Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=82558:56423&catid=1577&Itemid=566
Timestamp: 2019-04-20 08:40:15+00:00

Document:
G.R. No. 191475, December 11, 2013 - PHILIPPINE CARPET MANUFACTURING CORPORATION, PACIFIC CARPET MANUFACTURING CORPORATION, MR. PATRICIO LIM AND MR. DAVID LIM, Petitioners, v. IGNACIO B. TAGYAMON, PABLITO L. LUNA, FE B. BADAYOS, GRACE B. MARCOS, ROGELIO C. NEMIS, ROBERTO B. ILAO, ANICIA D. DELA CRUZ AND CYNTHIA L. COMANDAO, Respondents.
PHILIPPINE CARPET MANUFACTURING CORPORATION, PACIFIC CARPET MANUFACTURING CORPORATION, MR. PATRICIO LIM AND MR. DAVID LIM, Petitioners, v. IGNACIO B. TAGYAMON, PABLITO L. LUNA, FE B. BADAYOS, GRACE B. MARCOS, ROGELIO C. NEMIS, ROBERTO B. ILAO, ANICIA D. DELA CRUZ AND CYNTHIA L. COMANDAO, Respondents.
WHEREFORE, the petition is GRANTED. The private respondent is hereby ordered to reinstate the petitioners with full backwages less the amounts they received as separation pays. In case reinstatement would no longer be feasible because the positions previously held no longer exist, the private respondent shall pay them backwages plus, in lieu of reinstatement, separation pays equal to one (1) month pay, or one-half (1/2) month pay for every year of service, whichever is higher. In addition, the private respondent is hereby ordered to pay the petitioners moral damages in the amount of P20,000.00 each.
Petitioner Philippine Carpet Manufacturing Corporation (PCMC) is a corporation registered in the Philippines engaged in the business of manufacturing wool and yarn carpets and rugs.4 Respondents were its regular and permanent employees, but were affected by petitioner’s retrenchment and voluntary retirement programs.
This is to inform you that in view of a slump in the market demand for our products due to the un-competitiveness of our price, the company is constrained to reduce the number of its workforce. The long-term effects of September 11 and the war in the Middle East have greatly affected the viability of our business and we are left with no recourse but to reorganize and downsize our organizational structure.
We wish to inform you that we are implementing a retrenchment program in accordance with Article 283 of the Labor Code of the Philippines, as amended, and its implementing rules and regulations.
In this connection, we regret to advise you that you are one of those affected by the said exercise, and your employment shall be terminated effective at the close of working hours on April 15, 2004.
Accordingly, you shall be paid your separation pay as mandated by law. You will no longer be required to report for work during the 30-day notice period in order to give you more time to look for alternative employment. However, you will be paid the salary corresponding to the said period. We shall process your clearance and other documents and you may claim the payables due you on March 31, 2004.
On appeal, the National Labor Relations Commission (NLRC) sustained the LA decision.20 In addition to the LA ratiocination, the NLRC emphasized the application of the principle of laches for respondents’ inaction for an unreasonable period.
IN RENDERING ITS DISPUTED DECISION AND RESOLUTION, THE COURT A QUO HAS DECIDED A QUESTION OF SUBSTANCE NOT IN ACCORD WITH LAW AND/OR ESTABLISHED JURISPRUDENCE.
As for equity which has been aptly described as a “justice outside legality,” this is applied only in the absence of, and never against, statutory law or, as in this case, judicial rules of procedure. Aequetas nunguam contravenit legis. The pertinent positive rules being present here, they should preempt and prevail over all abstract arguments based only on equity.
The main issue sought to be determined in this case is the validity of respondents’ dismissal from employment. Petitioners contend that they either voluntarily retired from the service or terminated from employment based on an authorized cause. The LA and the NLRC are one in saying that the dismissal was legal. The CA, however, no longer discussed the validity of the ground of termination. Rather, it applied the Court’s decision in the Philcea case where the same ground was thoroughly discussed. In other words, the appellate court applied the doctrine of stare decisis and reached the same conclusion as the earlier case.
The question, therefore, is whether the factual circumstances of this present case are substantially the same as the Philcea case.
This case and the Philcea case involve the same period which is March to April 2004; the issuance of 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.
Respondents failed to adduce clear and convincing evidence to prove the confluence of the essential requisites for a valid retrenchment of its employees. We believe that respondents acted in bad faith in terminating the employment of the members of petitioner Union.
It bears stressing that the appropriation of P20,000,000.00 by the respondent Corporation on September 16, 2004 was made barely five months after the 77 Union members were dismissed on the ground that respondent Corporation was suffering from "chronic depression." Cash dividends were likewise declared on March 29, 2004, barely two weeks after it implemented its "retrenchment program."
If respondent Corporation were to be believed that it had to retrench employees due to the debilitating slump in demand for its products resulting in severe losses, how could it justify the purchase of P20,000,000.00 worth of machinery and equipment? There is likewise no justification for the hiring of more than 100 new employees, more than the number of those who were retrenched, as well as the order authorizing full blast overtime work for six hours daily. All these are inconsistent with the intransigent claim that respondent Corporation was impelled to retrench its employees precisely because of low demand for its products and other external causes.
That respondents acted in bad faith in retrenching the 77 members of petitioner is buttressed by the fact that Diaz issued his Memorandum announcing the cost-reduction program on March 9, 2004, after receipt of the February 10, 2004 letter of the Union president which included the proposal for additional benefits and wage increases to be incorporated in the CBA for the ensuing year. Petitioner and its members had no inkling, before February 10, 2004, that respondent Corporation would terminate their employment. Moreover, respondent Corporation failed to exhaust all other means to avoid further losses without retrenching its employees, such as utilizing the latter’s respective forced vacation leaves. Respondents also failed to use fair and reasonable criteria in implementing the retrenchment program, and instead chose to retrench 77 of the members of petitioner out of the dismissed 88 employees. Worse, respondent Corporation hired new employees and even rehired the others who had been "retrenched."
As shown by the SGV & Co. Audit Report, as of year end December 31, 2003, respondent Corporation increased its net sales by more than P8,000,000.00. Respondents failed to prove that there was a drastic or severe decrease in the product sales or that it suffered severe business losses within an interval of three (3) months from January 2004 to March 9, 2004 when Diaz issued said Memorandum. Such claim of a depressed market as of March 9, 2004 was only a pretext to retaliate against petitioner Union and thereby frustrate its demands for more monetary benefits and, at the same time, justify the dismissal of the 77 Union members.
We find no reason to depart from the above conclusions which are based on the Court’s examination of the evidence presented by the parties therein. 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 relitigate the issues presented herein. In short, we adopt the Court’s earlier findings that there was no valid ground to terminate the employees.
A closer look at petitioners’ arguments would show that they want the Court to re-examine our decision in the Philcea case allegedly on the ground that the conclusions therein were based on erroneous interpretation of the evidence presented.
The Abaria case, however, is not applicable in this case. There is no reason to abandon the Court’s ruling in the Philcea case.
Do we apply the aforesaid decision to all the respondents herein? Again, we answer in the affirmative.
Just like the union members in the Philcea case, respondents Tagyamon, Luna, Badayos, Dela Cruz, and Comandao received similarly worded memorandum of dismissal effective April 15, 2004 based on the same ground of slump in the market demand for the company’s products. As such, they are similarly situated in all aspects as the union members. With respect to respondents Marcos, Nemis and Ilao, although they applied for voluntary retirement, the same was not accepted by petitioner. Instead, it issued notice of termination dated March 6, 2004 to these same employees.42 And while it is true that petitioner paid them separation pay, the payment was in the nature of separation and not retirement pay. In other words, payment was made because of the implementation of the retrenchment program and not because of retirement.43 As their application for availing of the company’s voluntary retirement program was based on the wrong premise, the intent to retire was not clearly established, or rather that the retirement is involuntary. Thus, they shall be considered discharged from employment.44 Consequently, they shall be treated as if they are in the same footing as the other respondents herein and the union members in the Philcea case.
“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.”45 To excuse respondents from complying with the terms of their waivers, they must locate their case within any of three narrow grounds: (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.46 The instant case falls under the first situation.
Velasco, Jr., (Chairperson), Leonardo-De Castro,* Abad, and Leonen, JJ., concur.
* Designated Acting Member in lieu of Associate Justice Jose Catral Mendoza, per Raffle dated February 16, 2011.
1 Penned by Associate Justice Jose Catral Mendoza, with Associate Justices Sesinando E. Villon and Marlene Gonzales-Sison, concurring, rollo, pp. 50-59.
2 Penned by Associate Justice Marlene Gonzales-Sison, with Associate Justices Sesinando E. Villon and Ramon R. Garcia, concurring; rollo, pp. 61-62.
4Philippine Carpet Employees Association (PHILCEA) v. Hon. Sto. Tomas, 518 Phil. 299 (2006).
14 CA rollo, pp. 74-93.
30GF Equity, Inc. v. Valenzona, G.R. No. 156841, June 30, 2005, 462 SCRA 466, 480.
31 See: GF Equity, Inc. v. Valenzona, supra; Mendoza v. NLRC, 350 Phil. 486 (1998); Reno Foods, Inc. v. National Labor Relations Commission, 319 Phil. 500 (1995).
32Mendoza v. NLRC, 350 Phil. 486, 495 (1998).
34Reno Foods, Inc. v. National Labor Relations Commission, supra note 31, at 509.
36Abaria v. National Labor Relations Commission, G.R. No. 154113, December 7, 2011, 661 SCRA 686, 712.
37Hacienda Bino/Hortencia Starke, Inc. v. Cuenca, 496 Phil. 198, 207 (2005).
38Philippine Carpet Employees Association (PHILCEA) v. Hon. Sto. Tomas, supra note 4, at 317-323.
40Abaria v. National Labor Relations Commission, supra note 36, at 713.
43 See Ariola v. Philex Mining Corp., 503 Phil. 765, 780 (2005).
45Emco Plywood Corporation v. Abelgas, 471 Phil. 460, 483 (2004).
46Quevedo v. Benguet Electric Cooperative, Inc., 599 Phil. 438, 451 (2009).
47Emco Plywood Corporation v. Abelgas, supra note 45, at 483; Philippine Carpet Employee Association v. Philippine Carpet Manufacturing Corporation, 394 Phil. 716, 728-729 (2000).
48 See: TEA-SPFL v. NLRC, 338 Phil. 681, 690 (1997).
49Ariola v. Philex Mining Corp., supra note 43, at 789.
50Becton Dickinson Phils., Inc. v. NLRC, 511 Phil. 566, 589-590 (2005).
51Emco Plywood Corporation v. Abelgas, supra note 45.

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