THIRD DIVISION
[G.R. No. 171617. October 11, 2017.]
MALAYANG NAGKAKAISANG MANGGAGAWA NG PACIFIC PLASTIC CORPORATION AND MEMBERS: RIEL OBLENDA, President, EVANGELINE DALIMOT, LILIBETH DUGAN, EFREN OLIVEROS, ARTHUR OBLENDA, HENRITA CAVAN, ANNALIZA PAGAUITAN, JULITO PUNONG, RONALDO VICTORIO, ERNESTO CANCINO, ROGELIO CUENCA, BIENVENIDO GONZALES, ROBINSON DALIMOT, JESUS LUGTU, GEORGE OLIVEROS, CESAR RESURRECCION, BENITO CATCHERO, TERESITA ADRIANO AND BENITO CAPISTRANO, petitioners,vs. PACIFIC PLASTIC CORPORATION and/or MR. WILLIAM GATCHALIAN, respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Third Division, issued a Resolution datedOctober 11, 2017, which reads as follows: AScHCD
"G.R. No. 171617 (MALAYANG NAGKAKAISANG MANGGAGAWA NG PACIFIC PLASTIC CORPORATION AND MEMBERS: RIEL OBLENDA, President, EVANGELINE DALIMOT, LILIBETH DUGAN, EFREN OLIVEROS, ARTHUR OBLENDA, HENRITA CAVAN, ANNALIZA PAGAUITAN, JULITO PUNONG, RONALDO VICTORIO, ERNESTO CANCINO, ROGELIO CUENCA, BIENVENIDO GONZALES, ROBINSON DALIMOT, JESUS LUGTU, GEORGE OLIVEROS, CESAR RESURRECCION, BENITO CATCHERO, TERESITA ADRIANO AND BENITO CAPISTRANO, Petitioners, v. PACIFIC PLASTIC CORPORATION and/or MR. WILLIAM GATCHALIAN, Respondents.) — This appeal seeks the review and reversal of the decision promulgated on November 8, 2005, 1 and the resolution promulgated on February 14, 2006, 2 whereby the Court of Appeals (CA) respectively upheld the dismissal of the petitioners on the ground of serious business losses on the part of respondents but deleted the award of financial assistance in favor of the petitioners, and denying the petitioners' motion for reconsideration.
Antecedents
The petitioners were rank and file employees of Pacific Plastic Corporation (PPC) and members of petitioner union, Malayang Nagkakaisang Manggagawa ng Pacific Plastic Corporation (MNMPPC), an independent labor organization affiliated with the Alliance of Nationalist and Genuine Labor Organizations (ANGLO), a labor federation under the umbrella of the Kilusang Mayo Uno (KMU). 3
On October 15, 2001, or about four months after the execution of the Collective Bargaining Agreement (CBA) between the parties, which took effect on May 1, 2001 and ending on April 30, 2006, PPC filed a notice of suspension of business operations to prevent further losses caused by lack of demand and high cost of its products and unavailability of raw materials. The suspension took effect on November 16, 2001, and resulted in the dismissal of 145 employees. 4
On January 16, 2002, PPC filed a request for another extension of the suspension of operations for three months effective February 1, 2002. Thereafter, or on April 15, 2002, PPC finally filed a notice of permanent closure caused by severe financial losses brought about by the continuing economic depression. 5
PPC offered to pay separation pay equivalent to 22.5 days per year of service to employees who voluntarily resigned. 6 The petitioners declined the offer, however, and were eventually dismissed from the service. Preventive mediation conferences before the National Conciliation Mediation Board ensued but eventually failed; 7 thus, the petitioners filed a complaint for illegal dismissal and unfair labor practice against the respondents in the National Labor Relations Commission (NLRC) praying for reinstatement with backwages and payment of other labor standard claims. 8
On December 18, 2002, the Labor Arbiter (LA) rendered his decision, 9 disposing thusly:
WHEREFORE, premises considered, let the complaints be, as they are hereby DISMISSED, for lack of merit. However, respondent Pacific Plastic Corporation is ordered to pay the complainants their one-half (1/2) month salary for every year of service as financial assistance.
xxx xxx xxx
SO ORDERED.10
The parties both appealed to the NLRC.
On October 16, 2003, the NLRC promulgated its decision denying the appeals and affirming the decision of the LA in its entirety. 11
The NLRC later on denied the parties' motions for reconsideration on November 28, 2003 and January 9, 2004. 12
The parties thereafter separately assailed the ruling of the NLRC on certiorari in the CA.
In its assailed decision promulgated on November 8, 2005, 13 the CA upheld the NLRC but deleted the directive of the NLRC for PPC to pay financial assistance, to wit:
x x x PPC was able to prove that it had observed the legal requirements for the closure of its business and cessation of its operations, and that the reason for its closure was its severe business losses and financial reverses, brought about by dwindling orders and high cost of operations. Under the law, the consequent dismissal of its employees was unavoidable and is considered legal. Considering that the cause of the closure was severe business losses and financial reverses, PPC is not bound by law to give separation pay or financial assistance to its employees.
The Fallo
WHEREFORE, premises considered, the Decision of Labor Arbiter Florentino R. Darlucio, and affirmed by the NLRC, insofar as it held that the Complaints of MNMPPC, et al. are dismissed is hereby AFFIRMED. However, the Labor Arbiter's and the NLRC's ruling to order Pacific Plastics Corporation to pay the MNMPPC, et al. financial assistance is hereby DELETED. AcICHD
SO ORDERED. 14
The CA, denied the petitioners' motion for reconsideration on February 14, 2006. 15
Issues
Hence, this recourse, whereby the petitioners maintain that PPC was not able to present affirmative proof of the serious business losses suffered because the financial statements presented were not audited; and that PPC offered petitioners separation pay equivalent to 22.5 days salary for every year of service, and had in fact paid MNMPPC's previous union president, Patricio O. Alzaga, a higher amount of separation pay.
Ruling of the Court
After a judicious review, the Court resolves to deny the appeal and to affirm the November 8, 2005 decision and February 14, 2006 resolution of the CA.
Article 297 of the Labor Code allows an employer to dismiss an employee due to the cessation of operation or closure of its establishment or undertaking. 16 While the decision to close one's business is a management prerogative, the exercise of the prerogative requires the employer to pay the affected worker separation pay equivalent to one-month pay or to at least one-half-month pay for every year of service, whichever is higher. The only time the employer is not compelled to pay separation pay is when it closes its establishment or undertaking because of serious business losses or financial reverses. 17
To prove serious business losses, the employer must show losses on the basis of financial statements covering a sufficient period of time. The period covered, to be sufficient, must enable the NLRC and the CA to appreciate the nature and vagaries of the business. 18
The petitioners argue that the financial statements presented by PPC were not sufficient evidence to prove serious business losses inasmuch as they had not been audited by independent external auditors. Aside from raising a question of fact, this argument constitutes a bare allegation without any supporting evidence. This assertion is even contrary to the findings of fact of the labor tribunals, whose findings were upheld by the CA, to wit:
After due study, the Court affirms the labor tribunals' observation that PPC had adequately established that it had complied with the substantive and procedural requirements for closure and cessation of its business operations. It has also been adequately shown that the closure of its business was brought about by severe and continuing losses, and failure to sustain profitable operations.
Documents on record, and made part of PPC's position paper below, show that on October 15, 2001 and January 17, 2002 (pp. 70 and 72-73, SP 83053, Rollo; pp. 192 and 194, SP 82377 Rollo), PPC sent notices of suspension of operations of the company to the DOLE and to its employees previous to the actual suspension of said operations, and, on April 15, 2002 PPC also sent a notice of permanent closure of business operations (pp. 75-76, SP 83053 Rollo; pp. 197-198, SP 82377 Rollo), citing its severe financial losses since 2000, as cause of the suspension and closure, in compliance with the requirements of substantive law. Bolstering such claim PPC presented its Income Tax Returns for the years 2000, (p. 54, SP 83053, Rollo; p. 176, SP 82377 Rollo), and 2001, (p. 61, SP 83053, Rollo; p. 183, SP 82377 Rollo), and its financial statements for the years 1999 to 2001, (pp. 56-60, 64-69, SP 83053 Rollo; pp. 178-191, SP 82377 Rollo), all showing the downward trend of PPC's business profitability. There is substantial basis therefore to sustain the Labor Arbiter's and NLRC's ruling that severe business losses were the cause for the suspension and eventual closure of PPC's operations.
In the absence of countervailing evidence, we affirm the labor tribunals' resolution, therefore, finding no merit in MNMPPC, et al.'s claim that the business losses of PPC were contrived. 19
The LA, the NLRC and the CA all consistently found that PPC had genuinely incurred serious business losses that were duly established not only by PPC's financial statements, but also through its income tax returns. Absent any showing that the findings of fact of the labor tribunals and the CA were not supported by the evidence on record, or that their judgments were based on misapprehension of facts, the Court shall not examine anew the evidence submitted by the parties. 20 No such showing was tendered herein. Hence, the Court cannot disturb the factual findings of the lower tribunals, as upheld by the CA. TAIaHE
The Court holds, therefore, that PPI was not obliged to give separation benefits to the petitioners pursuant to Article 297 of the Labor Code, and should not even be compelled to extend financial assistance in their favor despite PPC's earlier offer to pay 22.5 days' salary per year of service to each of them. As aptly found by the CA thereon:
x x x Such rate was merely an offer of PPC's management for its employees when it was still an on-going venture, and when MNMPPC, et al. refused such offer, they have only themselves to blame for their decision, as PPC is not bound to maintain the earlier offer it made now that it had ceased its operations. Also, the fiscal reality of PPC, as substantially proven by evidence on record, is that its constant losses eventually diminished its resources and prevented it from continuing its business. It cannot be called upon now to resuscitate its earlier offer. 21
WHEREFORE, the Court DENIES the petition for review on certiorari; and AFFIRMS the November 8, 2005 decision and February 14, 2006 resolution of the Court of Appeals in CA-G.R. SP No. 82377 and CA-G.R. SP No. 83053, without pronouncement on costs of suit.
SO ORDERED."
Very truly yours,
(SGD.) WILFREDO V. LAPITANDivision Clerk of Court
Footnotes
1.Rollo, pp. 49-60; penned by Associate Justice Rodrigo V. Cosico, with Associate Justice Regalado E. Maambong and Associate Justice Lucenito N. Tagle concurring.
2.Id. at 77-79.
3.Id. at 52.
4.Id.
5.Id. at 53.
6.Id.
7.Id.
8.Id. at 83.
9.Id. at 83-94.
10.Id. at 93-94.
11.Id. at 113-123.
12.Id. at 56.
13.Supra note 1.
14.Rollo, p. 60.
15.Id. at 77-79.
16. Article 297 (formerly Article 283) of the Labor Code, as amended, provides:
Article 297.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 worker and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. x x x 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 as one (1) whole year.
17.G.J.T. Rebuilders Machine Shop v. Ambos, G.R. No. 174184, January 28, 2015, 748 SCRA 358, 369.
18.Id. at 367-368.
19.Rollo, pp. 58-59.
20.Sangwoo Philippines, Inc. v. Sangwoo Philippines, Inc. Employee Union-Olalia, G.R. No. 173154, December 9, 2013, 711 SCRA 618, 626.
21.Rollo, p. 60.