Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=82552:56412&catid=1577&Itemid=566
Timestamp: 2019-04-21 04:15:29+00:00

Document:
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,1 RESPONDENTS.; 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.
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.
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.
Before the Court are consolidated petitions for review on certiorari2 assailing the Decision3 dated January 12, 2006 and Resolution4 dated June 14, 2006 of the Court of Appeals (CA) in CA-G.R. SP No. 88965 that set aside the Resolutions5 dated January 26, 2005 and March 31, 2005 of the National Labor Relations Commission (NLRC), deleted the award of separation pay, and ordered the payment of financial assistance of P15,000.00 each to its employees.
On September 15, 2003, SPI temporarily ceased operations. Thereafter, it successively filed two (2) letters9 with the DOLE, copy furnished SPEU, for the extension of the temporary shutdown until March 15, 2004.10 Meanwhile, on October 28, 2003, SPEU filed a complaint for unfair labor practice, illegal closure, illegal dismissal, damages and attorney’s fees before the Regional Arbitration Branch IV of the NLRC.11 Subsequently, or on February 12, 2004, SPI posted, in conspicuous places within the company premises, notices of its permanent closure and cessation of business operations, effective March 16, 2004, due to serious economic losses and financial reverses.12 The DOLE was furnished a copy of said notice on February 13, 2004, together with a separate letter notifying it of the company’s permanent closure.13 SPEU was also furnished with a copy of the notice of permanent closure. Forthwith, SPI offered separation benefits of one-half (½) month pay for every year of service to each of its employees. 234 employees of SPI accepted the offer, received the said sums and executed quitclaims.14 Those who refused the offer, i.e., the minority employees,were nevertheless given until March 25, 2004 to accept their checks and correspondingly, execute quitclaims. However, the minority employees did not claim the said checks.
In a Decision15 dated June 4, 2004, the Labor Arbiter (LA) ruled in favor of SPI. The LA found that SPI was indeed suffering from serious business losses – as evidenced by financial statements which were never contested by SPEU – and, as such, validly discontinued its operations.16 Consequently, the LA held that SPI was not guilty of unfair labor practice, and similarly observed that it duly complied with the requirement of furnishing notices of closure to its employees and the DOLE. Lastly, the LA ruled that since SPI’s closure of business was due to serious business losses, it was not mandated by law to grant separation benefits to the minority employees.
Aggrieved, SPEU filed an Appeal Memorandum17 before the NLRC.
In aResolution18 dated January 26, 2005, the NLRC sustained the ruling of the LA, albeit with modification. While it upheld SPI’s closure due to serious business losses, it ruled that the members of SPEU are entitled to payment of separation pay equivalent to one-half (½) month pay for every year of service. In this relation, the NLRC opined that since SPI already gave separation benefits to 234 of its employees, the minority employees should not be denied of the same.
Dissatisfied, SPI filed a petition for certiorari19 before the CA, praying for, inter alia, the issuance of a temporary restraining order (TRO) and/or a writ of preliminary injunction against the execution of the aforesaid NLRC resolution.
In a Resolution20 dated April 12, 2005, the CA issued a TRO, which enjoined the enforcement of the NLRC resolution. Thereafter, in a Resolution21 dated June 3, 2005, the CA issued a writ of preliminary injunction against the same.
Meanwhile, pursuant to the CA’s Resolution22 dated May 19, 2005 which suggested that the parties explore talks of a possible compromise agreement, SPI sent a Formal Offer of Settlement23 dated May 24, 2005 to SPEU, offering the amount of P15,000.00 as financial assistance to each of the minority employees. On May 26, 2005, SPI sent a Reiteration of Formal Offer of Settlement to SPEU, reasserting its previous offer of financial assistance. However, settlement talks broke down as SPEU did not accept SPI’s offer.
In a Decision24 dated January 12, 2006, the CA held that the minority employees were not entitled to separation pay considering that the company’s closure was due to serious business losses. It pronounced that requiring an employer to be generous when it was no longer in a position to be so would be oppressive and unjust. Nevertheless, the CA still ordered SPI to pay the minority employees P15,000.00 each, representing the amount of financial assistance as contained in the Formal Offer of Settlement.
Both parties filed motions for reconsideration which were, however, denied in a Resolution25 dated June 14, 2006. Hence, these petitions.
The issues for the Court’s resolution are as follows: (a)whether or not the minority employees are entitled to separation pay; and (b) whether or not SPI complied with the notice requirement of Article 297 (formerly Article 283)26 of the Labor Code.
Both petitions are partly meritorious.
A. Non-entitlement to Separation Benefits.
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.
B. Insufficient Notice of Closure.
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 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.
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.
Carpio, (Chairperson), Brion, Del Castillo, and Leonen,* JJ., concur.
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.
5Rollo (G.R. No. 173229), pp. 113-122 and 124-125, respectively. Signed by Presiding Commissioner Lourdes C. Javier and Commissioner Tito F. Genilo.
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.
19 CA rollo, pp. 2-24.
24Rollo (G.R. No. 173154), pp. 8-22.
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).
39 CA rollo, pp. 104-227.
40Talam v. NLRC, G.R. No. 175040, April 6, 2010, 617 SCRA 408, 426.

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