THIRD DIVISION
|
BUSINESS
SERVICES OF THE FUTURE TODAY, INC. and RAMON F. ALLADO, Petitioners, - versus - |
G.R.
No. 157133 Present: Quisumbing,
J., (Chairman), Carpio, Carpio Morales, and Tinga, JJ. |
|
COURT OF APPEALS,
GILBERT C. VERUASA and MA. CELESTINA A. VERUASA, Respondents. |
Promulgated: January
30, 2006 |
x - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
QUISUMBING, J.:
For review on certiorari
is the Decision[1]
dated
These are the antecedent facts:
Mailboxes, Etc. (Davao)
is the local franchisee of Mailboxes, Etc. (MBE), a US-based corporation
operating business support and communication service centers worldwide. It is operated locally by petitioner Business
Services of the Future Today, Inc. (BSFTI), whose stockholders are petitioner
Ramon Allado and his nominees.
On P15,000 monthly. Due to lack of funds
from BSFTI, however, they were not paid their salaries amounting to P142,613.93
from March 1997 to
On
On or about P13,125 as partial payment of their
salaries. Despite repeated demands, the
petitioners did not pay the balance of P129,488.93 due to the spouses.
On their part, petitioners
had a different story. They claim that on or about P300,000. Allado and Dominguez accepted the
counter-proposal.
According to petitioners,
Gilbert Veruasa then laid the groundwork and
periodically submitted reports of his activities, accomplishments, and concerns
to Allado and Dominguez. On September 26
and P300,000 contribution. Petitioners, however, aver that all signed
copies, which were entrusted to Gilbert, could no longer be located. The parties also agreed that Gilbert’s wife,
Celestina, would assist in the management of the business for which they would
receive compensation of P15,000 monthly.
During its first year of
operations, BSFTI suffered losses amounting to P1,145,461.43. The following year, it experienced further
cash problems. The owners failed to
attract other investors. As the owners
were no longer willing to infuse additional capital, Gilbert Veruasa and petitioners decided to close shop.
Although all employees
were informed of the company’s closure and their termination, Gilbert failed to
inform the DOLE. Instead, he took
possession of important company records as well as the properties which he
contributed earlier to BSFTI.
Thereafter, the Veruasa spouses instituted a complaint for illegal
dismissal. The Labor Arbiter ruled the dismissal
of the spouses illegal. The Labor
Arbiter ruled that the spouses were employees of BSFTI since all the elements
of an employer-employee relationship were present. Neither was there any showing that the spouses
were stockholders. Further, the Labor
Arbiter said it was unlikely that petitioners did not have a copy of the
alleged Shareholders’ Agreement, if indeed there was such an agreement
evidencing the spouses’ participation in the business. Nor did BSFTI’s
articles of incorporation show that the spouses were incorporators. Thus, their dismissal of the spouses should
have been in accordance with the Labor Code.
Although the employees were given notices of termination, DOLE was not
provided a notice of closure. The Labor
Arbiter awarded the spouses P496,897.46 representing their separation pay, backwages, and 13th
month pay, plus 10% attorney’s fees.
Upon appeal by both
parties, the National Labor Relations Commission (NLRC) dismissed the case[5]
and ruled that, (1) Gilbert was both a BSFTI employee and stockholder as
evidenced by his communications to BSFTI’s other stockholders; (2) BSFTI was
not obliged to pay separation benefits to the spouses since there was a valid
closure of business due to serious financial losses; (3) the spouses were not
entitled to backwages since as manager, it was Gilbert’s duty to notify the
DOLE of the closure; (4) there was no basis for awarding 13th month
pay; and (5) there was no basis for the claim for unpaid salaries since there
were petty cash vouchers showing full payment of the spouses’ salaries.
On appeal, the Court of
Appeals reversed[6]
the NLRC and reinstated the decision of the Labor Arbiter with modification. The decretal portion of the decision reads:
WHEREFORE,
the assailed resolutions dated
1.
13th Month pay - P 12,787.50
2. Backwages -
467,512.50
TOTAL - P480,300.00
Less: Excess
in advance P 18,084.05
PARTIAL
NET - P462,215.95
Add: 10% of
total award
as
attorney’s fees - P
46,221.59
TOTAL
NET - P508,437.54
SO
ORDERED.[7]
The appellate
court held that the spouses were employees of BSFTI since all the essential elements
of an employer-employee relationship were present. According to the appellate court, there was no
evidence that Gilbert was a stockholder other than the petitioners’ bare
allegation that the parties had entered into a Shareholders’ Agreement. It likewise ruled that it was not Gilbert’s
duty, but petitioners’ to notify the DOLE of the closure. Absent such notice, the dismissal was without
effect. Nevertheless, it disallowed the
payment of separation pay since the closure was due to serious financial
losses. Instead, it ordered the payment
of backwages and unpaid salaries, for lack of proof that the salaries were paid.
The petitioners
now come to this Court alleging that:
2) Even
assuming arguendo the dismissal of respondents was
ineffectual, they are not entitled to backwages and
13th month pay from the time of their dismissal until finality of
the decision because the business of petitioner ceased to operate
simultaneously with their dismissal; and
3) Petitioner
submitted documents to prove that respondents were paid their salaries in full
and were even overpaid.[8]
Briefly,
the key issues in this petition are: (1) Were the spouses employees or stockholders of
BSFTI? (2) If they were employees, were they validly dismissed? and (3) Are
they entitled to 13th month pay, backwages,
separation pay as well as unpaid salaries?
Preliminarily,
it bears stressing that the prior existence of an employer-employee
relationship is an indispensable precondition for a claim of illegal dismissal
to prosper.[9]
Here, both parties admitted that Gilbert
and Celestina were hired as BSFTI’s manager and assistant manager,
respectively, with P15,000 monthly salary. The petitioners would have us believe,
however, that Gilbert was also a stockholder, hence, there was no need to notify
DOLE of the closure since as stockholder, he was presumed to have taken part in
the decision to close the business.
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 this requirement taints
the dismissal.[10] This rule, however, admits of exceptions. If the employee consented to his retrenchment
due to the closure or cessation of operation, 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.[11]
Did respondent
Gilbert Veruasa consent to his dismissal?
The
evidence shows that he did not. Although
only his correspondences with the petitioners suggest
that he was a stockholder of BSFTI,[12]
there is no showing that he participated in the alleged stockholders’ meeting
where the company’s closure was discussed. The self-serving Joint Affidavit of Allado and
Dominguez attesting that Gilbert participated in the meeting discussing the
closure is insufficient.[13]
The minutes of such meeting would have
been better. Further, the SEC certification
dated
Were
private respondents validly dismissed?
Article
283 of the Labor Code is the applicable law.
It states,
ART.
283. 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. In case of termination due to the installation
of labor saving devices or redundancy, the worker affected thereby shall be
entitled to a separation pay equivalent to at least his one (1) month pay or to
at least one (1) month pay for every year of service, whichever is higher. 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 (1/2) 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.
For
the cessation of business operations due to serious business losses or
financial reverses to be valid, the employer must give the employee and the
DOLE written notices 30 days prior to the effectivity of his separation.
In
Agabon v. National Labor Relations
Commission,[15] we ruled that where the dismissal is for
an authorized cause, the lack of statutory due process should not nullify the
dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the
employee, in the form of nominal damages, for the violation of his right to
statutory due process.[16]
The amount of such damages is addressed
to the sound discretion of the Court, taking into account the relevant
circumstances.[17]
In Jaka
Food Processing Corporation v. Pacot,[18]
we noted that
the sanction should be stiffer because the dismissal process was initiated by the
employer’s exercise of its management prerogative.
The NLRC and the Court of
Appeals were unanimous in finding that BSFTI’s closure was bona fide.
The
records before us revealed that it suffered losses from 1996 to 1998.[19]
Juxtaposing the facts of this
case vis the applicable law and jurisprudence, P40,000 as nominal damages would be sufficient
to vindicate each respondent’s right to due process. A violation of that right suffices to support
an award of nominal damages.[20]
In view of the valid dismissal, there is, thus, no basis for awarding
the spouses P12,787.50 as 13th month pay.
Lastly, the Labor Arbiter[21]
and the NLRC[22]
found that the spouses’ advances exceeded
their unpaid salaries by P43,402.54. The NLRC even noted that Annexes 18 to 341 of
the petitioners’ Position Paper contained the petty cash vouchers evidencing payment
of their salaries up to P15,000 from March 1997 to P129,488.93, minus the P13,125 which Allado paid to
them. Yet, in their Motion for Partial Clarification/Reconsideration,[25]
they admitted that their total advances amounted to P178,075.95. Hence, based on their admitted advances, they
were overpaid by P48,587.02. This
is even a larger amount than what was arrived at by the Labor Arbiter and the
NLRC. Said amount of P48,587.02
should be paid back to petitioners, to prevent unjust enrichment.
WHEREFORE, the instant petition is PARTIALLY GRANTED. Accordingly, the assailed Decision dated
April 16, 2002, as well as the Resolution dated January 15, 2003, of the Court
of Appeals in CA-G.R. SP No. 66733, are SET ASIDE, and a new one
entered upholding the legality of the dismissal. Petitioners are ORDERED to pay each of
the private respondents the amount of P40,000, or a total of P80,000
for the spouses representing nominal damages.
Private respondents, however, are also ORDERED to refund to
petitioners the amount of P48,587.02, which is the amount of admitted
advances taken by the Veruasa spouses exceeding the
amount of their unpaid salaries.
SO
ORDERED.
|
|
LEONARDO A. QUISUMBING Associate Justice |
WE CONCUR:
|
ANTONIO T. CARPIO Associate Justice |
|
|
CONCHITA CARPIO MORALES Associate Justice |
DANTE O. TINGA Associate Justice |
ATTESTATION
I attest that the conclusions in the
above Decision were reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
|
|
LEONARDO A. QUISUMBING Associate Justice Chairman, Third Division |
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution, and the Division Chairman’s Attestation, it is hereby
certified that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
|
|
ARTEMIO V. PANGANIBAN Chief Justice |
[1] Rollo, pp. 29-41. Penned by Associate Justice Remedios A. Salazar-Fernando, with Associate Justices Perlita J. Tria-Tirona, and Eliezer R. Delos Santos concurring.
[2]
[3]
[4]
[5] Rollo, pp. 118-125.
[6]
[7]
[8]
[9] Palomado v. National Labor Relations
Commission, G.R. No. 96520,
[10] Me-Shurn Corporation v. Me-Shurn Workers
Union-FSM, G.R. No. 156292, 11 January
2005, 448 SCRA 41, 54; See Guerrero
v. National Labor Relations Commission, G.R. No. 119842,
[11] Dole Philippines, Inc. v. National Labor
Relations Commission, G.R. No. 120009, 13 September 2001, 365 SCRA 124, 136; See International Hardware, Inc. v. NLRC, G.R. No. 80770,
[12] The letter dated May 6, 1995, contained his proposals regarding the parties’ equity contribution; the letters dated January 29, February 15, March 23, and May 14, 1996, outlined the details of the capital call made by the Board of Directors where he was enumerated as one of the stockholders; and the letters dated March 4, March 20, and April 21, 1998, contained his demands for the reimbursement of his capital infusion after the business was closed.
[13] Rollo, p. 196.
[14]
[15] G.R. No. 158693,
[16] Philippine Pizza, Inc. v. Bungabong, G.R.
No. 154315,
[17] Ibid.
[18] G.R. No. 151378,
[19] Rollo, pp. 208,
215.
[20] Almeda
v. Cariño, G.R. No. 152143, 13 January 2003, 395 SCRA 144, 149-150.
[21] Rollo, p. 84.
[22]
[23]
[24]
[25]