Sy v. Fairland Knifcraft Co.

, GR 182915, 189658, 12 December 2011

DEL CASTILLO, J.

FACTS: Susan de Leon (Susan) is the owner/proprietress of Weesan Garments

(Weesan). The complaining workers are sewers, trimmers, helpers, a guard and a
secretary who were hired by Weesan. Weesan filed before the Department of Labor
and Employment-National Capital Region (DOLE-NCR) a report on its temporary
closure for a period of not less than six months. As the workers were not anymore
allowed to work on that same day, they filed a complaint for illegal dismissal.
ISSUE: Whether or not the workers were illegally dismissed?
RULING: Yes. Article 283 of the Labor Code allows as a mode of termination of
employment the closure or termination of business. The decision to close business [or
to temporarily suspend operation] is a management prerogative exclusive to the
employer, the exercise of which no court or tribunal can meddle with, except only
when the employer fails to prove compliance with the requirements of Art. 283, to
wit:
a) that the closure/cessation of business is bona fide, i.e ., its purpose is to advance
the interest of the employer and not to defeat or circumvent the rights of employees
under the law or a valid agreement ;
b) that written notice was served on the employees and the DOLE at least one month
before the intended date of closure or cessation of business; and
c) in case of closure/cessation of business not due to financial losses, that the
employees affected have been given separation pay equivalent to month pay for every
year of service or one month pay, whichever is higher."
It bears stressing that the burden of proving that a temporary suspension is bona fide
falls upon the employer. In this case, Susan/Weesan was not able to discharge this
burden. The documents Weesan submitted to support its claim of severe business
losses cannot be considered as proof of financial crisis to justify the temporary
suspension of its operations since they clearly appear to have not been duly filed with
the BIR. Weesan failed to satisfactorily explain why the Income Tax Returns and
financial statements it submitted do not bear the signature of the receiving officers.
Also hard to ignore is the absence of the mandatory 30-day prior notice to the
workers.