FIRST DIVISION
RONALDO B. CASIMIRO, G.R. No. 162233
ELISA
M. LAT, JOSE L. LALAP,
CELESTIN S, LACHICA,
REYNALDO S. MALLILLIN, Present:
LEONILA G. ROJO, JULIE H.
SEBASTIAN, EDITHA M. PANGANIBAN, C.J.,
SOLOMON, EMILIANO T. Chairperson,
TAMBAOAN
G.
TROZADO, AUSTRIA-MARTINEZ,
Petitioners, CALLEJO, SR., and
CHICO-NAZARIO, JJ.
- versus
-
STERN
REMBRANDT HOTEL and/or
GRACE KRISTIN MEEHAN
(General Manager), and ERIC Promulgated:
SINGSON (Owner),
Respondents.
x - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
D E C I S I O N
CALLEJO, SR., J.:
This is a Petition for Review on Certiorari under Rule 45 of the Revised
Rules of Court, assailing the Decision[1] of
the Court of Appeals (CA) in CA-G.R. SP. No. 64536, as well as the Resolution[2]
dated
Respondent Stern Real Estate & Development Corporation is a corporation duly organized and existing under Philippine laws, engaged in the business of purchasing, selling and operating buildings and other real properties for profit. One such property it owns is the Hotel Rembrandt located at No. 26 Tomas Morato Avenue, corner Scout Bayoran Street, Quezon City, with Grace Kristine Meehan as General Manager, and Eric Singson as its Director.[3] The hotel has been fully operational since 1996.
On
1. Due to the hotel’s dire financial status, the hotel
has decided to implement/offer a one-time non-recurring special separation
program (SSP) that all employees can avail of for the limited period of 10th
May to
2. If the number of employees who apply for the Special
Separation Program do not meet the minimum number required by the company,
management will be constrained to involuntary terminate the services of
employees due to financial losses. Those employees who would be terminated
after this program would only receive the legal benefits mandated by law.
A.
Guidelines
1. Covered
Employees - This program is open
only to all regular employees of the hotel.
- Pioneer employees will be given a special
consideration.
2. Separation
Pay -
The hotel will pay affected employees in accordance with the following benefit
schedule per year of service (computed as 12 months) on a pro-rata basis tax exempt.
a. Basic: One-half (1/2) month basic salary for [every]
year of service or one (1) month salary, whichever is higher.
b. Additional: (1) One year of service or less ….. P1,000.00
(2) Two years of service ………... P3,000.00
(3) Three years of service ………. P6,000.00
(4) Four years of service …………P10,000.00
3. Other
Entitlements
a. Vacation
Leaves. Employees with earned
vacation leaves whose applications for separation are accepted under this
program, shall be allowed to go on terminal leave to use up their leave
credits. While they are on leave, they shall be entitled to correspondingly
share in the Service Charges. For employees whose applications for separation
are accepted but whose services are needed up to their last day of employment,
their earned leaves shall be commuted/paid in cash.
b. Thirteenth
(13th) Month Pay. All
employees approved to avail of the SSP will be entitled to a pro-rata payment
of the 13th month pay (i.e.,
from 1st January
4. The basis of computation of the separation pay is the
monthly basic salary as of Wednesday, 26th May.
5. The release of the special separation package will be
around 2 weeks from the submission of the necessary clearances.
6. All applications accepted under this Program shall be
effective
7. An employee who avails of the Special Separation
Program is not entitled to any other benefits by reason of his separation. The
employee waives the right to any other benefits normally associated with
his/her employment at Hotel Rembrandt.
8. Employees with physical limitations due to recurring
illness or advanced age and who can no longer perform their jobs effectively
shall be given priority [u]pon the certification of a physician designated by
the hotel, if the concerned employee’s physical infirmities/limitations that [sic] may adversely affect the employee’s
job performance.
9. The hotel reserves the sole right and discretion to
decide on the case of an employee.
10. The number of employees to be separated will depend on:
a. The ability of the company to fund this one time,
non-recurring special separation program.
b. The company’s explicit approval of each application on
a case-to-case basis.
11. This special separation program is a one-time,
non-recurring program. It should not set any precedent nor be invoked in the
future.[5]
On
On
Petitioners were among the retrenched employees.[8] They later filed a complaint for “illegal dismissal in the guise of retrenchment and underpayment/non-payment of overtime pay, premium compensation for holiday and rest day” with prayer for moral and exemplary damages and attorney’s fees before the National Labor Relations Commission (NLRC). The complaint was docketed as NLRC NCR Case No. 00-08-08351-99.
According to the complainants, while the hotel management claimed that they were retrenched due to “serious financial losses,” it failed to satisfy the requirements of the Labor Code in terminating their employment: no notice was given to the Department of Labor of such intended retrenchment and no evidence was submitted to prove that the hotel had been suffering financial losses. Moreover, respondents had not only advertised their need for personnel vacated by complainants;[9] they had already started hiring replacements. The complainants were convinced that their retrenchment was only a ploy to ease them out of their respective jobs.[10]
On
WHEREFORE, premises above considered, a decision is hereby issued declaring the retrenchment of the complainants devoid of factual and legal basis, hence respondent firm[,] Grace Kristen [sic] Meehan and Eric Singson is [sic] hereby ordered to reinstate complainants to their former or equivalent position with full backwages minus what have been received by them as separation benefits, reckoned from the date of their actual dismissal [or] retrenchment until reinstated actually or in payroll, plus attorney’s fees equivalent to ten (10%) percent of the award. For this purpose, the Examination and Computation Unit of this Arbitration branch is hereby directed to make the necessary computation of the complainants’ backwages which computation is hereby adopted and to form an integral part of this decision as Annex “A.”
The other claims including damages are hereby dismissed for lack of merit.[12]
In compliance with the Labor
Arbiter’s directive, the Examination and Computation Unit of the NLRC issued a
computation of complainants’ entitlement, awarding in their favor a total of P1,988,908.91.[13]
In its Decision[19]
dated P19,272,539.37,
P18,512,683.00 and P13,669,695.00, respectively. The NLRC further
ruled that the Labor Arbiter erred in disregarding these statements and giving
full credence to complainants’ contention that the hotel’s expenses were bloated.
It pointed out that respondents presented receipts on appeal to show that the repair
and maintenance, light and water expenses, and telephone and communication
expenses were not fabricated. Citing The New
Valley Times Press v. National Labor Relations Commission,[20] it averred that evidence presented on appeal
may be considered by it, and pointed out that the complainants did not rebut
the evidence despite due notice.
The NLRC further ruled that, contrary
to the allegation of the complainants, the first-in-last-out policy was
observed by respondents, since evidence of the complainants’ efficiency and
performance for the past years were presented to show that this criteria was
considered. The labor tribunal pointed
out that this evidence was not rebutted by the complainants. It further ruled that complainants failed to
show that they were forced to sign quitclaims when they received their
respective separation pay. Citing Veloso v. Department of Labor and Employment,[21] it
declared that “dire necessity” is not an acceptable reason to set aside
quitclaims otherwise valid.
Aggrieved, the retrenched employees filed
before the CA a Petition for Certiorari under
Rule 65 of the Revised Rules of Court. On
On P50,000.00 cash bond
and motion for the reduction of the supersedeas
bond. Once the computation of the monetary
award was received on
cancellation of the cash bond, and moved that it be substituted with a surety
bond equivalent to the monetary award. The CA further ruled that petitioners
failed to show that respondents were in bad faith or that they intended to
delay payment. It observed that when the
Labor Arbiter issued the writ of execution, respondents instructed petitioners
to immediately report to the hotel on
Citing NDC-Guthrie
Plantations, Inc. v. National Labor Relations Commission,[27]
the CA declared that respondents were able to comply with all the requirements
for a valid retrenchment under Article 283 of the
Labor Code.
5.1. THAT THE
HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION EQUIVALENT TO
LACK OR IN EXCESS OF JURISDICTION WHEN IT RULED THAT THE APPEAL OF THE
RESPONDENTS WITH THE NATIONAL LABOR RELATIONS COMMISSION WAS PERFECTED DESPITE
THE FACT THAT THE APPEAL OR SURETY BOND OF P1,988,908.91 WAS POSTED
SEVENTY (70) DAYS LATE FROM RECEIPT OF THE DECISION OF THE LABOR ARBITER.
5.2. THAT THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION EQUIVALENT TO LACK OR IN EXCESS OF JURISDICTION WHEN IT RULED THAT THE PETITIONERS WERE NOT PREJUDICED WHEN THE NLRC ADMITTED THE APPEAL MEMORANDUM AS WELL AS THE ADDITIONAL EVIDENCE OF THE RESPONDENTS EVEN WITHOUT FURNISHING FIRST THE PETITIONERS COPIES THEREOF MORE SPECIFICALLY THE APPEAL MEMORANDUM.
5.3. THAT THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION EQUIVALENT TO LACK OR IN EXCESS OF JURISDICTION WHEN IT RULED THAT THERE WAS A VALID RETRENCHMENT TO WARRANT THE DISMISSAL OF THE PETITIONERS.
5.4. THAT THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION EQUIVALENT TO LACK OR IN EXCESS OF JURISDICTION WHEN IT RULED THAT THE PETITIONERS EXECUTED A VALID QUITCLAIM.
5.5. THAT THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION EQUIVALENT TO LACK OR IN EXCESS OF JURISDICTION WHEN IT ADMITTED AND ENTERTAINED THE COMMENT OF THE RESPONDENTS DESPITE ITS ORDER THAT CONSIDERED SAID RESPONDENTS TO HAVE WAIVED THE RIGHT TO FILE THEIR COMMENT AND SAID ORDER WAS NOT RECONSIDERED AND SET ASIDE THUS LEGALLY STILL IN FULL FORCE AND EFFECT.[28]
Petitioners insist that a decision in labor cases
involving a monetary award may be perfected only upon the posting of a cash or
surety bond, as mandated by Republic Act No. 6715, as well as Section 6, Rule
VI of the New Rules of Procedure of the NLRC. They aver that the reason behind the rule is
to give the workers an assurance that they will be paid in the event that they
win the case. They claim that there was no reason why respondents could not
afford to deposit the sum of P1,988.908.01. While the late filing of the
supersedeas bond has been relaxed in
a number of cases, there is no cogent reason to apply a liberal interpretation
in the instant case. The word “only” in the provision, according to
petitioners, makes it perfectly clear that the lawmakers intended the posting
of a cash or surety bond as the exclusive means by which an employer’s appeal
may be perfected. They insist that the appeal bond of P50,000.00 is
shockingly low and grossly inadequate, as it constitutes only 2.5% of the
monetary award.
Petitioners also aver that, contrary to respondents’
claim in the appellate court, they (respondents) were furnished a copy of the Labor
Arbiter’s decision, as well as the computation of the monetary award. In fact, it was respondents who did not provide
them a copy of their
Memorandum of Appeal, contrary to Rule IV, Section 3 of the New Rules of Procedure
of the NLRC. On this score alone, the appeal before the NLRC should have been
dismissed. Petitioners aver that they were prevented from filing the appropriate
pleadings on account of such intentional act. They insist that additional
evidence on appeal cannot be filed on personal whims and caprices, and that
“there are rules to be observed in order that the rights of the other party
will not be prejudiced and trampled upon.” They conclude that petitioners’
intentional failure to furnish them a copy of such appeal memorandum deprived them
of their right to be heard - ultimately, their right to due process.
On the merits of the case, petitioners stress that respondents were not motivated by honest intentions in effecting their dismissal. They remind the Court that while the law recognizes the employer’s right to protect its interest, such right should be exercised in a manner which does not infringe on the employees’ constitutional right to security of tenure. They insist that respondents presented “sanitized financial statements” to justify the legality of their retrenchment. They reiterate that they were not furnished copies of said statements, hence, their failure to submit evidence to controvert the same. Under the circumstances, respondents should have presented respondent hotel’s income tax returns for the preceding years since audited financial statements are not entirely reliable and can be easily fabricated.
On the appellate court’s finding that the quitclaims they executed were valid, petitioners insist that they were forced to do so since their employer was determined to carry out their dismissal. Since most of them were their respective families’ sole breadwinners, there was no other recourse but for them to sign such waivers out of dire necessity.
Respondents, for their part, allege that no new matter or issue was raised in the instant petition, a mere rehash of petitioners’ arguments before the appellate court, and that such arguments had already been passed upon by the appellate court.
The issues involved in this case are procedural and substantial in nature. On the procedural aspect, petitioners question the filing of the cash bond, which, according to them, was a measly amount as compared to the award of the Labor Arbiter. They likewise question the fact that the CA considered the evidence submitted by respondents on appeal before the NLRC, and they contend that this is a violation of their right to due process. On the other hand, the main and substantial issue to be resolved by the Court is whether petitioners were validly retrenched, and, corollarily, whether respondents presented adequate proof of financial losses, and whether the quitclaims executed by petitioners are valid and binding.
At the outset, the Court stresses that the substantial issues for resolution are factual in nature, and generally, factual findings of the NLRC are accorded respect. However, there is compelling reason to deviate from this salutary principle where, as in this case, such findings of facts of the NLRC are in conflict with that of the Labor Arbiter. Accordingly, this Court must of necessity review the records to determine which findings should be preferred as more conformable to the evidentiary facts.[29]
A careful perusal of the records show that respondents
filed their Memorandum of Appeal on P50,000.00 cash
bond. They also filed a Motion for Reduction of Supersedeas Bond. Thereafter, respondents’ new counsel filed a
Manifestation with Motion to Substitute (Cash Bond with Supersedeas Bond), alleging that a copy of the monetary award had
not been attached to the copy of the Labor Arbiter’s decision which was furnished
them. The NLRC approved the substitution in a Resolution[30]
dated P50,000.00 cash
bond was justified under the circumstances.
The second paragraph of Article 223 of the Labor Code states that when a judgment involving monetary award is appealed by the employer, the appeal may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment. This is to assure the workers that if they finally prevail in the case, the monetary award will be given to them upon dismissal of the employer’s appeal, and is meant to discourage employers from using the appeal to delay or evade payment of their obligations to the employees.[31] However, as provided for in Section 6, Rule VI of the New Rules of Procedure of the NLRC, such amount of the bond may be reduced in meritorious cases, upon motion of the appellant. The exercise of this authority is not a matter of right on the part of the movant but lies within the sound discretion of the NLRC upon showing of meritorious grounds.[32] Indeed, an unreasonable and excessive amount of bond would be oppressive and unjust, and would have the effect of depriving a party of his right to appeal.[33]
The Court likewise holds that the NLRC did not err
in admitting the receipts and other evidence attached to the Memorandum of
Appeal of respondents. In Tanjuan v. Philippine Postal Savings Bank,
Inc.,[34] where this Court was confronted with
the similar question, i.e., whether
proof of business losses may be admitted on appeal before the NLRC, we declared
that the NLRC is not precluded from receiving evidence on appeal because
technical rules of procedure are not binding in labor cases, which rule applies
to both employer and employee.[35]
Moreover, the fact that evidence was not presented before the Labor Arbiter will
not justify its outright rejection, particularly since such evidence is
absolutely necessary to resolve the issue of whether retrenched employees were
validly terminated.[36]
No
less than the Labor Code directs labor officials to use all reasonable means to
ascertain the facts speedily and objectively, with little regard to
technicalities or formalities,[37]
while Section 10, Rule VII of the New Rules of Procedure of the NLRC provides
that technical rules are not binding.[38]
Indeed, the application of technical rules of procedure may be relaxed in labor
cases to serve the demand of substantial justice.[39]
Contrary to petitioners’ claim, they were not denied due
process. The essence of due process in
administrative proceedings is simply an opportunity to explain one’s side or an
opportunity to present evidence in support of one’s defense.[40] In
this case, petitioners submitted their respective pleadings to controvert the
allegations of respondents.
Article 283[41]
of the Labor Code of the
x x x (1) that retrenchment
is reasonably necessary and likely to prevent business losses which, if already
incurred, are not merely de minimis,
but substantial, serious, actual and real, or if only expected, are reasonably
imminent as perceived objectively and in good faith by the employer; (2) that
the employer served written notice both to the employees and to the Department
of Labor and Employment at least one month prior to the intended date of
retrenchment; (3) that the employer pays the retrenched employees separation
pay equivalent to one (1) month pay or at least one-half (1/2) month pay for
every year of service, whichever is higher; (4) that the employer exercises its
prerogative to retrench employees in good faith for the advancement of its
interest and not to defeat or circumvent the employees’ right to security of
tenure; and (5) that the employer used fair and reasonable criteria in
ascertaining who would be dismissed and who would be retained among the
employees, such as status, efficiency, seniority, physical fitness, age, and
financial hardship for certain workers.[46]
In this case, respondents presented audited financial statements and
receipts to prove that the hotel had been incurring business losses. As found
by the appellate court:
In the case at
bar, the respondent hotel undertook a Special Separation Program (SSP) which
all employees can avail of for the limited period of
included the herein petitioners. The private respondents likewise informed these
twenty-nine (29) employees that their services would be terminated thirty (30)
days after the receipt of the written notification. After one month from
receipt of the letters of termination, the twenty-nine (29) employees were
given their separation pay and the corresponding quitclaims were signed.
x x x x
The private respondents in the instant case presented balance sheets for the years 1997, 1998 and 1999 as audited by independent auditors, which showed that respondent Stern experienced net losses for several years, as follows:
1996 = P19,272,539.77
1997 = P18,512,683.11
1998 = P13,669, 095.80
1999 = P14,626,684.36
Hence, for a
period of four (4) years, respondent Stern accumulated losses amounting to
around P66,000,000.00, with no sign of abating in the future. The
petitioners failed to back up their allegation that the expenses presented in
the financial statements were bloated. Nor did the petitioners explain why
independent public accountants Clemente Uson & Co. and Banaria, Banaria and
Company would knowingly allow false figures to be included in the balance
sheets. Consequently, we are more inclined to affirm the finding of the public
respondent that the expenses presented by the private respondents were not
fabricated.[47]
Contrary to the allegation of petitioners, income tax returns are self-serving documents because they are generally filled up by the taxpayer himself, and are still to be examined by the Bureau of Internal Revenue for their correctness.[48]
The Court notes that petitioners failed to dispute the validity of the financial statements and receipts submitted by respondents, or that any false entries were made therein. They also failed to prove, much less impute, any ill motive on the part of the independent auditors who prepared the financial statements which respondents submitted.
The Court also finds that the quitclaims executed by
the individual petitioners in this case are valid and binding. Indeed,
quitclaims executed by employees are commonly frowned upon as being contrary to
public policy, and where there is clear proof that the waiver was wangled from
an unsuspecting or gullible person, or where the terms of settlement are unconscionable
on their faces, the law will step in to annul the questionable transactions.[49]
However, when such quitclaim was made voluntarily and there is no evidence that
the employer was guilty of fraud or intimidation in obtaining such waiver, as
in this case, the validity of the quitclaim must be upheld. As the Court held
in Magsalin v. National Organization of
Working Men:[50]
x x x While quitclaims executed by employees are
commonly frowned upon as being contrary to public policy and are ineffective to
bar claims for the full measure of their legal rights, there are, however,
legitimate waivers that represent a voluntary and reasonable settlement of
laborers’ claims which should be so respected by the Court as the law between
the parties. Where the person making the
waiver has done so voluntarily, with a full understanding thereof, and the
consideration for the quitclaim is credible and reasonable, the transaction
must be recognized as being a valid and binding undertaking. “Dire necessity”
is not an acceptable ground for annulling the release, when it is not shown
that the employee has been forced to execute it (emphasis supplied).[51]
Verily, it is neither the function of the law nor its intent to supplant
the prerogative of management in running its business, such as, to compel the
latter to operate at a continuing loss simply because it has to maintain its
workers in employment. Such an act would
be tantamount to the taking of property without due process of law.[52]
CONSIDERING THE FOREGOING, the instant petition is DENIED for lack of merit. The Decision of the Court of Appeals in
CA- CA-G.R. SP. No. 64536 is AFFIRMED.
SO ORDERED.
ROMEO J. CALLEJO, SR.
Associate Justice
WE
CONCUR:
Chief Justice
Chairperson
CONSUELO YNARES-SANTIAGO MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice
Associate Justice
Associate Justice
Pursuant to Section 13, Article VIII of the
Constitution, it is hereby certified that the conclusions in the above decision
had been 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] Penned by Associate Justice Delilah
Vidallon-Magtolis, with Associate Justices Remedios Salazar-Fernando and
Edgardo F. Sundiam, concurring; rollo,
pp. 44-57.
[2] Rollo,
p. 75.
[3] CA rollo,
p. 150.
[4]
[5]
[6]
[7]
[8] The following are the names and respective positions of the retrenched employees who filed the complaint for illegal dismissal against the private respondents (CA rollo, pp. 67-68):
|
Name of Employee |
Date employed |
Notice of Termination |
Effectivity of
termination |
Basic Salary/ Plus Service Charge |
TOTAL |
|
Rodolfo B. Cachuela Food and Beverage Coffee Shop |
|
|
|
|
|
|
Aldrin P. Camacho Front Office - |
|
|
|
|
|
|
[Rodelio] P. Camo Food and Beverage Stewarding |
|
|
|
|
|
|
Ronaldo B. [Casimiro] Food and Beverage Kitchen |
|
|
|
|
|
|
Manuel S. Fernandez Food and Beverage Kitchen Cook |
|
|
|
|
|
|
Wilma G. Gimpez Food and Beverage -Bar |
|