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Timestamp: 2019-04-21 12:10:40+00:00

Document:
G.R. No. 146225 - NASIPIT LUMBER COMPANY, ET AL. v. NATIONAL ORGANIZATION OF WORKINGMEN (NOWM), ET AL.
NASIPIT LUMBER COMPANY and PHILIPPINE WALLBOARD CORPORATION, Petitioners, v. NATIONAL ORGANIZATION OF WORKINGMEN (NOWM) AND ITS 30 MEMBERS, NAMELY: JUANITO LUNETA, MAXIMO SUSE, MARIANO SAJOR, CELSO LADANAN, CATALINO PAYOT, LOPE CABELAN, MANUEL FELIAS, ERNESTO DALAGUAN, ROMEO FLORES, SOPIO AQUILAM, JESUS LEGASPI, RAMONITO ROBLES, JESUS DANOCO, ARESTON LICAYAN, LORETO NAMOCA, ERNESTO GALOPE, SANTIAGO COCAMAS, RAULITO DALAGUAN, ROGELIO FELIAS, LEONILO OLEVER, ALEX CERO, TEODOLFO VILLANUEVA, SOPRONIO RANARION, ANGELO AWA, GERARDO CUHIT, ERNESTO AMORES, ROGELIO PAQUIRA, ALEJANDRO LOQUIAS, ARSENIO AMORA and AGAPITO YBANEZ, Respondents.
This is a Petition for Review of the Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 50579 affirming, with modification, the Decision2 of the National Labor Relations Commission (NLRC), in NLRC Case No. M-003556-97 and the resolution3 of the appellate court denying the petitioners' motion for reconsideration thereof for lack of merit.
Petitioner Nasipit Lumber Company (Nasipit) and its affiliate, petitioner Philippine Wallboard Corporation (Wallboard), employed, among others, thirty (30) individual workers at the Nasipit Processing Plant. These workers were members of the respondent, the National Organization of Workingmen (NOWM), which belonged to the Western Agusan Workers Union (WAWU-ALU-TUCP) which, in turn, was the certified bargaining unit in the said plant.
Nasipit applied with the National Wage and Productivity Commission (NWPC) for exemption from compliance with Wage Order Nos. RT-01 and RT-01-A. The NWPC rendered judgment on March 8, 1993 denying the application. The corporation challenged the said decision in this Court, and the case was docketed as G.R. No. 113097.
On January 29, 1996, the officers of respondent NOWM, WAWU-ALU-TUCP, representatives of the Department of Labor and Employment (DOLE) and the National Conciliation Mediation Board (NCMB) met and discussed the complaint. The NOWM demanded for the balance of the health bonus of its members for the year 1994, 13th month-pay, and the remaining backlog payables amounting to P1,800.000.00. Although no agreement was arrived at by the conferees, the petitioners granted financial assistance to their rank-and-file employees, security guards and company staff on February 9, 1996.
The petitioners were informed of the said resolution in a Letter5 dated February 19, 1996.
It appears that a Consolidated Statement of Income and Expenses was filed with the Bureau of Internal Revenue (BIR) on April 15, 1996 showing that petitioner Nasipit had a net loss of P13,489,031.00 in its operations for the year 1994, while its affiliate, petitioner Wallboard had a net loss of P8,754,366.00. It also appears that a Consolidated Statement of Income and Expenses was filed with the BIR on April 15, 1996 showing that for the year ending 1994, Wallboard incurred a net loss of P970,470.00 and for the year ending 1995, it incurred a net loss of P11,236,503.00.
In an Order dated September 4, 1996, the Regional Director directed petitioner Nasipit to pay to its employees P7,629,490.00 as unpaid wages. Petitioner Nasipit filed a motion for reconsideration which was denied. It appealed the Order to the DOLE, which was docketed as ROXIII-CI-002.
On October 24, 1997, the Secretary of Labor and Employment issued an Order7 directing the Regional Director to elevate the entire records of the case to the DOLE, Caraga Regional Office, for appropriate proceedings and computation of the total sum rightly due to the workers.
In the meantime, respondents NOWM and its thirty (30) members filed a complaint on November 18, 1996 against the petitioners for illegal cessation of business operations, non-payment of separation pay, underpayment of salary and salary arrears for one (1) year before the Sub-Regional Arbitration Branch of the NLRC. The respondents claimed that the petitioners terminated their employment on the allegation that the latter's operations were suspended effective January 1996. According to the respondents, they should be reinstated to their former positions, conformably to Article 286 of the Labor Code of the Philippines.
I. THE ISSUE OF ILLEGAL CESSATION OF OPERATIONS AND SEPARATION PAY IS THE SUBJECT OF ON-GOING EGOTIATIONS BETWEEN NALCO & AFFILIATES MANAGEMENT AND WAWU-ALU-TUCP (LOCAL 381-NMR) WHICH IS THE RECOGNIZED COLLECTIVE BARGAINING AGENT OF ALL COVERED WORKERS/EMPLOYEES WITHIN THE NASIPIT PLANT BARGAINING UNIT.
II. THE ISSUE OF NON-PAYMENT OF SALARY DIFFERENTIALS (P13.00 WAGE INCREASE) IS LIKEWISE BARRED BY A PRIOR PENDING ACTION BETWEEN THE SAME PARTIES FOR THE SAME CAUSE OR ISSUES BEFORE THE HONORABLE SUPREME COURT DOCKETED AS G.R. No. 113097 (Nasipit Lumber Co., Inc., et al., Petitioners, v. National Wages and Productivity Commission [NWPC], et al.).
III. THE ISSUE OF SALARY ARREARAGES IS ALSO BARRED BY A PRIOR ACTION BETWEEN THE SAME PARTIES FOR THE SAME CAUSE NOW PENDING BEFORE THE DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE) DOCKETED AS ROXIII-LSED-0963-CI-001 (In the matter of Complaint Inspection of Nasipit Lumber Co., Inc.).
As borne out by the records, respondents did not cause or initiate the cessation or suspension of respondent NALCO's operations. As aptly pointed out by respondents, NALCO desired to operate, but it cannot do so because on 18 February 1997 (sic), on account of a labor dispute, the general membership of WAWU-ALU-TUCP, the recognized CBA representative, approved Resolution No. 02-96 declaring that effective 19 February 1996, "No more rank-and-file workers of the company will report to work x x x."
Complaining union points out, however, that Resolution No. 02-96 was a mere offshoot of the respondents' refusal to pay the complainant's salaries which at the time the Resolution was passed amounted to about P1.8 Million Pesos. This case originally included as one of the causes of action, the non-payment of salaries to members of the complaining union over a period of one (1) year. This was the principal gripe which brought about the approval of Resolution No. 02-96. Incidentally, this claim was dropped by complainants in this case because it was [the] subject of another case pending before the Department of Labor and Employment under ROXIII-LSED-0963-CI-001.
Now, if the workers had not been paid their salaries for one (1) year, they have a justifiable reason not to continue working and opt to be paid their respective separation pay. An engine cannot run without gas, so to say. Similarly, the workers cannot be forced to work on an empty stomach.
We are not convinced. It must be borne in mind that the services of the private respondents were terminated in January 1996, a month before the other rank-and-file employees did not report to work. It seems to us that the petitioners made use of this event in order to avoid the fulfillment of their obligation to the private respondents. Moreover, the petitioners' insistence that the cessation of the operation was due to the union holds no water. As correctly observed by the union, such is a mere offshoot of the petitioners' refusal to make good their obligation to the workers concerned.
The CA cited the rulings of this Court in Industrial Timber Corporation v. NLRC,16 and Sebuguero v. NLRC17 to support their contentions.
The petitioners filed a motion for reconsideration on September 14, 2000, which was denied by the CA per its Resolution dated November 28, 2000.
Hence, the present Petition for Review .
While it may be true that even after six (6) months from January 1996, the individual respondents were without work, it was of their own doing and not that of petitioners. If the individual respondents themselves chose to no longer work pursuant to Resolution No. 02-96, how can their not reporting for work for a period exceeding six (6) months give rise to their being paid separation pay? By awarding them separation pay, the Honorable Court of Appeals placed a premium on the individual respondents' refusal to report for work.
In their comment on the petition, the respondents aver that the petitioners failed to adduce convincing evidence to justify the suspension of their operations. In fact, the respondents assert, the petitioners even gave financial assistance to the rank-and-file employees, security guards, middle managerial employees and the company staff.
The issues raised by the parties in this case are both factual and legal, to wit: (a) whether the petitioners suspended their operations on account of considerable losses incurred in the years 1994 and 1995; (b) whether the respondents were illegally dismissed by the petitioners; (c) whether the respondents are entitled to separation pay; and (d) if in the affirmative, the amount of entitlement of each individual respondent by way of separation pay and other monetary benefits.
(b) When the court a quo has so far departed from the accepted and usual course of judicial proceedings, or so far sanctioned such departure by a lower court, as to call for an exercise of the power of supervision.
We find that, based on the records, the petitioners merely downscaled their operations in 1995, and did not suspend the same because of economic difficulties. The respondents continued to work at the Nasipit Processing Plant although each of them received a monthly pay of only P600.00. The petitioners dismissed the respondents when the latter refused to report for work. We agree with the NLRC and the CA that the petitioners' claim of suspending operations in 1994 and 1995 was merely an afterthought to justify their dismissal of the respondents. It must be stressed that the petitioners obstinately refused to heed and agree to the respondents' just demands to pay their monetary benefits and backlog wages amounting to P1,800,000.00, which ultimately led to the latter's dismissal from employment.
Art. 286. When employment not deemed terminated - The bona fide suspension of the operations of a business or undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a military service or civic duty shall not terminate employment.
In all such cases, the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than one (1) month from the resumption of operations of his employer or from his relief from the military or civic duty.
Considering the severe consequences occasioned by retrenchment on the livelihood of the employee(s) to be dismissed, and the avowed policy of the State - under Sec. 3, Art. XIII of the Constitution, and Art. 3 of the Labor Code - to afford fall protection to labor and to assure the employee's right to enjoy security of tenure, the Court reiterates that "not every loss incurred or expected to be incurred by a company will justify retrenchment. The losses must be substantial and the retrenchment must be reasonably necessary to avert such losses. Settled is the rule that the employer bears the burden of proving this allegation of the existence or imminence of substantial losses, which by its nature is an affirmative defense. It is the duty of the employer to prove with clear and satisfactory evidence that legitimate business reasons exist to justify retrenchment. Failure to do so "inevitably results in a finding that the dismissal is unjustified." And the determination of whether an employer has sufficiently and successfully discharged this burden of proof "is essentially a question of fact for the Labor Arbiter and the NLRC to determine."
In the present case, the petitioners failed to prove with convincing evidence a bona fide suspension of their operations in 1994, 1995 and even in January 1996 due to acute economic losses in their operations.
First. The only evidence adduced by the petitioners that they sustained huge losses in their operations for 1994 and 1995 were the xerox copies of unsigned and unverified Comparative Statements of Income and Expenses for the Years Ended December 31, 1994 and 1995 filed with the BIR only on April 15, 1996. The petitioners failed to submit any other documents to support the said Comparative Statements. Thus, such statements are barren of probative weight.
Second. Despite their alleged huge losses in 1994 and 1995, the petitioners continued employing the respondents, although each of them received a monthly salary of only P600.00.
Third. The petitioners' claim that they were ready to resume operations in January 1996 were it not for the respondent union's issuance of Resolution No. 02-96 belies their contention that they sustained huge losses in their operations in 1994 and 1995. There is no evidence on record that the petitioners ever gave notice to their employees of the suspension of their operations, and, thereafter, that they were ready to resume such operation in January 1996.
Fourth. The CA declared that the petitioners even gave the following benefits to their employees on February 9, 1996; financial assistance of P300.00 for the rank-and-file employees; P400.00 for the security guards; P500.00 for middle managerial employees; and P750.00 for the company staff. The petitioners admitted these findings of the appellate court.
We note that the award of separation pay by the CA to the respondents was without prejudice to the ruling of this Court in Nasipit Lumber Company, et al. v. National Wages and Productivity Commission, et al..31 However, this Court, as early as April 27, 1998, had already promulgated its decision dismissing the petition in the said case.32 The decision of the CA has to be modified.
IN LIGHT OF THE FOREGOING, the petition is DENIED for lack of merit. The decision of the Court of Appeals is AFFIRMED with MODIFICATION. The petitioners are DIRECTED to pay, jointly and severally, each of the individual private respondents separation pay equivalent to one-half (1/2) month pay for every year of service. No costs.
Puno, (Chairman), Austria-Martinez, TINGA, and Chico-Nazario, JJ., concur.
1 Penned by Associate Justice Delilah Vidallon-Magtolis, with Associate Justices Eloy R. Bello, Jr. (retired) and Elvi John S. Asuncion, concurring.
2 RAB-10-11-00322-96 for "illegal cessation of business operations, non-payment of separation pay, underpayment of salary, salary differentials, salary arrears."
4 CA Rollo, p. 26.
10 CA Rollo, Annex "F."
16 243 SCRA 200 (1995).
17 248 SCRA 532 (1995).
27 Industrial Timber Corporation v. NLRC (5th Division), 273 SCRA 200 (1997).
29 287 SCRA 420 (1998).
30 J.A.T. General Services, et al. v. NLRC, G.R. No. 148340, January 26, 2004.
31 289 SCRA 667 (1998).

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