Opinaldo v.

Ravina
G.R. No. 196573 October 16, 2013

Opinaldo worked as a security guard for St. Louisse Security Agency while Ravina is the general
manager and sole proprietor of the said agency. Opinaldo was detailed to PAIJR Furniture Accessories
which later requested Ravina to relieve Olpino from its company due to health reasons. Ravina relieved
respondent and required him to submit a medical certificate to prove that he is physically and mentally fit
to work as a security guard. Meanwhile, Ravina assigned Opinaldo to Gomez Construction. After working
and upon receipt of his salary, Opinaldo ceased to report for work. According to the records, this was the
last assignment given to him. Later, Opinaldo filed a complaint against Ravina with the DOLE for
underpayment of salary and nonpayment of other labor standard benefits. The parties agreed to settle
and reached a compromise agreement and Opinaldo signed a Quitclaim and Release before the DOLE
for the amount of P5,000.

After almost four weeks from the settlement of the case, Opinaldo returned to Ravinas office.
Ravina refused to sign an SSS Sickness Notification presented by Opinaldo, which he was going to use
in order to avail of the discounted fees for a medical check-up, and informed him that he was no longer an
employee in view of the quitclaim he signed. Thus, Opinaldo filed a complaint for illegal dismissal. Ravina,
however, counterclaims that she did not illegally dismiss petitioner and that it was a valid exercise of
management prerogative that he was not given any assignment pending the submission of the required
medical certificate of his fitness to work.

Is it a valid exercise of management prerogative on the part of Ravia not to give Opinaldo any
work assignment pending submission of his medical certificate?

NO. True, Ravinas act of requiring Opinaldo to undergo a medical examination and submit a
medical certificate is a valid exercise of management prerogative, considering the reason behind PAIJRs
request to relieve Opinaldo from its company. To be sure, petitioners job as security guard naturally
requires physical and mental fitness under Section 5 of Republic Act No. 5487, as amended by
Presidential Decree No. 100.

However, while it is a management prerogative to require Opinaldo to
submit a medical certificate, the SC held that Ravina cannot withhold his employment without observing
the principles of due process and fair play. There is no evidence on record which establishes that Ravina
informed Opinaldo that his failure to submit the required medical certificate will result in his lack of work
assignment. It is a basic principle of labor protection in this jurisdiction that a worker cannot be deprived
of his job without satisfying the requirements of due process. Labor is property and the right to make it
available is next in importance to the rights of life and liberty. As enshrined under the Bill of Rights, no
person shall be deprived of life, liberty or property without due process of law. The due process
requirement in the deprivation of ones employment is transcendental that it limits the exercise of the
management prerogative of the employer to control and regulate the affairs of the business.

Manila Polo Club Employees Union (MPCEU) v. Manila Polo Club, Inc.
G.R. No. 172846 July 24, 2013

MPCEU (the union), is a legitimate labor organization duly registered with the DOLE. Manila Polo
Club, Inc. is a non-profit and proprietary membership organization which provides recreation and sports
facilities to its proprietary members, their dependents, and guests.

The Board of Directors of the Club unanimously resolved to completely terminate the entire
operations of its Food and Beverage (F & B) outlets due to substantial losses incurred, and award its
operations to a qualified restaurant operator or caterer. Subsequently, the Board approved the
implementation of the retrenchment program of employees who are directly and indirectly involved with
the operations of the F & B outlets and authorized its General Manager to pay the employees separation
pay following a specific scheme. The Club likewise sent notices to the union and the affected employees
(via registered mail) as well as submitted an Establishment Termination Report to the DOLE. Unaware yet
of the termination notice sent to them, the affected employees were surprised when they were prevented
from entering the Club premises as they reported for work. They later learned that the F & B operations of
respondent had been awarded to Makati Skyline, Inc. effective that day.

WON the retrenchment was valid

This case involves a closure of business undertaking, not retrenchment. The legal requirements
and consequences of these two authorized causes in the termination of employment are discernible.

RETRENCHMENT CLOSURE OF BUSINESS
Reduction of personnel to cut down costs of
operations


Reversal of fortune of the employer whereby there
is a complete cessation of business operations to
prevent further financial drain upon an employer
who cannot pay anymore his employees since
business has already stopped
As an authorized cause, it is the termination of
employment initiated by the employer, through no
fault of the employees, during periods of business
recession, industrial depression, or seasonal
fluctuations, or during lulls occasioned by lack of
orders, shortage of materials, conversion of the
plant for a new production program or the
introduction of new methods or more efficient
machinery, or of automation
As an authorized cause of termination of
employment, evidence of actual or imminent
reversal of the employers fortune is not necessary.

Article 283 authorizes termination of employment
due to business closure, regardless of the
underlying reasons and motivations therefor, be it
financial losses or not.
Requirements to be a valid management
prerogative:
1. Necessity of retrenchment to prevent losses,
with proof, by sufficient and convincing
evidence such as the employer's financial
statements audited by an independent and
credible external auditor, that such losses are
substantial and not merely flimsy and actual or
reasonably imminent; and that retrenchment is
the only effective measure to prevent such
imminent losses;
2. Written notice served on to the employees and
the DOLE at least one (1) month prior to the
intended date of retrenchment; and
3. Retrenched employees receive separation pay
equivalent to one (1) month pay or at least
one-half (1/2) month pay for every year of
service, whichever is higher.
Requirements for a valid cessation of business
operations:
1. service of a written notice to the employees
and to the DOLE at least one month before the
intended date thereof
2. the cessation of business must be bona fide in
character; and
3. payment to the employees of termination pay
amounting to one month pay or at least one-
half month pay for every year of service,
whichever is higher.

One of the prerogatives of management is the decision to close the entire establishment or to close or
abolish a department or section thereof for economic reasons, such as to minimize expenses and reduce
capitalization. For any bona fide reason, an employer can lawfully close shop anytime. Just as no law
forces anyone to go into business, no law can compel anybody to continue the same. It would be
stretching the intent and spirit of the law if a court interferes with management's prerogative to close or
cease its business operations just because the business is not suffering from any loss or because of the
desire to provide the workers continued employment. Here, the closure of the F & B Department was due
to legitimate business considerations. There is nothing on record to indicate that the closure was made in
bad faith. It was not motivated by any specific and clearly determinable union activity of the employees;
rather, it was truly dictated by economic necessity. While the Labor Code provides for the payment of
separation package in case of retrenchment to prevent losses, it does not obligate the employer for the
payment thereof if there is closure of business due to serious losses.

Some principles on closure of business:
1. Closure or cessation of operations of establishment or undertaking may either be partial or total.
2. Closure or cessation of operations of establishment or undertaking may or may not be due to
serious business losses or financial reverses. However, in both instances, proof must be shown
that: (1) it was done in good faith to advance the employer's interest and not for the purpose of
defeating or circumventing the rights of employees under the law or a valid agreement; and (2) a
written notice on the affected employees and the DOLE is served at least one month before the
intended date of termination of employment.
3. The employer can lawfully close shop even if not due to serious business losses or financial
reverses but separation pay, which is equivalent to at least one month pay as provided for by
Article 283 of the Labor Code, as amended, must be given to all the affected employees.
4. If the closure or cessation of operations of establishment or undertaking is due to serious
business losses or financial reverses, the employer must prove such allegation in order to avoid
the payment of separation pay. Otherwise, the affected employees are entitled to separation pay.
5. The burden of proving compliance with all the above-stated falls upon the employer.