Felecia General Development Corp. v. Pulgado

FIRST DIVISION

[G.R. No. 219690. December 2, 2021.]

FELECIA*GENERAL DEVELOPMENT CORP., RUPERT K. SUAREZ, ALBERT K. SUAREZ, ET AL., petitioners, vs.ELMO T. PULGADO, JONATHAN C. GEVERO, ROBERTO B. FREL, ET AL., respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution datedDecember 2, 2021which reads as follows: HTcADC

"G.R. No. 219690(Felecia General Development Corp., Rupert K. Suarez, Albert K. Suarez, et al. v. Elmo T. Pulgado, Jonathan C. Gevero, Roberto B. Frel, et al.). — Felecia General Development Corp. (FGDC) operates Hacienda Felecia, a sugarcane plantation located in Victorias City, Negros Occidental. Hacienda Felecia was composed of several parcels of land with an approximate area of 240 hectares. Two (2) of its lots, Lot No. 35-A-4 (49.49 hectares) covered by Transfer Certificate of Title (TCT) No. T-141433 and Lot No. 34-C (42.5036 hectares) covered by TCT No. T-141434, fell within the coverage of the Comprehensive Agrarian Reform Program (CARP) under Republic Act No. 6657. 1 Certificate of Land Ownership Award (CLOA) Nos. 00705257 and 00705258 covering the two (2) lots were eventually awarded to 111 beneficiaries who were all farm employees of FGDC. On March 8, 2004, TCT Nos. CLOA-11815 and CLOA-11801 in the name of the beneficiaries were issued in lieu of TCT Nos. T-141433 and T-141434. Despite the issuance of the CLOAs, FGDC continued to operate Hacienda Felecia, including the lots covered by the CLOAs, and retained the services of its employees. 2

The beneficiaries later expressed their desire to be given possession of their parcels of land. Sometime in May 2011, FGDC persuaded the beneficiaries to lease back the awarded lands to it once they are turned over. Otherwise, FGDC will be compelled to cease operations in these areas. Those who will lease their lands to FGDC will continue to be employed by FGDC while those who will refuse will be dismissed. 3 On June 1, 2011, the lands awarded in the CLOAs were turned over to some beneficiaries including private respondents excluding Johnril T. Canales (Pulgado, et al.). However, Pulgado, et al., refused to lease their lands to FGDC. The following day, FGDC dismissed them. Aggrieved, Pulgado, et al., filed a complaint for illegal dismissal against FGDC, Rupert K. Suarez, Albert K. Suarez, and Maria Jesusa S. De Felippo (FGDC, et al.). 4

On December 15, 2011, the Labor Arbiter (LA) ruled that Pulgado, et al., were validly dismissed. Citing National Federation of Labor, et al. v. National Labor Relations Commission, et al.5 (NFL) and Manaban, et al. v. Sarphil Corp./Apokon Fruits, Inc., et al.6 (Manaban), the LA declared that "that the termination of employer-employee relationship does not make out a case of illegal dismissal and does not warrant the payment of separation pay contemplated under Article 283 of the Labor Code." 7 FGDC did not cause the termination of the employees. It was constrained to cease operations of the farms due to the turnover of the parcels of land to the CARP beneficiaries. Since Pulgado, et al., refused to lease their parcels of land back to FGDC, FGDC was left with less area to cultivate, 8 thus:

WHEREFORE, in the light of the foregoing considerations, judgment is hereby rendered:

1. FINDING the charge of complainants ELMO T. PULGADO, JONATHAN C. GEVERO, ROBERTO B. FREL, VIRGINIA N. DATO-ON, MA. DULMA P. GEVERO, MA. MARILYN T. CANALES, ANALYN T. SINDOL, ROMEO D. SINDOL, LARRY F. POCIANO, HECTOR A. INLATERA, SONIATA F. ROJO, RITA K. MOPADA, DELIA P. GARDOSE of illegal dismissal to be without merit. The termination of the employer-employee relationships between these complainants and respondent Fel[e]cia General Development Corporation were not due to the unilateral act of the latter respondent but as a consequence of the implementation of [RA] No. 6657 upon the parcels of land where complainants worked and became lot beneficiaries themselves; x x x x.

5. DISMISSING all claims against respondents Maria Jesusa de Felippo, Rupert Suarez[,] and Albert Suarez and all other claims. x x x.

SO ORDERED. 9

Pulgado, et al., appealed to the National Labor Relations Commission (NLRC). On July 16, 2012, 10 the NLRC affirmed the validity of their dismissal based on NFL and Manaban. The NLRC denied Pulgado, et al.'s motion for reconsideration on October 31, 2012. Undeterred, Pulgado, et al., filed a Petition for Certiorari with the Court of Appeals (CA) docketed as CA-G.R. SP No. 07484. On September 19, 2014, 11 the CA ruled that the NLRC's and LA's reliance on NFL and Manaban is misplaced due to the difference in the facts of the cases. In NFL and Manaban, the employers ceased their operations because their lands were covered by the CARP. FGDC, on the other hand, continued to operate Hacienda Felecia including the areas covered by the CLOAs. FGDC was partial as it only dismissed the employees who did not lease their lands to FGDC. Even if the employees' refusal to lease their lands deprived FGDC a portion of their working area, this is not a valid cause for their termination. The CA concluded that Pulgado, et al., were illegally dismissed as FGDC, et al., failed to prove a just or authorized cause for dismissing them, thus:

WHEREFORE, premises considered, the instant petition for certiorari is GRANTED. The Decision dated July 16, 2012 and the Resolution dated October 31, 2012 of the National Labor Relations Commission, Seventh Division, in NLRC Case No. VAC-02-000098-2012, are AFFIRMED with MODIFICATION in that, the NLRC's dispositions with regard to the complaints of petitioners Eduard P. Pulgado and Johnril T. Canales against private respondent Fel[e]cia General Development Corporation have become final and executory as they did not appeal therefrom. However, with regard to petitioners Elmo T. Pulgado, Jonathan C. Gevero, Roberto B. Frel, Virginia N. Dato-on, Ma. Dulma P. Gevero, Ma. Marilyn T. Canales, Analyn T. Sindol, Romeo D. Sindol, Larry F. Ponciano, Hector A. Inlatera, Sonieta F. Rojo, Rita K. Mopada[,] and Delia P. Gardose, they are declared illegally terminated from their employment. Consequently, private respondent FGDC is ordered to immediately reinstate said petitioners without loss of seniority rights and other privileges and to pay them full backwages, inclusive of allowances and other benefits or their monetary equivalent computed from the date they were illegally terminated on June 2, 2011[,] until finality of this decision. Private respondent FGDC is further ordered to pay said petitioners attorney's fees of 10% of their total monetary awards.

Let this case be remanded to the Labor Arbiter for proper computation of petitioners' monetary awards.

SO ORDERED. 12

FGDC, et al., sought reconsideration but was denied. The CA stressed that FGDC was not totally deprived of its working area because only a portion of its sugarcane plantation was placed under CARP. 13 Hence, this recourse. 14 FGDC, et al., insist that Pulgado, et al., were validly dismissed based on NFL and Manaban. FGDC was compelled to cease its operations over the areas that were not leased back to them, and was constrained to terminate Pulgado, et al. FGDC would not have been compelled to cease its operations, terminate Pulgado, et al., had the latter agreed to lease their parcels of land back to them. 15 Pulgado, et al., echo the findings of the CA and emphasize that FGDC continued its operations even after the turnover of the lands to the beneficiaries. It even hired additional workers. They were discriminated against and dismissed simply because they refused to lease back their lands to FGDC. 16

The petition is unmeritorious.

Prefatorily, the CA can review the parties' evidence in certiorari proceedings. In labor cases, the CA is empowered to evaluate the materiality and significance of the evidence alleged to have been capriciously, whimsically, or arbitrarily disregarded by the NLRC in relation to all other evidence on record. The CA can grant the prerogative writ of certiorari when the factual findings complained of are not supported by the evidence on record; when it is necessary to prevent a substantial wrong or to do substantial justice; when the findings of the NLRC contradict those of the LA; and when necessary to arrive at a just decision of the case. To make this finding, the CA necessarily has to view the evidence to determine if the NLRC ruling had a substantial basis. Indeed, the Court has the same authority to sift through the factual findings of both the CA and the NLRC in the event of their conflict. 17 The Court is not precluded from reviewing the factual issues when there are conflicting findings by the CA, the NLRC and the LA. 18

In termination cases, the burden of proof rests upon the employer to show that the dismissal was for a just and valid cause; failure to do so would necessarily mean that the dismissal was illegal. 19 Here, FGDC, et al., maintained that there was no illegal dismissal and claimed that the CA erroneously failed to apply the rulings in NFL and Manaban. However, the Court agrees with the CA that the cited cases are inapplicable. Foremost, the case of NFL involved the closure of Patalon Coconut Estate and the dismissal of its employees as a result of the acquisition by the Department of Agrarian Reform (DAR) of a large portion of the estate pursuant to the CARP. Some of the dismissed employees sought payment of separation pay. When the case was elevated to the Court, the sole issue submitted for resolution was whether an employer that was compelled to cease its operations because of the compulsory acquisition by the government of its land for purposes of agrarian reform is liable to pay separation pay to its affected employees. The Court ruled that Article 283 of the Labor Code relating to the payment of separation pay does not apply when the closure of the business establishment was involuntary or forced upon the employer, thus:

It is clear that Article 283 of the Labor Code applies in cases of closures of establishment and reduction of personnel. The peculiar circumstances in the case at bar, however, involves [sic] neither the closure of an establishment nor a reduction of personnel as contemplated under the aforesaid article. When the Patalon Coconut Estate was closed because a large portion of the estate was acquired by DAR pursuant to CARP, the ownership of that large portion of the estate was precisely transferred to PEARA and ultimately to the petitioners as members thereof and as agrarian lot beneficiaries. Hence, Article 283 of the Labor Code is not applicable to the case at bench.

Even assuming, arguendo, that the situation in this case were [sic] a closure of the business establishment called Patalon Coconut Estate of private respondents, still [,] the petitioners/employees are not entitled to separation pay. The closure contemplated under Article 283 of the Labor Code is a unilateral and voluntary act on the part of the employer to close the business establishment as may be gleaned from the wording of the said legal provision that "The employer may also terminate the employment of any employee due to . . ." The use of the word "may," in a statute, denotes that it is directory in nature and generally permissive only. The "plain meaning rule" or verba legis in statutory construction is thus applicable in this case. Where the words of a statute are clear, plain and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation.

In other words, Article 283 of the Labor Code does not contemplate a situation where the closure of the business establishment is forced upon the employer and ultimately for the benefit of the employees. 20 (Emphasis supplied.)

In Manaban, Sarphil Corporation and Apokon Fruits, Inc., terminated the employment of all their workers, after their rubber and banana plantations were acquired by DAR pursuant to the CARP. Some of their employees sought the payment of separation pay. The NLRC and CA cited the case of NFL to justify non-payment of separation pay to the affected employees. However, the sole issue raised for the Court's resolution was whether the NLRC erred when it admitted the appeal despite the belated posting of the appeal bond.

Obviously, the above cases are not squarely applicable to the present case because they did not dwell on the issue of the validity of dismissal of the employees but merely on their entitlement to separation pay. The cases instruct that an employer who is compelled to cease operations and terminate its employees as a result of the acquisition of their properties under the CARP is not required to pay separation pay. Notably, in both cases, there was clearly closure of the business — which is an authorized cause for dismissal. In contrast, FGDC did not cease its operations notwithstanding the reduction in the area of Hacienda Felecia. FGDC continued to operate Hacienda Felecia even after the issuance of CLOAs and after the lands awarded to the beneficiaries were turned over to them except the parcels not leased to it. Clearly, there was no closure of business similar to that in NFL and Manaban. The CA correctly ruled that these cases do not justify the dismissal of Pulgado, et al.

FGDC, et al., assert that it was compelled to cease operations over the lands awarded to the beneficiaries which were not leased to them. Due to the reduction in the area of its operations, FGDC was compelled to terminate Pulgado, et al. Pulgado, et al.'s dismissal was a natural consequence of the implementation of the CARP which FGDC, et al., should not be faulted for. FGDC, et al., also blame Pulgado, et al., for their dismissal because they "held on to their decision to be installed and not to lease back, with full knowledge of its consequences." 21 FGDC, et al.'s position is without merit.

The reduction of the work area of Hacienda Felecia as a result of the implementation of the CARP alone does not automatically render the dismissal of Pulgado, et al., valid. FGDC, et al., claim that they closed their business or ceased their operations which resulted in the dismissal of Pulgado, et al. Article 298 of the Labor Code recognizes closure or cessation of operation of the establishment as an authorized cause for the dismissal of an employee. The closure or cessation of operation is the complete or partial cessation of the operations and/or shut-down of the establishment of the employer. It is carried out due to serious business losses or to promote the business interest of the employer. Under the first kind, the employer must sufficiently and convincingly prove substantial losses, while under the second kind, the employer can lawfully close shop anytime as long as cessation of or withdrawal from business operations was bona fide in character and not impelled by a motive to defeat or circumvent the tenurial rights of employees and as long as they recompense the employees' termination pay in the amount corresponding to their length of service. 22 As an additional requirement, the employer is required to serve a written notice to the employees and to the Department of Labor and Employment (DOLE) at least one month before the intended date of the closure or cessation of operations.

Here, there was no showing that the supposed cessation of operations of FGDC was bona fide and that it notified Pulgado, et al., and the DOLE of the cessation of operations one month before the intended date. Even assuming FGDC partially ceased its operations insofar as the parcels of land Pulgado, et al., refused to lease back to it, there was no showing that Pulgado, et al., were actually assigned to those areas such that the partial cessation of business necessarily resulted in their termination. In Alabang Country Club, Inc. v. National Labor Relations Commission, 23 the Court ruled that the closure of a department authorizes the concomitant termination of the employees assigned to that department. Neither did FGDC allege, much less prove, that the reduction of the land used in its operations resulted in an excess of manpower which forced it to terminate Pulgado, et al., due to redundancy.

All told, it is clear that FGDC, et al., selected and summarily dismissed Pulgado, et al., for their refusal to heed FGDC's demand to lease the parcels of land. The dismissal was clearly an act of reprisal and done by FGDC, et al., out of spite for Pulgado, et al. Since FGDC, et al., failed to prove any just or authorized cause to justify the dismissal of Pulgado, et al., the CA did not err when it reversed the Decision of the NLRC and ruled that Pulgado, et al., were illegally dismissed.

FOR THESE REASONS, the petition is DENIED. The Court of Appeals' Decision dated September 19, 2014 in CA-G.R. SP No. 07484 is AFFIRMED.

SO ORDERED."

By authority of the Court:

(SGD.) LIBRADA C. BUENADivision Clerk of Court

By:

MARIA TERESA B. SIBULODeputy Division Clerk of Court

 

Footnotes

* Also referred to as "Felicia" in some parts of the rollo.

1. Entitled "AN ACT INSTITUTING A COMPREHENSIVE AGRARIAN REFORM PROGRAM TO PROMOTE SOCIAL JUSTICE AND INDUSTRIALIZATION, PROVIDING THE MECHANISM FOR ITS IMPLEMENTATION, AND FOR OTHER PURPOSES OR THE COMPREHENSIVE AGRARIAN REFORM LAW OF 1988."

2.Rollo, pp. 45-46.

3.Id. at 47.

4.Id.

5. 383 Phil. 910, 918 (2000).

6. 495 Phil. 222, 232 (2005).

7.Id. at 608.

8.Id. at. 593-619. Penned by Labor Arbiter Henry B. Tañoso.

9.Id. at 618-619.

10.Id. at 654-664.

11.Id. at 44-58. Penned by Associate Justice Pamela Ann Abella Maxino with the concurrence of Associate Justices Gabriel T. Ingles and Marilyn B. Lagura-Yap.

12.Id. at 57.

13.Id. at 61-64.

14.Id. at 13-41.

15.Id. at 13-39; Id. at 787-792.

16.Id. at 745-750.

17.Id., citing Pepsi-Cola Products Philippines, Inc. v. Molon, 704 Phil. 120, 133 (2013).

18.Id., citing Plastimer Industrial Corporation, et al. v. Gopo, et al., 658 Phil. 627, 633 (2011).

19.Distribution & Control Products, Inc. v. Santos, 813 Phil. 423, 433 (2017).

20.Supra note 5 at 917-918.

21.Rollo, p. 36.

22.Unera v. Shin Heung Electro Digital, Inc., G.R. No. 228328, March 11, 2020.

23. 503 Phil. 937, 950 (2005).