Capitol Medical Center, Dr. Clemente v Dr.

Meris

GR 155098, September 16, 2005

Carpio Morales, J.:

FACTS:

On January 16, 1974, Capitol Medical Center, Inc. hired Dr. Cesar Meris to be in charge of its
Industrial Service Unit at a monthly salary of P10,270.00. Dr. Meris performed dual functions: providing
medical services to Capitols more than 500 employees and health workers and other employees having
retainer contracts.

On March 31, 1992, Dr. Meris receive a notice from Capitol’s President and Chairman of the
board, Dr. Thelma Navarette-Clemente, advising him of the management’s decision to close and abolish
the ISU and his termination as Chief; effective April 30, 1992.

On September 7, 1992, Dr. Meris filed a complaint against Capitol and Dr. Clemente for illegal
dismissal and reinstate with back-wages, and moral and exemplary damages. The Labor Arbiter ruled in
favor of Capitol and Dr. Clemente and held that the abolition of ISU was valid and lawful and dismissed
the complaint.

On appeal by Dr. Meris, the NLRC modified the decision and held that Capitol had the right to
close ISU even if it was not suffering losses; and that Dr. Meris did not retire and ordered separation pay
under Article 283.

Dr. Meris elevated the case to the Court of Appeals (CA) via a petition for review, and the CA
held that ISU was not abolished but changed hands from Dr. Meris to Dr. Clemente and that there was a
lapse in the termination process and there was no written notice to the Department of Labor (DOLE) of
the ISU’s abolishment, and ruled that Capitol failed to comply with both the procedural and substantive
process in order for the termination to be valid.

The CA rendered a decision, declaring Dr. Meris’ termination illegal ordering Capitol to pay him,
including back-wages, separation pay, moral and exemplary damages, attorney’s fees.

Hence the current petition for review.

ISSUES:

1. Whether or not Dr. Meris was illegally terminated?

2. Whether or not the ISU was validly abolished?

RULING:
1. Yes. There was no valid or justified cause other than a strained employer-employee relationship.
There was neither a notice nor even a hearing held for Dr. Meris to defend himself, thus, Dr. Meris was
illegally dismissed from his employment.

2. No. The right to close an establishment may be justified on the grounds of business losses but cannot
be done to suit the whims of the employer. Capitol failed to sufficiently prove its good faith in closing
the ISU, in Dr. Clemente’s letter, it was due to extinct demands for direct medical service; yet records
show that there was no extinct demands as there was an increase in client companies demanding health
care services for their employees from 11 to 18 from 1986 to 1991.

DISPOSITION:

In the courts decision dated September 16, 2005, the decision of the CA is affirmed with modification,
costs against Capitol.