REPUBLIC OF THE PHILIPPINES

NATIONAL LABOR RELATIONS COMMISSION

Regional Arbitration Branch No. VII
Governor's Cottage, Capitol Area, Dumaguete City

ALAIZA MALINAO, APRIEL RAB VII Case No. ____

SMITH, CHRISTELLE
ABELLO, KIM CHI
CRIZALDO, KIMBERLY
HAKENSON, LOU
DOMINIQUE PICZON, MARIA
ISABELA GALERIA, MARIA
YSABELLA YSMAEL,
MICHELE THERESA
GUMABAO, PAULA
MADARIETA ORTEGA,
SANDRA LEMONON, SIGRID
GRACE FLORES, SKELLY
IVY FLORIDA, TRACY
MAUREEN PEREZ, WE’AM
AHMED
Complainants,

- versus -

SILLY MEN UNIVERSITY

Respondent.
x --------------------------------- x

POSITION PAPER

Complainants, thru the undersigned and unto this

Honorable Labor Arbitration Office, respectfully submits this
position paper and states that:

MATERIAL DATES

During the mandatory conciliation conference held on

February 19, 2020, the Honorable Labor Arbiter directed the
parties to file simultaneously their respective position papers
within twenty (20) days, or no later than March 10, 2020.

THE PARTIES

Page 1 of 6
 Complainants ALAIZA MALINAO, APRIEL SMITH,
CHRISTELLE ABELLO, KIM CHI CRIZALDO, KIMBERLY
HAKENSON, LOU DOMINIQUE PICZON, MARIA ISABELA
GALERIA, MARIA YSABELLA YSMAEL, MICHELE THERESA
GUMABAO, PAULA MADARIETA ORTEGA, SANDRA
LEMONON, SIGRID GRACE FLORES, SKELLY IVY
FLORIDA, TRACY MAUREEN PEREZ, WE’AM AHMED
(hereinafter referred to as complainants) are of legal age,
single, and residents of Dumaguete City. They can be served
with notices, orders, resolutions and other processes of this
Honorable Labor Arbitration Branch at the address of their
undersigned counsel.

Respondent SILLY MEN UNIVERSITY (hereinafter

referred to as respondent) is a socially conscious academic
institution in Dumaguete City operating an infirmary which
serves as its community out-reach program. It may be served
with summons, orders, resolutions and other processes of this
Honorable Office at Villard Hall, Silly Men University,
Dumaguete City.

STATEMENT OF FACTS

1. On January 10, 2010, complainants services as school

physician, nurses, and utility workers were engaged by
respondent. Complainants started working part-time before
serving full-time from 2005.
2. On September 29, 2019, complainants were handed an
Inter-Office Memo from respondent, inviting the former to a
meeting concerning their “working condition.” The meeting
was set the following day, September 30, 2019, at the office
of respondent’s President, Mr. Silly Men.
3. In that meeting, complainants were handed a termination of
employment letter, explaining the reasons for and the terms
of their dismissal including payment of separation pay as
follows:
“Due to the current financial situation of Silly Men
University caused by the decrease in enrollment in
our institution, the Board of Regents in its last
meeting of September 24, 2019 has advised the
Health Services Department of Silly Men University

Page 2 of 6
 to downsize the health services staff at the end of
this 1st Semester of School Year 2019-2020.

Accordingly, we were forced to eliminate the 15

excess personnel.

It is really with regret that management has to take

this decision, as a last resort, to prevent serious
business losses.

Your last day of service with Silly Men University

shall be one month after your receipt of this letter.

The payments that you shall be receiving are the

computation of your one (1) month pay of the thirty
(30) days notice, one half (1/2) month of basic
salary for every year of service as a regular employee
(as of August 19, 2015), 13th month pay and tax
refund.”

4. After the complainants were dismissed, respondent

regularized five (5) employees and hired 10 (ten) previously
dismissed employees, thereby indicating that respondent
was not facing serious financial losses.
5. The dismissal of complainants was just designed to prevent
their union, Silly Men University Staff Association (SMUSA),
from becoming the certified bargaining agent of
respondent’s employees.

PROPOSED ISSUE TO BE RESOLVED

Was complainants’ dismissal pursuant to respondent’s

retrenchment program legal?

DISCUSSION / ARGUMENTS

Complainants, thru the undersigned counsel, submits

that the retrenchment program resorted to by the responded
was illegal, thus, complainants were illegally dismissed.

The Labor Code recognizes retrenchment as an

authorized cause for terminating employment.1 It is an option
1
Article 298. [283] Closure of Establishment and Reduction of Personnel. — The
employer may also terminate the employment of any employee due to the installation of
labor-saving devices, redundancy, retrenchment to prevent losses or the closing or
cessation of operation of the establishment or undertaking unless the closing is for the
purpose of circumventing the provisions of this Title, by serving a written notice on the

Page 3 of 6
validly available to an employer to address “losses in the
operation of the enterprise, lack of work, or considerable
reduction on the volume of business”. 2 Retrenchment is
normally resorted to by management during periods of
business reverses and economic difficulties occasioned by
such events as recession, industrial depression, or seasonal
fluctuations. It is an act of the employer of reducing the work
force because of losses in the operation of the enterprise, lack
of work, or considerable reduction on the volume of business.
Retrenchment is, in many ways, a measure of last resort when
other less drastic means have been tried and found to be
inadequate.3

In Cabaobas v. Pepsi4, the Court ruled that the requisites

for a valid retrenchment are as follows:
1. The 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. The employer served written notice both to the
employees and to the Department of Labor and
Employment (DOLE) at least one (1) month prior
to the intended date of retrenchment;
3. 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. 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. The employer used fair and reasonable criteria in
ascertaining who would be dismissed and would
be retained among the employees, such as

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) 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.
2
Edge Apparel, Inc. v. National Labor Relations Commission, 349 Phil. 972, 982 (1998).
[Per J. Vitug, First Division]
3
La Consolacion College v. Pascua, G.R. No. 214744, March 14, 2018
4
G.R. No. 176908, March 25, 2015.

Page 4 of 6
 status, efficiency, seniority, physical fitness, age,
and financial hardship for certain workers.

Respondent’s failure was non-compliance with the first

requisite of a valid retrenchment.

Jurisprudence requires that the necessity of

retrenchment to stave off genuine and significant business
losses or reverses be demonstrated by an employer’s
independently audited financial statements. Documents that
have not been the subject of an independent audit may very
well be self-serving. Moreover, it is not enough that it presents
its audited financial statement for the year that retrenchment
was undertaken for even if as it may be incurring losses for
that year, its overall financial status may already be
improving. Thus, it must “also show that its losses increased
through a period of time and that the condition of the
company is not likely to improve in the near future. 5

In the case at bar, respondent did not present any

document to prove that it suffered business reverses on an
aberrant drop in its revenue and income, thus compelling it to
retrench its employees. Moreover, the fact that respondent
regularized five (5) of its part-time workers and hired ten (10)
employees right after the complainants were dismissed is an
indication of bad faith and belies the claim that respondent is
suffering from losses. Logically, an employer that claims that
they are suffering from any losses would not regularize nor
hire employees temporarily as a cost-cutting measure.

PRAYER

WHEREFORE, premises considered, it is respectfully

prayed that judgment be issued declaring that the
complainants had been ILLEGALLY DISMISSED by way of
INVALID RETRENCHMENT by the respondent and that the
complainants are entitled to REINSTATEMENT.

FURTHER, it is respectfully prayed that the respondents

be ordered to pay or issue to the complainant, as the case may
be:

5
615 Phil. 33 (2009)

Page 5 of 6
 1. BACKWAGES from the date of their illegal
dismissal up to the time they are REINSTATED to their
former position without loss of seniority and other
benefits.

2. MORAL DAMAGES of P100,000.00.

3. EXEMPLARY DAMAGES of P200,000.00.

FINALLY, the complainants respectfully pray for such

and other reliefs as may be deemed just and equitable in the
premises.

February 24, 2020, Dumaguete City, Negros Oriental,

Philippines.

Mikko Jan E. dela Cruz

______________________________
Notary Public
Commission Serial No.122345 - Until December 31, 2020
Roll of Attorney 123456
IPB No. 123456789/Jan.2017/Negros Oriental
PTR No. 123456789/Jan.2017/Cebu City
MCLE No. VI-123456789

Copy furnished: (by Registered Mail)

SILLY MEN UNIVERSITY

Villard Hall, Silly Men University
Dumaguete City

EXPLANATION

There being no messenger employed by the undersigned

to effect personal service considering that he is preoccupied
with other equally important cases, copy of the foregoing paper
shall be sent via LBC.

(SGD.) MIKKO JAN E. DELA CRUZ

Page 6 of 6