G.R. No. 206789 . July 15, 2020.
TEAM PACIFIC CORPORATION, FEDERICO M. FERNANDEZ, AND AURORA Q. GARCIA, PETITIONERS, VS. LAYLA M. PARENTE, RESPONDENT.

FACTS

In February 1999, respondent Layla M. Parente was hired by petitioner Team Pacific Corporation. She was later promoted to quality assurance calibration technician. On April 23, 2009, she commenced a 60-day maternity leave, giving birth on April 27, 2009. While on leave, she was summoned by petitioner Aurora Q. Garcia, Team Pacific’s HR manager, on May 21, 2009. During the meeting, Garcia handed Parente a termination letter effective June 22, 2009 (the day after her maternity leave ended), citing retrenchment due to substantial business losses from the global economic crisis. Parente was asked to sign the letter. Following advice from the Department of Labor and Employment, she processed her clearance, signed documents, and received separation pay on June 8, 2009. On July 9, 2009, she filed a Complaint for illegal dismissal. Petitioners refused to receive the summons and did not attend the hearings or submit any position paper or evidence before the Labor Arbiter. The Labor Arbiter dismissed the complaint, finding the retrenchment valid. The National Labor Relations Commission affirmed, ruling Parente was estopped from suing due to her acceptance of separation pay. The Court of Appeals reversed, finding illegal dismissal due to petitioners’ failure to submit evidence of business losses and holding that the acceptance of separation pay did not constitute estoppel. Petitioners filed the present Petition for Review.

ISSUE

Whether respondent Layla M. Parente was illegally dismissed by petitioners.

RULING

Yes, the Supreme Court affirmed the Court of Appeals’ finding of illegal dismissal. For a valid retrenchment, the employer must prove: (1) substantial business losses; (2) that retrenchment was necessary to prevent further losses; (3) written notice to employees and the Department of Labor and Employment at least one month before effectivity; (4) payment of separation pay; (5) good faith in implementing retrenchment; and (6) use of fair and reasonable criteria in selecting employees for retrenchment. Petitioners failed to substantiate their claim of substantial business losses as they did not submit any evidence before the Labor Arbiter, having refused to participate in the proceedings. Their submission of Audited Financial Statements only before the Court of Appeals was a violation of due process. Furthermore, the termination letter was issued and effective immediately after Parente’s maternity leave, indicating bad faith. The acceptance of separation pay does not bar an employee from contesting dismissal, especially when, as here, the employee was in a vulnerable position having just given birth and was advised by the DOLE to accept the payment first. Petitioners Federico M. Fernandez and Aurora Q. Garcia were held solidarity liable with Team Pacific Corporation as they were directly responsible for carrying out the illegal dismissal. The Court ordered reinstatement without loss of seniority rights and payment of full backwages, allowances, and other benefits.