GR 157634; (May, 2005) (Digest)
G.R. No. 157634 ; May 16, 2005
MAYON HOTEL & RESTAURANT, PACITA O. PO and/or JOSEFA PO LAM, petitioners, vs. ROLANDO ADANA, et al., respondents.
FACTS
Petitioner Mayon Hotel & Restaurant, a single proprietorship registered under Pacita O. Po but managed by her mother Josefa Po Lam, employed sixteen respondents in various capacities. Due to the expiration and non-renewal of its lease at Rizal Street, the hotel operations were suspended on March 31, 1997. The restaurant continued at a new location, but only nine employees were retained. The other seven employees, along with the retained ones, filed complaints for illegal dismissal and various monetary claims, including underpayment of wages, non-payment of holiday pay, service incentive leave, and other benefits.
The Labor Arbiter ruled in favor of the employees, declaring illegal dismissal for some and awarding monetary claims. The National Labor Relations Commission (NLRC) reversed this, dismissing all complaints. The Court of Appeals then reinstated the Labor Arbiter’s decision, prompting this petition.
ISSUE
The core issues were: (1) the propriety of holding Josefa Po Lam liable as the owner; (2) whether the cessation of hotel operations constituted illegal dismissal; and (3) the entitlement of respondents to their monetary claims.
RULING
The Supreme Court denied the petition and affirmed the Court of Appeals. On the first issue, the Court held Josefa Po Lam solidarily liable with the registered owner, Pacita O. Po. The evidence, including management control and admissions, established Josefa as the beneficial owner and employer, making her a proper party.
On the second issue, the Court ruled that the termination of the seven employees due to the hotel’s closure was a case of illegal dismissal. The closure was not shown to be due to serious business losses under Article 283 of the Labor Code. Petitioners failed to substantiate any authorized cause for termination, such as retrenchment to prevent losses, and did not comply with the mandatory notice requirement to both the employees and the Department of Labor and Employment.
Regarding the monetary claims, the Court upheld the awards for underpayment and non-payment of statutory benefits. The burden of proof to disprove such claims rests on the employer. Petitioners’ failure to present crucial documentary evidence like payrolls, daily time records, and proof of payment constituted a failure to discharge this burden. Consequently, the employees’ claims, supported by their position papers, were deemed substantiated. The awards for separation pay, damages, and attorney’s fees were also affirmed as a consequence of the illegal dismissal and unlawful withholding of wages.