% &onth pa$ for ever$ $ear of servi e, 'hi hever is hi!her. / fra tion of at least si< "=% &onths shall #e onsidered one "(% 'hole $ear.99 Retren h&ent is defined as the ter&ination of e&plo$&ent initiated #$ the e&plo$er throu!h no fault of the e&plo$ee and 'ithout preDudi e to the latter, resorted #$ &ana!e&ent durin! periods of #usiness re ession, industrial depression or seasonal flu tuations or durin! lulls over shorta!e of &aterials. It is a redu tion in &anpo'er, a &easure utili?ed #$ an e&plo$er to &ini&i?e #usiness losses in urred in the operation of its #usiness.95 E<plainin! the i&port of the phrase @to prevent losses,@ this Court held in Cope? Su!ar Corporation v. Federation of Free 2or1ers,9= thus, In its ordinar$ onnotation, the phrase @to prevent losses@ &eans that retren h&ent or ter&ination of the servi es of so&e e&plo$ees is authori?ed to #e underta1en #$ the e&plo$er so&eti&e #efore the losses anti ipated are a tuall$ sustained or reali?ed. It is not, in other 'ords, the intention of the la'&a1er to o&pel the e&plo$er to sta$ his hand and 1eep all his e&plo$ees until so&eti&e after losses shall have, in fa t, &ateriali?ed0 if su h an intent 'ere e<pressl$ 'ritten into the la', that la' &a$ 'ell #e vulnera#le to onstitutional atta 1 as ta1in! propert$ fro& one &an to !ive to another. This is si&ple enou!h.93 The prero!ative of an e&plo$er to retren h its e&plo$ees &ust #e e<er ised onl$ as a last resort, onsiderin! that it 'ill lead to the loss of the e&plo$ees> livelihood. It is Dustified onl$ 'hen all other less drasti &eans have #een tried and found insuffi ient or inade+uate.9B Moreover, the e&plo$er &ust prove the re+uire&ents for a valid retren h&ent #$ lear and onvin in! eviden e0 other'ise, said !round for ter&ination 'ould #e sus epti#le to a#use #$ s he&in! e&plo$ers 'ho &i!ht #e &erel$ fei!nin! losses or reverses in their #usiness ventures in order to ease out e&plo$ees. The re+uire&ents are, <<< "(% that the retren h&ent is reasona#l$ ne essar$ and li1el$ to prevent #usiness losses 'hi h, if alread$ in urred, are not &erel$ de &ini&is, #ut su#stantial, serious, a tual and real, or if onl$ e<pe ted, are reasona#l$ i&&inent as per eived o#De tivel$ and in !ood faith #$ the e&plo$er0 "7% that the e&plo$er served 'ritten noti e #oth to the e&plo$ees and to the Depart&ent of Ca#or and E&plo$&ent at least one &onth prior to the intended date of

retren h&ent0 ":% that the e&plo$er pa$s the retren hed e&plo$ees separation pa$ e+uivalent to one &onth pa$ or at least K &onth pa$ for ever$ $ear of servi e, 'hi hever is hi!her0 "9% that the e&plo$er e<er ises its prero!ative to retren h e&plo$ees in !ood faith for the advan e&ent of its interest and not to defeat or ir u&vent the e&plo$ees> ri!ht to se urit$ of tenure0 and "5% that the e&plo$er used fair and reasona#le riteria in as ertainin! 'ho 'ould #e dis&issed and 'ho 'ould #e retained a&on! the e&plo$ees, su h as status "i.e., 'hether the$ are te&porar$, asual, re!ular or &ana!erial e&plo$ees%, effi ien $, seniorit$, ph$si al fitness, a!e, and finan ial hardship for ertain 'or1ers.94 2hat the la' spea1s of is serious #usiness losses or finan ial reverses. Slidin! in o&es or de reasin! !ross revenues are not ne essaril$ losses, &u h less serious #usiness losses 'ithin the &eanin! of the la'. The #are fa t that an e&plo$er &a$ have sustained a net loss, su h loss, per se, a#sent an$ other eviden e on its i&pa t on the #usiness, nor on e<pe ted losses that 'ould have #een in urred had operations #een ontinued, &a$ not a&ount to serious #usiness losses &entioned in the la'.5) The e&plo$er &ust also sho' that its losses in reased throu!h a period of ti&e and that the ondition of the o&pan$ 'ill not li1el$ i&prove in the near future. Redundan $, on the other hand, e<ists 'hen the servi e apa#ilit$ of the 'or1 for e is in e< ess of 'hat is reasona#l$ needed to &eet the de&ands of the enterprise. / redundant position is one rendered superfluous #$ an$ nu&#er of fa tors, su h as overhirin! of 'or1ers, de reased volu&e of #usiness, droppin! of a parti ular produ t line previousl$ &anufa tured #$ the o&pan$, or phasin! out of a servi e a tivit$ previousl$ underta1en #$ the #usiness. .nder these onditions, the e&plo$er has no le!al o#li!ation to 1eep in its pa$roll &ore e&plo$ees than are ne essar$ for the operation of its #usiness.5( For the i&ple&entation of a redundan $ pro!ra& to #e valid, the e&plo$er &ust o&pl$ 'ith the follo'in! re+uisites, "(% 'ritten noti e served on #oth the e&plo$ees and the Depart&ent of Ca#or and E&plo$&ent at least one &onth prior to the intended date of retren h&ent0 "7% pa$&ent of separation pa$ e+uivalent to at least one &onth pa$ for ever$ $ear of servi e, 'hi hever is hi!her0 ":% !ood faith in a#olishin! the redundant positions0 and "9% fair and reasona#le riteria in as ertainin! 'hat positions are to #e de lared redundant and a ordin!l$ a#olished.57 Respondents failed to addu e lear and onvin in! eviden e to prove the onfluen e of the essential re+uisites for a valid retren h&ent of its e&plo$ees. 2e #elieve that respondents a ted in #ad faith in ter&inatin! the e&plo$&ent of the &e&#ers of petitioner .nion. Contrar$ to the lai& of respondents that the Corporation 'as e<perien in! #usiness losses, respondent Corporation, in fa t, a&assed su#stantial earnin!s fro& (444 to 7)):. It found no need to appropriate its retained earnin!s e< ept on Mar h 7:, 7))(, 'hen it appropriated P=),))),))).)) to in rease produ tion apa it$.5: The respondent Corporation never in urred an$ net loss durin! said period, 'hi h is #orne out #$ the eviden e on re ord, thus, Retained Earnin!s ".nappropriated% Retained Earnin!s "/ppropriated%

(444 P():,7)),4=).)) 7))) P(5=,337,((B.)) 7))( P(75,54:,55).)) P=),))),))).)) 7))7 P(55,)33,:7B.)) 7)): P(53,3:3,B59.))59 Respondent Corporation appropriated the P=),))),))).)) to fund the in rease in produ tion apa it$ on Mar h 7:, 7))( and P7),))),))).)) for the e<pansion of its plant. /lthou!h the Corporation>s retained earnin!s de lined in 7))(, in 7))7 su h earnin!s a&ounted to P(55,)33,:7B.)), sli!htl$ lo'er than its P(53,3:3,B59.)) earnin!s in 7)):.55 The eviden e on re ord #elies the P77,B7),(5(.)) net in o&e loss in 7))9 as proDe ted #$ the SOCE. On Mar h 74, 7))9, the ;oard of Dire tors approved the appropriation of P7),))),))).)) to pur hase &a hiner$ to i&prove its fa ilities, and de lared ash dividends to sto 1holders at P:).)) per share. This is eviden ed #$ the finan ial report, e. On Mar h 74, 7))9, the ;OD approved the reversal of the appropriation for plant e<pansion a&ountin! toP=),))),))). On the sa&e date, the ;OD approved the de laration of P() per share ash dividends to sto 1holders of re ord as of Mar h 74, 7))9 and the appropriation for a +uisition of &a hiner$ and e+uip&ent a&ountin! to P7),))),))) out of the Parent Co&pan$>s unappropriated retained earnin!s. f. On Septe&#er (=, 7))9, the ;OD approved the appropriation fro& unappropriated retained earnin!s for the pur hase of &a hiner$ and i&prove&ent of the Parent Co&pan$>s fa ilities a&ountin! to P7),))),))). On the sa&e date, the ;OD de lared ash dividends of P:) per share pa$a#le in 7))5 and reversed the appropriation &ade on Mar h 74, 7))9 for a +uisition of &a hiner$ and e+uip&ent.5= It #ears stressin! that the appropriation of P7),))),))).)) #$ the respondent Corporation on Septe&#er (=, 7))9 'as &ade #arel$ five &onths after the 33 .nion &e&#ers 'ere dis&issed on the !round that respondent Corporation 'as sufferin! fro& @ hroni depression.@ Cash dividends 'ere li1e'ise de lared on Mar h 74, 7))9, #arel$ t'o 'ee1s after it i&ple&ented its @retren h&ent pro!ra&.@ If respondent Corporation 'ere to #e #elieved that it had to retren h e&plo$ees due to the de#ilitatin! slu&p in de&and for its produ ts resultin! in severe losses, ho' ould it Dustif$ the pur hase of P7),))),))).)) 'orth of &a hiner$ and e+uip&entL There is li1e'ise no Dustifi ation for the hirin! of &ore than ()) ne' e&plo$ees, &ore than the nu&#er of those 'ho 'ere retren hed, as 'ell as the order authori?in! full #last overti&e 'or1 for si< hours dail$. /ll these are in onsistent 'ith the intransi!ent lai& that respondent Corporation 'as i&pelled to retren h its e&plo$ees pre isel$ #e ause of lo' de&and for its produ ts and other e<ternal auses.

The eviden e on re ord also sho's that fro& (444 to 7)):, respondent Corporation had the follo'in! net sales, !ross and net profits, as 'ell as net in o&e, Net Sales 6ross Profit Net Profit Net In o&e (444 P::4,99:,)(3.)) P3B,()),9B5.)) P3,5=7,537.)) P74,)=B,:BB.)) 7))) P9(3,94),:)4.)) PB3,99B,:77.)) P74,(5B,7B9.)) P=:,=9),9)B.)) 7))( P9(4,B7(,9==.)) P44,)B(,9:B.)) P3),=):,34).)) P9=,554,4(3.)) 7))7 P9)5,B4:,7B=.)) PB4,B(9,=4B.)) P==,74),9)5.)) P:4,55:,)7B.)) 7)): P9(:,=(=,(33.)) P3B,B=9,((9.)) P=9,5(=,4(3.)) P(7,374,33=.))53 Thus, there 'as a su#stantial in rease in net sales fro& (444 to 7))), a&ountin! to P3B,)93,747.)). /lthou!h net sales in 7))( de reased #$ P7,::(,(53.)), this 'as aused #$ the politi al risis in the latter half of 7))). The onsidera#le de rease in net sales in 7))7 "PB,47B,(:).))% 'as aused #$ the de rease in sales to one of respondent Corporation>s do&esti usto&ers, the .niversal Far East Corporation "fro& P(),(4(,B4(.)) in 7))( to P74,==:,:3(.)) in 7))7%.5B This pro&pted respondent Corporation to retren h so&e of its personnel and stop the operation of P2SC effe tive Gul$ :(, 7))7. 8o'ever, it re overed in 7)): and in reased net sales #$P3,377,B4(.)), 'hi h paralleled its net sales in 7))(. Conse+uentl$, respondent Corporation in reased its retained earnin!s to P(5=,337,((B.)). In 7)):, the net sales in reased #$ &ore than PB,))),))).)). There 'as also an in rease of sales to su#sidiaries and asso iates fro& P55,4)),:B9.)) in 7))7 to P3(,459,4B7.)) in 7)):.54 The personnel osts for salaries and 'a!es, e&plo$ee #enefits and allo'an es and retire&ent osts also de reased fro& P(9),554,35:.)) in 7))7 to onl$ P(77,)35,:B:.)) in 7)):.=) Even !eneral and ad&inistrative e<penses sli!htl$ de reased to P(9,5B=,93(.)) in 7)): fro& P(5,7=7,4)(.)) in 7))7.=( The net in o&e of respondent Corporation in (444 "P74,)=B,:BB.))% in reased to P=:,=9),9)B.)) in 7))). Its retained earnin!s ofPB9,7)(,B77.)) at the #e!innin! of (444 in reased to P():,7)),4=).)) in 7))).=7 The Corporation>s net profits of P3,5=7,537.)) in (444 in reased to P74,(5B,7B9.)) in 7))). /d&ittedl$, the net in o&e of respondent Corporation of P9=,554,4(3.)) in 7))( de reased to P:3,3=9,:):.)) in 7))7. 8o'ever, su h de rease ensued #e ause respondent Corporation de lared ash dividends for its shareholders a&ountin! to P7B,))),))).)).=: It also appears that respondent Corporation>s !ross profit of PB4,B(9,=4B.)) in 7))7 de reased toP3B,B=9,((9.)) in 7)):. The reason for this is that the ost of !oods sold in 7))7 a&ounted to P:(=,)3B,5BB.)). In 7)):, it in reased to P::9,357,)=:.)) in 7)):,=9 in lar!e part due to net han!es in finished !oods and !oods in the pro ess a&ountin! to P4,7):,=)5.)),=5 as 'ell as osts for ra' &aterials used, spare parts and supplies, li!ht, po'er and 'ater, and depre iation of ost of !oods sold in reased. 8o'ever, personnel osts de reased toP43,43(,934.)).== There 'as thus no reason for respondent Corporation to i&ple&ent its @retren h&ent pro!ra&@ and ter&inate the BB e&plo$ees.

The net in o&e of the respondent Corporation of P:4,55:,)7B.)) in 7))7 de reased to P(7,374,33=.)) in 7)):.=3 It #ears stressin!, ho'ever, that the sto 1holders re eived ash dividends in the total a&ount ofP(7,754,93:.)).=B /lso, the net in o&e of respondent Corporation de reased #e ause its in o&e #efore e+uit$ in net earnin!s of its su#sidiaries and asso iates 'as redu ed to P((,(77,(97.)).=4 /s sho'n in the S6V J Co. /udit Report, the net in o&e of PCMC-.S/ de reased to P=,=(7,))).)), 'hile PCMC-Clar1 and MP8I suffered net losses.3) That respondents a ted in #ad faith in retren hin! the 33 &e&#ers of petitioner is #uttressed #$ the fa t that Dia? issued his Me&orandu& announ in! the ost-redu tion pro!ra& on Mar h 4, 7))9, after re eipt of the Fe#ruar$ (), 7))9 letter of the .nion president 'hi h in luded the proposal for additional #enefits and 'a!e in reases to #e in orporated in the C;/ for the ensuin! $ear. Petitioner and its &e&#ers had no in1lin!, #efore Fe#ruar$ (), 7))9, that respondent Corporation 'ould ter&inate their e&plo$&ent. Moreover, respondent Corporation failed to e<haust all other &eans to avoid further losses 'ithout retren hin! its e&plo$ees, su h as utili?in! the latter>s respe tive for ed va ation leaves. Respondents also failed to use fair and reasona#le riteria in i&ple&entin! the retren h&ent pro!ra&, and instead hose to retren h 33 of the &e&#ers of petitioner out of the dis&issed BB e&plo$ees. 2orse, respondent Corporation hired ne' e&plo$ees and even rehired the others 'ho had #een @retren hed.@ /s sho'n #$ the S6V J Co. /udit Report, as of $ear end De e&#er :(, 7)):, respondent Corporation in reased its net sales #$ &ore than PB,))),))).)). Respondents failed to prove that there 'as a drasti or severe de rease in the produ t sales or that it suffered severe #usiness losses 'ithin an interval of three ":% &onths fro& Ganuar$ 7))9 to Mar h 4, 7))9 'hen Dia? issued said Me&orandu&. Su h lai& of a depressed &ar1et as of Mar h 4, 7))9 'as onl$ a prete<t to retaliate a!ainst petitioner .nion and there#$ frustrate its de&ands for &ore &onetar$ #enefits and, at the sa&e ti&e, Dustif$ the dis&issal of the 33 .nion &e&#ers. In /!a#on v. National Ca#or Relations Co&&ission3( and Ga1a Food Pro essin! Corp. v. Pa ot,37 the Court sustained the dis&issals for Dust ause under /rti le 7B7 and for authori?ed ause under /rti le 7B: of the Ca#or Code, respe tivel$, despite non- o&plian e 'ith the statutor$ re+uire&ent of noti e and hearin!. The !rounds for dis&issal in those ases, na&el$, ne!le t of dut$ and retren h&ent, re&ained valid #e ause the non- o&plian e 'ith the noti e and hearin! re+uire&ent in the Ca#or Code did not under&ine the validit$ of the !rounds for the dis&issals. The Court in those ases dire ted the e&plo$ers to pa$ no&inal da&a!es to the e&plo$ees dis&issed for Dust or authori?ed ause for non- o&plian e 'ith the pro edural due pro ess. In ontrast, in this ase, the retren h&ent effe ted #$ respondent Corporation is invalid due to a su#stantive defe t, non- o&plian e 'ith the su#stantial re+uire&ents to effe t a valid retren h&ent0 it ne essaril$ follo's that the ter&ination of the e&plo$&ent of petitioner .nion>s &e&#ers on su h !round is, li1e'ise, ille!al. /s su h, the$ "petitioner .nion>s &e&#ers% are entitled to reinstate&ent 'ith full #a 1'a!es.3: 8o'ever, in the ase of those e&plo$ees&e&#ers of petitioner .nion 'ho had re eived their respe tive separation pa$, the a&ounts of su h pa$&ents shall #e dedu ted fro& the #a 1'a!es due the&.39 2here reinstate&ent is no lon!er feasi#le #e ause the positions the$ previousl$ held no lon!er e<ist, respondent

Corporation shall pa$ the e&plo$ees-&e&#ers of petitioner .nion #a 1'a!es plus, in lieu of reinstate&ent, separation pa$ e+uivalent to one &onth pa$, or one-half &onth pa$ for ever$ $ear of servi e, 'hi hever is hi!her.35 It is note'orth$ that the separation pa$ #ein! a'arded in the instant ase is due to ille!al dis&issal0 hen e, it is different fro& the a&ount of separation pa$ provided for in /rti le 7B: of the Ca#or Code in ase of retren h&ent to prevent losses or in ase of losure or essation of the e&plo$er>s #usiness, in either of 'hi h the separation pa$ is e+uivalent to at least one "(% &onth or one-half "(A7% &onth pa$ for ever$ $ear of servi e, 'hi hever is hi!her.3= Considerin! further that there 'as evident #ad faith on the part of respondent Corporation in ter&inatin! the e&plo$&ent of the e&plo$ees-&e&#ers of petitioner .nion on the !round of retren h&ent, the$ are entitled to an a'ard of &oral da&a!es in the a&ount of P7),))).)) ea h.33 IN CI68T OF T8E FORE6OIN6, the De ision and Resolution of the Court of /ppeals in C/6.R. SP No. B3=5( are REVERSED /ND SET /SIDE. Respondent Corporation is found !uilt$ of ille!al dis&issal and is ORDERED to reinstate the e&plo$ees-&e&#ers of petitioner .nion 'ith full #a 1'a!es, provided that 'ith respe t to those 'ho had re eived their respe tive separation pa$, the a&ounts of pa$&ents shall #e dedu ted fro& their #a 1'a!es. 2here reinstate&ent is no lon!er feasi#le #e ause the positions previousl$ held no lon!er e<ist, respondent Corporation shall pa$ #a 1'a!es plus, in lieu of reinstate&ent, separation pa$ e+ual to one "(% &onth pa$, or one-half "(A7% &onth pa$ for ever$ $ear of servi e, 'hi hever is hi!her. In addition, respondent Corporation is DIRECTED to pa$ the said e&plo$ees &oral da&a!es in the a&ount of P7),))).)) ea h. SO ORDERED.

FIRST DIVISION G.R. No. 165618 Mar-( 70, 2006

IN/0!TRIAL TIM.ER CORPORATION, IN/0!TRIAL PL 8OO/ GRO0P CORPORATION, TOMA! TANG!OC, 4R., LOREN3O TANG!OC a%& TOMA! TAN, Petitioners, vs. 1IRGILIO A.A.ON, IGNACIO A.ACA4EN, ANGELINA A.A 9A.A , E/ITH A.REA, !AM0EL A.REA, .IEN1ENI/O ACILO, RO/RIGO ACILO, 1ICTOR ACILO, ART0RO A/1INC0LA, GERTR0/E! AMPARO, 1IRGILIO ANTONIO, MILA AR:0ITA, PR0/ENCIO AR:0ITA, AL.ERT ATON, 8ARLITA A0TI/A, ALICIA A8ITAN, LEOPOL/O A ATON, ART0RO .AL.OTEN, /ANILO .ANATE, LOLITA .ATAN, RAMIL .0TALON, CARMILITA CAINGLE!, 1ICENTE CAHARIAN, .ENE/ICTA CA4IPE, FELIPE CALLANO, ALFRE/O CARILLO, NILA CARILLO, ALGER COR.ETA, GREGORIO /A.ALO!, TERE!ITA /A.ALO!, 1ENERAN/O /ALA0TA, RICAR/O /ANGC0LO!, MONTANO /APRO!A, L0I!ITO /IA3, FELI3AR/O /0M0LAO, E/ITHA /0MANON, ALFRE/O FAELNAR, RA0L FORT0N, MA;IMO GALLA, ANGELE! GAL0PO, PERFECTO GAM.E, 1ERGINITA GANGCA, R0PERTO GORGONIO, ROMEO HERRERO, !ERGIO HORO9HORO, FRANCI!CO I.ARRA, A.RAHAM 4ALE, /AN/ LA.ITA/, ANTONINA LAM.ANG, ERNE!TO LA0!A, 1ICTORIA LOO/, NEME!IO LOPE, 4R., E!CARLITO MA/LO!, MARCO! MA2INANO, REMEGIO MA2INANO, 1ICENTE MA2INANO, RE NAL/O MA!0HA , HELEN MARATA!, ELI3A.ETH MEN/O3A, G0IL.ERTA MONTERO!O, GIL/A NA1ALTA, PILAR NA1ARRO, !IMPORIANO N0<E3, 4R., ELI!EO ORONGAN, ARMAN/O OROPA, A!0NCION OROPA, 4O!E E/8IN OROPA, .AL/EMAR PAGALAN, .ARTOLOME PAGALAN, /AMA!O PALOMA, MANALO PLA3A, 4EREMIA! PELAE3, FRANCI!CO PICAR/AL, HERMINIA P0.LICO, ROM0LO :0INTO!, FI/EL :0ITA, FELICIANO RANA/A, RO/OLFO RAR0, LEAN CIL/RIC RO/RIG0E3, !AM0EL !AROMINE!, NATI1I/A/ !IGNAR, CHERRIE !ON, !AM0EL TAG0PA, 1ICTOR TAG0PA, .RIGI/A TA.ANAO, PE/RO TA.ANAO, RO.ERTO TA.ANAO, MARIA TAN, RONNIE TAN, TOLENTINO TEE, ROGELIO TAMA/A, MIN/A T0MAO. a%& RO.ERTO T0TOR, Respondents. <----------------< G.R. No. 165966 Mar-( 70, 2006

1IRGILIO A.A.ON, IGNACIO A.ACA4EN, ANGELINA A.A 9A.A , E/ITH A.REA, !AM0EL A.REA, .IEN1ENI/O ACILO, RO/RIGO ACILO, 1ICTOR ACILO, ART0RO A/1INC0LA, GERTR0/E! AMPARO, MILA AR:0ITA, 1IRGILIO ANTONIO, PR0/ENCIO AR:0ITA, AL.ERT ATON, 8ARLITA A0/ITA, ALICIA A8ITAN, LEOPOL/O A ATON, ART0RO .AL.OTEN, /ANILO .ANATE, LOLITA .ATAN, RAMIL .0TALON, CARMELITA CAINGLE!, 1ICENTE CAHARIAN, .ENE/ICTA CA4IPE, FELIPE CALLANO, ALFRE/O CARILLO, NILA CARILLO, ALGIER COR.ETA, GREGORIO /A.ALO!, TERE!ITA /A.ALO!, 1ENERAN/O /ALA0TA, RICAR/O /ANGC0LO!, MONTANO /APRO!A, L0I!ITO /IA3, FELI3AR/O /0M0LAO, E/ITHA /0MANON, ALFRE/O FAELNAR, RA0L FORT0N, MA;IMO GALLA, ANGELE! GAL0PO, PERFECTO GAM.E, 1IRGINITA GANGCA, R0PERTO GORGONIO, ROMEO HERRERO, !ERGIO HOR9HORO, FRANCI!CO I.ARRA, A.RAHAM 4ALE, /AN/ LA.ITA/, ANTONINA LAM.ANG, ERNE!TO LA0!A, 1ICTORIA LOO/, NEME!IO LOPE, 4R., E!CARLITO MA/LO!, MARCO! MA2INANO, REMEGIO MA2INANO, 1ICENTE MA2INANO, RE NAL/O MAH0!A , HELEN MARATA!, ELI3A.ETH MEN/O3A, G0IL.ERTA MONTERO!O, GIL/A NA1ALTA, PILAR NA1ARRO, !IMPORIANO N0<E3, 4R., ELI!EO ORONGAN, ARMAN/O OROPA, A!0NCION OROPA, 4O!E E/8IN OROPA, .AL/EMAR PAGALAN, .ARTOLOME PAGALAN, /AMA!O PALOMA, MANALO PLA3A, 4EREMIA! PELAE3, FRANCI!CO PICAR/AL, HERMINIA P0.LICO, ROM0LO :0INTO!, FI/EL :0ITA, FELICIANO RANA/A, RO/OLFO RAR0, LEAN CIL/RIC RO/RIG0E3, !AM0EL !AROMINE!, NATI1I/A/ !IGNAR, CHERRIE !ON, !AM0EL TAG0PA, 1ICTOR TAG0PA, .RIGI/A TA.ANAO, PE/RO TA.ANAO, RO.ERTO TA.ANAO, MARIA TAN, RONNIE TAN, TOLENTINO TEE, ROGELIO TAMA/A, MIN/A T0MAO., a%& RO.ERTO T0TOR, Petitioners, vs. THE HONORA.LE CO0RT OF APPEAL!, IN/0!TRIAL TIM.ER CORPORATION, IN/0!TRIAL PL 8OO/ GRO0P CORPORATION, TOMA! TANG!OC, 4R., LOREN3O TANG!OC a%& TOMA! TAN, Respondents. RESOC.TION NARE!9!ANTIAGO, J.: On Ganuar$ 75, 7))=, the Court rendered Dud!&ent disposin! of the ase as follo's, 8HEREFORE, in vie' of the fore!oin!, the O to#er 7(, 7))7 De ision of the Court of /ppeals in C/-6.R. SP No. 5(4==, 'hi h set aside the Ma$ 79, (445 De ision of the NCRC, as 'ell as the Gul$ (=, 7))9 Resolution den$in! ITC>s &otion for re onsideration, are here#$ RE1ER!E/. The Ma$ 79, (445 De ision of the NCRC reinstatin! the de ision of the Ca#or /r#iter findin! the losure or essation of ITC>s #usiness valid, is AFFIRME/ ='*( *(e MO/IFICATION! that ITC is ordered to pa$ separation pa$ e+uivalent to one &onth pa$ or at least one-half &onth pa$ for ever$ $ear of servi e, 'hi hever is hi!her, and P5),))).)) as no&inal da&a!es to ea h e&plo$ee. !O OR/ERE/.(

On Mar h (9, 7))=, respondents in 6.R. No. (=95(B 'ho are also petitioners in 6.R. No. (=94=5 filed a Motion for Re onsideration see1in! to set aside the a#ove-stated De ision and reinstate the O to#er 7(, 7))7 De ision of the Court of /ppeals, 'ith the &odifi ation that the$ #e a'arded full #a 1'a!es, 'ith the additional a'ard of P5),))).)) as no&inal da&a!es for ea h 'or1er. The$ insist that the holdin! in International Ti&#er Corporation v. National Ca#or Relations Co&&ission7 that the losure of ITC>s ;utuan Plant 'as valid should not have #een applied in the instant ases 'hi h pertain to ITC>s Stanpl$ Plant. The$ further lai& that the findin!s #$ the Ca#or /r#iter that there 'as a shorta!e of ra' &aterials0 that the 'ood pro essin! plaint per&it has e<pired0 that the lease ontra t 'ith IP6C 'as ter&inated0 and that ITC and IP6C 'ere not #usiness onduits, 'ere all de#un1ed #$ the NCRC. The ar!u&ents raised have #een a&pl$ dis ussed0 at an$ rate, the$ are in onse+uential as to affe t the assailed De ision. On the other hand, petitioners in 6.R. No. (=95(B 'ho are also respondents in 6.R. No. (=94=5 also filed a Motion for Partial Re onsideration see1in! to delete or redu e the no&inal da&a!es a'arded to ea h e&plo$ee, onsiderin! that sin e /u!ust (3, (44) it had eased operation of its #usiness and that the a'ard involves a hu!e a&ount onsiderin! that there are 43 'or1ers.: 2hile 'e ruled in this ase that the san tion should #e stiffer in a dis&issal #ased on authori?ed ause 'here the e&plo$er failed to o&pl$ 'ith the noti e re+uire&ent than a dis&issal #ased on Dust ause 'ith the sa&e pro edural infir&it$, ho'ever, in instan es 'here the e<e ution of a de ision #e o&es i&possi#le, unDust, or too #urdenso&e, &odifi ation of the de ision #e o&es ne essar$ in order to har&oni?e the disposition 'ith the prevailin! ir u&stan es. In the deter&ination of the a&ount of no&inal da&a!es 'hi h is addressed to the sound dis retion of the ourt, several fa tors are ta1en into a ount, "(% the authori?ed ause invo1ed, 'hether it 'as a retren h&ent or a losure or essation of operation of the esta#lish&ent due to serious #usiness losses or finan ial reverses or other'ise0 "7% the nu&#er of e&plo$ees to #e a'arded0 ":% the apa it$ of the e&plo$ers to satisf$ the a'ards, ta1en into a ount their prevailin! finan ial status as #orne #$ the re ords0 "9% the e&plo$er>s !rant of other ter&ination #enefits in favor of the e&plo$ees0 and "5% 'hether there 'as a bona fide atte&pt to o&pl$ 'ith the noti e re+uire&ents as opposed to !ivin! no noti e at all. In the ase at #ar, there 'as valid authori?ed ause onsiderin! the losure or essation of ITC>s #usiness 'hi h 'as done in !ood faith and due to ir u&stan es #e$ond ITC>s ontrol. Moreover, ITC had eased to !enerate an$ in o&e sin e its losure on /u!ust (3, (44). Several &onths prior to the losure, ITC e<perien ed di&inished in o&e due to hi!h produ tion osts, errati suppl$ of ra' &aterials, depressed pri es, and poor &ar1et onditions for its 'ood produ ts. It appears that ITC had !iven its e&plo$ees all #enefits in a ord 'ith the C;/ upon their ter&ination.

Thus, onsiderin! the ir u&stan es o#tainin! in the ase at #ar, 'e dee& it 'ise and Dust to redu e the a&ount of no&inal da&a!es to #e a'arded for ea h e&plo$ee to P(),))).)) ea h instead of P5),))).)) ea h. 28EREFORE, pre&ises onsidered, the Motion for Re onsideration of respondents in 6.R. No. (=95(B 'ho are also petitioners in 6.R. No. (=94=5 is DENIED. The Motion for Partial Re onsideration of petitioners in 6.R. No. (=95(B 'ho are also respondents in 6.R. No. (=94=5 is 6R/NTED. The a&ount of no&inal da&a!es a'arded to ea h e&plo$ee is redu ed fro& P5),))).)) to P(),))).)). SO ORDERED.

T8IRD DIVISION G.R. No. 167177 4a%uary 70, 2006

.0!INE!! !ER1ICE! OF THE F0T0RE TO/A , INC. a%& RAMON F. ALLA/O, Petitioners, vs. CO0RT OF APPEAL!, GIL.ERT C. 1ER0A!A a%& MA. CELE!TINA A. 1ER0A!A, Respondents. DECISION :0I!0M.ING, J.: For revie' on ertiorari is the /e-'+'o%( dated /pril (=, 7))7, as 'ell as the Re+o)u*'o%7 dated Ganuar$ (5, 7)):, of the Court of /ppeals in C/-6.R. SP No. ==3::. The appellate ourt had reversed the Resolution: dated Mar h (5, 7))(, of the National Ca#or Relations Co&&ission in NCRC C/ No. M-))5B:)-7))), 'hi h earlier reversed the De ision9 dated Gune (, 7))), of the Ca#or /r#iter in Case No. R/;-((-)4-)()5:-44. These are the ante edent fa ts, Mail#o<es, Et . "Davao% is the lo al fran hisee of Mail#o<es, Et . "M;E%, a .S-#ased orporation operatin! #usiness support and o&&uni ation servi e enters 'orld'ide. It is operated lo all$ #$ petitioner ;usiness Servi es of the Future Toda$, In . ";SFTI%, 'hose sto 1holders are petitioner Ra&on /llado and his no&inees. On Ganuar$ B, (44=, /llado hired private respondents, spouses 6il#ert and Ma. Celestina Veruasa, as &ana!er and assistant &ana!er, respe tivel$, of Mail#o<es, Et . "Davao% for a

o&pensation pa 1a!e of P(5,))) &onthl$. Due to la 1 of funds fro& ;SFTI, ho'ever, the$ 'ere not paid their salaries a&ountin! to P(97,=(:.4: fro& Mar h (443 to Ganuar$ B, (44B. On Ganuar$ B, (44B, /llado personall$ !ave noti es of ter&ination effe tive i&&ediatel$ to the spouses. The$ !ave as reason, the ne!ative ashflo' and ;SFTI>s failure to infuse additional apital to the #usiness. No 'ritten noti e of losure of #usiness 'as !iven to the Depart&ent of Ca#or and E&plo$&ent "DOCE%. /llado then padlo 1ed the offi es of Mail#o<es, Et . "Davao%, onfis ated all its #usiness re ords, and appropriated for hi&self all the transfera#le ri!hts and e+uip&ent of the offi e. On or a#out Mar h 7), (44B, /llado !ave the spouses P(:,(75 as partial pa$&ent of their salaries. Despite repeated de&ands, the petitioners did not pa$ the #alan e of P(74,9BB.4: due to the spouses. On their part, petitioners had a different stor$. The$ lai& that on or a#out /pril 5, (445, /llado and Ceo 6. Do&in!ue? invited 6il#ert Veruasa to invest in a #usiness under the fran hise of M;E. /t that ti&e, /llado had alread$ or!ani?ed ;SFTI althou!h its re!istration 'as still pendin! 'ith the Se urities and E< han!e Co&&ission "SEC%. 6il#ert su#&itted his ounterproposal statin!, a&on! others, that he 'ould, "(% &ana!e the #usiness0 and "7% ontri#ute as e+uit$, the assets and !ood'ill of his for&er #usiness enterprise, Fa< ;usiness Shop, 'orthP:)),))). /llado and Do&in!ue? a epted the ounter-proposal. / ordin! to petitioners, 6il#ert Veruasa then laid the !round'or1 and periodi all$ su#&itted reports of his a tivities, a o&plish&ents, and on erns to /llado and Do&in!ue?. On Septe&#er 7= and O to#er (:, (445, 6il#ert su#&itted a report see1in! onfir&ation of his invest&ent in ;SFTI. The parties then si!ned a Shareholders> /!ree&ent 'hi h re o!ni?ed 6il#ert>s P:)),))) ontri#ution. Petitioners, ho'ever, aver that all si!ned opies, 'hi h 'ere entrusted to 6il#ert, ould no lon!er #e lo ated. The parties also a!reed that 6il#ert>s 'ife, Celestina, 'ould assist in the &ana!e&ent of the #usiness for 'hi h the$ 'ould re eive o&pensation ofP(5,))) &onthl$. Durin! its first $ear of operations, ;SFTI suffered losses a&ountin! to P(,(95,9=(.9:. The follo'in! $ear, it e<perien ed further ash pro#le&s. The o'ners failed to attra t other investors. /s the o'ners 'ere no lon!er 'illin! to infuse additional apital, 6il#ert Veruasa and petitioners de ided to lose shop. /lthou!h all e&plo$ees 'ere infor&ed of the o&pan$>s losure and their ter&ination, 6il#ert failed to infor& the DOCE. Instead, he too1 possession of i&portant o&pan$ re ords as 'ell as the properties 'hi h he ontri#uted earlier to ;SFTI. Thereafter, the Veruasa spouses instituted a o&plaint for ille!al dis&issal. The Ca#or /r#iter ruled the dis&issal of the spouses ille!al. The Ca#or /r#iter ruled that the spouses 'ere e&plo$ees of ;SFTI sin e all the ele&ents of an e&plo$er-e&plo$ee relationship 'ere present. Neither 'as there an$ sho'in! that the spouses 'ere sto 1holders. Further, the Ca#or /r#iter said it 'as unli1el$ that petitioners did not have a op$ of the alle!ed Shareholders> /!ree&ent, if indeed there 'as su h an a!ree&ent eviden in! the spouses> parti ipation in the #usiness.

Nor did ;SFTI>s arti les of in orporation sho' that the spouses 'ere in orporators. Thus, their dis&issal of the spouses should have #een in a ordan e 'ith the Ca#or Code. /lthou!h the e&plo$ees 'ere !iven noti es of ter&ination, DOCE 'as not provided a noti e of losure. The Ca#or /r#iter a'arded the spouses P94=,B43.9= representin! their separation pa$, #a 1'a!es, and (:th &onth pa$, plus ()* attorne$>s fees. .pon appeal #$ #oth parties, the National Ca#or Relations Co&&ission "NCRC% dis&issed the ase5 and ruled that, "(% 6il#ert 'as #oth a ;SFTI e&plo$ee and sto 1holder as eviden ed #$ his o&&uni ations to ;SFTI>s other sto 1holders0 "7% ;SFTI 'as not o#li!ed to pa$ separation #enefits to the spouses sin e there 'as a valid losure of #usiness due to serious finan ial losses0 ":% the spouses 'ere not entitled to #a 1'a!es sin e as &ana!er, it 'as 6il#ert>s dut$ to notif$ the DOCE of the losure0 "9% there 'as no #asis for a'ardin! (:th &onth pa$0 and "5% there 'as no #asis for the lai& for unpaid salaries sin e there 'ere pett$ ash vou hers sho'in! full pa$&ent of the spouses> salaries. On appeal, the Court of /ppeals reversed= the NCRC and reinstated the de ision of the Ca#or /r#iter 'ith &odifi ation. The de retal portion of the de ision reads, 8HEREFORE, the assailed resolutions dated Mar h (5, 7))( and /u!ust 77, 7))( issued #$ pu#li respondent National Ca#or Relations Co&&ission, 5th Division, in NCRC C/ No. M))55B:)-7))) are here#$ RE1ER!E/ a%& !ET A!I/E, and the de ision dated Gune (, 7))) of Ca#or /r#iter Miria& /. Ci#ron-;arroso in NCRC R/; ((-)4-))()5:-44 is AFFIRME/ ='*( MO/IFICATION, to delete the a'ard of separation pa$, to 'it, (. (:th Month pa$ - P (7,3B3.5) 7. ;a 1'a!es - 9=3,5(7.5) TOT/C - P9B),:)).)) Cess, E< ess in advan e P (B,)B9.)5 P/RTI/C NET - P9=7,7(5.45 /dd, ()* of total a'ard as attorne$>s fees - P 9=,77(.54 TOT/C NET - P608,577.65 SO ORDERED.3 The appellate ourt held that the spouses 'ere e&plo$ees of ;SFTI sin e all the essential ele&ents of an e&plo$er-e&plo$ee relationship 'ere present. / ordin! to the appellate ourt, there 'as no eviden e that 6il#ert 'as a sto 1holder other than the petitioners> #are alle!ation that the parties had entered into a Shareholders> /!ree&ent. It li1e'ise ruled that it 'as not 6il#ert>s dut$, #ut petitioners> to notif$ the DOCE of the losure. /#sent su h noti e, the dis&issal 'as 'ithout effe t. Nevertheless, it disallo'ed the pa$&ent of separation pa$ sin e

the losure 'as due to serious finan ial losses. Instead, it ordered the pa$&ent of #a 1'a!es and unpaid salaries, for la 1 of proof that the salaries 'ere paid. The petitioners no' o&e to this Court alle!in! that, (% The re+uire&ent of filin! of 'ritten noti e of losure of #usiness 'ith the Depart&ent of Ca#or and E&plo$&ent is not appli a#le and unne essar$ in the ase of respondents #e ause the$ 'ere sto 1holders and &ana!ers of petitioner orporation 'ho too1 part in the de ision to lose the #usiness0 7% Even assu&in! ar!uendo the dis&issal of respondents 'as ineffe tual, the$ are not entitled to #a 1'a!es and (:th &onth pa$ fro& the ti&e of their dis&issal until finalit$ of the de ision #e ause the #usiness of petitioner eased to operate si&ultaneousl$ 'ith their dis&issal0 and :% Petitioner su#&itted do u&ents to prove that respondents 'ere paid their salaries in full and 'ere even overpaid.B ;riefl$, the 1e$ issues in this petition are, "(% 2ere the spouses e&plo$ees or sto 1holders of ;SFTIL "7% If the$ 'ere e&plo$ees, 'ere the$ validl$ dis&issedL and ":% /re the$ entitled to (:th &onth pa$, #a 1'a!es, separation pa$ as 'ell as unpaid salariesL Preli&inaril$, it #ears stressin! that the prior e<isten e of an e&plo$er-e&plo$ee relationship is an indispensa#le pre ondition for a lai& of ille!al dis&issal to prosper.4 8ere, #oth parties ad&itted that 6il#ert and Celestina 'ere hired as ;SFTI>s &ana!er and assistant &ana!er, respe tivel$, 'ith P(5,))) &onthl$ salar$. The petitioners 'ould have us #elieve, ho'ever, that 6il#ert 'as also a sto 1holder, hen e, there 'as no need to notif$ DOCE of the losure sin e as sto 1holder, he 'as presu&ed to have ta1en part in the de ision to lose the #usiness. Noti e of losure to the DOCE is &andator$. It allo's the DOCE to as ertain 'hether the losure andAor dis&issals 'ere done in !ood faith and not a prete<t for evadin! o#li!ations to the e&plo$ees. This re+uire&ent prote ts the 'or1ers> ri!ht to se urit$ of tenure. Failure to o&pl$ 'ith this re+uire&ent taints the dis&issal.() This rule, ho'ever, ad&its of e< eptions. If the e&plo$ee onsented to his retren h&ent due to the losure or essation of operation, the re+uired prior noti e to the DOCE is not ne essar$ as the e&plo$ee there#$ a 1no'led!es the e<isten e of a valid ause for ter&ination of his e&plo$&ent.(( Did respondent 6il#ert Veruasa onsent to his dis&issalL The eviden e sho's that he did not. /lthou!h onl$ his orresponden es 'ith the petitioners su!!est that he 'as a sto 1holder of ;SFTI,(7 there is no sho'in! that he parti ipated in the alle!ed sto 1holders> &eetin! 'here the o&pan$>s losure 'as dis ussed. The self-servin! Goint /ffidavit of /llado and Do&in!ue? attestin! that 6il#ert parti ipated in the &eetin! dis ussin! the losure is insuffi ient.(: The &inutes of su h &eetin! 'ould have #een #etter. Further, the SEC ertifi ation dated Nove&#er 4, (444, provided that ;SFTI did not su#&it an$ o&&uni ation si!nif$in! the ter&ination of its orporate life nor its non-operation for (44B,(9 !ivin! rise to serious dou#ts that su h &eetin! ever too1 pla e. 8en e, there is no

onvin in! eviden e to sho' that 6il#ert onsented to his dis&issal and for these reasons the petitioners should have su#&itted a 'ritten noti e of ;SFTI>s losure to the DOCE. 2ere private respondents validl$ dis&issedL /rti le 7B: of the Ca#or Code is the appli a#le la'. It states, /RT. 7B:. Closure of esta#lish&ent and redu tion of personnel. E The e&plo$er &a$ also ter&inate the e&plo$&ent of an$ e&plo$ee due to the installation of la#or savin! devi es, redundan $, retren h&ent to prevent losses or the losin! or essation of operation of the esta#lish&ent or underta1in! unless the losin! is for the purpose of ir u&ventin! the provisions of this Title, #$ servin! a 'ritten noti e on the 'or1er and the Ministr$ of Ca#or and E&plo$&ent at least one "(% &onth #efore the intended date thereof. In ase of ter&ination due to the installation of la#or savin! devi es or redundan $, the 'or1er affe ted there#$ shall #e entitled to a separation pa$ e+uivalent to at least his one "(% &onth pa$ or to at least one "(% &onth pa$ for ever$ $ear of servi e, 'hi hever is hi!her. In ase of retren h&ent to prevent losses and in ases of losures or essation of operations of esta#lish&ent or underta1in! not due to serious #usiness losses or finan ial reverses, the separation pa$ shall #e e+uivalent to one "(% &onth pa$ or at least one-half "(A7% &onth pa$ for ever$ $ear of servi e, 'hi hever is hi!her. / fra tion of at least si< "=% &onths shall #e onsidered as one "(% 'hole $ear. For the essation of #usiness operations due to serious #usiness losses or finan ial reverses to #e valid, the e&plo$er &ust !ive the e&plo$ee and the DOCE 'ritten noti es :) da$s prior to the effe tivit$ of his separation. In /!a#on v. National Ca#or Relations Co&&ission,(5 'e ruled that 'here the dis&issal is for an authori?ed ause, the la 1 of statutor$ due pro ess should not nullif$ the dis&issal, or render it ille!al, or ineffe tual. 8o'ever, the e&plo$er should inde&nif$ the e&plo$ee, in the for& of no&inal da&a!es, for the violation of his ri!ht to statutor$ due pro ess.(= The a&ount of su h da&a!es is addressed to the sound dis retion of the Court, ta1in! into a ount the relevant ir u&stan es.(3 In Jaka Food Processing Corporation v. Pacot,(B 'e noted that the san tion should #e stiffer #e ause the dis&issal pro ess 'as initiated #$ the e&plo$er>s e<er ise of its &ana!e&ent prero!ative. The NCRC and the Court of /ppeals 'ere unani&ous in findin! that ;SFTI>s losure 'as bona fide. The re ords #efore us revealed that it suffered losses fro& (44= to (44B.(4 Gu<taposin! the fa ts of this ase vis the appli a#le la' and Durispruden e, P9),))) as no&inal da&a!es 'ould #e suffi ient to vindi ate ea h respondent>s ri!ht to due pro ess. / violation of that ri!ht suffi es to support an a'ard of no&inal da&a!es.7) In vie' of the valid dis&issal, there is, thus, no #asis for a'ardin! the spouses P(7,3B3.5) as (:th &onth pa$. Castl$, the Ca#or /r#iter7( and the NCRC77 found that the spouses> advan es e< eeded their unpaid salaries #$P9:,9)7.59. The NCRC even noted that /nne<es (B to :9( of the petitioners> Position Paper ontained the pett$ ash vou hers eviden in! pa$&ent of their salaries up to De e&#er 74, (443.7: Interestin!l$, the spouses ar!ued in their Position Paper79 that the$ 'ere

not paid their &onthl$ salar$ of P(5,))) fro& Mar h (443 to Ganuar$ B, (44B. Their total lai& for unpaid salaries therefore a&ounted to P(74,9BB.4:, &inus the P(:,(75 'hi h /llado paid to the&. Het, in their Motion for Partial Clarifi ationARe onsideration, 75 the$ ad&itted that their total advan es a&ounted to P(3B,)35.45. 8en e, #ased on their ad&itted advan es, the$ 'ere overpaid #$ P9B,5B3.)7. This is even a lar!er a&ount than 'hat 'as arrived at #$ the Ca#or /r#iter and the NCRC. Said a&ount of P9B,5B3.)7 should #e paid #a 1 to petitioners, to prevent unDust enri h&ent. 28EREFORE, the instant petition is P/RTI/CCH 6R/NTED. / ordin!l$, the assailed De ision dated /pril (=, 7))7, as 'ell as the Resolution dated Ganuar$ (5, 7)):, of the Court of /ppeals in C/-6.R. SP No. ==3::, are!ET A!I/E, and a ne' one entered upholdin! the le!alit$ of the dis&issal. Petitioners are OR/ERE/ to pa$ ea h of the private respondents the a&ount of P9),))), or a total of PB),))) for the spouses representin! no&inal da&a!es. Private respondents, ho'ever, are also OR/ERE/ to refund to petitioners the a&ount of P9B,5B3.)7, 'hi h is the a&ount of ad&itted advan es ta1en #$ the Veruasa spouses e< eedin! the a&ount of their unpaid salaries. !O OR/ERE/.

SECOND DIVISION >G.R. No. 152876. !e?*e,ber 7, 2001@ E/GAR AG0!TILO, petitioner, vs. CO0RT OF APPEAL!, !AN MIG0EL CORPORATION, FRANCI!CO MAN3ON, 4R., 1ICE PRE!I/ENT a%& /IRECTOR, LEONOR CANE4A, PER!ONNEL OFFICER, a%& RO/RIGO G0RREA, ENGINEERING /EPARTMENT MANAGER, respondents. /ECI!ION MEN/O3A, J.A This is a petition for revie' on certiorari of the de ision,M(N dated O to#er 77, (444, and resolution, dated /pril =, 7))), of the Court of /ppeals, 'hi h reversed and set aside the de ision,M7N dated Ma$ 75, (44B, and resolution, dated Ganuar$ ((, (444, of the National Ca#or Relations Co&&ission "NCRC% and reinstated the de ision,M:N dated Mar h 7), (44=, of the e<e utive la#or ar#iter, dis&issin! petitioner>s o&plaint for unfair la#or pra ti e, ille!al dis&issal, and pa$&ent of separation pa$ and attorne$>s fees due to la 1 of &erit. Petitioner Ed!ar /!ustilo 'as hired on Gul$ (, (434 #$ respondent San Mi!uel Corporation "SMC% as a te&porar$ e&plo$ee at its Mandaue ;re'er$ in Mandaue, Ce#u. On O to#er (, (434, he 'as &ade per&anent and desi!nated as a safet$ ler1. On Ma$ (, (4B7, he 'as transferred to the En!ineerin! Depart&ent of the SMC Mandaue ;re'er$ as an ad&inistrative se retar$. So&eti&e in (44(, SMC Mandaue ;re'er$ adopted a poli $ that &ana!ers 'ould no lon!er #e assi!ned se retaries and that onl$ dire tor level positions &a$ #e !iven

se retaries. /s a result, on /u!ust 5, (44(, petitioner>s position as ad&inistrative se retar$ 'as a#olished and he 'as transferred to the o&pan$>s Plant Dire tor>s Offi e-Oualit$ I&prove&ent Tea& "PDO-OIT%. On Fe#ruar$ 3, (447, petitioner 'as infor&ed that 5B9 e&plo$ees, in ludin! hi&, 'ould #e retren hed due to the &oderni?ation pro!ra& of the o&pan$. Petitioner 'as told that his servi es 'ould #e ter&inated effe tive Mar h (5, (447 and that he 'ould #e paid his #enefits :) da$s after he 'as leared of all a ounta#ilities. In a letter, dated Fe#ruar$ (:, (447, SMC notified the DOCE of its &oderni?ation pro!ra&. On /pril B, (447, petitioner 'as !iven separation pa$ in the a&ount of P:)7,95).:B, representin! (35* of his entitle&ents under the Ca#or Code. 8e si!ned a +uit lai& desi!nated as PRe eipt and ReleaseQ in favor of SMC #efore Senior Ca#or E&plo$&ent Offi er Mateo P. ;alda!o of the Ca#or Standards Enfor e&ent Division of the DOCE, Re!ion VII. Petitioner then filed a o&plaint a!ainst respondents for unfair la#or pra ti e, ille!al dis&issal, and pa$&ent of separation pa$, attorne$>s fees, and da&a!es. 8e alle!ed that he 'as a re!ular e&plo$ee of SMC fro& (434 to (4470 that on Ma$ (, (4B7, he 'as pro&oted to the position of ad&inistrative se retar$ of the En!ineerin! Depart&ent until his e&plo$&ent 'as ter&inated on Mar h (5, (447 #$ reason of union a tivities0 that in Ma$ (4B=, he tried to onvin e so&e e&plo$ees to for& a union so that the$ ould parti ipate in the ertifi ation ele tions0 that respondent Fran is o Man?on, Gr. learned of his union a tivities and advised hi& to pro eed 'ith it as union and non-union e&plo$ees 'ould re eive the sa&e #enefits0 that he and other non-union &e&#ers 'ere eventuall$ !iven a salar$ in rease of P7,5)).)) a &onth retroa tive fro& Ganuar$ (4B=0 that in (4B3, a !roup of Ilon!!o 'or1ers for&ed an or!ani?ation alled M!a Iasi&an'a sa Su!#u, 'ith hi& as president and respondent Man?on, Gr. as its adviser0 that he resi!ned fro& the union after reali?in! that the or!ani?ation 'as a pro&ana!e&ent !roup desi!ned to #ust union a tivities0 that in (44), he re eived a salar$ in re&ent of P:,:(5.)) to PMdissuadeN hi& fro& Doinin! a la#or unionQ0 that on Gune (=, (44), he 'as !iven the PModel E&plo$ee /'ardQ0M9N that in Gul$ (44(, he approa hed Feli< Capin! ao, the National President of ;u1lod n! Man!!a!a'an! Pilipino ";MP%, e<pressin! his desire to Doin the latter>s or!ani?ation and 'as advised to !ather si!natories for dire t &e&#ership0 that 'hen respondent Man?on, Gr. learned a#out his a tivities, he threatened petitioner 'ith dis&issal0 and that his reassi!n&ent on /u!ust 5, (44( fro& the En!ineerin! Depart&ent to the PDO-OIT 'as ille!al as 'as his su#se+uent dis&issal. Petitioner further lai&ed that 'hen he reported to his ne' 'or1 post, he 'as not !iven an$ 'or1 to do so that he si&pl$ sat on the visitor>s #en h fro& B,)) a.&. to (7,)) noon and fro& (,)) to 5,)) p.&. ever$da$. Cater, #e ause he ontinued 'ith his union a tivities, his s hedule 'as han!ed fro& 9,)) p.&. to (7,)) &idni!ht. Petitioner pra$ed that he #e reinstated to his for&er position 'ithout loss of seniorit$ ri!hts and paid &oral da&a!es in the a&ount of P5)),))).)), e<e&plar$ da&a!es of P7)),))).)), and attorne$>s fees e+uivalent to 75* of the total a'ard in his favor. On Mar h 7), (44=, the e<e utive la#or ar#iter rendered a de ision dis&issin! petitioner>s o&plaint for la 1 of &erit. The pertinent portions of his de ision state,

In the MlatterN part of (44) and the earl$ part of (44(, the respondent o&pan$ Mherein respondent SMCN ondu ted a stud$ on the possi#le &oderni?ation pro!ra& 'hi h 'ill auto&ate the pro esses of #re'in!, #ottlin! and au<iliar$ servi es. This stud$ 'as approved for i&ple&entation #$ &ana!e&ent, in fa t, a tuall$ i&ple&ented MinN /pril (44(. /s a result of this &oderni?ation pro!ra&, the &annin! levels of the Mandaue ;re'er$ Plant 'as redu ed #$ 5B9 personnel. The redu tion 'as i&ple&ented in t'o "7% phases, the first on Mar h (5, (447, the se ond on Nove&#er 5, (447. Co&plainant Mherein petitionerN 'as in luded in the first #at h. .... The fore&ost issue here is 'hether or not petitioner 'as ille!all$ dis&issed. 2e find for the respondents. Eviden e in the re ords prove that o&plainant>s ter&ination 'as Dustified and that respondents adhered to the pro edural re+uire&ents !overnin! the sa&e. 2e have noted ver$ learl$ that petitioner>s separation fro& e&plo$&ent 'as #rou!ht a#out #$ the installation of la#or savin! devi es and &a hineries pursuant to the e&plo$er>s reor!ani?ational and e<pansion pro!ra&. The la' in this re!ard allo's su h a state of han!e. /rt. 7B: of the Ca#or Code allo's the redu tion of personnel 'ith the installation of la#or savin! devi es. Co&plainant lai&s that his separation 'as not valid #e ause in realit$ respondent fir& had not arried on its pro!ra& of &oderni?ation. /s a &atter of fa t, after three ":% $ears fro& the ti&e he 'as separated, the e+uip&ent and &a hineries installed have not $et #een operational as ertified to #$ the respe tive !overn&ent a!en ies on erned "Re#uttal /ffidavit E<h. P/=Q%. This i&plies that o&plainant 'as &erel$ de eived into #elievin! that an i&pendin! han!e 'as a#out to ta1e pla e, #ut 'hi h, in realit$, did not &ateriali?e. 2e 'ent over the re ords on this lai& and 'e find that 'hile respondent fir& had not full$ a o&plished the proDe ted ph$si al han!es, nevertheless, 'e noted that there 'ere indeed han!es underta1en and these 'ere su#stantial enou!h to Dustif$ the respondents> a t. To our &ind, 'ith the hu!e fundin! involved "P7.= ;illion%, 'e ould not see an$ reason 'h$ respondent o&pan$ 'ill not pursue its &oderni?ation pro!ra& to a su essful end. Its non-operational status is &erel$ te&porar$. /nd it is our vie' that these &a hineries and e+uip&ent installed 'ill not #e 1ept idle for lon! or &erel$ laid to total 'aste. .... 2hile 'e s$&pathi?e 'ith the o&plainant re o!ni?in! the onsidera#le period of his e&plo$&ent of &ore than (( $ears, $et e+uall$ too, 'e re o!ni?e the respondents> Dud!&ent in the ondu t of its #usiness for 'hi h the la's do not authori?e interferen e. /s a &atter of fa t, the Ca#or Code and its I&ple&entin! Rules do not vest in the Ca#or /r#iters nor in the different divisions of the NCRC &ana!erial authorit$. The e&plo$er is free to deter&ine, usin! his o'n dis retion and #usiness Dud!&ent, all ele&ents of e&plo$&ent Pfro& hirin! to firin!Q "National Federation of Ca#or .nion v. NCRC, 7)7 SCR/ :9= "(44(%%. Moreover, the freedo& of &ana!e&ent to ondu t its #usiness operations to a hieve its purpose annot #e denied "Hu o Che&i al Industries v. Min. of Ca#or, (B5 SCR/ 373 "(44)%%. For as 'e see in the ase at #en h, o&plainant 'as not dis ri&inated a!ainst. In the respondents> pro!ra& of &oderni?ation, &ore than 5)) others, to #e pre ise, 5B: 'or1ers, 'ere li1e'ise affe ted. /nd

'e annot vie' this as a &anifestation of #ad faith and insin erit$ of respondents ta1in! into a ount the installation of &a hineries and e+uip&ent pursuant to the pro!ra& as a &eans of strea&linin! the personnel stru ture. In a pro!ra& li1e this, the eventualit$ of personnel #ein! re&oved annot #e avoided. To ontend other'ise 'ould #e to intrude into the ondu t of an enterprise 'hose &ain reason for #ein! is the profita#ilit$ of its operations.M5N The la#or ar#iter found the PRe eipt and ReleaseQM=N si!ned #$ petitioner to #e valid. In addition, he held that the o&plaint 'as #arred as it 'as filed onl$ on Ganuar$ 9, (449, or al&ost t'o $ears after his e&plo$&ent 'as ter&inated. 8e #ased his rulin! on /rt. 74), par. 7 of the Ca#or Code 'hi h provides that o&plaints for unfair la#or pra ti es shall #e filed 'ith the appropriate a!en $ 'ithin one "(% $ear fro& a rual of su h unfair la#or pra ti e. On appeal #$ petitioner, the NCRC reversed. The dispositive portion of its de ision reads, 28EREFORE, the de ision appealed fro& is here#$ /NN.CCED and SET /SIDE and Dud!&ent is here#$ rendered, (. De larin! the dis&issal of o&plainant to #e 'ithout an$ Dust or authori?ed ause and, therefore, ille!al0 7. Orderin! respondent San Mi!uel Corporation to reinstate the o&plainant to his for&er or e+uivalent position 'ithout loss of seniorit$ ri!hts and other privile!es, and 'ith full #a 1'a!es fro& Mar h (=, (447 up to the ti&e of his a tual reinstate&ent. 8o'ever, should reinstate&ent #e no lon!er possi#le due to so&e valid reasons, respondent San Mi!uel Corporation is ordered to pa$ the o&plainant separation pa$ of one "(% &onth pa$ for ever$ $ear of servi e, in addition to o&plainant>s full #a 1'a!es0 :. Orderin! respondent San Mi!uel Corporation to pa$ o&plainant &oral da&a!es of P:)),))).)) and e<e&plar$ da&a!es of P(5),))).)), plus ten "()*% per ent of the total &onetar$ a'ards, as attorne$>s fees. SO ORDERED.M3N Respondents filed a &otion for re onsideration. On Ganuar$ ((, (444, the NCRC rendered a resolutionMBN affir&in! its de ision, althou!h deletin! the a'ard of da&a!es in favor of petitioner. On /pril (:, (444, respondents filed a petition for certiorari 'ith pra$er for the issuan e of a te&porar$ restrainin! order andAor inDun tion in the Court of /ppeals. In the &eanti&e, on /pril (9, (444, petitioner filed #efore the NCRC Re!ional /r#itration ;ran h No. VII a Motion for the Issuan e of a 2rit of E<e ution.M4N On Ma$ :(, (444, the la#or ar#iter ordered the SMC to reinstate petitioner.M()N 8o'ever, on &otion of respondents, the Court of /ppeals issued a te&porar$ restrainin! order enDoinin! the e<e ution of the de ision of the NCRC.M((N The TRO lapsed after =) da$s, #ut the la#or ar#iter refused to enfor e the 'rit of e<e ution he had previousl$ issued in vie' of the Gune ((, (444 resolution of the Court of /ppeals issuin! the TRO.M(7N

On O to#er 77, (444, the Court of /ppeals rendered its de ision reversin! the de ision of the NCRC and reinstatin! that of the la#or ar#iter. On /pril =, 7))), it denied petitioner>s &otion for re onsideration. 8en e, this petition for revie' on ertiorari. First. Petitioner ontends that the Court of /ppeals annot revise the fa tual findin!s of the NCRC and su#stitute the sa&e 'ith its o'n. 8e insists that the Court of /ppeals a ted 'ith !rave a#use of dis retion 'hen it refused to dis&iss the ori!inal spe ial ivil a tion of certiorari filed #$ private respondents #efore it. 8e lai&s that #$ su#stitutin! the fa tual findin!s of the NCRC, the Court of /ppeals disre!arded the rulin! laid do'n in the ase of Jamer v. NLRCM(:N in 'hi h it 'as held that &ere varian e in the assess&ent of the eviden e #$ the NCRC resultin! in its dis&issal of the o&plaints for ille!al dis&issal and #$ the la#or ar#iter findin! the o&plainants to have #een validl$ dis&issed did not ne essaril$ 'arrant another full revie' of the fa ts #$ the appellate ourt provided that the findin!s of the NCRC are supported #$ the re ords. /ppl$in! the rulin! in that ase, petitioner ar!ues that 'hatever error of Dud!&ent the NCRC &a$ have o&&itted in this ase is not orre ti#le throu!h an ori!inal spe ial ivil a tion for certiorari #efore the Court of /ppeals. The ontention has no &erit. In St. Martin Funeral Homes v. NLRC,M(9N it 'as held that the spe ial ivil a tion of ertiorari is the &ode of Dudi ial revie' of the de isions of the NCRC either #$ this Court and the Court of /ppeals, althou!h the latter ourt is the appropriate foru& for see1in! the relief desired Pin stri t o#servan e of the do trine on the hierar h$ of ourtsQ and that, in the e<er ise of its po'er, the Court of /ppeals an revie' the fa tual findin!s or the le!al on lusions of the NCRC. The ontrar$ rule in Jamer 'as thus overruled. Second. Petitioner ontends that the Court of /ppeals o&&itted !rave a#use of dis retion in issuin! a te&porar$ restrainin! order a!ainst the de ision of the NCRC and in later P!ivin! the TRO a lifeti&e si&ilar to that of a preli&inar$ inDun tion 'ithout the #enefit of an inDun tion #ond in #latant disre!ard of par. 9, Rule 5B, se tion 5, of the (443 Rules of Civil Pro edure.Q There is &erit in this ar!u&ent. 8o'ever, the point is no' &oot and a ade&i as the Court of /ppeals has alread$ rendered its de ision. Rule 5B, R5 of the Rules of Civil Pro edure provides in pertinent part, In the event that the appli ation for preli&inar$ inDun tion is denied or not resolved 'ithin the said period, the te&porar$ restrainin! order is dee&ed auto&ati all$ va ated. The effe tivit$ of a te&porar$ restrainin! order is not e<tendi#le 'ithout need of an$ Dudi ial de laration to that effe t and no ourt shall have authorit$ to e<tend or rene' the sa&e on the sa&e !round for 'hi h it 'as issued. 8o'ever, if issued #$ the Court of /ppeals or a &e&#er thereof, the te&porar$ restrainin! order shall #e effe tive for si<t$ "=)% da$s fro& servi e on the part$ or person sou!ht to #e enDoined. / restrainin! order issued #$ the Supre&e Court or a &e&#er thereof shall #e effe tive until further orders. "E&phasis added% In its order of Gune ((, (444 !rantin! a TRO, the Court of /ppeals said,

7.). 6R/NT the petitioners> pra$er for a TEMPOR/RH RESTR/ININ6 ORDER, pendin! Our resolution of the ase on its &erits, so as not to frustrate the ends of Dusti e, prohi#itin! respondents fro& e<e utin! the De ision, dated 75 Ma$ (44B, and the Resolution, dated (( Ganuar$ (444, in NCRC Case No. V-)(:B-4=.M(5N Pursuant to Rule 5B, R5, as a#ove +uoted, a TRO issued #$ the Court of /ppeals is effe tive onl$ for si<t$ "=)% da$s fro& servi e on the part$ or person sou!ht to #e enDoined. The =)-da$ period is intended to !ive the appeals ourt ti&e to deter&ine the propriet$ of !rantin! a preli&inar$ inDun tion 'hi h !oes no further than to preserve the status uo until that deter&ination is &ade. 8en e, 'hen the period lapsed 'ithout a 'rit of preli&inar$ inDun tion #ein! issued, the TRO auto&ati all$ e<pired and a Dudi ial de laration to this effe t 'as not ne essar$.M(=N It 'as thus error for the la#or ar#iter to den$ petitioner>s &otion for e<e ution unless the Court of /ppeals P learl$ &andateMdN other'ise.Q 8o'ever, petitioner should have filed an a tion for &anda&us to o&pel the la#or ar#iter to enfor e the 'rit of e<e ution he had issued. /s he did not do so and the Court of /ppeals has alread$ de ided the ase, this &atter is no' &oot and a ade&i . !"ird. Co&in! no' to the &erits of this ase, petitioner ontends that he 'as ille!all$ dis&issed and that his transfer on /u!ust 5, (44( fro& the En!ineerin! Depart&ent to the PDO-OIT, in 'hi h he 'or1ed until Fe#ruar$ (7, (447, a&ounted to a onstru tive dis&issal. Petitioner lai&s that the date of his dis&issal should, therefore, #e re 1oned fro& Fe#ruar$ (7, (447, not Mar h (5, (447. The ontention has no &erit. Petitioner>s e&plo$&ent 'as ter&inated on the !round of the installation of la#or savin! devi es #$ SMC. /rt. 7B: of the Ca#or Code provides, /RT. 7B:. Closure of establis"ment and reduction of personnel. S The e&plo$er &a$ also ter&inate the e&plo$&ent of an$ e&plo$ee due to the installation of la#or savin! devi es, redundan $, retren h&ent to prevent losses or the losin! or essation of operation of the esta#lish&ent or underta1in! unless the losin! is for the purpose of ir u&ventin! the provisions of this Title, #$ servin! a 'ritten noti e on the 'or1ers and the Ministr$ of Ca#or and E&plo$&ent at least one "(% &onth #efore the intended date thereof. In ase of ter&ination due to the installation of la#or savin! devi es or redundan $, the 'or1er affe ted there#$ shall #e entitled to a separation pa$ e+uivalent to at least his one "(% &onth pa$ or to at least one "(% &onth pa$ for ever$ $ear of servi e, 'hi hever is hi!her. In ase of retren h&ent to prevent losses and in ases of losures or essation of operations of esta#lish&ent or underta1in! not due to serious #usiness losses or finan ial reverses, the separation pa$ shall #e e+uivalent to one "(% &onth pa$ or at least one-half "(A7% &onth pa$ for ever$ $ear of servi e, 'hi hever is hi!her. / fra tion of at least si< "=% &onths shall #e onsidered one "(% 'hole $ear. The noti e of ter&inationM(3N served upon petitioner states, Fe#ruar$ 3, (447 MR. ED6/R 6. /6.STICO Mandaue ;re'er$

Mandaue Cit$ Dear Mr. /!ustilo, /s previousl$ dis ussed 'ith $ou, the PDO-OIT 6RO.P has #een a#olished after a thorou!h stud$. Conse+uentl$, $our position therein has also #een a#olished. The o&pan$ is, therefore, onstrained to separate $ou fro& servi e effe tive at MtheN lose of #usiness hours, Mar h (5, (447. This ver$ diffi ult de ision has #een ta1en as a last re ourse and onl$ after e<haustin! all possi#le alternatives. Durin! the period fro& Fe#ruar$ (=, (447 to Mar h (5, (447, $ou 'ill #e paid $our re!ular o&pensation, ho'ever, $ou 'ill not #e re+uired to report for 'or1, unless re+uested #$ the o&pan$, to ena#le $ou to &a1e the ne essar$ preparations for $our separation. In this onne tion, $ou are ur!ed to attend the Total /ssistan e Plan Se&inars, sponsored #$ the o&pan$ for $our #enefit, fro& Fe#ruar$ (3, (447 to /pril :), (447. /ll #enefits due $ou in this re!ard 'ill #e released 'ithin thirt$ ":)% da$s fro& the date of $our separation upon $our a o&plish&ent of the re+uired learan es. Please all the 8ead of 8R Operations Servi es, Mr. Ceo C. Hpil, at telephone nu&#ers B3()) or B39:4, for the final arran!e&ents. 2e 'ould li1e to than1 $ou for $our past servi es to the o&pan$ and 'ish $ou su ess in $our future underta1in!s. Ver$ trul$ $ours, S/N MI6.EC CORPOR/TION ;$, "S!d.% FR/NCISCO ;. M/NTON, GR. Vi e President J Dire tor Mandaue Plant Operations Re eived op$, UUUUUUUUUUUUUUUUUU Na&e J Si!nature UUUUUUUUUUUUUUUUUU Date

In its letter,M(BN dated Fe#ruar$ (:, (447, to the Depart&ent of Ca#or and E&plo$&ent, SMC stated, Fe#ruar$ (:, (447

8ON. ;/RTOCOME /MO6.IS Dire tor Depart&ent of Ca#or and E&plo$&ent Re!ion VII Dear 8on. Dire tor /&o!uis, San Mi!uel Corporation onstantl$ revie's its various #usinesses in ter&s of via#ilit$ and strate!i fit. /lon! this dire tion, the o&pan$>s Mandaue ;re'er$ plant has e&#ar1ed into a PModerni?ation Pro!ra&Q -- #rin!in! in ne' te hnolo!$ in #eer pro essin! 'ith hi!h-te h, stateof-the-art &a hines, a &u h i&proved la$outApro ess and &ulti-s1illed e&plo$ees. In anti ipation of this &oderni?ation effort, the plant has #een reor!ani?ed and restru tured to deter&ine the appropriate &annin! re+uire&ent ne essar$ to effi ientl$ run a &odern plant. This onse+uentl$ resulted into a redu tion in &annin!. The e< ess e&plo$ees 'ill #e separated fro& servi e in t'o #at hes, the first #at h of 7)5 e&plo$ees 'ill #e separated at MtheN lose of #usiness hours on Mar h (5, (447 and the se ond #at h 'ill #e separated in Septe&#er 'hen the ne' &a hines and e+uip&ent 'ill #e operational. The Co&pan$, #efore o&in! 'ith this inevita#le de ision, has e<erted all efforts to find suita#le pla e&ents for the affe ted e&plo$ees 'ithin the o&pan$. 8o'ever, no positions are availa#le, onsiderin! all other units are also under!oin! strea&linin! of their or!ani?ations. 8en e, the Co&pan$ had to resort to de larin! the& redundant. 8o'ever, to &ini&i?e the ne!ative i&pa t of losin! e&plo$&ent, the Co&pan$ has prepared the Total /ssistan e Plan 'hi h overs the follo'in!, a. Finan ial pa 1a!e of ())* #asi for ever$ $ear of servi e plus an additional pre&iu& of up to 35* of #asi rate0 #. :-$ear free hospitali?ation overa!e.

In the i&ple&entation of this de ision, our Co&pan$ 'ill o&pl$ 'ith all pertinent provisions of the Ca#or Code and underta1es to respe t a rued e&plo$ees> ri!hts, #enefits and privile!es under our esta#lished poli ies, pra ti es and e<istin! Colle tive ;ar!ainin! /!ree&ents. /tta hed is the list of affe ted e&plo$ees. Ver$ trul$ $ours,

S/N MI6.EC CORPOR/TION

;$, ;/CDOMERO C. ESTENTO /ssistant Vi e President J 8ead Mandaue Ce!al .nit 2e hold that the Court of /ppeals orre tl$ found petitioner>s separation fro& 'or1 to #e due to a valid reason, i.e.# the installation of la#or savin! devi es. /s the appeals ourt stated, In the ase at #ar, 2e are of the opinion, and so hold that petitioners have de&onstrated #efore the Ca#or /r#iter #$ lear and onvin in! eviden e that the Mandaue plant 'here private respondent used to 'or1 had instituted a &oderni?ation pro!ra& 'hi h onsisted of, a&on! others, Pa 95 &illion ases per $ear apa it$ #re'house0 a (,9)) 8I per hour filtration s$ste&0 a o&plete ellarin! s$ste& 'ith si< $lindro- oni al tan1s at (),))) 8I ea h to in lude other tan1a!es and a essories0 a (,))) #ottles per &inute liter #ottlin! line0 and support s$ste&s su h as three (,))) 8P N8: o&pressors 'ith t'o li+uid overfeed N8: separators0 an B),))) l#s. per hour 'ater tu#e stea& !enerator and a 3)) 8O air o&pressorQ the operations of 'hi h are Pall auto&ated usin! &i ropro essor and ele troni pro ess ontrollers and instru&entation s$ste&s throu!h intelli!ent interfa in! 'ith Sie&ens Industrial o&puters.Q /ll of these hi!hte hnolo!$ innovations, at the ost of 7.= #illion pesos, trul$ render the fun tions of the Plant Dire tor>s Offi e Oualit$ Control .nit, 'here private respondent 'as transferred after his post as /d&inistrative Se retar$ to the plant &ana!er 'as validl$ a#olished, upon &ana!e&ent prero!ative that the sa&e Pdid not add value to the or!ani?ation.QM(4N Fourt". Petitioner asserts that he 'as &erel$ for ed #$ ne essit$ to a ept the separation #enefits !iven #$ SMC and that the +uit lai& he e<e uted in favor of SMC 'as not voluntar$. The notari?ed +uit lai&, entitled PRe eipt and Release,QM7)N reads in pertinent parts, RECEIPT /ND RECE/SE INO2 /CC MEN ;H T8ESE PRESENTS, 28ERE/S, I, ED6/R 6. /6.STICO, Filipino, of le!al a!e, 'ith residen e at :B /. S. FORT.N/ ST., M/ND/.E CITH, has #een e&plo$ed #$ San Mi!uel Corporation as /DMINISTR/TIVE SECRET/RH at its Mandaue ;re'er$0 28ERE/S, I a& full$ a'are of the strea&linin! of San Mi!uel Corporation>s Mandaue ;re'er$ operations due to &er!er of so&e fun tions, losure of so&e operatin! lines, e+uip&ent up!radin! and reor!ani?ation 'hi h resulted to redu tion of its 'or1for e0 28ERE/S, I have a epted to #e separated fro& the servi e of San Mi!uel Corporation effe tive at the lose of #usiness hours of Mar h (5, (4470 NO2 T8EREFORE, for and in onsideration of the pre&ises and of the su& of T8REE 8.NDRED T2O T8O.S/ND FO.R 8.NDRED FIFTH J :BA)) ONCH "P:)7,95).:B%,

Philippine Curren $, re eipt of 'hi h is here#$ a 1no'led!ed, in full pa$&ent and settle&ent of all the o&pensation, #enefits, and privile!es due &e in onne tion 'ith &$ e&plo$&ent in and separation fro& San Mi!uel Corporation, I, the said ED6/R 6. /6.STICO, have re&ised, released, and forever dis har!ed the said San Mi!uel Corporation, its su essors and assi!ns, andAor an$ of its dire tors, offi ers, and e&plo$ees, of and fro& an$ &anner of a tion or a tions, ause or auses of a tion, su& or su&s of &one$0 a ounts, da&a!es, lai&s and de&ands 'hatsoever, in la' or e+uit$ 'hi h M&a$ #e filedN a!ainst said San Mi!uel Corporation, its su essors and assi!ns, andAor dire tors, offi ers, and e&plo$ees, I ever had, no' have, or 'hi h &$ heirs, e<e utors, and ad&inistrators shall or &a$ have upon and #$ reason upon an$ &atter, ause or thin! 'hatsoever in onne tion 'ith &$ e&plo$&ent in and separation fro& the said San Mi!uel Corporation0 I do here#$ a 1no'led!e and de lare that I have #een paid #$ San Mi!uel Corporation all a&ounts due &e #$ 'a$ of salaries or 'a!es, overti&e o&pensation, Sunda$ and holida$ andAor ni!ht differential pa$ or other o&pensation arisin! out and in the ourse of &$ e&plo$&ent0 and that I si!ned these presents after havin! read and full$ understood its ontent. IN 2ITNESS 28EREOF, I have hereunto set &$ hand this Bth da$ of /pril, (447, at Ce#u Cit$, Philippines. "S!d.% ED6/R 6. /6.STICO SI6NED IN T8E PRESENCE OF, "S!d.% UUUUUUUUUUUUUU "S!d.% UUUUUUUUUUUUUUUUUU

2hile +uit lai&s and releases are !enerall$ held ontrar$ to pu#li poli $, there are nevertheless voluntar$ a!ree&ents 'hi h represent reasona#le settle&ents and are onsidered #indin! on the parties. Su h is the PRe eipt and ReleaseQ involved in this ase. Petitioner is not an illiterate person 'ho needs spe ial prote tion. /s the la#or ar#iter found, petitioner holds a &aster>s de!ree in li#rar$ s ien e and is an instru tor in politi al s ien e at the .niversit$ of San Carlos. 8e 'as also at that ti&e a la' student in the said universit$. 2hile it is the dut$ of the ourts to #e vi!ilant in preventin! the e<ploitation of e&plo$ees, it also #ehooves the& to prote t the inte!rit$ of ontra ts so lon! as the$ are not ontrar$ to la'.M7(N In this ase, 'hen petitioner a 1no'led!ed re eipt of the letter of ter&ination, he 'rote, P/ epted under protest and 'ithout preDudi e.Q ;ut 'hen he later si!ned the PRe eipt and Release,QM77N he did not +ualif$ his a t. Considerin! the fore!oin!, it is hard to on lude that he 'as &erel$ for ed #$ ne essit$ to e<e ute the +uit lai&. 8HEREFORE, the petition is DENIED for la 1 of sho'in! that the Court of /ppeals o&&itted an$ reversi#le error. !O OR/ERE/.

!ECON/ /I1I!ION

FRANCI! RA TALAM, Petitioner,

G.R. No.

176050

Present,

versus

C/RPIO# J.# C"airperson# ;RION, DEC C/STICCO, /;/D, and

NATIONAL LA.OR RELATION! COMMI!!ION, 5*( /I1I!ION, CE.0 CIT , THE !OFT8ARE FACTOR , INC. a%&Bor TERE!A GRAPILON, O$$'-e Ma%aCer, a%& 8OLFGANG HERMLE, C('e$ EDe-u*'Ee O$$'-er, Respondents. --

PERET, JJ.

Pro&ul!ated,

/pril =, 7)() <9999999999999999999999999999999999999999999999999999999999999999999999999999999999999999 <

/ E C I ! I O N

.RION, J.,

2e resolve the present Petition for Revie' on CertiorariM(N filed #$ Fran is Ra$ Tala& "!alam% see1in! to set aside the De isionM7N of the Nineteenth Division of the Court of /ppeals "C$% dated Gul$ :(, 7))= and its ResolutionM:N dated Septe&#er 74, 7))= rendered in C/-6.R.SP No. )(3=).M9N

THE ANTECE/ENT!

The fa ts of the ase are su&&ari?ed #elo'.

The respondent, The Soft'are Fa tor$, In . "!SF%%, is a do&esti orporation en!a!ed in providin! infor&ation te hnolo!$ and o&puter onsultan $ to the pu#li . It holds offi e in Ma1ati Cit$. In /pril 7))(, it e&plo$ed Tala& as a full-ti&e pro!ra&&er.

In the latter part of 7))( and in 7))7, TSFI suffered finan ial reverses. Its e<ternal finan ial auditor advised that it ut on its pa$roll e<penses 'hi h a ounted for 9(* of its total operatin! osts.M5N TSFI heeded the advi e and decided to retrenc" some of its emplo&ees# using as basis its emplo&ees' service income and contribution margins to t"e compan&. TSFI found that Tala& 'as one of t'o e&plo$ees 'ith the least or 'ith no in o&e ontri#ution for the $ear 7))7. Conse+uentl$, respondents Teresa 6rapilon "(rapilon%, TSFIVs Offi e Mana!er, and 2olf!an! 8er&le "Hermle%, Chief E<e utive Offi er, ver#all$ infor&ed Tala& that his servi es 'ith the o&pan$ 'ould #e ter&inated thirt$ ":)% da$s after Septe&#er 73, 7))7. Thereafter,

TSFI notified Tala& in 'ritin! of the ter&ination of his e&plo$&ent. M=N The noti e 'as dated O to#er (, 7))7, #ut re eived #$ Tala& on O to#er 9, 7))7.M3N )n November *# +,,+# or after a mont"# !alam signed a Release and -uitclaimMBN in onsideration and re eipt of PB4,459.)) in o&pensation and other #enefits.M4N

On Nove&#er 74, 7))7, Tala& +uestioned the le!alit$ of his separation fro& the servi e throu!h a o&plaint for ille!al dis&issal and ille!al dedu tion, 'ith lai&s for servi e in entive leave pa$, da&a!es and attorne$Vs fees a!ainst TSFI, 6rapilon and 8er&le, #efore the National Ca#or Relations Co&&ission "NLRC% in Ce#u Cit$.

THE COMP0L!OR AR.ITRATION PROCEE/ING!

Tala& alle!ed #efore the Ca#or /r#iter that his dis&issal fro& e&plo$&ent 'as ille!al #e ause the o&pan$ did not o&pl$ 'ith the re+uisites under /rti le 7B: of the Ca#or Code for a valid retren h&ent a tion.

On the other hand, TSFI ar!ued that Tala& had #een validl$ dis&issed. It ontended that retren h&ent is one of the authori?ed auses under the Ca#or Code for ter&ination of e&plo$&ent, and sou!ht the dis&issal of the o&plaint on the !round of i&proper venue0 Tala& should have filed the o&plaint in the Cit$ of Ma1ati, his pla e of 'or1, rather than in Ce#u Cit$, his ho&epla e.

On O to#er 7B, 7)):, E<e utive Ca#or /r#iter Re$noso /. ;elar&ino rendered a de isionM()N de larin! Tala&Vs dis&issal ille!al and dire tin! TSFI to pa$ Tala& separation #enefits, #a 1'a!es and (:th &onth pa$ in the a!!re!ate a&ount of P7=),5=).)). The ar#iter held that 'hile it is TSFIVs ri!ht to redu e its 'or1for e to prevent losses, it failed to present eviden e that the o&pan$ adopted a retren h&ent pro!ra& and there 'as also no eviden e sho'in! learl$ that Tala& should #e retren hed. 8e disre!arded the release and +uit lai& e<e uted #$ Tala& de larin! that he 'as o&pelled to a ept the &onetar$ onsideration #ehind it out of ne essit$. 8e ho'ever ruled out reinstate&ent as Pt"e parties can no longer .ork toget"er in mutual trust.Q

TSFI appealed to the NCRC. In a De ision dated Fe#ruar$ 7(, 7))5,M((N the NCRC Fourth Division set aside the la#or ar#iterVs rulin! and dis&issed Tala&Vs o&plaint 'ithout preDudi e, for i&proper venue. It ruled that Tala& should have filed the o&plaint 'ith the NCRC-Re!ional /r#itration ;ran h in the National Capital Re!ion 'hi h has Durisdi tion over the 'or1pla e

in Ma1ati Cit$. Tala& sou!ht a re onsideration 'hi h the NCRC !ranted in a resolution pro&ul!ated on Ma$ 75, 7))5.M(7N It set aside its earlier de ision and rendered a ne' one affir&in! 'ith &odifi ation the la#or ar#iterVs de ision. Ci1e the Ca#or /r#iter, it nullified the release and +uit lai& si!ned #$ Tala&. The NCRC found Tala&Vs dis&issal valid #$ reason of retren h&ent, #ut deleted the a'ard of separation pa$ Pin vie. of pa&ment.Q

TSFI &oved for re onsideration of the NCRC resolution 'hi h 'as partiall$ !ranted in another resolution dated Septe&#er 73, 7))5.M(:N This ti&e, the NCRC deleted the a'ard of #a 1'a!es and (:th &onth pa$, #ut ordered the o&pan$ to pa$ Tala& P:),))).)) as no&inal da&a!es for violatin! his ri!ht to pro edural due pro ess, itin! Jaka Food Processing Corp. v. /ar.in Pacot# et al.,M(9N 'here the Court held that althou!h the o&plainantVs dis&issal 'as #ased on an authori?ed ause, no&inal da&a!es 'ere a'arded #e ause of the respondentVs failure to o&pl$ 'ith the noti e re+uire&ent. The NCRC ruled that the non-o#servan e of the noti e re+uire&ent 'ill not invalidate Tala&Vs separation on the !round of retren h&ent0 thus, the a'ard of full #a 1'a!es 'as not proper.

Tala& &oved for re onsideration, #ut the NCRC denied the &otion on Ganuar$ :(, 7))=. Tala& thereafter sou!ht relief fro& the C/ throu!h a petition for certiorariunder Rule =5 of the Rules of Court,M(=N har!in! the NCRC 'ith !rave a#use of dis retion for its resolutions of Septe&#er 73, 7))5 and Ganuar$ :(, 7))=. In parti ular, Tala& +uestioned the deletion of the a'ard to hi& of #a 1'a!es and (:th &onth pa$.
M(5N

THE CA /ECI!ION

In its de ision rendered on Gul$ :(, 7))=,M(3N the C/ denied the petition for la 1 of &erit. It found Tala&Vs separation fro& the servi e #$ reason of retren h&ent to #e valid. 8o'ever, 'hile it a 1no'led!ed that TSFI 'as sufferin! fro& finan ial losses as onfir&ed #$ the report of independent e<ternal auditor Ceah /. Villanueva,M(BN it ruled that the o&pan$ failed to !ive Tala& the noti e re+uired #$ la'.M(4N It noted that on Septe&#er 73, 7))7, TSFI, throu!h 6rapilon and 8er&le, ver#all$ advised Tala& of his separation fro& the servi e due to retren h&ent. On O to#er (, 7))7,M7)N TSFI sent Tala& and the Depart&ent of Ca#or and E&plo$&ent "/)L0% separate noti es 'ith different effe tivit$ dates of Tala&Vs ter&ination of e&plo$&ent, the noti e to Tala& 'as to #e effe tive O to#er 73, 7))7, 'hile the noti e to DOCE 'as effe tive O to#er (=, 7))7. The C/ also noted that Tala&Vs e&plo$&ent ontra t provided for t'o &onthVs noti e.M7(N

The C/ opined that althou!h the la' &andated that the 'ritten noti e of ter&ination of e&plo$&ent for authori?ed auses should #e served at least one &onth #efore the effe tive date of the ter&ination, the e&plo$&ent ontra t should prevail #e ause it does not violate the &ini&u& re+uire&ent under /rti le 7B: of the Ca#or Code. Even if /rti le 7B: 'ere to #e follo'ed, the C/ added, TSFI still failed to o&pl$ 'ith the noti e re+uire&ent onsiderin! that the noti es to Tala& and to DOCE 'ere for less than thirt$ ":)% da$s.

/lthou!h Tala&Vs dis&issal 'as due to a ause authori?ed #$ la', the C/ dee&ed TSFI lia#le for no&inal da&a!es for violation of Tala&Vs ri!ht to pro edural due pro ess. The appellate ourt affir&ed 'ith &odifi ation the assailed NCRC de ision. It in reased to P5),))).)) the no&inal da&a!es of P:),))).)) a'arded #$ the NCRC. The C/ found support in the CourtVs rulin! in the Jaka Food Processing ase,M77N the sa&e rulin! relied upon #$ the NCRC, for its a'ard of no&inal da&a!es. Spe ifi all$, the C/ found appropriate the CourtVs pronoun e&ent in Ga1a that Pif t"e dismissal is based on an aut"ori1ed cause under $rticle +23# but t"e emplo&er failed to compl& .it" t"e notice re uirement# t"e sanction s"ould be stiffer because t"e dismissal process .as initiated b& t"e emplo&er's e4ercise of management prerogative,Q as distin!uished fro& $gabon v. National Labor Relations CommissionM7:N 'here the dis&issal 'as for a Dust ause #ut due to non- o&plian e 'ith pro edural due pro ess, the e&plo$er 'as &ade to pa$P:),))).)) in no&inal da&a!es.

Tala& &oved for re onsideration of the de ision, #ut the C/ denied the &otion in a resolution pro&ul!ated on Septe&#er 74, 7))=.M79N 8en e, the present re ourse to the Court.

THE PETITION

The petition su#&its that the C/ seriousl$ erred andAor o&&itted !rave a#use of dis retion in, "(% Dustif$in! the retren h&ent of Tala& on the #asis alone of the report of the e<ternal auditor0 "7% Dustif$in! the retren h&ent despite the TSFIVs failure to o#serve fair and reasona#le standards for a valid retren h&ent and to first institute ost redu tion &easures0 and ":% appl$in! the ases of Jaka Food Processing Corporation v. /ar.in Pacot# et al. and $gabon v. NLRC.

Tala& ontends that 'hile it &a$ #e true that audited finan ial state&ents nor&all$ serve as proofs of the profit and loss perfor&an e of a o&pan$, the finan ial state&ents relied upon #$ the o&pan$ do not sho' that TSFI 'as in dire finan ial straits nor 'as it sufferin!, or 'ill i&&inentl$ suffer, drasti #usiness losses0 the losses 'ere insu#stantial or in onse+uential0 ontrar$ to TSFIVs lai&, a loser loo1 at the S hedule of Operatin! E<penses for the $ear

ended De e&#er :(, 7))7 and Septe&#er 7))7 'ould sho' that the o&pan$Vs pa$roll did not a tuall$ over 9(* of its total operatin! e<penses #ut onl$ (=*, onsiderin! that &u h of the e<pense is allotted to &ana!e&ent fees, not to &ention that there 'ere e<penses in urred for re ruit&ent servi es0 the alle!ed losses 'ere not i&&inent as there 'ere onl$ t'o "7% e&plo$ees "Ronilo Ra$&undo and Tala&% 'ho 'ere retren hed0 in fa t, TSFI i&&ediatel$ hired e&plo$ees for the position o upied #$ Tala&0 at the ti&e Tala& 'as retren hed, there 'ere five "5% pro#ationar$ e&plo$ees 'ho #e a&e re!ular e&plo$ees on O to#er (, 7))7, four "9% of 'ho& had lo'er ontri#ution &ar!ins.

Tala& further ontends that if TSFI 'as indeed e<perien in! finan ial diffi ulties, it ould also have redu ed its other operatin! e<penses to a#ate the losses. Further, Tala& ar!ues that TSFI failed to provide reasona#le riteria in i&ple&entin! its retren h&ent pro!ra& as the alle!ed ause of Tala&Vs dis&issal E that he had the least ontri#ution &ar!in to the o&pan$ E is not a valid ause for dis&issal under /rti les 7B7 and 7B: of the Ca#or Code0 #e that as it &a$, he did not have the hi!hest ne!ative ontri#ution &ar!in.

To prove his point, Tala& lai&s that the ta#le of ontri#ution &ar!insM75N relied upon #$ TSFI is in o&plete and ina urate as there 'as a total of nineteen "(4% onsultants at the ti&e, $et the ta#le listed onl$ seventeen "(3%0 he had a ne!ative ontri#ution #e ause the TSFI &ana!e&ent did not !ive hi& the han e to #e en!a!ed in proDe ts0 'hile it is true that he had no servi e in o&e for 7))7, this 'as pri&aril$ #e ause he 'as assi!ned to 'or1 in the offi e on a spe ial proDe t.

On Nove&#er 7:, 7))3, Tala& filed a Me&orandu&M7=N reiteratin! essentiall$ the sa&e ar!u&ents raised in the petition.

THE CA!E FOR T!FI

;$ 'a$ of a Co&&ent filed on Fe#ruar$ (=, 7))3M73N and a Me&orandu& dated Nove&#er :, 7))3,M7BN TSFI pra$s for the dis&issal of the petition for la 1 of &erit, ontendin! that Tala&Vs ar!u&ents are &erel$ a rehash of his previous ar!u&ents #efore the NCRC and the C/. Spe ifi all$, it ar!ues that the petition raises onl$ fa tual issues 'hi h are not proper su#De ts of appeal under the Rules of Court0M74N Tala& is estopped fro& +uestionin! the C/ de ision #e ause 'hat he 'anted had alread$ #een !ranted #$ the C/0 Tala&Vs retren h&ent is valid and supported #$ eviden e and he is onl$ entitled to no&inal da&a!es pursuant to la' and Durispruden e.

TSFI ontends that the petitionVs pro edural defe t is evident in the follo'in! +uestions it raised, "(% 'as the o&pan$ sufferin! fro& su#stantial finan ial losses to Dustif$ a retren h&entL "7% 'as the retren h&ent #ased on fair and reasona#le standardsL ":% did Tala& have the hi!hest ne!ative ontri#ution &ar!in to Dustif$ his dis&issalL These +uestions, TSFI posits, annot #e resolved 'ithout the Court revie'in! or evaluatin! the eviden e. On the assu&ption that Tala& &a$ properl$ raise these +uestions, TSFI ontends that the fa tual deter&ination re!ardin! the validit$ of the retren h&ent annot #e distur#ed an$&ore #e ause findin!s of fa t of ad&inistrative #odies li1e the NCRC, as 'ell as those of the C/, are #indin! upon the Court.

Despite the fore!oin!, TSFI &aintains that Tala& is estopped fro& assailin! the C/ de ision of Gul$ :(, 7))= #e ause 'hat he 'anted had alread$ #een !ranted #$ the appellate ourt. It then e<plains that the NCRC resolution of Septe&#er 73, 7))5,M:)N 'hi h Tala& +uestioned #efore the C/, deleted the a'ard of #a 1'a!es and (:th &onth pa$ to Tala&, #ut a'arded hi& no&inal da&a!es of P:),))).)) for the o&pan$Vs non- o&plian e 'ith pro edural due pro ess. The C/ affir&ed the a'ard #ut in reased the a&ount to P5),))).)). This C/ response eli ited a rea tion fro& Tala& 'ith the state&ent that Pif fa tual ir u&stan es of the Jaka ase are the sa&e as in this instant ase, then the inde&nit$ in favor of the Petitioner should have #een fi<ed also in the a&ount of Fift$ Thousand Pesos "P5),))).))%.QM:(N TSFI su#&its that #$ his ver$ o'n 'ords, Tala& P"as concededQ that an in rease in the a&ount of inde&nit$ a'arded to hi& 'ould alread$ #e a epta#le and this the C/ alread$ !ranted.

On the validit$ of its retren h&ent a tion, TSFI posits that the ost- uttin! &easure it arried out &easured up to the standard i&posed #$ la' and Durispruden e. It &aintains that it did not onl$ e<pe t #ut had alread$ suffered su#stantial losses, as reported #$ its e<ternal auditor and as esta#lished #$ its finan ial re ords0M:7N as of De e&#er :(, 7))7, it had a u&ulated losses a&ountin! to P7,935,9(B.)) 'hi h onstituted 4=.9(* of sto 1holders> e+uit$ of P3,3)),))).)).M::N It ar!ues further that the fa t that it retren hed onl$ t'o e&plo$ees did not &ean its losses 'ere not i&&inent0 it did not have to dis&iss all its e&plo$ees #e ause it also needed to survive, not to o&pletel$ shut do'n0 in an$ event, redu in! its (3 onsultants #$ t'o represented alread$ ((* of its 'or1for e.

TSFI li1e'ise disputes Tala&Vs su#&ission that its pa$roll e<pense did not a tuall$ represent 9(* #ut onl$ (=*. Tala&Vs salar$ is a dire t ost in luded in the a ount of Psalaries and .ages and incentivesQ in the s hedule of dire t ost as sho'n in the finan ial state&ents, not in the s hedule of operatin! e<penses0 this a ount indi ates an e<pense of P=,:43,5=B.)), 'hi h is at least 9:* of the total dire t osts. It adds that supervisors and &ana!erial e&plo$ees should also #e o&pensated for their 'or1. 2ith respe t to the five "5% pro#ationar$ e&plo$ees 'ho 'ere &ade re!ular e&plo$ees in O to#er 7))7, TSFI e<plains that the$ 'ere

'or1in! on a proDe t that 'as then in &id-strea& and, onsiderin! their 1no'-ho' in the proDe t, ould not Dust #e assi!ned to Tala&.

TSFI ta1es e< eption to Tala&Vs lai& that it has in reased the nu&#er of its onsultants to t'ent$ "7)% and is preparin! to transfer or has transferred to a ne' and #i!!er offi e spa e. It &aintains that there is a#solutel$ no proof to the alle!ation0 it 'as a fa tual &atter not raised in the earlier pro eedin!s and annot thus #e raised for the first ti&e on appeal0 assu&in! it is true, the onditions durin! the $ears (444 to 7))7 'ere different fro& the present onditions and if the o&pan$ 'as a#le to 'eather the finan ial risis durin! those $ears, it 'as #e ause it undertoo1 &easures that ena#led it to survive and #e o&e finan iall$ a#le a!ain0 it used as an offi e a s&all roo& "a &ere u#i le% durin! the rises $ears0 it had onl$ a t'o-person support staff in the persons of 6rapilon and 8er&le, and it had redu ed the salaries of its e&plo$ees #$ as &u h as :)*.

TSFI insists that Tala& 'as retren hed #e ause he had the hi!hest ne!ative ontri#ution &ar!in, ontrar$ to his lai& that he Pdid not "ave t"e lo.est contribution margin among t"e consultants of t"e compan&.Q It ar!ues that as sho'n in the profit and loss state&ent,M:9N Tala& had the hi!hest ne!ative ontri#ution &ar!in of P5((,=7(.33, follo'ed #$ another onsultant 'ith a ne!ative ontri#ution &ar!in of P5)(,5B7.9=0 Tala&Vs perfor&an e as a onsultant resulted in a net loss to the o&pan$ of P5((,=7(.33. It su#&its that Tala& 'as not hosen #$ an$ of its lients as sho'n #$ the fa t that sin e Ganuar$ 7))7 until his separation, he had no servi e in o&e. It posits that it annot #e e<pe ted to &aintain an e&plo$&ent onsultant 'hose servi es the lients do not need. It insists that the ontri#ution &ar!in or servi e in o&e is a fair and reasona#le riterion in de idin! 'ho to retren h.

THE R0LING OF THE CO0RT

O% Ma**er+ o$ Pro-e&ure

TSFI as1s the Court to dis&iss the present petition on the !round that it is pro edurall$ defe tive as, alle!edl$, it raises onl$ +uestions of fa t, in ontravention of the re+uire&ent under Rule 95 of the Rules of Court that an appeal #$ certiorari shall raise onl$ +uestions of la'. 2hile the petition indeed poses fa tual issues E i.e., 'hether the o&pan$ 'as sufferin! fro& su#stantial losses to Dustif$ a retren h&ent &easure, 'hether it o#served fair and reasona#le

standards in i&ple&entin! a retren h&ent, and 'hether Tala& deserved to #e retren hed E 'e dee& it proper to e<a&ine the fa ts ourselves in vie' of the onfli tin! fa tual findin!s a&on! the Ca#or /r#iter, the NCRC and the C/.M:5N

/dditionall$, TSFI preli&inaril$ su#&its that Tala& is estopped fro& assailin! the C/ de ision #e ause the appellate ourt alread$ !ranted 'hat he as1ed for 'hen the C/ in reased to P5),))).)) the a&ount of no&inal da&a!es a'arded to hi&.

On this point, !SF% is .rong. It too1 out of onte<t Tala&Vs state&ent in his petitionM:=N that if the fa ts in the Jaka ase 'ere si&ilar to his ase, then the no&inal da&a!es should have #een fi<ed at P5),))).)). TSFI overloo1ed the fa t that Tala& pra$ed for annul&ent of the NCRC resolutions of Septe&#er 73, 7))5 and Ganuar$ :(, 7))=, parti ularl$ 'ith respe t to the deletion of the !rant of #a 1'a!es and (:th &onth pa$. The state&ent alluded to annot, #$ itself, #ar Tala& fro& pursuin! 'hat he pra$ed for, 'hi h 'as not li&ited to no&inal da&a!es alone. 8e 'as si&pl$ &a1in! a state&ent re!ardin! the need for onsisten $ in the appli ation of the Court>s rulin!s. /nother issue for preli&inar$ onsideration is Tala&Vs insistent +uestionin! of the validit$ of the retren h&ent TSFI had underta1en. TSFI posits that he is #arred fro& harpin! on the issue #e ause he failed to &ove for re onsideration of the NCRCVs Ma$ 75, 7))5 resolution de larin! the validit$ of his dis&issal #$ reason of retren h&ent.M:3N

/!ain, TSFI>s argument is untenable. TSFI itself filed a &otion for re onsideration of the said resolution,M:BN 'hi h the NCRC disposed of throu!h its resolution of Septe&#er 73, 7))5, a op$ of 'hi h 'as furnished Tala&Vs ounsel. 8avin! failed to file a &otion for re onsideration of the Ma$ 75, 7))5 resolution, an Tala& &ove for re onsideration of the NCRCVs Septe&#er 73, 7))5 resolutionL

In the ase of Sadol v. Pilipinas 5ao# %nc.# et al.M:4N 'here the o&pan$ lost the ri!ht to appeal fro& a de ision of the NCRC #ut the other part$ appealed fro& the sa&e de ision, the Court ruled that the o&pan$ ould file a &otion for re onsideration of the NCRC de ision on appeal. The pro edural situation in this ase #ein! the sa&e as inSadol, 'e hold that Tala& did not lose the ri!ht to +uestion the validit$ of his dis&issal as, in fa t, he sou!ht a re onsideration of the NCRC Septe&#er 73, 7))5 resolution sustainin! his dis&issal on the !round of retren h&ent. /s 'e said in Sadol, the rules of te hni alit$ &ust $ield to the #roader interest of Dusti e.

T(e Mer'*+ o$ *(e Ca+e

2e no' resolve the issue of 'hether there 'as a valid ause for Tala&>s dis&issal.

2e ans'er in the affir&ative.

The C/ o&&itted no reversi#le error in affir&in! the NCRC rulin! that Tala& 'as validl$ dis&issed on the !round of retren h&ent. 2e o&e to this on lusion #ased on the follo'in! onsiderations,

First. The de ision to retren h had a #asis0 it 'as not si&ulated nor resorted to for the purpose of !ettin! rid of e&plo$ees. The de ision 'as upon the re o&&endation of the o&pan$>s e<ternal auditor Ceah /. Villanueva, as ontained in her letter to the TSFI ;oard of Dire tors in O to#er 7))7.M9)N The letter reads,

I have revie'ed $our Profit and Coss State&ent for the period Ganuar$ to Septe&#er 7))7 and the / o&pan$in! ProDe ted Profit and Coss State&ent for the last +uarter of 7))7. Net Coss for the period endin! a&ounted to C8F::3,=(=. /vera!e Operatin! E<penses per &onth a&ounted to C8F()),((3 and /vera!e / tual Revenue per &onth a&ounted to C8F=:,(=:. ;ased on e<istin! lients, revenue for the last +uarter is proDe ted at C8F(4(,9)) and Operatin! E<penses for the last +uarter is proDe ted at C8F:9(,5)3 resultin! to a proDe ted Net Coss of C8F(5),()3 at the end of $ear 7))7.

To &ini&i?e net loss and ash defi ien $, I re o&&end ost uttin! &easures on $our Pa$roll E<penses / ount 'hi h &a1es 9(* of $our Total Operatin! E<penses. I su!!est that $ou revie' ontri#ution &ar!in per onsultant and o&pensation pa 1a!es of personnel in the e<e utive and support !roup. Munders orin! suppliedN

/s the C/ noted, the standard proof of a o&pan$>s finan ial standin! is its finan ial state&ents dul$ audited #$ redi#le e<ternal auditors.M9(N 2e see nothin! in the re ords 'hi h i&pu!ns VillanuevaVs assess&ent of the finan ial ondition of TSFI at the ti&e &aterial to the ase.

Second. The ost- uttin! &easure re o&&ended involved redu tion of TSFI>s pa$roll e<pense a ount 'hi h, as the auditor found, &a1es up 9(* of the o&pan$>s total operatin!

e<penses. Tala& insinuates that the share in the o&pan$>s operatin! osts of personnel e<penses is &isleadin!, ontendin! that the #ul1 of the e<pense !oes into &ana!e&ent fees. 2hile this &a$ #e so, it annot #e denied that the &ana!e&ent !roup is still part of the personnel o&ponent of the o&pan$, and a#sent an$ sho'in! of #ad faith, the hoi e of 'ho should #e retren hed &ust #e on eded to the o&pan$ for as lon! as there e<ists a #asis for it.

In the present ase, 'e note that the auditor su!!ested that TSFI Previe. t"e contribution margin per consultant and compensation packages of personnel in t"e e4ecutive and support group.Q /!ain, a#sent an$ sho'in! of #ad faith, 'e annot fault the o&pan$ for hoosin! the option of loo1in! at the &ar!ins of ontri#ution of the onsultants to the in o&e of the o&pan$ as pri&ar$ retren h&ent standard. It is Dust unfortunate that #ased on this $ardsti 1, Tala& a&e out as one of t'o onsultants 'ith ver$ hi!h ne!ative ontri#ution &ar!ins and 'as therefore hosen for retren h&ent.

Tala& disputes the unfavora#le assess&ent of his perfor&an e as a onsultant, ar!uin! that a&on! nineteen "(4% onsultants of the o&pan$ "not seventeen M(3N, as listed #$ TSFI%, there 'ere four "9% e&plo$ees 'ho had lo'er ontri#ution &ar!ins0 he had no ontri#ution in o&e for 7))7 #e ause he 'as assi!ned to do offi e 'or1 and 'as not #ein! !iven proDe ts.

2hile Tala& &a$ not have the least ontri#ution &ar!in, he hi&self ad&itted that he had no ontri#ution in o&e for 7))7 and tried to e<plain this a'a$ #$ sa$in! that he 'as assi!ned at the offi e and he 'as not #ein! !iven proDe ts. Mana!e&ent, ho'ever, ountered that TSFI>s lients did not hoose hi& or as1 for his servi es E a &ana!e&ent lai& Tala& did not dispute. The o&pan$ satisfa toril$ e<plained, too, ho' it vie'ed and o&pared the ne!ative ontri#ution &ar!in. In these li!hts, TSFI annot #e #la&ed for hoosin! hi& after onsiderin! the e&plo$ees> respe tive ontri#utions to the o&pan$>s &ain #usiness of o&puter onsultan $.

!"ird. Tala& 'as dis&issed due to a ause authori?ed #$ la' E retren h&ent to prevent losses.M97N /t the ti&e of Tala&>s dis&issal, TSFI>s finan ial ondition, as found #$ the e<ternal auditor, sho'ed that it 'as not Dust e<pe tin! losses, it alread$ suffered a net in o&e loss of P7,939,9(B.)) and retained earnin!s defi it of P3,979,75).)) for the period endin! De e&#er :(, 7))7.M9:N

Tala& tried to ne!ate this dire finan ial pi ture lai&in! that the ver$ finan ial state&ent ited #$ TSFI sho'ed a net in o&e of P74B,375.)),M99N referrin! to the period endin! on

Septe&#er :), 7))7. Su h a lai&, ho'ever, annot erase the fa t that the o&pan$ had suffered su#stantial a u&ulated losses of P7,939,9(B.)) as of the end of De e&#er 7))7. M95N For a s&all o&pan$ li1e TSFI "'ith onl$ t'ent$ M7)N e&plo$ees%, the losses it suffered 'ere not &erel$ de minimis in e<tent #ut 'ere, at the ti&e Tala& 'as dis&issed, a tual and 'ith &ore losses reasona#l$ i&&inent. Si!nifi antl$, the e&plo$er o#De tivel$ and in !ood faith per eived the i&&inen e of &ore losses as it 'as #ased on the report of its e<ternal auditor.

Fourt". TSFI resorted to other &easures to a#ate its losses. It lai&ed that durin! the rises period, it used as an offi e a s&all-roo& "a &ere u#i le% 'ith onl$ a t'o-person support staff in the persons of 6rapilon and 8er&le0 it redu ed the salaries of its e&plo$ees #$ as &u h as :)*. This su#&ission #$ the o&pan$ is su#stantiated #$ the s hedule of Operatin! E<penses for the $ear ended De e&#er :(, 7))7 and Septe&#er :), 7))7.M9=N / +ui 1 !lan e at the s hedule readil$ sho's a redu tion of TSFI>s operatin! e<penses a ross the #oard. The s hedule indi ates a su#stantial de rease in the operatin! e<penses, fro& P5,3::,3:5.)) in Septe&#er 7))7 to P(,=4B,557.:= as of the end of De e&#er 7))7.

On the 'hole, 'e find that TSFI satisfied the re+uisites for a valid retren h&ent.M93N

T(e Re)ea+e a%& :u'*-)a',

Independentl$ of the a#ove onsiderations, 'e note that Tala& e<e uted a Release and Ouit lai&M9BN on Nove&#er =, 7))7 at a#out the ti&e his separation fro& the servi e 'as to ta1e effe t, in onsideration of PB4,459.)) in o&pensation and other #enefits.M94N The la#or ar#iter and the NCRC did not onsider the release and +uit lai& as a #ar to the filin! of the o&plaint, sa$in! that Tala& had no hoi e #ut to si!n the do u&ent out of ne essit$. The C/ hose to #e silent a#out it0 in effe t, affir&in! the la#or tri#unalVs findin!s on the &atter.

The C/ erred in !lossin! over the le!al effe t of Tala&Vs release and +uit lai&. It should not have #een nullified. Tala& 'as not an unlettered e&plo$ee0M5)N he 'as an infor&ation te hnolo!$ onsultant and &ust have #een full$ a'are of the onse+uen es of 'hat he 'as enterin! into.M5(N The +uit lai& 'as a voluntar$ a t as there is no sho'in! that he 'as oer ed into e<e utin! the instru&ent0 he re eived a valua#le onsideration for his less than t'o $ears of servi e 'ith the o&pan$. Thus, fro& all indi ations, the release and +uit lai& 'as a valid and #indin! underta1in! that should have #een re o!ni?ed #$ the la#or authorities and the C/.

2hile the la' loo1s 'ith disfavor upon releases and +uit lai&s #$ e&plo$ees 'ho are invei!led or pressured into si!nin! the& #$ uns rupulous e&plo$ers see1in! to evade their le!al responsi#ilities, a le!iti&ate 'aiver representin! a voluntar$ settle&ent of a la#orerVs lai&s should #e respe ted #$ the ourts as the la' #et'een the parties.M57N In our vie', Tala&Vs release and +uit lai& fall into the ate!or$ of le!iti&ate 'aivers as defined #$ the Court.

In e<e utin! the release and +uit lai&, Tala& had un+uivo a#l$ si!nified his a eptan e of his separation fro& the servi e as o&&uni ated to hi& in 'ritin! #$ TSFI on O to#er (, 7))7,M5:N after the o&pan$ &ana!e&ent ver#all$ dis ussed the &atter 'ith hi&. In fa t, on the da$ he re eived the 'ritten noti e of his separation "O to#er 9, 7))7%, he 'as issued, upon his re+uest, a ertifi ationM59N that he Pis a former emplo&ee of !"e Soft.are Factor& %nc.Q 'ho Doined the o&pan$ Pon $pril 67# +,,6 until )ctober 36# +,,+ as a Programmer.Q

2ith the fore!oin! #a 1drop in Tala&>s e<e ution of the release and +uit lai&, 'e find the filin! of the ille!al dis&issal ase tainted 'ith #ad faith on his part for he has alread$ Preleased and forever disc"argedQ the o&pan$ Pfro& an$ and all lai&s of da&a!es and other lia#ilit$, an$ fro& an$ and all &anner of lai&s, ause or auses of a tions 'hatsoever < < < a!ainst the&.QM55N

6iven the release and +uit lai&, 'e do not see ho' TSFI an #e &ade to ans'er for failure to afford Tala& pro edural due pro ess. The release and +uit lai&, to our &ind, erased 'hatever infir&ities there &i!ht have #een in the noti e of ter&ination as Tala& had alread$ voluntaril$ a epted his dis&issal throu!h the release and +uit lai&. 2ith this a eptan e, the 'ritten noti e #e a&e a ade&i 0 the noti e, after all, is &erel$ a prote tive &easure put in pla e #$ la' and serves no useful purpose after prote tion has #een assured. 2e thus find no #asis for the on lusion that TSFI violated pro edural due pro ess and should pa$ no&inal da&a!es.

/ll told, 'e find the petition to #e 'ithout &erit. The o&plaint should #e dis&issed.

8HEREFORE, pre&ises onsidered, the petition is here#$ /ENIE/. The assailed de ision and resolution of the Court of /ppeals are AFFIRME/ #ut MO/IFIE/to /ELETE the a'ard of no&inal da&a!es. / ordin!l$, the o&plaint is /I!MI!!E/. Costs a!ainst the petitioner.

!O OR/ERE/.

!ECON/ /I1I!ION

/ANNIE M. PANTO4A, Petitioner#

G.R. No. 167665

Present,

C/RPIO, J., C"airperson# - versus DEC C/STICCO, /;/D, PERET, and MENDOT/,W JJ. !CA H GIENE PRO/0CT! CORPORATION, Respondent. Pro&ul!ated, /pril 7:, 7)()

<-------------------------------------------------------------<

/ECI!ION

/EL CA!TILLO, J.:

On e a!ain, 'e uphold the e&plo$er>s e<er ise of its &ana!e&ent prero!ative #e ause it 'as done for the advan e&ent of its interest and not for the purpose of defeatin! the la'ful ri!hts of an e&plo$ee.

This petition for revie' on certiorariM(N assails the De isionM7N dated Ganuar$ :), 7))9 and ResolutionM:N dated Ma$ (:, 7))9 of the Court of /ppeals "C/% in C/-6.R. SP No. 3:)3=, 'hi h affir&ed the Ma$ :), 7))7 De isionM9N of the National Ca#or Relations Co&&ission "NCRC% and reinstated the Ca#or /r#iter>s dis&issal of the ille!al dis&issal o&plaint filed #$ petitioner Dannie M. PantoDa a!ainst respondent SC/ 8$!iene Produ ts Corporation. Factual Antecedents

Respondent, a orporation en!a!ed in the &anufa ture, sale and distri#ution of industrial paper and tissue produ ts, e&plo$ed petitioner as a utilit$ &an on Mar h (5, (4B3. Petitioner 'as eventuall$ assi!ned at respondent>s Paper Mill No. 9, the se tion 'hi h &anufa tures the o&pan$>s industrial paper produ ts, as a #a 1 tender in har!e of the proper operation of the se tion>s &a hineries.

In a Noti e of Transfer dated Mar h 73, (444,M5N respondent infor&ed petitioner of its reor!ani?ation plan and offered hi& a position at Paper Mill No. 5 under the sa&e ter&s and onditions of e&plo$&ent in anti ipation of the eventual losure and per&anent shutdo'n of Paper Mill No. 9 effe tive Ma$ 5, (444. The losure and on o&itant reor!ani?ation is in line 'ith respondent>s de ision to strea&line and phase out the o&pan$>s industrial paper &anufa turin! operations due to finan ial diffi ulties #rou!ht a#out #$ the lo' volu&e of sales and orders for industrial paper produ ts.

8o'ever, petitioner reDe ted respondent>s offer for his transfer. Thus, a noti e of ter&inationM=N of e&plo$&ent effe tive Ma$ 5, (444 'as sent to petitioner as his position 'as de lared redundant #$ the losure of Paper Mill No. 9. 8e then re eived his separation pa$ e+uivalent to t'o &onths pa$ for ever$ $ear of servi e in the a&ount ofP:5=,::5.7) and thereafter e<e uted a release and +uit lai&M3N in favor of respondent. On /pril 5, (444,

respondent infor&ed the Depart&ent of Ca#or and E&plo$&ent "DOCE% of its reor!ani?ation and partial losure #$ su#&ittin! 'ith the said offi e an Esta#lish&ent Ter&ination ReportMBN to!ether 'ith the listM4N of :( ter&inated e&plo$ees.

On Gune 7), 7))), petitioner filed a o&plaint for ille!al dis&issal a!ainst respondent assailin! his ter&ination as 'ithout an$ valid ause. 8e averred that the alle!ed redundan $ never o urred as there 'as no per&anent shutdo'n of Paper Mill No. 9 due to its ontinuous operation sin e his ter&ination. / o-e&plo$ee, Nestor /!tan!, onfir&ed this fa t and further attested that several ontra tual 'or1ers 'ere e&plo$ed to operate Paper Mill No. 9. M()N Petitioner also presented in eviden e do u&ents pertainin! to the a tual and ontinuous operation of Paper Mill No. 9 su h as the Paper Mill Personnel S hedule for Gul$ 7-B, 7)))M((N and 7:-74, 7)))M(7N and Paper Ma hine No. 9 Produ tion Report and Operatin! Data dated /pril 7B, 7)))M(:N and Ma$ (B, 7))).M(9N

In its defense, respondent refuted petitioner>s lai& of ille!al dis&issal. It ar!ued that petitioner has voluntaril$ separated hi&self fro& servi e #$ optin! to avail of the separation #enefits of the o&pan$ instead of a eptin! reassi!n&entAtransfer to another position of e+ual ran1 and pa$. / ordin! to respondent, petitioner>s dis ussion on the alle!ed resu&ption of operation of Paper Mill No. 9 is rendered &oot #$ the fa t of petitioner>s voluntar$ separation.

Ruling of the Labor Arbiter

On Mar h 7:, 7))(, the Ca#or /r#iter rendered a De isionM(5N dis&issin! petitioner>s o&plaint for la 1 of &erit. The Ca#or /r#iter ruled that inas&u h as petitioner reDe ted the position offered to hi&, opted to re eive separation pa$ and e<e uted a release and +uit lai& releasin! the o&pan$ fro& an$ lai& or de&and in onne tion 'ith his e&plo$&ent, petitioner>s lai& that he 'as ille!all$ dis&issed &ust perfor e fail.

Ruling of the National Labor Relations Commission

.pon appeal #$ petitioner, the NCRC reversed the Ca#or /r#iter>s De ision #$ findin! petitioner>s separation fro& e&plo$&ent ille!al. The NCRC !ave reden e to petitioner>s eviden e of Paper Mill No. 9>s ontinuous operation and onse+uentl$ opined that the fei!ned shutdo'n of operations renders respondent>s redundan $ pro!ra& le!all$ infir&. / ordin! to the NCRC, petitioner>s refusal to #e transferred to an e+ual post in Paper Mill No. 5 is of no

onse+uen e sin e he 'ould not have had the need to &a1e a hoi e 'here the situation, in the first pla e, never alled for it. The NCRC further disre!arded the validit$ of the +uit lai& #e ause its e<e ution annot #e onsidered as havin! #een done voluntaril$ #$ petitioner there #ein! fraud and &isrepresentation on the part of respondent. The dispositive portion of the NCRC De ision reads,

28EREFORE, pre&ises onsidered, the de ision under revie' is here#$ REVERSED and SET /SIDE, and another entered, de larin! o&plainant>s dis&issal fro& e&plo$&ent as ICCE6/C.

/ ordin!l$, respondent is ordered to REINST/TE the o&plainant to his for&er position 'ithout loss of seniorit$ ri!hts and pa$ hi& F.CC ;/CI2/6ES in the a&ount orrespondin! to the period 'hen he 'as a tuall$ dis&issed until a tual reinstate&ent, less the su& of T8REE 8.NDRED FIFTH SIX T8O.S/ND T8REE 8.NDRED T8IRTH FIVE J 7)A()) Pesos "P:5=,::5.7)% representin! his separation pa$.

Respondent is further ordered to pa$ the o&plainant, #$ 'a$ of attorne$>s fees, ten per ent "()*% of the total net a&ount due as #a 1'a!es.

SO ORDERED.M(=N

Respondent sou!ht re onsideration of the NCRC>s rulin!. It denied the fa t that Paper Mill No. 9 ontinued to #e full$ operational in (444. Respondent asseverated that 'hen Paper Mill No. 9 'as shut do'n in (444 due to its lo' produ tion output as ertified in an affidavitM(3N e<e uted #$ SC/>s VP-Tissue Manufa turin! Dire tor, there 'as a ne essit$ to o asionall$ run fro& ti&e to ti&e the &a hines in Paper Mill No. 9 onl$ for the purpose of &aintainin! and preservin! the sa&e and does not &ean that Paper Mill No. 9 ontinued to #e operational. It 'as onl$ in 7))) that Paper Mill No. 9 'as su#se+uentl$ reopened due to a &ore favora#le #usiness li&ate, 'hi h de ision is re o!ni?ed as a ri!htful e<er ise of &ana!e&ent prero!ative. Moreover, respondent &aintained that this is a ase of voluntar$ separation and not ille!al dis&issal.

In a ResolutionM(BN dated /u!ust 77, 7))7, respondent>s &otion 'as denied.

Ruling of the Court of Appeals

/!!rieved, respondent filed a petition for certiorari 'ith the C/. On Ganuar$ :), 7))9, the C/ reversed the NCRC>s De ision and reinstated the Ca#or /r#iter>s De ision dis&issin! the o&pliant. It ruled that there 'as no ille!al dis&issal as the a t of petitioner in reDe tin! the transfer and a eptin! the separation pa$ onstitutes a valid #asis for the separation fro& e&plo$&ent. Respondent>s Motion to /nnul the NCRC>s Entr$ of Gud!&ent 'as !ranted #$ the C/.

Petitioner filed a &otion for re onsideration #ut it 'as denied. I++ue

The lone issue in this petition for revie' on certiorari is 'hether or not respondent is !uilt$ of ille!al dis&issal.

Petitioner ontends that respondent>s strea&linin! of operations 'hi h resulted in the redu tion of personnel 'as a &ere s he&e to !et rid of re!ular e&plo$ees 'hose se urit$ of tenure is prote ted #$ la'. /s there 'as evident #ad faith in the i&ple&entation of a fla'ed retren h&ent pro!ra&, petitioner ar!ued that his separation fro& e&plo$&ent due to his de ision to a ept separation pa$ is ille!al sin e respondent has no valid #asis to !ive hi& an option either to #e transferred or #e separated. Further, neither an the +uit lai& he e<e uted sta&p le!alit$ to his pre ipitate separation.

Our Ru)'%C

The petition la 1s &erit.

Respondent8s rig"t of management prerogative .as e4ercised in good fait".

Respondent presented eviden e of the lo' volu&e of sales and orders for the produ tion of industrial paper in (444 'hi h inevita#l$ resulted to the o&pan$>s de ision to

strea&line its operations. This fa t 'as orro#orated #$ respondent>s VP-Tissue Manufa turin! Dire tor and 'as not disputed #$ petitioner. E<er isin! its &ana!e&ent prero!ative and sound #usiness Dud!&ent, respondent de ided to ut do'n on operational osts #$ shuttin! do'n one of its paper &ill. /s held in %nternational Harvester Macleod# %nc. v. %ntermediate $ppellate Court,M(4N the deter&ination of the need to phase out a parti ular depart&ent and onse+uent redu tion of personnel and reor!ani?ation as a la#or and ost savin! devi e is a re o!ni?ed &ana!e&ent prero!ative 'hi h the ourts 'ill not !enerall$ interfere 'ith.

In this ase, the a#olish&ent of Paper Mill No. 9 'as undou#tedl$ a #usiness Dud!&ent arrived at in the fa e of the lo' de&and for the produ tion of industrial paper at the ti&e. Despite an apparent reason to i&ple&ent a retren h&ent pro!ra& as a ost- uttin! &easure, respondent, ho'ever, did not outri!htl$ dis&iss the 'or1ers affe ted #$ the losure of Paper Mill No. 9 #ut !ave the& an option to #e transferred to posts of e+ual ran1 and pa$. /s an #e seen, retren h&ent 'as utili?ed #$ respondent onl$ as an availa#le option in ase the affe ted e&plo$ee 'ould not 'ant to #e transferred. Respondent did not pro eed dire tl$ to retren h. This, to our &ind, is an indi ation of !ood faith on respondent>s part as it e<hausted other possi#le &easures other than retren h&ent. ;esides, the e&plo$er>s prero!ative to #rin! do'n la#or osts #$ retren hin! &ust #e e<er ised essentiall$ as a &easure of last resort, after less drasti &eans have #een tried and found 'antin!. 6ivin! the 'or1ers an option to #e transferred 'ithout an$ di&inution in ran1 and pa$ spe ifi all$ #elie petitioner>s alle!ation that the alle!ed strea&linin! s he&e 'as i&ple&ented as a plo$ to ease out e&plo$ees, thus, the a#sen e of #ad faith. /pparentl$, respondent i&ple&ented its strea&linin! or reor!ani?ation plan 'ith !ood faith, not in an ar#itrar$ &anner and 'ithout preDudi in! the tenurial ri!hts of its e&plo$ees.

Petitioner harps on the fa t that there 'as no a tual shutdo'n of Paper Mill No. 9 #ut that it ontinued to #e operational. No eviden e, ho'ever, 'as presented to prove that there 'as ontinuous operation after the shutdo'n in the $ear (444. 2hat the re ords reveal is that Paper Mill No. 9 resu&ed its operation in 7))) due to a &ore favora#le #usiness li&ate. The resu&ption of its industrial paper &anufa turin! operations does not, ho'ever, &a1e respondent>s strea&linin!Areor!ani?ation plan ille!al #e ause, a!ain, the a#olish&ent of Paper Mill No. 9 in (444 'as a #usiness Dud!&ent arrived at to prevent a possi#le finan ial drain at that ti&e. /s lon! as no ar#itrar$ or &ali ious a tion on the part of an e&plo$er is sho'n, the 'isdo& of a #usiness Dud!&ent to i&ple&ent a ost savin! devi e is #e$ond this ourt>s deter&ination. /fter all, the free 'ill of &ana!e&ent to ondu t its o'n #usiness affairs to a hieve its purpose annot #e denied.M7)N

Petitioner8s voluntar& separation from emplo&ment renders "is claim of illegal dismissal unfounded and baseless.

Petitioner lai&s that he had no hoi e #ut to resi!n on the #elief that Paper Mill No. 9 'ill #e per&anentl$ losed as &isrepresented #$ respondent and thus an invalidate the release and +uit lai& e<e uted #$ hi&.

2e find this ontention untena#le.

2e held that 'or1 reassi!n&ent of an e&plo$ee as a !enuine #usiness ne essit$ is a valid &ana!e&ent prero!ative.M7(N /fter #ein! !iven an option to #e transferred, petitioner reDe ted the offer for reassi!n&ent to Paper Mill No. 5 even thou!h su h transfer 'ould not involve an$ di&inution of ran1 and pa$. Instead, he opted and preferred to #e separated #$ e<e utin! a release and +uit lai& in onsideration of 'hi h he re eived separation pa$ in the a&ount of P:5=,::5.7) e+ual to t'o &onths pa$ for ever$ $ear of servi e plus other a rued #enefits. Clearl$, petitioner freel$ and voluntaril$ onsented to the e<e ution of the release and +uit lai&. 8avin! done so apart fro& the fa t that the onsideration for the +uit lai& is redi#le and reasona#le, the 'aiver represents a valid and #indin! underta1in!.M77N /s aptl$ on luded #$ the C/, the +uit lai& 'as not e<e uted under for e or duress and that petitioner 'as !iven a separation pa$ &ore than 'hat the la' re+uires fro& respondent.

8HEREFORE, the petition is /ENIE/. The assailed Ganuar$ :), 7))9 De ision of the Court of /ppeals in C/-6.R. SP No. 3:)3= dis&issin! petitioner Dannie M. PantoDa>s o&plaint for ille!al dis&issal and the Ma$ (:, 7))9 Resolution den$in! the Motion for Re onsideration are AFFIRME/.

!O OR/ERE/.

SECOND DIVISION >G.R. No+. 151702907. AuCu+* 2, 2001@ CATHA PACIFIC AIR8A !, LT/., petitioner, vs. NATIONAL LA.OR RELATION! COMMI!!ION a%& MARTHA 3. !ING!ON, respondents. /ECI!ION .ELLO!ILLO, J.A This petition for revie' on certiorari see1s to set aside the 7) Septe&#er (444 De isionM(N of the Court of /ppeals de larin! respondent Martha T. Sin!son ille!all$ dis&issed #$ petitioner Catha$ Pa ifi /ir'a$s, Ctd., and thus should #e reinstated 'ith full #a 1 'a!es and a'arded &oral as 'ell as e<e&plar$ da&a!es. This petition tra es its ori!in to t'o "7% petitions for ertiorari under Rule =5 initiall$ filed 'ith the Supre&e Court, Mart"a 9. Singson v. National Labor Relations Commission :NLRC; and Cat"a& Pacific $ir.a&s Ltd.# SP Case No. 7+6,<# and Cat"a& Pacific $ir.a&s# Ltd. v. National Labor Relations Commission and Mart"a 9. Singson# SP Case No. 57()5, 'hi h 'ere onsolidatedM7N and referredM:N to the Court of /ppeals in onsonan e 'ith the St. Martin Funeral 8o&es do trine. Catha$ Pa ifi /ir'a$s, Ctd. "C/T8/H%, is an international airline o&pan$ en!a!ed in providin! international fli!ht servi es 'hile Martha T. Sin!son 'as a a#in attendant of C/T8/H hired in the Philippines on 79 Septe&#er (44) 'ith ho&e #ase in 8on!1on!. On 7= /u!ust (44( Sin!son 'as s heduled on a five "5%-da$ fli!ht to Condon #ut 'as una#le to ta1e the fli!hts as she 'as feelin! fati!ued and e<hausted fro& her transfer to a ne' apart&ent 'ith her hus#and. On 74 /u!ust (44( she visited the o&pan$ do tor, Dr. E&er Fah$, 'ho e<a&ined and dia!nosed her to #e sufferin! fro& a &oderatel$ severe asth&a atta 1. She 'as advised to ta1e a Ventolin ne#uli?er and in rease the &edi ation she 'as urrentl$ ta1in!, an

oral Prednisone "steroid%. Dr Fah$ thereafter onve$ed to Dr. Gohn 6. Fo'ler, Prin ipal Medi al Offi er, her findin!s re!ardin! Sin!son>s &edi al ondition as a result of 'hi h she 'as evaluated as unfit for fl$in! due to her &edi al ondition. On : Septe&#er (44( Sin!son a!ain visited Dr. Fah$ durin! 'hi h ti&e the latter de lared her ondition to have vastl$ i&proved. 8o'ever, later that da$, Ca#in Cre' Mana!er Ro#ert G. Nipperess infor&ed Sin!son that C/T8/H had de ided to retire her on &edi al !rounds effe tive i&&ediatel$ #ased on the re o&&endation of Dr. Fo'ler and Dr. Fah$. Martha T. Sin!son 'as surprised 'ith the suddenness of the notifi ation #ut nonetheless a 1no'led!ed it. Cater, she &et 'ith Nipperess and in+uired of possi#le e&plo$&ent that entailed onl$ !round duties 'ithin the o&pan$. She 'as advised to &eet 'ith ertain personnel 'ho 1ne' of the e&plo$&ent re+uire&ents in other depart&ents in the o&pan$, and to a'ait a possi#le offer fro& the o&pan$. On 7) De e&#er (44( Sin!son filed #efore the Ca#or /r#iter a o&plaint a!ainst C/T8/H for ille!al dis&issal, 'ith pra$er for a tual, &oral and e<e&plar$ da&a!es and attorne$>s fees. Efforts on initial settle&ent havin! failed, trial follo'ed. Ro#ert G. Nipperress and Dr. Gohn 6. Fo'ler appeared as 'itnesses for C/T8/H. Nipperess onfir&ed that the de ision to retire respondent 'as &ade upon the re o&&endation of Dr. Fo'ler. In turn, Dr. Fo'ler testified that the affli tion of respondent 'ith asth&a rendered her unfit to fl$ as it posed aviation ris1s, i.e., asth&a disa#led her fro& properl$ perfor&in! her a#in re' fun tions, spe ifi all$ her air safet$ fun tions. On the other hand, Sin!son presented herself and Dr. ;enDa&in Ca?o, a do tor in the ountr$ spe iali?in! in internal &edi ine and pul&onar$ diseases. She denied #ein! affli ted 'ith asth&a at an$ point in her life, 'hile Dr. Ca?o onfir&ed the sa&e de larin! that at the ti&e of his e<a&ination of Sin!son he found her to #e of nor&al ondition. On the #asis of the eviden e presented #efore hi&, Ca#or /r#iter Pa#lo C. Espiritu Gr. de lared C/T8/H lia#le for ille!al dis&issal and ordered the airline to pa$ Sin!son 8IF5:(,(5).B) representin! full #a 1 'a!es and privile!es, 8IF59,(:3.3) for undisputed #enefits due her, 8IF()),))).)) as a tual da&a!es, 8IF5)).)) as &oral da&a!es, 8IF5)).)) as e<e&plar$ da&a!es, and 8IF(=B,57B.B5 as attorne$>s fees. Further&ore, C/T8/H 'as ordered to reinstate Sin!son to her for&er position as airline ste'ardess 'ithout loss of seniorit$ ri!hts, #enefits and privile!es. On (4 Mar h (44: C/T8/H appealed the de ision of the Ca#or /r#iter to the National Ca#or Relations Co&&ission. On 74 De e&#er (449 the NCRC reversed the de ision of the Ca#or /r#iter and de lared valid Sin!son>s dis&issal fro& servi e.M9N Rel$in! on the testi&on$ of Dr. Fo'ler and the affidavit and &edi al re ords su#&itted #$ Dr. Fah$, ad&itted as ne'l$dis overed eviden e, the NCRC found Sin!son to #e indeed affli ted 'ith asth&a that rendered her unfit to fl$ and perfor& a#in re' fun tions. Conse+uentl$, the NCRC 'ithdre' the #a 1 'a!es, &oral and e<e&plar$ da&a!es a'arded to Sin!son for la 1 of fa tual or le!al #asis. It ho'ever ordered C/T8/H to retain her servi es as !round ste'ardess, 'ith salaries and

#enefits, notin! that she had #een reinstated therein sin e (7 Mar h (44:. In turn, Sin!son 'as !ranted the option to ontinue her e&plo$&ent 'ith C/T8/H. Thereafter, #oth parties filed their respe tive &otions for re onsiderationM5N #efore the NCRC 'hi h on :( /u!ust (445 'ere denied for la 1 of &erit. Petitions for ertiorari under Rule =5 'ere su#se+uentl$ filed #$ #oth parties #efore the Supre&e Court 'hi h, after onsolidation, 'ere referred to the Court of /ppeals for resolution.M=N Mean'hile, pursuant to the de ision of the NCRC, Sin!son 'as reinstated as a#in ste'ardess 'ith !round duties on (7 Mar h (44: pendin! the resolution of the petitions. On 7) Septe&#er (444 the Court of /ppeals reversed the rulin! of the NCRC and reinstated the de ision of the Ca#or /r#iter de larin! Sin!son to have #een ille!all$ ter&inated. The appellate ourt an hored its Dud!&ent on the follo'in! findin!s, First# Dr. Fo'ler>s opinion a#out Sin!son>s &edi al ondition 'as #ased on the personal e<a&ination of Dr. Fah$, and not his o'n. The appellate ourt held that a personal and prolon!ed e<a&ination of a patient 'as ne essar$ and ru ial #efore he or she ould #e properl$ dia!nosed as affli ted 'ith asth&a, M3N and thus Dr. Fo'ler>s e<pert opinion 'as unrelia#le and &ere hearsa$. Second#C/T8/H disre!arded Se . B, Rule I, ;oo1 VI, of the )mnibus Rules %mplementing t"e Labor CodeMBN 'hi h re+uires a ertifi ation #$ a o&petent pu#li health authorit$ 'hen disease is the reason for an e&plo$ee>s separation fro& servi e, sin e it relied &erel$ on the dia!nosis of its o&pan$ do tors, Dr. Fo'ler and Dr. Fah$. !"ird# the NCRC erroneousl$ relied on the affidavit e<e uted #$ Dr. Fah$ sin e she 'as not personall$ presented as a 'itness to identif$ and testif$ on its ontents. Fourth, respondent passed the &edi al e<a&ination re+uired of prospe tive fli!ht a#in attendants, the International Ca#or Or!ani?ation>s O upational 8ealth and Safet$ in Civil /viation e<a&ination, prior to her e&plo$&ent and found to #e fit for fli!ht-related servi e. Fift"# C/T8/H failed to ade+uatel$ prove the health standards re+uired in aviation, parti ularl$ the non-+ualifi ation of fli!ht attendants affli ted 'ith asth&a to fli!ht-related servi e.
M4N

Conse+uentl$, the appellate ourt a'arded respondent full #a 1 'a!es 'ith reinstate&ent, as 'ell as &oral e<e&plar$ da&a!es, 'hile deletin! the a'ard of a tual da&a!es reasonin! that no undue da&a!e inured to her sin e her hus#and nonetheless re&ained in 8on!1on! &ana!in! t'o "7% orporations. The appellate ourt ho'ever de lared the option !iven to respondent to ontinue her e&plo$&ent as a !round ste'ardess 'ith C/T8/H to have #een erroneousl$ issued and onse+uentl$ nullified the sa&e. C/T8/H no' ar!ues that the Court of /ppeals should have onfined its in+uir$ to issues of 'ant or e< ess of Durisdi tion and !rave a#use of dis retion and not into the fa tual findin!s of the NCRC sin e the petition #efore it 'as &ade under Rule =5. This Court is not persuaded. C/T8/H>s petition for ertiorari filed #efore the Court of /ppeals assailed spe ifi all$ the Dud!&ent of the NCRC !rantin! respondent the hoi e to ontinue her e&plo$&ent 'ith C/T8/H as !round ste'ardess as, in fa t, she had #een reinstated as su h sin e (7 Mar h (44:. On the other hand, respondent>s petition atta 1ed the NCRC de ision de larin! her dis&issal valid and nullif$in! the a'ard of da&a!es in her favor on the #asis of Dr.

Fo'ler>s testi&on$ and not Dr. Ca?o>s. Conse+uentl$, it 'as inevita#le for the Court of /ppeals to e<a&ine the eviden e ane' to deter&ine 'hether the fa tual findin!s of the NCRC 'ere supported #$ the eviden e presented and the on lusions derived therefro& a uratel$ as ertained. /s pointed out #$ the appellate ourt, this #e a&e even &ore essential in vie' of the fa t that there 'as a onfli t of de ision #et'een the Ca#or /r#iter and the NCRC. 2e thus find no error in the appellate ourt>s evaluation of the eviden e despite the pleadin!s #ein! petitions for ertiorari under Rule =5. C/T8/H ne<t ar!ues that the Court of /ppeals erred in not ad&ittin! as eviden e the affidavit of Dr. Fah$. 2e a!ree. The appellate ourt &a$ have overloo1ed the prin iple in la#or ases that the rules of eviden e prevailin! in ourts of la' or e+uit$ are not al'a$s ontrollin!. M()N It is not ne essar$ that affidavits and other do u&ents presented onfor& to the te hni al rules of eviden e as the Court &aintains a li#eral stan e re!ardin! pro edural defi ien ies in la#or ase. M((N Se tion :, Rule V, of the Ne. Rules of procedure of t"e NLRC spe ifi all$ allo's parties to su#&it position papers a o&panied #$ all supportin! do u&ents in ludin! affidavits of their respe tive 'itnesses 'hi h ta1e the pla e of their testi&onies.M(7N Thus, the fa t that Dr. Fah$ 'as not presented as 'itness to identif$ and testif$ on the ontents of her affidavit 'as not a fatal pro edural fla' that affe ted the ad&issi#ilit$ of her affidavit as eviden e. The non-presentation of Dr. Fah$ durin! the trial 'as dul$ e<plained E she 'as no lon!er onne ted 'ith C/T8/H and had transferred residen e to Ireland. It is for this sa&e reason that 'e find no error in the NCRC>s ad&ission of Dr. Fah$>s 'ritten &edi al notes as ne'l$dis overed eviden e. Moreover, the su#&ission of additional eviden e #efore the NCRC is not prohi#ited #$ the Ne. Rule of Procedure of t"e NLRC, su h su#&issions not #ein! preDudi ial to the part$ for the latter ould su#&it ounter-eviden e.M(:N Not'ithstandin! the fore!oin!, 'e find Sin!son to have #een ille!all$ dis&issed fro& the servi e. 6rantin! 'ithout ad&ittin! that indeed respondent 'as sufferin! fro& asth&a, this alone 'ould not #e valid !round for C/T8/H to dis&iss her su&&aril$. Se tion B, Rule I, ;oo1 VI, of the )mnibus Rules %mplementing t"e Labor Code re+uires a ertifi ation #$ a o&petent pu#li health authorit$ that the disease is of su h nature or at su h a sta!e that it annot #e ured 'ithin a period of si< "=% &onths even 'ith proper &edi al treat&ent. In the instant ase, no ertifi ation #$ o&petent pu#li health authorit$ 'as presented #$ C/T8/H. It dis&issed Sin!son #ased onl$ on the re o&&endation of its o&pan$ do tors 'ho on luded that she 'as affli ted 'ith asth&a. It did not li1e'ise sho' proof that Sin!son>s asth&a ould not #e ured in si< "=% &onths even 'ith proper &edi al treat&ent. On the ontrar$, 'hen Sin!son returned to the o&pan$ lini on : Septe&#er (44( or five "5% da$s after her initial e<a&ination on 74 /u!ust (44(, Dr. Fah$ dia!nosed her ondition to have vastl$ i&proved. C/T8/H ould not ta1e refu!e in Clause 77 of the Conditions of Service it entered into 'ith Sin!son. /lthou!h a ertifi ation #$ a o&petent pu#li health authorit$ is not re+uired, still C/T8/H is o#li!ed to follo' several steps under the Conditions of Service #efore ter&inatin! its e&plo$ee. The pertinent part of Clause 77 thereof provides E

Clause 77. Si 1 Ceave. E <<<< In ase of serious illness the Co&pan$ 'ill !rant si 1 leave 'ith full pa$ for the first three &onths and 'ith 7A: of pa$ for the fourth &onth. Consideration 'ill #e !iven to !rantin! the a#in re' further si 1 leave, either 'ith pa$ or off pa$ up to a further t'o &onths, or retirin! the a#in re' on &edi al !round <<<< Thus, even on the assu&ption that asth&a is a serious illness, this a!ain 'ould not e< use C/T8/H fro& i!norin! pro edure spe ified in its e&plo$&ent ontra t 'ith Sin!son. .nder the ontra t, Catha$ &ust first allo' Sin!son to ta1e a leave of a#sen e and not to ter&inate her servi es ri!ht there and then. It is onl$ after the e&plo$ee has enDo$ed four "9% &onths of si 1 leave that the option to retire the e&plo$ee #ased on &edi al !round arises. In the instant ase, Sin!son 'ent to the o&pan$ lini on 74 /u!ust (44(. On : Septe&#er (44( she returned to the o&pan$ lini onl$ to #e told that Peffe tive i&&ediatel$Q she 'as dis&issed on &edi al !rounds. 2e a!ree 'ith the Court of /ppeals in its a'ard of &oral and e<e&plar$ da&a!es to respondent. C/T8/H su&&aril$ dis&issed Sin!son fro& the servi e #ased onl$ on the re o&&endation of its &edi al offi ers, in effe t, failin! to o#serve the provision of the Ca#or Code 'hi h re+uires a ertifi ation #$ a o&petent pu#li health authorit$. Nota#l$, the de ision to dis&iss Sin!son 'as rea hed after a sin!le e<a&ination onl$. C/T8/H>s &edi al offi ers re o&&ended Sin!son>s dis&issal even after havin! dia!nosed her ondition to have vastl$ i&proved. It did not &a1e even a to1en offer for Sin!son to ta1e a leave of a#sen e as 'hat it provided in its Contra t of Servi e. C/T8/H is presu&ed to 1no' the la' and the stipulation in its Contra t of Servi e 'ith Sin!son. 8HEREFORE, the De ision of the Court of /ppeals dated 7) Septe&#er (444 de larin! the dis&issal of respondent Martha T. Sin!son #$ petitioner C/T8/H P/CIFIC /IR2/HS, CTD. as ille!al and orderin! her reinstate&ent to her for&er or an e+uivalent position 'ithout loss of seniorit$ ri!hts, 'ith full #a 1 'a!es and #enefits, and to pa$ her 8IF5)).)) as &oral da&a!es, 8IF5)).)) as e<e&plar$ da&a!es plus ten per ent "()*% of the total &onetar$ a'ard as attorne$>s fees, is /FFIRMED. The a&ounts re eived #$ respondent representin! her si< "=% &onths retire&ent !ratuit$ and one "(% &onth pa$ in lieu of noti e should #e DED.CTED fro& respondent>s o&puted #a 1 'a!es, 'ith osts a!ainst petitioner. !O OR/ERE/.

FIRST DIVISION >G.R. No. 116807. A?r') 15, 1997@ MARIANO N. TAN &o'%C bu+'%e++ u%&er *(e %a,e CARTERF! GENERAL !ALE!, petitioner, vs. NATIONAL LA.OR RELATION! COMMI!!ION, ROMEO GARRI/O a%& ANTONIO I.0TNAN/I, respondents. /ECI!ION .ELLO!ILLO, J.A PETITIONER assails the de ision of the National Ca#or Relations Co&&ission "NCRC% de larin! that Ro&eo 6arrido and /ntonio I#utnandi 'ere ille!all$ dis&issedM(N as 'ell as its resolution den$in! his &otion for re onsideration.M7N Mariano Tan doin! #usiness under the na&e Carter's (eneral Sales is en!a!ed in sellin! hard'are and onstru tion &aterials. /ntonio I#utnandi 'as his driver and Ro&eo 6arrido his deliver$ helper sin e ( /u!ust (43= and 7 Mar h (4B:, respe tivel$. The$ 'ere paid on a dail$ #asis. On (= Ganuar$ (4B4 I#utnandi and 6arrido filed a o&plaint 'ith the Depart&ent of Ca#or and E&plo$&ent, National Capital Re!ion, har!in! their e&plo$er 'ith various violations of la#or standards spe ifi all$ underpa$&ent of 'a!es and overti&e pa$ as 'ell as nonpa$&ent of le!al holida$ pa$, servi e in entive leave pa$ and (:th &onth pa$. M:N On 5 /pril (4B4 the o&plaint 'as a&ended to in lude the har!e of ille!al dis&issal. 6arrido alle!ed that on 7B Ganuar$ (4B4 his ri!ht hand "little fin!er% 'as inDured 'hile he 'as liftin! heav$ #o<es of on rete nails in the store of petitioner. /s a onse+uen e, he had to stop 'or1in!. Despite his inDur$ ho'ever E&&a Tan, 6eneral Mana!er and 'ife of petitioner, ordered hi& to ontinue liftin! the heav$ #o<es. 2hen he refused #e ause his inDured fin!er &ade the tas1 e<tre&el$ diffi ult and painful, #esides #ein! ris1$, E&&a Tan pro&ptl$ alled up her la'$er. /tt$. Ro#erto ;. /r a arrived and de&onstrated ho' 6arrido ould ontinue liftin! the heav$ #o<es #$ usin! onl$ his four "9% other fin!ers. 2hen 6arrido persistentl$ refused as he 'anted to have his inDured fin!er treated first, /tt$. /r a then and there served hi& 'ith a letterM9N dire tin! hi& to e<plain 'h$ no dis iplinar$ a tion should #e ta1en a!ainst hi& for failin! to o#e$ a valid order of his e&plo$er. .pon his return three ":% 'or1in! da$s later, after his

fin!er 'as alread$ treated, E&&a Tan told hi& to @!o to hell.@ The re&ar1 not'ithstandin!, he loitered around the store pre&ises for the ne<t four "9% da$s #ut 'as treated li1e a leper. M5N 8e 'as eventuall$ dis&issed for alle!ed a#andon&ent of 'or1 ten "()% da$s later. /ntonio I#utnandi, on the other hand, 'as dis&issed #e ause he failed to present a &edi al ertifi ate fro& a !overn&ent do tor ertif$in! that he 'as alread$ ured of pul&onar$ tu#er ulosis "PT;%, hen e, alread$ fit to 'or1. On :( Gul$ (4B4, Ca#or /r#iter Eduardo 6. Ma!no dis&issed for la 1 of &erit the lai&s for le!al holida$ and servi e in entive leave pa$s on the !round that petitioner 'as a retail esta#lish&ent re!ularl$ e&plo$in! less than ten "()% e&plo$ees, hen e, e<e&pt under /rts. 49 and 45 of the Ca#or Code. /s to the underpaid 'a!es and overti&e pa$, Ca#or /r#iter Ma!no on luded that the vou hers presented #$ petitioner suffi ientl$ esta#lished pa$&ent #$ hi& of the orre t &ini&u& 'a!e and overti&e pa$. On the issue of ille!al dis&issal, 6arrido 'as de lared validl$ dis&issed for a#andon&ent of 'or1 'hile I#utnandi 'as dire ted to present a &edi al ertifi ate issued #$ a !overn&ent ph$si ian ertif$in! that he 'as fit to 'or1 'ithin thirt$ ":)% da$s fro& re eipt of the de ision0 other'ise, he 'ould #e onsidered to have a#andoned his Do#.M=N 6arrido and I#utnandi appealed to the NCRC 'hi h reversed the Ca#or /r#iter #$ de larin! that o&plainants 'ere indeed dis&issed ille!all$, the ulti&ate ause of 'hi h 'as their a t of filin! on (= Ganuar$ (4B4 their o&plaint for various violations of la#or standards a!ainst their e&plo$er. 8o'ever, the ase 'as ordered re&anded to the Ca#or /r#iter for further presentation of eviden e on the issue of o&plainantsV "private respondents% &one$ lai&s as those on hand 'ere onsidered insuffi ient to resolve the issue. On 74 Gul$ (449,M3N ho'ever, the fore!oin! dire tive 'as set aside in vie' of the Goint ManifestationMBN filed #$ 6arrido and I#utnandi 'aivin! their &one$ lai&s in favor of the #i!!er issue of ille!al dis&issal. /t the sa&e ti&e, NCRC denied the Motion for Re onsideration andAor For Re all of the De ision filed #$ Mariano Tan. 8en e, this petition #$ Tan. Petitioner ontends that respondent NCRC o&&itted !rave a#use of dis retion in rulin! that private respondents 'ere dis&issed for havin! filed the la#or standards o&plaint a!ainst hi& on (= Ganuar$ (4B4. 8e insists that a#andon&ent of 'or1 e<ists as a valid !round for Ro&eo 6arridoVs ter&ination 'hile /ntonio I#utnandi 'as validl$ dis&issed under /rt. 7B9 of the Ca#or Code and for his failure to su#&it a &edi al ertifi ate fro& a !overn&ent ph$si ian ertif$in! that he 'as alread$ ured of pul&onar$ tu#er ulosis "PT;%. 2e den$ the petition. First, petitionerVs alle!ations are not supported even #$ his o'n eviden e. 8e alle!es that despite t'o "7% noti es de&andin! that 6arrido return to 'or1, the latter did not heed the de&ands and instead a#sented hi&self fro& :) Ganuar$ to 5 /pril (4B4 'hen he suddenl$ har!ed petitioner 'ith ille!al dis&issal. 8en e, for his prolon!ed a#sen e for si<t$-si< "==% da$s, respondent 6arrido 'as dee&ed to have a#andoned his Do# and onse+uentl$ ter&inated.M4N The re ords dis lose that respondent Ro&eo 6arrido did not a#sent hi&self fro& 'or1 'ithout leave for si<t$-si< "==% da$s. On the ontrar$, he 'as not a#le to report for 'or1 an$&ore

#e ause as earl$ as nine "4% da$s after his Do#-related inDur$ on 7B Ganuar$ (4B4, his servi es 'ere alread$ ter&inated #$ E&&a Tan, 'ife of petitioner, in her apa it$ as Mana!er of CarterVs 6eneral Sales throu!h a letter dated 3 Fe#ruar$ (4B4.M()N In fa t, 'hen 6arrido first returned on 7 Fe#ruar$ (4B4 after his inDur$ he 'as &ade to feel #$ E&&a Tan that his servi es 'ere no lon!er desira#le nor needed 'hen he 'as told to @!o to hell.@ /nd 'hen respondent persistentl$ han! around the store pre&ises for the ne<t four "9% da$s hopin! to #e !iven so&e 'or1, he 'as treated li1e a leper. Petitioner no' atte&pts to onvin e us that respondent is !uilt$ of Do# a#andon&ent. 6iven the fore!oin! s enario, 'e are hardl$ onvin ed. ;esides, Durispruden e di tates that for a#andon&ent to onstitute a valid !round for dis&issal there &ust #e a lear, deli#erate and unDustified refusal to resu&e e&plo$&ent and a lear intention to sever the e&plo$er-e&plo$ee relationship on the part of the e&plo$ee.M((N It is e&phati all$ stated that &ere a#sen e or failure to report for 'or1 is not enou!h to a&ount to su h a#andon&ent.M(7N 8en e, 6arridoVs a#sen es 'hi h 'ere at first due to his Do#-related inDur$ and, su#se+uentl$, the hostile treat&ent !iven hi& #$ petitionerVs 'ife ever sin e the la#or standards o&plaint 'as filed ould hardl$ a&ount to a#andon&ent of his 'or1. It 'ould #e the hei!ht of inDusti e to allo' an e&plo$er to lai& as a !round for a#andon&ent a situation 'hi h he hi&self had #rou!ht a#out.M(:N In the ase of respondent /ntonio I#utnandi, it annot #e denied that he #e a&e affli ted 'ith pul&onar$ tu#er ulosis "PT;% and that under /rt. 7B9 of the Ca#or Code, an e&plo$er &a$ ter&inate the servi es of his e&plo$ee found to #e sufferin! fro& an$ disease and 'hose ontinued e&plo$&ent is prohi#ited #$ la' or is preDudi ial to his health as 'ell as to that of his o-e&plo$ees. 8o'ever, the fa t that an e&plo$ee is sufferin! fro& su h a disease does not ipso facto &a1e hi& a sure andidate for dis&issal as 'hat petitioner did 'ith respondent I#utnandi. Consistent 'ith the Ca#or Code poli $ of affordin! prote tion to la#or and of li#eral onstru tion of la#or la's in favor of the 'or1in! lass, Se . B, Rule I, ;oo1 VI, of the O&ni#us Rules I&ple&entin! the Ca#or Code provides 2here the e&plo$ee suffers fro& a disease and his ontinued e&plo$&ent is prohi#ited #$ la' or preDudi ial to his health or to the health of his o-e&plo$ees, the e&plo$er shall not ter&inate his e&plo$&ent unless there is a ertifi ation #$ a o&petent pu#li authorit$ that the disease is of su h nature or at su h a sta!e that it annot #e ured 'ithin a period of si< "=% &onths even 'ith proper &edi al treat&ent. If the disease or ail&ent an #e ured 'ithin the period, the e&plo$er shall not ter&inate the e&plo$ee #ut shall as1 the e&plo$ee to ta1e a leave. The e&plo$er shall reinstate the e&plo$ee to his for&er position i&&ediatel$ upon the restoration of his nor&al health. "E&phasis ours% Clearl$, it is onl$ 'here there is a prior ertifi ation fro& a o&petent pu#li authorit$ that the disease affli tin! the e&plo$ee sou!ht to #e dis&issed is of su h nature or at su h sta!e that it annot #e ured 'ithin si< "=% &onths even 'ith proper &edi al treat&ent that the latter ould #e validl$ ter&inated fro& his Do#. There is ab+o)u*e)y %o*('%C on re ord to sho' that su h a ertifi ation 'as ever o#tained #$ petitioner, &u h less that one 'as issued #$ a o&petent pu#li authorit$, #efore respondent /ntonio I#utnandi 'as dis&issed. On the ontrar$, 'hat appears on re ord is a Medi al

Certifi ate dated 5 Ma$ (4B4M(9N issued #$ Dr. Cenita C. de Castro ertif$in! to the ontrar$, i. e., that respondent 'as in fa t alread$ fit to return to 'or1. 8o'ever, petitioner did not a ept the ertifi ate and insisted that I#utnandi present one issued #$ a !overn&ent ph$si ian. For his failure to present su h a ertifi ate, respondent 'as penali?ed 'ith dis&issal. O#viousl$, the ondition i&posed #$ petitioner finds no #asis under the la'. To reiterate, ontrar$ to his insisten e that respondent first o#tain a &edi al ertifi ate attestin! that he 'as alread$ ured of pul&onar$ tu#er ulosis, the a#ove+uoted Se . B, Rule I, ;oo1 VI, of the O&ni#us Rules is lear that the #urden is upon petitioner, not respondent, to Dustif$ the dis&issal 'ith a ertifi ate fro& a o&petent pu#li authorit$ that respondentVs disease is at su h sta!e or of su h nature that it annot #e ured 'ithin si< "=% &onths even 'ith proper &edi al treat&ent. For petitionerVs #latant failure to present one, 'e an onl$ rule that respondent I#utnandiVs dis&issal, li1e that of 6arrido, is ille!al, invalid and unDustified. One final note. /s the NCRC itself has on luded, ir u&stan es do indi ate that petitioner, throu!h his 'ife 'ho is his 6eneral Mana!er, dis ri&inated a!ainst respondents for no other reason than the filin! of the la#or standards o&plaint on (= Ganuar$ (4B4. 2e annot on lude other'ise #e ause the su#De t dis&issals evolved fro& &inor in idents that 'ere #lo'n out of proportion #$ petitionerVs 'ife apparentl$ for their o'n intention of eventuall$ !ettin! rid of respondents. Respondents, at the ti&e of their ter&ination fro& e&plo$&ent, have #een in petitionerVs e&plo$ for several $ears "sin e (4B: and (43=, respe tivel$% 'hose perfor&an e 'as previousl$ un&arred #$ &is#ehavior or &is ondu t of an$ sort, i. e., until the$ &ade the &ista1e "fro& petitionerVs point of vie'% of filin! a la#or standards o&plaint a!ainst hi&. Re!ardin! the ontention that respondent NCRC a#used its dis retion in a'ardin! #a 1 'a!es to respondent /ntonio I#utnandi onsiderin! that the latter enDo$ed paid si 1 leaves durin! the period of his illness, suffi e it to sa$ that su h a'ards are ele&entar$ le!al re&edies !ranted to e&plo$ees upon a findin! of ille!al dis&issal and indu#ita#l$ san tioned under /rt. 734 of the Ca#or Code. 8o'ever, 'e &odif$ the de ision of the NCRC insofar as it a'arded to #oth respondents /ntonio I#utnandi and Ro&eo 6arrido #a 1 'a!es for a period of onl$ three ":% $ears. Gurispruden e distin!uishes #et'een e&plo$ees dis&issed #efore the effe tivit$ of R. /. No. =3(5 on 7( Mar h (4B4 and those dis&issed after. 2hile those ille!all$ dis&issed #efore 7( Mar h (4B4 shall #e a'arded #a 1 'a!es li&ited to three ":% $ears 'ithout dedu tion or +ualifi ation,M(5N those dis&issed after shall #e entitled to full #a 1 'a!es and other #enefits for the entire period that the$ 'ere out of 'or1 and until a tual reinstate&ent.M(=N 8en e, 'hile #a 1 'a!es li&ited to three ":% $ears 'ere properl$ a'arded to respondent Ro&eo 6arrido sin e he 'as dis&issed on 3 Fe#ruar$ (4B4 or #efore the effe tivit$ of R. /. No. =3(5, a si&ilar a'ard to /ntonio I#utnandi is in orre t sin e he 'as dis&issed after or upon the e<piration of his si 1 leave on :( Mar h (4B4. 8HEREFORE, pre&ises onsidered, the petition is DENIED and the +uestioned De ision and Resolution of respondent National Ca#or Relations Co&&ission de larin! that respondents

Ro&eo 6arrido and /ntonio I#utnandi 'ere ille!all$ dis&issed are /FFIRMED. 8en e, respondents are entitled to REINST/TEMENT 'ith #a 1 'a!es or, in lieu of reinstate&ent, pa$&ent of separation pa$ e+uivalent to one "(% &onth pa$ for ever$ $ear of servi e. M(3N 8o'ever, 'hile respondent Ro&eo 6arrido is entitled to #a 1 'a!es li&ited to three ":% $ears onl$ 'ithout +ualifi ation or dedu tion fro& 3 Fe#ruar$ (4B4, respondent /ntonio I#utnandi is entitled to full #a 1 'a!es fro& the ti&e of his ille!al dis&issal on :( Mar h (4B4 until a tual reinstate&ent. Costs a!ainst petitioner. !O OR/ERE/.

FIRST DIVISION

G.R. No. 127521 /e-e,ber 8, 1999 PHILIPPINE IN/0!TRIAL !EC0RIT AGENC CORPORATION, petitioner, vs. 1IRGILIO /APITON a%& *(e NATIONAL LA.OR RELATION! COMMI!!ION, respondents.

P0NO, J.: This ase arose fro& a o&plaint for illegal dismissal, underpa$&ent of salaries and 'a!es, overti&e pa$, holida$ pa$, (:th &onth pa$ and servi e in entive leave pa$ filed #$ respondent =irgilio /. /apiton a!ainst petitionerP"ilippine %ndustrial Securit& $genc& Corporation and its President, Isidro Cira!. The eviden e for petitioner sho's that on Nove&#er 7, (44) petitioner hired respondent as a se urit$ !uard. 8is initial assi!n&ent 'as at PCI;an1 in Ialoo1an Cit$. Durin! his tour of dut$ at PCI;an1 on Ganuar$ 75, (449, respondent had a heated ar!u&ent 'ith his fello' se urit$ !uard, Roderi 1 Cu&en. The in ident al&ost led to a shootout. /fter investi!ation, petitionerVs hief investi!ator re o&&ended their dis&issal. Cu&en 'as o&pelled to resi!n 'hile respondent 'as suspended fro& 'or1 for seven "3% da$s. Petitioner alle!ed that respondent did not serve his suspension and instead 'ent on a leave of a#sen e. Nonetheless, he 'as assi!ned at the ;PI Fa&il$ ;an1 in Navotas 'hen he reported #a 1 for dut$. /lle!edl$, respondent refused to a ept his assi!n&ent. In Mar h (449, respondent 'as assi!ned at Sevilla Candle Fa tor$ in Mala#on. Three ":% 'ee1s later, he a#andoned his post and 'ent on a#sen e 'ithout leave "/2OC%.

Respondent 'as !iven another assi!n&ent at Se urit$ ;an1 and Trust Co&pan$. 8e 'as re+uired to report for an intervie' and to under!o a neurolo!i al e<a&ination. Respondent refused and alle!edl$ a!ain 'ent on /2OC. On /pril (5, (449, petitioner sent a tele!ra& to respondent to report to its offi e for a onferen e. Respondent did not sho' up. Instead, on /pril 77, (449, respondent filed the present ille!al dis&issal ase. Respondent denied petitionerVs alle!ations. 8e lai&ed that after he served his suspension, he 'as assi!ned at ;PI Fa&il$ ;an1 in Navotas. 8e a epted the ne' post. 8o'ever, after a short period, he 'as relieved and 'as transferred to the Mer ur$ Dru!store in 6rand Central, Ialoo1an Cit$. /!ain, after a #rief tour of dut$, he 'as relieved. In Mar h (449, he 'as posted at Sevilla Candle Fa tor$. 2hile on dut$, he 'itnessed so&e s"abu dealers doin! their ille!al trade. Fearful for his life, he left his post and re+uested petitioner to transfer hi& to another post. 8e ad&itted that his assi!n&ent at Se urit$ ;an1 did not &ateriali?e for he failed to ta1e the neurolo!i al test. 8e e<plained he ould not pa$ the e<a&ination fee in the a&ount of P75).)). 8e as1ed petitioner to pa$ the said a&ount #ut it refused. Respondent alle!ed that thereafter, he 'as redu ed to a &ere reliever of a#sent se urit$ !uards and 'as fre+uentl$ transferred fro& one post to another. 8is last assi!n&ent 'as at the Philippine Savin!s ;an1 "PS;% in Ma1ati. It lasted for onl$ one "(% da$. Sin e /pril (:, (449, he 'as not !iven an$ assi!n&ent. 8e reported to petitionerVs offi e re!ularl$ for his postin! #ut to no avail. Conse+uentl$, on /pril 77, (449, he sued petitioner for ille!al dis&issal and as1ed for separation pa$. The ase 'as do 1eted as NCRC-NCR Case No. ))-)9-):74(-49. On Gune (5, (449, respondent filed an /&ended Co&plaint and Position Paper. 1 8e pra$ed for reinstate&ent and further har!ed petitioner 'ith underpa$&ent of salaries and 'a!es, overti&e pa$, holida$ pa$, (:th &onth pa$ and servi e in entive leave pa$. 8e alle!ed that he 'as onl$ paid P9,B)).)) &onthl$ for (7 hours of 'or1 per da$. 8e #e a&e a reliever of a#sent se urit$ !uards and so&eti&es he 'or1ed for &ore than ei!ht "B% hours. The dail$ rate #efore De e&#er (44: 'as P((B.)). The rate in reased #$ P(3.)) in De e&#er (44: and #$ P().)) in /pril (449. Thus, usin! the rate of P((B.)) alone, respondent lai&ed that petitioner should have paid hi& as &u h as P5,357.5) per &onth. On /u!ust 75, (449, after further e< han!e of pleadin!s, Ca#or /r#iter Felipe Pati issued an order de larin! the ase as su#&itted for de ision. 2 Nonetheless, on O to#er 79, (449, petitioner filed a Motion to $dmit to re#ut respondentVs &one$ lai&s. 7 /tta hed to the &otion 'as a su&&ar$ of the o&putation of the salaries, overti&e pa$, (:th &onth pa$ and other &onetar$ #enefits alle!edl$ re eived #$ respondent fro& (447-(449. Petitioner did not su#&it the e&plo$&ent re ords and pa$rolls of respondent for the said period alle!edl$ #e ause the$ 'ere volu&inous. 8o'ever, petitioner undertoo1 to su#&it said do u&ents should the la#or ar#iter re+uire it. /dditionall$, its &ana!in! dire tor e<e uted an affidavit 5 attestin! to the

truthfulness of its o&putation per the e<istin! re ords of the o&pan$. The &otion 'as not a ted upon. On De e&#er (9, (449, Ca#or /r#iter Felipe P. Pati rendered a de ision 6 findin! petitioner lia#le for onstru tive dis&issal. Essentiall$, the la#or ar#iter found that fro& (44) up to (44:, respondent 'as assi!ned at PCI;an1 in Ialoo1an Cit$. /fter his suspension on Ganuar$ 7=, (449, respondent 'as transferred fre+uentl$ to different posts and despite its a usation that respondent 'as al'a$s a#sent fro& 'or1, it ontinued to !ive hi& ne' assi!n&ents and did not ta1e an$ dis iplinar$ a tion a!ainst hi&. Thus, the la#or ar#iter on luded that said transfers 'ere a &ere s he&e of petitioner to ease out respondent fro& 'or1. The la#or ar#iter ordered respondentVs reinstate&ent 'ith pa$&ent of #a 1'a!es. Moreover, petitioner and its president, Isidro Cira!, 'ere re+uired to pa$ the su& of P39,B99.79, representin! respondentVs 'a!e differential, overti&e pa$, (:th &onth pa$ and ni!ht shift differential. Petitioner and Cira! appealed to the NCRC. The NCRC dis&issed the appeal, al#eit respondent Isidro Cira! 'as held not lia#le for the &one$ lai&s of respondent. The fallo of the NCRC de ision reads, 6 28EREFORE, the appealed De ision is here#$ /FFIRMED, e< ept the a'ards, onfor&a#l$ 'ith this Resolution, shall #e solel$ the lia#ilit$ of "petitioner% appellant a!en $. PetitionerVs &otion for re onsideration 'as denied on Gul$ :(, (44=. 7 8en e, this petition. Petitioner ontends that the NCRC !ravel$ a#used its dis retion in, I DENHIN6 PETITIONERVS MOTION FOR RECONSIDER/TION /ND /FFIRMIN6 T8E C/;OR /R;ITERVS FINDIN6 OF ICCE6/C DISMISS/C NOT2IT8ST/NDIN6 T8E F/CT T8/T T8ERE 2ERE OVER28ECMIN6 EVIDENCE TO S8O2 T8/T IT 2/S T8E PRIV/TE RESPONDENT 8IMSECF 28O /;/NDONED 8IS POST /ND REF.SED PETITIONERVS OFFER OF NE2 /SSI6NMENT0 II /FFIRMIN6 T8E DECISION OF T8E C/;OR /R;ITER 8OCDIN6 PETITIONER CI/;CE FOR .NDERP/HMENT SOCECH ON T8E ;/SIS OF PRIV/TE RESPONDENTVS .NS.;ST/NTI/TED /CCE6/TIONS OR CC/IMS /ND /T T8E S/ME TIME, TOT/CCH DISRE6/RDIN6 PETITIONERVS EVIDENCE. The petition is partl$ &eritorious. The first issue is su#stantiveS'hether petitioner onstru tivel$ dis&issed the respondent. Petitioner ontends that there 'as no dis&issal, onstru tive or other'ise. Petitioner lai&s that respondent a#andoned his post, refused to a ept his ne' assi!n&ents and 'ent on /2OC. The re ords #elie petitionerVs posture.

Constructive dismissal is defined as a @+uittin! #e ause ontinued e&plo$&ent is rendered i&possi#le, unreasona#le or unli1el$0 as an offer involvin! a de&otion in ran1 and di&inution in pa$.@ 8 On the other hand,abandonment of .ork &eans a lear, deli#erate and unDustified refusal of an e&plo$ee to resu&e his e&plo$&ent and a lear intention to sever the e&plo$ere&plo$ee relationship. 9 $bandonment is incompatible .it" constructive dismissal. 10 In the ase at #ar, 'e hold that there 'as no deli#erate intent on the part of the respondent to a#andon his e&plo$&ent 'ith petitioner. The lear eviden e that respondent did not 'ish to #e separated fro& 'or1 is that, after his last assi!n&ent on /pril (7, (449, he reported to petitionerVs offi e re!ularl$ for a ne' postin! #ut to no avail. 8e then lost no ti&e in filin! the ille!al dis&issal ase. /n e&plo$ee 'ho forth'ith ta1es steps to protest his la$off annot #$ an$ lo!i #e said to have a#andoned his 'or1. 11 Moreover, respondentVs failure to assu&e his posts in Sevilla Candle Fa tor$ and the Se urit$ ;an1 and Trust Co&pan$ is not 'ithout reason. 8e e<plained that he re+uested for a transfer of assi!n&ent fro& Sevilla Candle Fa tor$ #e ause he for his life after he 'itnessed s"abu dealers doin! their #usiness in his 'or1station. /s re!ards the Se urit$ ;an1 assi!n&ent, he failed to ta1e the neurolo!i al test for la 1 of &one$ to pa$ for the e<a&ination fee. Petitioner annot overinflate the si!nifi an e of the fa t that respondent often a#sented hi&self fro& 'or1 'ithout an approved leave. It is a settled rule that &ere a#sen e or failure to report for 'or1 is not tanta&ount to a#andon&ent of 'or1. 12 Even the failure to report for 'or1 after a noti e to return to 'or1 has #een served does not ne essaril$ onstitute a#andon&ent nor does it #ar reinstate&ent. 17 The #urden of provin! that respondent has a#andoned his Do# rests 'ith petitioner. 8o'ever, petitioner failed &isera#l$ to dis har!e the #urden. The re ords sho' no &e&oranda on ernin! respondentVs alle!ed unauthori?ed a#sen es and refusal to 'or1. Even the tele!ra& petitioner sent to respondent after he alle!edl$ 'ent on /2OC &erel$ re+uired respondent to report to its offi e for a onferen e #ut did not &ention an$thin! a#out his a#sen es. 2e find it in redi#le that petitioner did not even 'rite respondent on his alle!ed refusal to a ept the posts assi!ned to hi& and the a#andon&ent of his posts onsiderin! that su h a ts onstitute 'illful diso#edien e and !ross ne!le t of dut$ 'hi h are valid !rounds for dis&issal. 15 Petitioner ould have also su#&itted the dail$ ti&e re ords of respondent to prove that he indeed 'ent on /2OC. It did not. Instead, it onl$ su#&itted the follo'in! do u&ents, vi1, a letter-petition of respondentVs fello' se urit$ !uards de&andin! respondentVs re&oval fro& their unit for his alle!ed arro!an e "/nne< @/@%0 the result of petitionerVs investi!ation on the Ganuar$ 75, (449 in ident at the PCI;an1, 'here its hief investi!ator re o&&ended the dis&issal of respondent and Cu&en fro& the servi e "/nne< @;@%0 a &e&orandu& dated Ganuar$ 7=, (449, addressed to respondent, infor&in! the latter of his suspension for seven "3% da$s due to his involve&ent in the Ganuar$ 75, (449 in ident "/nne< @C@%0 a letter of introdu tion dated /pril (5, (449, addressed to Se urit$ ;an1 and Trust Co&pan$, issued #$ Mr. Isidro Cira! for the #enefit of respondent for his possi#le detail at said #an1 "/nne< @D@%, and a tele!ra& dated /pril (5,

(449 alle!edl$ sent #$ petitioner to respondent, re+uirin! hi& to report to petitionerVs offi e for a onferen e. ;$ no stret h of the i&a!ination an the fore!oin! do u&ents prove that respondent has a#andoned his Do# or that he unDustifia#l$ refused the ne' posts assi!ned to hi&. The$ onl$ sho' that respondent had #ad relationship 'ith his fello' se urit$ !uards and that petitioner 'as Dustified in suspendin! and su#se+uentl$ relievin! hi& fro& his post at PCI;an1. Petitioner ontends that respondent 'as onl$ provisionall$ relieved fro& his last post and not dis&issed fro& e&plo$&ent. 8en e, the filin! of the ille!al dis&issal ase on /pril 77, (449 'as pre&ature. If at all, it is ar!ued that respondent should #e onsidered on temporar& @off> detail@ status. Petitioner relies on the ase of Superstar Securit& $genc&, %nc. vs. NLRC# 16 'here 'e held that pla in! an e&plo$ee on te&porar$ @off-detail@ is note+uivalent to dis&issal provided that su h te&porar$ ina tivit$ should ontinue onl$ for a period of si< "=% &onths. Other'ise, the se urit$ a!en $ on erned ould #e held lia#le for onstru tive dis&issal under /rti le 7B3 "no' /rti le 7B=% of the Ca#or Code. PetitionerVs ar!u&ent la 1s &erit. The ase of Superstar Securit& $genc& does not appl$ to the ase at #ar as it 'as de ided on a different fa tual &ilieu. In said ase, the se urit$ !uard 'as te&poraril$ sidelined #e ause the a!en $Vs lient, SMH, did not rene' its se urit$ ontra t pursuant to its ost- uttin! pro!ra&. The a!en $ 'as onstrained to put the !uard detailed at SMH on a floatin! status for la 1 of availa#le post. 2e then held that there 'as no onstru tive dis&issal to spea1 of, ta1in! into onsideration that, at ti&es, se urit$ !uards ould #e pla ed on te&porar$ @off-detail@ as their assi!n&ents pri&aril$ depend on the ontra ts entered into #$ the se urit$ a!en $ 'ith third parties. The rulin! 'as an hored in /rti le 7B= of the Ca#or Code. It reads, /rt. 7B=. ?"en emplo&ment not deemed terminated. S The bona fide suspension of the operation of a #usiness or underta1in! for a period not e< eedin! si< "=% &onths, or the fulfill&ent #$ the e&plo$ee of a &ilitar$ or ivi dut$ shall not ter&inate e&plo$&ent. In all su h ases, the e&plo$er shall reinstate the e&plo$ee to his for&er position 'ithout loss of seniorit$ ri!hts if he indi ates his desire to resu&e his 'or1 not later than one "(% &onth fro& the resu&ption of operations of his e&plo$er or fro& his relief fro& the &ilitar$ or ivi dut$. 2e stress that /rti le 7B= applies onl$ 'hen there is a bona fide suspension of t"e emplo&er's operation of a business or undertaking for a period not e4ceeding si4 :*; mont"s. In su h a ase, there is no ter&ination of e&plo$&ent #ut onl$ a te&porar$ displa e&ent of e&plo$ees, al#eit the displa e&ent should not e< eed si< "=% &onths. The para&ount onsideration should #e the dire e<i!en $ of the #usiness of the e&plo$er that o&pels it to put so&e of its e&plo$ees te&poraril$ out of 'or1. In se urit$ servi es, the te&porar$ @off-detail@ of !uards ta1es pla e 'hen the se urit$ a!en $Vs lients de ide not to rene' their ontra ts 'ith the se urit$ a!en $, resultin! in a situation 'here the availa#le posts under its e<istin! ontra ts are less than the nu&#er of !uards in its roster. 16 In the ase at #ar, the re ords do not sho' that respondent had to #e pla ed on te&porar$ @offdetail@ for la 1 of availa#le post. Petitioner Dust stopped !ivin! respondent his assi!n&ent after

his dut$ at the PS;. It 'as the stra' that #ro1e the a&elVs #a 1, so to spea1, as far as respondent 'as on erned. This is not to deni!rate the inherent prero!ative of an e&plo$er to transfer and reassi!n its e&plo$ees to &eet the re+uire&ents of its #usiness. 17 For instan e, 'here the rotation of e&plo$ees fro& the da$ shift to the ni!ht shift 'as a standard operating procedure of management, an e&plo$ee 'ho had #een on the da$ shift for so&eti&e &a$ #e transferred to the ni!ht shift. 18 Si&ilarl$, transfers an #e effe ted pursuant to a compan& polic& to transfer e&plo$ees fro& one pla e of 'or1 to another pla e of 'or1 o'ned #$ the e&plo$er to prevent onnivan e a&on! the&. 19 Ci1e'ise, 'e have affir&ed the ri!ht of an e&plo$er to transfer an e&plo$ee to another offi e in the e<er ise of 'hat it too1 to #e sound #usiness Dud!&ent and in a ordan e 'ith pre>determined and establis"ed office polic& and practice. Parti ularl$ so 'hen no illi it, i&proper or underhanded purpose an #e as ri#ed to the e&plo$er and the o#De tion to the transfer 'as !rounded solel$ on the personal in onvenien e or hardship that 'ill #e aused to the e&plo$ee #$ virtue of the transfer. 20 In se urit$ servi es, the transfer onnotes a han!in! of !uards or e< han!e of their posts, or their reassi!n&ent to other posts. 8o'ever, all are onsidered !iven their respe tive posts. ;e that as it &a$, the prero!ative of the &ana!e&ent to transfer its e&plo$ees &ust #e e<er ised 'ithout !rave a#use of dis retion. The e<er ise of the prero!ative should not defeat an e&plo$eeVs ri!ht to se urit$ of tenure.!"e emplo&er's privilege to transfer its emplo&ees to different .orkstations cannot be used as a subterfuge to rid itself of an undesirable .orker. 21 In the ase at #ar, the eviden e sho' that respondent enDo$ed a sin!le post at the PCI;an1 for three ":% $ears. It han!ed after his suspension. In a span of less than three ":% &onths, respondent 'as assi!ned to at least four "9% esta#lish&ents, na&el$, ;PI Fa&il$ ;an1, Mer ur$ Dru!store, Sevilla Candle Fa tor$ and Philippine Savin!s ;an1. 8e suddenl$ found hi&self #ein! tossed to different posts and relievin! a#sent se urit$ !uards. Respondent 'as then left un ertain as to 'hen and 'here his ne<t assi!n&ents 'ould #e. Considerin! the totalit$ of the fa ts of this ase, the la#or offi ials #elo' ri!htl$ found that the fre+uent transfers of respondent to different posts on short periods of ti&e 'ere indire t 'a$s of dis&issin! hi&. 22 The se ond issue is pro eduralS did pu#li respondent !ravel$ a#use its dis retion in affir&in! petitionerVs &onetar$ lia#ilities 'ithout onsiderin! the eviden e it su#&itted to the la#or ar#iterL The settled rule is that the NCRC is not pre luded fro& re eivin! eviden e on appeal as te hni al rules of eviden e are not #indin! in la#or ases. 27 In fa t, la#or offi ials are &andated #$ the Ca#or Code to use ever$ and all reasonable means to ascertain t"e facts in eac" case speedil$ and o#De tivel$, 'ithout re!ard to te hni alities of la' or pro edure, all in the interest of due pro ess. 25 Thus, in La.in Securit& Services vs. NLRC 26 and @ristol Laboratories 0mplo&ees' $ssociation>/F$ vs. NLRC, 26 'e held that even if the eviden e 'as not su#&itted to the la#or ar#iter, the fa t that it 'as dul$ introdu ed on appeal to the NCRC is enou!h #asis for the latter to #e &ore Dudi ious in ad&ittin! the sa&e, instead of fallin! #a 1 on the &ere te hni alit$ that said eviden e an no lon!er #e onsidered on appeal. Certainl$, the first ourse of a tion 'ould #e &ore onsistent 'ith e+uit$ and the #asi notions of fairness.

2e find no o!ent reason to disre!ard the a#ove rulin!. 2e note that the la#or ar#iterVs de ision hardl$ &entioned the #asis for allo'in! the &one$ lai&s of respondent. The la#or ar#iter &erel$ held thatS /s re!ards the issue of &one$ lai&s, 'e li1e'ise find for the o&plainants. Re ords sho' that o&plainant 'as not paid the orre t &ini&u& 'a!e, overti&e pa$, ni!ht shift differential and (:th &onth pa$. 28EREFORE, fore!oin! pre&ises onsidered, Dud!&ent is here#$ rendered findin! respondents "petitioners% to have ille!all$ dis&issed the o&plainant. / ordin!l$, respondents "petitioners% are here#$ ordered to reinstate o&plainant 'ith #a 1'a!es. Respondents "Petitioners% are li1e'ise ordered to pa$ o&plainant the a&ount of Sevent$ Four Thousand Ei!ht 8undred Fort$ Four Pesos and 79A()) "P39,B99.79%, representin! his 'a!e differential, overti&e pa$, (:th &onth pa$, ni!ht shift differential, o&putation of 'hi h is hereto atta hed. Other lai&s are here#$ dis&issed for la 1 of &erit. SO ORDERED. The o&putation of the su& a'arded to respondent is also va!ue, thus, R0A C)MPB!$!%)N )F BN/0RP$CM0N! $N/ )=0R!%M0 P$C $S P0R %NS!RBC!%)N )F L.$. F0L%P0 P. P$!% Bnderpa&ment 6+>"ours 9A77A4( - (7A(5A4: Y :(,33 &os. P=,B7=.:3-P9,B)) Y P7,)7=.:3 < :(.33 &os Y P=9,:33.33 (7A(=A4: - :A:(A49 Y :.5A &os. P3,34).97 - P9,B)) Y P7,44).97 X :.5 &os. Y (),9==.93 SSSSS Total P39,B99.79 Manila, Philippines, De e&#er 7), (449. It assu&es that respondent rendered overti&e 'or1 fro& /pril 77, (44( to Mar h :(, (449. 2e ould not even tell fro& said o&putation 'hi h part of the su& a'arded 'as for the 'a!e differential, (:th &onth pa$, overti&e pa$, et . Moreover, respondentVs salar$ and other &onetar$ #enefits, if an$, fro& /pril (-(7, (449, 'ere not in luded in the o&putation.

Even the o&putation of the #a 1'a!es 'as not spe ified, althou!h the la#or ar#iterVs de ision stated that said lai& for #a 1'a!es 'as alread$ in luded in the su& of P39,B99.79. 8o'ever, Dud!in! fro& the dates &entioned in the o&putation, i.e., fro& /pril 77, (44( to Mar h :(, (449, it appears that no #a 1'a!es 'ere a'arded. ;a 1'a!es have to #e paid #$ an e&plo$er as part of the pri e or penalt$ he has to pa$ for ille!all$ dis&issin! his e&plo$ee. It is o&puted fro& the ti&e of the e&plo$eeVs ille!al dis&issal "or fro& the ti&e his o&pensation 'as 'ithheld fro& hi&% up to the ti&e of his reinstate&ent. 27 /rt. 74( of the Ca#or Code should also #e onsidered. It reads, /rt. 74(. Mone& claims. S /ll &one$ lai&s arisin! fro& e&plo$er-e&plo$ee relations a ruin! durin! the effe tivit$ of this Code shall #e filed 'ithin three ":% $ears fro& the ti&e the ause of a tion a rued0 other'ise, the$ shall #e forever #arred. Clearl$, respondentVs &one$ lai&s should #e filed 'ithin three ":% $ears fro& the ti&e his ause of a tion a rued or forever #e #arred #$ pres ription. Respondent filed his &one$ lai&s on Gune (5, (449, throu!h his /&ended Co&plaint and Position Paper. 8is &one$ lai&s fro& Nove&#er 7, (44) to Gune (9, (447, are #arred #$ pres ription pursuant to /rti le 74( of the Ca#or Code. /pparentl$, the la#or ar#iter &ista1enl$ relied on the date of filin! of the ori!inal o&plaint of respondent. It is true that said o&plaint 'as filed on /pril 77, (449, ho'ever, at that ti&e, respondent &erel$ a used petitioner of ille!al dis&issal and has not $et har!ed petitioner 'ith underpa$&ent of 'a!es or non-pa$&ent of overti&e pa$, (:th &onth pa$, et . ;efore the la#or ar#iter de ided the ase, petitioner had alread$ su#&itted its o&putation of the salaries and other #enefits re eived #$ respondent durin! his e&plo$&ent. Het, the la#or ar#iter si&pl$ i!nored petitionerVs eviden e and de ided the ase 'ithout even statin! the #asis of his de ision. The la#or ar#iterVs failure to dis uss the fa ts and the la' 'hi h 'ould support the a'ard of P39,B99.79 in favor of the respondent should have pro&pted the NCRC to re&and the ase to the la#or ar#iter for further pro eedin!s to deter&ine the &onetar$ lia#ilities of petitioner to respondent. / strin!ent appli ation of pro edural rules &a$ #e rela<ed to &eet the ends of su#stantial Dusti e. IN VIE2 28EREOF, the petition is P/RTI/CCH 6R/NTED. The assailed de ision of the National Ca#or Relations Co&&ission in NCRC-NCR. No. ))-)9-):74(-49, dated Ma$ (), (44=, is /FFIRMED, su#De t to the &odifi ation that the &onetar$ a'ard in favor of respondent Vir!ilio Dapiton in the su& of P39,B99.79 is SET /SIDE. / ordin!l$, the ase is re&anded to the la#or ar#iter for further pro eedin!s solel$ for the purpose of deter&inin! the &onetar$ lia#ilities of petitioner, if an$. SO ORDERED.

SECOND DIVISION >G.R. No. 126028. February 9, 1998@ RE NAL/O 1AL/E3, petitioner, vs. NATIONAL LA.OR RELATION! COMMI!!ION a%& NEL.0!CO, INC., respondents. /ECI!ION REGALA/O, J.A This spe ial ivil a tion for certiorari hallen!es the de ision of the National Ca#or Relations Co&&ission "NCRC%, pro&ul!ated on De e&#er (:, (445, dis&issin! petitioner>s o&plaint and there#$ reversin! the de ision of the Ca#or /r#iter dated Septe&#er (5, (449, as 'ell as the for&er>s resolution of Mar h (5, (44= 'hi h denied petitioner>s &otion for re onsideration. M(N /uspi iousl$, there is no su#stantial dispute on the ante edents of this ase. So&eti&e in De e&#er, (4B=, petitioner 'as hired #$ private respondent as a #us driver on o&&ission #asis, 'ith an avera!e earnin! of P=,))).)) a &onth. On Fe#ruar$ 7B, (44:, the air onditionin! unit of the #us 'hi h petitioner 'as drivin! suffered a &e hani al #rea1do'n. Respondent o&pan$ told hi& to 'ait until the air onditionin! unit 'as repaired. Mean'hile, no other #us 'as assi!ned to petitioner to 1eep hi& !ainfull$ e&plo$ed. Thereafter, petitioner ontinued reportin! to his e&plo$er>s offi e for 'or1, onl$ to find out ea h ti&e that the air onditionin! unit had not #een repaired. Several &onths elapsed #ut he 'as never alled #$ respondent o&pan$ to report for 'or1. Cater, petitioner found out that the #us for&erl$ driven #$ hi& 'as pl$in! an assi!ned route as an ordinar$ #us, 'ith a ne'l$-hired driver. On Gune (5, (44:, petitioner filed a o&plaint a!ainst private respondent for ille!al dis&issal, 'ith &one$ lai&s for la#or standard #enefits, and for rei&#urse&ent of his #ond and tire deposit. 8e lai&ed that the reason 'h$ respondent o&pan$ did not allo' hi& to drive a!ain

'as due to his refusal to si!n an undated o&pan$-prepared resi!nation letter and a #lan1 affidavit of +uit lai& and release. Private respondent, on the other hand, ad&itted that it told petitioner to 'ait until the air onditionin! unit of the #us 'as repaired. 8o'ever, private respondent alle!ed that after the #us driven #$ the petitioner #ro1e do'n due to his fault and ne!li!en e, the latter did not report for 'or1. 8e supposedl$ infor&ed the &ana!e&ent later that he 'as voluntaril$ resi!nin! fro& his e&plo$&ent in order to supervise the onstru tion of his house. Conse+uent to his resi!nation, petitioner de&anded the return of his ash #ond and tire deposit. Respondent o&pan$ re+uired hi& to se ure the ne essar$ &ana!e&ent learan e and other pertinent papers relative to his resi!nation. Instead of o&pl$in! 'ith those re+uire&ents, petitioner filed the instant o&plaint. On Septe&#er (5, (449, the Ca#or /r#iter rendered a de ision 'ith the follo'in! dispositive portion, P28EREFORE, 'ith all the fore!oin! onsiderations, Dud!&ent is here#$ rendered de larin! o&plainant ille!all$ dis&issed and respondent NEC;.SCO, INC, is here#$ ordered to pa$ o&plainant as follo's, P(((,))).)) - Full #a 1'a!es :=,))).)) - Separation pa$ in lieu of reinstate&ent 4,))).)) - Refund of tire deposit UUUUUUUUUUUU P(5=,))).)) TOT/C ash #ond and

/ll other lai&s are here#$ dis&issed. SO ORDERED.QM7N /!!rieved #$ the said de ision, private respondent filed a &e&orandu& on appeal 'ith the NCRC. On De e&#er (:, (445, pu#li respondent rendered its de ision su#De t of the present re ourse, adDud!in! as follo's, P28EREFORE, in vie' of the fore!oin! pre&ises, the de ision appealed fro& is here#$ SET /SIDE and a ne' one entered dire tin! respondent to reinstate o&plainant #a 1 to 'or1 #ut 'ithout #a 1'a!es. Should reinstate&ent #e not possi#le, respondent shall pa$ o&plainant separation #enefits e+uivalent to one "(% &onth pa$ for ever$ $ear of servi e o&puted up to the ti&e he 'as te&poraril$ laid-off and to refund to hi& the ash #ond and tire deposit. /ll other lai&s are DENIED for la 1 of &erit.

SO ORDERED.QM:N On Fe#ruar$ B, (44=, petitioner filed a &otion for re onsideration 'hi h 'as denied in a resolution dated Mar h (7, (44=.M9N 8en e the present petition, raisin! the issues of "(% 'hether or not petitioner 'as ille!all$ dis&issed, and "7% 'hether or not petitioner is entitled to #a 1 'a!es and separation pa$ startin! fro& the ti&e he 'as laid off.M5N 2e find the petition &eritorious. Pu#li respondent o&&itted !rave a#use of dis retion in holdin! that petitioner 'as not ille!all$ dis&issed and in onse+uentl$ deletin! the a'ard of #a 1 'a!es. It is espe iall$ so, sin e this ase does not present su h o&pli ated issues as 'ould &islead it into o&&ittin! the errors o&plained of. .nder /rti le 7B= of the Ca#or Code, the bona fide suspension of the operation of a #usiness or underta1in! for a period not e< eedin! si< &onths shall not ter&inate e&plo$&ent. Conse+uentl$, 'hen the bona fide suspension of the operation of a #usiness or underta1in! e< eeds si< &onths, then the e&plo$&ent of the e&plo$ee shall #e dee&ed ter&inated. ;$ the sa&e to1en and appl$in! said rule #$ analo!$, if the e&plo$ee 'as for ed to re&ain 'ithout 'or1 or assi!n&ent for a period e< eedin! si< &onths, then he is in effe t onstru tivel$ dis&issed.M=N The Soli itor 6eneral opines that, stri tl$ spea1in!, /rti le 7B= does not appl$ to this ase, ontrar$ to the position ta1en #$ respondent "NCRC%. Of ourse, it is true that sin e private respondent operated a fleet of #uses, its entire #usiness operations 'ere not suspended, 'hether 'e spea1 of either a bona fide suspension or not. 8o'ever, as alread$ stated, the prin iple underl$in! that provision 'hi h puts si< &onths as a definin! utoff period an #e used as a onsonant #asis in deter&inin! the reasona#leness of the len!th of ti&e 'hen petitioner ould #e deprived of 'or1 for auses i&puta#le to private respondent. In the instant ase, the reason for the stoppa!e of operation of the #us assi!ned to petitioner 'as the #rea1do'n of the air onditionin! unit, 'hi h is a valid reason for the suspension of its operation. 8o'ever, su h suspension re!ardin! that parti ular #us should li1e'ise last onl$ for a reasona#le period of ti&e.M3N The defe t in the air onditionin! unit ould have #een easil$ re&edied #$ private respondent. The period of si< &onths 'as &ore than enou!h for it to ause the repair thereof. ;e$ond that period, the stoppa!e of its operation 'as alread$ le!all$ unreasona#le and e ono&i all$ preDudi ial to herein petitioner 'ho 'as not !iven a su#stitute vehi le to drive. The so- alled Pfloatin! statusQ of an e&plo$ee should last onl$ for a le!all$ pres ri#ed period of ti&e. 2hen that Pfloatin! statusQ of an e&plo$ee lasts for &ore than si< &onths, he &a$ #e onsidered to have #een ille!all$ dis&issed fro& the servi e. Thus, he is entitled to the orrespondin! #enefits for his separation,MBN and this 'ould appl$ to the t'o t$pes of 'or1 suspension heretofore noted, that is, either of the entire #usiness or of a spe ifi o&ponent thereof.

/lthou!h, it is true that the present o&plaint 'as filed #$ petitioner #efore the end of the si< &onths period, the filin! of the sa&e is nonetheless in order, onsiderin! the several attendant ir u&stan es hereunder dis ussed. It 'as not denied #$ private respondent that it tried to for e private respondent to si!n an undated o&pan$-prepared resi!nation letter and a #lan1 undated affidavit of +uit lai& and release 'hi h the latter validl$ refused to si!n. Further&ore, the #us 'hi h petitioner used to drive 'as alread$ pl$in! a transportation route as an ordinar$ #us and 'as #ein! driven #$ another person, 'ithout petitioner havin! #een priorl$ offered the sa&e alternative arran!e&ent. Finall$, private respondent ad&itted in its appeal &e&orandu& dated Septe&#er 7:, (449, or &ore than one $ear and si< &onths fro& petitioner>s dis&issal, that the #us 'as still a'aitin! repair. 8en e, even after the lapse of si< &onths fro& the date the #us driven #$ petitioner #ro1e do'n, private respondent 'as still not in a position to ree&plo$ or provide an$ 'or1 assi!n&ent to petitioner. The other alle!ation of private respondent that petitioner voluntaril$ resi!ned fro& 'or1 o#viousl$ does not deserve an$ onsideration. It 'ould have #een illo!i al for herein petitioner to resi!n and then file a o&plaint for ille!al dis&issal. Resi!nation is in onsistent 'ith the filin! of the said o&plaint.M4N Resi!nation is defined as the voluntar$ a t of an e&plo$ee 'ho finds hi&self in a situation 'here he #elieves that personal reasons annot #e sa rifi ed in favor of the e<i!en $ of the servi e, and, that he has no other hoi e #ut to disasso iate hi&self fro& his e&plo$&ent. Resi!nation is a for&al pronoun e&ent of relin+uish&ent of an offi e. It &ust #e &ade 'ith the intention of relin+uishin! the offi e a o&panied #$ an a t of relin+uish&ent.M()N The ardinal rule in ter&ination ases is that the e&plo$er #ears the #urden of proof to sho' that the dis&issal is for Dust ause, failin! in 'hi h it 'ould &ean that the dis&issal is not Dustified.M((N This rule applies adversel$ a!ainst herein respondent o&pan$ sin e it has utterl$ failed to dis har!e that onus #$ the re+uisite +uantu& of eviden e. .nder /rti le 734 of the Ca#or Code, as a&ended, an e&plo$ee 'ho is unDustl$ dis&issed fro& 'or1 shall #e entitled to reinstate&ent 'ithout loss of seniorit$ ri!hts and other privile!es and to his full #a 1 'a!es, in lusive of allo'an es, and to other #enefits or their &onetar$ e+uivalent o&puted fro& the ti&e his o&pensation 'as 'ithheld fro& hi& up to the ti&e of his a tual reinstate&ent.M(7N Thus, it #ein! learl$ esta#lished that herein petitioner 'as onstru tivel$ dis&issed, the de ision of the Ca#or /r#iter a'ardin! hi& #a 1 'a!es and separation pa$ in lieu of reinstate&ent, plus the refund of his ash #ond and tire deposit, is definitel$ in order. 8HEREFORE, the +uestioned de ision of respondent National Ca#or Relations Co&&ission is !ET A!I/E and the de ision of the Ca#or /r#iter dated Septe&#er (5, (449 is here#$REIN!TATE/. !O OR/ERE/.

!ECON/ /I1I!ION

ROMEO .A!A , 40LIAN LITERAL a%& 40LIAN A.0E1A, Petitioners#

G.R. No. 176672

- versus -

Present,

HACIEN/A CON!OLACION, a%&Bor .R0NO .O0FFAR/ III, 4O!E RAMON .O0FFAR/, MALOT .O0FFAR/, !PO0!E! CARMEN a%& !TE1E .0MANLAG, .ERNIE .O0FFAR/, ANAL N .O0FFAR/, a%& /ONA .O0FFAR/, a+ O=%er+, Respondents.

C/RPIO, J.# C"airperson# ;RION, DEC C/STICCO, /;/D, and PERET, JJ.

Pro&ul!ated, /pril (4, 7)()

< - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - <

/ECI!ION

/EL CA!TILLO, J.:

Fair evidentiar$ rule di tates that #efore e&plo$ers are #urdened to prove that the$ did not o&&it ille!al dis&issal, it is in u&#ent upon the e&plo$ee to first esta#lish the fa t of his or her dis&issal.

This Petition for Revie' on CertiorariM(N assails the De isionM7N dated Gune 3, 7))= of the Court of /ppeals "C/% in C/-6.R. SP No. )):(:, 'hi h affir&ed the Mar h 77, 7))9 De isionM:N of the National Ca#or Relations Co&&ission "NCRC%, dis&issin! the ille!al dis&issal ase filed #$ petitioners a!ainst respondents.

Factual Antecedents

Respondents hired petitioners Ro&eo ;asa$ ";asa$% in (4=3 and Gulian Citeral "Citeral% in (4B9, as tra tor operators, and petitioner Gulian /#ueva "/#ueva% in (4B4, as la#orer, in the ha ienda devoted for su!ar ane plantation.

On /u!ust 74, 7))(, petitioners filed a o&plaintM9N for ille!al dis&issal 'ith &onetar$ lai&s a!ainst respondents. The$ alle!ed that so&eti&e in Gul$ 7))(, respondents ver#all$ infor&ed the& to stop 'or1in!. Thereafter, the$ 'ere not !iven 'or1 assi!n&ents despite their status as re!ular e&plo$ees. The$ alle!ed that their ter&ination 'as done in violation of their ri!ht to su#stantive and pro edural due pro ess. Petitioners also lai&ed violation of Mini&u& 2a!e Ca' and non-pa$&ent of overti&e pa$, pre&iu& pa$ for holida$ and rest da$, five da$s servi e in entive leave pa$, separation pa$ and (:th &onth pa$. The$ also pra$ed for da&a!es and attorne$>s fees.

Respondents denied petitioners> alle!ations. /s re!ards /#ueva, respondents averred that he is not an e&plo$ee #ut a &ere ontra tor in the ha ienda. / ordin! to respondents, /#ueva hired other &en to perfor& 'eedin! Do#s and even entered into ontra t 'ith nei!h#orin! ha iendas for si&ilar Do#s. Respondents alle!ed that /#ueva>s na&e does not appear in the pa$roll, thus indi atin! that he is not an e&plo$ee. /s su h, there an #e no dis&issal to spea1 of, &u h less an ille!al dis&issal.

2ith re!ard to petitioners Citeral and ;asa$, respondents ad&itted that #oth are re!ular e&plo$ees, ea h re eivin! P(:).)) per da$>s 'or1 as eviden ed #$ a Master Vou her. M5N 8o'ever, respondents denied havin! ille!all$ dis&issed the& and asserted that the$ a#andoned their Do#s.

Respondents alle!ed that Citeral 'as fa in! har!es of &is ondu t, insu#ordination, da&a!in! and ta1in! advanta!e of ha ienda propert$, and unauthori?ed ultivation of a portion of the ha ienda. Citeral 'as ordered to e<plain0 instead of o&pl$in!, Citeral did not an$&ore report for 'or1. Instead, he filed a o&plaint for ille!al dis&issal.

Respondents asserted that the$ sent a representative to onvin e petitioners to return #ut to no avail. Respondents &aintained that the$ have #een reli!iousl$ !ivin! (:th&onth pa$ to their e&plo$ees as eviden ed #$ a vou herM=N orrespondin! to $ear 7))).

Ruling of the Labor Arbiter

On De e&#er (4, 7))(, the Ca#or /r#iter rendered a De isionM3N e<oneratin! respondents fro& the har!e of ille!al dis&issal as petitioners 'ere the ones 'ho did not report for 'or1 despite respondents> all. The Ca#or /r#iter, ho'ever, a'arded petitioners> lai& of (:th &onth pa$ and salar$ differentials. The dispositive portion of the Ca#or /r#iter>s De ision reads,

28EREFORE, all the fore!oin! pre&ises #ein! onsidered, Dud!&ent is here#$ rendered de larin! the Respondent not !uilt$ of Ille!al Dis&issal #ut is ho'ever dire ted to pa$ the o&plainants their (:th Month Pa$ overin! the $ears (44B and (444, and their Salar$ Differentials for 7 $ears at = &onths per $ear of servi e. The o&putation of the fore!oin! &onetar$ a'ards are as follo's,

I - (:th Month Pa$, "For Ea h Co&plainant%

(44B J (444 Y 7 $ears or (7 &onths Z = &onths per $ear of servi e

P(95.))Ada$ < 7= da$s Y P:,33).))A&o. P:,33).))A&o. < (7 &os. Y P95,79).))Y P3,59).)) =

II E Salar$ Differential,

"a%

Ro&eo ;asa$, Y P(95.))Ada$ Y P(77.))Ada$

;asi Pa$ Salar$ Re eived

Salar$ Differential Y P 7:.))Ada$

(44B J (444 Y 7 $ears or :(7 da$s

P7:.))Ada$ < :(7 da$s

Y P3,(3=.))

"#%

Gulian Citeral, Y P(95.))Ada$ Y P 4(.))Ada$

;asi Pa$ Salar$ Re eived

Salar$ Differential Y P 59.))Ada$

(44B J (444 Y 7 $ears or :(7 da$s

P59.))Ada$ < :(7 da$s

Y P(=,B9B.))

" %

Gulian /#ueva, Y P(95.))Ada$ Y P 4(.5)Ada$

;asi Pa$ Salar$ Re eived

Salar$ Differential Y P 5:.5)Ada$

(44B J (444 Y 7 $ears or :(7 da$s

P5:.5)Ada$ < :(7 da$s

Y P(=, =47.))

!0MMAR

(.

ROMEO ;/S/H, Y P3,59).)) Y P3,(3=.)) P(9,3(=.))

a% (:th Month Pa$ #% Salar$ Differential Total

7.

G.CI/N CITER/C Y P 3,59).)) Y P(=,B9B.)) P79,:BB.))

a% (:th Month Pa$ #% Salar$ Differential Total

:.

G.CI/N /;.EV/ Y P 3,59).)) Y P(=,=47.))

a% (:th Month Pa$ #% Salar$ Differential

Total

P79,7:7.))

GRAN/ TOTAL. . . . . . . . . . . . . . . . . . . .

P=:,::=.))

Ten Per ent "()*% /ttorne$>s Fees is also adDudi ated fro& the total &onetar$ a'ard.

SO ORDERED.MBN

Ruling of the National Labor Relations Commission

;oth parties sou!ht re ourse to the NCRC. Petitioners filed a Partial /ppealM4N to the De ision de larin! respondents not !uilt$ of ille!al dis&issal. The$ ar!ued that there 'as no proof of lear and deli#erate intent to a#andon their 'or1. On the ontrar$, their filin! of an ille!al dis&issal ase ne!ates the intention to a#andon. Petitioners li1e'ise alle!ed that respondents failed to o#serve pro edural due pro ess.

Respondents, for their part, filed a Me&orandu& on /ppealM()N 'ith respe t to the a'ard of salar$ differentials and (:th &onth pa$ to petitioners. Respondents averred that the Ca#or /r#iter erred in findin! that petitioners are entitled to re eive a &ini&u& 'a!e of P(95.))Ada$ instead of P(:).))Ada$ 'hi h is the &ini&u& 'a!e rate for su!ar ane 'or1ers in Ne!ros Oriental per 2a!e Order No. ROVII-)3.M((N Respondents li1e'ise presented vou hersM(7N to prove pa$&ent of (:th &onth pa$ for the $ears (44B and (444.

The NCRC, in its De isionM(:N dated Mar h 77, 7))9, found &erit in respondents> appeal. It ruled that respondents have satisfa toril$ proven pa$&ent of the orre t a&ount of 'a!es and (:th &onth pa$ for the $ears (44B, (444 and 7))), as sho'n in the Master Vou her indi atin! the 'or1ers> pa$roll and the various vou hers for (:th &onth pa$. The NCRC further ruled that /#ueva is not an e&plo$ee of the ha ienda #ut a &ere ontra tor0 thus, he is not entitled to an$ of his lai&s. The NCRC thus affir&ed 'ith &odifi ation the De ision of the Ca#or /r#iter, vi1, 8HEREFORE, findin! o&plainants not ille!all$ dis&issed, Dud!&ent is here#$ rendered AFFIRMING the De ision of the Ca#or /r#iter dated De e&#er (:, 7))(, 'ith

theMO/IFICATION that o&plainants Gulian Citeral and Ro&eo ;asa$ are not entitled to their lai&s for salar$ differentials and (:th &onth pa$ for la 1 of le!al #asis. 8o'ever, respondents are ordered to pa$ o&plainants Gulian Citeral and Ro&eo ;asa$ proportionate (:th &onth pa$ o&puted fro& Ganuar$ (, 7))( to /u!ust 74, 7))(.

/ll other lai&s are dis&issed for la 1 of &erit.

!O OR/ERE/.M(9N

Petitioners filed a Motion for Re onsiderationM(5N 'hi h 'as denied #$ the NCRC in a ResolutionM(=N dated Septe&#er :, 7))9.

Ruling of the Court of Appeals

/!!rieved, petitioners filed 'ith the C/ a petition for certiorari. On Gune 3, 7))=, ho'ever, the C/ dis&issed the petition and affir&ed the findin!s of the NCRC. It opined that respondents have &anifested their 'illin!ness to retain petitioners #ut the latter intentionall$ a#andoned their 'or1. The C/ also stru 1 do'n petitioners> ontention that a#andon&ent is in onsistent 'ith the filin! of a o&plaint for ille!al dis&issal as this rule applies onl$ 'hen a o&plainant see1s reinstate&ent and not 'hen separation pa$ is instead pra$ed for, as in the ase of petitioners. /s to the issue posed #$ petitioners assailin! the ad&issi#ilit$ of the Master Vou her due to la 1 of petitioners> authenti si!natures, the C/ refrained fro& resolvin! the &atter sin e the issue 'as onl$ raised for the first ti&e on appeal. Petitioners &oved for re onsideration, #ut to no avail.

I++ue

8en e, this petition raisin! the issue of 'hether petitioners 'ere ille!all$ dis&issed and are entitled to their &one$ lai&s.

Petitioners ontend that the C/ erred in affir&in! the findin!s of the la#or tri#unals that the$ deli#eratel$ a#andoned their 'or1 on the #asis of respondents> self-servin! alle!ation that the$ sent e&issaries to persuade the& to return to 'or1. The$ &aintain that in the a#sen e of o&petent eviden e to sho' lear intention to sever the e&plo$&ent relationship and o&plian e 'ith the t'o-noti e rule, no a#andon&ent an e<ist. Moreover, the theor$ that a#andon&ent of 'or1 is in onsistent 'ith the filin! of a o&plaint for ille!al dis&issal is appli a#le in the present ase sin e 'hat 'as pra$ed for in the o&plaint 'as reinstate&ent, ontrar$ to the C/>s findin! that the$ 'ere as1in! for separation pa$. Petitioners li1e'ise insist that the C/ !ravel$ erred in holdin! that the$ assailed the ad&issi#ilit$ of the Master Vou her for the first ti&e onl$ durin! appeal. The$ lai& that su h issue 'as raised in their &otion for re onsideration of the NCRC De ision. Finall$, petitioners alle!e that the fa t that the$ 'ere sta$in! inside the pre&ises of the ha ienda and had #een 'or1in! therein for &ore than a $ear is an indi ation that the$ are re!ular e&plo$ees entitled to their &onetar$ lai&s, as orre tl$ found #$ the Ca#or /r#iter.

Our Ru)'%C

The petition is partl$ &eritorious.

!"ere .as no illegal dismissal.

2e are not un&indful of the rule in la#or ases that the e&plo$er has the #urden of provin! that the ter&ination 'as for a valid or authori?ed ause0 ho'ever, it is li1e'ise in u&#ent upon the e&plo$ees that the$ should first esta#lish #$ o&petent eviden e the fa t of their dis&issal fro& e&plo$&ent.M(3N The one 'ho alle!es a fa t has the #urden of provin! it and the proof should #e lear, positive and onvin in!.M(BN In this ase, aside fro& &ere alle!ations, no eviden e 'as proffered #$ the petitioners that the$ 'ere dis&issed fro& e&plo$&ent. The re ords are #ereft of an$ indi ation that petitioners 'ere prevented fro& returnin! to 'or1 or other'ise deprived of an$ 'or1 assi!n&ent #$ respondents.

The C/, in sustainin! the Ca#or /r#iter and NCRC>s findin! that there 'as no ille!al dis&issal, ruled that respondents have &anifested their 'illin!ness to retain petitioners in their e&plo$. Petitioners, ho'ever, o&plained that this findin! is an hored on &ere alle!ations of respondents.

2e do not a!ree. Respondents presented a de larationM(4N &ade under oath #$ Ceopoldo .tlan!, Gr., assistant supervisor of the ha ienda, attestin! that petitioners 'ere as1ed to return to do so&e 'or1 for the ha ienda #ut refused to do so upon the advi e of their la'$er. Interestin!l$ too, as late as Nove&#er of 7))( or even after al&ost three &onths fro& the filin! of the ille!al dis&issal ase, the na&es of Citeral and ;asa$ 'ere still listed and in luded in respondents> pa$roll as an #e !leaned in the Master Vou her overin! the e&plo$ees> pa$roll of Nove&#er (7 to (=, 7))(. 2hile a vou her does not ne essaril$ prove pa$&ent, it is an a epta#le do u&entar$ re ord of a #usiness transa tion.M7)N /s su h, entries &ade therein, #ein! entered in the ordinar$ or re!ular ourse of #usiness, enDo$ the presu&ption of re!ularit$.M7(N 8en e, on the #asis of this &aterial proof evin in! respondents> intention to retain petitioners as e&plo$ees, 'e are not onvin ed that petitioners 'ere told to stop 'or1in! or 'ere prevented fro& 'or1in! in the ha ienda. This &a$ 'ell #e an indi ation of respondents> la 1 of intention to dis&iss petitioners fro& e&plo$&ent sin e the$ 'ere still onsidered e&plo$ees as of that ti&e. Re ords are li1e'ise #ereft of an$ sho'in! that to date, respondents had alread$ ter&inated petitioners fro& e&plo$&ent.

2e are not persuaded #$ petitioners> ontention that nothin! 'as presented to esta#lish their intention of a#andonin! their 'or1, or that the fa t that the$ filed a o&plaint for ille!al dis&issal ne!ates the theor$ of a#andon&ent.

It #ears e&phasi?in! that this ase does not involve ter&ination of e&plo$&ent on the !round of a#andon&ent. /s earlier dis ussed, there is no eviden e sho'in! that petitioners 'ere a tuall$ dis&issed. Petitioners> filin! of a o&plaint for ille!al dis&issal, irrespe tive of 'hether reinstate&ent or separation pa$ 'as pra$ed for, ould not #$ itself #e the sole onsideration in deter&inin! 'hether the$ have #een ille!all$ dis&issed. /ll ir u&stan es surroundin! the alle!ed ter&ination should also #e ta1en into a ount.

In $bad v. Roselle Cinema#M77N 'e ruled that the su#stantial eviden e proffered #$ the e&plo$er that it had not ter&inated the e&plo$ee should not #e i!nored on the prete<t that the e&plo$ee 'ould not have filed the o&plaint for ille!al dis&issal if he had not reall$ #een dis&issed. 2e held that su h non se uitur reasonin! annot ta1e the pla e of the eviden e of #oth the e&plo$er and the e&plo$ee.

6iven that there 'as no dis&issal to spea1 of, there an #e no +uestion as to the le!alit$ or ille!alit$ thereof.

@asa& and Literal are entitled to salar& differentials for t.o &ears and proportionate 63t" mont" pa& from Januar& 6>+D# +,,6. $bueva is not an emplo&ee# t"us not entitled to "is claims.

2e a!ree 'ith the petitioners that the issue on the ad&issi#ilit$ of the Master Vou her, 'hi h does not sho' that the$ a tuall$ re eived the a&ount of salar$ indi ated therein, 'as raised in their &otion for re onsideration of the NCRC De ision dated Mar h 77, 7))9 'here the la#or tri#unal ruled that petitioners 'ere dul$ o&pensated for their 'or1 on the #asis of su h vou her. /t an$ rate, even if its ad&ission as eviden e is not put into issue, still, the Master Vou her did not prove that petitioners 'ere indeed paid the orre t a&ount of 'a!es.

/ perusal of the Master Vou her sho's that it overs the e&plo$ees> pa$roll for the period of Nove&#er (7-(=, 7))( onl$. Clearl$, the Master Vou her annot onstitute as proof that petitioners 'ere dul$ paid for other periods not overed #$ su h vou her. No other pertinent vou hers, pa$rolls, re ords or other si&ilar do u&ents have #een presented as proof of pa$&ent of the orre t a&ount of salaries paid, parti ularl$, for the $ears (44B and (444. /s a !eneral rule, one 'ho pleads pa$&ent has the #urden of provin! it.M7:N Conse+uentl$, respondents failed to dis har!e the #urden of provin! pa$&ent there#$ &a1in! the& lia#le for petitioners> lai& for salar$ differentials. 2e thus reinstate the Ca#or /r#iter>s a'ard of salar$ differentials for (44B and (444, o&puted at = &onths per $ear of servi e. 8o'ever, the Ca#or /r#iter>s o&putation &ust #e &odified pursuant to 2a!e Order No. ROVII-)3. .nder this 'a!e order, the &ini&u& 'a!e rate of su!ar ane plantation 'or1ers is at P(:).))Ada$. The orre t o&putation for the salar$ differentials due to ;asa$ and Citeral, 'ho lai&ed to have re eived onl$ P(77.)) and P4(.)) per da$, respe tivel$, should #e as follo's,

For ROMEO ;/S/H, ;asi Pa$ Salar$ Re eived Y P(:).))Ada$ Y P(77.))Ada$ B.))Ada$

Salar$ Differential Y P

PB.))Ada$ < :(7 da$s "for (44B J (444%

P7,94=.))

For G.CI/N CITER/C,

;asi Pa$ Salar$ Re eived

Y P(:).))Ada$ Y P 4(.))Ada$

Salar$ Differential Y P :4.))Ada$

P:4.))Ada$ < :(7 da$s "for (44B J (444%

P(7,(=B.))

/s re!ards the (:th &onth pa$, respondents 'ere a#le to addu e eviden e that the #enefit 'as !iven to the e&plo$ees for the $ears (44B, (444, and 7))). 8o'ever, for an e&plo$ee 'ho has #een separated fro& servi e #efore the ti&e for pa$&ent of the (:th &onth pa$, he is entitled to this &onetar$ #enefit in proportion to the len!th of ti&e he 'or1ed durin! the $ear, re 1oned fro& the ti&e he started 'or1in! durin! the alendar $ear up to the ti&e of his separation.M79N The NCRC>s a'ard of proportionate (:th &onth pa$ o&puted fro& Ganuar$ (, 7))( to /u!ust 74, 7))( in favor of ;asa$ and Citeral, is therefore proper.

/s for petitioner /#ueva, he is not entitled to his lai&s. The NCRC e< luded /#ueva in its Dud!&ent a'ard, rulin! that he is not an e&plo$ee #ut a &ere ontra tor. The e<isten e of an e&plo$er-e&plo$ee relationship is ulti&atel$ a +uestion of fa t.M75N Settled is the rule that onl$ errors of la' are !enerall$ revie'ed #$ this Court.M7=N Fa tual findin!s of ad&inistrative and +uasi-Dudi ial a!en ies spe iali?in! in their respe tive fields, espe iall$ 'hen affir&ed #$ the C/, &ust #e a orded hi!h respe t, if not finalit$.M73N

The ele&ents to deter&ine the e<isten e of an e&plo$&ent relationship are, "(% sele tion and en!a!e&ent of the e&plo$ee0 "7% the pa$&ent of 'a!es0 ":% the po'er of dis&issal0 and "9% the e&plo$er>s po'er to ontrol the e&plo$ee>s ondu t.M7BN In filin! a o&plaint for ille!al dis&issal, it is in u&#ent upon /#ueva to prove the relationship #$ su#stantial eviden e.

In this re!ard, petitioners lai& that /#ueva has 'or1ed 'ith respondents for &ore than a $ear alread$ and 'as allo'ed to sta$ inside the ha ienda. /s su h, he is a re!ular e&plo$ee entitled to &onetar$ lai&s. 8o'ever, petitioners have not presented o&petent proof that respondents en!a!ed the servi es of /#ueva0 that respondents paid his 'a!es or that respondents ould di tate 'hat his ondu t should #e 'hile at 'or1. In other 'ords, /#ueva>s alle!ations did not esta#lish that his relationship 'ith respondents has the attri#utes of e&plo$er-e&plo$ee on the #asis of the a#ove-&entioned four-fold test. Therefore, /#ueva 'as

not a#le to dis har!e the #urden of provin! the e<isten e of an e&plo$er-e&plo$ee relationship. Moreover, /#ueva 'as not a#le to refute respondents> assertions that he hires other &en to perfor& 'eedin! Do# in the ha ienda and that he is not e< lusivel$ 'or1in! for respondents.

8HEREFORE, the petition is PARTL GRANTE/. The De ision of the Court of /ppeals in C/-6.R. SP No. )):(: dated Gune 3, 7))=, findin! petitioners Ro&eo ;asa$, Gulian Citeral and Gulian /#ueva not ille!all$ dis&issed and a'ardin! petitioners Ro&eo ;asa$ and Gulian Citeral their proportionate (:th &onth pa$ o&puted fro& Ganuar$ (, 7))( to /u!ust 74, 7))(, is AFFIRME/ 'ith MO/IFICATION that the petitioners Ro&eo ;asa$ and Gulian Citeral are entitled to re eive the a&ounts of P7,94=.)) andP(7,(=B.)) as salar$ differentials, respe tivel$.

!O OR/ERE/.