Republic of the Philippines GOMA, petitioners,

SUPREME COURT vs.

BELLOSILLO, J.:
G.R. No. 110017 January 2, 1997
The State is bound under the Constitution to afford full protection to labor and when
RODOLFO FUENTES, RAINERIO DURON, JULIET VISTAL, ELENA DELLOMES, conflicting interests of labor and capital are to be weighed on the scales of social justice
LEODEGARIO BALHINON, ROGELIO MALINAO, LILY BASANEZ, MALIZA ELLO, VILMA the heavier influence of the latter should be counterbalanced with the sympathy and
NOQUERA, JESSICA CASTILLO, ROGELIO TABLADILLO, REMELDA VISCAYA, compassion the law accords the less privileged workingman. This is only fair if the
MELANIA VISCAYA, CELIA LUBRICO, EDITH LLACUNA, ELPIDIO FERRER, worker is to be given the opportunity and the right to assert and defend his cause not as
NORBERTO MIRANDA, FERNANDO MIRANDA, CORDIO DUMAY, LEONARDO DELA a subordinate but as part of management with which he can negotiate on even plane.
VEGA, ISIDRO ALIDO, AQUINO MACABEHA, LEOPOLDO ABAA, PAULINO ASIS, JR., Thus labor is not a mere employee of capital but its active and equal partner. 1
REYNALDO BLANCO, MADILYN FABON, MARCIANA OSOK, BEBIANO OSOK,
FRANCISCO SEMULTA, MARCIA LLAMES, PRINCIPE DANIEL, MARIA BAYA, NENITA Petitioners, numbering seventy-five (75) in all, seek to set aside the decision of
RASONABLY, SORIANO PENALOSA, JOSE PENALOSA, RODOLFO VILLAR, REMEGIAS respondent National Labor Relations Commission dated 27 November 1992 reversing
DEMINGOY, TEODORO TUGOGON, DIONISIO APOLINARIO, EDYING DE LA CRUZ, that of the Labor Arbiter which granted their claims, for having been rendered with
RODOLFO BUTAUAN, CRISPIN FABON, ARCADIO FABON, NENITA SARDINOLA, grave abuse of discretion amounting to lack or excess of jurisdiction.
ALEX LICAYAN, MARIO DAL, BADON EDUARDO, FELISA VILLAREL, EMILY GARAN,
ROGELIO GARAN, RODOLFO COLITE, RODOLFO MENIANO, ROMERO TERRY, ZOILO Petitioners were regular employees of private respondent Agusan Plantations, Inc.,
VALLEJOS, VIRGINIA BANDERA, BLANDINA LUNA, FLAXIANA CARLON, CRESENCIO which was engaged in the operation of a palm tree plantation in Trento, Agusan del Sur,
CARLON, NOTARTE LEONARDA, EFREN CANTERE, ROWENA CAGUMAY, ALFONSO since September 1982. Claiming that it was suffering business losses which resulted in
PARAJES, VIOLETA MONTECLAR, NESTOR ALLADO, JR., APOLINARIO CULATAS, the decision of the head office in Singapore to undertake retrenchment measures,
LANNIE CAPARAS, ANGELICO NUNEZ, JR., NICOLAS CANAL, HERMOGENA private respondent sent notices of termination to petitioners and the Department of
TAGLOCOP, ALEJO BAUMBAD, CARLITO DE LA PENA, AMANCIO ABOYLO, JERRY Labor and Employment (DOLE).
PARALES, LYDIA ALLADO, AGAPITO ODAL, MAGNO BARIOS, FLORENDO MARIANO,
SOLATORIO BONIFACIO, RENE DEMINGOY, FELIMON ADORNO, VIRGILIO On 31 October 1990 petitioners filed with the DOLE office in Cagayan de Oro City a
INOCENCIO, RUEL INOCENCIO, AVELINO LUNA, ALLAN MARCELLANA, FELIX complaint for illegal dismissal with prayer for reinstatement, backwages and damages
SANCHEZ, AVELINO PANDI, VILLA SORIO, NOEL LAS PENAS, FRANCISCO GARDO, against private respondent Agusan Plantation, Inc., and/or Chang Chee Kong. In their
ROGELIO CULLABA, GEORGE RAGAR, CARMELITO CABRIADAS, ANANIAS answer respondents denied the allegations of petitioners and contended that upon
MELLORIA, ALFONSO ALLADO, MARLINO MARTINEZ, LINO MARTINEZ, ERNESTO receipt of instructions from the head office in Singapore to implement retrenchment,
OLARAN, JOHNNY JOSAYAN, ANECITO SOBIONO, MARGARITO DUMALAGAN, private respondents conducted grievance conferences or meetings with petitioners'
FRANCISCO CABALES, FELIX ROCERO, PABLITO DAPAR, FRANCISCA CABALHIN, representative labor organization, the Association of Trade Unions through its national
FORTUNATA BAUMBAD, CARMEN RADAY, NICOLAS TAMON, REYNALDO president Jorge Alegarbes, its local president and its board of directors. Private
CANTORIA, ELMER NAPONE, ANTONIO VALLAR, BERNADITH TOLOZA, EMETERIA respondents also contended that the 30-day notices of termination were duly sent to
FERRER, CLANICA CABALES, CLAUDIO OJUYLAN, ERLINDA BLANCO, ROSITA petitioners.
DURON, FRANCISCA ADLAWON, CARDINAL MAGLISANG, JOVEN ASIS, JOSE FLORES,
ALICIA FLORES, JULIETO ADORNO, LORENZO CANINES, ISAAC CELLASAY, ANDRES
INDIABLE, ARSENIO DURON, NARCISA MALASPINA, ROQUE SUBAAN, GRACE After both parties submitted their position papers articulating their respective theses,
DURON, JAIME BALMORIA, PEDRO PECASALES, PRIMITORAGAS and GRACE the Labor Arbiter rendered a decision on 27 May 1992 in favor of petitioners ordering
private respondents to pay the former separation pay equivalent to fifteen (15) days pay In the case before us, private respondents merely alleged in their answer and position
for every year of service plus salary differentials and attorney's fees. paper that after their officials from the head office had visited the plantation respondent
manager Chang Chee Kong received a letter from the head office directing him to
On appeal by respondents to the National Labor Relations Commission, the decision of proceed immediately with the termination of redundant workers and staff, and change
the Labor Arbiter was reversed on 27 November 1992. the operations to contract system against direct employment. They also alleged that
after five (5) years of operations, the return of investments of respondent company was
Petitioners elevated their plight to this Court on a special civil action for certiorari under meager; that the coup attempt in August 1987 as well as that of December 1989
Rule 65 of the Rules of Court alleging that respondent NLRC gravely abused its aggravated the floundering financial state of respondent company; that the financial
discretion amounting to lack or excess of jurisdiction in ruling that petitioners were losses due to lack of capital funding resulted in the non-payment of long-overdue
legally terminated from their employment. They argued that their dismissal or accounts; that the untimely cut in the supply of fertilizers and manuring materials and
retrenchment did not comply with the requirements of Art. 283 of the Labor Code. equipment parts delayed the payment of salaries and the implementation of weekly job
rotations by the workers. Except for these allegations, private respondents did not
present any other documentary proof of their alleged losses which could have been
We sustain petitioners. The ruling of the Labor Arbiter that there was no valid easily proven in the financial statements which unfortunately were not shown.
retrenchment is correct. Article 283 of the Labor Code clearly states:
There is no question that an employer may reduce its work force to prevent losses.
Art. 283. Closure of establishment and reduction of personnel. — The employer However, these losses must be serious, actual and real.3 Otherwise, this ground for
may also terminate the employment of any employee due to the installation of termination of employment would be susceptible to abuse by scheming employers who
labor-saving devices, redundancy, retrenchment to prevent losses or the closing might be merely feigning losses in their business ventures in order to ease out
or cessation of operation of the establishment or undertaking unless the closing employees.4
is for the purpose of circumventing the provisions of the title, by serving a
written notice on the workers and the Ministry of Labor and Employment at
least one (1) month before the intended date thereof. In case of termination due Indeed, private respondents failed to prove their claim of business losses. What they
to the installation of labor-saving devices or redundancy, the worker affected submitted to the Labor Arbiter were mere self-serving documents and allegations.
thereby shall be entitled to a separation pay equivalent to at least his one (1) Private respondents never adduced evidence which would show clearly the extent of
month pay or to at least one (1) month pay for every year of service, whichever losses they suffered as a result of lack of capital funding, which failure is fatal to their
is higher. In case of retrenchment to prevent losses and in case of closure or cause.
cessation of operations of establishment or undertaking not due to serious
business losses or financial reverses, the separation pay shall be equivalent to As regards the requirement of notices of termination to the employees, it is undisputed
one (1) month pay or at least one-half (1/2) month pay for every year of that the Notice of Retrenchment was submitted to the Department of Labor and
service, whichever is higher. A fraction of at least six (6) months shall be Employment on 12 September 19905 The findings of both the Labor Arbiter and NLRC
considered one (1) whole year. show that petitioners were terminated on the following dates in 1990 after they
received their notices of termination, to wit:
Under Art. 283 therefore retrenchment may be valid only when the following requisites
are met: (a) it is to prevent losses; (b) written notices were served on the workers and Name of Employee Date of Notice of Effectivity of
the Department of Labor and Employment (DOLE) at least one (1) month before the Termination Termination
effective date of retrenchment; and, (c) separation pay is paid to the affected workers.
1. Noquera, Vilma 22 Sept. 25 Sept.
The closure of a business establishment is a ground for the termination of the services of 2. Dumalagan, Margarito 22 Sept. 30 Sept.
an employee unless the closing is for the purpose of circumventing pertinent provisions 3. Osok, Marciano 20 Sept. 30 Sept.
of the Labor Code. But while business reverses can be a just cause for terminating 4. Abaa, Leopoldo 01 Sept. 30 Sept.
employees, they must be sufficiently proved by the employer.2 5. Aboylo, Amancio 01 Sept. 30 Sept.
6. Allado, Nestor Jr. 01 Sept. 30 Sept.
7. Bandera, Verginia 01 Sept. 30 Sept.
 8. Basanez, Lily 01 Sept. 30 Sept. at least one (1) month from the date of notice to the workers. Petitioners were
9. Baumbad, Alejo 01 Sept. 30 Sept. terminated less than a month after notice was sent to DOLE and to each of the workers.
10. Blanco, Myrna 01 Sept. 30 Sept.
11. Blanco, Reynaldo 01 Sept. 30 Sept. We agree with the conclusion of the Labor Arbiter that the termination of the services of
12. Canal, Marieto 01 Sept. 30 Sept. petitioners was illegal as there was no valid retrenchment. Respondent NLRC committed
13. Fabon, Madilyn 01 Sept. 30 Sept. grave abuse of discretion in reversing the findings of the Labor Arbiter and ruling that
14. Ferrer, Elpidio 01 Sept. 30 Sept. there was substantial compliance with the law. This Court firmly holds that measures
15. Meniano, Rodolfo 01 Sept. 30 Sept. should be strictly implemented to ensure that such constitutional mandate on
16. Nunez, Angelico 01 Sept. 30 Sept. protection to labor is not rendered meaningless by an erroneous interpretation of
17. Osok, Bebiano 01 Sept. 30 Sept. applicable laws.
18. Penaloga, Jose Jr. 01 Sept. 30 Sept.
19. Taglocop, Hermogena 01 Sept. 30 Sept. We uphold the monetary award of the Labor Arbiter for: (a) the balance of the
20. Allado, Lydio 22 Aug. 30 Sept. separation pay benefits of petitioners equivalent to fifteen (15) days for every year of
21. Baya, Maria 22 Aug. 30 Sept. service after finding that reinstatement is no longer feasible under the circumstances,
22. Carlon, Flaviana 22 Aug. 30 Sept. and (b) the salary differentials for complainants who were relieved during the pendency
23. Carlon, Cresencio 22 Aug. 30 Sept. of the case before the Labor Arbiter and full back wages for the rest of the complainants.
24. Culaba, Rogelio 22 Aug. 30 Sept. This is in accord with Art. 279 of the Labor Code as amended by R.A. 6715 under which
25. Cabriades, Carmelito 22 Aug. 30 Sept. petitioners who were unjustly dismissed from work shall be entitled to full back wages
26. Dellomes, Elma 22 Aug. 30 Sept. inclusive of allowances and other benefits or their monetary equivalent computed from
27. Fabon, Arcadio 22 Aug. 30 Sept. the time their compensation was withheld up to the date of this decision.
28. Gordo, Francisco 22 Aug. 30 Sept.
29. Inocencio, Virgilio 22 Aug. 30 Sept.
30. Inocencio, Ruel 22 Aug. 30 Sept. WHEREFORE, the Petition is GRANTED. The decision of the Labor Arbiter of 27 March
31. Luna, Blandina 22 Aug. 30 Sept. 1992 granting petitioners their claim for the balance of their separation pay benefits
32. Luna, Avelino 22 Aug. 30 Sept. equivalent to fifteen (15) days for every year of service, and salary differentials for
33. Lubrico, Celia 22 Aug. 30 Sept. complainants who were relieved during the pendency of the case before the Labor
34. Monteclar, Violeta 22 Aug. 25 Sept. Arbiter, and full back wages for the rest of the complainants is REINSTATED.
35. Macabecha, Aquino 22 Aug. 25 Sept. Consequently, the decision of the National Labor Relations Commission dated 27
36. Melloria, Ananian 22 Aug. 25 Sept. September 1992 is REVERSED and SET ASIDE.
37. Malinao, Rogelio 22 Aug. 25 Sept.
38. Leonarda, Notarte 22 Aug. 25 Sept. SO ORDERED.
39. Parejas, Jerry 22 Aug. 25 Sept.
40. Parejas, Alfonso 22 Aug. 25 Sept. Padilla, Vitug, Kapunan and Hermosisima, Jr., JJ., concur.
41. Sardinola, Alfonso 22 Aug. 25 Sept.
42. Solaterio, Bonifacio 22 Aug. 25 Sept.

Culled from the above data, the termination of petitioners could not have validly taken
effect either on 25 or 30 September 1990. The one-month notice of retrenchment filed
with the DOLE and served on the workers before the intended date thereof is
mandatory. Private respondents failed to comply with this requisite. The earliest
possible date of termination should be 12 October 1990 or one (1) month after notice
was sent to DOLE unless the notice of termination was sent to the workers later than the
notice to DOLE on 12 September 1990, in which case, the date of termination should be