GR 170669; (February, 2009) (Digest)
G.R. No. 170669 February 4, 2009
MOBILIA PRODUCTS, INC., Petitioner, vs. ALAN G. DEMECILLO, CRISTOPHER S. DALIGDIG, MANUELITO V. SUSON, MARCIANO SUAREZ and ANTONIO MONTECILLO, JR., Respondents.
FACTS
Respondents were employees of petitioner Mobilia Products, Inc., a furniture manufacturer for export. In July 1998, petitioner initiated a retrenchment program, allegedly due to reduced orders from Japan, offering twice the legal separation pay. One hundred eight employees, including respondents, accepted the offer and executed quitclaims. Petitioner paid the equivalent of 30 days’ salary instead of giving a 30-day notice prior to termination. Respondents filed complaints for salary differential, later amended to include illegal dismissal (except for Antonio Montecillo, Jr.). The labor arbiter ruled the retrenchment invalid due to non-compliance with the 30-day notice requirement and awarded backwages. The NLRC reversed, holding the retrenchment valid as the employees consented, making notice unnecessary, but granted overtime differentials. The Court of Appeals reversed the NLRC, finding no evidence of substantial losses to justify retrenchment and ruling that payment of 30 days’ salary did not comply with the notice requirement, awarding backwages, nominal damages, and attorney’s fees.
ISSUE
1. Whether the retrenchment was valid.
2. Whether the Court of Appeals erred in giving due course to the petition for certiorari.
3. Whether the award of backwages to respondent Antonio Montecillo, Jr. was proper.
RULING
1. The retrenchment was not valid. For retrenchment to be valid under Article 283 of the Labor Code, the employer must prove: (a) necessity to prevent losses with sufficient evidence; (b) written notice to employees and DOLE at least one month prior; and (c) payment of separation pay. Petitioner failed to substantiate serious, actual, and real losses, as it presented only the letters of acceptance and quitclaims, not independent audited financial statements. The ruling in International Hardware, Inc. v. NLRC does not dispense with the burden to prove losses; it only exempts from the notice requirement if employees consent. Here, consent did not relieve petitioner of proving losses. Payment of 30 days’ salary cannot substitute for the mandatory 30-day written notice; the notice is intended to give employees time to prepare and the DOLE opportunity to ascertain the reason for termination.
2. The Court of Appeals did not err in giving due course to the petition for certiorari. Petitioner’s arguments on procedural defects (e.g., not naming petitioners, not impleading NLRC) were not substantiated with sufficient evidence or argumentation in the petition. The appellate court has discretion to overlook procedural lapses in labor cases to serve substantial justice.
3. The award of backwages to Antonio Montecillo, Jr. was proper. Although his complaint did not initially include illegal dismissal, he raised the issue in his position paper, which under the NLRC Rules of Procedure, is allowed as it forms part of the pleadings where claims can be amplified. Thus, his claim for illegal dismissal was properly considered.