GR 110017; (January, 1997) (Digest)
G.R. No. 110017 , January 02, 1997
Rodolfo Fuentes, et al., Petitioners, vs. National Labor Relations Commission, 5th Division, Cagayan de Oro City, Agusan Plantation Inc., and/or Chang Chee Kong, Respondents.
FACTS
Petitioners were seventy-five regular employees of private respondent Agusan Plantations, Inc., a palm tree plantation in Agusan del Sur. In September 1990, claiming business losses and acting on instructions from its Singapore head office to undertake retrenchment, the company sent notices of termination to the petitioners and the Department of Labor and Employment (DOLE). The petitioners subsequently filed a complaint for illegal dismissal, seeking reinstatement, backwages, and damages.
The Labor Arbiter ruled in favor of the petitioners, finding the retrenchment invalid and ordering the payment of separation pay, salary differentials, and attorney’s fees. On appeal, the National Labor Relations Commission (NLRC) reversed this decision. The NLRC held that the retrenchment was justified and that there had been substantial compliance with legal requirements, including the conduct of grievance conferences with the petitioners’ labor union. The petitioners then elevated the case to the Supreme Court via certiorari.
ISSUE
Whether the National Labor Relations Commission committed grave abuse of discretion in reversing the Labor Arbiter’s decision and ruling that the petitioners were legally terminated on the ground of retrenchment.
RULING
Yes, the NLRC committed grave abuse of discretion. The Supreme Court reinstated the Labor Arbiter’s decision, declaring the dismissals illegal. For a valid retrenchment under Article 283 of the Labor Code, the employer must prove it is undertaken to prevent losses and must serve written notices on both the workers and the DOLE at least one month before the intended date of termination. The Court found that private respondent failed to strictly comply with this mandatory notice period.
The notices to the DOLE and the workers were sent on September 12, 1990, yet the termination was effected on September 25 or 30, 1990, which was less than one month later. This procedural defect rendered the retrenchment invalid. The Court emphasized that the constitutional mandate to afford full protection to labor requires strict, not merely substantial, compliance with these procedural safeguards. The alleged business losses and the conduct of grievance meetings did not cure this fatal flaw. Consequently, the petitioners were entitled to full backwages, inclusive of allowances and benefits, from the time compensation was withheld until finality of the decision, and separation pay in lieu of reinstatement.