GR 120971; (March, 1999) (Digest)
G.R. No. 120971 March 10, 1999
TAGGAT INDUSTRIES, INC., petitioner, vs. THE NATIONAL LABOR RELATIONS COMMISSION and ANTONIO E. JACILDO, respondents.
FACTS
Taggat Industries, Inc., a logging company under PCGG sequestration, had its timber license cancelled in 1986 and was prohibited from further operations. It claimed to have suffered serious business losses from 1986-1987, leading to the foreclosure of its assets. Private respondent Antonio Jacildo, employed since 1959, was a retained managerial employee tasked with protecting company assets after operations ceased. On October 15, 1991, he was verbally informed his services were no longer needed. Jacildo objected, asserting no infractions warranted dismissal, and later demanded various monetary benefits, which Taggat refused. Taggat countered that Jacildo had abandoned his work after being confronted about an alleged unauthorized sale of company equipment and only filed a complaint almost two years later.
ISSUE
Whether the National Labor Relations Commission committed grave abuse of discretion in reversing the Labor Arbiter’s decision and ruling that Jacildo was illegally dismissed and entitled to separation pay.
RULING
The Supreme Court dismissed the petition and affirmed the NLRC decision. The legal logic centered on the failure of Taggat to validly effect a dismissal on the ground of retrenchment due to alleged serious business losses. For retrenchment to be lawful, Article 283 of the Labor Code requires: (a) necessity to prevent losses and proof thereof; (b) written notice to employees at least one month prior; and (c) payment of separation pay. The Court found Taggat’s evidence of losses unconvincing, as the financial statements pertained to 1986-1987, yet Jacildo was dismissed only in 1991 without any showing of a retrenchment program implemented in the interim. Critically, Taggat failed to provide the mandatory written notice, merely giving a verbal termination. This procedural flaw rendered the dismissal illegal. The claim of abandonment was also unsubstantiated, as Jacildo’s immediate objection to his termination and subsequent filing for benefits negated an intent to abandon. Consequently, the heirs of Jacildo were rightfully awarded separation benefits. The NLRC did not gravely abuse its discretion but correctly applied the law on dismissals due to retrenchment.