GR 178397; (October, 2010) (Digest)
G.R. No. 178397; October 20, 2010
PEĂ‘AFRANCIA TOURS AND TRAVEL TRANSPORT, INC., Petitioner, vs. JOSELITO P. SARMIENTO and RICARDO S. CATIMBANG, Respondents.
FACTS
Respondents Joselito Sarmiento and Ricardo Catimbang were employed as bus inspectors by petitioner Peñafrancia Tours and Travel Transport, Inc. Sarmiento worked from October 1993, and Catimbang from February 1997, until both received termination notices on October 30, 2002. The stated ground for termination was irreversible business losses, and they were paid separation and 13th-month pay. Petitioner claimed it had sold its business to the Perez family of ALPS Transportation, and the new owners opted not to rehire the respondents. However, respondents alleged that the sale was not genuine, as the company’s former president, Bonifacio Cu, resumed management shortly after their dismissal and subsequently entered into another transaction with a different entity.
ISSUE
Whether the respondents were illegally dismissed.
RULING
Yes, the respondents were illegally dismissed. The Supreme Court affirmed the findings of the Court of Appeals and the National Labor Relations Commission (NLRC). The legal logic hinges on the employer’s failure to substantiate its twin justifications for termination: authorized cause due to business losses and a bona fide sale of the business. For termination due to business losses, the law requires clear and convincing evidence of such losses, which the petitioner failed to provide. Regarding the alleged sale, the evidence revealed it was not a legitimate transfer. The purported new owners issued memoranda but soon returned management to the original owner, Bonifacio Cu, who then executed another deed of sale with a different company. This sequence of events demonstrated a lack of good faith and a genuine change in ownership, making the termination a mere pretext. Consequently, the dismissal was without lawful cause. The Court upheld the factual findings of the NLRC, as affirmed by the CA, which are accorded finality when supported by substantial evidence. The petitioner’s failure to meet its burden of proof rendered the dismissal illegal, entitling respondents to reinstatement and backwages.