05. GSWU-NAFLU-KMU vs. NLRC
GR No. 165757
17 October 2006
Topic: Authorized Causes
Doctrine:
Art. 283. Closure of establishment and reduction of
personnel. The employer may also terminate the
employment of any employee due to the installation of labor
saving devices, redundancy, retrenchment to prevent losses
or the closing or cessation of operation of the establishment
or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written
notice on the workers and the Ministry of Labor and
Employment at least one (1) month before the intended date
thereof. In case of termination due to the installation of labor
saving devices or redundancy, the worker affected thereby
shall be entitled to a separation pay equivalent to at least his
one (1) month pay or to at least one (1) month pay for every
year of service , whichever is higher. In case of retrenchment
to prevent losses and in cases of closures or cessation of
operations of establishment or under taking not due to
serious business losses or financial reverses, the separation
pay shall be equivalent to one (1) month pay or at least one-
half (1/2) month pay for every year of service, whichever is
higher. A fraction of at least six (6) months shall be
considered one (1) whole year.
FACTS:
• Galaxie Steel Corp was engaged in the business of
manufacturing & sale of re-bars and steel billets.
• However, due to serious business losses equal to
about P127M, Galaxie decided to close down its business
operations.
• Thru a written notice filed on 30 July 1999, it
informed the DOLE of its intended closure and the
termination of its EEs effective on 31 Aug. 1999.
• It also posted notice of its closure on its corporate
bulletin board.
• In response, the Union filed a suit for illegal
dismissal, ULP and money claims against Galaxie.
• The LA held that the closure of Galaxie’s business
was valid, but granted the EEs their money claims. The NLRC
affirmed but removed the monetary awards.
• The Union argued that the real reason for the corp’s
closure of business was because of its anti-union stance, and
not because of serious business losses.
ISSUE/S:
W/N Galaxie was guilty of ULP. – No. Authorized cause was
present in this case.
W/N there was a proper notice given to employee. – No.
RULING:
1. Since the corp validly evidenced that it was experiencing
serious business losses, while the Union failed to present
concrete evid contrary to such, the latter’s claim of ULP could
not prosper. ULP refers to acts that violate the worker’s right
to be organized and non-obervance of the CBA. If not, the act
isn’t deemed as an ULP.
Under Art. 283 of the LC, valid causes of the termination
pertain to: (a) installation of labor saving devices; (b)
redundancy; (c) retrenchment to prevent losses; and (d) the
closing /cessation of operations of the
establishment/undertaking due to business losses. Hence,
the termination of the EEs herein was for cause.
2. With regard to the notice requirement, the Labor Arbiter
found, and it was upheld by the NLRC and the Court of
Appeals, that the written notice of closure or cessation of
Galaxies business operations was posted on the company
bulletin board one month prior to its effectivity. The mere
posting on the company bulletin board does not, however,
meet the requirement under Article 283 of serving a written
notice on the workers. The purpose of the written notice is to
inform the employees of the specific date of termination or
closure of business operations, and must be served upon
them at least one month before the date of effectivity to give
them sufficient time to make the necessary arrangements.In
order to meet the foregoing purpose, service of the written
notice must be made individually upon each and every
employee of the company.
In Business Services of the Future Today, Inc. v. Court of
Appeals, which reiterated the ruling in Agabon v. National
Labor Relations Commission this Court held that where the
dismissal is for an authorized cause, the lack of statutory
due process should not nullify the dismissal, or render it
illegal, or ineffectual. However, the employer should
indemnify the employee, in the form of nominal damages,
for the violation of his right to statutory due process.
WHEREFORE, the assailed Decision dated March 26,
2004 and Resolution dated October 19, 2004 issued by the
Court of Appeals in CA-G.R. SP No. 68669 are AFFIRMED with
the MODIFICATION that respondent Galaxie Steel
Corporation is ORDERED to PAY each of the individual
petitioners the amount of P20,000.00 as nominal damages for
non-compliance with statutory due process.
SO ORDERED.