Republic of the Philippines

Department of Labor and Employment

NATIONAL LABOR RELATIONS COMMISSION
Quezon City
National Capital Region

IROSE T. MALUNHAO, RAYMART A.

BONSATO, FE C. EIMAN, HELEN D.
DELA VEGA, ELVIE I. AGSAULIO,
RONALYN C. MANGUBAT, JEZA R.
PEPITO, PILIPINA E. BRIOL, and
OMEGA N. BOLAÑOS,
Complainants,

- versus - NLRC-NCR Case No. 05-08766-18

HON. L.A. ROMMEL R. VELUZ

SURGILINK ENTERPRISES AND

PHARMACY/JOYCE ANN MEDINA LOPEZ,
Respondents.
x---------------------------------------------------------x

CONSOLIDATED POSITION PAPER

Complainants, by counsel, to this Honorable Office, by way of a Reply

to respondents’ position paper, dated 03 September 2018, most respectfully
set forth the following:

Respondents would like to make it appear that their act of of putting

the complainants unemployed is justified under the provision of Article 298
[283] of the Labor Code. Moreover, they are saying that no employer-
employee relationship exists between the respondents and the complainants
because the latter are allegedly mere project-based employees whose tenure
with the company ends upon the termination of the project.

The temerity of the respondents in lying and misleading this

Honorable Office must not be countenanced.

At the onset, it is emphasized that the respondents had failed to prove

the legal and factual existence of the cause of the alleged closure of their
establishment. Further, respondents had miserably fallen short with the
mandated requirements in the implementation of the cessation of
employment of their employees. Serious business losses are substantial
losses, not de minimis. "Losses" means that the business must have operated

Page 1 of 13
at a loss for a period of time for the employer "to [have] perceived
objectively and in good faith" that the business’ financial standing is
unlikely to improve in the future. The burden of proving serious business
losses is with the employer. The employer must show losses on the basis of
financial statements covering a sufficient period of time.

In the present case, respondents glaringly failed to show its financial

condition prior to and at the time it closed its establishment. Respondents
did not submit audited financial statements regarding their alleged financial
losses. Hence, it is obvious that the alleged closure of the respondents’
business was merely simulated and does not conform with the requirements
set for a genuine cessation of business.

Moreover, respondents did not comply with the due notice

requirements. The complainants were merely disallowed to enter the
premises of the respondents’ establishment under the guise of “renovation”.
Worse, they were charged with absence without official leave (AWOL) when
the fact is that the office where they are assigned are closed during the
period of their alleged AWOL. These facts were clearly stated in the
complainants’ “Pinagsama-samang Sinumpaang Salaysay”, to wit:

xxx

(a) Sa aming pagtatrabaho, mayroong mga panahon na

paghihigpit ang ginawa ng pamunuan ng Surgilink
Pharmacy sa amin. Halos araw-araw kaming pinag-iinitan
dahil sinisingil sa amin ang mga expired na produkto na
mismong pinadala ng kumpanya, pati ang nawawalang
injectable ay isinisisi pa rin sa amin. Kapag kami naman ay
nale-late sa trabaho, sinisingil kami ng kumpanya base sa
oras ng aming pagkakahuli sa pagpasok;

(b) May pangyayari pang naganap sa kumpanya noong

nakatanggap sila ng sulat galing Department of Labor and
Employment (DOLE). Upang magmukhang rehistrado ang
nasabing pharmacy, nagpadala sila ng agency (Job on Link)
at hinikayat kaming magsinungaling at pumirma sa
nasabing sulat. Dahil din dito, nag-iba ang shifting ng
pasok ng kumpanya na dating 3 shifts, ay naging 2 shifts na
lamang;

(c) Bukod po sa wala sa minimum wage and sahod namin,

ang malupit pa nito ay wala kaming benepisyo natatangap
sa kumpanya tulad ng SSS, PhilHealth, PagIbig, Double
pay, Sick Leave, Maternity Leave, 13th month pay at Night
Shift Differential. Kinakaltasan din kami ng Isang Daang

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Piso (P100.00) para daw sa Emergency Fund. Kapag
sumapit na ang Emergency ay hindi ito makukuha agad at
kung makukuha man, ito ay mas mababa sa aming ibinigay;

(d) Kung kaya’t, nagpasya kaming magkakasama na

magtatag ng UNYON upang igiit sa kumpanya ang
pagtupad nila sa labor standards at ipaglaban ang aming
mga karapatan. Kami ay sumapi sa labor federation na
Kilusan ng mga Manggagawang Katipunan (KMM-
Katipunan) at binuo ang KMM-Surgilink Enterprises and
Pharmacy Chapter;

(e) At nang lumakas ang aming organisasyon, naging

banta ito laban sa mga malupit na namamahala sa loob ng
pharmacy;

(f) Noong papasok na kami sa trabaho noong ika-30 ng

Abril, 2018, nagulat na lamang kami na nakasarado na
ang Pharmacy at may karatulang nakalagay na “Close
for Renovation”. Ang masakit pa dito, hindi man
lamang kami binigyan ng impormasyon tungkol sa
pagsasara ng botika. Kalaunan, pinadalhan kami ng
sulat ng kumpanya at sinasabing AWOL na kami at
nalugi na ang kumpanya;

(g) Isa lamang po ang nakikita naming dahilan ng

pagtanggal sa amin. Ito ay ang pagsama namin sa Kilusan
ng mga Manggagawang Makabayan-Katipunan;

(h) Malinaw po na ito ay isang Unfair Labor Practice

(ULP). Karapatan po ng mga manggagawa ang bumuo,
sumuporta at maging kasapi ng isang unyon para
proteksyunan ang kanilang mga karapatan. Ito po ay
nakabatay sa ating Saligang Batas at ganun din sa Batas
Paggawa;

(i) Dahil dito, kami ay sama-samang dumiretso sa

tangapan ng DOLE para idulog ang aming mga hinaing at
mabigyang katarungan ang aming sinapit.

(j) Dahil po sa iligal na pagkakatanggal nila sa amin, kami

ay napilitang magsampa ng kaso sa National Labor
Relations Commission (NLRC) upang panagutin ang
pamunuan ng Surgilink Enterprises and Pharmacy sa
kanilang mga iligal na gawain laban sa kanilang mga
manggagawa na katulad namin;

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 (k) Dahil din po sa biglaan at iligal na pagkakatanggal
(AWOL) sa amin sa trabaho, kami at ang aming mga
pamilya ay dumanas ng hindi birong paghihirap dahil sa
kami lamang ang inaasahan nila. Dumanas kami ng gutom,
hindi mapagkatulog, palaging balisa, takot, walang gana sa
pagkain, kahihiyan at iba pa;

(l) Dahil din po dito ay napilitan kaming kumuha ng

serbisyo ng isang abogado upang maayos at mahinusay na
malitis ang kasong ito;

(m) Ang biglaang pagkakatanggal sa amin sa aming mga

trabaho ay malinaw na isang pagmamani-obra upang
makatakas sa kanilang mga pananagutan;

(n) Hindi naging makatarungan ang pagtrato sa amin ng

pamunuan ng Surgilink Enterprises and Pharmacy. Ang
nangyaring paglabag sa aming mga karapatan, na kaakibat
ang matinding paghihirap ng aming mga pamilya, ay hindi
dapat katigan kung kaya’t lubusan ang aming pakikibaka
upang mabigyan ng tahasang kasagutan ang aming
pagdadalamhati sa kasalukuyan;

(o) Ginawa namin ang Pinagsama-samang Sinumpaang

Salaysay na ito upang ilahad ang paglabag ng Surgilink
Enterprises and Pharmacy at pamunuan nito sa aming mga
karapatan; (Emphasis supplied)

xxx

What is more appalling is the fact that respondents did not actually
close the operation of their business or undertaking. They merely, in a
capricious and whimsical manner, transferred all their merchandise to
another location and then terminated the employment of the complainants.
This is too plain and simple to be overlooked.

A company’ s exercise of its management prerogatives is not absolute.

It cannot exercise its prerogative in a cruel, repressive, or despotic manner.

It has been pronounced that the Court is not oblivious of the

significant role played by the corporate sector in the country’s economic and
social progress. Implicit in turn in the success of the corporate form in doing
business is the ethos of business autonomy which allows freedom of
business determination with minimal governmental intrusion to ensure
economic independence and development in terms defined by businessmen.
Yet, this vast expanse of management choices cannot be an unbridled

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prerogative that can rise above the constitutional protection to labor.
Employment is not merely a lifestyle choice to stave off boredom.
Employment to the common man is his very life and blood, which must be
protected against concocted causes to legitimize an otherwise irregular
termination of employment. (F.F. Marine Corp. v. NLRC G.R. No.
152039, April 8, 2005) (Underscoring supplied)

In VETERANS FEDERATION OF THE PHILIPPINES v.

EDUARDO L. MONTENEJO, G.R. No. 184819, November 29, 2017, the
Honorable Supreme Court had the opportunity to lay down the following
standards that a company must meet to justify business closure to prevent
abuse by employers, as follows:

“In our jurisdiction, the right of an employer to

terminate employment is regulated by law. Both the
Constitution and our laws guarantee security of tenure to
labor and, thus, an employee can only be validly dismissed
from work if the dismissal is predicated upon any of
the just or authorized causes allowed under the Labor
Code. Correspondingly, a dismissal that is not based on
either of the said causes is regarded as illegal and entitles
the dismissed employee to the payment of backwages and,
in most cases, to reinstatement.

One of the authorized causes for dismissal

recognized under the Labor Code is the bona fide cessation
of business or operations by the employer. Article 298 of
the Labor Code explicitly sanctions terminations due to the
employer's cessation of business or operations-as long as
the cessation is bona fide or is not made ''for the purpose of
circumventing the [employees' right to security of tenure]":

Art. 298. 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 workers 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)

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 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 one (1) whole
year.

As stated in the provision, an employer's closure or

cessation of business or operations is regarded as an invalid
ground for the termination of employment only when the
closure or cessation is made for the purpose of
circumventing the tenurial rights of the employees. A
survey of relevant jurisprudence can shed light on what can
be considered as an invalid cessation of business or
operations:

1. In Me-Shurn Corporation v. Me-Shurn Workers

Union-FSM, a company that supposedly closed due to
financial losses was discovered to have revived its
operations barely a month after it closed. Some of the
employees who were dismissed as a consequence of the
company's closure challenged their terminations on the
ground that such closure is not bona fide and claimed that
the same was only made to forestall the formation of their
union. When the issue reached us, we sided with the
employees-ratiocinating that the company's unusual and
immediate resumption of operations had lent credence to
the employees' claim that the company's earlier closure had
been done in bad faith.

2. Danzas Intercontinental, Inc. v. Daguman, on the

other hand, featured a company which apparently closed
one of its departments. However, in the ensuing illegal
dismissal case filed by the employees terminated in the
closure, it had been established that the company did not
actually stop operating the concerned department as it even
hired a new set of staff for the same. On these premises, we
declared that the company's earlier closure of the subject
department as not bona fide and ordered the reinstatement
of the terminated employees.

3. A cross between Me-Shum and Danzas is the case

of St. John Colleges, Inc. v. St. John Academy Faculty and
Employees Union. In St. John, a deadlock in the Collective

Page 6 of 13
Bargaining Agreement negotiations between a school and
its faculty union prompted the former to close its high
school department and effect a mass lay-off. But barely one
year after it announced such closure, the school reopened
its high school department. The employees who lost their
jobs in the closure of the high school department lodged an
illegal dismissal complaint hinged on the argument that
said closure is invalid and made in bad faith. We favored
the employees and observed that the timing and the reason
of both the closure of the high school department and its
reopening were indicative of the school's bad faith in
effecting the closure.

4. And finally, the case of Eastridge Golf Club, Inc.

v. East Ridge Golf Club, Inc. Labor Union-Super.
Eastridge involved a company which closed one of its
departments by allegedly transferring its operations to a
concessionaire. However, in the illegal dismissal case filed
by the employees laid off in the closure, it was proven that
the company did not actually transfer the operations of the
subject department to a concessionaire and that the former
remained to be the employer of all the workers in the
department. On this score, we ruled that the company's
closure of its department was simulated and that the
employees' dismissal by reason thereof was illegal.

All of the instances of invalid closures of business or

operations discussed above have a common and telling
characteristic-all of them were not genuine closures or
cessations of businesses; they are mere simulations which
make it appear that the employer intended to close its
business or operations when the latter, in truth, had no such
intention. To unmask the true intent of an employer when
effecting a closure of business, it is important to consider
not only the measures adopted by the employer prior to the
purported closure but also the actions taken by the
latter after the fact. For, as can be seen from the examples
in the cited cases, the employer's subsequent acts
of suddenly reviving a business it had just
closed or surreptititiously continuing with its operation
after announcing a shutdown are telltale badges that the
employer had no real intent to cease its business or
operations and only seeks an excuse to terminate
employees capriciously.”

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 From the foregoing discourse, it is not enough for the respondents to
merely declare that they are suffering from a business slowdown. It must
produce adequate proof of such business loss to justify cessation of its
business. It bears stressing that no evidence was submitted by the
respondents to prove their financial losses. What they proffered are mere
allegations and conclusions not supported by other evidence. Respondents
did not even bother to illustrate or explain in detail how and why they did
not submit any Employment Termination Report. It must be remembered
that the employer bears the burden of proving the cause or causes for
termination. Its failure to do so would necessarily lead to a judgment of
illegal dismissal.

Again, it bears stressing that substantial evidence is the question of

evidence required to establish a fact in cases before administrative and
quasi-judicial bodies. Substantial evidence, as amply explained in numerous
cases, is that amount of relevant evidence which a reasonable mind might
accept as adequate to support a conclusion. (Reno Foods, Inc. v. NLRC,
G.R. No. 116462, October 18, 1995)

Verily, it is now safe to conclude that the complainants were illegally

dismissed. Respondents cannot conveniently terminate the work of any of its
employees in the guise of business reverses when it has not shown
compliance with the legal parameters under Article 298 of the Labor Code.
With respondents failing to prove such compliance, the resulting legal
conclusion is that the complainants had been illegally dismissed; and since
the same was effected without any genuine cause and due process, the
finding that complainants’ dismissal was illegal must be sustained.

The respondents are likewise saying that the complainants are not
their regular employees but are mere project based employees whose tenure
with the establishment ceases upon the expiration of the project.

The respondents are hallucinating.

The complainants are regular employees of the respondents. The

activities they were performing are usually necessary and desirable in the
usual trade or business of the respondents. This fact is too plain to be
mistaken.

In their attempt to prove their claim of project-based employment,

respondents exuded the temerity to proffer the alleged project employment
contracts and company I.D.’s of the complainants. Truth to tell, the
foregoing pieces of documents were mere fabrications.

Page 8 of 13
 It is quite incongruous for the respondents to be holding the respective
I.D.’s of the complainants purportedly issued by “Job-on-Link Staffing
Services. If indeed such company I.D.s lawfully exist, how come they
remain in the custody of the respondents and not in the hands of the
complainants. Those I.D.’s should be in the hands of the complainants and
not in the safekeep of any other individuals and, much more, not in the
keeping of the respondents. For the appreciation of this Honorable Office,
attached hereto, and made an integral part hereof, as Annex “A” - Annex
“A-1” are samples of the complainants company I.D.s with Surgilink.

It is worthy to emphasize that project-based employment from its

inception until its termination is governed by law and cannot be utilized or
exercised by anyone capriciously or freakishly. As can be gleaned from the
affidavit of the complainants, they were merely forced to sign the alleged
employment contracts with “Job-on-Link Staffing Services:

(b) May pangyayari pang naganap sa kumpanya noong

nakatanggap sila ng sulat galing Department of Labor and
Employment (DOLE). Upang magmukhang rehistrado
ang nasabing pharmacy, nagpadala sila ng agency (Job
on Link) at hinikayat kaming magsinungaling at
pumirma sa nasabing sulat. Dahil din dito, nag-iba ang
shifting ng pasok ng kumpanya na dating 3 shifts, ay
naging 2 shifts na lamang;

There is no question that stipulation on employment contract

providing for a fixed period of employment such as "project-to-project"
contract is valid provided the period was agreed upon knowingly and
voluntarily by the parties, without any force, duress or improper pressure
being brought to bear upon the employee and absent any other circumstances
vitiating his consent, or where it satisfactorily appears that the employer and
employee dealt with each other on more or less equal terms with no moral
dominance whatever being exercised by the former over the latter. However,
where from the circumstances it is apparent that periods have been imposed
to preclude the acquisition of tenurial security by the employee, they should
be struck down as contrary tenurial security by the employee, they should be
struck down as contrary to public policy, morals, good custom or public
order. (Rogelio Caramol vs. NLRC., G.R. No. 102973 August 24, 1993).

In the case before us, the mere insinuation by the respondents that the
complainant’s tenure with the company has legally ended upon the
termination of their alleged project-based contracts is untenable and has no
leg to stand on.

Page 9 of 13
 The ruling of the Court in Baguio Country Club Corporation
v. NLRC, G.R. No. 71664, 28 February 1992, is instructive, to wit:

“. . . . The primary standard . . . of determining a

regular employment is the reasonable connection between
the particular activity performed by the employee in
relation to the usual business or trade of the employer. The
test is whether the former is usually necessary or desirable
in the usual business or trade of the employer. The
connection can be determined by considering the nature of
the work performed and its relation to the scheme of the
particular business or trade in its entirety. Also, if the
employee has been performing the job for at least one year,
even if the performance is not continuous or merely
intermittent, the law deems the repeated and continuing
need for its performance as sufficient evidence of the
necessity if not indispensability of that activity to the
business. Hence the employment is also considered regular,
but only with respect to such activity and while such
activity exists" (De Leon v. National Labor Relations
Commission, G.R. No. 70705, August 21, 1989, 176 SCRA
615, 620-621) . . . .

Such repeated rehiring and the continuing need for his

service are sufficient evidence of the necessity and
indispensability of his service to the petitioner's business or
trade.

. . . . the private respondent performed the said task which

lasted for more than one year, . . . by this fact alone he is
entitled by law to be considered a regular employee.

Owing to private respondent's length of service with the

petitioner corporation, he became a regular employee, by
operation of law, one year after he was employed . . . .

It is of no moment that private respondent was told when

he was hired that his employment would only be "on a day
to day basis for a temporary period" and may be terminated
at any time subject to the petitioner's discretion. Precisely,
the law overrides such conditions which are prejudicial to
the interest of the worker. Evidently, the employment
contracts entered into by private respondent with the
petitioner have the purpose of circumventing the
employee's security of tenure. The Court, therefore,
rigorously disapproves said contracts which demonstrate a

Page 10 of 13
 clear attempt to exploit the employee and deprive him of
the protection sanctioned by the Labor Code.

It is noteworthy that what determines whether a certain

employment is regular or casual is not the will and word of
the employer, to which the desperate worker often accedes.
It is the nature of the activities performed in relation to the
particular business or trade considering all circumstances,
and in some cases the length of time of its performance and
its continued existence.” (Emphasis supplied)

The arguments and/or discussion contained in complainants’ Position

Paper in this case are hereby re-pleaded and made part hereof by reference.

As to the other issues in this case, the same were already lengthily and
sufficiently discussed in complainants’ Position Paper and are just hereby re-
pleaded by reference.

As to the other issues and/or points raised by respondents in their

position papers subject of this Reply, the same are either already addressed
in complainants’ Position Paper or are plainly irrelevant in this case.

PRAY E R

WHEREFORE, in view of all the foregoing, it is most respectfully

prayed for that, after due consideration, a DECISION BE RENDERED in
favor of the complainants as follows:

1. DECLARING complainants to have been DENIED DUE

PROCESS and their DISMISSAL as ILLEGAL;

2. DIRECTING respondents to immediately REINSTATE the

complainants to their former positions without loss of seniority rights and
other privileges under the law and the payment of their FULL
BACKWAGES, inclusive of allowances and other benefits or their
monetary equivalent, computed from the time their compensations were
withheld from them up to the time of their actual reinstatement;

3. HOLDING respondents guilty of Unfair Labor Practice for

their union-busting activities;

4. HOLDING respondents SOLIDARILY LIABLE for other

monetary claims herein demanded as well as DAMAGES in the amount of

Page 11 of 13
ONE HUNDRED THOUSAND (P100,000.00) PESOS, FOR EACH
COMPLAINANT, as moral damages and TWO HUNDRED THOUSAND
(P200,000.00) PESOS, FOR EACH COMPLAINANT, as exemplary
damages; and

5. DECLARING respondents SOLIDARILY LIABLE to reimburse

complainants all THEIR litigation and other related expenses, including
attorney’s fees equivalent to ten (10%) percent of the total monetary award.

OTHER RELIEFS deemed just and equitable under the premises are
likewise prayed for.

Quezon City, 28 September 2018.

LAW I N
(Legal Advocates for Workers’ INterest)
Counsel for the Complainants
Room 206, Jiao Building
2 Timog Avenue, Quezon City
Email address: lawin2setusfree@yahoo.com
Telefax (02) 373-18-44

ERNESTO R. ARELLANO
PTR No. 5521327; 01-04-18; Quezon City
IBP No. 020231; 01-04-18; CALMANA
ROLL No. 22660
MCLE No. V-0011875; Issued 11-11-15; Until 04-14-19

JASPER C. BALBOA
PTR No. 2723758; 01-18-18; Mandaluyong City
IBP No. 025213; 01-10-18; Manila I
ROLL No. 63288
MCLE Compliance No. V-0019823
valid from 04/20/2016 until 04/14/2019

Page 12 of 13
Copy furnished: by hand and during
hearing

SURGILINK ENTERPRISES AND

PHARMACY/JOYCE ANN MEDINA LOPEZ
1658 Rizal Avenue, Sta Cruz, Manila NCR 1000 and/or
1748 Rizal Avenue, Brgy. 337, Zone 034, Sta. Cruz,
Manila 1000

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