Cheniver Deco Print Technics Corporation vs NLRC
G.R. No. 122876; 17 February 2000 the closing or cessation of operation of the
The phrase “closure or cessation of operation of an
establishment or undertaking not due to serious business
losses or reverses’ under Article 283 of the Labor Code
includes both the complete cessation of all business
operations and the cessation of only part of a company’s
business.
Even though the transfer of a company plant is due to a
reason beyond the control of the employer, it still has to
accord its employee some relief in the form of severance
pay.
Facts:
- Cheniver is a corporation operating its printing
business in Makati. The respondents are
members of the labor union and former
employees of Cheniver.
- June 5, 1992 – Cheniver informed its employees
that it will transfer its operations to Batangas.
Reasons for the transfer are expiration of lease
contract on the premises of Makati plant and
local authorities’ action to force out Cheniver’s
operations from Makati because of alleged
hazards to residents nearby.
- Cheniver have its employees until the end of
June to inform management if they wanted with
Cheniver in its transfer, otherwise it would hire
replacements. August first was the scheduled
start of operations in the new plant in Batangas.
- August 04, 1992 – Cheniver wrote its employees
to report to the new location within 7 days,
otherwise they will be deemed to have lost
interest in the job and would be replaced.
However, no one reported for work in Batangas,
even after extension of period of time to report to
work.
- Respondents filed a complaint for unfair labor
practice and illegal dismissal, and demanded
separation pay (among others).
- LA ruled that the transfer of operations was valid
and absolved Cheniver of charges for unfair labor
practice and illegal dismissal. It however ordered
payment of separation pay. NLRC affirmed.
- Cheniver contends that the transfer of its
business is neither closure nor retrenchment,
thus separation pay should not be awarded. Also,
employees were not terminated but they resigned
because they find the new site to far from their
residences.
Issue:
Whether or not employees are entitled to separation pay
considering that the transfer of the plant was valid.
Held:
YES.
- Art. 283. Closure of the establishment and
reduction of personnel. The employer may
terminate the employment of any employee due
to the installation of labor saving devices,
redundancy, retrenchment to prevent losses or
establishment or undertaking unless the closing
is for the purpose of circumventing the
provisions.
- In case of retrenchment to prevent losses and in
cases of closures or cessation of operations of
establishment or undertaking not due to serious
business losses or financial reverses, the
separation pay shall be equivalent to 1 month
pay or at least ½ month pay for every year of
service, whichever is higher.
- There appears no complete dissolution of
Cheniver’s business undertaking but the
relocation of its plant to Batangas, in SC’s view,
amounts to cessation of petitioner’s nusiness
operations in Makati. It must be stressed that the
phrase “closure or cessation of operation of an
establishment or undertaking not due to serious
business losses or reverses” under Art 283
includes both complete cessation of all business
operations and the cessation of only part of a
company’s business.
- There is no doubt that petitioner has legitimate
reason to relocate its plant because of the
expiration of the lease contract on the premises it
occupied. That is its prerogative. But even though
the transfer was due to a reason beyond its
control, Cheniver has to accord its employees
some relief in the form of severance pay.
- Since closure of the plant is not on account of
serious business losses, Cheniver shall give
respondents separation pay equivalent to at least
1 month or ½ month pay for every yer of service.
- That the employees resigned is not convincing.
The transfer of Cheniver to another place hardly
accessible to its workers resulted in the latter’s
untimely separation from the service not to their
own liking, hence, not construable as resignation.
- PETITION DENIED. NLRC resolutions
AFFIRMED.