Facts:
Petitioner Alabang Country Club Inc. (ACCI), is a stock, non-profit corporation that operates and maintains a country club and various sports and recreational facilities for the exclusive use of its members. Sometime in 1993, Francisco Ferrer, then President of ACCI, requested its Internal Auditor, to conduct a study on the profitability of ACCI’s Food and Beverage Department (F & B Department). Consequently, report showed that from 1989 to 1993, F & B Department had been incurring substantial losses.
Realizing that it was no longer profitable for ACCI to maintain its own F & B Department, the management decided to cease from operating the department and to open the same to a contractor, such as a concessionaire, which would be willing to operate its own food and beverage business within the club. Thus, ACCI sent its F & B Department employee’s individual letters informing them that their services were being terminated and that they would be paid separation pay. The Union in turn, with the authority of individual respondents, filed a complaint for illegal dismissal.
Issue:
Whether or not the club’s right to terminate its employees for an authorized cause, particularly to secure its continued viability and existence is valid.
Held:
When petitioner decided to cease operating its F & B Department and open the same to a concessionaire, it did not reduce the number of personnel assigned thereat. It terminated the employment of all personnel assigned at the department.
Petitioner’s failure to prove that the closure of its F & B Department was due to substantial losses notwithstanding, the Court finds that individual respondents were dismissed on the ground of closure or cessation of an undertaking not due to serious business losses or financial reverses, which is allowed under Article 283 of the Labor Code.
The closure of operation of an establishment or undertaking not due to serious business losses or financial reverses includes both the complete cessation of operations and the cessation of only part of a company’s activities.
Philippine Commercial International Bank vs. Anastascio D. Abad - GR No. 158045 Case Digest
Facts:
Anastacio D. Abad was the senior Assistant Manager (Sales Head) of petitioner Philippine Commercial International Bank (PCI Bank now Equitable PCI Bank)], when he was dismissed from his work. Abad received a Memorandum from petitioner Bank concerning the irregular clearing of PNB-Naval Check of Sixtu Chu, the Bank’s valued client. Abad submitted his Answer, categorically denying that he instructed his subordinates to validate the out-of-town checks of Sixtu Chu presented for deposit or encashment as local clearing checks. During the actual investigation conducted by petitioner Bank, several transactions violative of the Bank’s Policies and Rules and Regulations were uncovered by the Fact-Finding Committee.
Consequently, the Fact-Finding Officer of petitioner Bank issued another Memorandum to Abad asking the latter to explain the newly discovered irregularities. Not satisfied with the explanations of Abad, petitioner Bank served another Memorandum, terminating his employment effective immediately upon receipt of the same. Thus, Abad instituted a Complaint for Illegal Dismissal.
Issue:
Whether or not awarding of separation pay equivalent to one-half (1/2) month’s pay for every year of service to respondent is gross, the same being contrary to law and jurisprudence.
Held:
The award of separation pay is required for dismissals due to causes specified under Articles 283 and 284 of the Labor Code, as well as for illegal dismissals in which reinstatement is no longer feasible. On the other hand, an employee dismissed for any of the just causes enumerated under Article 282 of the Labor Code is not, as a rule, entitled to separation pay.
As an exception, allowing the grant of separation pay or some other financial assistance to an employee dismissed for just causes is based on equity. The Court has granted separation pay as a measure of social justice even when an employee has been validly dismissed, as long as the dismissal was not due to serious misconduct or reflective of personal integrity or morality.
Anastacio D. Abad was the senior Assistant Manager (Sales Head) of petitioner Philippine Commercial International Bank (PCI Bank now Equitable PCI Bank)], when he was dismissed from his work. Abad received a Memorandum from petitioner Bank concerning the irregular clearing of PNB-Naval Check of Sixtu Chu, the Bank’s valued client. Abad submitted his Answer, categorically denying that he instructed his subordinates to validate the out-of-town checks of Sixtu Chu presented for deposit or encashment as local clearing checks. During the actual investigation conducted by petitioner Bank, several transactions violative of the Bank’s Policies and Rules and Regulations were uncovered by the Fact-Finding Committee.
Consequently, the Fact-Finding Officer of petitioner Bank issued another Memorandum to Abad asking the latter to explain the newly discovered irregularities. Not satisfied with the explanations of Abad, petitioner Bank served another Memorandum, terminating his employment effective immediately upon receipt of the same. Thus, Abad instituted a Complaint for Illegal Dismissal.
Issue:
Whether or not awarding of separation pay equivalent to one-half (1/2) month’s pay for every year of service to respondent is gross, the same being contrary to law and jurisprudence.
Held:
The award of separation pay is required for dismissals due to causes specified under Articles 283 and 284 of the Labor Code, as well as for illegal dismissals in which reinstatement is no longer feasible. On the other hand, an employee dismissed for any of the just causes enumerated under Article 282 of the Labor Code is not, as a rule, entitled to separation pay.
As an exception, allowing the grant of separation pay or some other financial assistance to an employee dismissed for just causes is based on equity. The Court has granted separation pay as a measure of social justice even when an employee has been validly dismissed, as long as the dismissal was not due to serious misconduct or reflective of personal integrity or morality.
JAKA Food Processing vs. Pacot - GR No. 151378 Case Digest
FACTS:
Respondents were hired by JAKA until their termination on August 29, 1997 because the Corporation was “in dire financial straits”. It was not disputed that they were terminated without complying with the requirement under Art. 283 of the Labor Code regarding the service of notice upon the employees and DOLE at least one month before the intended date of termination.
ISSUE:
Whether or not full backwages and separation pay be awarded to respondents when employers effected termination without complying with the twin notice rule.
RULING:
The dismissal of the respondents was for an authorized cause under Article 283. A dismissal for authorized cause does not necessarily imply delinquency or culpability on the part of the employee. Instead, the dismissal process is initiated by the employer’s exercise of his management prerogative, i.e. when the employer opts to install labor-saving devices, when he decides to cease business operations or when… he undertakes to implement a retrenchment program.
Accordingly, it is wise to hold that:
1) if the dismissal is based on a just cause but the employer failed to comply with the notice requirement, the sanction to be imposed upon him should be tempered because the dismissal was initiate by an act imputable to the employee.
2) if the dismissal is based on an authorized cause but the employer fails to comply with the notice requirement, the sanction should be stiffer because the dismissal process was initiated by the employer’s exercise of his management prerogative. Thus, dismissal was upheld but ordered JAKA to pay each of the respondents the amount of PhP 50,000.00 representing nominal damages for non-compliance with statutory due process.
___________________________
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Respondents were hired by JAKA until their termination on August 29, 1997 because the Corporation was “in dire financial straits”. It was not disputed that they were terminated without complying with the requirement under Art. 283 of the Labor Code regarding the service of notice upon the employees and DOLE at least one month before the intended date of termination.
ISSUE:
Whether or not full backwages and separation pay be awarded to respondents when employers effected termination without complying with the twin notice rule.
RULING:
The dismissal of the respondents was for an authorized cause under Article 283. A dismissal for authorized cause does not necessarily imply delinquency or culpability on the part of the employee. Instead, the dismissal process is initiated by the employer’s exercise of his management prerogative, i.e. when the employer opts to install labor-saving devices, when he decides to cease business operations or when… he undertakes to implement a retrenchment program.
Accordingly, it is wise to hold that:
1) if the dismissal is based on a just cause but the employer failed to comply with the notice requirement, the sanction to be imposed upon him should be tempered because the dismissal was initiate by an act imputable to the employee.
2) if the dismissal is based on an authorized cause but the employer fails to comply with the notice requirement, the sanction should be stiffer because the dismissal process was initiated by the employer’s exercise of his management prerogative. Thus, dismissal was upheld but ordered JAKA to pay each of the respondents the amount of PhP 50,000.00 representing nominal damages for non-compliance with statutory due process.
___________________________
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Agabon vs. NLRC / Riviera Home - GR No. 158693 Case Digest
FACTS:
Petitioners were employed by Riviera Home as gypsum board and cornice installers from January 1992 to February 23, 1999 when they were dismissed for abandonment of work. Petitioners filed a complaint for illegal dismissal and was decided in their favor by the Labor Arbiter. Riviera appealed to the NLRC contending just cause for the dismissal because of petitioner’s abandonment of work. NLRC ruled there was just cause and petitioners were not entitled to backwages and separation pay. The CA in turn ruled that the dismissal was not illegal because they have abandoned their work but ordered the payment of money claims.
ISSUE:
Whether or not petitioners were illegally dismissed.
RULING:
To dismiss an employee, the law required not only the existence of a just and valid cause but also enjoins the employer to give the employee the right to be heard and to defend himself. Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. For a valid finding or abandonment, two factors are considered: failure to report for work without a valid reason; and, a clear intention to sever employer-employee relationship with the second as the more determinative factor which is manifested by overt acts from which it may be deduced that the employees has no more intention to work.
Where the employer had a valid reason to dismiss an employee but did not follow the due process requirement, the dismissal may be upheld but the employer will be penalized to pay an indemnity to the employee. This became known as the Wenphil Doctrine of the Belated Due process Rule.
Art. 279 means that the termination is illegal if it is not for any of the justifiable or authorized by law. Where the dismissal is for a just cause, the lack of statutory due process should not nullify the dismissal but the employer should indemnify the employee for the violation of his statutory rights. The indemnity should be stiffer to discourage the abhorrent practice of “dismiss now, pay later” which we sought to deter in Serrano ruling. The violation of employees’ rights warrants the payment of nominal damages.
Petitioners were employed by Riviera Home as gypsum board and cornice installers from January 1992 to February 23, 1999 when they were dismissed for abandonment of work. Petitioners filed a complaint for illegal dismissal and was decided in their favor by the Labor Arbiter. Riviera appealed to the NLRC contending just cause for the dismissal because of petitioner’s abandonment of work. NLRC ruled there was just cause and petitioners were not entitled to backwages and separation pay. The CA in turn ruled that the dismissal was not illegal because they have abandoned their work but ordered the payment of money claims.
ISSUE:
Whether or not petitioners were illegally dismissed.
RULING:
To dismiss an employee, the law required not only the existence of a just and valid cause but also enjoins the employer to give the employee the right to be heard and to defend himself. Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. For a valid finding or abandonment, two factors are considered: failure to report for work without a valid reason; and, a clear intention to sever employer-employee relationship with the second as the more determinative factor which is manifested by overt acts from which it may be deduced that the employees has no more intention to work.
Where the employer had a valid reason to dismiss an employee but did not follow the due process requirement, the dismissal may be upheld but the employer will be penalized to pay an indemnity to the employee. This became known as the Wenphil Doctrine of the Belated Due process Rule.
Art. 279 means that the termination is illegal if it is not for any of the justifiable or authorized by law. Where the dismissal is for a just cause, the lack of statutory due process should not nullify the dismissal but the employer should indemnify the employee for the violation of his statutory rights. The indemnity should be stiffer to discourage the abhorrent practice of “dismiss now, pay later” which we sought to deter in Serrano ruling. The violation of employees’ rights warrants the payment of nominal damages.
Serrano vs. NLRC / ISETANN - GR No. 117040 Case Digest
FACTS:
Serrano was a regular employee of Isetann Department Store as the head of Security Checker. In 1991, as a cost-cutting measure, Isetann phased out its entire security section and engaged the services of an independent security agency. Petitioner filed a complaint for illegal dismissal among others. Labor arbiter ruled in his favor as Isetann failed to establish that it had retrenched its security section to prevent or minimize losses to its business; that private respondent failed to accord due process to petitioner; that private respondent failed to use reasonable standards in selecting employees whose employment would be terminated. NLRC reversed the decision and ordered petitioner to be given separation pay.
ISSUE:
Whether or not the hiring of an independent security agency by the private respondent to replace its current security section a valid ground for the dismissal of the employees classed under the latter.
RULING:
An employer’s good faith in implementing a redundancy program is not necessarily put in doubt by the availment of the services of an independent contractor to replace the services of the terminated employees to promote economy and efficiency. Absent proof that management acted in a malicious or arbitrary manner, the Court will not interfere with the exercise of judgment by an employer.
If termination of employment is not for any of the cause provided by law, it is illegal and the employee should be reinstated and paid backwages. To contend that even if the termination is for a just cause, the employee concerned should be reinstated and paid backwages would be to amend Art 279 by adding another ground for considering dismissal illegal.
If it is shown that the employee was dismissed for any of the causes mentioned in Art 282, the in accordance with that article, he should not be reinstated but must be paid backwages from the time his employment was terminated until it is determined that the termination of employment is for a just cause because the failure to hear him before he is dismissed renders the termination without legal effect.
Serrano was a regular employee of Isetann Department Store as the head of Security Checker. In 1991, as a cost-cutting measure, Isetann phased out its entire security section and engaged the services of an independent security agency. Petitioner filed a complaint for illegal dismissal among others. Labor arbiter ruled in his favor as Isetann failed to establish that it had retrenched its security section to prevent or minimize losses to its business; that private respondent failed to accord due process to petitioner; that private respondent failed to use reasonable standards in selecting employees whose employment would be terminated. NLRC reversed the decision and ordered petitioner to be given separation pay.
ISSUE:
Whether or not the hiring of an independent security agency by the private respondent to replace its current security section a valid ground for the dismissal of the employees classed under the latter.
RULING:
An employer’s good faith in implementing a redundancy program is not necessarily put in doubt by the availment of the services of an independent contractor to replace the services of the terminated employees to promote economy and efficiency. Absent proof that management acted in a malicious or arbitrary manner, the Court will not interfere with the exercise of judgment by an employer.
If termination of employment is not for any of the cause provided by law, it is illegal and the employee should be reinstated and paid backwages. To contend that even if the termination is for a just cause, the employee concerned should be reinstated and paid backwages would be to amend Art 279 by adding another ground for considering dismissal illegal.
If it is shown that the employee was dismissed for any of the causes mentioned in Art 282, the in accordance with that article, he should not be reinstated but must be paid backwages from the time his employment was terminated until it is determined that the termination of employment is for a just cause because the failure to hear him before he is dismissed renders the termination without legal effect.
WENPHIL Corporation vs. NLRC - GR No. 80587 Case Digest
FACTS:
Private respondent Mallare had an altercation with a co-employee. The following day, the Operations Manager served them memorandum of suspension and in the afternoon of that same day, Mallare was dismissed from work. Labor Arbiter dismissed Mallare’s petition for unfair labor practice for lack of merit. NLRC reversed the decision and ordered the reinstatement of Mallare with full backwages of one year without qualification and deduction.
ISSUE:
Whether or not an employee dismissed for just cause but without due process be reinstated to work.
RULING:
The basic requirement of due proves is that which hears before it condemns, proceeds upon inquiry and renders judgment only after trial. The dismissal of an employee must be for a just cause and after due process. Petitioner committed an infraction of the second requirement thus it must be imposed a sanction for its failure to give a formal notice and conduct an investigation as required by law before dismissing Mallare from employment. Petitioner must indemnify the dismissed employee which depends on the facts of each case and the gravity of the omission committed by the employer.
Where the private respondent appears to be of violent temper, caused trouble during office hours and even defied his supervisors as they tried to pacify him, he should not be rewarded with re-employment and backwages. The dismissal of the respondent should be maintained.
_________________________
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Private respondent Mallare had an altercation with a co-employee. The following day, the Operations Manager served them memorandum of suspension and in the afternoon of that same day, Mallare was dismissed from work. Labor Arbiter dismissed Mallare’s petition for unfair labor practice for lack of merit. NLRC reversed the decision and ordered the reinstatement of Mallare with full backwages of one year without qualification and deduction.
ISSUE:
Whether or not an employee dismissed for just cause but without due process be reinstated to work.
RULING:
The basic requirement of due proves is that which hears before it condemns, proceeds upon inquiry and renders judgment only after trial. The dismissal of an employee must be for a just cause and after due process. Petitioner committed an infraction of the second requirement thus it must be imposed a sanction for its failure to give a formal notice and conduct an investigation as required by law before dismissing Mallare from employment. Petitioner must indemnify the dismissed employee which depends on the facts of each case and the gravity of the omission committed by the employer.
Where the private respondent appears to be of violent temper, caused trouble during office hours and even defied his supervisors as they tried to pacify him, he should not be rewarded with re-employment and backwages. The dismissal of the respondent should be maintained.
_________________________
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UST Faculty Union vs. Bitonio / BLR - GR No. 131235 Case Digest
FACTS:
Private respondent Marinio et al were duly elected officers of UST faculty. The union has a 5-year CBA with its employer and is set to expire on May 31, 1998. On October 5, 1996 various UST club presidents requested a general faculty assembly thus union and non-union faculty members convened. New set of officers were elected, violative of the CBL and that the GA was held with non-union members present. Union officers were served with a notice to vacate the union office, and CBA was ratified by an overwhelming majority. Med-Arbiter declared the election violative of the CBL while BLR director Bitonio upheld the decision with a ruling that the CBL which constituted the covenant between the union and its members could not be suspended during the general assembly of all faculty members, since it ha not been authorized by the union.
ISSUES:
Whether or not the public respondent committed grave abuse of discretion in refusing to recognize the officers elected during the “general assembly”.
RULING:
Self-organization is a fundamental right guaranteed by the Constitution and the Labor Code. Corollary to this right is the prerogative not to join, affiliate with or assist a labor union. Therefore, to become a union member, an employee must not only signify the intent to become one, but also take some positive steps to realize that intent. The procedure for union membership is usually embodied in the union’s CBL. An employee who becomes a union member acquires the rights and he concomitant obligations that go with the new status and becomes bound by the union’s rules and regulations.
Private respondent Marinio et al were duly elected officers of UST faculty. The union has a 5-year CBA with its employer and is set to expire on May 31, 1998. On October 5, 1996 various UST club presidents requested a general faculty assembly thus union and non-union faculty members convened. New set of officers were elected, violative of the CBL and that the GA was held with non-union members present. Union officers were served with a notice to vacate the union office, and CBA was ratified by an overwhelming majority. Med-Arbiter declared the election violative of the CBL while BLR director Bitonio upheld the decision with a ruling that the CBL which constituted the covenant between the union and its members could not be suspended during the general assembly of all faculty members, since it ha not been authorized by the union.
ISSUES:
Whether or not the public respondent committed grave abuse of discretion in refusing to recognize the officers elected during the “general assembly”.
RULING:
Self-organization is a fundamental right guaranteed by the Constitution and the Labor Code. Corollary to this right is the prerogative not to join, affiliate with or assist a labor union. Therefore, to become a union member, an employee must not only signify the intent to become one, but also take some positive steps to realize that intent. The procedure for union membership is usually embodied in the union’s CBL. An employee who becomes a union member acquires the rights and he concomitant obligations that go with the new status and becomes bound by the union’s rules and regulations.
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