· Special Award – +5
· Commendations – +2
· Appreciation – +1
· Disciplinary Actions – Reminder (-3), Warning/Admonition & Reprimands (-5), Suspension (-20), Passenger Complaints (-30), Appearance (-10)
C. ATTENDANCE – 35%
· Perfect Attendance – +2
· Missed Assignment – -30
· Sick Leaves in excess of allotment and other leaves in excess of allotment – -20
· Tardiness – -10 93
The appellate court held that there was no need for PAL to consult with FASAP
regarding standards or criteria that the airline would utilize in the implementation of the retrenchment program; and that the criteria actually used which was unilaterally
formulated by PAL using its Performance Evaluation Form in its Grooming and Appearance Handbook was reasonable and fair. Indeed, PAL was not obligated to consult FASAP regarding the standards it would use in evaluating the performance of the each cabin crew. However, we do not agree with the findings of the appellate court that the criteria utilized by PAL in the actual retrenchment were reasonable and fair.
This Court has repeatedly enjoined employers to adopt and observe fair and reasonable standards to effect retrenchment. This is of paramount importance because an
employer’s retrenchment program could be easily justified considering the subjective nature of this requirement. The adoption and implementation of unfair and unreasonable criteria could not easily be detected especially in the retrenchment of large numbers of employees, and in this aspect, abuse is a very distinct and real possibility. This is where labor tribunals should exercise more diligence; this aspect is where they should
concentrate when placed in a position of having to judge an employer’s retrenchment program.
Indeed, the NLRC made a detailed listing of the retrenchment scheme based on the ICCD Masterank and Seniority 1997 Ratings. It found the following:
1. Number of employees retrenched due to inverse seniority rule and other reasons -- 454
2. Number of employees retrenched due to excess sick leaves -- 299
3. Number of employees who were retrenched due to excess sick leave and other reasons -- 61
4. Number of employees who were retrenched due to other reasons -- 107
5. Number of employees who were demoted -- 552
Total -- 1,473.94
Prominent from the above data is the retrenchment of cabin crew personnel due to
"other reasons" which, however, are not specifically stated and shown to be for a valid cause. This is not allowed because it has no basis in fact and in law.
Moreover, in assessing the overall performance of each cabin crew personnel, PAL only considered the year 1997. This makes the evaluation of each cabin attendant’s
efficiency rating capricious and prejudicial to PAL employees covered by it. By discarding the cabin crew personnel’s previous years of service and taking into
consideration only one year’s worth of job performance for evaluation, PAL virtually did away with the concept of seniority, loyalty and past efficiency, and treated all cabin attendants as if they were on equal footing, with no one more senior than the other.
In sum, PAL’s retrenchment program is illegal because it was based on wrongful
premise (Plan 14, which in reality turned out to be Plan 22, resulting in retrenchment of more cabin attendants than was necessary) and in a set of criteria or rating variables that is unfair and unreasonable when implemented. It failed to take into account each cabin attendant’s respective service record, thereby disregarding seniority and loyalty in the evaluation of overall employee performance.
Anent the claim of unfair labor practices committed against petitioner, we find the same to be without basis. Article 261 of the Labor Code provides that violations of a CBA, except those which are gross in character, shall no longer be treated as unfair labor practice and shall be resolved as grievances under the parties’ CBA. Moreover, "gross violations of CBA" under the same Article referred to flagrant and/or malicious refusal to comply with the economic provisions of such agreement, which is not the issue in the instant case.1avvphi1
Also, we fail to see any specific instance of union busting, oppression or harassment and similar acts of FASAP’s officers. The fact that majority of FASAP’s officers were either retrenched or demoted does not prove restraint or coercion in their right to organize. Instead, we see a simple retrenchment scheme gone wrong for failure to
abide by the stringent rules prescribed by law, and a failure to discharge the employer’s burden of proof in such cases.
Quitclaims executed as a result of PAL’s illegal retrenchment program are likewise annulled and set aside because they were not voluntarily entered into by the retrenched employees; their consent was obtained by fraud or mistake, as volition was clouded by a retrenchment program that was, at its inception, made without basis. The law looks with disfavor upon quitclaims and releases by employees pressured into signing by unscrupulous employers minded to evade legal responsibilities. As a rule, deeds of release or quitclaim cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal. The acceptance of those benefits would not amount to estoppel. The amounts already received by the retrenched employees as consideration for signing the quitclaims should, however, be deducted from their respective monetary awards.95
In Trendline Employees Association-Southern Philippines Federation of Labor v. NLRC, 96 we held that where the employer led its employees to believe that the employer was suffering losses and as a result thereof accept retrenchment by executing quitclaims and waivers, there was evident bad faith on the part of the employer justifying the setting aside of the quitclaims and waivers executed.
As to PAL’s recall and rehire process (of retrenched cabin crew employees), the same is likewise defective. Considering the illegality of the retrenchment, it follows that the
subsequent recall and rehire process is likewise invalid and without effect.
A corporate officer is not personally liable for the money claims of discharged corporate employees unless he acted with evident malice and bad faith in terminating their
employment.97 We do not see how respondent Patria Chiong may be held personally liable together with PAL, it appearing that she was merely acting in accordance with what her duties required under the circumstances. Being an Assistant Vice President for Cabin Services of PAL, she takes direct orders from superiors, or those who are
charged with the formulation of the policies to be implemented.
With respect to moral damages, we have time and again held that as a general rule, a corporation cannot suffer nor be entitled to moral damages. A corporation, being an artificial person and having existence only in legal contemplation, has no feelings, no emotions, no senses; therefore, it cannot experience physical suffering and mental anguish. Mental suffering can be experienced only by one having a nervous system and it flows from real ills, sorrows, and griefs of life – all of which cannot be suffered by an artificial, juridical person.98 The Labor Arbiter’s award of moral damages was therefore improper.
WHEREFORE, the instant petition is GRANTED. The assailed Decision of the Court of Appeals in CA-G.R. SP No. 87956 dated August 23, 2006, which affirmed the Decision of the NLRC setting aside the Labor Arbiter’s findings of illegal retrenchment and its
Resolution of May 29, 2007 denying the motion for reconsideration, are REVERSED and SET ASIDE and a new one is rendered:
1. FINDING respondent Philippine Airlines, Inc. GUILTY of illegal dismissal;
2. ORDERING Philippine Air Lines, Inc. to reinstate the cabin crew personnel who were covered by the retrenchment and demotion scheme of June 15, 1998 made effective on July 15, 1998, without loss of seniority rights and other privileges, and to pay them full backwages, inclusive of allowances and other monetary benefits computed from the time of their separation up to the time of their actual reinstatement, provided that with respect to those who had received their respective separation pay, the amounts of payments shall be deducted from their backwages. Where reinstatement is no longer feasible because the positions previously held no longer exist, respondent Corporation shall pay backwages plus, in lieu of reinstatement, separation pay equal to one (1) month pay for every year of service;
3. ORDERING Philippine Airlines, Inc. to pay attorney’s fees equivalent to ten percent (10%) of the total monetary award.
Costs against respondent PAL.
SO ORDERED.
Republic of the Philippines SUPREME COURT
Manila
G.R. No. 181503 September 18, 2009
BIO QUEST MARKETING INC. and/or JOSE L. CO, Petitioner, vs.
EDMUND REY, Respondent.
D E C I S I O N
CARPIO MORALES, J.:
Edmund Rey (respondent) was hired by petitioner Bio Quest Marketing, Inc. on December 1, 1997 as its Area Collector in Quezon, Batangas and all the provinces of the Bicol region. As Area Collector, he was tasked to collect payment for various
Mere decrease in sales by more than 100milkin is not enough to have a valid dismissal thru retrenchment.
If only mere loss would entitle the employers to retrench employees, it would. Be subject to abuse.
The statement of profit and loss was not signed and signified by. CPA. nor was ere any independent public accountant who can attest the validity of the statement.
Before retrenchment could be done some other measures has to be undertaken and it iPad to be proved.
veterinary products sold to feedmill companies, piggery and poultry farms within his area of assignment.
Allegedly as part of its cost cutting measures brought about by a decline in its sales receipts and collections, petitioner furnished the Department of Labor and Employment (DOLE) a copy of the retrenchment notice on September 3, 2003.1 And by letter of August 30, 2003 which was received by respondent, petitioner terminated his services on September 29, 2003.2
Claiming that he was dismissed without a valid cause and the observance of due process, respondent filed a complaint for illegal dismissal against petitioner.
Petitioner averred, however, that it furnished complainant a retrenchment notice3 in compliance with Art. 283 of the Labor Code;4 and that it had the prerogative to retrench its employees including respondent to forestall business losses,5 to prove which claim of business losses it submitted a comparative report of its sales and collections for 2001-2003.6
By Decision of March 10, 2004,7 the Labor Arbiter found that respondent was illegally dismissed and accordingly disposed:
WHEREFORE, premises considered, judgment is hereby rendered, ordering the respondents Bio [Q]uest Marketing, Inc. and/or Jose L. Co to:
1) reinstate complainant Edmund Rey to his former position without loss of seniority rights; and
2) pay complainant the amount of ONE HUNDRED EIGHT THOUSAND & TWO
HUNDRED SEVENTEEN PESOS & 20/100 (P108,217.20) representing his backwages, holiday pay, 13th month pay and attorney’s fees.
All other claims are DISMISSED for lack of merit.8 (Emphasis in the original)
Except with respect to the award of holiday pay which it deleted, the NLRC affirmed the Labor Arbiter’s ruling by Decision of November 23, 2005.9 However, on petitioner’s Motion for Reconsideration, the NLRC, by Decision of June 19, 2006,10 held that
petitioner was able to prove that it undertook a valid retrenchment program, as imminent and not actual losses suffices to justify such, but that "while [herein petitioner] may have exercised its sound judgment in doing away with the services of [herein respondent], the latter should be entitled to some form of reward for all the dedication, hard work and loyalty he has exhibited during his years of service with [herein petitioner]." It thus VACATED its Decision of November 23, 2005 and disposed as follows:
WHEREFORE, the respondent’s Motion for Reconsideration is hereby, GRANTED.
Accordingly, the decision sought to be reconsidered is hereby, VACATED and SET ASIDE. A new one is hereby entered ordering the respondent to pay the complainant
separation pay equivalent to one (1) month salary for every year of service.11 (Underscoring supplied)
Respondent thus elevated the case via Certiorari12 to the Court of Appeals which, by Decision of September 28, 2007,13 held that herein petitioner "failed to prove
convincingly that [herein respondent] was validly terminated on account of
retrenchment" and accordingly reversed and set aside the decision of the NLRC, disposing as follows:
WHEREFORE, the foregoing considered, the instant petition is GRANTED and the assailed Decision is REVERSED and SET ASIDE. Accordingly, private respondents are ordered to:
Reinstate petitioner to his former position without loss of seniority rights and if this is no longer possible, to pay him:
(a) separation pay, in addition to;
(b) backwages equivalent to one-half month pay for every year of service from the time he was illegally dismissed up to the finality of this decision;
(c) his 13th month pay in the amount of Twenty-eight Thousand Five Hundred Seven Pesos and 68/100 (P28,507.68), as computed by the Labor Arbiter.
Let this case be REMANDED to the Labor Arbiter for the computation of the amounts due petitioner.14 (Emphasis in the original)
Petitioner’s motion for reconsideration15 having been denied by the appellate court by Resolution of January 23, 2008,16 petitioner comes before this Court via petition for review on certiorari, advancing the following argument:
THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN REVERSING AND SETTING ASIDE THE NLRC DECISION BY DECLARING THAT PETITIONER FAILED TO PROVE IT WAS SUFFERING FROM SUBSTANTIAL, ACTUAL OR IMMINENT LOSSES.
The petition is bereft of merit.
Retrenchment to avoid or minimize business losses is a justified ground to dismiss employees under Article 283 of the Labor Code. The employer, however, bears the burden to prove such ground with clear and satisfactory evidence, failing which the dismissal on such ground is unjustified.17 In discharging its burden, the employer must satisfy certain established standards, all of which must concur,18 viz:
1. That 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. That the employer served written notice both to the employees and to the Department of Labor and Employment at least one month prior to the intended date of retrenchment;
3. That 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. That the employer exercises its prerogative to retrench employees in goof faith for the advancement of its interest and not to defeat or circumvent the employees’ right to security of tenure; and
5. That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as status, efficiency, seniority, physical fitness, age, and financial hardship for certain workers.19
Petitioner contends that contrary to the findings of the Labor Arbiter and the appellate court, the comparative report of its sales and collections for years 2001, 2002 and 2003 sufficiently proves that it was "suffering or [was] about to suffer imminent losses due to the gap between sales and collection, and/or poor collection efforts, coupled with
declining sales;"20 and that although the report showed an increase of sales from 2001 to 2002, there was a sharp decline thereof in 2003 by more than P38 Million while collections from 2002 to 2003 decreased by almost P100 Million.
While the above-said comparative report of sales and collections indicates that there was a decrease in the amount of sales and collections from 2002 to 2003, the same does not suffice to prove that petitioner was suffering or about to suffer losses within the contemplation of Article 283 of the Labor Code.
Clarion Printing House, Inc. v. NLRC21 teaches that sliding incomes or decreasing gross revenues alone do not necessarily indicate business losses within the meaning of Article 283, for, in the nature of things, the possibility of incurring losses is constantly present in business operations.
The decline in petitioner’s sales and collections from 2002 to 2003 cannot thus be considered as the loss referred to in Article 283 of the Labor Code, petitioner having failed to prove the stringent requirement that it was substantial, continuing and without any immediate prospect of abating.22
To consider every loss incurred or expected to be incurred by a company as a
justification of retrenchment23 would be susceptible to abuse by scheming employers who might be merely feigning business losses or reverses in their business ventures to ease out employees.24
As for the Statement of Profit and Loss submitted by petitioner, the same does not bear the signature of a certified public accountant. Neither is there a showing that it was audited by an independent auditor, hence, it is a self-serving document which ought to be treated as a mere scrap of paper devoid of any probative value.251avvph!1
At all events, even if the comparative report were to be considered, the Court is not persuaded on the necessity of resorting to retrenchment to prevent or minimize actual or imminent business losses on the part of petitioner. For retrenchment should only be resorted to when other less drastic means have been tried and found to be inadequate.
26 So Polymart Paper Industries, Inc. v. NLRC27 instructs:
. . . [E]ven if business losses were indeed sufficiently proven, the employer must still prove that retrenchment was resorted to only after less drastic measures such as the reduction of both management and rank-and-file bonuses and salaries, going on reduced time, improving manufacturing efficiency, reduction of marketing and advertising costs, faster collection of customer accounts, reduction of raw materials investment and others, have been tried and found wanting. (Emphasis supplied)
In the case at bar, petitioner did not adduce evidence to prove that retrenchment was resorted to because other measures were undertaken to abate actual or future business losses but thus failed.
WHEREFORE, the Petition is DENIED and the challenged Decision and Resolution of the Court of Appeals are AFFIRMED.
Costs against petitioner.
SO ORDERED.
Republic of the Philippines SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 148340 January 26, 2004
J.A.T. GENERAL SERVICES and JESUSA ADLAWAN TOROBU, Petitioners, vs.
NATIONAL LABOR RELATIONS COMMISSION and JOSE F. MASCARINAS, Respondents.
D E C I S I O N
There is no need to notify the DOLE in case of temporary closure of business operations. It is a management prerogative which the court cannot panghilabot
But the formal closure of business due to causes that they have realized when they temporarily close business operations, during the period of suspension, then subsequent closure as an afterthought is valid and considered in good faith.
They have notified the employees and sent a notice to DOLE that ey have ceased formally business operations
QUISUMBING, J.:
For review are the Decision1 dated February 27, 2001 of the Court of Appeals in CA-G.R. SP No. 60337, and its Resolution2 dated May 28, 2001, denying the motion for reconsideration. The Court of Appeals dismissed the petition for certiorari filed by petitioners and affirmed the Resolution3 of the National Labor Relations Commission (NLRC), Third Division, which affirmed the Decision4 of Labor Arbiter Jose G. De Vera in NLRC-NCR Case No. 00-03-02279-98, which found petitioners liable for illegal
dismissal and ordered petitioners to pay private respondent Jose Mascarinas separation pay, backwages, legal holiday pay, service incentive leave pay and 13th month pay in the aggregate sum of P85,871.00.