Beruflich Dokumente
Kultur Dokumente
*
retrenchment to prevent losses, it does not obligate
the employer for the payment thereof if there is
ALABANG COUNTRY CLUB, INC., ROBERTO
closure of business due to serious losses.
ANONAS, CATALINO SANTOS, ERNESTO Same; Same; Same; For any bona fide reason, an
CAYETANO and ROGELIO MANALO, petitioners, employer can lawfully close shop anytime—just as no
vs. NATIONAL LABOR RELATIONS COMMISSION, law forces anyone to go into business, no law can
ALABANG COUNTRY CLUB INDEPENDENT compel anybody to continue the same.—The closure of
EMPLOYEES UNION, MARILOU ABADIANO, operation of an establishment or undertaking not due
ERNESTO BANAL, BENEDICTO CATALAN, ABNER to serious business losses or financial reverses includes
CAVESTANY, ROMULO DALAYGON, ELENA DELA both the complete cessation of operations and the
CRUZ, RONALDO IBARRA, MA. ISABELITA cessation of only part of a company’s activities. For
any bona fide reason, an employer can lawfully close
PIZARRO, FELIX ARISME, EDILBERTO BANTILLES,
shop anytime. Just as no law forces anyone to go into
BERNARDO DE CHAVEZ, MEDARDO ENRIQUEZ, business, no law can compel anybody to continue the
ERNESTO DEREZA, DOMINGO IBALLAR, GINA same. It would be stretching the intent and spirit of the
DUMALAON, JOSE MASAGCA, MARIO FRANCHE, law if a court interferes with management’s
SHARON DANTES-PLATERO, ANNALISSA GARCIA, prerogative to close or cease its business operations
JULIET TENORIO, ROLANDO GANNABAN, just because the business is not suffering from any loss
EMERSON ARGOSO, ANICETO GLEAN, FELIPE or because of the desire to provide the workers
CADENA, PERLITA HENARES, JOSEPH TAYONG, continued employment.
331
JAIME HIDALGO, ROSANNA ROSARIAL,
LEODEGARIO HUMIRANG, EFREN ABIADA,
VOL. 466, AUGUST 9, 331
FILIPINO DIZON, ELPIDIO IBUOS, JR., ROBERTO
LANON, ARNOLD LAYUG, JOEL LINAOGO, 2005
EDUARDO LLENAS, JOSELITO LORINO, FERDINAND Alabang Country Club, Inc. vs.
MABITASAN, GEORGE MARASIGAN, PERLA National Labor Relations Commission
MARGES, CYNTHIA MATHAY, WERLITO NAVARRO, Same; Same; Same; Management
CRISTINA OLEGARIO, CRISTINA OMAYAO, NENEN Prerogatives; Management’s exercise of its
ORTIGOZA, ELEONOR PALIMA, MARIA PANTALITA, prerogatives to close a section, branch, department,
EDUARDO PERALTA, RICHARD PEREZ, JOVITO plant or shop will be upheld as long as it is done in
PIDLAOAN, PACITA PILONGO, BENJAMIN PINTOR, good faith to advance the employer’s interest and not
NARCISO QUIZANA, AGRIFINO REYES, DENNIS for the purpose of defeating or circumventing the
rights of employees under the law or a valid
REYES, EDUARDO RUBINA, ARISTEO SANTOS,
agreement.—While petitioner did not sufficiently
ROBERTO SOLANTE, ARMANDO SUAREZ, establish substantial losses to justify closure of its F &
DOLORES VALIENTE, REMEDIOS UMALI, INGERSOL B Department on this ground, there is basis for its
POMIDA, and FLORO MACABIT, respondents. claim that the continued maintenance of said
department had become more expensive through the
Labor Law; Retrenchment; Closure of
years. An evaluation of the financial figures appearing
Business; Words and Phrases; “Retrenchment,” and
in the audited financial statements prepared by the
“Closure of Business or Undertaking
_______________
SGV&Co. shows that ninety-one to ninety-six (91%–
96%) percent of the actual revenues earned by the F &
*
THIRD DIVISION. B Department comprised the costs and expenses in
maintaining the department. Petitioner’s decision to
330 place its F & B operations under a concessionaire must
then be respected, absent a showing of bad faith on its
330 SUPREME COURT part. In fine, management’s exercise of its prerogative
REPORTS ANNOTATED to close a section, branch, department, plant or shop
will be upheld as long as it is done in good faith to
Alabang Country Club, Inc. vs. advance the employer’s interest and not for the
National Labor Relations Commission purpose of defeating or circumventing the rights of
Due to Reversal of Fortune,” Explained; While the employees under the law or a valid agreement.
Labor Code provides for the payment of separation Same; Waivers or Quitclaims; A waiver or
package in case of retrenchment to prevent losses, it quitclaim is a valid and binding agreement between
does not obligate the employer for the payment the parties, provided that it constitutes a credible and
thereof if there is closure of business due to serious reasonable settlement and the one accomplishing it
losses.—This Court, however, views the case as one has done so voluntarily and with a full understanding
involving closure of a business undertaking, not of its import.—By petitioner’s information, it had paid,
retrenchment. While retrenchment and closure of a during the pendency of the case, the separation
business establishment or undertaking are often used package of sixty-two (62) of the sixty-three (63)
interchangeably and are interrelated, they are actually individual respondents on account of which they
two separate and independent authorized causes for executed Releases, Waivers and Quitclaims in its favor.
termination of employment. Retrenchment is A waiver or quitclaim is a valid and binding agreement
the reduction of personnel for the purpose of cutting between the parties, provided that it constitutes a
down on costs of operations in terms of salaries and credible and reasonable settlement and the one
wages resorted to by an employer because of losses in accomplishing it has done so voluntarily and with a full
operation of a business occasioned by lack of work and understanding of its import. As the waivers and
considerable reduction in the volume of quitclaims executed by individual respondents who had
business. Closure of a business or undertaking due to been given their separation pay were duly notarized,
business losses is the reversal of fortune of the the certificate of acknowledgement in each of them
employer whereby there is a complete cessation of serves as prima facie evidence of their due execution.
business operations to prevent further financial drain Not one of individual respondents who executed the
upon an employer who cannot pay anymore his waivers or quitclaims has come forward to challenge
employees since business has already stopped. One of the reasonableness of the settlement and/or
the prerogatives of management is the decision to voluntariness of the execution of the documents.
close the entire establishment or to close or abolish a
332
department or section thereof for economic reasons,
such as to minimize expenses and reduce 332 SUPREME COURT REPORTS
capitalization. While the Labor Code provides for the ANNOTATED
payment of separation package in case of
Alabang Country Club, Inc. vs. National
and Beverage; and (iii) Undistributed Operating
Labor Relations Commission Costs and Expenses. The actual/ profit loss of the F
& B may not be accurately determined by simply
PETITION for review on certiorari of the decision deducting the figure termed as “Departmental Cost
and Expenses: Food and Beverage” from the figure
and resolution of the Court of Appeals.
termed as “Revenues, Excluding Membership Dues
and Other Fees: Food and Beverage” appearing on
The facts are stated in the opinion of the Court. the Club’s audited Statement of Income and deficit.
Salvador C. Medialdea for petitioners. This is so because some of the costs and expenses
incurred in the operation of the F & B are not
Ma. Verena Kasilag-Villanueva, Fernandez included in the item “Departmental Costs and
& Kasilag-Villanueva for respondents. Expenses: Food and Beverage” but were included in
the “Undistributed Operating Costs and Expenses.”
CARPIO-MORALES, J.: These costs and expenses include, among others:
Petitioner Alabang Country Club Inc. (ACCI), a 1. (i)depreciation of appliances and equipment used in
the operation of the F & B (which operation
stock, nonprofit corporation that operates and occupied practically 50% of total clubhouse
maintains a country club and various sports and
recreational facilities for the exclusive use of its 334
members, seeks to set aside the appellate court’s
Decision of August 14, 2002 as well as its
1
334 SUPREME COURT REPORTS
Resolution of March 6, 2003 denying petitioner’s
2 ANNOTATED
motion for reconsideration. The appellate court Alabang Country Club, Inc. vs. National
reversed and set aside the National Labor Labor Relations Commission
Relation Commission’s (NLRC) Decision of March 3
333
_______________
VOL. 466, AUGUST 9, 2005 333
Alabang Country Club, Inc. vs. National 1. area), such as air conditioning units and freezers;
2. (ii)expenses for utilities such as water and electricity
Labor Relations Commission used in the operation of function rooms, and
& B Department. However, while SGV&Co. telephone used in the F & B office and function
deducted the entire “undistributed operating rooms;
3. (iii)expenses for supplies for members and guests,
costs and expenses” consisting of “general and such as face towels used in the Golfer’s Ve-randa;
maintenance costs” from the total income of 4. (iv)Association dues, such as for garbage collection;
ACCI, Ugalde allocated a percentage of these
6
5. (v)Fees paid to the government, such as for permits;
expenses and charged the same against the total 6. (vi)Fees for professional services, such as for
auditors, etc.
revenue of the F & B Department. Consequently,
7
Also on December 1, 1994, ACCI sent its F & B As scheduled, ACCI ceased operating its F & B
Department employees individual letters Department by January 1, 1995 as La Tasca
informing them that their services were being began operating its own F & B business at the
terminated effective January 1, 1995; and that 14
Alabang Country Club.
they would be paid separation pay equivalent to Meanwhile, in the proceedings before the
one hundred twenty five (125%) percent of their Labor Arbiter, respondent union and individual
monthly salary for every year of service. ACCI 15
respondents informed that the F & B Division had
also informed them that La been reporting gaining profits as shown by the
_______________ Statement of Income and Deficit prepared by
SGV&Co. They thus argued that compliance with
21
Id., at p. 21.
10
Ibid.
11
the standards for losses in Lopez Sugar
Id., at pp. 134-138.
12 Corporation v. Federation of Free Workers to 22
Id., at p. 134.
13
justify their retrenchment were not met by ACCI.
Id., at p. 22.
14
the Collective Bargaining Agreement entered into by and management prerogatives to adopt a cost-saving
between the ACCI and the Union provides to wit: and cost-consciousness program to improve
SECTION 3. RIGHTS IN CASE OF RETRENCHMENT.—In case the CLUB efficiency in its operations, prevent losses, and
23
first to be lad off, unless the more senior UNION member voluntarily workers and contract out their jobs. 25
offers him
During the pendency of the complaint for
336 illegal dismissal before the Labor Arbiter, forty-
336 SUPREME COURT REPORTS seven (47) of the individual respondents accepted
separation benefits from ACCI at 125% of their
ANNOTATED monthly salary for every year of service, on
Alabang Country Club, Inc. vs. National account of which they executed Waivers and
Labor Relations Commission Quitclaims in favor of ACCI: Marilou Abadiano,
Tasca agreed to absorb all affected employees Ernesto Banal, Benedicto Catalan, Abner
immediately with the status of regular employees Cavestany, Romulo Dalaygon, Elena dela Cruz,
without need of undergoing a probationary _______________
period, and that all affected employees would
terference with any of the operations of the CLUB during
receive the same salary they were receiving from the term of this Agreement or any extension thereof.
ACCI at the time of their termination. 16
Rollo at p. 402.
20
Rollo at p. 594.
23
The Union then filed a notice of strike. ACCI, 18 338 SUPREME COURT REPORTS
finding that the requirements under the Labor ANNOTATED
Code had not been complied with, suspended on Alabang Country Club, Inc. vs. National
December 28, 1994 those who participated in the
strike. 19
Labor Relations Commission
_______________ Ernesto Dereza, Gina Dumalaon, Mario Franche,
Annalissa Garcia, Rolando Gannaban, Aniceto
self to be laid off. UNION members who have been laid off for any Glean, Perlita Henares, Jaime Hidalgo, Leodegario
cause shall receive a separation pay equivalent to one month and a
quarter (1.25%) for every year of service; a fraction of a year shall be
Humirang, Elpidio Ibuos, Jr., Roberto Lanon,
considered one year. Arnold Layug, Joel Linaogo, Eduardo Llenas,
Joselito Lorino, Ferdinand Mabitasan, George
Rollo at p. 113. The agreement by and between La Tasca
16
and ACCI dated December 1, 1994 provides to wit: Marasigan, Perla Marges, Cynthis Mathay, Werlito
2. OBLIGATIONS OF PROPONENT Navarro, Cristina Olegario, Cristina Omayao,
2.1 PROPONENT agrees to absorb all regular employees of Nenen Ortigoza, Eleonor Palima, Maria Pantalita,
ACC[I] whose term of employment may be or are affected by Eduardo Peralta, Richard Perez, Jovito Pidlaoan,
this agreement at their present monthly salary rates and as
regular employees of the PROPONENT. Pacita Pilongo, Benjamin Pintor, Narciso Quizana,
xxx Agrifino Reyes, Dennis Reyes, Eduardo Rubina,
Rollo at pp. 22-23.
17
Aristeo Santos, Roberto Solante, Armando Suarez,
Id., at p. 401.
18
Collective Bargaining Agreement entered into by and between Pomida and Floro Macabit. 26
ACCI and the Union effective for the period April 9, 1993-April By decision of April 30, 1999, the Labor Arbiter
9, 1996 provides: dismissed the complaint for illegal dismissal on
the ground that a business entity has the right to ANNOTATED
reduce its work force if necessitated by
compelling economic factors which endanger its
Alabang Country Club, Inc. vs. National
existence or stability. The Labor Arbiter in fact
27 Labor Relations Commission
found that the study made by Ugalde which was a Association, held36
that financial statements
more detailed version of the financial statements audited by independent external auditors, and
prepared by SGV&Co. clearly established that the not a mere study report of an internal auditor of a
F & B Department was incurring losses, thus company, constitute the normal method of proof
justifying ACCI to exercise its inherent of the profit and loss of the company. 37
prerogative to retrench its workers to prevent ACCI’s motion for reconsideration having been
38
On appeal, the NLRC acknowledged the right March 6, 2003, it comes before this
of ACCI to regulate, according to its own Court via petition for review on certiorari,
discretion and judgment, all aspects of advancing the following arguments:
employment including the lay-off of workers A.
because of losses in the operation of its business,
lack of work and considerable reduction in the CONTRARY TO LAW AND ESTABLISHED
JURISPRUDENCE, THE COURT OF APPEALS GRAVELY
volume of business. It thus dismissed the appeal.
29
_______________
DISREGARDED THE CLUB’S RIGHT TO TERMINATE ITS
EMPLOYEES FOR AN AUTHORIZED CAUSE,
26
Id., at pp. 24-25.
PARTICULARLY TO SECURE ITS CONTINUED VIABILITY
27
Id., at p. 389. AND EXISTENCE.
28
Id., at p. 391.
29
CA Rollo pp. 129-130. B.
339
CONSISTENT WITH ESTABLISHED LAW AND
VOL. 466, AUGUST 9, 2005 339 JURISPRUDENCE, INASMUCH AS BOTH FINDINGS OF
Alabang Country Club, Inc. vs. National PUBLIC RESPONDENT NLRC AND THE LABOR
ARBITER A QUO THAT THE CLUB’S F & B EMPLOYEES
Labor Relations Commission WERE VALIDLY TERMINATED, ARE SUPPORTED BY
Private respondents’ motion for reconsideration AUDITED FINANCIAL STATEMENTS AND OTHER
of the NLRC’s dismissal of the appeal was denied SUBSTANTIAL EVIDENCE, THE PETITION BELOW
by Resolution of April 28, 2000.
30
SHOULD HAVE BEEN DISMISSED.
Private respondents thereupon brought their
case, via petition for certiorari, before the Court
31 C.
of Appeals, alleging that the Labor Arbiter and the
NLRC committed grave abuse of discretion and THE ORDER FOR REINSTATEMENT, PAYMENT OF
utter ignorance of the law in completely BACKWAGES, AND THE AWARD OF ATTORNEY’S FEES
disregarding the audited financial statements ARE NOT PROPER SINCE RESPONDENTS WERE
TERMINATED FOR AN AUTHORIZED CAUSE AND AFTER
prepared by SGV&Co. showing that ACCI’s F & B
COMPLIANCE WITH DUE PROCESS.
Department had been consistently earning
profits. 32
_______________
During the pendency of the petition before the
appellate court, fifteen (15) of the individual 330 SCRA 363 (2000).
36
ACCI’s financial status, the appellate court, justifies the closure of its F & B Department
citing Bogo-Medellin Sugarcane Planters based on business losses incurred for the past
Association, Inc. v. NLRC and Dela Salle years as reflected in its letter to its employees
35
Alabang Country Club, Inc. vs. National short of the stringent requirement of the law that
Labor Relations Commission the employer prove sufficiently and convincingly
likely to effectively prevent the expected losses; its allegation of substantial losses.
and (4) the alleged losses, if already realized and In contrast, part of the evidence presented by
the expected imminent losses sought to be respondents are audited financial statements
forestalled, must be proven by sufficient and prepared by SGV&Co. for 1989 to 1993 which
convincing evidence. 43 show a positive net income for the F & B
This Court, however, views the case as one Department ranging from P959,533-P2,911,810
involving closure of a business undertaking, not and, except for the year 1992, marked increases
retrenchment. While retrenchment and closure of in annual net income per year. Moreover, for the
52
a business establishment or undertaking are year 1994, its last year of operation,
often used interchangeably and are interrelated, _______________
they are actually two separate and independent
Cama v. Joni’s Food Services, Inc., 425 SCRA 259, 269
49
of business operations to prevent further financial In claiming that the F & B Department had
drain upon an employer who cannot pay anymore been losing, petitioner’s internal auditor deducted
his employees since business has already from the department’s annual income the
stopped. 47
least one (1) month pay for every year of service, While the closure of F & B Department is found
whichever is higher. In case of retrenchment to prevent
to be justified, petitioner is, under the above-
losses and in cases of closures or cessation of
operations of the establishment or undertaking not due quoted provision of Art. 283 of the Labor Code,
to serious business losses or financial reverses, the mandated to pay separation pay computed from
separation pay shall be equivalent to one (1) month the time individual respondents commenced their
pay or at least one-half (1/2) month pay for every year employment until the time the department
of service, whichever is higher. A fraction of at least six ceased operations, in an amount equivalent to
(6) months shall be considered as one (1) whole year. one (1) month pay or at least one-half (1/2)
(Emphasis in the original) month pay for every year of service, whichever is
_______________ higher. In petitioner’s case, it in fact voluntarily
doled out to some of individual respondents
53
Id., at p. 140. separation pay equivalent to one month and a
quarter (1 1/4) for every year of service, a
345
fraction of a year being considered as one year. 60
VOL. 466, AUGUST 9, 2005 345 Respondents not having been illegally
Alabang Country Club, Inc. vs. National dismissed, they are not entitled to backwages.
Labor Relations Commission By petitioner’s information, it had paid, during
The closure of operation of an establishment or the pendency of the case, the separation package
undertaking not due to serious business losses or of sixty-two (62) of the sixty-three (63) individual
financial reverses includes both the complete respondents on account of which they executed
cessation of operations and the cessation of only Releases, Waivers and Quitclaims in its favor. 61
court interferes with management’s prerogative by individual respondents who had been given
to close or cease its business operations just their separation pay were duly
_______________
because the business is not suffering from any
loss or because of the desire to provide the (1997); Special Events & Central Shipping Office Workers
workers continued employment. 56
Union v. San Miguel Corp., 122 SCRA 557, 574 (1983).
While petitioner did not sufficiently establish 59
J.A.T. General Services v. National Labor Relations
substantial losses to justify closure of its F & B Commission, supra at p. 89; Industrial Timber Corporation v.
National Labor Relations Commission (5th Division), 273 SCRA
Department on this ground, there is basis for its 200, 211 (1997).
claim that the continued maintenance of said 60
Rollo at p. 47.
department had become more expensive through 61
Id., at pp. 289-381.
Wack Wack Golf and Country Club v. National Labor
the years. An evaluation of the financial figures
62
wit:
SEC. 30. Proof of notarial documents.—Every instrument duly
acknowledged or proved and certified as provided by law, may be
presented without further proof, the certificate of acknowledgment
being prima facie evidence of the execution of the instrument or
document involved.
348
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