SHOPPES MANILA V. NLRC (LABOR)

FACTS: Buan and Torno were employees of Shoppes Manila. They were charged with stealing items and subsequently suspended then dismissed.

HELD: In order to effect a valid dismissal, the law requires that

1. there be just or valid cause as provided under Article 282 of the Labor Code; and
2. the employee be afforded an opportunity to be heard and to defend himself.

The petitioner had failed to show that it had complained with the TWO-NOTICE REQUIREMENT:

1. a written notice containing a statement of the cause for the termination to afford the employee amply opportunity to be heard and defend himself with the assistance of his representative; and
2. if the employer decides to terminate the services of the employee, the employer must notify him in writing of the decision to dismiss him, stating clearly the reason therefor.

MAGOS V. NLRC (LABOR)

FACTS: Magos is a manager of Pepsi in Surigao. One supplier complained that Magos was supplying in a different area despite agreement on the matter to which Magos countered that it was necessary as sales were down. Magos was later terminated.

HELD: What is most important is that before termination, employee must be given the twin requirements of due process proper notice and hearing. The essence of due process is that a party be afforded a reasonable opportunity to be heard and to submit any evidence he may have in support of his defense. Even though petitioner in this case never admitted the accusations of dishonesty against him, he impliedly acknowledged his insubordination as shown in his petition.

CAINGAT V. NLRC (LABOR)

FACTS: Petitioner became the General Manager of Sta Lucia Realty and was discovered to have deposited company funds in his personal account and used such funds to pay his credit card purchases and trips abroad. Without conducting any investigation, company filed a complaint while petitioner filed a complaint for illegal dismissal.

HELD: While the dismissal may be truly justified by loss of confidence, management failed to observe fully the procedural requirement of due process for the termination of petitioner's employment.

Employer sent only one notice, no other notice was sent. Neither the public notice in the Phil Daily Inquirer, a newspaper could constitute substantial compliance. What the public notice did was to inform the public that petitioner was already separated as of June 20, 1996, the same day he was suspended.

STA CATALINA COLLEGE V. NLRC (LABOR)

FACTS: Hilaria was hired as an elementary teacher in petitioner school in 1955 until 1970. In 1970, she applied for and was granted 1 year leave of absence without pay on account of her mother's illness. In the meantime, she was employed as a teacher in another school. In 1982, she applied anew at petitioner school. When she reached the compulsory retirement age of 65, petitioner school pegged her retirement benefits only from her service from 1982 to 1997. Hilaria then files a complaint for non-payment of retirement benefits.

HELD: HILARIA ABANDONED HER WORK, for which reason, she could not be credited for her services from 1955 to 1970 in determining her retirements benefits for after 1 year of leave of absence in 1971 without her requesting for extension thereof as in fact she had not been heard from until she resurfaces in 1982 when she reapplied, she abandoned her teaching position as in fact she was employed elsewhere and effectively relinquished the retirement benefits that accumulated during said period.

ABANDONMENT OF WORK being a just cause for terminating the services of Hilaria, petitioner school was under no obligation to serve a written notice to her.

SUNDOWNER DEVELOPMENT V. DRILON (LABOR)

FACTS: Hotel Mabuhay leased the premises belonging to Syjuco. However, due to non-payment of rentals, a case for ejectment was filed and Hotel Mabuhay offered to amicably settle by surrendering the premises and to sell its assets and property to any interested party, to which Syjuco acceded.

HELD: The absorption of the employees of Hotel Mabuhay may not be imposed on Sundowner, who has no liability whatsoever to the employees of Hotel Mabuhay and its responsibility if at all, is only to consider them for re-employment in the operation of the business in the same premises. There can be no implied acceptance of the employees of Hotel Mabuhay by petitioner as it is expressly provided in the agreement that petitioner has no commitment or duty to absorb them.

The rule is that unless expressly assumed. labor contracts such as employment contracts and CBAs are not enforceable against a transferee of an enterprise, labor contracts being IN PERSONAM, thus, binding only between the parties. A labor contract merely creates an action in personam and does not create an real right which should be respected by third parties. This conclusion draws its force from the right of an employer to select his employees and to decide when to engage them as protected under our Constitution and the same can only be restricted by law through the exercise of police power.

As a general rule, there is no law requiring a bona fide purchaser of assets of an on-going concern to absorb in its employ the employees of the latter. However, although the purchaser is not legally bound to absorb in its employ the employees of the seller, the parties are liable to the employees if the transaction between is clothed with bad faith.

PIDO V. NLRC (LABOR)

FACTS: Pido, an employee of Cherubim Security was suspended which eventually led to his illegal dismissal.

HELD: There was indeed CONSTRUCTIVE DISMISSAL. His prolonged suspension, owing to respondent's neglect to conclude the investigation had ripened to constructive dismissal. His filing of a complaint for constructive dismissal, along with a prayer for reinstatement clearly indicates that he did not abandon his work.

Verily, the floating status requires the dire exigency of the employer's bona fide suspension of operation of a business or undertaking. In security services, this happens when the security agency's clients which do not renew their contracts are more than those that do and the ones that the agency gets. Also, in instances when contracts for security services stipulate that the client may request the agency for the replacement of the guards assigned to it even for want of cause, the replaced security guard may be placed on temporary off-detail if there are no available posts under respondent's existing contracts.

When a security guard is placed on a floating status, he does not receive any salary or financial benefit provided by law. Due to the grim economic consequences to the employee, the employer should bear the burden of proving that there are no posts available to which the employees temporarily out of work can be assigned.

DANZAS INTERNATIONAL V. DAGUMAN (LABOR)

FACTS: Petitioners aver that they were compelled to close the company's brokerage department, to which losses were alleged traceable due to incorrect handling of sales, in order to prevent further losses which threatened the company's viability. Essentially, petitioners invoke a blend of retrenchment to prevent losses and closure of a section of the company's business to justify the termination of private respondents.

HELD: UNJUSTIFIED TERMINATION, either as retrenchment to prevent losses because petitioners' evidence to prove business losses or closure of the establishment because the brokerage department did not actually cease operations.

The condition of business losses justifying retrenchment is normally shown by audited financial documents as well as annual income tax returns. Financial statements must be prepared and signed by independent auditors otherwise, they may be assailed as self-serving. Parenthetically, if the business losses that justify the closure of the establishment are duly proved, the right of affected employees to separation pay is lost for obvious reasons. Otherwise, the employer closing his business is obligated to pay his employees their separation pay.

SAN MIGUEL JEEPNEY SERVICE V. NLRC (LABOR)

FACTS: San Miguel had a contract with the US Naval Base in Zambales to provide transportation services to personnel and dependents inside the base facility. When said contract expired, San Miguel opted not to renew the existing contract nor bid on the new contract due to financial difficulties, it having suffered a net loss the previous year. As a consequence, the services of the complainants were terminated.

HELD: Apparently, San Miguel did not renew its contract because of sliding incomes and not because of serious business losses, thus, it cannot justify the non-payment of separation pay.

As San Miguel admitted, what they suffered were sliding incomes in other words, decreasing revenues. What the law speaks of is serious business losses or financial reverses. Clearly, sliding incomes are not necessarily losses, much less serious business losses within the meaning of the law.

PHILIPPINE CARPET V. STO TOMAS (LABOR)

FACTS: A Memorandum was issued informing all employees that a comprehensive cost reduction program would be implemented by the corporation "on account of depressed business conditions brought about by currency crisis and the 9/11 incident." After the retrenchment program was implemented, more than 200 new workers were hired, including some who have been retrenched, and some were promoted.

HELD: The corporation failed to adduce clear and convincing evidence to prove the confluence of the essential requisites for a valid retrenchment of its employees. It acted in bad faith in terminating the employment of the members of the union.

The requirements are:

1. that the retrenchment is reasonably necessary and likely to prevent business losses which if already incurred, 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. that the employer served written notice both to the employees and DOLE at least 1 month prior to the intended date of retrenchment;
3. that the employer pays the retrenched employees separation pay for every year of service, whichever is higher;
4. that the employer exercises its prerogative to retrench employees in good faith for the advancement of its interest and not to defeat or circumvent employees' right to security of tenure; and
5. that the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees such as status, efficiency, seniority, physical fitness, age, and financial hardship for certain workers.

TIERRA INTERNATIONAL V. NLRC (LABOR)

FACTS: Olivar, a shift supervisor for shipping company was dismissed from service and repatriated to the Philippines 6 months before his contract expired. Ground for dismissal: promotion of economy, efficiency, and profitability in operations and reduction of personnel whose positions are redundant or surplusage and/or reassignment of personnel to other available useful positions.

ISSUE: Was the termination of Olivar for just and valid cause:

HELD: YES. Olivar's position was deleted due to a decrease in scope of work assigned to the company. Unfortunately, there were no other available positions for which he could qualify. Other positions were also abolished, showing that he was not singled out and his termination was not arbitrary or malicious.

Redundancy exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. A position is redundant where it is superfluous and superfluity of a position may be the outcome of a number of factors such as overhiring or workers, decreased volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise.

The law does not make any distinction between a technical and non-technical position for purposes of determining the validity of termination due to redundancy. Neither does the law nor the employment contract here involved require that junior employees should first be terminated. In redundancy, what is looked into is the position itself, the nature of the services performed by the employee, and the necessity of such position.

LOPEZ SUGAR CORP V. FRANCO (LABOR)

FACTS: Lopez Sugar issued a Memorandum for the adoption of a special retirement program for selected supervisory and middle-level managers, allegedly due to over-staffing and duplication of functions. Private respondents, all supervisory employees who organized a labor union which was currently undergoing CBA negotiations with Lopez Sugar were included in its coverage and terminated from employment.

ISSUE: Was the termination of respondents by virtue of the special retirement program valid?

HELD: NO. The corporation illegally dismissed the private respondents by including them in its special retirement program, this debilitating the union, rendering it pliant by decapacitating its leadership. No standards, criteria, or guidelines for the selection of the employees to be dismisses were made known to them, and all they were told was that they had been selected for termination.

ESCAREAL V. NLRC (LABOR)

FACTS: Escareal's position as Pollution Control and Safety Manager was declared redundant.

HELD: Dismissal was illegal. PRC had no valid and acceptable basis to declare the position redundant.

If the aim was to generate savings in terms of the salaries that PRC would not be paying the employee anymore as a result of the streamlining of operations for improved efficiency, such move could hardly be justified in the face of PRC's hiring of fresh graduates for various positions. Besides, there would seem no compelling reason to save money by removing such an important position. As shown by their recent financial statements, PRC's net profits have steadily increased.

While concededly, Article 283 of the Labor Code does not require that the employer should be suffering financial losses before it could terminate the services of an employee on the ground of redundancy, it does not mean wither that a company which is doing well can effect such a dismissal whimsically or capriciously.

The position of Pollution Control and Safety Manager is required by law. Thus, it cannot be said that the services of employee are in excess of what is reasonably required by the enterprise.
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SORIANO V. NLRC (LABOR)

FACTS: PLDT utilized high technology equipment in its operations such as computers and digital switches which necessarily resulted in the reduction of the demand for the services of a switchman.

HELD: Dismissal was valid. PLDT submitted the relevant documents attesting redundancy of employing switchmen and it has also paid separation pay to the dismisses workers.

PLDT as employer, has the recognized right and prerogative to select persons to be hired and to designate the work as well as the employees to perform it. This includes the right of PLDT to determine the employees to be retained or discharged and who among the applicants are qualified and competent for a vacant position. The rationale for this principle is that PLDT is in the best position to ascertain what is proper for the advancement of its business interest. Thus, this Court cannot interfere with the wisdom and soundness of PLDT's decision as to who among the switchmen should be retained or discharged or who should be transferred to vacant positions, as long as such was made in good faith and not for the purpose of curbing the rights of the employees.

ASUFRIN V. SAN MIGUEL (LABOR)

FACTS: An illegal dismissal case which stemmed from SMC's new marketing system known as pre-selling scheme. As a consequence, all positions of route sales and warehouse personnel were declared redundant.

HELD: Dismissal was invalid. In selecting employees to be dismissed, a fair and reasonable criteria must be used such as but not limited to

1. less preferred status (e.g., temporary employee);
2. efficiency; and
3. seniority.

In the case at bar, no criterion whatsoever was adopted by the employee. Furthermore, SMC has not shown how the cessation of the employees' services would contribute to the ways and means of improving efficiency and cutting distribution overhead and other related costs.

In other words, it is not enough for a company to merely declare that it has become overmanned. It must produce adequate proof that such is the actual situation to justify the dismissal of the affected employees for redundancy.

WILTSHIRE FILE V. NLRC (LABOR)

FACTS: Ong was dismissed because of serious business losses. In the termination letter, the ground alleged was redundancy of the position. Ong countered that there could be no redundancy because nobody except him in the company was then performing the same duties.

HELD: Dismissal was valid. The losses were proven by the company and most importantly, company finally closed its doors and terminated all its operations. SC considered that finally shutting down business operations constitutes strong confirmatory evidence of financial distress.

REDUNDANCY exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. That no other person was holding the same position that employee held does not show that his position had not become redundant.

The characterization of employee's services as no longer necessary or sustainable and therefore, properly terminable, was a valid exercise of BUSINESS JUDGMENT on the part of the employer.

The determination of the continuing necessity of a particular officer or position in a business corporation is MANAGEMENT PREROGATIVE, and the courts will not interfere with the exercise of such so long as no abuse of discretion or merely arbitrary or malicious action on the part of the management is shown.

BUSINESS SERVICES OF THE FUTURE TODAY V. CA (LABOR)

FACTS: The employee was terminated on the ground of severe business losses. The employers believed however, that since the employee was also a stockholder, there was no need to notify the DOLE of the closure since as stockholder, he was presumed to have taken part in the decision to close the business.

HELD: NOTICE OF CLOSURE to the DOLE is mandatory. It allows the DOLE to ascertain whether the closure and/or dismissals were done in good faith and not a pretext for evading obligations to the employees. This requirement protects the workers' right to security of tenure. Failure to comply with the requirement taints the dismissal.

An exception is when the employee consented to his retrenchment, the required prior notice to the DOLE is not necessary as the employee thereby acknowledges the existence of a valid cause for termination of his employment. However, there is no evidence to show that the employee consented to his dismissal and for this reason, the employee should have submitted a written notice of closure to the DOLE.

The NLRC and the CA were unanimous in finding that the closure was bona fide. As in the case of Agabon, nominal damages were awarded to vindicate employee's right to due process.

FILIPINAS V. GATBALAYAN (LABOR)

FACTS: Another illegal dismissal case by the workers who were terminated due to massive retrenchment of the company to forestall serious business losses and/or closure of operations.

ISSUE: Under what circumstances does the employer become legally privileged to retrench and reduce the number of employees?

HELD: The following are general standards in terms of which the acts of employer must 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 such imminence can be perceived objectively and in good faith by the employer.
3. It must be reasonably necessary and likely to effectively prevent the expected losses.
4. The alleged losses if already realized, and the expected imminent losses sought to be forestalled, must be proven by sufficient and convincing evidence.

To impart operational meaning to the constitutional policy of providing full protection to labor, the employer's prerogative to bring down labor costs by retrenching must be exercised essentially as a measure of last resort, after less drastic means, e.g., reduction of both management and rank-and-file bonuses and salaries, going on reduced time, improving manufacturing efficiencies, trimming of marketing and advertising costs, etc.

UICHICO V. NLRC (LABOR)

FACTS: The case is an illegal dismissal case filed by workers of Crispa who were terminated on the ground of retrenchment due to alleged serious business losses suffered by the company.

HELD: The Statement of Profits and Losses submitted by Crispa to prove its alleged losses, without the accompanying signature of a CPA or without being audited by an independent auditor, is not credible. This is not the kind of sufficient and convincing evidence necessary to discharge the burden of proof required to establish the alleged losses suffered by Crispa.

The corporate directors and officers of Crispa are SOLIDARILY LIABLE with the corporation for the termination of employment done with malice or in bad faith. In this case, it is undisputed that they have a direct hand in the illegal dismissal of respondent employees.

The law employees the right of every business entity to reduce its work force if the same is made necessary by compelling economic factors which would endanger its existence or stability. In spite of overwhelming support granted by the social justice provisions of our Constitution in favor of labor, the fundamental law itself guarantees, even during the process of tilting the scales of social justice towards workers and employees the right of enterprises to reasonable returns on investment and to expansion and growth.

AGABON V. NLRC (LABOR)

FACTS: Agabon was dismissed for abandonment of work (subcontracting for another company). The court held that the cause for the dismissal was valid but the company failed to follow notice requirements. The company reasoned that it would be useless becuase the Agabons did not reside there anymore.

HELD: This is not a valid excuse because the TWIN NOTICE REQUIREMENTS are mandatory. The dismissal is upheld but the company should be held liable for nominal damages, for the violation of his right to satutory due process.

the law also recognizes the right of the employer to expect from its employees not only good performance, adequate work and diligence, but also good conduct and loyalty. The employer may not be compelled to continue to employ such persons whose continuance in the service will patently be inimical to his interests.