February 2011 Philippine Supreme Court Decisions on Labor Law and Procedure

Here are selected February 2011 rulings of the Supreme Court of the Philippines on labor law and procedure:

Abandonment; elements. Respondents filed an illegal dismissal case against the petitioner-corporation. For its defense, petitioner-corporation alleged that the respondents abandoned their work and were not dismissed, and that it sent letters advising respondents to report for work, but they refused. The Court held that for abandonment to exist, it is essential (a) that the employee must have failed to report for work or must have been absent without valid or justifiable reason; and (b) that there must have been a clear intention to sever the employer-employee relationship manifested by some overt acts. The employer has the burden of proof to show the employee’s deliberate and unjustified refusal to resume his employment without any intention of returning. Mere absence is not sufficient. There must be an unequivocal intent on the part of the employee to discontinue his employment. Based on the evidence presented, the reason why respondents failed to report for work was because petitioner-corporation barred them from entering its construction sites. It is a settled rule that failure to report for work after a notice to return to work has been served does not necessarily constitute abandonment. The intent to discontinue the employment must be shown by clear proof that it was deliberate and unjustified. Petitioner-corporation failed to show overt acts committed by respondents from which it may be deduced that they had no more intention to work.  Respondents’ filing of the case for illegal dismissal barely four (4) days from their alleged abandonment is totally inconsistent with the known concept of what constitutes abandonment. E.G. & I. Construction Corporation and Edsel Galeos v. Ananias P. Sato, et al., G.R. No. 182070, February 16, 2011.

Certification election; petition for cancellation of union registration. Respondent union filed a petition for certification election. Petitioner moved to dismiss the petition for certification election alleging the pendency of a petition for cancellation of the union’s registration. The DOLE Secretary ruled in favor of the legitimacy of the respondent as a labor organization and ordered the immediate conduct of a certification election. Pending appeal in the Court of Appeals, the petition for cancellation was granted and became final and executory. Petitioner argued that the cancellation of the union’s certificate of registration should retroact to the time of its issuance. Thus, it claimed that the union’s petition for certification election and its demand to enter into collective bargaining agreement with the petitioner should be dismissed due to respondent’s lack of legal personality. The Court ruled that the pendency of a petition for cancellation of union registration does not preclude collective bargaining, and that an order to hold a certification election is proper despite the pendency of the petition for cancellation of the union’s registration because at the time the respondent union filed its petition, it still had the legal personality to perform such act absent an order cancelling its registration.  Legend International Resorts Limited v. Kilusang Manggagawa ng Legenda, G.R. No. 169754, February 23, 2011.

Certiorari under Rule 65; review of facts by the Court of Appeals. While it is true that factual findings made by quasi-judicial and administrative tribunals, if supported by substantial evidence, are accorded great respect and even finality by the courts, this general rule admits of exceptions.  When there is a showing that a palpable and demonstrable mistake that needs rectification has been committed or when the factual findings were arrived at arbitrarily or in disregard of the evidence on record, these findings may be examined by the courts. In the present case, the Court of Appeals found itself unable to completely sustain the findings of the NLRC thus, it was compelled to review the facts and evidence and not limit itself to the issue of grave abuse of discretion. Nelson A. Culili v. Eastern Telecommunications Philippines, Inc., et al. G.R. No. 165381, February 9, 2011.

Construction Industry; project employees. Petitioner is a duly licensed labor contractor engaged in painting houses and buildings. Respondents, former painters of the petitioner, filed an illegal dismissal case against petitioner. Petitioner alleged that the respondents abandoned their job and were not dismissed by the petitioner. The Labor Arbiter ruled that there was neither illegal dismissal nor abandonment of job and that the respondents should be reinstated but without any backwages. On appeal, petitioner alleged that the reinstatement of respondents to their former positions, which were no longer existing, is impossible, highly unfair and unjust.  It further alleged that the project they were working on at the time of their alleged dismissal was already completed. Having completed their tasks, their positions automatically ceased to exist.  Thus, there were no more positions where they can be reinstated as painters. The Court ruled that there are two types of employees in the construction industry. The first is referred to as project employees or those employed in connection with a particular construction project or phase thereof and such employment is coterminous with each project or phase of the project to which they are assigned.  The second is known as non-project employees or those employed without reference to any particular construction project or phase of a project. Respondents belonged to the second type and are classified as regular employees of petitioner.  It is clear from the records of the case that when one project is completed, respondents were automatically transferred to the next project awarded to petitioners. There was no employment agreement given to respondents which clearly spelled out the duration of their employment and the specific work to be performed and there is no proof that they were made aware of these terms and conditions of their employment at the time of hiring. Thus, it is now too late for petitioner to claim that respondents are project employees whose employment is coterminous with each project or phase of the project to which they are assigned. Nonetheless, assuming that respondents were initially hired as project employees, a project employee may acquire the status of a regular employee when the following factors concur: (1) There is a continuous rehiring of project employees even after cessation of a project; and (2) The tasks performed by the alleged project employee are vital, necessary and indispensable to the usual business or trade of the employer. In this case, the evidence on record shows that respondents were employed and assigned continuously to the various projects of petitioners.  As painters, they performed activities which were necessary and desirable in the usual business of petitioner, which was engaged in subcontracting jobs for painting of residential units, condominium and commercial buildings. As regular employees, respondents are entitled to be reinstated without loss of seniority rights. Exodus International Construction Corporation, et al. v. Guillermo Biscocho, et al., G.R. No. 166109, February 23, 2011.

Constructive Dismissal; security guards. Respondent was hired by petitioner, a security agency, as a security guard. He was assigned at the Philippine Heart Center until his relief on January 30, 2006.  Respondent was not given any assignment thereafter.  Thus, on August 2, 2006, he filed a complaint for constructive dismissal and nonpayment of 13th month pay, with prayer for damages against petitioner. To refute the claim, petitioner alleged that respondent was not constructively or illegally dismissed, but had voluntarily resigned. The Court held that respondent was constructively dismissed. In cases involving security guards, a relief and transfer order in itself does not sever employment relationship between a security guard and his agency. An employee has the right to security of tenure, but this does not give him a vested right to his position as would deprive the company of its prerogative to change his assignment or transfer him where his service, as security guard, will be most beneficial to the client. Temporary “off-detail” or the period of time security guards are made to wait until they are transferred or assigned to a new post or client does not constitute constructive dismissal, so long as such status does not continue beyond six months. The onus of proving that there is no post available to which the security guard can be assigned rests on the employer. In the instant case, the failure of petitioner to give respondent a work assignment beyond the reasonable six-month period makes it liable for constructive dismissal. Nationwide Security and Allied Services, Inc. v. Ronald P. Valderama, G.R. No. 186614, February 23, 2011.

Constructive dismissal; defense of abandonment. Respondent filed an illegal dismissal case against the petitioner. Petitioner alleged that respondent abandoned his job and was not dismissed. The Court held that respondent was illegally dismissed. The jurisprudential rule on abandonment is constant.  It is a matter of intention and cannot lightly be presumed from certain equivocal acts. To constitute abandonment, two elements must concur:  (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intent, manifested through overt acts, to sever the employer-employee relationship.  In this case, petitioner failed to establish clear evidence of respondent’s intention to abandon his employment.  Except for petitioner’s bare assertion that respondent did not report to the office for reassignment, no proof was offered to prove that respondent intended to sever the employer-employee relationship.  Besides, the fact that respondent filed the instant complaint negates any intention on his part to forsake his work. It is a settled doctrine that the filing of a complaint for illegal dismissal is inconsistent with the charge of abandonment, for an employee who takes steps to protest his dismissal cannot by logic be said to have abandoned his work. Nationwide Security and Allied Services, Inc. v. Ronald P. Valderama, G.R. No. 186614, February 23, 2011.

Constructive dismissal; defense of resignation. Respondent, a security guard, filed an illegal dismissal case against the petitioner. To refute the claim, petitioner alleged that respondent was not constructively or illegally dismissed, but had voluntarily resigned. Petitioner alleged that respondent’s resignation is evident from his withdrawal of his cash and firearm bonds. Resignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and one has no other choice but to dissociate oneself from employment. It is a formal pronouncement or relinquishment of an office. The intent to relinquish must concur with the overt act of relinquishment. Thus, the acts of the employee before and after the alleged resignation must be considered in determining whether, he or she, in fact, intended to sever his or her employment. Should the employer interpose the defense of resignation, it is incumbent upon the employer to prove that the employee voluntarily resigned.  On this point, the Court held that petitioner failed to discharge its burden. Moreover, the filing of a complaint belies petitioner’s claim that respondent voluntarily resigned. Nationwide Security and Allied Services, Inc. v. Ronald P. Valderama, G.R. No. 186614, February 23, 2011.

Execution of Judgment; properties covered. Premier Allied and Contracting Services, Inc. (PACSI) and its President, the petitioner, were held liable to pay the respondents separation pay and attorney’s fees. To execute this judgment, the NLRC sheriff issued a Notice of Sale of a property with a TCT in the name of the petitioner and his wife. The Court ruled that the Notice of Sale is null and void. The power of the NLRC, or the courts, to execute its judgment extends only to properties unquestionably belonging to the judgment debtor alone.  A sheriff, therefore, has no authority to attach the property of any person except that of the judgment debtor.  Likewise, there is no showing that the sheriff ever tried to execute on the properties of the corporation. The TCT of the property bears out that, indeed, it belongs to petitioner and his wife. Thus, even if we consider petitioner as an agent of the corporation – and, therefore, not a stranger to the case – such that the provision on third-party claims will not apply to him, the property was registered not only in the name of petitioner but also of his wife. She stands to lose the property subject of execution without ever being a party to the case. This will be tantamount to deprivation of property without due process. Paquito V. Ando v. Andresito Y. Campo, et al., G.R. No. 184007, February 16, 2011.

Illegal dismissal; burden of proof. Respondents filed an illegal dismissal case against petitioner. Petitioner alleged that the respondents abandoned their work and were never dismissed by the petitioner. NLRC ruled that the respondents were not illegally dismissed since they failed to present a written notice of termination. This was however reversed by the Court of Appeals. The Court held that a written notice of dismissal is not a pre-requisite for a finding of illegal dismissal. Petitioner failed to prove that respondents were dismissed for a just or authorized cause. In an illegal dismissal case, the onus probandi rests on the employer to prove that the dismissal of an employee is for a valid cause. E.G. & I. Construction Corporation and Edsel Galeos v. Ananias P. Sato, et al., G.R. No. 182070, February 16, 2011.

Illegal dismissal; burden of proof. Respondents filed an illegal dismissal case against the petitioners. Petitioners, in their defense, alleged that the respondents abandoned their work and were not dismissed by the petitioners. Although In cases of illegal dismissal, the employer bears the burden of proof to prove that the termination was for a valid or authorized cause, the employee must first establish by substantial evidence the fact that he was dismissed. If there is no dismissal, then there can be no question as to the legality or illegality thereof. In the present case, the Court held that there was no evidence that respondents were dismissed or that they were prevented from returning to their work.  It was only respondents’ unsubstantiated conclusion that they were dismissed.  As a matter of fact, respondents could not name the particular person who effected their dismissal and under what particular circumstances. Absent any showing of an overt or positive act proving that petitioners had dismissed respondents, the latters’ claim of illegal dismissal cannot be sustained. Exodus International Construction Corporation, et al. v. Guillermo Biscocho, et al., G.R. No. 166109, February 23, 2011.

Illegal dismissal; final and executory judgment. Respondent employee filed an illegal dismissal case against the petitioner-company and Tom Madula, its operations manager. The case was dismissed by the labor arbiter and the dismissal was affirmed by NLRC. On August 29, 2002, the Court of Appeals reversed and set aside the NLRC decision and resolution. The CA ordered the petitioner company to pay respondent separation pay, moral and exemplary damages, and attorney’s fees. The decision became final and executory on February 27, 2004, and consequently a writ of execution was issued. Petitioner-company filed a Motion to Quash Writ of Execution. The Labor Arbiter granted the Motion and exonerated the petitioner company from paying backwages and held that it was petitioner Madula who should be liable to pay backwages. Respondent then filed before the CA a Very Urgent Motion for Clarification of Judgment. On December 10, 2004, CA granted the Motion and held that petitioner-company is solely liable for the judgment award. As a general rule, final and executory judgments are immutable and unalterable, except under these recognized exceptions, to wit: (a) clerical errors; (b) nunc pro tunc entries which cause no prejudice to any party; and (c) void judgments. The underlying reason for the rule is two-fold: (1) to avoid delay in the administration of justice and thus make orderly the discharge of judicial business, and (2) to put judicial controversies to an end, at the risk of occasional errors, inasmuch as controversies cannot be allowed to drag on indefinitely and the rights and obligations of every litigant must not hang in suspense for an indefinite period of time. What the CA rendered on December 10, 2004 was a nunc pro tunc order clarifying the decretal portion of its August 29, 2002 Decision. The object of a judgment nunc pro tunc is not the rendering of a new judgment and the ascertainment and determination of new rights, but is one placing in proper form on the record, the judgment that had been previously rendered, to make it speak the truth, so as to make it show what the judicial action really was. It is not to correct judicial errors, such as to render a judgment anew in place of the one it rendered, nor to supply nonaction by the court, however erroneous the judgment may have been. Filipinas Palmoil Processing, Inc. and Dennis T. Villareal v. Joel P. Dejapa, represented by his Attorney-in-Fact Myrna Manzano, G.R. No. 167332, February 7, 2011.

Illegal dismissal; liability of corporate officers. Petitioner filed a complaint against respondent company and its officers for illegal dismissal, unfair labor practice, and money claims. Petitioner alleged that the officers should be held personally liable for the acts of company which were tainted with bad faith and arbitrariness. As a general rule, a corporate officer cannot be held liable for acts done in his official capacity because a corporation, by legal fiction, has a personality separate and distinct from its officers, stockholders, and members.  To pierce this fictional veil, it must be shown that the corporate personality was used to perpetuate fraud or an illegal act, or to evade an existing obligation, or to confuse a legitimate issue.  In illegal dismissal cases, corporate officers may be held solidarily liable with the corporation if the termination was done with malice or bad faith. Moral damages are awarded only where the dismissal was attended by bad faith or fraud, or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs or public policy.  Exemplary damages may avail if the dismissal was effected in a wanton, oppressive or malevolent manner. In the present case, the Court held that petitioner failed to prove that his dismissal was orchestrated by the individual respondents and their acts were attended with bad faith or were done oppressively. Nelson A. Culili v. Eastern Telecommunications Philippines, Inc., et al. G.R. No. 165381, February 9, 2011.

Illegal dismissal; redundancy. Respondent-company, due to business troubles and losses, implemented a Right-Sizing Program which entailed a company-wide reorganization involving the transfer, merger, absorption or abolition of certain departments of the company. As a result, respondent-company terminated the services of petitioner on account of redundancy. Petitioner filed a complaint against respondent-company and its officers for illegal dismissal, unfair labor practice, and money claims. The Court ruled that petitioner was validly dismissed. There is redundancy when the service capability of the workforce is greater than what is reasonably required to meet the demands of the business enterprise.  A position becomes redundant when it is rendered superfluous by any number of factors such as over-hiring of workers, decrease in volume of business, or dropping a particular product line or service activity previously manufactured or undertaken by the enterprise. The Court has been consistent in holding that the determination of whether or not an employee’s services are still needed or sustainable properly belongs to the employer.  Provided there is no violation of law or a showing that the employer was prompted by an arbitrary or malicious act, the soundness or wisdom of this exercise of business judgment is not subject to the discretionary review of the Labor Arbiter and the NLRC.   However, an employer cannot simply declare that it has become overmanned and dismiss its employees without producing adequate proof to sustain its claim of redundancy.  Among the requisites of a valid redundancy program are: (1) the good faith of the employer in abolishing the redundant position; and (2) fair and reasonable criteria in ascertaining what positions are to be declared redundant, such as but not limited to: preferred status, efficiency, and seniority.  The Court also held that the following evidence may be proffered to substantiate redundancy: adoption of a new staffing pattern, feasibility studies/ proposal on the viability of the newly created positions, job description and the approval by the management of the restructuring. Nelson A. Culili v. Eastern Telecommunications Philippines, Inc., et al. G.R. No. 165381, February 9, 2011.

Labor Union; collateral attack on legal personality. . Petitioner moved to dismiss the petition for certification election filed by respondent union by questioning the validity of the respondent’s union registration. The Court held that legitimacy of the legal personality of respondent cannot be collaterally attacked in a petition for certification election proceeding but only through a separate action instituted particularly for the purpose of assailing it. The Implementing Rules stipulate that a labor organization shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration.  Once a certificate of registration is issued to a union, its legal personality cannot be subject to a collateral attack.  It may be questioned only in an independent petition for cancellation in accordance with Section 5 of Rule V, Book V of the Implementing Rules. Legend International Resorts Limited v. Kilusang Manggagawa ng Legenda, G.R. No. 169754 , February 23, 2011.

Money claims; burden of proof. Respondents alleged that petitioner-corporation failed to pay them their full compensation. The Labor Arbiter granted their monetary claims but the NLRC reversed the award considering that the petitioner-corporation submitted copies of payrolls, which it annexed to its memorandum on appeal, showing full payment. The general rule is that the burden rests on the employer to prove payment, rather than on the employee to prove non-payment. The reason for the rule is that the pertinent personnel files, payrolls, records, remittances, and other similar documents — which will show that overtime, differentials, service incentive leave, and other claims of the worker have been paid — are not in the possession of the worker but in the custody and absolute control of the employer. In this case, the submission by petitioner-corporation of the time records and payrolls only when the case was on appeal before the NLRC is contrary to the elementary precepts of justice and fair play. Respondents were not given the opportunity to check the authenticity and correctness of the evidence submitted on appeal. Thus, the Supreme Court held that the monetary claims of respondents should be granted. It is a time-honored principle that if doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter. It is the rule in controversies between a laborer and his master that doubts reasonably arising from the evidence, or in the interpretation of agreements and writing, should be resolved in the former’s favor. E.G. & I. Construction Corporation and Edsel Galeos v. Ananias P. Sato, et al., G.R. No. 182070 ,February 16, 2011.

National Labor Relations Commission; jurisdiction. Respondents filed an illegal dismissal case against Premier Allied and Contracting Services, Inc. (PACSI) and its President, the petitioner. PACSI and the petitioner were held liable to pay the respondents separation pay and attorney’s fees. To execute this judgment, NLRC sheriff issued a Notice of Sale of a property with TCT in the name of the petitioner and his wife. Petitioner filed an action for prohibition and damages with prayer for the issuance of a temporary restraining order (TRO) before the Regional Trial Court (RTC). The Court ruled that the RTC lacks jurisdiction to resolve the matter. The Court has long recognized that regular courts have no jurisdiction to hear and decide questions which arise from and are incidental to the enforcement of decisions, orders, or awards rendered in labor cases by appropriate officers and tribunals of the Department of Labor and Employment. To hold otherwise is to sanction splitting of jurisdiction which is obnoxious to the orderly administration of justice. The NLRC Manual on the Execution of Judgment deals specifically with third-party claims in cases brought before that body. It defines a third-party claim as one where a person, not a party to the case, asserts title to or right to the possession of the property levied upon. It also sets out the procedure for the filing of a third-party claim, to wit: “such person shall make an affidavit of his title thereto or right to the possession thereof, stating the grounds of such right or title and shall file the same with the sheriff and copies thereof served upon the Labor Arbiter or proper officer issuing the writ and upon the prevailing party.”  In the present case, there is no doubt that petitioner’s complaint is a third-party claim within the cognizance of the NLRC. Petitioner may indeed be considered a “third party” in relation to the property subject of the execution since there is no question that the property belongs to petitioner and his wife, and not to the corporation. It can be said that the property belongs to the conjugal partnership, and not to petitioner alone. At the very least, the Court can consider petitioner’s wife to be a third party within the contemplation of the law. Paquito V. Ando v. Andresito Y. Campo, et al., G.R. No. 184007, February 16, 2011.

Placement Fee; proof of excessive collection. Petitioner filed a complaint against respondent for collection of excess placement fee defined in Article 34(a) of the Labor Code. Petitioner presented as her evidence a promissory note reflecting excessive fees and testified as to the deductions made by her foreign employer. On the other hand, respondent presented an acknowledgment receipt reflecting collection of an amount authorized by POEA. The Court held that the pieces of evidence presented by petitioner are not substantial enough to show that the respondent collected from her more than the allowable placement fee. In proceedings before administrative and quasi-judicial agencies, the quantum of evidence required to establish a fact is substantial evidence, or that level of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. The Court gave more credence to respondent’s evidence consisting of the acknowledgment receipt showing the amount paid by petitioner and received by respondent. A receipt is a written and signed acknowledgment that money or goods have been delivered. Although a receipt is not conclusive evidence, an exhaustive review of the records of the case fails to disclose any other evidence sufficient and strong enough to overturn the acknowledgment embodied in respondent’s receipt as to the amount it actually received from petitioner. Having failed to adduce sufficient rebuttal evidence, petitioner is bound by the contents of the receipt issued by respondent. The subject receipt remains as the primary or best evidence. The promissory note presented by petitioner cannot be considered as adequate evidence to show the excessive placement fee. It must be emphasized that a promissory note is a solemn acknowledgment of a debt and a formal commitment to repay it on the date and under the conditions agreed upon by the borrower and the lender. A person who signs such an instrument is bound to honor it as a legitimate obligation duly assumed by him through the signature he affixes thereto as a token of his good faith. The fact that respondent is not a lending company does not preclude it from extending a loan to petitioner for her personal use. As for the deductions purportedly made by petitioner’s foreign employer, the Court noted that there is no single piece of document or receipt showing that deductions have in fact been made, or is there any proof that these deductions from the salary formed part of the subject placement fee. To be sure, mere general allegations of payment of excessive placement fees cannot be given merit as the charge of illegal exaction is considered a grave offense which could cause the suspension or cancellation of the agency’s license.  They should be proven and substantiated by clear, credible, and competent evidence. Avelina F. Sagun v. Sunace International Management Services, Inc., G.R. No. 179242, February 23, 2011.

Procedural due process; notice requirements. Petitioner was dismissed by respondent-company due to redundancy. However, it failed to provide the Department of Labor and Employment with a written notice regarding petitioner’s termination. The notice of termination was also not properly served on the petitioner. Further, a reading of the notice shows that respondent-company failed to properly inform the petitioner of the grounds for his termination.  There are two aspects which characterize the concept of due process under the Labor Code: one is substantive — whether the termination of employment was based on the provision of the Labor Code or in accordance with the prevailing jurisprudence; the other is procedural — the manner in which the dismissal was effected. There is a psychological effect or a stigma in immediately finding one’s self laid off from work.  This is why our labor laws have provided for procedural due process.  While employers have the right to terminate employees it can no longer sustain, our laws also recognize the employee’s right to be properly informed of the impending termination of his employment. Though the failure of respondent-company to comply with the notice requirements under the Labor Code did not affect the validity of the dismissal, petitioner is however entitled to nominal damages in addition to his separation pay. Nelson A. Culili v. Eastern Telecommunications Philippines, Inc., et al. G.R. No. 165381, February 9, 2011.

Quitclaims; validity. Respondents were terminated from employment due to retrenchment implemented by petitioner. Upon their dismissal, the respondents signed individual “Release Waiver and Quitclaim.” The Court ruled that a waiver or quitclaim is a valid and binding agreement between the parties, provided that it constitutes a credible and reasonable settlement, and that the one accomplishing it has done so voluntarily and with a full understanding of its import. In this case, the respondents were sufficiently apprised of their rights under the waivers and quitclaims that they signed. Each document contained the signatures of the union president and its counsel, which proved that respondents were duly assisted when they signed the waivers and quitclaims. Hence, the Court upheld the validity of the waivers and quitclaims signed by the respondents in this case. Plastimer Industrial Corporation and Teo Kee Bin v. Natalia C. Gopo, et al., G.R. No. 183390, February 16, 2011.

Retrenchment; notice requirements. Petitioner issued a Memorandum informing all its employees of the decision of the company’s Board of Directors to downsize and reorganize its business operations due to the change of its corporate structure. Petitioner served the individual notice of termination on its employees on May 14, 2004 or 30 days before the effective date of their termination on 13 June 2004, while it submitted the notice of termination to the Department of Labor and Employment only on 26 May 2004, short of the one-month prior notice requirement under Article 283 of the Labor Code. The Court held that petitioners’ failure to comply with the one-month notice to the DOLE is only a procedural infirmity and does not render the retrenchment illegal. When the dismissal is for a just cause, the absence of proper notice will not nullify the dismissal or render it illegal or ineffectual. Instead, the employer should indemnify the employee for violation of his statutory rights. Plastimer Industrial Corporation and Teo Kee Bin v. Natalia C. Gopo, et al., G.R. No. 183390, February 16, 2011.

Retrenchment; notice requirements. In 2004, the petitioner had to retrench and consequently terminate the employment of the respondents. Respondents questioned the validity of the retrenchment, and alleged that though petitioner’s financial statements in 2001 and 2002 reflected losses, it declared net income in 2003. The Court ruled that the fact that there was a net income in 2003 does mean that there was no valid reason for the retrenchment. Records showed that the net income of P6,185,707.05 in 2003 was not enough to allow petitioners to recover the loss of P52,904,297.88 which it suffered in 2002. Article 283 of the Labor Code recognizes retrenchment to prevent losses as a right of the management to meet clear and continuing economic threats or during periods of economic recession to prevent losses. There is no need for the employer to wait for substantial losses to materialize before exercising ultimate and drastic option to prevent such losses. Plastimer Industrial Corporation and Teo Kee Bin v. Natalia C. Gopo, et al., G.R. No. 183390, February 16, 2011.

Unfair Labor Practice; right to self-organize. Respondent-company implemented a company-wide reorganization which resulted in the abolition of petitioner’s position. Petitioner alleged that he was illegally dismissed and that respondent-company is guilty of unfair labor practice because his functions were outsourced to labor-only contractors.  The Supreme Court held unfair labor practice refers to acts that violate the workers’ right to organize.  The prohibited acts are related to the workers’ right to self-organization and to the observance of a CBA. Thus, an employer may be held liable for unfair labor practice only if it can be shown that his acts interfere with his employees’ right to self-organization. Since there is no showing that the respondent company’s implementation of the Right-Sizing Program was motivated by ill will, bad faith or malice, or that it was aimed at interfering with its employees’ right to self-organization, there is no unfair labor practice to speak of in this case. Nelson A. Culili v. Eastern Telecommunications Philippines, Inc., et al. G.R. No. 165381, February 9, 2011.

(Leslie takes Rachel T. Uy for assisting in the preparation of this post.)

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