Republic of the
Supreme Court
THIRD DIVISION
RAYCOR AIRCONTROL G.R. NO. 158132
SYSTEMS,
INC.,
Petitioner,
Present:
YNARES-SANTIAGO, J.,
Chairperson,
- versus - AUSTRIA-MARTINEZ,
CHICO-NAZARIO, and
NACHURA,
JJ.
MARIO
SAN PEDRO and
NATIONAL
LABOR RELATIONS
COMMISSION, Promulgated:
Respondents. July 4, 2007
x-
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D E C I S I O N
AUSTRIA-MARTINEZ,
J.:
Assailed in the Petition for Review[1]
before this Court are the
The facts are as stated by the CA.
Raycor Aircontrol
Systems, Inc. (petitioner) hired Mario San Pedro (respondent) as tinsmith
operator subject to the condition that his employment shall commence “on August
24, 1995 and shall be effective only for the duration of the contract at Uniwide Las Piñas after
completion of which on November 18, 1995, it automatically terminates without
necessity of further notice.”[5] As
the Uniwide Las Piñas
project (first project) lasted for one year, petitioner extended respondent's
contract beyond
In a Memorandum[7]
dated
Respondent filed a Complaint[8]
for illegal dismissal with damages. The Labor Arbiter (LA) rendered a Decision
dated
WHEREFORE, premises considered,
this Office finds and so rule that the complainant was illegally dismissed by
the respondent without just cuase and without due
process of law on P105,534.00 (P198.00/day x 26 days x
20.5 mos.).
Other
claims are dismissed for lack of merit.
SO
ORDERED.[9]
On appeal by petitioner, the National
Labor Relations Commission (NLRC) issued a Resolution[10]
dated September 18, 2000, affirming the July 15, 1999 LA Decision, and a Resolution[11]
dated December 15, 2000, denying petitioner's Motion for Reconsideration.
Petitioner filed a Petition for Certiorari
which the CA denied in the
Hence, the present recourse of
petitioner on the sole issue:
Whether or not the Court of Appeals committed grave error in ruling that private respondent was illegally dismissed.[12]
The Court denies the petition for lack of
merit.
The CA, as well as the NLRC and LA, considered
respondent a regular employee of petitioner because of the existence of a
reasonable connection between the former's regular
activity in relation to the latter's business. They based this finding on the uncontroverted fact that petitioner repeatedly rehired
respondent in five successive projects for 23 continuous months - nine months
in the first project, four months in the second, four months in the third, four
months in the fourth, and two months in the fifth - which repeated rehiring is
indicative of the desirability and indispensability of the activity performed
by respondent to the usual business or trade of petitioner. They held that, being a regular employee
entitled to security of tenure, respondent's dismissal
was illegal for lack of a just or authorized cause and due process. [13]
Petitioner denies that it dismissed
respondent, insisting that the latter’s
services were terminated for he was a mere project employee whose employment
contract expired when the fifth project to which he was assigned was
scrapped due to non-payment by the
project owner, Uniwide Holdings, Inc. (Uniwide).[14] It argues that the rehiring of respondent for
23 months did not make him a regular employee, given the following nature of
its business:
Petitioner
is engaged in the installation of air conditioning units in high and low rise
building[s]. Petitioner gets business from architects/engineers who invite petitioner
to participate in a public bidding on a certain project. If the project is
awarded to it, that will only be the time when it
mobilizes and engages the services of workers to install the air conditioning
units in the building. Petititioner is not a
manufacturing or trading company. Workers are hired according to their skills.
It is for this reason that private respondent was hired as tinsmith operator.[15]
The concurrent findings of the CA and the labor
tribunals on the existence of an employer-employee
relationship between the parties in the present case are factual in nature and are
accorded due deference[16] for being well-founded.
The issue of regularization of employees had already
beset petitioner, as early as the year 1996, in Raycor
Aircontrol Systems, Inc. v. National Labor Relations
Commission.[17] In
said case, the Court resolved the issue whether several individuals it hired
and rehired to work as tinsmith, leadman, aircon
mechanic, installer, welder, and painter in its various projects became regular
employees after rendering service for more than one year, with some of them
serving for two to six years. The Court
recognized that petitioner was engaged in a peculiar business which constrained
it not to maintain a regular work force. The Court observed:
It
is not so much that this Court cannot appreciate petitioner's contentions about
the nature of its business and its inability to maintain a large workforce on
its permanent payroll. Private
respondents have admitted that petitioner is engaged only in the installation
(not manufacture) of aircon systems or units in
buildings, and since such a line of business would obviously be highly (if not
wholly) dependent on the availability of buildings or projects requiring such
installation services, which factor no businessman, no matter how savvy, can
accurately forecast from year to year, it can be easily surmised that
petitioner, aware that its revenues and income would be unpredictable, would
always try to keep its overhead costs to a minimum, and would naturally want to
engage workers on a per-project or per-building basis only, retaining very few
employees (if any) on its permanent payroll.
It would also have been more than glad if its employees found other
employment elsewhere, in between projects.
To our mind, it appears rather unlikely that petitioner would keep
private respondents -- all fifteen of them -- continuously on its permanent
payroll for, say, ten or twelve years, knowing fully well that there would be
periods (of uncertain duration) when no project can be had. To illustrate, let us assume that private
respondents (who were each making about P118.00 to P119.50 per
day in 1991) were paid only P100.00 per day. If the fifteen were, as they claimed, regular
employees entitled to their wages regardless of whether or not they were
assigned to work on any project, the overhead for their salaries alone --
computed at P100.00/day for 30 days in a month -- would come to no less
than P45,000.00 a month, or P540,000.00
a year, not counting 13th month pay, Christmas bonus, SSS/Medicare premium
payments, sick leaves and service incentives leaves, and so forth. Even if petitioner may have been able to
afford such overhead costs, it certainly does not make business sense for it or
anyone else to do so, and is in every sense contrary to human nature, not to
mention common business practice. On this score alone, we believe
that petitioner could have made out a strong case. x x x (Emphasis ours)[18]
Nonetheless, the Court ruled against petitioner because the
latter failed to adduce
clear and convincing evidence that the projects to which its
workers were assigned were of limited scope and duration and that, at the time
of hiring, said workers knowingly accepted the restrictions on their employment,
thus:
For that matter, it seems
self-evident to this Court that, even if the contracts presented by petitioner
had been signed by the employees concerned, still, they would not constitute
conclusive proof of petitioner's claim.
After all, in the usual scheme of things, contract terms are normally
dictated by the employer and simply acceded to and accepted by the employee,
who may be desperate for work and therefore in no position to bargain freely or
negotiate terms to his liking.
In any event, petitioner in this
case undoubtedly could have presented additional evidence to buttress its
claim. For instance, petitioner
could have presented copies of its contracts with its clients, to show the
time, duration and scope of past installation projects. The data from these contracts could then have
been correlated to the data which could be found in petitioner's payroll
records for, let us say, the past three years or so, to show that private
respondents had been working intermittently as and when they were assigned to
said projects, and that their compensation had been computed on the basis of
such work. But petitioner did not
produce such additional evidence, and we find that it failed to discharge its
burden of proof.[19]
(Emphasis ours)
The
same fate befalls petitioner once again.
Other
than the 1995 employment contract it issued to respondent, which contract we
have held to be insufficient evidence of project employment,[20]
petitioner utterly failed to
adduce additional evidence which would have convinced us that: 1) each time it hired and rehired respondent,
it intended for him to accomplish specific tasks in the particular project to
which he was assigned; 2) it intended for respondent to carry out these
specific tasks in accordance with the project plan it had drawn out and within
the limited time it had to complete the same; and 3) it made such restrictions
on each engagement known to respondent, and the same were freely accepted by
him. Petitioner's failure to present
such evidence is inexcusable, given its access to such documents as project
contracts, payment remittances, employment records and payslips.[21] Such lapse is dismaying, considering that in Raycor v. National Labor Relations Commission,
the Court had signalled to petitioner that, given
the peculiar nature of its business, it had a strong case against the regularization
of some of its workers. The Court even enumerated the kind of evidence petitioner
should present
to establish the project employment of its workers.
Evidently,
petitioner did not heed the Court’s observations in Raycor
v. National Labor Relations Commission, leaving us no option but to declare that it
failed, yet again, to discharge its burden of proving that respondent was a
project employee.
Consequently,
the Court affirms the finding of the CA and the labor tribunals that respondent
became a regular employee after 23 months of rehiring.
The
next question then is whether respondent was validly dismissed on
Petitioner
claims that respondent was laid off due to adverse business conditions it
suffered at that time, attributing these to the Asian currency crisis, in
general, and to the rehabilitation of Uniwide, in
particular.[22]
The
CA rejected such pretext and held:
In the instant case, Raycor merely alleged that its business was affected by the Asian currency. It could not also rely on the financial reverses suffered by its client, Uniwide Holdings, Inc. without adducing sufficient and convincing proof that by reason of such economic reverses, it suffered imminent substantial losses and retrenchment was the most reasonable and effective recourse to prevent the expected losses. In short, Raycor could not establish exculpation from liability in the illegal dismissal of San Pedro by invoking another company's economic reverses.[23]
The CA is correct.
To justify
termination of employment under Article 283[24]
of the Labor Code, the employer must prove compliance with the following
requirements: (a) a written notice must be served on the
employees, and the Department of Labor and Employment (DOLE) at least one month
before the intended cessation of business;[25]
and (b) the cessation of business
must be bona fide in character.[26]
It
is readily apparent that petitioner did not comply with any of the foregoing
requirements. There is no evidence that it
complied with the one-month notice requirement. While petitioner claims that it
issued to respondent an October 30, 1997 Memorandum of termination of
employment, it failed to prove that such document was ever served upon respondent
and the DOLE. Moreover, the notice is
less than one month, for the memorandum states that respondent’s contract of
employment is to expire on November 3, 1997, or only three days later from the date
of the Memorandum.
Worse,
there is no evidence at all that petitioner dismissed respondent because it
actually ceased or suspended business operations, or
it resorted to the dismissal of
respondent and other employees to stave off
cessation or suspension of its business.
The best evidence of reversal of fortune is audited financial and income
statements which detail the extent and pattern of business losses suffered by the employer.[27] Petitioner did not present any such document
where it could have demonstrated how the 1997 Asian financial currency crisis
or the rehabilitation of Uniwide adversely and
significantly affected the viability of its business.
Again,
for failure of petitioner to discharge its burden of proving business reverses
as a ground for the lay-off of respondent, we uphold the CA in ruling that the
latter's dismissal was illegal.
WHEREFORE,
the petition is DENIED.
Costs against petitioner.
SO ORDERED.
MA. ALICIA AUSTRIA-MARTINEZ
Associate
Justice
WE CONCUR:
CONSUELO
YNARES-SANTIAGO
Associate Justice
Chairperson
MINITA V.
Associate Justice
Associate Justice
ATTESTATION
I attest that the conclusions in the
above Decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Court’s Division.
CONSUELO
YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division
C
E R T I F I C A T I O N
Pursuant to Section 13, Article VIII
of the Constitution, and the Division Chairperson’s attestation, it is hereby
certified that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
REYNATO S. PUNO
Chief Justice
[1] Under Rule 45 of the Rules of Court.
[2] Penned by Associate Justice Eriberto U. Rosario, Jr., with the concurrence of Associate Justices Buenaventura J. Guerrero and Edgardo P. Cruz; rollo, p. 26.
[3] Penned by Associate Justice Buenaventura J. Guerrero with the concurrence of Associate Justices Martin S. Villarama, Jr. and Edgardo P. Cruz; id. at 36.
[4] Entitled “Raycor Aircontrol Systems, Inc., Petitioner, v. National Labor Relations Commission and Mario San Pedro, Respondents.”
[5] Contract of Employment, CA rollo, p. 95.
[6] CA Decision, rollo, p. 27.
[7] CA rollo, p. 32.
[8]
[9]
[10]
[11]
[12] Petition, rollo, p. 14.
[13] CA Decision, rollo, pp. 30-31.
[14]
[15]
[16] San Miguel
Corporation v. SMC, G.R. No. 147566,
[17] 330 Phil. 306 (1996).
[18]
[19]
[20]
[21] Poseidon
Fishing v. National Labor Relations Commission, G.R. No. 168052,
[22] Rollo, p. 19.
[23]
[24] 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 Department of Labor and Employment at least one (1) month
before the intended date thereof. x x x In case of
retrenchment to prevent losses and in cases of closures or cessation of
operations of establishment or undertaking not due to serious business losses
or financial reverses, the separation pay shall be equivalent to one (1) month
pay or to 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.
[25] Espina v. National Labor Relations Commission, G.R. No. 164582,
[26] Galaxie
Steel Workers
[27] Filipinas Systems, Inc. v. Gatlabayan, G.R. No. 167959, April 19, 2006, 487 SCRA
673, 692; J.A.T. General Services v. National
Labor Relations Commission, 465 Phil. 785, 795 (2004).