GR 188223; (July, 2010) (Digest)
G.R. No. 188223; July 5, 2010
SENTINEL INTEGRATED SERVICES, INC., Petitioner, vs. RIO JOSE REMO, Respondent.
FACTS
Respondent Rio Jose Remo was dismissed from his position as operations officer by petitioner Sentinel Integrated Services, Inc. after nearly twenty years of service. The company cited retrenchment due to serious financial losses as the ground for termination. The Labor Arbiter and the National Labor Relations Commission upheld the dismissal, finding the retrenchment valid. Remo appealed to the Court of Appeals.
The Court of Appeals reversed the NLRC, finding grave abuse of discretion. The CA ruled Sentinel failed to prove serious financial losses warranting retrenchment, noting its submitted financial statements lacked proof of an independent audit. The appellate court also found the hiring of a replacement for Remo, Marcelo Albay, inconsistent with a bona fide retrenchment and noted the company failed to explore less drastic measures before termination.
ISSUE
Whether the Court of Appeals erred in ruling that Remo was illegally dismissed.
RULING
The Supreme Court denied the petition and affirmed the CA’s finding of illegal dismissal, albeit on a more fundamental ground. The Court found that retrenchment was not the true cause for Remo’s termination. Examination of the records revealed Sentinel’s real motive was to replace Remo with Albay, who had military training, because Remo’s administrative position was deemed indispensable. This actual reason was concealed by the company’s termination letter, which falsely cited an economic slump and downsizing.
This misrepresentation constituted an act of active bad faith that fatally tainted the dismissal. Since the stated cause (retrenchment) was a pretext, the dismissal was inherently illegal regardless of any subsequent discussion on the validity of the company’s financial claims. The labor tribunals’ failure to appreciate this bad faith was a gross misappreciation of evidence. Consequently, Remo is entitled to relief for illegal dismissal. Due to the sensitive nature of his former position and the adversarial history, separation pay in lieu of reinstatement is awarded, computed at one month’s pay for every year of service from the date of dismissal until the finality of this Decision.