G.R. No. 173154, December 09, 2013
SANGWOO PHILIPPINES, INC. AND/OR SANG IK JANG, JISSO JANG, WISSO JANG, AND NORBERTO TADEO, Petitioners, v. SANGWOO PHILIPPINES,INC. EMPLOYEES UNION – OLALIA, REPRESENTED BY PORFERIA SALIBONGCOGON,1Respondents.
[G.R. No. 173229]
SANGWOO PHILIPPINES, INC. EMPLOYEES UNION – OLALIA, REPRESENTED BY PORFERIA SALIBONGCOGON, Petitioners, v. SANGWOO PHILIPPINES INC. AND/OR SANG IK JANG, JISSO JANG, WISSO JANG, AND NORBERTO TADEO, Respondent.
D E C I S I O N
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  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  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. (Emphasis and underscoring supplied)In this case, the LA, NLRC, and the CA all consistently found that SPI 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.31 Perforce, without any cogent reason to deviate from the findings on the validity of SPI’s closure, the Court thus holds that SPI is not obliged to give separation benefits to the minority employees pursuant to Article 297 of the Labor Code as interpreted in the case of Galaxie. As such, SPI should not be directed to give financial assistance amounting to P15,000.00 to each of the minority employees based on the Formal Offer of Settlement. If at all, such formal offer should be deemed only as a calculated move on SPI’s part to further minimize the expenses that it will be bound to incur should litigation drag on, and not as an indication that it was still financially sustainable. However, since SPEU chose not to accept, said offer did not ripen into an enforceable obligation on the part of SPI from which financial assistance could have been realized by the minority employees.
Finally, with regard to the notice requirement, the Labor Arbiter found, and it was upheld by the NLRC and the Court of Appeals, that the written notice of closure or cessation of Galaxie’s business operations was posted on the company bulletin board one month prior to its effectivity. The mere posting on the company bulletin board does not, however, meet the requirement under Article  of “serving a written notice on the workers.” The purpose of the written notice is to inform the employees of the specific date of termination or closure of business operations, and must be served upon them at least one month before the date of effectivity to give them sufficient time to make the necessary arrangement. In order to meet the foregoing purpose, service of the written notice must be made individually upon each and every employee of the company. (Emphasis and underscoring supplied; citations omitted)Keeping with these principles, the Court finds that the LA, NLRC, and CA 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. As earlier explained, SPI was required to serve written notices of termination to its employees, which it, however, failed to do. It is well to stress that while SPI 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.35 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 circumstances.36 Thus, in the case of Industrial Timber Corporation v. Ababon37(Industrial Timber), the Court reduced the amount of nominal damages awarded to employees from P50,000.00 to P10,000.00 since the authorized cause of termination was the employer’s closure or cessation of business which was done in good faith and due to circumstances beyond the employer’s control, viz.:38
In the determination of the amount of nominal damages which is addressed to the sound discretion of the court, several factors are taken into account: (1) the authorized cause invoked, whether it was a retrenchment or a closure or cessation of operation of the establishment due to serious business losses or financial reverses or otherwise; (2) the number of employees to be awarded; (3) the capacity of the employers to satisfy the awards, taken into account their prevailing financial status as borne by the records; (4) the employer’s grant of other termination benefits in favor of the employees; and (5) whether there was a bona fide attempt to comply with the notice requirements as opposed to giving no notice at all.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 – similar to the case of Industrial Timber – deems it just to reduce the amount of nominal damages to be awarded to each of the minority employees from P50,000.00 to P10,000.00. To be clear, the foregoing award should only obtain in favor of the minority employees and not for those employees who already received sums equivalent to separation pay and executed quitclaims “releasing [SPI] now and in the future any claims and obligation which may arise as results of [their] employment with the company.”39 For these latter employees who have already voluntarily accepted their dismissal, their executed quitclaims practically erased the consequences of infirmities on the notice of dismissal,40 at least as to them.
In the case at bar, there was a valid authorized cause considering the closure or cessation of ITC’s business which was done in good faith and due to circumstances beyond ITC’s control. Moreover, ITC had ceased to generate any income since its closure on August 17, 1990. Several months prior to the closure, ITC experienced diminished income due to high production costs, erratic supply of raw materials, depressed prices, and poor market conditions for its wood products. It appears that ITC had given its employees all benefits in accord with the CBA upon their termination.
Thus, considering the circumstances obtaining in the case at bar, we deem it wise and just to reduce the amount of nominal damages to be awarded for each employee to P10,000.00 each instead of P50,000.00 each. (Emphasis and underscoring supplied)
* Designated Acting Member per Special Order No. 1627.
1 “Forfiria Salimbongcogon” in some parts of the records.
2Rollo (G.R. No. 173154), pp. 29-43; rollo(G.R. No. 173229), pp. 53-84.
3Rollo (G.R. No. 173154), pp. 8-22. Penned by Associate Justice Jose L. Sabio, Jr., with Associate Justices Noel G. Tijam and Mariflor Punzalan Castillo, concurring.
4 Id. at 23-24.
5Rollo (G.R. No. 173229), pp. 113-122 and 124-125, respectively. Signed by Presiding Commissioner Lourdes C. Javier and Commissioner Tito F. Genilo.
6 Id. at 138.
7 Id. at 35.
8 Id. at 135-137.
9 Id. at 154 and 154-A
10 Id. at 10.
11 Id. at 9.
12 Id. at 75-76.
13Rollo (G.R. No. 173154), pp. 75-76.
14 CA rollo, pp. 104-227.
15Rollo (G.R. No. 173229), pp. 155-159. Penned by Labor Arbiter Enrico Angelo C. Portillo.
16 Id. at 158.
17 Id. at 160-199.
18 Id. at 113-122.
19 CA rollo, pp. 2-24.
20 Id. at 424-427.
21 Id. at 441-444.
22 Id. at 432-433.
23 Id. at 438.
24Rollo (G.R. No. 173154), pp. 8-22.
25 Id. at 23-24.
26 As amended and renumbered by Republic Act No. 10151, entitled “AN ACT ALLOWING THE EMPLOYMENT OF NIGHT WORKERS, THEREBY REPEALING ARTICLES 130 AND 131 OF PRESIDENTIAL DECREE NUMBER FOUR HUNDRED FORTY-TWO, AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES.”
27 Article 297 (formerly Article 283) of the Labor Code, as amended, provides:Article 297. Closure of Establishment and Reduction of Personnel. – The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the worker and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. xxx In case 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, the separation pay shall be equivalent to one (1) month pay or at least one-half (½) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered as one (1) whole year. (Emphases and underscoring supplied)28J.A.T. General Services v. NLRC, G.R. No. 148340, January 26, 2004, 421 SCRA 78, 86.
29Galaxie Steel Workers Union (GSWU-NAFLU-KMU) v. NLRC, G.R. No. 165757, October 17, 2006, 504 SCRA 692, 700-701, citing North Davao Mining Corporation v. NLRC, G.R. No. 112546, March 13, 1996, 254 SCRA 721, 729-730.
30 Id. at 701, citing Cama v. Joni’s Food Services, Inc., G.R. No. 153021, March 10, 2004, 425 SCRA 259, 269.
31Ignacio v. Coca-Cola Bottlers Phils., Inc., G.R. No. 144400, September 19, 2001, 365 SCRA 418, 423.
32Shoppers Gain Supermart v. NLRC, G.R. No. 110731, July 26, 1996, 259 SCRA 411, 423.
33Angeles, et al. v. Polytex Design, Inc., G.R. No. 157673, October 15, 2007, 536 SCRA 159, 167, citing San Miguel Corporation v. Aballa, G.R. No. 149011, June 28, 2005, 461 SCRA 392, 430.
34Galaxie Steel Workers Union (GSWU-NAFLU-KMU) v. NLRC, supra note 28, at 701-702.
35 See Abbott Laboratories, Philippines v. Alcaraz, G.R. No. 192571, July 23, 2013.
36Industrial Timber Corporation v. Ababon, 520 Phil. 522, 527 (2006).
38 Id. at 527-528.
39 CA rollo, pp. 104-227.
40Talam v. NLRC, G.R. No. 175040, April 6, 2010, 617 SCRA 408, 426.