December 2013 Philippine Supreme Court Decisions on Labor Law

Here are select December 2013 rulings of the Supreme Court of the Philippines on labor law:

Appeal; NLRC; accredited bonding company; revocation of authority is prospective in application. The respondents filed a surety bond issued by Security Pacific Assurance Corporation (Security Pacific) on June 28, 2002. At that time, Security Pacific was still an accredited bonding company. However, the NLRC revoked its accreditation on February 16, 2003.  This subsequent revocation should not prejudice the respondents who relied in good faith on the then subsisting accreditation of Security Pacific. In Del Rosario v. Philippine Journalists, Inc. (G.R. No. 181516, August 19, 2009), it was held that a bonding company’s revocation of authority is prospective in application. Nonetheless, the respondents should post a new bond issued by an accredited bonding company in compliance with paragraph 4, Section 6, Rule 6 of the NLRC Rules of Procedure, which states that “[a] cash or surety bond shall be valid and effective from the date of deposit or posting, until the case is finally decided, resolved or terminated or the award satisfied.” Wilgen Loon, et al. v. Power Master, Inc., et al., G.R. No. 189404, December 11, 2013.

Appeal; NLRC; bond; jurisdictional. Paragraph 2, Article 223 of the Labor Code provides that “[i]n case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the NLRC in the amount equivalent to the monetary award in the judgment appealed from.”  Contrary to the respondents’ claim, the issue of the appeal bond’s validity may be raised for the first time on appeal since its proper filing is a jurisdictional requirement. The requirement that the appeal bond should be issued by an accredited bonding company is mandatory and jurisdictional. The rationale of requiring an appeal bond is to discourage the employers from using an appeal to delay or evade the employees’ just and lawful claims. It is intended to assure the workers that they will receive the money judgment in their favor if the employer’s appeal is dismissed. Wilgen Loon, et al. v. Power Master, Inc., et al., G.R. No. 189404, December 11, 2013.

Appeal; NLRC; verification; formal requisite, not jurisdictional. Neither the laws nor the rules require the verification of the supplemental appeal.  Furthermore, verification is a formal, not a jurisdictional, requirement. It is mainly intended to give assurance that the matters alleged in the pleading are true and correct and not of mere speculation.  Also, a supplemental appeal is merely an addendum to the verified memorandum on appeal that was earlier filed in the case; hence, the requirement for verification has been substantially complied. Wilgen Loon, et al. v. Power Master, Inc., et al., G.R. No. 189404, December 11, 2013.

Appeal; Rule 45; limited to review of questions of law. In this Rule 45 petition for review on certiorari, the Supreme Court (SC) reviewed the Court of Appeals’ (CA) decision of a Rule 65 petition for certiorari. The Supreme Court’s power of review in such case is limited to legal errors that the CA might have committed in issuing its assailed decision, in contrast with the review for jurisdictional errors which it undertakes in an original certiorari (Rule 65) action filed with it. The SC examines the CA decision based on how it determined the presence or absence of grave abuse of discretion in the manner by which the NLRC rendered its decision and not on the basis of whether the NLRC decision on the merits of the case was correct.  Moreover, the Court’s power in a Rule 45 petition limits it to a review of questions of law raised against the assailed CA decision. Baguio Central University v. Ignacio Gallente, G.R. No. 188267, December 2, 2013.

Attorney’s fees; when entitled. An employee is entitled to an award of attorney’s fees equivalent to ten percent (10%) of the amount of the wages in actions for unlawful withholding of wages pursuant to Article 111 of the Labor Code.  Wilgen Loon, et al. v. Power Master, Inc., et al., G.R. No. 189404, December 11, 2013.

Backwages; when entitled. In termination cases, the burden of proving just and valid cause for dismissing an employee from his employment rests upon the employer. The employer’s failure to discharge this burden in the instant case arising from their non-submission of evidence at the proceedings before the labor arbiter resulted in the finding that the dismissal is unjustified. Thus, the employees are entitled to the payment of backwages.   Wilgen Loon, et al. v. Power Master, Inc., et al., G.R. No. 189404, December 11, 2013.

Deeds of release and quitclaim; grounds to invalidate. As a rule, deeds of release and quitclaim cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal. The acceptance of those benefits would not amount to estoppel. To excuse respondents from complying with the terms of their waivers, any one of the following grounds must exist: (1) the employer used fraud or deceit in obtaining the waivers; (2) the consideration the employer paid is incredible and unreasonable; or (3) the terms of the waiver are contrary to law, public order, public policy, morals, or good customs or prejudicial to a third person with a right recognized by law.  The Court concluded that the instant case falls under the first situation.

As the ground for termination of employment was illegal, the quitclaims are deemed illegal because the employees’ consent had been vitiated by mistake or fraud. The law looks with disfavor upon quitclaims and releases by employees pressured into signing by unscrupulous employers minded to evade legal responsibilities.  The circumstances show that petitioner’s misrepresentation led its employees, specifically respondents herein, to believe that the company was suffering losses which necessitated the implementation of the voluntary retirement and retrenchment programs, and eventually the execution of the deeds of release, waiver and quitclaim. The amounts already received by respondents as consideration for signing the releases and quitclaims, however, should be deducted from their respective monetary awards.  Philippine Carpet Manufacturing Corporation, et al. v. Ignacio B. Tagyamon, et al., G.R. No. 191475, December 11, 2013.

Disability benefits; principle of work-aggravation; concept of. Compensability may be established on the basis of the theory of work aggravation if, by substantial evidence, it can be demonstrated that the working conditions aggravated or at least contributed in the advancement of respondent’s cancer.  As held in Rosario v. Denklav Marine, “the burden is on the beneficiaries to show a reasonable connection between the causative circumstances in the employment of the deceased employee and his death or permanent total disability.” In the present case, both parties failed to discharge their respective burdens – for petitioners, they failed to prove the non-work-relatedness of the disease; and for respondent, he failed to prove that his work aggravated his condition. Thus, the Court had to resolve the case on some other basis. The Court held that disability should be understood not more on its medical significance, but on the loss of earning capacity. Permanent total disability means disablement of an employee to earn wages in the same kind of work or work of similar nature that he was trained for or accustomed to perform, or any kind of work which a person of his mentality and attainment could do. It does not mean absolute helplessness. Evidence of this condition can be found in a certification of fitness/unfitness to work issued by the company-designated physician. In this case, records reveal that the medical report issued by the company-designated oncologist was bereft of any certification that respondent remained fit to work as a seafarer despite his cancer. This is important, according to the Court, since the certification is the document that contains the assessment of his disability which can be questioned in case of disagreement as provided under Section 20 (B) (3) of the POEA-SEC. In the absence of any certification, the law presumes that the employee remains in a state of temporary disability. Should no certification be issued within 240 day maximum period, as in this case, the pertinent disability becomes permanent in nature. Accordingly, the Court affirmed respondent’s entitlement to permanent total disability benefits awarded to him. Jebsens Maritime, Inc., et al. v. Eleno A. Baol, G.R. No. 204076, December 4, 2013.

Disability benefits; principle of work-relation; concept of. As a general rule, the principle of work-relation requires that the disease in question must be one of those listed as an occupational disease under Sec. 32-A of the POEA-SEC. Nevertheless, should it be not classified as occupational in nature, Section 20 (B) paragraph 4 of the POEA-SEC provides that such diseases are disputably presumed as work-related.

In this case, it is undisputed that Nasopharyngeal Carcinoma (NPC) afflicted respondent while on board the petitioners’ vessel. As a non-occupational disease, it has the disputable presumption of being work-related. This presumption obviously works in the seafarer’s favor. Hence, unless contrary evidence is presented by the employers, the work-relatedness of the disease must be sustained.  The Court held that the petitioners, as employers, failed to disprove the presumption of NPC’s work-relatedness. The petitioners primarily relied on the medical report issued by Dr. Co Pefia which, however, failed to make a categorical statement confirming the total absence of work relation.  As the doctor opined only a probability, there was no certainty that his condition was not work related.  There being no certainty, the Court will lean in favor of the seafarer consistent with the mandate of POEA-SEC to secure the best terms and conditions of employment for Filipino workers. Hence, the presumption of NPC’s work-relatedness stays. Jebsens Maritime, Inc., et al. v. Eleno A. Baol, G.R. No. 204076, December 4, 2013.

Illegal dismissal; burden of proof. In termination cases, the burden of proving just and valid cause for dismissing an employee from his employment rests upon the employer. The employer’s failure to discharge this burden results in the finding that the dismissal is unjustified.

Failing to prove just and valid cause for the dismissal, the Court held that the petitioners are entitled to salary differential, service incentive, holiday, and thirteenth month pays.  As in illegal dismissal cases, the general rule is that the burden rests on the defendant to prove payment rather than on the plaintiff to prove non-payment of these money claims.  However, the Court decided that they are not entitled to overtime and premium pays.  The burden of proving entitlement to overtime pay and premium pay for holidays and rest days rests on the employee because these are not incurred in the normal course of business.  In the present case, the petitioners failed to adduce any evidence that would show that they actually rendered service in excess of the regular eight working hours a day, and that they in fact worked on holidays and rest days. Wilgen Loon, et al. v. Power Master, Inc., et al., G.R. No. 189404, December 11, 2013.

Labor cases; strict adherence to the technical rules of procedure is not required; when liberality allowed. In labor cases, strict adherence to the technical rules of procedure is not required. Time and again, the Court has allowed evidence to be submitted for the first time on appeal with the NLRC in the interest of substantial justice.  Thus, it has consistently supported the rule that labor officials should use all reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, in the interest of due process.  However, this liberal policy should still be subject to rules of reason and fairplay. The liberality of procedural rules is qualified by two requirements: (1) a party should adequately explain any delay in the submission of evidence; and (2) a party should sufficiently prove the allegations sought to be proven.  The reason for these requirements is that the liberal application of the rules before quasi-judicial agencies cannot be used to perpetuate injustice and hamper the just resolution of the case.  Neither is the rule on liberal construction a license to disregard the rules of procedure.  In the present case, the Court held that the respondents failed to adequately explain their delay in the submission of evidence and prove the allegations sought to be proven.  Wilgen Loon, et al. v. Power Master, Inc., et al., G.R. No. 189404, December 11, 2013.

Labor; ground for valid dismissal; loss of trust and confidence; requisites. Loss of trust and confidence is a just cause for dismissal under Article 282(c) of the Labor Code. Article 282(c) provides that an employer may terminate an employment for “fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative.” However, in order for the employer to properly invoke this ground, the employer must satisfy two conditions.  First, the employer must show that the employee concerned holds a position of trust and confidence. Second, the employer must establish the existence of an act justifying the loss of trust and confidence. To be a valid cause for dismissal, the act that betrays the employer’s trust must be real, i.e., founded on clearly established facts, and the employee’s breach of the trust must be willful, i.e., it was done intentionally, knowingly and purposely, without justifiable excuse.

In Lopez v. Keppel Bank Philippines, Inc. (G.R. No. 176800, September 5, 2011), the Court repeated the guidelines for the application of loss of confidence as follows: (1) loss of confidence should not be simulated; (2) it should not be used as a subterfuge for causes which are improper, illegal or unjustified; (3) it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and (4) it must be genuine, not a mere afterthought to justify an earlier action taken in bad faith.

As applied to the dismissal of managerial employees, employers – as a rule – enjoy wider latitude of discretion. They are not required to present proof beyond reasonable doubt as the mere existence of a basis for believing that such employee has breached the trust of the employer would suffice for the dismissal. Thus, as long as the employer “has reasonable ground to believe that the employee concerned is responsible for the purported misconduct, and the nature of his participation therein renders him unworthy of the trust and confidence demanded of his position,” the dismissal on this ground is valid.

The Court held that there was sufficient basis to dismiss the respondent for loss of trust and confidence.  First, the Court believed that the respondent held a position of trust and confidence because he was a managerial employee of the petitioner.  As the Dean of two of the petitioner’s departments, he was tasked, among others, to assist the school head in all matters affecting the general policies of the entire institution, to direct and advise the students in their programs of study and to approve their subject load and exercise educational leadership among his faculty.  These tasks involved the exercise of powers and prerogatives equivalent to managerial actions.  Second, the Court ruled that the respondent committed wilful breach of trust sufficient to justify dismissal.  The heart of the loss-of-trust charge is the employee’s betrayal of the employer’s trust. “Damage aggravates the charge but its absence does not mitigate nor negate the employee’s liability.  The respondent betrayed his owed fidelity the moment he engaged in a venture that required him to  perform tasks and make calculated decisions which his duty to the petitioner would have equally required him to perform or would have otherwise required him to oppose. The Court was convinced that actual conflict of interest existed when respondent sought to conduct review courses for nursing examination knowing that the petitioner was already offering similar classes. The respondent’s good intentions were beside the point.  Ultimately, the determinant is his deliberate engagement in a venture that would have directly conflicted with the petitioner’s interests. If respondent merely intended to help the petitioner and its students in increasing their chances of passing the Civil Service Examination, he could have just offered, as part of the BCU’s course curriculum, review classes for the Civil Service Examination instead of altogether organizing a review center that obviously will offer the course to everyone minded to enroll.  Baguio Central University v. Ignacio Gallente, G.R. No. 188267, December 2, 2013.

Labor; valid dismissal; requisites. Our Constitution, statutes and jurisprudence uniformly guarantee to every employee or worker tenurial security. What this means is that an employer shall not dismiss an employee except for just or authorized cause and only after due process is observed. Thus, for an employee’s dismissal to be valid, the employer must meet these basic requirements of: (1) just or authorized cause (which constitutes the substantive aspect of a valid dismissal); and (2) observance of due process (the procedural aspect). Baguio Central University v. Ignacio Gallente, G.R. No. 188267, December 2, 2013.

Petition for review on certiorari; only questions of law can be reviewed; exceptions.The well-entrenched rule in this jurisdiction is that only questions of law may be entertained by the SC in a petition for review on certiorari under Rule 45. This rule, however, is not absolute and admits certain exceptions, such as when the petitioner persuasively alleges that there is insufficient or insubstantial evidence on record to support the factual findings of the tribunal or court a quo as Section 5, Rule 133 of the Rules of Court states in express terms that in cases filed before administrative or quasi-judicial bodies, a fact may be deemed established only if supported by substantial evidence. Jebsens Maritime, Inc., et al. v. Eleno A. Baol, G.R. No. 204076, December 4, 2013.

Probationary employment; concept of; probationer can only qualify upon fulfillment of the reasonable standards set for permanent employment of a teaching personnel. Probationary employment refers to the trial stage or period during which the employer examines the competency and qualifications of job applicants, and determines whether they are qualified to be extended permanent employment status.  Such an arrangement affords an employer the opportunity – before the full force of the guarantee of security of tenure comes into play – to fully scrutinize and observe the fitness and worth of probationers while on the job and to determine whether they would become proper and efficient employees.  It also gives the probationers the chance to prove to the employer that they possess the necessary qualities and qualifications to meet reasonable standards for permanent employment.

Mere completion of the three-year probation, even with an above-average performance, does not guarantee that the employee will automatically acquire a permanent employment status.  It is settled jurisprudence that the probationer can only qualify upon fulfillment of the reasonable standards set for permanent employment of a teaching personnel.

The Court ruled that the requirement to obtain a master’s degree was made known to the petitioner.  The contract she signed clearly incorporates the rules, regulations, and employment conditions contained in the SSC Faculty Manual.  The Manual provided for a criteria for permanency which includes, among others, the requirement that the faculty member must have completed at least a master’s degree.  Viewed next to the statements and actions of Manaois – i.e., the references to obtaining a master’s degree in her application letter, in the subsequent correspondences between her and SSC, and in the letter seeking the extension of a teaching load for the school year 2003-2004; and her submission of certifications from UP and from her thesis adviser – the Court found that there is indeed substantial evidence proving that she knew about the necessary academic qualifications to obtain the status of permanency.  Jocelyn Herrera-Manaois v. St. Scholastica’s College, G.R. No. 188914, December 11, 2013.

Probationary employment; part-time member of the academic personnel; requisites to acquire permanence of employment and security of tenure. Pursuant to the 1992 Manual of Regulations for Private Schools, private educational institutions in the tertiary level may extend “full-time faculty” status only to those who possess, inter alia, a master’s degree in the field of study that will be taught. This minimum requirement is neither subject to the prerogative of the school nor to the agreement between the parties. For all intents and purposes, this qualification must be deemed impliedly written in the employment contracts between private educational institutions and prospective faculty members. The issue of whether probationers were informed of this academic requirement before they were engaged as probationary employees is thus no longer material, as those who are seeking to be educators are presumed to know these mandated qualifications. Thus, all those who fail to meet the criteria under the 1992 Manual cannot legally attain the status of permanent full-time faculty members, even if they have completed three years of satisfactory service.

Further, the Court stated that in line with academic freedom and constitutional autonomy, an institution of higher learning has the discretion and prerogative to impose standards on its teachers and determine whether these have been met. Upon conclusion of the probation period, the college or university, being the employer, has the sole prerogative to make a decision on whether or not to re-hire the probationer. The probationer cannot automatically assert the acquisition of security of tenure and force the employer to renew the employment contract. In the case at bar, petitioner failed to comply with the stated academic qualifications required for the position of a permanent full-time faculty member.  Jocelyn Herrera-Manaois v. St. Scholastica’s College, G.R. No. 188914, December 11, 2013.

Question of law; distinguished from a question of fact. A question of law arises when the doubt or controversy concerns the correct application of law or jurisprudence to a certain set of facts. In contrast, a question of fact exists when a doubt or difference arises as to the truth or falsehood of facts.

In this petition, the petitioner essentially asks the question – whether, under the circumstances and the presented evidence, the termination of respondent’s employment was valid. As framed, therefore, the question before the Court is a proscribed factual issue that it cannot generally consider in this Rule 45 petition, except to the extent necessary to determine whether the CA correctly found the NLRC in grave abuse of its discretion in considering and appreciating this factual issue.

Nonetheless, as an exception to the Rule 45 requirement, the Court deemed it proper to review the conflicting factual findings of the LA and the CA, on the one hand, and the NLRC, on the other. Such exception applies when, based on the records, the factual findings of the tribunals below are in conflict.  Baguio Central University v. Ignacio Gallente, G.R. No. 188267, December 2, 2013.

Stare decisis; doctrine of. Under the doctrine of stare decisis, when a court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases in which the facts are substantially the same, even though the parties may be different. Where the facts are essentially different, however, stare decisis does not apply because a perfectly sound principle as applied to one set of facts might be entirely inappropriate when a factual variant is introduced.

This case and the Philippine Carpet Employees Association (PHILCEA) v. Hon. Sto. Tomas case (Philcea case; G.R. No. 168719, February 22, 2006), involve the same period which is March to April 2004; the issuance of the Memorandum to employees informing them of the implementation of the cost reduction program; the implementation of the voluntary retirement program and retrenchment program, except that this case involves different employees; the execution of deeds of release, waiver, and quitclaim, and the acceptance of separation pay by the affected employees.  As the respondents here were similarly situated as the union members in the Philcea case, and considering that the questioned dismissal from the service was based on the same grounds under the same circumstances, there is no need to re-litigate the issues presented herein. In short, stare decisis applies and the Court deems it wise to adopt its earlier findings in the Philcea case that there was no valid ground to terminate the services of the employees. Philippine Carpet Manufacturing Corporation, et al. v. Ignacio B. Tagyamon, et al., G.R. No. 191475, December 11, 2013.

Substantial evidence; definition of. The assertions of respondent do not constitute as substantial evidence that a reasonable mind might accept as adequate to support the conclusion that there is a causal relationship between his illness and the working conditions on board the petitioners’ vessel. Although the Court has recognized as sufficient that work conditions are proven to have contributed even to a small degree, such must, however, be reasonable, and anchored on credible information. The claimant must, therefore, prove a convincing proposition other than by his mere allegations. Jebsens Maritime, Inc., et al. v. Eleno A. Baol, G.R. No. 204076, December 4, 2013.

Termination of employment; authorized causes; retrenchment. The illegality of the basis of the implementation of both voluntary retirement and retrenchment programs of petitioners had been thoroughly ruled upon by the Court in Philippine Carpet Employees Association (PHILCEA) v. Hon. Sto. Tomas (G.R. No. 168719, February 22, 2006).  It discussed the requisites of both retrenchment and redundancy as authorized causes of termination and concluded that petitioners failed to substantiate them. In ascertaining the bases of the termination of employees, it took into consideration petitioners’ claim of  business losses; the purchase of machinery and equipment after the termination, the declaration of cash dividends to stockholders, the hiring of 100 new employees after the retrenchment, and the authorization of full blast overtime work for six hours daily. These, said the Court, are inconsistent with petitioners’ claim that there was a slump in the demand for its products which compelled them to implement the termination programs. In arriving at its conclusions, the Court took note of petitioners’ net sales, gross and net profits, as well as net income. The Court, thus, reached the conclusion that the retrenchment effected by the company is invalid due to a substantive defect. Philippine Carpet Manufacturing Corporation, et al. v. Ignacio B. Tagyamon, et al., G.R. No. 191475, December 11, 2013.

Termination of employment; ground; closure of business due to serious business losses; notice requirement. Article 297 of the Labor Code provides that before any employee is terminated due to closure of business, it must give one (1) month’s prior written notice to the employee and to the Department of Labor and Employment.  In this relation, case law instructs that it is the personal right of the employee to be personally informed of his proposed dismissal as well as the reasons therefor; and such requirement of notice is not a mere technicality or formality which the employer may dispense with. Since the purpose of previous notice is to, among others, give the employee some time to prepare for the eventual loss of his job, the employer has the positive duty to inform each and every employee of their impending termination of employment. To this end, jurisprudence states that an employer’s act of posting notices to this effect in conspicuous areas in the workplace is not enough. Verily, for something as significant as the involuntary loss of one’s employment, nothing less than an individually-addressed notice of dismissal supplied to each worker is proper. The Court held that the Labor Arbiter, NLRC, and Court of Appeals erred in ruling that SPI complied with the notice requirement when it merely posted various copies of its notice of closure in conspicuous places within the business premises. SPI is required to serve individual written notices of termination to its employees.  Sangwoo Philippines, Inc. and/or Sang Ik Jang, Jisso Jang, et al. v. Sangwoo Philippines, Inc. Employees Union-OLALIA, rep. by Porferia Salibongcogon/Sangwoo Philippines, Inc. Employees Union-OLALIA, rep. by Porferia Salibongcogon v. Sangwoo Philippines, Inc. and/or Sang Ik Jang, Jisso Jang, et al., G.R. No. 173154./G.R. No. 173229, December 9, 2013

Termination of employment; authorized cause; closure of business due to serious business losses; separation pay. Closure of business is the reversal of fortune of the employer whereby there is a complete cessation of business operations and/or an actual locking-up of the doors of establishment, usually due to financial losses. Closure of business, as an authorized cause for termination of employment, aims to prevent further financial drain upon an employer who cannot pay anymore his employees since business has already stopped. In such a case, the employer is generally required to give separation benefits to its employees, unless the closure is due to serious business losses.  As explained in the case of Galaxie Steel Workers Union (GSWU-NAFLU-KMU) v. NLRC (G.R. No. 165757, October 17, 2006): “The Constitution, while affording full protection to labor, nonetheless, recognizes “the right of enterprises to reasonable returns on investments, and to expansion and growth.” In line with this protection afforded to business by the fundamental law, Article [297] of the Labor Code clearly makes a policy distinction. It is only in instances of “retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses” that employees whose employment has been terminated as a result are entitled to separation pay. In other words, Article [297] of the Labor Code does not obligate an employer to pay separation benefits when the closure is due to serious losses. To require an employer to be generous when it is no longer in a position to do so, in our view, would be unduly oppressive, unjust, and unfair to the employer. Ours is a system of laws, and the law in protecting the rights of the working man, authorizes neither the oppression nor the self-destruction of the employer.”

In this case, the Labor Arbiter, NLRC, and the Court of Appeals all consistently found that petitioners indeed suffered from serious business losses which resulted in its permanent shutdown and accordingly, held the company’s closure to be valid. It is a rule that absent any showing that the findings of fact of the labor tribunals and the appellate court are not supported by evidence on record or the judgment is based on a misapprehension of facts, the Court shall not examine anew the evidence submitted by the parties. Perforce, without any cogent reason to deviate from the findings on the validity of respondent’s closure, the Court held that it is not obliged to give separation benefits to minority employees pursuant to Article 297 of the Labor Code. Sangwoo Philippines, Inc. and/or Sang Ik Jang, Jisso Jang, et al. v. Sangwoo Philippines, Inc. Employees Union-OLALIA, rep. by Porferia Salibongcogon/Sangwoo Philippines, Inc. Employees Union-OLALIA, rep. by Porferia Salibongcogon v. Sangwoo Philippines, Inc. and/or Sang Ik Jang, Jisso Jang, et al., G.R. No. 173154./G.R. No. 173229, December 9, 2013.

Termination of employment due to closure; procedural infirmity; nominal damages as sanction.  It is well to stress that while respondent had a valid ground to terminate its employees, i.e., closure of business, its failure to comply with the proper procedure for termination renders it liable to pay the employee nominal damages for such omission.  Based on existing jurisprudence, an employer which has a valid cause for dismissing its employee but conducts the dismissal with procedural infirmity is liable to pay the employee nominal damages in the amount of P30,000.00 if the ground for dismissal is a just cause, or the amount of P50,000.00 if the ground for dismissal is an authorized cause.  However, case law exhorts that in instances where the payment of such damages becomes impossible, unjust, or too burdensome, modification becomes necessary in order to harmonize the disposition with the prevailing circumstance.  In this case, considering that SPI closed down its operations due to serious business losses and that said closure appears to have been done in good faith, the Court as in the case of Industrial Timber Corporation v. Ababon (G.R. No. 164518, March 30, 2006), deems it just to reduce the amount of nominal damages to be awarded to each of the minority employees from P50,000.00 to Pl0,000.00. Sangwoo Philippines, Inc. and/or Sang Ik Jang, Jisso Jang, et al. v. Sangwoo Philippines, Inc. Employees Union-OLALIA, rep. by Porferia Salibongcogon/Sangwoo Philippines, Inc. Employees Union-OLALIA, rep. by Porferia Salibongcogon v. Sangwoo Philippines, Inc. and/or Sang Ik Jang, Jisso Jang, et al., G.R. No. 173154./G.R. No. 173229, December 9, 2013.

 (Leslie thanks Mae Grace June C. Nillama for assisting in the preparation of this post.) 

 

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