G.R. No. 97846 September 25, 1998
BOGO-MEDELLIN SUGARCANE PLANTERS ASSOCIATION, INC. and HORACIO FRANCO, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, ASSOCIATED LABOR UNIONS, BONIFACIO MONTILIA, JOSE YBAÑEZ JR., BERNARDO DELA RAMA, ILDEFONSO CARREDO, ROSETO CANALES, FORTUNATO MIGABON JR. and HERACLEO MEGABON, respondents.

FACTS

The private respondents were employees of the petitioner Bogo-Medellin Sugarcane Planters Association, Inc., with service ranging from 1 to 17 years. On May 31, 1985, they joined the Associated Labor Unions, with Bonifacio Montilla as its local president. While campaigning for union membership, Montilla was warned by the firm’s treasurer, Jose Mari Miranda, to withdraw from the union or else they would not be hired at the start of the milling season and would be dismissed. The private respondents did not heed the warning. Consequently, notices of termination were sent to Bernardo Dela Rama, Ildefonso Carredo, Bonifacio Montilla, and Jose Ybañez Jr., informing them that their services would be terminated due to financial difficulties. Although the notices stated termination would be effective 30 days from date, they were not allowed to work during that period, and Montilla was immediately replaced. The private respondents filed a complaint for illegal dismissal and unfair labor practice on December 20, 1985. On December 28, 1985, four of the private respondents were paid separation/gratuity pay and signed Quitclaim and Release documents. The petitioners maintained the dismissal was a valid retrenchment to prevent losses, submitting a comparative statement of revenue and expenses showing a loss of P54,692.31 for the crop year ending August 1985, and argued the quitclaims barred the complaint.

ISSUE

1. Whether private respondents’ retrenchment was valid and legal under Article 283 of the Labor Code.
2. Whether the Quitclaim and Release barred the private respondents from charging petitioners with illegal dismissal.
3. Whether a corporate officer could be held liable for illegal dismissal without a showing that he acted maliciously and in bad faith.
4. Whether Respondent Commission gravely abused its discretion by denying due process to petitioners.

RULING

1. No, the retrenchment was not valid. The employer must prove serious business losses to justify retrenchment. The petitioners failed to present adequate proof of such losses. The Comparative Statement of Revenue and Expenses submitted was neither sufficient nor substantial. They also failed to show that fair and reasonable standards were used to determine who would be retrenched, and that they gave the required 30-day notice to the labor department. Furthermore, the hiring of additional personnel after the retrenchment negated the claim of business losses and strengthened the finding that the dismissal was due to union activities.
2. No, the Quitclaim and Release did not bar the complaint. If the requisites for a valid retrenchment under Article 283 of the Labor Code are not fulfilled, a deed of quitclaim and release is unavailing to exculpate an employer from liability for illegal retrenchment. The quitclaims, signed after the complaint was filed, did not waive the private respondents’ right to question the legality of their dismissal.
3. Yes, a corporate officer can be held jointly and severally liable. The labor arbiter’s decision, which identified petitioner Horacio Franco as the manager directly responsible for the illegal dismissal, was affirmed. The Court found no reason to reverse this finding of personal liability.
4. No, there was no grave abuse of discretion or denial of due process. The petitioners were given ample opportunity to present their case. The Respondent Commission’s decision was based on the evidence and the labor arbiter’s findings, which are accorded respect and finality. The claim of denial of due process was unfounded.