GREAT PACIC LIFE ASSURANCE CORPORATION, petitioner, vs.

NATIONAL LABOR
RELATIONS COMMISSION and ROSA ALLADO, respondents
G.R. No. L-51183. December 21, 1983.
MEDIALDEA, J p:
FACTS:

Ms. Rosa Allado alleged that she was hired by GREPALIFE as clerk in its regional o􀀸ce in
Laoag, Ilocos Norte sometime in January, 1969. After only three (3) months on the job, she was
promoted to Regional Cashier at the same station.

In 1971, she was transferred to Baguio City, following the transfer of the corporation's regional
o􀀸ce to that city, where she remained with the company until May 25, 1984. At the time of her
separation she was receiving P2,230.00 a month.

She further alleged that on April 4, 1984, Ms. Rosa Y. Choa, the corporation's Assistant Vice
President, issued an inter-o􀀸ce memorandum to Ms. Ana Marie Barredo, head of the Human
Resources Administration Department, instructing the latter to implement the decision taken by
the company to transfer Allado to "IL Accounting Department-Premium Section" at Metro Manila
to take the place of one Ms. Paz Francisco who resigned March 30, 1984. The reason given for
the transfer, as stated in the memorandum, was for the company to cut down on its expenses at
its Baguio o􀀸ce the function of Allado as Regional Cashier to be assumed by the Regional
Administrator.

Barredo notified Allado of the foregoing stating that though the corporation was "well aware of
[her] reservation about relocating to Manila" "present circumstances leave the company no
other recourse," and informed her that she was entitled to a "relocation expense" of P1,000.00
subject to liquidation. Allado wrote the president of the corporation requesting reconsideration of
the decision of her transfer.

She reasoned that with the salary she was receiving she could not afford to live in a highly
urbanized area as Metro Manila, and "more importantly," she wrote, she has "dependents who
are studying in Baguio City whom she cannot simply leave" behind. Cdpr

The corporation's president, through Barredo, denied reconsideration explaining

that management had decided to abolish her item since the volume of business in her station
"can more than adequately be handled by the Regional Administrator”
Allado instituted a complaint with the Sub-Regional Arbitration Branch of the NLRC in Baguio
City against the corporation charging illegal dismissal.

LA: Allado was illegally dismissed.

NLRC: Affirmed

HELD:

1. A special civil action of certiorari may be 􀀶led within a reasonable time and there is no
time frame 􀀶xed by Rule 65 of the Rules of Court.

We entertained a petition for certiorari notwithstanding the fact that it was

􀀶led only after seven (7) months from the promulgation of the NLRC decision
considering that it has not yet been executed and the substantial issues raised merited this
Court's attention. And after a careful reading of this case, We are of the opinion that the instant
petition has merit.

2. The deletion of Allado's o􀀸ce should be accepted as a valid exercise of

management prerogative.

Much has been said regarding the transfer of Allado to Makati, Metro Manila
disregarding the reason for such transfer which is the abolition of Allado's position of Regional
Cashier in Baguio City. That it has in fact been abolished is not disputed. It is also not disputed
that the Regional Administrator had assumed the function of Regional Cashier and GREPALIFE
had not hired anyone in Allado's stead. In fact, there is no serious challenge at all to the
decision of GREPALIFE deleting Allado's item. It is, of course, a management prerogative to
abolish a position which it deems no longer necessary and this Court, absent any 􀀶ndings of
malice on the part of management, cannot erase that initiative simply to protect the person
holding that o􀀸ce. And We do not see anything that would indicate that Allado's position was
abolished to ease her out of employment.

But GREPALIFE sought to accommodate Allado by ordering her to transfer to a

position recently vacated. Whether that position is two grades lower than a Regional Cashier is
immaterial because GREPALIFE could have then terminated Allado's services when it
abolished her position. Her proposed transfer was merely an accommodation.

It is erroneous, therefore, to conclude that a situation was created by GREPALIFE to force

Allado to resign. cdll

Based on this premise, however, that Allado's services could have been
terminated after her position as Regional Cashier was abolished, We adopt by analogy Article
283 of the Labor Code which provides that in case of termination of employment due to
installation of labor-saving devices or redundancy, the worker affected shall be entitled to a
separation pay of at least one (1) month pay or to at least one (1) month pay for every year of
service whichever is higher.

RUBEN SERRANO, petitioner, vs . NATIONAL LABOR RELATIONS

COMMISSION and ISETANN DEPARTMENT STORE, respondents.
G.R. No. 117040. January 27, 2000.
Mendoza, J.
FACTS:
Petitioner was hired by private respondent Isetann Department Store as a securitychecker to
apprehend shoplifters and prevent pilferage of merchandise. 1 Initially hired on October 4, 1984
on contractual basis, petitioner eventually became a regular employee on April 4, 1985.

In 1988, he became head of the Security Checkers Section of private respondent. 2

Sometime in 1991, as a cost-cutting measure, private respondent decided to phase out its entire
security section and engage the services of an independent security agency.
For this reason, it wrote petitioner a memorandum terminating his employment. The said
memorandum was received by him at the day of his termination or on Oct. 11, 1991.
The loss of his employment prompted petitioner to 􀀵le a complaint on December 3, 1991 for
illegal dismissal, illegal layoff, unfair labor practice, underpayment of wages, and nonpayment of
salary and overtime pay.

LA: Private Respondent was illegally dismissed.

NLRC: Affirmed.

HELD:

1. The termination of petitioner's services was for an authorized cause, i.e., redundancy.

2. The consequence of the failure of the employer to give notice before the termination
would not render the termination void but would only give rise for payment of damages.

If an employee is laid off for any of the causes in Arts. 283- 284, i.e., installation of a labor-
saving device, but the employer did not give him and the DOLE a 30-day written notice of
termination in advance, then the termination of his employment should be considered ineffectual
and he should be paid backwages. However, the termination of his employment should not be
considered void but he should simply be paid separation pay as provided in Art. 283 in addition
to backwages. The Wenphil Rule should thus be overturned.

That would be to uphold the right of the employee but deny the right of the employer to dismiss
for cause. Rather, the remedy is to order the payment to the employee of full backwages from
the time of his dismissal until the court 􀀵nds that the dismissal was for a just cause. But,
otherwise, his dismissal must be upheld and he should not be reinstated. This is because his
dismissal is ineffectual.

We hold, therefore, that, with respect to Art. 283 of the Labor Code, the employer's failure to
comply with the notice requirement does not constitute a denial of due process but a mere
failure to observe a procedure for the termination of employment which makes the termination of
employment merely ineffectual.

3. There are three reasons why the violation by the employer of the notice requirement
cannot be considered a denial of due process resulting in the nullity of the employee's
dismissal or layoff.

The 􀀵rst is that the Due Process Clause of the Constitution is a limitation on governmental
powers. It does not apply to the exercise of private power, such as the termination of
employment under the Labor Code. This is plain from the text of Art. III, §1 of the Constitution,
viz.: "No person shall be deprived of life, liberty, or property without due process of law. . . ." The
reason is simple: Only the State has authority to take the life, liberty, or property of the
individual. The purpose of the Due Process Clause is to ensure that the exercise of this power is
consistent with what are considered civilized methods.

The second reason is that notice and hearing are required under the Due Process Clause
before the power of organized society are brought to bear upon the individual. This is obviously
not the case of termination of employment under Art. 283. Here the employee is not faced with
an aspect of the adversary system. The purpose for requiring a 30-day written notice before an
employee is laid off is not to afford him an opportunity to be heard on any charge against him,
for there is none. The purpose rather is to give him time to prepare for the eventual loss of his
job and the DOLE an opportunity to determine whether economic causes do exist justifying the
termination of his employment.

The third reason why the notice requirement under Art. 283 can not be considered a
requirement of the Due Process Clause is that the employer cannot really be expected to be
entirely an impartial judge of his own cause. This is also the case in termination of employment
for a just cause under Art. 282 (i.e., serious misconduct or wilful disobedience by the employee
of the lawful orders of the employer, gross and habitual neglect of duties, fraud or willful breach
of trust of the employer, commission of crime against the employer or the latter's immediate
family or duly authorized representatives, or other analogous cases).

ASIAN ALCOHOL CORPORATION , petitioner, vs . NATIONAL LABOR

RELATIONS COMMISSION, FOURTH DIVISION, CEBU CITY and
ERNESTO A. CARIAS, ROBERTO C. MARTINEZ, RAFAEL H. SENDON,
CARLOS A. AMACIO, LEANDRO O. VERAYO and ERENEO S. TORMO ,
respondents.
G.R. No. 131108. March 25, 1999
PUNO, J p:
FACTS:
In September, 1991, the Parsons family, who originally owned the controlling stocks in Asian
Alcohol, were driven by mounting business losses to sell their majority rights to Prior Holdings,
Inc. (hereinafter referred to as Prior Holdings).

The next month, Prior Holdings took over its management and operation. 4
To thwart further losses, Prior Holdings implemented a reorganizational plan and other cost-
saving measures. Some one hundred seventeen (117) employees out of a total workforce of
three hundred sixty (360) were separated. Seventy two (72) of them occupied redundant
positions that were abolished. Of these positions, twenty one (21) were held by union members
and fifty one (51) by non-union members.

The six (6) private respondents are among those union members 5 whose positions were
abolished due to redundancy. Private respondents Carias, Martinez, and Sendon were water
pump tenders; Amacio was a machine shop mechanic; Verayo was a briquetting plant operator
while Tormo was a plant helper under him. They were all assigned at the Repair and
Maintenance Section of the Pulupandan plant. 6

In October, 1992, they received individual notices of termination effective November 30, 1992. 7
They were paid the equivalent of one month salary for every year of service as separation pay,
the money value of their unused sick, vacation, emergency and seniority leave credits,
thirteenth (13th) month pay for the year 1992, medicine allowance, tax refunds, and goodwill
cash bonuses for those with at least ten (10) years of service. 8 All of them executed sworn
releases, waivers and quitclaims. 9 Except for Verayo and Tormo, they all signed sworn
statements of conformity to the company retrenchment program. 10
And except for Martinez, they all tendered letters of resignation. 11

On December 18, 1992, the six (6) private respondents 􀀴led with the NLRC Regional
Arbitration Branch VI, Bacolod City, complaints for illegal dismissal with a prayer for
reinstatement with backwages, moral damages and attorney's fees.
The NLRC rendered the challenged decision. It rejected the evidence proffered by Asian
Alcohol to prove its business reversals. It ruled that the positions of private respondents were
not redundant for the simple reason that they were replaced by casuals

HELD:

The termination of the respondents are valid by reason of retrenchment and redundancy.

The requirements for valid retrenchment which must be proved by clear and
convincing evidence are:

(1) that the retrenchment is reasonably necessary and likely to prevent business losses which,
if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if only
expected, are reasonably imminent as perceived objectively and in good faith by the employer;
24

(2) that the employer served written notice both to the employees and to the Department of
Labor and Employment at least one month prior to the intended date of retrenchment; 25

(3) that the employer pays the retrenched employees separation pay equivalent to one month
pay or at least ½ month pay for every year of service, whichever is higher; 26

(4) that the employer exercises its prerogative to retrench employees in good faith for the
advancement of its interest and not to defeat or circumvent the employees' right to security of
tenure; 27 and

(5) that the employer used fair and reasonable criteria 28 in ascertaining who would be
dismissed and who would be retained among the employees, such as status (i.e., whether they
are temporary, casual, regular or managerial employees), e􀁀ciency, seniority, 29 physical
fitness, age, and financial hardship for certain workers.

The condition of business losses is normally shown by audited 􀀴nancial documents like yearly
balance sheets and pro􀀴t and loss statements as well as annual income tax returns. 31 It is our
ruling that 􀀴nancial statements must be prepared and signed by independent auditors. 32
Unless duly audited, they can be assailed as self-serving documents. 33 But it is not enough
that only the 􀀴nancial statements for the year during which retrenchment was undertaken, are
presented in evidence.

In the instant case, private respondents never contested the veracity of the audited 􀀴nancial
documents proffered by Asian Alcohol before the Executive Labor Arbiter. Neither did they
object to their admissibility. They show that petitioner has accumulated losses amounting to
P306,764,349.00 and showing nary a sign of abating in the near future. The allegation of union
busting is bereft of proof. Union and non-union members were treated alike. The records show
that the positions of 􀀴fty one (51) other non-union members were abolished due to business
losses.

On the other hand, For the implementation of a redundancy program to be valid, the employer
must comply with the following requisites:

(1) written notice served on both the employees and the Department of Labor and Employment
at least one month prior to the intended date of
retrenchment;

(2) payment of separation pay equivalent to at least one month pay or at least one month pay
for every year of service, whichever is higher;

(3) good faith in abolishing the redundant positions; 46 and

(4) fair and reasonable criteria in ascertaining what positions are to be declared redundant and
accordingly abolished.

In the case at bar, private respondents Carias, Martinez and Sendon were water pump tenders.
They tended the water wells of Asian Alcohol located in Ubay, Pulupandan, Negros Occidental.
However, Asian Alcohol did not own the land where the wells stood. It is only leased them. In
1992, the lease contract, which also provided for a right of way leading to the site of the wells,
was terminated. Also, the water from the wells had become salty due to extensive prawn
farming nearby and could no longer be used by Asian Alcohol for its purpose. The wells had to
be closed and needless to say, the services of Carias, Martinez and Sendon had to be
terminated on the twin grounds of redundancy and retrenchment.

Private respondent Verayo was the briquetting plant operator in charge of the coal- 􀀴red boiler.
Private respondent Tormo was one of the three briquetting helpers. To enhance production
efficiency, the new management team shifted to the use of bunker fuel by about seventy percent
(70%) to 􀀴re its boiler. The shift meant substantial fuel cost savings. In the process, however,
the need for a briquetting plant operator ceased as the services of only two (2) helpers were all
that was necessary to attend to the much lesser amount of coal required to run the boiler. Thus,
the position of private respondent Verayo had to be abolished. Of the three (3) briquetting
helpers, Tormo was the oldest, being already 41 years old. The other two, Rudy Javier, Jr. and
Eriberto Songaling, Jr., were younger, being only 28 and 35, respectively. Age, with the physical
strength that comes with it, was particularly taken into consideration by the management team
in deciding whom to separate. Hence, it was private respondent Tormo who was separated from
service. The management choice rested on a rational basis.

Private respondent Amacio was among the ten (10) mechanics who manned the machine shop
at the plant site. At their current production level, the new management found that it was more
cost e􀁀cient to maintain only nine (9) mechanics. In choosing whom to separate among the ten
(10) mechanics, the management examined employment records and reports to determine the
least e􀁀cient among them. It was private respondent Amacio who appeared the least efficient
because of his poor health condition. NELSON A. CULILI, petitioner, vs

NELSON A. CULILI, petitioner, vs . EASTERN TELECOMMUNICATIONS

PHILIPPINES, INC., SALVADOR HIZON (President and Chief
Executive O􀀴cer), EMILIANO JURADO (Chairman of the Board),
VIRGILIO GARCIA (Vice President) and STELLA GARCIA (Assistant
Vice President), respondents
G.R. No. 165381. February 9, 2011
LEONARDO-DE CASTRO, J

FACTS:
.
Petitioner Nelson A. Culili (Culili) was employed by ETPI as a Technician in its
Field Operations Department on January 27, 1981. On December 12, 1996, Culili was promoted
to Senior Technician in the Customer Premises Equipment Management Unit of the Service
Quality Department and his basic salary was increased. 8

As a telecommunications company and an authorized IGF operator, ETPI was required, under
Republic Act No. 7925 and Executive Order No. 109, to establish landlines in Metro Manila and
certain provinces. 9 However, due to interconnection problems with the Philippine Long
Distance Telephone Company (PLDT), poor subscription and cancellation of subscriptions, and
other business di􀀴culties, ETPI was forced to halt its roll out of one hundred twenty-nine
thousand (129,000) landlines already allocated to a number of its employees. 10

In 1998, due to business troubles and losses, ETPI was compelled to implement a Right-Sizing
Program which consisted of two phases: the 􀁅rst phase involved the reduction of ETPI's
workforce to only those employees that were necessary and which ETPI could sustain; the
second phase entailed a company-wide reorganization which would result in the transfer,
merger, absorption or abolition of certain departments of ETPI. 11

As part of the 􀁅rst phase, ETPI, on December 10, 1998, offered to its employees
who had rendered at least 􀁅fteen years of service, the Special Retirement Program, which
consisted of the option to voluntarily retire at an earlier age and a retirement package equivalent
to two and a half (2 1/2) months' salary for every year of service. 12

This offer was initially rejected by the Eastern Telecommunications Employees' Union (ETEU),
ETPI's duly recognized bargaining agent, which threatened to stage a strike.

ETPI explained to ETEU the exact details of the Right-Sizing Program and the Special
Retirement Program and after consultations with ETEU's members, ETEU agreed to the
implementation of both programs. 13 Thus, on February 8, 1999, ETPI re-offered the Special
Retirement Program and the corresponding retirement package to the one hundred two (102)
employees who quali􀁅ed for the program. 14 Of all the employees who qualified to avail of the
program, only Culili rejected the offer.

After the successful implementation of the 􀁅rst phase of the Right-Sizing

Program, ETPI, on March 1, 1999 proceeded with the second phase which necessitated the
abolition, transfer and merger of a number of ETPI's departments. 16

Among the departments abolished was the Service Quality Department. The functions of the
Customer Premises Equipment Management Unit, Culili's unit, were absorbed by the Business
and Consumer Accounts Department. The abolition of the Service Quality Department rendered
the specialized functions of a Senior Technician unnecessary. As a result, Culili's position was
abolished due to redundancy and his functions were absorbed by Andre Andrada, another
employee already with the Business and Consumer Accounts Department.

On March 5, 1999, Culili discovered that his name was omitted in ETPI's New Table of
Organization. Culili, along with three of his co-employees who were similarly situated, wrote
their union president to protest such omission. 18

In a letter dated March 8, 1999, ETPI, through its Assistant Vice President Stella
Garcia, informed Culili of his termination from employment effective April 8, 1999
On February 8, 2000, Culili 􀁅led a complaint against ETPI and its o􀀴cers for illegal dismissal,
unfair labor practice, and money claims before the Labor Arbiter.

LA rendered a decision 􀁅nding ETPI guilty of illegal dismissal and unfair labor practice

NLRC affirmed.

CA partially granted the petition of the respondent. The Court of Appeals found that Culili's
position was validly abolished due to redundancy. Nevertheless, it ruled that Culili was entitled
to payment of backwages.

HELD:

Culili's termination was due to an authorized cause and thus, his dismissal is valid.
However, in view of ETPI's failure to comply with the notice requirements under
the Labor Code, Culili is entitled to nominal damages in addition to his separation
pay.
There is redundancy when the service capability of the workforce is greater than what is
reasonably required to meet the demands of the business enterprise. A position becomes
redundant when it is rendered super􀁌uous by any number of factors such as over-hiring of
workers, decrease in volume of business, or dropping a particular product line or service activity
previously manufactured or undertaken by the enterprise. 36

This Court has been consistent in holding that the determination of whether or not an
employee's services are still needed or sustainable properly belongs to the employer. Provided
there is no violation of law or a showing that the employer was prompted by an arbitrary or
malicious act, the soundness or wisdom of this exercise of business judgment is not subject to
the discretionary review of the Labor Arbiter and the NLRC. 37

However, an employer cannot simply declare that it has become overmanned and dismiss its
employees without producing adequate proof to sustain its claim of redundancy. 38 Among the
requisites of a valid redundancy program are: (1) the good faith of the employer in abolishing
the redundant position; and (2) fair and reasonable criteria in ascertaining what positions are to
be declared redundant, 39 such as but not limited to: preferred status, efficiency, and seniority.
40

This Court also held that the following evidence may be proffered to substantiate redundancy:
the new sta􀀴ng pattern, feasibility studies/proposal on the viability of the newly created
positions, job description and the approval by the management of the restructuring. 41

In the case at bar, ETPI was upfront with its employees about its plan to implement a Right-
Sizing Program. Even in the face of initial opposition from and rejection of the said program by
ETEU, ETPI patiently negotiated with ETEU's o􀀴cers to make them understand ETPI's
business dilemma and its need to reduce its workforce and streamline its organization. This
evidently rules out bad faith on the part of ETPI.

In deciding which positions to retain and which to abolish, ETPI chose on the basis of e􀀴ciency,
economy, versatility and 􀁌exibility. It needed to reduce its workforce to a sustainable level while
maintaining functions necessary to keep it operating. The records show that ETPI had
su􀀴ciently established not only its need to reduce its workforce and streamline its organization,
but also the existence of redundancy in the position of a Senior Technician. ETPI explained how
it failed to meet its business targets and the factors that caused this, and how this necessitated
it to reduce its workforce and streamline its organization. ETPI also submitted its old and new
tables of organization and su􀀴ciently described how limited the functions of the abolished
position of a Senior Technician were and how it decided on whom to absorb these functions
In the new table of organization that the management approved, one hundred twelve (112)
employees were redeployed and nine (9) positions were declared redundant. 44 It is
inconceivable that ETPI would effect a company-wide reorganization of this scale for the mere
purpose of singling out Culili and terminating him. If Culili's position were indeed indispensable
to ETPI, then it would be absurd for ETPI, which was then trying to save its operations, to
abolish that one position which it needed the most. Contrary to Culili's assertions that ETPI
could not do away with his functions as long as it is in the telecommunications industry, ETPI
did not abolish the functions performed by Culili as a Senior Technician. What ETPI did was to
abolish the position itself for being too specialized and limited. The functions of that position
were then added to another employee whose functions were broad enough to absorb the tasks
of a Senior Technician.

ETPI does not deny its failure to provide DOLE with a written notice regarding
Culili's termination. It, however, insists that it has complied with the requirement to serve
a written notice to Culili as evidenced by his admission of having received it and
forwarding it to his union president.

Regardless of how this notice was served on Culili, this Court believes that
ETPI failed to properly notify Culili about his termination. Aside from the manner the
written notice was served, a reading of that notice shows that ETPI failed to properly
inform Culili of the grounds for his termination.

ASIA WORLD PUBLISHING HOUSE, INC., petitioner, vs. HON. BLAS

OPLE, MINISTER OF LABOR & EMPLOYMENT, and CONCEPCION M.
JOAQUIN, respondents

G.R. No. L-56398. July 23, 1987

GUTIERREZ, JR., J
FACTS:

On March 17, 1975, the private respondent was hired by Asiaworld Publishing House,
Inc., as its advertising sales director. As such, she managed and supervised the
petitioner's advertising sales force, prepared advertising sales campaign programs, and
solicited advertisements from local and foreign advertisers.

To enable the private respondent to entertain advertisers in the course of her duties, she
was allowed to establish a credit line with Shiruko Restaurant with the petitioner agreeing
to pay whatever amount was incurred by her for representation purposes. Sometimes, the
private respondent had to entertain clients elsewhere, spending her own money and
petitioner would later reimburse her for such expenses.

Due to the respondent's able management and hard work, Asiaworld's income from sales
advertising increased tremendously. Sometime in 1976, Vicente Pesayco, Jr., the
corporation's president and private respondent's immediate superior, requested Ms.
Joaquin not to go on vacation leave because she was needed to help direct the advertising
sales campaign of Asia Forum, a magazine the petitioner had newly acquired.
Respondent Joaquin acceded to such request.

She did not avail of her vacation leave bene􀁆ts for three times at the request of Pesayco.
Meanwhile, in October of 1976, the respondent was eventually designated to take charge
of the advertising sales work for Asia Forum.

In 1977, the private respondent was appointed Vice President for marketing in a
concurrent capacity and her monthly compensation was increased to P2,300.00.

On May 3, 1978, the petitioner advised the private respondent in writing that he services
would be terminated effective May 16, 1978 because of continued losses and offered to
pay her one (1) month's salary for her more than three (3) years of service.

The private respondent 􀁆led a complaint with the O􀁇ce of the Regional Director,
National Capital Region (NCR), Minister of Labor and Employment for illegal dismissal
and for recovery of unpaid earned and unused vacation leave credits and reimbursement
of representation expenses which she advanced for the petitioner.

The Regional Director promulgated an order directing the reinstatement of the private
respondent.

HELD:

The private respondent was illegally dismissed.

As the Solicitor General correctly stated, there must be fair and reasonable criteria to be
used in selecting employees to be dismissed, such as: (a) less preferred status (e.g.
temporary employee); (b) e􀁇ciency rating, and (c) seniority.

In the case at bar, the petitioner never denied the fact that the private respondent was
performing her job satisfactorily so much so that its income from sales advertising
increased.
Secondly, both the Regional Director and the respondent Minister found that after the
private respondent's termination, the petitioner hired a new employee to take the former's
position. Although the petitioner belies the fact that the person who assumed the private
respondent's job was a new employee, it did not present any employment contract or
other proof to support its allegation. It merely presented BIR forms of the new employee
showing reported income from commissions given by the petitioner and its record of
payment to the employee of sales commission, gasoline allowances, and incentive bonus
purportedly received for the years 1977 and 1978.

Thirdly, the petitioner never controverted the private respondent's allegation that
in all instances when she did not go on vacation leave it was upon the request of the
president of Asiaworld. Clearly, she was prevented from taking the vacation leaves to
which she was entitled.

To argue now that the private respondent should have secured the authority of
her superior and the approval of management to liquidate and convert into cash her
unused vacation leaves for 1975, 1976, and 1977, would be grossly unfair. The
respondent Minister correctly a􀁇rmed the decision of the Regional Director in awarding
the respondent the cash equivalent of her unused vacation leaves. Lib

DANILO O. ALMOITE, petitioner, vs. PACIFIC ARCHITECTS &

ENGINEERS, INC., RESOURCE MANAGEMENT INTERNATIONAL INC.
AND/OR DONALD A. JONES AND THE NATIONAL LABOR RELATIONS
COMMISSION, respondents.
G.R. No. 73680. July 10, 1986
CRUZ, J : p

FACTS:

The private respondent is a firm hired by the Ministry of Public Works and Highways to
oversee various government construction projects. On April 25, 1983, it employed the
petitioner to supervise construction of the Zamboanga Area Shop Project, at P4,000.00 a
month.

On August 4, 1983, he was given a 50% raise in salary and assigned a wider area of
supervision, including the Zamboanga City area. On August 24, 1983, a new resident
engineer was assigned to the Zamboanga Area Shop Project and asked to report to the
petitioner for instruction and training. On June 26, 1984, the services of this engineer
were terminated and taken over by the petitioner.

On July 30, 1984, owing to complaints of the Ministry of Public Works and Highways of
certain construction defects in the said project, the petitioner was relieved as senior
resident engineer thereof. On August 3, 1984, he explained his side regarding the said
defects. On August 8, 1984, he filed a report dated August 2, 1984, concerning his
findings on the construction defects.
On August 15, 1984, he was formally notified of the termination of his services effective
August 31, 1984. 2 The petitioner then filed a complaint for illegal dismissal which was
decided against him by the
labor arbiter and later by the NLRC.

HELD:
1. Petitioner did not prove that his dismissal is illegal. By contrast, the private
respondent has satisfactorily established the legal basis for his removal, to wit, loss
of confidence in him because of incompetence and dishonesty, as found by the labor
arbiter and affirmed by the National Labor Relations Commission.

The factual findings made by the labor authorities support the claim of loss
of confidence by the private respondent in the petitioner's competence and integrity. This
is a sufficient ground for his dismissal.

As for retrenchment, which is another justification raised by the private respondent, it is

settled that where there is need for reduction of the work force, management has the right
to choose whom to lay off, depending on the work still required to be done and the
qualities of the workers to be retained. 16 The project having been practically completed,
and considering the loss of confidence in the petitioner, his dismissal for economic
reasons by the private respondent cannot be declared unlawful.

2.The petitioner was not denied due process.

As early as December 17, 1984, the labor arbiter had given the parties the
opportunity to file their respective position papers not later than January 7, 1985, or
within an initial period of 21 days. On January 7, 1985, the labor arbiter, acting on the
manifestation of the parties, granted the private respondent an additional five days to file
its position paper and the petitioner five days to file his reply, although at that time he had
not even filed his position paper.

On January 22, 1985, the parties agreed to submit simultaneous position papers not later
than February 10, 1985, to serve as the basis for the resolution of the case. On February
11, 1985, the private respondent asked for a 10- day extension and on February 12, 1985,
the petitioner asked for a 15-day extension. The private respondent filed its position paper
on February 22, 1985, but on February 26, 1985, the petitioner asked for still another
extension, of five days, until March 4, 1985. The petitioner thus had the chance to present
his side from December 18, 1984 to March 4, 1985, 4 or during a period of more than
two-and-a-half months.
The petitioner did not meet even the final deadline on March 4, 1985. In the end, he did
file his position paper, but only on March 14, 1985, or ten days later. 5 He was already ten
days late.

The petitioner is aware of all these and yet has the temerity now to claim that he has been
deprived of the right to be heard. When it is considered that his position paper, although
filed out of time, was nevertheless included in the records elevated to the National Labor
Relations Commission, to which he had submitted his memorandum of appeal dated
April 2, 1985, and his motion for reconsideration dated October 7, 1985, it is difficult to
understand how he can honestly claim that he was not given his day in court.

It is not denial of the right to be heard but denial of the opportunity to be heard that
constitutes violation of due process of law. 6 In this case, the petitioner was given not
only the opportunity to be heard, which he forfeited in the proceedings before the labor
arbiter, but also the right to be heard, which he actually exercised through his various
representations before the NLRC.

LOPEZ SUGAR CORPORATION, petitioner, vs. FEDERATION OF FREE

WORKERS, PHILIPPINE LABOR UNION ASSOCIATION (PLUA-NACUSIP)
and NATIONAL LABOR RELATIONS COMMISSION, respondents.

G.R. Nos. 75700-01. August 30, 1990

FELICIANO, J

FACTS:
The petitioner, allegedly to prevent losses due to major economic problems, and
exercising its privilege under Article XI, Section 2 of its 1975 - 1977 CBA entered
into between petitioner and private respondent Philippine Labor Union Association
("PLUA- NACUSIP"), caused the retrenchment and retirement of a number of its
employees. Thus, on 3

OnJanuary 1980, petitioner filed with the Bacolod District Office of the then Ministry
of Labor and Employment ("MOLE") a combined report on retirement and application
for clearance to retrench, dated 28 December 1979, affecting eighty-six (86) of its
employees. Of these eighty- six (86) employees, fifty-nine (59) were retired effective
1 January 1980 and twenty-seven (27) were to be retrenched effective 16 January
1980 "in order to prevent losses."

Also, on 3 January 1980, private respondent Federation of Free Workers ("FFW"), as

the certified bargaining agent of the rank-and-file employees of petitioner, filed with
the Bacolod District Office of the MOLE a complaint dated
On 27 December 1979 for unfair labor practices and recovery of union dues.
.
Petitioner denied having hired casuals to replace those it had retired or retrenched. It
explained that the announcement calling for 110 workers to report to its personnel
office was only for the purpose of organizing a pool of extra workers which could be
tapped whenever there were temporary vacancies by reason of leaves of absence of
regular workers. On 22 January 1980, another report on retirement affecting an
additional twenty-five (25) employees effective 1 February 1980 was filed by
petitioner.
LA: LA denied petitioner's application for clearance to retrench its employees on the
ground that for retrenchment to be valid, the employer's losses must be serious, actual
and real and must be amply supported by sufficient and convincing evidence.
.
NLRC: The NLRC, finding no justifiable reason for disturbing the decision of the
Labor Arbiter, affirmed the said

HELD:

Petitioner's application to retrench some of its employees is not proper

In its ordinary connotation, the phrase "to prevent losses" means that retrenchment or
termination of the services of some employees is authorized to be undertaken by the
employer sometime before the losses anticipated are actually sustained or realized. It
is not, in other words, the intention of the lawmaker to compel the employer to stay
his hand and keep all his employees until sometime after losses shall have in fact
materialized; if such an intent were expressly written into the law, that law may well
be vulnerable to constitutional attack as taking property from one man to give to
another. At the other end of the spectrum, it seems equally clear that not every
asserted possibility of loss is sufficient legal warrant for reduction of personnel. In the
nature of things, the possibility of incurring losses is constantly present, in
greater or lesser degree, in the carrying on of business operations, since some, indeed
many, of the factors which impact upon the profitability or viability of such operations
may be substantially outside the control of the employer. Thus, the difficult question
is determination of when, or under what circumstances, the employer becomes legally
privileged to retrench
and reduce the number of his employees. (See Art. 283, LC)

Firstly, the losses expected should be substantial and not merely de minimis in extent.
If the loss purportedly sought to be forestalled by retrenchment is clearly shown to be
insubstantial and inconsequential in character, the bonafide nature of the retrenchment
would appear to be seriously in question.

Secondly, the substantial loss apprehended must be reasonably imminent, as such

imminence can be perceived objectively and in good faith by the employer.

There should, in other words, be a certain degree of urgency for the retrenchment,
which is after all a drastic recourse with serious consequences for the livelihood of the
employees retired or otherwise laid-off. Because of the consequential nature of
retrenchment, it must,thirdly, be reasonably necessary and likely to effectively prevent
the expected losses. The
employer should have taken other measures prior or parallel to retrenchment to
forestall losses, i.e., cut other costs than labor costs. An employer who, for instance,
lays off substantial numbers of workers while continuing to dispense fat executive
bonuses and perquisites or so- called "golden parachutes", can scarcely claim to be
retrenching in good faith to avoid losses.

To impart operational meaning to the constitutional policy of providing "full

protection" to labor, the employer's prerogative to bring down labor costs by
retrenching must be exercised essentially as a measure of last resort, after less drastic
means -- e.g., reduction of both management and rank-and-file bonuses and salaries,
going on reduced time, improving manufacturing efficiencies, trimming of marketing
and advertising costs, etc. -- have been tried and found wanting.

Lastly, alleged losses if already realized, and the expected imminent losses sought to
be forestalled, must be proved by sufficient and convincing evidence. The reason for
requiring this quantum of proof is readily apparent: any less exacting standard of
proof would render too easy the abuse of this ground for termination of services of
employees.

Whether or not an employer would imminently suffer serious or substantial losses for
economic reasons is essentially a question of fact for the Labor Arbiter and the NLRC
to determine. The LA found no sufficient and convincing evidence to sustain
petitioner's essential contention that it was acting in order to prevent substantial and
serious losses. No proof of actual declining gross and net revenues was submitted. No
audited financial statements showing the financial condition of petitioner corporation
during the above mentioned crop years were submitted. Since financial statements
audited by independent external auditors constitute the normal method of proof of the
profit and loss performance of a company, it is not easy to understand why petitioner
should have failed to submit such financial statements.
Moreover, while petitioner made passing reference to cost reduction measures it had
allegedly undertaken, it was, once more, a fairly conspicuous failure to specify the
cost-reduction measures actually undertaken in good faith before resorting to
retrenchment.

Upon the other hand, it appears from the record that petitioner, after reducing its
work force, advised 110 casual workers to register with the company personnel officer
as extra workers. Petitioner, as earlier noted, argued that it did not actually hire casual
workers but that it merely organize[d] a pool of 'extra workers' from which workers
could be drawn whenever vacancies occurred by reason of regular workers going on
leave of absence. Both the Labor Arbiter and the NLRC did not accord much credit to
petitioner's explanation but petitioner has not shown that the Labor
Arbiter and the NLRC were merely being arbitrary and capricious in their evaluation.

We note also that petitioner did not claim that the retrenched and retired employees
were brought into the "pool of extra workers" rather than new casual workers. Upon
the other hand, we find valid the retirement of those employees who were retired by
petitioner pursuant to the applicable provisions of the CBA.

FE S. SEBUGUERO, CARLOS ONG, NENE MANAOG, JUANITO

CUSTODIO, CRISANTA LACSAM, SATURNINO GURAL, WILMA
BALDERA, LEONILA VALDEZ, FATIMA POTESTAD, EVANGELINE
AGNADO, RESTITUTO GLORIOSO, JANESE DE LOS REYES, RODOLFO
SANCHEZ, WILMA ORBELLO, DAISY PASCUA, and ALEX MASAYA ,
petitioners, v s . NATIONAL LABOR RELATIONS COMMISSION, G.T.I.
SPORTSWEAR CORPORATION and/or BENEDICTO YUJUICO ,
respondents.

G.R. No. 115394. September 27, 1995

DAVIDE, JR.,
FACTS: