the Life i live.

TITLE: Ruben L. Andrada, Bernaldo V. delos Santos,

                        Joven M. Pabustan, Filamer Alfonso, Vicente A.

                        Mantala, Jr., Harvey D. Cayetano, and Jovencio L.

                        Poblete, petitioners.

 

                        Versus

 

                        National Labor Relations Commission, Subic Legend

                        Resorts and Casino, Inc., and/or Mr. Hwa Puay,

                        Ms. Flordeliza Maria Reyes Rayel, and its Corporate

                        Officers, respondents.

 

                        December 28, 2007

 

 

FACTS:

                       

            The petitioners in this case, whose names appear in the title, are employees of Subic legend Resorts and Casino, Inc. who were hired on various dates from 1995 up to 1997 working as architects, draftsmen, operators, engineers, and surveyors in the Project Development Division on various projects. Herein respondents Mr. Hwa Puay and Ms. Flordeliza Maria Reyes Rayel are impleaded in this case in their official capacities as officers of said resort and casino.

 

            On January 6, 1998, Subic Legend Resorts and Casino, Inc. decided to retrench and terminate the employment of some thirty four (34) employees including herein petitioners sending notice of such action to the Department of Labor and Employment. Legend has undertaken this action on the strength of the updated status report of its Project Development Division, as follows:

1.      shelving of the condotel project until economic conditions in the Philippines improve.

2.      completion of the temporary casino in Cubi by Mid-February 1998

3.      subcontracting the super structure work of Grand Legend to a third party

4.      completion of the rectification work at the Legenda hotel

5.      completion of the temporary casino in Cubi

6.      abolition of the Personnel and Administrative department of the Project Development division and transfer of its function back to Legend’s Human Resource Department.

 

For the same reasons, Legend sent to the 34 employees the notices of retrenchment and offering them retrenchment options. After they have chosen their options they signed a quitclaim reserving the right to sue should their separation benefits not be settled by January 30, 2008.

 

On that same day, Labor and Employment Center of Subic Bay Metropolitan Authority advertised that Legend International Resorts, Inc. was in need of employees for the positions which were very much similar to those vacated by the petitioners.

 

On March 3, 1998, fourteen (14) of the 34 retrenched employees filed before the Regional Arbitration Branch of the NLRC in San Fernando, Pampanga a complaint for illegal dismissal based on the advertisement made by the Subic Bay Metropolitan Authority saying that Legend have created positions similar to those which they have vacated. Legend however, invoked management prerogatives.

 

The Labor Arbiter decided that the petitioners were illegally dismissed on the ground of insufficiency of documents showing that legend had suffered actual losses or that there were redundancy of positions as occupied by the petitioners. Legend then appealed the decision to the National Labor Relations which reversed the decision.

 

Herein petitioners appealed the NLRC decision to the Court of Appeals. The latter however sustained the CA’s ruling and held that the employees were validly terminated from employment due to redundancy and not retrenchment.  Aggrieved with the CA’s decision, the above petitioners appealed to the Supreme Court.

 

ISSUES:

 

            Whether or not the complainants were illegally dismissed? Corollary, was there a valid retrenchment?

 

COURT RULING:

 

            The Supreme Court favors the petitioners.

 

            It held that a company’s prerogative is not absolute. It cannot exercise its prerogative in a cruel, repressive, or despotic manner. In the case of Ariola vs. Philex Mining Corporation, the following are requirements of a valid retrenchment:

1.      It is undertaken to prevent losses, which are not merely de minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as perceived objectively and in good faith by the employer

2.      The employer serves written notice both to the employees and the DOLE at least one month prior to the intended date of retrenchment

3.      The employer pays the retrenched employees separation pay equivalent to one month pay or at least ½ month pay for every year of service, whichever is highter.

The court further added that the employer must use fair and reasonable criteria in ascertaining who would be dismissed and retained among the employees and that the retrenchment  must be undertaken in good faith.

 

Supreme Court held that in the instant case, Legend glaringly failed to show its financial conditions prior to and at the time it enforced its retrenchment program. Furthermore, it failed to submit audited financial statements regarding its alleged financial losses. Thus, the retrenchment was illegal.

 

On the issue of redundancy, Supreme Court held that Legend failed to establish it as such. It further explains that retrenchment and redundancy are two different concepts. The difference of which were clearly elaborated in the case of Sebuguero vs. NLRC. To simply put it, redundancy according to the Supreme Court exists when the number of employees is in excess of what is reasonably necessary to operate the business.

 

Thus, the Supreme Court finally held, that the basis for retrenchment was not established by substantial evidence and it also ruled that Legend failed to establish by the same quantum of proof the fact of redundancy; hence the petitioners’ termination from employment was illegal.

TITLE: Ruben L. Andrada, Bernaldo V. delos Santos,

                        Joven M. Pabustan, Filamer Alfonso, Vicente A.

                        Mantala, Jr., Harvey D. Cayetano, and Jovencio L.

                        Poblete, petitioners.

 

                        Versus

 

                        National Labor Relations Commission, Subic Legend

                        Resorts and Casino, Inc., and/or Mr. Hwa Puay,

                        Ms. Flordeliza Maria Reyes Rayel, and its Corporate

                        Officers, respondents.

 

                        December 28, 2007

 

 

FACTS:

                       

            The petitioners in this case, whose names appear in the title, are employees of Subic legend Resorts and Casino, Inc. who were hired on various dates from 1995 up to 1997 working as architects, draftsmen, operators, engineers, and surveyors in the Project Development Division on various projects. Herein respondents Mr. Hwa Puay and Ms. Flordeliza Maria Reyes Rayel are impleaded in this case in their official capacities as officers of said resort and casino.

 

            On January 6, 1998, Subic Legend Resorts and Casino, Inc. decided to retrench and terminate the employment of some thirty four (34) employees including herein petitioners sending notice of such action to the Department of Labor and Employment. Legend has undertaken this action on the strength of the updated status report of its Project Development Division, as follows:

1.      shelving of the condotel project until economic conditions in the Philippines improve.

2.      completion of the temporary casino in Cubi by Mid-February 1998

3.      subcontracting the super structure work of Grand Legend to a third party

4.      completion of the rectification work at the Legenda hotel

5.      completion of the temporary casino in Cubi

6.      abolition of the Personnel and Administrative department of the Project Development division and transfer of its function back to Legend’s Human Resource Department.

 

For the same reasons, Legend sent to the 34 employees the notices of retrenchment and offering them retrenchment options. After they have chosen their options they signed a quitclaim reserving the right to sue should their separation benefits not be settled by January 30, 2008.

 

On that same day, Labor and Employment Center of Subic Bay Metropolitan Authority advertised that Legend International Resorts, Inc. was in need of employees for the positions which were very much similar to those vacated by the petitioners.

 

On March 3, 1998, fourteen (14) of the 34 retrenched employees filed before the Regional Arbitration Branch of the NLRC in San Fernando, Pampanga a complaint for illegal dismissal based on the advertisement made by the Subic Bay Metropolitan Authority saying that Legend have created positions similar to those which they have vacated. Legend however, invoked management prerogatives.

 

The Labor Arbiter decided that the petitioners were illegally dismissed on the ground of insufficiency of documents showing that legend had suffered actual losses or that there were redundancy of positions as occupied by the petitioners. Legend then appealed the decision to the National Labor Relations which reversed the decision.

 

Herein petitioners appealed the NLRC decision to the Court of Appeals. The latter however sustained the CA’s ruling and held that the employees were validly terminated from employment due to redundancy and not retrenchment.  Aggrieved with the CA’s decision, the above petitioners appealed to the Supreme Court.

 

ISSUES:

 

            Whether or not the complainants were illegally dismissed? Corollary, was there a valid retrenchment?

 

COURT RULING:

 

            The Supreme Court favors the petitioners.

 

            It held that a company’s prerogative is not absolute. It cannot exercise its prerogative in a cruel, repressive, or despotic manner. In the case of Ariola vs. Philex Mining Corporation, the following are requirements of a valid retrenchment:

1.      It is undertaken to prevent losses, which are not merely de minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as perceived objectively and in good faith by the employer

2.      The employer serves written notice both to the employees and the DOLE at least one month prior to the intended date of retrenchment

3.      The employer pays the retrenched employees separation pay equivalent to one month pay or at least ½ month pay for every year of service, whichever is highter.

The court further added that the employer must use fair and reasonable criteria in ascertaining who would be dismissed and retained among the employees and that the retrenchment  must be undertaken in good faith.

 

Supreme Court held that in the instant case, Legend glaringly failed to show its financial conditions prior to and at the time it enforced its retrenchment program. Furthermore, it failed to submit audited financial statements regarding its alleged financial losses. Thus, the retrenchment was illegal.

 

On the issue of redundancy, Supreme Court held that Legend failed to establish it as such. It further explains that retrenchment and redundancy are two different concepts. The difference of which were clearly elaborated in the case of Sebuguero vs. NLRC. To simply put it, redundancy according to the Supreme Court exists when the number of employees is in excess of what is reasonably necessary to operate the business.

 

Thus, the Supreme Court finally held, that the basis for retrenchment was not established by substantial evidence and it also ruled that Legend failed to establish by the same quantum of proof the fact of redundancy; hence the petitioners’ termination from employment was illegal.