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Serrano v NLRC [G.R. No.

117040, January 27, 2000] FACTS: Petitioner was hired by the Respondent Isetann Department Store as a security checker to apprehend shoplifters. As a cost-cutting measure, private respondent decided to phase out its security section engage the services of an independent security agency. Petitioner was then terminated prompting him to file a complaint for illegal dismissal. NLRC ordered petitioner to be given separation pay holding that the phase-out of the security section was a legitimate business decision. However, respondent was denied the right to be given written notice before termination of his employment.

ISSUE: What is the effect of violation of the notice requirement when termination is based on an authorized cause?

HELD: The Wenphil doctrine stated that it was unjust to require an employer to reinstate an employee if, although termination is made with cause, if due process was not satisfied. The remedy was to orderthe payment to the employees of full backwages from the time of his dismissal until the court finds that the dismissal was for a just cause. But his dismissal must be upheld and he should not be reinstated. This is because the dismissal is ineffectual. In termination of employment under Art. 283, the violation of notice requirements is not a denial of due process as the purpose is not to afford the employee an opportunity to be heard on any charge against him for there is none. The purpose is to give him time to prepare for the eventual loss of his job and the DOLE to determine whether economic causes do exist justifying the termination of his employment. With respect to Art. 283, the employers failure t o comply with the notice requirement does not constitute a denial of due process but a mere failure to observe a procedure for the termination of employment which makes the termination of employment merely ineffectual. If the employees separation is without cause, instead of being given separation pay, he should be reinstated. In either case, whether he is reinstated or given separation pay, he should be paid full backwages if he has been laid off without written notice at least 30 days in advance. With respect to dismissals under 282, if he was dismissed for any of the just causes in 282, he should not be reinstated. However, he must be paid backwages from the time his employment was terminated until it is determined that the termination is for a just cause because the failure to hear him renders the termination of his employment without legal effect.

SMC thereafter wrote a letter to petitioner informing him that,owing to the implementation of the preselling operationsscheme, all positions of route and warehouse personnel will bedeclared redundant and the Sum-ag Sales Office will be closedeffective April 30, 1996. Thus, from April 1, 1996 to May 15,1996, petitioner reported to respondents PersonnelDepartment at the Sta. Fe Brewery, pursuant to a previousdirective.Thereafter, the employees of Sum-ag sales force wereinformed that they can avail of respondents early retirementpackage pursuant to the retrenchment program, while thosewho will not avail of early retirement would be redeployed orabsorbed at the Brewery or other sales offices.Petitioner opted to remain and manifested to Acting PersonnelManager Salvador Abadesco his willingness to be assigned toany job, considering that he had three children in college.Petitioner was surprised when he was informed by the ActingPersonnel Manager that his name was included in the list of employees who availed of the early retirement package.Petitioner s request that he be given an assignment in thecompany was ignored by the Acting Personnel Manager.- Petitioner thus filed a complaint for illegal dismissal with theNLRC.- The Labor Arbiter dismissed the complaint for lack of merit.- Petitioner appealed to the NLRC which set aside the LaborArbiters decision and ordered respondent SMC to reinstatepeti tioner to his former or equivalent position with fullbackwages.Respondent filed a petition with the Court of Appeals whichreversed the decision of the NLRC and reinstated the judgmentof the Labor Arbiter dismissing the complaint for illegaldis missal.- Petitioners motion for reconsideration]was denied. ISSUE WON the dismissal of petitioner is based on a just andauthorized cause HELD NO-Dole Philippines, Inc. v. NLRC, citing the leading case of Wiltshire File Co., Inc. v. NLRC: redundancy in an employers personnel force necessarily or even ordinarily refers to duplicationof work. That noother person was holding the same position that privaterespondent held prior to the termination of his services, does not show that his position had not become redundant.Indeed, in any well-organized business enterprise, it wouldbe surprising to find duplication of work and two (2) ormore people doing the work of one person. We believe thatredundancy, for purposes of the Labor Code, exists wherethe services of an employee are in excess of what isreasonably demanded by the actual requirements of theenterprise. Succinctly put, a position is redundant where itis superfluous, and superfluity of a position or positionsmay be the outcome of a number of factors, such asoverhiring of workers, decreased volume of busines s, ordropping of a particular product line or service activitypreviously manufactured or undertaken by the enterprise.The determination that employees services are no longernecessary or sustainable and, therefore, properly terminable isan exercise of business judgment of the employer.- The wisdom or soundness of this judgment is not subject todiscretionary review of the Labor Arbiter and the NLRC,provided there is no violation of law and no showing that it wasprompted by an arbitrary or malicious act.- It is not enough for a company to merely declare that it hasbecome overmanned. It must produce adequate proof that suchis the actual situation to justify the dismissal of the affectedemployees for redundancy.- Persuasive as the explanation proffered by respondent may beto justify the dismissal of petitioner, a number of disturbingcircumstances, however, leave the Court unconvinced.1. Of the 23 SMC employees assigned at the Sum-ag SalesOffice/Warehouse, 9 accepted the offer of SMC to avail of

ASUFRIN JR V SAN MIGUEL CORP 425 SCRA 270YNARES-SANTIAGO; March 10, 2004 FACTS - Coca Cola Plant, then a department of respondent San MiguelBeer Corporation (SMC), hired petitioner as autility/miscellan eous worker.- He became a regular employee paid on daily basis as a ForkliftOperator. Then became a monthly paid employee promoted asStock Clerk.- The sales office and operations at the Sum-ag, Bacolod CitySales Office were reorganized. Several positions wereabolished including petitioners position as Stock Clerk. Afterreviewing petitioners qualifications, he was designatedw arehouse checker at the Sum-ag Sales Office.- SMC implemented a new marketing system known as the preselling scheme at the Sumag Beer Sales Office. As aconsequence, all positions of route sales an d warehousepersonnel were declared redundant. Respondent notified theDOLE Director of Region VI that 22 personnel of the SalesDepartment of the Negros Operations Center would be retired.-

theearly retirement whose separation benefits was computed at250% of their regular pay. The rest, including petitioner, didnot accept the offer. Out of the remaining fourteen14,only petitioner clearly manifested, through several letters, hisdesire to be redeployed to the Sta. Fe Brewery or any salesoffice and forany position not necessarily limited to that of a warehouse checker. In short, he was even willing to accepta demotion just to continue his employment. Meanwhile,other employees whodid not even write a letter to SMC wereredeployed to the Sta. Fe Brewery or absorbed by otheroffices/outlets outside Bacolod City.2. Petitioner was in the payroll of the Sta. Fe Brewery andassigned to the Materials Section, Logistics Department,although he was actually posted at the Sum-ag Warehouse. Thus, even assuming that his position in the SumagWarehouse became redundant, he should have been returnedto the Sta. Fe Brewery where he was actually assigned andwhere there were vacant positions to accommodate him.3. It appears that despite respondents allegation that itceased and closed down its warehousing operations at theSum-ag Sales Office, actually it is still used for warehousingactivities and as a transit point where buyers and dealers gettheir stocks.4. In selecting employees to be dismissed, a fair andreasonable criteria must be used, such as but not limited to(a) less preferred status, e.g.temporary employee; (b)efficiency; and (c) seniority. In the case at bar,no criterionwhatsoever was adopted by respondent in dismissingpetitioner. - Furthermore, as correctly observed by the NLRC,respondent has not shown how the cessation of operationsof the Sum-ag Sales Office contributed to the ways andmeans of improving effectiveness of the organization with theend in view of efficiency and cutting distribution overheadand other related costs.Respondent, thus, clearly resorted to sweepinggeneralization[s] in dismissing complainant. Indeed,petitioners predicament may have something to do with anincident where he incurred the ire of an immediate superior inthe Sales Logistics Unit for exposing certain irregularitiescommitte d by the latter.- Whether it be by redundancy or retrenchment or any of theother authorized causes, no employee may be dismissedwithout observance of the fundamentals of good faith.- It is not difficult for employers to abolish positions in the guiseof a cost-cutting measure and we should not be easily swayedby such schemes which all too often reduce to near nothingwhat is left of the rubble of rights of our exploited workers.- Given the nature of petitioners job as a Warehouse Checker, itis inconceivable that respondent could not accommodate hisservices considering that the warehousing operations at Sum-agSales Office has not shut down.- To sustain the position taken by the appellate court wouldbeto dilute the workingmans most important right: hisconstitut ional right to security of tenure.- While respondent may have offered a generous compensationpackage to those whose services were terminated upon theimplementation of the preselling scheme, we find such anoffer, in the face of the prevailing facts, anathema to theunderlying principles whi ch give life to our labor statutesbecause it would be tantamount to lik ening an employer-employee relationship to a salesman and a purchaser of acommodity.- To quote what has been aptly stated by former GovernorGeneral Leonard Wood in his inaugural message before the 6th Philippine Legislature on October 27, 1922 labor is neither achattel nor a commodity, but human and must be dealt withfrom the standpoint of human interest.As has been said: We do not treat our workers asmerchandise and their right to security of tenure cannot bevalued in precise pesoand-centavo terms. It is a right whichcannot be allowed to be

devalued by the purchasing power of employers who are only too willing to bankroll the separationpay of their illegally dismissed employees to get rid of them.- This right will never be respected by the employer if wemerely honor it with a price tag. The policy of dismiss now andpay later favors moneyed employers and is a mockery of theright of employees to social justice. Disposition. The petition was granted.

Lopez Sugar Corporation v. Federation of Free Workers LOPEZ SUGAR CORPORATION V. FEDERATION OF FREE WORKERS, PHILIPPINELABOR UNION ASSOCIATION (PLUA-NACUSIP) AND NATIONAL LABOR RELATIONSCOMMISSION189 SCRA 179J. FELICIANO. FACTS Private respondent Federation of Free Workers ("FFW"), as the certified bargainingagent of the rank-and-file employees of petitioner, filed with the Ministry of Labor andEmployment a complaint for unfair labor practices and recovery of union dues.In said complainant, FFW claimed that the terminations undertaken by petitioner wereviolative of the security of tenure of its members and were intended to "bust" theunion and hence constituted an unfair labor practice.FFW claimed that after the termination of the services of its members, petitioner advised110 casuals to report to its personnel office. FFW further argued that to justifyretrenchment, serious business reverses must be "actual, real and amply supportedby sufficient and convincing evidence." FFW prayed for reinstatement of its memberswho had been retired or retrenched.The Labor Arbiter denied petitioner's application for clearance to retrench its employeeson the ground that for retrenchment to be valid, the employer's losses must beserious, actual and real and must be amply supported by sufficient and convincingevidence.Petitioner was ordered to reinstate twenty-seven retired or retrenched employeesrepresented by private respondent Philippine Labor Union Association and FFW andto pay them full backwages from the time of termination until actual reinstatement.Both dissatisfied with the Labor Arbiter's decision, petitioner and respondent FFWappealed the case to public respondent NLRC. On appeal, the NLRC, finding no justifiable reason for disturbing the decision of the Labor Arbiter, affirmed thatdecision. Hence, this Petition for certiorari.ISSUE Is petitioner justified in the retrenchment of the private respondents? HELDNO.The retrenchment is unjustified. Petitioner argues that under the law, it has the right toreduce its workforce if made necessary by economic factors which would endanger itsexistence, and that for retrenchment to be valid, it is not necessary that losses be actuallysustained. Article 283 of the Labor Code provides for the authorized causes of termination ofemployment. In its ordinary connotation, he phrase "to prevent losses" means thatretrenchment or termination of the services of some employees is authorized to beundertaken by the employer sometime before the losses anticipated are actually sustainedor realized. It is not, in other words, the intention of the lawmaker to compel the employer tostay his hand and keep all his employees until sometime after losses shall have in factmaterialized ; if such an intent were expressly written into the law, that law may well bevulnerable to constitutional attack as taking property from one man to give to another. Thisis simple enough.At the other end of the spectrum, it seems equally clear that not every asserted possibility ofloss is sufficient legal warrant for reduction of

personnel. In the nature of things, thepossibility of incurring losses is constantly present, in greater or lesser degree, in thecarrying on of business operations, since some, indeed many, of the factors which impactupon the profitability or viability of such operations may be substantially outside the controlof the employer. Thus, the difficult question is determination of when, or under whatcircumstances, the employer becomes legally privileged to retrench and reduce the numberof his employees.The following are the general standards in terms of which the acts of petitioner employermust be appraised. 1. The losses expected should be substantial and not merely de minimis in extent. 2. The substantial loss apprehended must be reasonably imminent, as suchimminence can be perceived objectively and in good faith by the employer. There should, inother words, be a certain degree of urgency for the retrenchment, which is after all a drasticrecourse with serious consequences for the livelihood of the employees retired or otherwiselaid-off. Because of the consequential nature of retrenchment, it must, 3. be reasonablynecessary and likely to effectively prevent the expected losses. The employer should havetaken other measures prior or parallel to retrenchment to forestall losses, i.e., cut other coststhan labor costs. Whether or not an employer would imminently suffer serious or substantiallosses for economic reasons is essentially a question of fact for the Labor Arbiter and theNLRC to determine. In the instant case, the Labor Arbiter found no sufficient and convincingevidence to sustain petitioner's essential contention that it was acting in order to preventsubstantial and serious losses.

They were not recalled since then. 9. Private respondents joined the Lakas ng Manggagawa sa Pilipinas Labor Union (Lakas Union) and, through the latter union, filed a notice of strike against API on the ground of unfair labor practice. The Labor Arbiter declared the strike as illegal. 10. Meanwhile, at the instance of several employees which included private respondents Boaquina and Gayola, a complaint for illegal dismissal, violation of labor standards and separation pay, as well as for recovery of moral and exemplary damages, was filed against API and/or Frank Yih (API's President) before the NLRC National Capital Region Arbitration Branch. 11. The Labor Arbiter declared the private respondent's dismissal as illegal. On appeal, NLRC modified the Labor Arbiter's decision declaring that private respondents were not illegally dismissed but were validly terminated due to the retrenchment policy implemented by API. ISSUE 1. Whether or not private respondents who are officers of Lakas Union are still entitled to separation pay and indemnity despite having participated in a strike that has been declared illegal. 2. Whether or not a stockholder/director/officer of a corporation can be held liable for the obligation of the corporation absent any proof and finding of bad faith. HELD Anent the first issue, we must rule in the negative. It is quite evident that the termination of employment of privaterespondents was due to the retrenchment policy adopted by API and not because of the former's union activities. The decision of Labor Arbiter, declaring private respondents to have lost their employment status due to their participation in an illegal strike is of no really significance to petitioners. It should suffice to say, as so aptly observed by the NLRC, that the retrenchment of private respondents has, in fact, preceded the declaration of strike. It is, instead, on the issue of joint and solidary liability of petitioner Frank Yih with API that the Court has decided to give due course to the instant petition. The court cannot agree with the Solicitor-General in suggesting that even if Frank Yih had no direct hand in the dismissal of the respondents he should be personally liable therefor on account alone of his being the President and majority stockholder of the company. In Sunio vs. NLRC, petitioner

Asionics Philippines, Inc. v. NLRC ASIONICS PHILIPPINES VS. NLRC 290 SCRA 164 VITUG, J. FACTS 1. API is a domestic corporation engaged in the business of assembling semiconductor chips and other electronic products mainly for export. 2. Yolanda Boaquina and Juana Gayola started working for API in 1979 and 1988, respectively, as material control clerk and as production operator. 3. During the third quarter of 1992, API commenced negotiations with the duly recognized bargaining agent of its employees, the Federation of Free Workers ("FFW"), for a Collective Bargaining Agreement ("CBA"). 4. A deadlock, however, ensued and the union decided to file a notice of strike. This event prompted the two customers of API, Indala and CP Clare Theta J, to thereupon refrain from sending to API additional kits or materials for assembly. 5. API, given the circumstance that its assembly line had to thereby grind to a halt, was forced to suspend operations pursuant to Article 286 of the Labor Code. Private respondents Boaquina and Gayola were among the employees asked to take a leave from work. 6. Upon the resolution of the bargaining deadlock in October of 1992, a CBA was concluded between API and FFW. 7. Subsequently, and inasmuch as its business activity remained critical, API was constrained to implement a company-wide retrenchment affecting one hundred five (105) employees from a work force that otherwise totalled three hundred four (304). 8. Boaquina and Gayola were ordered by API to take an indefinite leave of absence.

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hotel enterprises of the philippines vs samasah

ME-SHURN CORPORATION V. ME-SHURN WORKERS UNION Facts: On June 7, 1998, the regular rank and file employees of Me-Shurn Corporation organized Me-Shurn Workers Union-FSM, an affiliate of the February Six Movement (FSM).6 Respondent union had a pending application for registration with the Bureau of Labor Relations (BLR) through a letter dated June 11, 1998. Ten days later, or on June 17, 1998, petitioner corporation started placing on forced leave all the rank and file employees who were members of the unions bargaining unit. On June 23, 1998, respondent union filed a Petition for Certification Election with the Med-Arbitration Unit of the Department of Labor and Employment (DOLE), Regional Office No. 3. Instead of filing an answer to the Petition, the corporation filed on July 27, 1998, a comment stating that it would temporarily lay off employees and cease operations, on account of its alleged inability to meet the export quota required by the Board of Investment. While the Petition was pending, 184 union members allegedly submitted a retraction/withdrawal thereof on July 14, 1998. As a consequence, the med-arbiter dismissed the Petition. On May 7, 1999, DOLE Undersecretary Rosalinda Dimapilis-Baldoz granted the unions appeal and ordered the holding of a certification election among the rank and file employees of the corporation. Meanwhile, on August 4, 1998, respondent union filed a Notice of Strike against petitioner corporation on the ground of unfair labor practice (illegal lockout and union busting). This matter was docketed as Case No. NCMB-RO3-BEZ-NZ-08-42-98. On August 31, 1998, Chou Fang Kuen (alias Sammy Chou, the other petitioner herein) and Raquel Lamayra (the Filipino administrative manager of the corporation) imposed a precondition for the resumption of operation and the rehiring of laid off workers. He allegedly required the remaining union officers to sign an Agreement containing a guarantee that upon their return to work, no union or labor organization would be organized. Instead, the union officers were to serve as mediators between labor and management. After the signing of the Agreement, the operations of the corporation resumed in September 1998. On November 5, 1998, the union reorganized and elected a new set of officers. Respondent Rosalina Cruz was elected president. Thereafter, it filed two Complaints docketed as NLRC Case Nos. RAB-III-119586-98 and RAB-III-09-0322-99. These cases were consolidated and assigned to Labor Arbiter Henry Isorena for compulsory arbitration. Respondents charged petitioner corporation with unfair labor practice, illegal dismissal, underpayment of wages and deficiency in separation pay, for which they prayed for damages and attorneys fees. The corporation countered that because of economic reversals, it was compelled to close and cease its operations to prevent serious business losses.

Petitioner corporation questioned the legality of the representation of respondent union. Allegedly, it was not the latter, but the Me-Shurn Independent Employees Union with Christopher Malit as president that was recognized as the existing exclusive bargaining agent of the rank and file employees and as the one that had concluded a Collective Bargaining Agreement (CBA) with the corporation on May 19, 1999.16 Hence, the corporation asserted that Undersecretary Dimapilis-Baldozs Decision ordering the holding of a certification election had become moot and academic. On the other hand, respondents contested the legality of the formation of the Me-Shurn Independent Employees Union and petitioners recognition of it as the exclusive bargaining agent of the employees. Respondents argued that the pendency of the representation issue before the DOLE had barred the alleged recognition of the aforementioned union. Labor Arbiter Isorena dismissed the Complaints for lack of merit. On appeal, the NLRC reversed the Decision of Labor Arbiter Isorena. Finding petitioners guilty of unfair labor practice, the Commission ruled that the closure of the corporation shortly after respondent union had been organized, as well as the dismissal of the employees, had been effected under false pretenses. The true reason therefor was allegedly to bar the formation of the union. Accordingly, the NLRC held that the illegally dismissed employees were entitled to back wages.18 After the denial of their Motion for Reconsideration, petitioners elevated the cases to the CA via a Petition for Certiorari under Rule 65. Petitioners added that respondent unions personality to represent the affected employees had already been repudiated by the workers themselves in the certification election conducted by the DOLE. Pursuant to the Decision of Undersecretary Dimapilis-Baldoz in Case No. RO3 00 9806 RU 001, a certification election was held on September 7, 2000, at the premises of petitioner corporation under the supervision of the DOLE. Ruling of the Court of Appeals The CA dismissed the Petition because of the failure of petitioners to submit sufficient proof of business losses. It found that they had wanted merely to abort or frustrate the formation of respondent union. The burden of proving that the dismissal of the employees was for a valid or authorized cause rested on the employer. The appellate court further affirmed the unions legal personality to represent the employees. It held that (1) registration was not a prerequisite to the right of a labor organization to litigate; and (2) the cases may be treated as representative suits, with respondent union acting for the benefit of all its members. Hence, this Petition. Issues: (1) Whether the dismissal of the employees of petitioner Meshurn Corporation is for an authorized cause, and (2) Whether respondents can maintain a suit against petitioners. HELD: The Petition lacks merit. Validity of the Dismissal

The reason invoked by petitioners to justify the cessation of corporate operations was alleged business losses. Yet, other than generally referring to the financial crisis in 1998 and to their supposed difficulty in obtaining an export quota, interestingly, they never presented any report on the financial operations of the corporation during the period before its shutdown. Neither did they submit any credible evidence to substantiate their allegation of business losses. We also take note of the allegation that after several years of attempting to organize a union, the employees finally succeeded on June 7, 1998. Ten days later, without any valid notice, all of them were placed on forced leave, allegedly because of lack of quota. All these considerations give credence to their claim that the closure of the corporation was a mere subterfuge, a systematic approach intended to dampen the enthusiasm of the union members. Third, as a condition for the rehiring of the employees, the union officers were made to sign an agreement that they would not form any union upon their return to work. This move was contrary to law. Fourth, notwithstanding the Petition for Certification Election filed by respondents and despite knowledge of the pendency thereof, petitioners recognized a newly formed union and hastily signed with it an alleged Collective Bargaining Agreement. Their preference for the new union was at the expense of respondent union. Moncada Bijon Factory v. CIR held that an employer could be held guilty of discrimination, even if the preferred union was not companydominated. Fifth, petitioners were not able to prove their allegation that some of the employees contracts had expired even before the cessation of operations. We find this claim inconsistent with their position that all 342 employees of the corporation were paid their separation pay plus accrued benefits in August 1998. Sixth, proper written notices of the closure were not sent to the DOLE and the employees at least one month before the effectivity date of the termination, as required under the Labor Code. Notice to the DOLE is mandatory to enable the proper authorities to ascertain whether the closure and/or dismissals were being done in good faith and not just as a pretext for evading compliance with the employers just obligations to the affected employees. This requirement is intended to protect the workers right to security of tenure. The absence of such requirement taints the dismissal. All these factors strongly give credence to the contention of respondents that the real reason behind the shutdown of the corporation was the formation of their union. Note that, to constitute an unfair labor practice, the dismissal need not entirely and exclusively be motivated by the unions activities or affiliations. It is enough that the discrimination was a contributing factor. If the basic inspiration for the act of the employer is derived from the affiliation or activities of the union, the formers assignment of another reason, no matter how seemingly valid, is unavailing. Legal Personality of Respondent Union Neither are we prepared to believe petitioners argument that respondent union was not legitimate. It should be pointed out that on June 29, 1998, it filed a Petition for Certification Election. While this Petition was initially dismissed by the med-arbiter on the basis of a supposed retraction, note that the appeal was granted and that Undersecretary Dimapilis-Baldoz ordered the holding of a certification election. The DOLE would not have entertained the Petition if the union were not a legitimate labor organization within the meaning of the Labor Code. Under this Code, in an unorganized establishment, only a

legitimate union may file a petition for certification election.34 Hence, while it is not clear from the record whether respondent union is a legitimate organization, we are not readily inclined to believe otherwise, especially in the light of the pro-labor policies enshrined in the Constitution and the Labor Code. Verily, the union has the requisite personality to sue in its own name in order to challenge the unfair labor practice committed by petitioners against it and its members. It would be an unwarranted impairment of the right to self-organization through formation of labor associations if thereafter such collective entities would be barred from instituting action in their representative capacity. Finally, in view of the discriminatory acts committed by petitioners against respondent union prior to the holding of the the pending Petition for certification election the results of that election cannot be said to constitute a repudiation by the affected employees of the unions right to represent them in the present case. WHEREFORE, the Petition is DENIED, and the assailed Decision AFFIRMED. Costs against the certification election on September 27, 2000 acts that included their immediate grant of exclusive recognition to another union as a bargaining agent despite petitioners. SO ORDERED.