Clarion Printing House, Inc. vs. National Labor Relations Commission

272
SUPREMECOURTREPORTSANNOTATED
ClarionPrintingHouse,Inc.vs.NationalLaborRelationsCommission
G.R.No.148372.June27,2005.*
CLARION PRINTING HOUSE, INC., and EULOGIO YUTINGCO,
petitioners, vs. THEHONORABLENATIONALLABORRELATIONS
COMMISSION(ThirdDivision)andMICHELLEMICLAT,respondents.
LaborLaw;PleadingsandPractice;Partiesmaypresentevidenceforthefirst
timeonappealtotheNLRCitiswellsettledthattheNLRCisnotprecludedfrom
receiving evidence, even for the first time on appeal, because technical rules of
procedurearenotbindinginlaborcases.ContrarytotheCAsruling,petitioners
couldpresentevidenceforthefirsttimeonappealtotheNLRC.Itiswellsettledthat
theNLRCisnotprecludedfromreceivingevidence,evenforthefirsttimeonappeal,
becausetechnicalrulesofprocedurearenotbindinginlaborcases.Thesettledruleis
thattheNLRCisnotprecludedfromreceivingevidenceonappealastechnicalrules
ofevidencearenotbindinginlaborcases.Infact,laborofficialsaremandatedbythe
LaborCodetouseeveryandallreasonablemeanstoascertainthefactsineachcase
speedilyandobjectively,withoutregardtotechnicalitiesoflaworprocedure,allin
theinterestofdueprocess.Thus,in LawinSecurityServicesv.NLRC,and Bristol
Laboratories Employees AssociationDFA v. NLRC, we held that even if the
evidencewasnotsubmittedtothelaborarbiter,thefactthatitwasdulyintroducedon
appealtotheNLRCisenoughbasisforthelattertobemorejudiciousinadmitting
thesame,insteadoffallingbackonthemeretechnicalitythatsaidevidencecanno
longerbeconsideredonappeal.Certainly,thefirstcourseofactionwouldbemore
consistentwithequityandthebasicnotionsoffairness.
Same; Retrenchment; Requisites.It is likewise wellsettled that for
retrenchmenttobejustified,anyclaimofactualorpotentialbusinesslossesmust
satisfythefollowingstandards:(1)thelossesaresubstantialandnotdeminimis;(2)
thelossesare actualorreasonablyimminent;(3)theretrenchmentis reasonably
necessary and is likely to be effective in preventing expected losses; and (4) the
allegedlosses,ifalreadyincurred,ortheexpectedimminentlosses
_______________
*THIRDDIVISION.
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VOL.461,JUNE27,2005
273
soughttobeforestalled,areprovenbysufficientandconvincingevidence.Andit
istheemployerwhohastheonusofprovingthepresenceofthesestandards.
Same;Same;CorporationLaw;ThattheSecuritiesandExchangeCommission,
mandatedbylawtohaveregulatoryfunctionsovercorporations,partnershipsor
associations,appointedaninterimreceiverforagroupofcompaniesonitspetition
in light of factors beyond the control and anticipation of the management
renderingitunabletomeet itsobligationastheyfalldue,andthusresultingin
complications and problems . . . to arise that would impair and affect [its]
operations . . . show that the petitioner corporation, together with the other
membercompanies,wassufferingbusinessreversesjustifying,amongotherthings,
theretrenchmentofitsemployees.FromtheabovequotedprovisionsofP.D.No.
902A,asamended,theappointmentofareceiverormanagementcommitteebythe
SECpresupposesafindingthat,interalia,acompanypossessessufficientpropertyto
cover all its debts but foresees the impossibility of meeting them when they
respectivelyfalldueandthereisimminentdangerofdissipation,loss,wastageor
destructionofassetsofotherpropertiesorparalizationofbusinessoperations.That
the SEC, mandated by law to have regulatory functions over corporations,
partnershipsorassociations,appointed aninterimreceiverfortheEYCOGroupof
Companies on its petition in light of, as quoted above, the therein enumerated
factorsbeyondthecontrolandanticipationofthemanagementrenderingitunable
to meet its obligation as they fall due, and thus resulting to complications and
problems...toarisethatwouldimpairandaffect[its]operations...showsthat
CLARION, together with the other membercompanies of the EYCO Group of
Companies, was suffering business reverses justifying, among other things, the
retrenchmentofitsemployees.
Same;Same;JudicialNotice;Acourtwilltakejudicialnoticeofitsownacts
andrecordsinthesamecase,offactestablishedinpriorproceedingsinthesame
case,oftheauthenticityofitsownrecordsofanothercasebetweenthesameparties,
ofthefilesofrelatedcasesinthesamecourt,andofpublicrecordsonfileinthe
same court.That judicial notice can be taken of the abovesaid case of Nikon
Industrial Corp., et al.v.PNB,etal.,thereshould benodoubt.Asprovidedin
Section 1, Rule 129 of the Rules of Court: SECTION 1. Judicial notice, when
mandatory.Acourtshalltakejudicialnotice,
274
274
withouttheintroductionofevidence,oftheexistenceandterritorialextentof
states,theirpoliticalhistory,formsofgovernmentandsymbolsofnationality,thelaw
ofnations,theadmiraltyandmaritimecourtsoftheworldandtheirseals,thepolitical
constitution and history of the Philippines, the official acts of the legislative,
executiveandjudicialdepartmentsofthePhilippines,thelawsofnature,themeasure
oftime,andthegeographicaldivisions.(Emphasisanditalicssupplied)whichMr.
JusticeEdgardoL.Parasinterpretedasfollows:Acourtwilltakejudicialnoticeof
itsownactsandrecordsinthesamecase,offactsestablishedinpriorproceedingsin
thesamecase,oftheauthenticityofitsownrecordsofanothercasebetweenthesame
parties,ofthefilesofrelatedcasesinthesamecourt,andofpublicrecordsonfile
inthesamecourt.Inadditionjudicialnoticewillbetakenoftherecord,pleadingsor
judgmentofacaseinanothercourtbetweenthesamepartiesorinvolvingoneofthe
sameparties,aswellasoftherecordofanothercasebetweendifferentpartiesinthe
samecourt.Judicialnoticewillalsobetakenofcourtpersonnel.
Same; Probationary Employees; Where an employee hired on probationary
basis was not informed of the standards that would qualify her as a regular
employee,shewasdeemedtohavebeenhiredfromdayoneasaregularemployee.
ThisCourtsfindingthatMiclatsterminationwasjustifiednotwithstanding,sinceat
thetimeshewashiredonprobationarybasisshewasnotinformedofthestandards
that would qualify her as a regular employee, under Section 6, Rule I of the
Implementing Rules of Book VI of the Labor Code which reads: SEC. 6.
Probationaryemployment.Thereisprobationaryemploymentwheretheemployee,
uponhisengagement,ismadetoundergoatrialperiodduringwhichtheemployer
determines his fitness to qualify for regular employment, based on reasonable
standardsmadeknowntohimatthetimeofengagement.Probationaryemployment
shallbegovernedbythefollowingrules:xxx(d) Inallcasesofprobationary
employment, the employer shall make known to the employee the standards
underwhichhewillqualifyasaregularemployeeatthetimeofhisengagement.
Where no standards are made known to the employee at that time, he shall be
deemedaregularemployee(Emphasisanditalicssupplied),shewasdeemedto
havebeenhiredfromdayoneasaregularemployee.
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VOL.461,JUNE27,2005
275
Same;DueProcess;Damages;Nominaldamagesawardedtodeteremployers
fromfutureviolationsofthestatutorydueprocessrightsofemployees.ThisCourt
thusdeemsitpropertoawardtheamountequivalenttoMiclatsone(1)monthsalary
ofP6,500.00asnominaldamagestodeteremployersfromfutureviolationsofthe
statutorydueprocessrightsofemployees.
Same;CorporationLaw;Receivership;Withtheappointmentofamanagement
receiver,allclaimsandproceedingsagainstthecorporation,includinglaborclaims,
aredeemedsuspendedduringtheexistenceofthereceivershipthelaborarbiter,
theNLRC,aswellastheCourtofAppealsshouldnotproceedtoresolvecomplaints
forillegaldismissalandshouldinsteaddirecttheemployeestolodgetheirclaims
before the dulyappointed receiver.With the appointment of a management
receiverinSeptember1997,however,allclaimsandproceedingsagainstCLARION,
including labor claims, were deemed suspended during the existence of the
receivership. The labor arbiter, the NLRC, as well as the CA should not have
proceededtoresolverespondentscomplaintforillegaldismissalandshouldinstead
havedirectedrespondenttolodgeherclaimbeforethethendulyappointedreceiver
ofCLARION.Tostillrequirerespondent,however,atthistimetorefileherlabor
claimagainstCLARIONunderthepeculiarcircumstancesofthecasethat8years
havelapsedsinceherterminationandthatalltheargumentsanddefensesofboth
partieswerealreadyventilatedbeforethelaborarbiter,NLRCandtheCA;andthat
CLARION is already in the course of liquidationthis Court deems it most
expedientandadvantageousforbothpartiesthatCLARIONsliabilitybedetermined
withfinality,insteadof still requiringrespondenttolodgeherclaimatthistime
beforetheliquidatorsofCLARIONwhichwouldjustentailamerereiterationof
what has been alreadyargued and pleaded. Furthermore, itwould bein thebest
interest of the other creditors of CLARION that claims against the company be
finallysettledanddeterminedsoastofurtherexpeditetheliquidationproceedings.
Forthelessernumberofclaimstobeproved,thesoonertheclaimsofallcreditorsof
CLARIONareprocessedandsettled.
PETITIONforreviewoncertiorariofthedecisionandresolutionofthe
CourtofAppeals.
ThefactsarestatedintheopinionoftheCourt.
276
276
GraceEloisaJ.Queforpetitioners.
OfficeoftheLegalAid(UP)forrespondentM.Miclat.
CARPIOMORALES,J.:
RespondentMichelleMiclat(Miclat)wasemployedonApril21,1997on
a probationary basis as marketing assistant with a monthly salary of
P6,500.00bypetitionerClarionPrintingHouse(CLARION)ownedbyits
copetitionerEulogioYutingco.Atthetimeofheremployment,shewas
not informed of the standards that would qualify her as a regular
employee.
On September 16, 1997, the EYCO Group of Companies of which
CLARION formed part filed with the Securities and Exchange
Commission (SEC) a Petition for the Declaration of Suspension of
Payment, Formation and Appointment of Rehabilitation
Receiver/Committee, Approval of Rehabilitation Plan with Alternative
Prayer for Liquidation and Dissolution of Corporation1the pertinent
allegationsofwhichread:
xxx
5.Thesituationwasthatsinceallthesecompaniesweresistercompaniesand
were operating under a unified and centralized management team, the financial
requirementsofonecompanywouldnormallybebackeduporsupportedbyoneof
theavailablefundingsfromtheothercompanies.
6.TheexpansionexhaustedthecashavailabilityofNikon,NKI,and2000because
thosefundingswereabsorbedbytherequirementsofNPIandEYCOProperties,Inc.
which were placed on real estate investments. However, at the time that those
investmentsandexpansionsweremade,therewasnocauseforalarmbecausethe
market situation was very bright and very promising, hence, the decision of the
managementtoimplementtheexpansion.
7.Thesituationresultedinthecashpositionbeingspreadthin.However,despite
thethincashpositioning,themanagementstillwasverypositiveandsawavery
viablepropositionsincethe
_______________
1IRecordsatpp.137148.
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VOL.461,JUNE27,2005
277
expansionandtheadditionalinvestmentswouldresultinabiggerrealestatebase
whichwouldbeverycrediblecollateralforfurtherexpansions.Itwasenvisionedthat
intheend,therewouldbebiggercashprocurementwhichwouldresultingreater
volumeofproduction,profitabilityandothergoodresultsbasedontheexpectations
andprojectionsoftheteamitself.
8.Unfortunately,factorsbeyondthecontrolandanticipationofthemanagement
cameintoplaywhichcaughtthepetitionersflatfooted,suchas:
1. a)
Theglutintherealestatemarketwhichhasresultedinthebubbleeconomyfor
therealestatedemandwhichrightnowhasresultedinasevereslowdownin
thesalesofproperties;
2. b)
Theeconomicinterplayconsistingoftheinflationandtheerraticchangesin
thepesodollarexchangeratewhichprecipitatedasoaringbankinginterest.
3. c)
Laborproblemsthathasprecipitatedadversecompanyeffectonthemediaandin
thefinancialcircuit.
4. d)
Liberalizationoftheindustry(GATT)whichhasresultedinfloodingthemarket
withimportedgoods;
5. e)
Otherrelatedadversematters.
9.TheinabilityoftheEYCOGroupofCompaniestomeettheobligationsasthey
falldueonthescheduleagreedwiththebankhasnowbecomeastarkreality.The
situationthereforeisthatsincetheobligationswouldnotbemetwithinthescheduled
duedate, complicationsandproblemswoulddefinitelyarisethatwouldimpairand
affect the operations of theentire conglomeratecomprising theEYCO Groupof
Companies.
xxx
12.Byvirtueofthisdevelopment,thereisaneedforsuspensionofallaccounts
o[r]obligationsincurredbythepetitionersintheirseparateandcombinedcapacities
inthemeantimethattheyareworkingfortherehabilitationofthecompaniesthat
wouldeventuallyredoundtothebenefitofthesecreditors.
13. The foregoing notwithstanding, however, the present combined financial
conditionofthepetitionersclearlyindicatesthattheirassetsaremorethanenoughto
payoffthecredits.
278
278
xxx(Emphasisanditalicssupplied)2
OnSeptember19,1997,theSECissuedanOrder3thepertinentportionsof
whichread:
xxx
Itappearingthatthepetitionissufficientinformandsubstance, thecorporate
petitionersprayerforthecreationofmanagementorreceivershipcommitteeand
creditorsapprovaloftheproposedRehabilitationPlanisherebysetforhearingon
October22,1997 at2:00oclockintheafternoonattheSICD,SECBldg.,EDSA,
Greenhills,MandaluyongCity.
xxx
Finally,thepetitionersareherebyenjoinedfromdisposinganyandalloftheir
propertiesinanymanner,whatsoever,exceptintheordinarycourseofbusinessand
frommakinganypaymentoutsideofthelegitimatebusinessexpensesduringthe
pendencyoftheproceedingsandasaconsequenceofthefilingofthePetition,all
actions,claimsandproceedingsagainsthereinpetitionerspendingbeforeanycourt,
tribunal, office board and/or commission are deemed SUSPENDED until further
ordersfromthisHearingPanelpursuanttotherulingsoftheSupremeCourtinthe
casesofRCBCv.IAC,etal.,213SCRA830andBPIv.CA,229SCRA223.(Italics
supplied)
And on September 30, 1997, the SEC issued an Order4 approving the
creationofaninterimreceiverfortheEYCOGroupofCompanies.
OnOctober10,1997,theEYCOGroupofCompaniesissuedtoits
employeesthefollowingMemorandum:5
ThisistoformallyannouncetheentryoftheInterimReceiverGrouprepresentedby
SGVfromtodayuntilOctober22,1997oruntilfurtherformalnoticefromtheSEC.
_______________
2Id.,atpp.140142.
3Id.,atpp.150153.
4Id.,atpp.155156.
5Id.,atp.114.
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VOL.461,JUNE27,2005
279
Thisinterimreceivergroupsfunctionistomakesurethatallassetsofthecompany
aresecuredandaccountedforbothfortheprotectionofusandourcreditors.
Their function will involve familiarization with the different processes and
controlsinourorganization&keepingphysicaltrackofourassetslikeinventories
andmachineries.
Anythingthatwouldberequiredfromyouwouldneedtobeinwritingandduly
approvedbythetopmanagementinorderforustomaintainaclearline.
Wetrustthatthistemporaryinconveniencewillbenefitallofusinthespiritof
goodwill.Letsextendourfullcooperationtothem.
Thankyou.(Italicssupplied)
On October 22, 1997, the Assistant Personnel Manager of CLARION
informed Miclat by telephone that her employment contract had been
terminated effective October 23, 1997. No reason was given for the
termination.
The following day or on October 23, 1997, on reporting for work,
MiclatwasinformedbytheGeneralSalesManagerthathertermination
waspartofCLARIONscostcuttingmeasures.
OnNovember17,1997,Miclatfiledacomplaint 6forillegaldismissal
againstCLARIONandYutingco(petitioners)beforetheNationalLabor
RelationsCommission(NLRC).
In the meantime, or on January 7, 1998, the EYCO Group of
Companies issued a Memorandum7 addressed to company managers
advisingthemofatemporarypartialshutdownofsomeoperationsofthe
CompanycommencingonJanuary12,1998uptoFebruary28,1998:
Inviewofthenumerousexternalfactorssuchasslowdowninbusinessandconsumer
demandandconsistentwithArt.286oftheRevisedLaborCodeofthePhilippines,
weareconstrainedtogoonatemporarypartialshutdownofsomeoperationsofthe
Company.
_______________
6Id.,atp.1.
7Id.,atp.115.
280
280
Toimplementthismeasure,pleasesubmittomyofficethroughyourlocalHRADthe
listofthosewhomyouwillrequiretoreportforworkandtheirspecificschedules.
Uponrevalidationandapprovalofthislist,allthosenotinthelistwillnotreceive
anypaynorwillitbecreditedagainsttheirVL.
PleasesubmitthelistingnolaterthanthemorningofFriday,January09,1998.
ShutdownshallcommenceonJanuary12,1998uptoFebruary28,1998,unless
otherwiserecalledatanearlierdate.
Implementation of th[ese] directives will be done through your HRAD
departments.(Italicssupplied)
InherPositionPaper8datedMarch3,1998filedbeforethelaborarbiter,
Miclatclaimedthatshewasneverinformedofthestandardswhichwould
qualify her as a regular employee. She asserted, however, that she
qualified as a regular employee since her immediate supervisor even
submitted a written recommendation in her favor before she was
terminatedwithoutjustorauthorizedcause.
Respectingtheallegedfinanciallossescitedbypetitionersasbasisfor
her termination, Miclat disputed the same, she contending that as
marketingassistanttaskedtoreceivesalescalls,producesalesreportsand
conductmarketsurveys,acredibleassessmentonproductionandsales
showedotherwise.
Inanyevent,Miclatclaimedthatassumingthatherterminationwas
necessary,themannerinwhichitwascarriedoutwasillegal,nowritten
noticethereofhavingbeenservedonher,andshemerelylearnedofitonly
adaybeforeitbecameeffective.
Additionally,Miclatclaimedthatshedidnotreceiveseparationpay,
13thmonthpayandsalariesforOctober21,22and23,1997.
_______________
8Id.,atpp.1321.
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281
Ontheotherhand,petitionersclaimedthattheycouldnotbefaultedfor
retrenchingsomeofitsemployeesincludingMiclat,theydrawingattention
to the EYCO Group of Companies being placed under receivership,
noticeofwhichwassenttoitssupervisorsandrankandfileemployeesvia
a Memorandum of July 21, 1997; that in the same memorandum, the
EYCO Group of Companies advised them of a scheme for voluntary
separation from employment with payment of severance pay; and that
CLARIONwasonlyadoptingtheLASTIN,FIRSTOUTPRINCIPLE
whenitterminatedMiclatwhowasrelativelynewinthecompany.
Contending that Miclats termination was made with due process,
petitionersreferredtotheEYCOGroupofCompaniesabovesaidJuly21,
1997Memorandumwhich,sotheyclaimed,substantiallycompliedwith
thenoticerequirement,ithavingbeenissuedmorethanonemonthbefore
MiclatwasterminatedonOctober23,1997.
ByDecision9ofNovember23,1998,thelaborarbiterfoundthatMiclat
was illegally dismissed and directed her reinstatement. The dispositive
portionofthedecisionreads:
WHEREFORE,inviewoftheforegoingpremises,judgmentisherebyrendered
orderingtherespondenttoreinstatecomplainanttoherformerorequivalentposition
withoutlossofseniorityrightsandbenefitsandtopayherbackwages,fromthetime
ofdismissaltoactualreinstatement,proportionate13thmonthpay andtwo(2)days
salarycomputedasfollows:
a.1)
Backwages10/23/97to11/30/98

P6,500.00x13.25months
=
P86,125.00
a.2)
Proportionate13thmonthpay

1/12ofP86,125
=
7,177.08
b)
13thmonthpay1997

=P6,500x9.75months/12
=
5,281.25
c)
Twodayssalary

=P6,500/26x2days
=
500.00
_______________
9Id.,atpp.6668.
282
282
TOTAL
P99,083.33
(EmphasisandItalicssupplied).
Before the National Labor Relations Commission (NLRC) to which
petitionersappealed,theyarguedthat:10
1. [CLARION] was placed under receivership thereby evidencing the fact that it
sustained business losses to warrant the termination of [Miclat] from her
employment.
2. The dismissal of [Miclat] from her employment having been effected in
accordancewiththelawandingoodfaith,[Miclat]doesnotdeservetobereinstated
andpaidbackwages,13thmonthpayandtwo(2)dayssalary.
AndpetitionerspointedoutthatCLARIONhadexpresseditsdecisionto
shutdown its operations by Memorandum11 of January 7, 1998 to its
companymanagers.
AppendedtopetitionersappealbeforetheNLRCwerephotocopiesof
theirbalancesheetsfrom1997toNovember1998whichtheyclaimedto
unanimouslyshowthatxxx[petitioner]companyexperiencedbusiness
reverseswhichweremadethebasisxxxinretrenchingxxx.12
ByResolution13ofJune17,1999,theNLRCaffirmedthelaborarbiters
decision.ThepertinentportionoftheNLRCResolutionreads:
Therearethree(3) validrequisitesforvalidretrenchment:(1)theretrenchmentis
necessarytopreventlossesandsuchlossesareproven;(2)writtennoticestothe
employeesandtotheDepartmentofLaborandEmploymentatleastone(1)month
prior to the intended date of retrenchment; and (3) payment of separation pay
equivalenttoone(1)monthpayoratleast1/2monthpayforeveryyearofservice,
whicheverishigher.Thetwonoticesaremandatory.Ifthenoticetotheworkersis
laterthanthenoticessenttoDOLE,
_______________
10Id.,atpp.7285.
11Id.,atp.115.
12Id.,atp.81.
13Id.,atpp.167174.
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VOL.461,JUNE27,2005
283
thedateofterminationshouldbeatleastonemonthfromthedateofnoticetothe
workers.
In Lopez Sugar Corporation v. Federation of Free Workers Philippine Labor
UnionAssociation(PLUANACUSIP)andNationalLaborRelationsCommission,the
SupremeCourthadtheoccasiontosetforth fourstandardswhichwouldjustify
retrenchment, being, firstly,the losses expected should be substantial and not
merely de minimis in extent. If the loss purportedly sought to be forestalled by
retrenchmentisclearlyshowntobeinsubstantialandinconsequentialincharacter,
thebonafidenatureoftheretrenchmentwouldappeartobeseriouslyinquestion;
secondly,thesubstantiallossapprehendedmustbereasonablyimminent,assuch
imminencecanbeperceivedobjectivelyandingoodfaithbytheemployer.There
should,inotherwords,beacertaindegreeofurgencyfortheretrenchment,whichis
after all a drastic course with serious consequences for the livelihood of the
employeesretiredorotherwiselaidoff;thirdly,becauseoftheconsequentialnature
ofretrenchment,itmustbereasonablynecessaryandlikelytoeffectivelypreventthe
expectedlosses.Theemployershouldhavetakenothermeasurespriororparallelto
retrenchmenttoforestalllosses,i.e.,cutothercostthanlaborcosts;andlastly,the
alleged losses if already realized and the expected imminent losses sought to be
forestalled,mustbeprovenbysufficientandconvincingevidence.
Therecordsshowthattheserequirementswerenotsubstantiallycompliedwith.
Andproofspresentedbyrespondentsappellantswereshortofbeingsufficientand
convincing to justify valid retrenchment. Their position must therefore fail. The
reason is simple. Evidences on record presented fall short of the requirement of
substantial, sufficient and convincing evidence to persuade this Commission to
declare the validity of retrenchment espoused by respondentsappellants. The
petition before the Securit[ies] and Exchange Commission for suspension of
payment does not prove anything to come within the bounds of justifying
retrenchment.Infact,thepetitionitselflendscredencetothefactthatretrenchment
wasnotactuallyreinstatedunderthecircumstancesprevailingwhenitstated,The
foregoingnotwithstanding,however,thepresentcombinedfinancialconditionofthe
petitionersclearlyindicatesthattheirassetsaremorethanenoughtopayoffthe
credits.Verily,readingfurtherintothepetition,Wearenotreadytodisregardthe
factthatthepetitionmerelyseekstosus
284
284
pend payments of their obligation from creditor banks and other financing
institutions,andnotbecauseofimminentsubstantialfinancialloss.Onthisaccount,
Wetakenoteofparagraph7ofthepetitionwhichstated:Thesituationresultedin
cash position being spread thin. However, despite the thin cash positioning, the
managementwasverypositiveandsawaveryviablepropositionsincetheexpansion
andtheadditionalinvestmentswouldresultinabiggerrealestatebasewhichwould
beaverycrediblecollateralforfurtherexpansions.Itwasenvisionedthatintheend,
therewouldabiggercashprocurementwhichwouldresultingreatervolumeof
production, profitability and other good results based on the expectations and
projections of the team itself. Admittedly, this does not create a picture of
retrenchablebusinessatmospherepursuanttoArticle283oftheLaborCode.
Wecannotdisregardthefactthat respondentappellants failedinalmostallof
thecriteriasetbylawandjurisprudenceinjustifyingvalidretrenchment.Thetwo
(2)mandatorynoticeswereviolated.ThesupposednoticetotheDOLE(Annex4,
ListofEmployeesonShutdown)isofnomoment,thesamehavingnobearinginthis
case.Hereincomplainantappelleewasnotevenlistedthereinandthedateofreceipt
byDOLE,thatis,January18,1999,waswayoutoftimeinrelationtothiscase.And
noproofwasadducedtoevidencecostcuttingmeasures,tosaytheleast.Norwas
thereproofshownthatseparationpayhadbeenawardedtocomplainantappellee.
WHEREFORE,premisesconsidered,andfindingnograveabuseofdiscretionon
thefindingsofLaborArbiterNievesV.DeCastro,theappealisDENIEDforlackof
merit.
The decision appealed from is AFFIRMED in toto. (Italics in the original;
boldfacesupplied;citationsomitted)
PetitionersMotionforReconsiderationoftheNLRCresolutionhaving
beendeniedbyResolution14ofJuly29,1999,petitionersfiledapetitionfor
certiorari15 before the Court of Appeals (CA) raising the following
arguments:
_______________
14Id.,atpp.191192.
15CourtofAppeals(CA)Rolloatpp.220.
285
VOL.461,JUNE27,2005
285
1.PETITIONERCLARIONWASPLACED UNDERRECEIVERSHIPTHEREBY
EVIDENCING THE FACT THAT IT SUSTAINED BUSINESS LOSSES TO
WARRANT THE TERMINATION OF PRIVATE RESPONDENT MICLAT FROM
HEREMPLOYMENT.
2. THE DISMISSAL OF PRIVATE RESPONDENT MICLAT FROM HER
EMPLOYMENT HAVING BEEN EFFECTED IN ACCORDANCE WITH THE
LAWANDINGOODFAITH,PRIVATERESPONDENTDOESNOTDESERVE
TO BE REINSTATED AND PAID BACKWAGES, 13TH MONTH PAY AND
TWO(2)DAYSSALARY.(Italicssupplied)
ByDecision16ofNovember24,2000,theCAsustainedtheresolutionsof
theNLRCinthiswise:
Intheinstantcase,Clarionfailedtoproveitsgroundforretrenchmentaswellas
compliance with the mandated procedure of furnishing the employee and the
DepartmentofLaborandEmployment(hereafter,DOLE)withone(1)monthwritten
noticeandpaymentofseparationpaytotheemployee.Clarionsfailuretodischarge
itsburdenofproofisevidentfromthefollowinginstances:
First, Clarion presented no evidence whatsoever before the Labor Arbiter.To
prove serious business losses, Clarion presented its 1997 and 1998 financial
statementsandtheSECOrderfortheCreationofanInterimReceiver,forthefirst
timeonappealbeforethe NLRC.TheSupremeCourthasconsistentlydisallowed
such practice unless the party making the belated submission of evidence had
satisfactorilyexplainedthedelay.Intheinstantcase,saidfinancialstatementsarenot
admissibleinevidenceduetoClarionsfailuretoexplainthedelay.
Second,evenifsuchfinancialstatementswereadmittedinevidence,theywould
not alter the outcome of the case as statements have weak probative value. The
requiredmethodof proof insuchcaseisthe presentationof financialstatements
preparedbyindependentauditorsandnotmerelybycompanyaccountants.Again,
petitionerfailedinthisregard.
_______________
16Rolloatpp.1117.
286
286
Third,evenauditedfinancialstatementsarenotenough.Theemployermustpresent
the statement for the year immediately preceding the year the employee was
retrenched,whichClarionfailedtodointheinstantcase,toprovenotonlythefactof
business losses but more importantly, the fact that such losses were substantial,
continuingandwithoutimmediateprospectofabatement.Hence,neithertheNLRC
nor the courts must blindly accept such audited financial statements. They must
examineandmakeinferencesfromthedatapresentedtoestablishbusinesslosses.
Furthermore, they must be cautioned by the fact that sliding incomes or
decreasing gross revenues alone are not necessarily business losses within the
meaningofArt.283sinceinthenatureofthings,thepossibilityofincurringlossesis
constantlypresentinbusinessoperations.
Last,evenifbusinesslosseswereindeedsufficientlyproven,theemployermust
stillprovethatretrenchmentwasresortedtoonlyafterlessdrasticmeasuressuchas
thereductionofbothmanagementandrankandfilebonusesandsalaries,goingon
reduced time, improving manufacturing efficiency, reduction of marketing and
advertisingcosts,fastercollectionofcustomeraccounts,reductionofrawmaterials
investmentandothers,havebeentriedandfoundwanting.Again,petitionerfailedto
provetheexhaustionoflessdrasticmeasuresshortofretrenchmentasithadfailed
withtheotherrequisites.
ItisinterestingtonotethatMiclatstartedasaprobationaryemployeeon21April
1997.Therebeingnostipulationtothecontrary,herprobationperiodhadaduration
ofsix(6)monthsfromherdateofemployment.Thus,aftertheendoftheprobation
periodon22October1997,shebecamearegularemployeeasof23October1997
sinceshewasallowedtoworkaftertheendofsaidperiod.Itisalsoclearthather
probationaryemploymentwasnotterminatedattheendoftheprobationperiodon
the ground that the employee failed to qualify in accordance with reasonable
standardsmadeknowntoheratthetimeofengagement.
However, 23 October 1997 was also the day of Miclats termination from
employmentonthegroundofretrenchment.Thus,wehaveabizarresituationwhen
the first day of an employees regular employment was also the day of her
termination.However,thisisentirelypossible,ashadinfacthappenedintheinstant
case,wheretheemployersbasisforterminationisArt.288,insteadofArt.281of
theLaborCode.IfpetitionerterminatedMiclatwithArt.281in
287
VOL.461,JUNE27,2005
287
mind,itwouldhavebeentoolatetopresentsuchtheoryatthisstageanditwould
havebeenequallydevastatingforpetitionerhaditdonesobecausenoevidenceexists
toshowthatMiclatfailedtoqualifywithpetitionersstandardsforregularization.
Failuretodischargeitsburdenofproofwouldstillbepetitionersundoing.
WhicheverwayWeexaminethecase,theconclusionisthesameMiclatwas
illegallydismissed. Consequently,reinstatementwithoutlossofseniorityrightsand
fullbackwagesfromdateofdismissalon23October1997untilactualreinstatement
isinorder.
WHEREFORE,theinstantpetitionisherebyDISMISSEDandthe29July1999
and7June1999resolutionsoftheNLRCareSUSTAINED.(Emphasisanditalics
supplied)
ByResolution17 ofMay23,2001,theCAdeniedpetitionersmotionfor
reconsiderationofthedecision.
Hence, the present petition for review on certiorari, petitioners
contendingthat:
WITH ALL DUE RESPECT, THE HONORABLE COURT OF APPEALS
GRAVELY ERRED IN SUSTAINING THE ASSAILED DECISIONS OF
HONORABLEPUBLICRESPONDENTCOMMISSION:
A.HOLDINGTHATPRIVATERESPONDENTMICLATWASILLEGALLY
DISMISSED;and
B. ORDERING THE REINSTATEMENT OF PRIVATE RESPONDENT
MICLATTOHERFORMEROREQUIVALENTPOSITIONWITHOUTLOSSOF
SENIORITY RIGHTS AND BENEFITS AND PAYMENT OF BACKWAGES,
1[3]THMONTHPAYANDTWO(2)DAYSSALARY.18
PetitionersarguethattheconclusionoftheCAthatnosufficientproofof
financial losses on the part of CLARION was adduced is patently
erroneous,giventheseriousbusinessreversesithadgravelysufferedas
reflectedinitsfinancial
_______________
17Id.,atp.18.
18Id.,atpp.3233.
288
288
statements/balance sheets, thereby leaving as its only option the
retrenchmentofitsemployeesincludingMiclat.19
Petitionersfurtherarguethatwhenacompanyisunderreceivershipand
areceiverisappointedtotakecontrolofitsmanagementandcorporate
affairs, one of the evident reasons is to prevent further losses of said
companyandprotectitsremainingassetsfrombeingdissipated;andthat
the submission of financial reports/statements prepared by independent
auditors had been rendered moot and academic, the company having
shutdownitsoperationsandhavingbeenplacedunderreceivershipbythe
SECduetoitsinabilitytopayorcomplywithitsobligations.20
RespectingtheCAsholdingthatthefinancialstatementsCLARION
submittedforthefirsttimeonappealbeforetheNLRCareinadmissiblein
evidenceduetoitsfailuretoexplainthedelayinthesubmissionthereof,
petitioners lament the CAs failure to consider that technical rules on
evidenceprevailinginthecourtsarenotcontrollinginproceedingsbefore
theNLRCwhichmayconsiderevidencesuchasdocumentsandaffidavits
submittedbythepartiesforthefirsttimeonappeal.21
AstotheCAsholdingthatCLARIONfailedtoprovetheexhaustion
oflessdrasticmeasuresshortofretrenching,petitionersadvancethatprior
totheterminationofMiclat,CLARION,togetherwiththeothercompanies
under the EYCO Group of Companies, was placed under receivership
during which drastic measures to continue business operations of the
companyandeventuallyrehabilitateitselfwereimplemented.22
DenyingMiclatsentitlementtobackwages,petitionersprofferthather
dismissalresteduponavalidandauthorized
_______________
19Id.,atp.34.
20Id.,atp.35.
21Id.,atpp.3536.
22Id.,atpp.3738.
289
VOL.461,JUNE27,2005
289
cause.Andpetitionersassailasgrosslyerroneoustheawardof13thmonth
pay to Miclat, she not having sought it and, therefore, there was no
jurisdictiontoawardthesame.23
Thepetitionispartlymeritorious.
ContrarytotheCAsruling,petitionerscouldpresentevidenceforthe
firsttimeonappealtotheNLRC.ItiswellsettledthattheNLRCisnot
precluded from receiving evidence, even for the first time on appeal,
becausetechnicalrulesofprocedurearenotbindinginlaborcases.
ThesettledruleisthattheNLRCisnotprecludedfromreceivingevidenceonappeal
astechnicalrulesofevidencearenotbindinginlaborcases.Infact,laborofficialsare
mandatedbytheLaborCodetouseeveryandallreasonablemeanstoascertainthe
factsineachcasespeedilyandobjectively,withoutregardtotechnicalitiesoflawor
procedure,allintheinterest ofdueprocess.Thus,in LawinSecurityServicesv.
NLRC,andBristolLaboratoriesEmployeesAssociationDFAv.NLRC,weheldthat
eveniftheevidencewasnotsubmittedtothelaborarbiter,thefactthatitwasduly
introducedonappealtotheNLRCisenoughbasisforthelattertobemorejudicious
in admitting the same, instead of falling back on the mere technicality that said
evidencecannolongerbeconsideredonappeal.Certainly,thefirstcourseofaction
wouldbemoreconsistentwithequityandthebasicnotionsoffairness.(Italicsinthe
original;citationsomitted)24
Itislikewisewellsettledthatforretrenchmenttobejustified,anyclaimof
actualorpotentialbusinesslossesmustsatisfythefollowingstandards:(1)
thelossesaresubstantialandnotdeminimis;(2)thelossesareactualor
reasonablyimminent;(3)theretrenchmentisreasonablynecessaryandis
likely tobeeffectivein preventingexpected losses; and(4)the alleged
losses,ifalreadyincurred,ortheexpectedimminentlossessoughttobe
forestalled,areprovenbysufficientand
_______________
23Id.,atpp.3839.
24 Philippine Industrial Security Agency Corp. v. Dapiton, 320 SCRA 124, 136137
(1999).
290
290
convincingevidence.25Anditistheemployerwhohastheonusofproving
thepresenceofthesestandards.
Sections 5 and 6 of Presidential Decree No. 902A (P.D. 902A)
(REORGANIZATION OF THE SECURITIES AND EXCHANGE
COMMISSIONWITHADDITIONALPOWERSANDPLACINGSAID
AGENCYUNDERTHEADMINISTRATIVESUPERVISIONOFTHE
OFFICEOFTHEPRESIDENT),26asamended,read:
SEC. 5. In addition to the regulatory and adjudicative functions of THE
SECURITIES AND EXCHANGE COMMISSION over corporations, partnerships
andotherformsofassociationsregisteredwithitasexpresslygrantedunderexisting
lawsanddecrees,itshallhaveoriginalandexclusivejurisdictiontohearanddecide
casesinvolving:
xxx
(d)Petitionsofcorporations,partnershipsorassociationsdeclaredinthestate
of suspension of payments in cases where the corporation, partnership or
association possesses sufficient property to cover all debts but foresees the
impossibilityofmeetingthemwhentheyrespectivelyfalldueorincaseswhere
the corporation, partnership, association has no sufficient assets to cover its
liabilities, but is under the management of a Rehabilitation Receiver or
ManagementCommitteecreatedpursuanttothisDecree.
SEC.6.Inordertoeffectivelyexercisesuchjurisdiction,theCommissionshall
possessthefollowingpowers:
xxx
_______________
25Tanjuanv.PhilippinePostalSavingsBank,Inc.,411SCRA168,180(2003).
26NowamendedbytheSecuritiesRegulationCode(SRC)whichtookeffectonAugust
8,2000.Sec.5.2oftheSRCprovidesthattheSECsjurisdictionoverallcasesenumerated
underSection5ofPD902AistransferredtotheappropriateRegionalTrialCourtbutshall
retainjurisdictionoverpendingsuspensionofpayments/rehabilitationcasesfiledasofJune
30,2000untilfinallydisposed.
291
VOL.461,JUNE27,2005
291
(c)Toappointoneormorereceiversoftheproperty,realandpersonal,whichisthe
subject of the action pending before the Commission in accordance with the
provisionsoftheRulesofCourtinsuchothercaseswhenevernecessaryinorderto
preservetherightsofthepartieslitigantsand/orprotecttheinterestoftheinvesting
public and creditors: Provided, however, That the Commission may in
appropriatecases,appointarehabilitationreceiverofcorporations,partnerships
orotherassociationsnotsupervisedorregulatedbyothergovernmentagencies
who shall have, in addition to powers of the regular receiver under the
provisionsoftheRulesofCourt,suchfunctionsandpowersasareprovidedfor
inthesucceedingparagraph(d)hereof:xxx
(d)Tocreateandappointamanagementcommittee,boardorbodyuponpetition
or motuproprio toundertakethemanagementofcorporations,partnershiporother
associationsnotsupervisedorregulatedbyothergovernmentagenciesinappropriate
caseswhenthereisimminentdangerofdissipation,loss,wastageordestructionof
assets or other properties or paralization of business operations of such
corporations or entities which may be prejudicial to the interest of minority
stockholders,partieslitigantsofthegeneralpublic: xxx(Emphasisanditalics
supplied).
FromtheabovequotedprovisionsofP.D.No.902A,asamended,the
appointment of a receiver or management committee by the SEC
presupposes a finding that, inter alia, a company possesses sufficient
propertytocoverallitsdebtsbutforeseestheimpossibilityofmeeting
themwhentheyrespectivelyfalldueandthereisimminentdangerof
dissipation,loss,wastageordestructionofassetsofotherpropertiesor
paralizationofbusinessoperations.
That the SEC, mandated by law to have regulatory functions over
corporations,partnershipsorassociations,27ap
_______________
27 Sec. 3 of PD 902A provides that the SEC shall have absolute jurisdiction,
supervision and control over all corporations, partnerships or associations, who are the
granteesofprimaryfranchisesand/orlicenseorpermitissuedbythegovernmenttooperate
inthe
292
292
pointed an interim receiver for the EYCO Group of Companies on its
petition in light of, as quoted above, the therein enumerated factors
beyond the control and anticipation of the management rendering it
unable to meet its obligation as they fall due, and thus resulting to
complicationsandproblems...toarisethatwouldimpairandaffect[its]
operations...showsthatCLARION,togetherwiththeothermember
companies of the EYCO Group of Companies, was suffering business
reversesjustifying,amongotherthings,theretrenchmentofitsemployees.
ThisCourtinfacttakesjudicialnoticeoftheDecision 28oftheCourtof
AppealsdatedJune11,2000inCAG.R.SPNo.55208,NikonIndustrial
Corp.,NikoliteIndustrialCorp.,etal.[includingCLARION],otherwise
knownastheEYCOGroupofCompaniesv.PhilippineNationalBank,
Solidbank Corporation, et al., collectively known and referred as the
Consortium of Creditor Banks, which was elevated to this Court via
PetitionforCertiorarianddocketedasG.R.No.145977,butwhichpetition
thisCourtdismissedbyResolutiondatedMay3,2005:
Considering the joint manifestation and motion to dismiss of petitioners and
respondentsdatedFebruary24,2003,statingthat thepartieshavereachedafinal
andcomprehensivesettlement ofalltheclaimsandcounterclaimssubjectmatterof
thecaseandaccordingly,agreedtothedismissalofthepetitionforcertiorari,the
CourtResolvedtoDISMISSthepetitionforcertiorari(Italicssupplied).
The parties in G.R. No. 145977 having sought, and this Court having
granted,thedismissaloftheappealofthethereinpetitionersincluding
CLARION,theCAdecisionwhichaf
_______________
Philippines; x x x. The SRC retained said power of the SEC over corporations.
Paragraph(a)ofSec.5ofsaidlawprovidesthattheSEChasjurisdictionandsupervision
over all corporations, partnerships or associations who are the grantees of primary
franchisesand/orlicenseorpermitissuedbytheGovernment.
28G.R.No.145977,Rolloatpp.3247.
293
VOL.461,JUNE27,2005
293
firmedintototheSeptember14,1999Order oftheSEC,thedispositive
portionofwhichSECOrderreads:
WHEREFORE,premisesconsidered,theappealisasitishereby,grantedandthe
Orderdated18December1998issetaside.ThePetitiontobeDeclaredinStateof
Suspension of payments is hereby disapproved and the SAC Plan terminated.
Consequently,allcommittee,conservator/receiverscreatedpursuanttosaidOrder
aredissolvedanddischargedandallactsandordersissuedthereinarevacated.
The Commission, likewise, orders the liquidation and dissolution of the
appelleecorporations.Thecaseisherebyremandedtothehearingpanelbelowfor
thatpurpose.
xxx(Emphasisanditalicssupplied),
hasnowbecomefinalandexecutory.Ergo,theSECsdisapprovalofthe
EYCOGroupofCompaniesPetitionfortheDeclarationofSuspension
ofPayment...andtheorderfortheliquidationanddissolutionofthese
companiesincludingCLARION,mustbedeemedtohavebeenunassailed.
That judicial notice can be taken of the abovesaid case of Nikon
IndustrialCorp.,etal.v.PNB,etal.,thereshouldbenodoubt.
AsprovidedinSection1,Rule129oftheRulesofCourt:
SECTION1. Judicialnotice,whenmandatory.Acourtshalltakejudicialnotice,
withouttheintroductionofevidence,oftheexistenceandterritorialextentofstates,
theirpoliticalhistory,formsofgovernmentandsymbolsofnationality,thelawof
nations,theadmiraltyandmaritimecourtsoftheworldandtheirseals,thepolitical
constitution and history of the Philippines, the official acts of the legislative,
executiveandjudicialdepartmentsofthePhilippines,thelawsofnature,themeasure
oftime,andthegeographicaldivisions.(Emphasisanditalicssupplied)
whichMr.JusticeEdgardoL.Parasinterpretedasfollows:
Acourtwilltakejudicialnoticeofitsownactsandrecordsinthesamecase,offacts
establishedinpriorproceedingsinthe
294
294
samecase,oftheauthenticityofitsownrecordsofanothercasebetweenthesame
parties,ofthefilesofrelatedcasesinthesamecourt,andofpublicrecordsonfile
inthesamecourt.Inadditionjudicialnoticewillbetakenoftherecord,pleadingsor
judgmentofacaseinanothercourtbetweenthesamepartiesorinvolvingoneofthe
sameparties,aswellasoftherecordofanothercasebetweendifferentpartiesinthe
same court. Judicial notice will also be taken of court personnel. (Emphasis and
italicssupplied)29
Infine,CLARIONsclaimthatatthetimeitterminatedMiclatitwas
experiencing business reverses gains more light from the
SECsdisapproval of the EYCO Group of Companies petition to be
declared in state of suspension of payment, filed before Miclats
termination, and of the SECs consequent order for the group of
companiesdissolutionandliquidation.
This Courts finding that Miclats termination was justified
notwithstanding,sinceatthetimeshewashiredonprobationarybasisshe
was not informed of the standards that would qualify her as a regular
employee,underSection6,RuleIoftheImplementingRulesofBookVI
oftheLaborCodewhichreads:
SEC.6. Probationaryemployment.Thereisprobationaryemploymentwherethe
employee,uponhisengagement,ismadetoundergoatrialperiodduringwhichthe
employer determines his fitness to qualify for regular employment, based on
reasonablestandardsmadeknowntohimatthetimeofengagement.
Probationaryemploymentshallbegovernedbythefollowingrules:
xxx
(d)Inallcasesofprobationaryemployment,theemployershallmakeknown
totheemployeethestandardsunderwhichhewillqualifyasaregularemployee
atthetimeofhisengagement.Wherenostandardsaremadeknowntotheem
_______________
29 E.PARAS,IV RULESOFCOURTANNOTATED,3rdeditionatp.59citingGrahamon
Evidence,1986edition;CitedinRepublicv.CourtofAppeals,277SCRA633,641(1997).
295
VOL.461,JUNE27,2005
295
ployeeatthattime,heshallbedeemedaregularemployee(Emphasisanditalics
supplied),
shewasdeemedtohavebeenhiredfromdayoneasaregularemployee.30
CLARION, however, failed to comply with the notice requirement
providedforinArticle283oftheLaborCode,towit:
ART.283.CLOSUREOFESTABLISHMENTANDREDUCTIONOFPERSONNEL.
Theemployermayalsoterminatetheemploymentofanyemployeeduetothe
installationoflaborsavingdevices,redundancy,retrenchmenttopreventlossesorthe
closing or cessation of operation of the establishment or undertaking unless the
closingisforthepurposeofcircumventingtheprovisionsofthisTitle,byservinga
writtennoticeontheworkerandtheMinistryofLaborandEmploymentat
leastone(1)monthbeforetheintendeddatethereof.xxx(Emphasisanditalics
supplied)
This Court thus deems it proper to award the amount equivalent to
Miclatsone(1)monthsalaryofP6,500.00asnominaldamagestodeter
employers from future violations of the statutory due process rights of
employees.31
SinceArticle283oftheLaborCodealsoprovidesthat[i]ncaseof
retrenchmenttopreventlosses,...theseparationpayshallbeequivalent
toone(1)monthpayoratleastonehalf(1/2)monthpayforeveryyearof
service,whicheverishigher...,[a]fractionofatleastsix(6)months
[being]consideredone(1)wholeyear,thisCourtholdsthatMiclatis
entitledtoseparationpayequivalenttoone(1)monthsalary.
_______________
30Cielov.NationalLaborRelationsCommission,193SCRA410,418(1991).
31 Jaka Food Processing Corporation v. Darwin Pacot, Robert Parohinog, David

Bisnar, Marlon Domingo, Rhoel Lescano and Jonathan Cagabcab, G.R. No. 151378,
March28,2005,454SCRA119. VideAgabonv.NationalLaborRelationsCommission,
G.R.No.158693,November17,2004,442SCRA573.
296
296
AstoMiclatsentitlementto13thmonthpay,paragraph6oftheRevised
Guidelinesonthe13thMonthPayLawprovides:
6.13thMonthPayofResignedorSeparatedEmployee
Anemployeexxxwhoseserviceswereterminatedanytimebeforethetimefor
paymentofthe13thmonthpayisentitledtothismonetarybenefitinproportionto
the length of time he worked during the calendar year up to the time of his
resignationorterminationfromtheservice.ThusifheworkedonlyfromJanuaryup
toSeptemberhisproportionate13thmonthpayshallbeequivalentto1/12ofhistotal
basicsalaryheearnedduringthatperiod.
xxx
HavingworkedatCLARIONforsixmonths,Miclats13thmonthpayshouldbe
computedasfollows:
(MonthlySalaryx6)/12=Proportionate13thmonthpay
(P6,500.00x6)/12=P3,250.00
With the appointment of a management receiver in September 1997,
however,allclaimsandproceedingsagainstCLARION,includinglabor
claims,32weredeemedsuspendedduringtheexistenceofthereceivership. 33
Thelaborarbiter,theNLRC,aswellastheCAshouldnothaveproceeded
toresolverespondentscomplaintforillegaldismissalandshouldinstead
havedirectedrespondenttolodgeherclaimbeforethethendulyappointed
receiverofCLARION.Tostillrequirerespondent,however,atthistimeto
refileherlaborclaimagainstCLARIONunderthepeculiarcircumstances
ofthecasethat8yearshavelapsedsinceherterminationandthatallthe
argumentsanddefensesofbothpartieswerealreadyventilatedbeforethe
laborarbiter,NLRCandtheCA;andthatCLARIONisalreadyinthe
course of liquidationthis Court deems it most expedient and
advantageousforboth
_______________
32Rubberworld(Phils.),Inc.v.NationalLaborRelationsCommission,305SCRA721,
729730(1999).
33Pres.DecreeNo.902A(1976),sec.6.
297
VOL.461,JUNE27,2005
297
partiesthatCLARIONsliabilitybedeterminedwithfinality,insteadof
still requiring respondent to lodge her claim at this time before the
liquidators of CLARION which would just entail a mere reiteration of
whathasbeenalreadyarguedandpleaded.Furthermore,itwouldbeinthe
bestinterestoftheothercreditorsofCLARIONthatclaimsagainstthe
companybefinallysettledanddeterminedsoastofurtherexpeditethe
liquidationproceedings.Forthelessernumberofclaimstobeproved,the
soonertheclaimsofallcreditorsofCLARIONareprocessedandsettled.
WHEREFORE, the Court ofAppeals November 24,2000 Decision,
togetherwithitsMay23,2001Resolution,isSETASIDEandanother
rendereddeclaringthelegalityofthedismissalofrespondent,Michelle
Miclat.PetitionersareORDERED,however,toPAYherthefollowingin
accordancewiththeforegoingdiscussions:
1. 1)
P6,500.00asnominaldamagesfornoncompliancewithstatutorydue
process;
2. 2)
P6,500.00asseparationpay;and
3. 3)
P3,250.00as13thmonthpay.
LetacopyofthisDecisionbefurnishedtheSECHearingPanelcharged
withtheliquidationanddissolutionofpetitionercorporationforinclusion,
inthelistofclaimsofitscreditors,respondentMichelleMiclatsclaims,to
besatisfiedinaccordancewithArticle110oftheLaborCodeinrelationto
theCivilCodeprovisionsonConcurrenceandPreferenceofCredits.
Costsagainstpetitioners.
SOORDERED.
Panganiban(Chairman),SandovalGutierrez,CoronaandGarcia,
JJ.,concur.
Judgment and resolution set aside, dismissal of Michelle Miclat
declaredlegal.
298
298
NorthwestTourismCorp.vs.CourtofAppeals,FormerSpecialThirdDivision
Notes.A probationary employee is one who is on trial by an
employer during which the employer determines whether or not he is
qualified for permanent employment. (Phil. Federation of Credit
Cooperatives, Inc. [PECCI] vs. National Labor Relations Commission,
300SCRA72[1998])
It is an elementary rule in the law on labor relations that even a
probationaryemployeeisentitledtosecurityoftenure.(SameerOverseas
Placement Agency, Inc. vs. National Labor Relations Commission, 317
SCRA120[1999])
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