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G.R. No.


March 29, 2010


The petitioner White Diamond Trading Corporation (the company) is engaged in buying and selling second hand motor vehicles. The company employed Maria Myrna Omela (Omela) in 1999 as assistant secretary, Mary Jane Pastoril (Pastoril) in 2000 as secretary, and Norlito Escoto (Escoto) in 2001 as salesman. On February 28, 2004, Escoto consummated the sale of a Toyota Town Ace to Teodoro Abejar Aquino (Aquino) for P200,000.00. While the purchase price indicated in the original copy of the receipt issued to Aquino was P200,000.00, it was only P190,000.00 in the duplicate copy that remained with the company. The receipt was issued by Omela to Aquino after he gave Omela P200,000.00 in cash, which amount Aquino counted in the presence of Pastoril. Pastoril then took out the deed of sale and handed it to Aquino. The deed showed that the consideration for the sale to be P190,000.00 On March 8, 2004, the company terminated the employment of Escoto, Omela and Pastoril. On March 10, 2004, the three employees filed a complaint for illegal dismissal against the company and its two top officers. The Company alleged that the petitioners stole the company fund. Labor Arbiter dismissed the complaint for lack of merit in her decision of September 30, 2004. The arbiter found that Escoto, Omela and Pastoril defrauded the company through their concerted action. The labor arbiter found that they made it appear in the company records that Aquino bought the Toyota Town Ace for P190,000.00, but charged Aquino and issued him a receipt for P200,000.00. On appeal, the NLRC affirmed the labor arbiter's ruling with modification. While the NLRC was convinced that the company had validly dismissed Escoto and Omela for having effected the discrepancies in sales amount of the Toyota Town Ace, it found that no contributory act was shown from Pastoril who, in Aquinos Sinumpaang Salaysay, merely handed him the Deed of Sale. It therefore ruled that Pastoril's dismissal was without just cause. The NLRC denied the companys motion for reconsideration, thus, paving the way for the elevation of the case to the CA . Appellate Court dismissed the petition for lack of merit.

Issue: Whether or not Pastoril was illegally dismissed. Ruling: The Court find that Pastoril was not illegally dismissed. It finds that Pastoril was as actively involved as Escoto and Omela in the sale of the Toyota Town Ace that resulted in a loss to the company. All three participated in making the company believe that Aquino bought the Toyota Town Ace for P190,000.00 when in fact, Aquino paid P200,000.00 for the vehicle. The company was completely in the dark about the actual purchase price until it learned about the irregularity and commenced an investigation. Pastorils involvement in the questionable transaction was much more than handing over to Aquino his copy of the deed of sale. The payment of the purchase price, the issuance of the receipt and the handing of the deed of sale to Aquino were not separate isolated acts. They occurred in one continuous logical sequence with the players in close proximity with one another. Under these circumstances, to say that Pastoril merely handed over the deed of sale to Aquino without even looking at the document or knowing what it contained, and without knowing what was actually happening, can hardly be believed. The deed of sale did not appear out of thin air; somebody in the company prepared the document. Given the positions of the three dismissed employees in the company and based on the sequence of events, it could only be Pastoril, the secretary, who prepared the deed of sale, not Omela. To reiterate, Pastoril was not an innocent participant in the fraudulent sale of the companys Toyota Town Ace. She acted in concert with Escoto and Omela in the transaction that defrauded their employer in the amount of P10,000.00 the difference in the vehicles actual price of P200,000.00 paid by the buyer, and the price (P190,000.00) entered in the duplicate purchase receipt and in the deed of sale. Pastoril prepared and issued the deed of sale indicating that the vehicle was sold for P190,000.00, although she knew that the buyer was being charged P200,000.00 for the vehicle. Under these facts, there was a conspiracy where every participant had made significant contributory acts. Therefore, there was a valid dismissal against Pastoril.

G.R. No. 165756

June 5, 2009

In 2001, HEPIs hotel business suffered a slump due to the local and international economic slowdown, aggravated by the events of September 11, 2001 in the United States. An audited financial report made by Sycip Gorres Velayo (SGV) & Co. on January 28, 2002 indicated that the hotel suffered a gross operating loss amounting to P16,137,217.00 in 2001, a staggering decline compared to its P48,608,612.00 gross operating profit in year 2000. According to petitioner, the management initially decided to costcut by implementing energy-saving schemes. Meanwhile, on August 31, 2001, the Union filed a notice of strike due to a bargaining deadlock before the National Conciliation Mediation Board (NCMB) In the course of the proceedings, HEPI submitted its economic proposals for the rank-and-file employees which included manning and staffing standards for employees. The Union accepted the economic proposals. Hence, a new collective bargaining agreement (CBA) was signed on November 21, 2001, adopting the manning standards for the 248 rank-and-file employees. Subsequently, on January 21, 2002, petitioner decided to implement a downsizing scheme after studying the operating costs of its different divisions to determine the areas where it could obtain significant savings. After evaluating the hotels manning guide, the following positions were identified as redundant or in excess of what was required for the hotels actual operation given the prevailing poor business condition, viz.: a) housekeeping attendant-linen; b) tailor; c) room attendant; d) messenger/mail clerk; and e) telephone technician. The effect was to be a reduction of the hotels rank-and file employees from the agreed number of 248 down to just 150 but it would generate estimated savings of around P9,981,267.00 per year. The Union opposed the downsizing plan because no substantial evidence was shown to prove that the hotel was incurring heavy financial losses, and for being violative of the CBA, more specifically the manning/staffing standards agreed upon by both parties in November 2001.

Despite its opposition, a list of the positions declared redundant and to be contracted out was given by the management to the Union on March 22, 2002. Notices of termination were, likewise, sent to 48 employees whose positions were to be retrenched or declared as redundant. The notices were sent on April 5, 2002 and were to take effect on May 5, 2002. A notice of termination was also submitted by the management to DOLE. All were given separation pay equivalent to one (1) months salary for every year of service. Thereafter, the hotel management engaged the services of independent job contractors to perform the following services: (1) janitorial (previously, stewarding and public area attendants); (2) laundry; (3) sundry shop; (4) cafeteria; and (5) engineering. Some employees, including one Union officer, who were affected by the downsizing plan were transferred to other positions in order to save their employment.On April 12, 2002, the Union filed a notice of strike based on unfair labor practice (ULP) against HEPI. On April 29, 2002, HEPI filed a motion to dismiss notice of strike. On May 8, 2002, conciliation proceedings were held between petitioner and respondent, but to no avail. On May 10, 2002, respondent Union went on strike. Issues: 1. Was petitioners downsizing scheme valid? 2. Does the implementation of the downsizing scheme preclude petitioner from availing the services of contractual and agencyhired employees? Ruling:

1. In case of redundancy, the employer must prove that: (1) a written

notice was served on both the employees and the DOLE at least one month prior to the intended date of retrenchment; (2) separation pay equivalent to at least one month pay or at least one month pay for every year of service, whichever is higher, has been paid; (3) good faith in abolishing the redundant positions; and (4) adoption of fair and reasonable criteria in ascertaining which positions are to be declared redundant and accordingly abolished. In the case at bar, petitioner justifies the downsizing scheme on the ground of serious business losses it suffered in 2001. Some positions had to be declared redundant to cut losses. In this context, what may technically be considered as redundancy may verily be considered as a retrenchment measure. To substantiate its claim, petitioner presented a financial report covering the years 2000 and 2001 submitted by the SGV & Co., from an impressive gross operating profit of P48,608,612.00 in 2000, it nose-dived to negative P16,137,217.00 the

following year. This was the same financial report submitted to the SEC and later on examined by respondent Unions auditor. The hotel was already operating not only on a slump in income, but on a huge deficit as well. With the local and international economic conditions equally unstable, belt-tightening measures logically had to be implemented to forestall eventual cessation of business. Our labor laws only allow retrenchment or downsizing as a valid exercise of management prerogative if all other else fail. But in this case, petitioner did implement various cost-saving measures and even transferred some of its employees to other viable positions just to avoid the premature termination of employment of its affected workers. It was when the same proved insufficient and the amount of loss became certain that petitioner had to resort to drastic measures to stave off P9,981,267.00 in losses, and be able to survive. If we see reason in allowing an employer not to keep all its employees until after its losses shall have fully materialized, with more reason should we allow an employer to let go of some of its employees to prevent further financial slide.

2. In any event, we have held that an employers good faith in

implementing a redundancy program is not necessarily destroyed by availment of the services of an independent contractor to replace the services of the terminated employees. We have previously ruled that the reduction of the number of workers in a company made necessary by the introduction of the services of an independent contractor is justified when the latter is undertaken in order to effectuate more economic and efficient methods of production.

With petitioners downsizing scheme being valid, and the availment of contractual and agency-hired employees legal, the strike staged by officers and members of respondent Union is, perforce, illegal.