GR 119583; (January, 1996) (Digest)
G.R. No. 119583 ; January 29, 1996
NESCITO C. HILARIO, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, REYNOLDS PHILIPPINES CORPORATION, JAMES G. MILLER, HENRY W. PINKEY, and GEORGE C. MOLINA, respondents.
FACTS
Petitioner Nescito C. Hilario was hired as Personnel Manager for respondent Reynolds Philippines Corporation’s Cavite plant in December 1984. After six months, he was transferred to the Makati head office to handle legal matters. In November 1985, he was notified of his termination effective January 1986 on the ground of retrenchment due to alleged financial losses. Hilario filed a complaint for illegal dismissal. The Labor Arbiter initially dismissed the complaint but awarded certain monetary benefits. On appeal, the NLRC reversed the Arbiter, declaring the dismissal illegal. The NLRC found the retrenchment claim paradoxical, noting Hilario received a salary increase after his transfer, his successors were given higher salaries, and the company’s SEC filings indicated it was a viable going concern generating substantial monthly cash flow.
ISSUE
Whether the NLRC correctly declared Hilario’s dismissal illegal and, if so, what are the proper awards for backwages and damages.
RULING
The Supreme Court affirmed the NLRC’s finding of illegal dismissal but modified the awarded remedies. Retrenchment requires proof of substantial business losses, which Reynolds failed to establish convincingly. The company’s act of advertising for a personnel manager shortly before claiming severe financial difficulty, coupled with evidence of salary increases for Hilario and his successors and positive SEC financial data, negated the claim of necessary retrenchment. This constituted evident bad faith. On the awards, backwages for illegally dismissed employees prior to the effectivity of Republic Act No. 6715 on March 21, 1989, are limited to three years without deduction. Thus, Hilario is entitled to backwages from January 1, 1986, to January 1, 1989. The Court also upheld the awards for unpaid December 1985 salary, Christmas bonus, and separation pay. However, the moral damages were reduced from P30,000 to P20,000, as the company’s acts, while in evident bad faith, did not rise to the level of gross bad faith or wanton oppression required for a higher award. Exemplary damages were not awarded.