Republic of the
Supreme Court
FRANCIS RAY
TALAM,
Petitioner, - versus - NATIONAL LABOR RELATIONS COMMISSION, 4th DIVISION, CEBU
CITY, THE SOFTWARE FACTORY, INC. and/or TERESA GRAPILON, Office Manager, and
WOLFGANG HERMLE, Chief Executive Officer,
Respondents. -- - |
G.R. No. 175040
Present: CARPIO, J., Chairperson,
BRION, ABAD, and PEREZ, JJ. Promulgated: April
6, 2010 |
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D E
C I S
I O N
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BRION, J.: |
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We resolve the present Petition for Review on Certiorari[1] filed by Francis Ray Talam (Talam) seeking to set aside the Decision[2] of the Nineteenth Division of the Court of Appeals (CA) dated July 31, 2006 and its Resolution[3] dated September 29, 2006 rendered in CA-G.R.-SP No. 01760.[4]
THE ANTECEDENTS
The facts of the case are
summarized below.
The respondent, The
Software Factory, Inc. (TSFI), is a domestic corporation engaged in
providing information technology and computer consultancy to the public. It holds office in
In the latter part of
2001 and in 2002, TSFI suffered financial reverses. Its external financial auditor advised that it
cut on its payroll expenses which accounted for 41% of its total operating
costs.[5] TSFI heeded the advice and decided to retrench some of its employees,
using as basis its employees' service income and contribution margins to the
company. TSFI found that Talam was
one of two employees with the least or with no income contribution for the year
2002. Consequently, respondents Teresa
Grapilon (Grapilon), TSFI's Office Manager, and Wolfgang Hermle (Hermle),
Chief Executive Officer, verbally informed Talam that his services with the
company would be terminated thirty (30) days after September 27, 2002. Thereafter, TSFI notified Talam in writing
of the termination of his employment.[6] The notice was dated October 1, 2002, but
received by Talam on October 4, 2002.[7] On
November 6, 2002, or after a month, Talam signed a Release and Quitclaim[8] in
consideration and receipt of P89,954.00 in compensation and other
benefits.[9]
On November 29, 2002,
Talam questioned the legality of his separation from the service through a
complaint for illegal dismissal and illegal deduction, with claims for service
incentive leave pay, damages and attorney's fees against TSFI, Grapilon and
Hermle, before the National Labor Relations Commission (NLRC) in
THE COMPULSORY ARBITRATION PROCEEDINGS
Talam alleged before the
Labor Arbiter that his dismissal from employment was illegal because the
company did not comply with the requisites under Article 283 of the Labor Code
for a valid retrenchment action.
On the other hand, TSFI
argued that Talam had been validly dismissed.
It contended that retrenchment is one of the authorized causes under the
Labor Code for termination of employment, and sought the dismissal of the
complaint on the ground of improper venue; Talam should have filed the
complaint in the City of
On October 28, 2003,
Executive Labor Arbiter Reynoso A. Belarmino rendered a decision[10]
declaring Talam's dismissal illegal and directing TSFI to pay Talam separation
benefits, backwages and 13th month pay in the aggregate amount of P260,560.00. The arbiter held that while it is TSFI's
right to reduce its workforce to prevent losses, it failed to present evidence
that the company adopted a retrenchment program and there was also no evidence
showing clearly that Talam should be retrenched. He disregarded the release and quitclaim
executed by Talam declaring that he was compelled to accept the monetary
consideration behind it out of necessity.
He however ruled out reinstatement as “the parties can no longer work
together in mutual trust.”
TSFI appealed to the
NLRC. In a Decision dated February 21,
2005,[11] the
NLRC Fourth Division set aside the labor arbiter's ruling and dismissed Talam's
complaint without prejudice, for improper venue. It ruled that Talam should have filed the
complaint with the NLRC-Regional Arbitration Branch in the National Capital
Region which has jurisdiction over the workplace in
TSFI moved for
reconsideration of the NLRC resolution which was partially granted in another
resolution dated September 27, 2005.[13] This time, the NLRC deleted the award of
backwages and 13th month pay, but ordered the company to pay Talam P30,000.00
as nominal damages for violating his right to procedural due process, citing Jaka Food Processing Corp. v.
Darwin Pacot, et al.,[14] where
the Court held that although the complainant's dismissal was based on an
authorized cause, nominal damages were awarded because of the respondent's
failure to comply with the notice requirement.
The NLRC ruled that the non-observance of the notice requirement will
not invalidate Talam's separation on the ground of retrenchment; thus, the
award of full backwages was not proper.
Talam moved for reconsideration, but the NLRC
denied the motion on January 31, 2006.[15] Talam
thereafter sought relief from the CA through a petition for certiorari
under Rule 65 of the Rules of Court,[16]
charging the NLRC with grave abuse of discretion for its resolutions of
September 27, 2005 and January 31, 2006.
In particular, Talam questioned the deletion of the award to him of
backwages and 13th month pay.
THE CA DECISION
In its decision rendered
on July 31, 2006,[17] the CA
denied the petition for lack of merit.
It found Talam's separation from the service by reason of retrenchment
to be valid. However, while it acknowledged that TSFI was suffering from
financial losses as confirmed by the report of independent external auditor
Leah A. Villanueva,[18] it
ruled that the company failed to give Talam the notice required by law.[19] It
noted that on September 27, 2002, TSFI, through Grapilon and Hermle, verbally
advised Talam of his separation from the service due to retrenchment. On October 1, 2002,[20] TSFI
sent Talam and the Department of Labor and Employment (DOLE) separate
notices with different effectivity dates of Talam's termination of
employment: the notice to Talam was to
be effective October 27, 2002, while the notice to DOLE was effective October
16, 2002. The CA also noted that Talam's
employment contract provided for two month's notice.[21]
The CA opined that although
the law mandated that the written notice of termination of employment for
authorized causes should be served at least one month before the effective date
of the termination, the employment contract should prevail because it does not
violate the minimum requirement under Article 283 of the Labor Code. Even if Article 283 were to be followed, the
CA added, TSFI still failed to comply with the notice requirement considering
that the notices to Talam and to DOLE were for less than thirty (30) days.
Although Talam's
dismissal was due to a cause authorized by law, the CA deemed TSFI liable for
nominal damages for violation of Talam's right to procedural due process. The appellate court affirmed with
modification the assailed NLRC decision. It increased to P50,000.00 the
nominal damages of P30,000.00 awarded by the NLRC. The CA found support in the Court's ruling in
the Jaka Food Processing case,[22] the
same ruling relied upon by the NLRC, for its award of nominal damages. Specifically, the CA found appropriate the
Court's pronouncement in Jaka that “if the dismissal is based on an
authorized cause under Article 283, but the employer failed to comply with the
notice requirement, the sanction should be stiffer because the dismissal
process was initiated by the employer's
exercise of management prerogative,” as distinguished from Agabon
v. National Labor Relations Commission[23] where
the dismissal was for a just cause but due to non-compliance with procedural
due process, the employer was made to pay P30,000.00 in nominal damages.
Talam moved for
reconsideration of the decision, but the CA denied the motion in a resolution
promulgated on September 29, 2006.[24] Hence, the present recourse to the Court.
THE PETITION
The petition submits that
the CA seriously erred and/or committed grave abuse of discretion in: (1)
justifying the retrenchment of Talam on the basis alone of the report of the
external auditor; (2) justifying the retrenchment despite the TSFI's failure to
observe fair and reasonable standards for a valid retrenchment and to first
institute cost reduction measures; and (3) applying the cases of Jaka Food
Processing Corporation v. Darwin Pacot, et al. and Agabon v. NLRC.
Talam contends that while
it may be true that audited financial statements normally serve as proofs of
the profit and loss performance of a company, the financial statements relied
upon by the company do not show that TSFI was in dire financial straits nor was
it suffering, or will imminently suffer, drastic business losses; the losses were insubstantial or
inconsequential; contrary to TSFI's claim, a closer look at the Schedule of
Operating Expenses for the year ended December 31, 2002 and September 2002 would
show that the company's payroll did not actually cover 41% of its total operating
expenses but only 16%, considering that much of the expense is allotted to
management fees, not to mention that there were expenses incurred for
recruitment services; the alleged losses were not imminent as there were only
two (2) employees (Ronilo Raymundo and Talam) who were retrenched; in fact,
TSFI immediately hired employees for
the position occupied by Talam; at the time Talam was retrenched, there were
five (5) probationary employees who became regular employees on October 1,
2002, four (4) of whom had lower contribution margins.
Talam further contends
that if TSFI was indeed experiencing financial difficulties, it could also have
reduced its other operating expenses to abate the losses. Further, Talam argues that TSFI failed to
provide reasonable criteria in implementing its retrenchment program as the
alleged cause of Talam's dismissal – that he had the least contribution margin
to the company – is not a valid cause for dismissal under Articles 282 and 283
of the Labor Code; be that as it may, he did not have the highest negative
contribution margin.
To prove his point, Talam
claims that the table of contribution margins[25] relied
upon by TSFI is incomplete and inaccurate as there was a total of nineteen (19)
consultants at the time, yet the table listed only seventeen (17); he had a
negative contribution because the TSFI management did not give him the chance
to be engaged in projects; while it is
true that he had no service income for 2002, this was primarily because he was
assigned to work in the office on a special project.
On November 23, 2007,
Talam filed a Memorandum[26]
reiterating essentially the same arguments raised in the petition.
The Case for TSFI
By way of a Comment filed
on February 16, 2007[27] and a
Memorandum dated November 3, 2007,[28] TSFI
prays for the dismissal of the petition for lack of merit, contending that
Talam's arguments are merely a rehash of his previous arguments before the NLRC
and the CA. Specifically, it argues that
the petition raises only factual issues which are not proper subjects of appeal
under the Rules of Court;[29] Talam is estopped from questioning the CA
decision because what he wanted had already been granted by the CA; Talam's
retrenchment is valid and supported by evidence and he is only entitled to
nominal damages pursuant to law and jurisprudence.
TSFI contends that the
petition's procedural defect is evident in the following questions it raised:
(1) was the company suffering from substantial financial losses to justify a
retrenchment? (2) was the retrenchment
based on fair and reasonable standards?
(3) did Talam have the highest negative contribution margin to justify
his dismissal? These questions, TSFI
posits, cannot be resolved without the Court reviewing or evaluating the
evidence. On the assumption that Talam
may properly raise these questions, TSFI contends that the factual
determination regarding the validity of the retrenchment cannot be disturbed
anymore because findings of fact of administrative bodies like the NLRC, as well
as those of the CA, are binding upon the Court.
Despite the foregoing, TSFI maintains that
Talam is estopped from assailing the CA decision of July 31, 2006 because what
he wanted had already been granted by the appellate court. It then explains that the NLRC resolution of
September 27, 2005,[30] which Talam
questioned before the CA, deleted the award of backwages and 13th
month pay to Talam, but awarded him nominal damages of P30,000.00 for
the company's non-compliance with procedural due process. The CA affirmed the award but increased the
amount to P50,000.00. This CA
response elicited a reaction from Talam with the statement that “if factual
circumstances of the Jaka case are the same as in this instant case, then the indemnity in favor of the Petitioner
should have been fixed also in the amount of Fifty Thousand Pesos (P50,000.00).”[31] TSFI submits that by his very own words,
Talam “has conceded” that an increase in the amount of indemnity awarded
to him would already be acceptable and this the CA already granted.
On the validity of its
retrenchment action, TSFI posits that the cost-cutting measure it carried out measured
up to the standard imposed by law and jurisprudence. It maintains that it did not only expect but
had already suffered substantial losses, as reported by its external auditor
and as established by its financial records;[32] as
of December 31, 2002, it had accumulated
losses amounting to P2,475,418.00 which constituted 96.41% of
stockholders’ equity of P7,700,000.00.[33] It argues further that the fact that it
retrenched only two employees did not mean its losses were not imminent; it did
not have to dismiss all its employees because it also needed to survive, not to
completely shut down; in any event, reducing its 17 consultants by two represented
already 11% of its workforce.
TSFI likewise disputes
Talam's submission that its payroll expense did not actually represent 41% but
only 16%. Talam's salary is a direct
cost included in the account of “salaries and wages and incentives” in the
schedule of direct cost as shown in the
financial statements, not in the schedule of operating expenses; this account
indicates an expense of P6,397,568.00, which is at least 43% of the
total direct costs. It adds that
supervisors and managerial employees should also be compensated for their
work. With respect to the five (5)
probationary employees who were made regular employees in October 2002, TSFI
explains that they were working on a project that was then in mid-stream and,
considering their know-how in the project, could not just be assigned to Talam.
TSFI takes exception to
Talam's claim that it has increased the number of its consultants to twenty
(20) and is preparing to transfer or has transferred to a new and bigger office
space. It maintains that there is
absolutely no proof to the allegation; it was a factual matter not raised in
the earlier proceedings and cannot thus be raised for the first time on appeal;
assuming it is true, the conditions during the years 1999 to 2002 were
different from the present conditions and if the company was able to weather
the financial crisis during those years, it was because it undertook measures
that enabled it to survive and become financially able again; it used as an
office a small room (a mere cubicle) during the crises years; it had only a
two-person support staff in the persons of Grapilon and Hermle, and it had
reduced the salaries of its employees by as much as 30%.
TSFI insists that Talam
was retrenched because he had the highest negative contribution margin,
contrary to his claim that he “did not have the lowest contribution margin
among the consultants of the company.”
It argues that as shown in the profit and loss statement,[34] Talam
had the highest negative contribution margin of P511,621.77, followed by
another consultant with a negative contribution margin of P501,582.46;
Talam's performance as a consultant resulted in a net loss to the company of P511,621.77.
It submits that Talam was not chosen by any of its clients as shown by
the fact that since January 2002 until his separation, he had no service
income. It posits that it cannot be expected to maintain an employment
consultant whose services the clients do not need. It insists that the contribution margin or
service income is a fair and reasonable criterion in deciding who to retrench.
The Ruling of the Court
On Matters of Procedure
TSFI asks the Court to dismiss the present
petition on the ground that it is procedurally defective as, allegedly, it
raises only questions of fact, in contravention of the requirement under Rule
45 of the Rules of Court that an appeal by certiorari
shall raise only questions of law. While the petition indeed poses factual
issues – i.e., whether the company
was suffering from substantial losses to justify a retrenchment measure,
whether it observed fair and reasonable
standards in implementing a retrenchment, and whether Talam deserved to be
retrenched – we deem it proper to examine the facts ourselves in view of the
conflicting factual findings among the Labor Arbiter, the NLRC and the CA.[35]
Additionally, TSFI preliminarily
submits that Talam is estopped from assailing the CA decision because the
appellate court already granted what he asked for when the CA increased to P50,000.00
the amount of nominal damages awarded to him.
On this point, TSFI is wrong. It took out of context
Talam's statement in his petition[36] that if
the facts in the Jaka case were similar to his case, then the nominal
damages should have been fixed at P50,000.00. TSFI overlooked the fact that Talam prayed
for annulment of the NLRC resolutions of September 27, 2005 and January 31,
2006, particularly with respect to the deletion of the grant of backwages and
13th month pay. The statement
alluded to cannot, by itself, bar Talam from pursuing what he prayed for, which
was not limited to nominal damages alone.
He was simply making a statement regarding the need for consistency in
the application of the Court’s rulings.
Another issue for
preliminary consideration is Talam's insistent questioning of the validity of
the retrenchment TSFI had undertaken. TSFI
posits that he is barred from harping on the issue because he failed to move
for reconsideration of the NLRC's May 25, 2005 resolution declaring the
validity of his dismissal by reason of retrenchment.[37]
Again,
TSFI’s argument is untenable. TSFI itself filed a motion for
reconsideration of the said resolution,[38] which the NLRC disposed of through its
resolution of September 27, 2005, a copy of which was furnished Talam's counsel. Having failed to file a motion for
reconsideration of the May 25, 2005 resolution, can Talam move for
reconsideration of the NLRC's September 27, 2005 resolution?
In the case of Sadol v. Pilipinas Kao, Inc., et al.[39] where the company lost the right to appeal
from a decision of the NLRC but the other party appealed from the same
decision, the Court ruled that the company could file a motion for
reconsideration of the NLRC decision on appeal.
The procedural situation in this case being the same as in Sadol, we hold that Talam did not lose
the right to question the validity of his dismissal as, in fact, he sought a
reconsideration of the NLRC September 27, 2005 resolution sustaining his
dismissal on the ground of retrenchment.
As we said in Sadol, the rules
of technicality must yield to the broader interest of justice.
The Merits of the Case
We now resolve the issue
of whether there was a valid cause for Talam’s dismissal.
We answer in the affirmative.
The CA committed no
reversible error in affirming the NLRC ruling that Talam was validly dismissed
on the ground of retrenchment. We come
to this conclusion based on the following considerations:
First. The decision to
retrench had a basis; it was not simulated nor resorted to for the purpose of
getting rid of employees. The decision
was upon the recommendation of the company’s external auditor Leah A.
Villanueva, as contained in her letter to the TSFI Board of Directors in
October 2002.[40] The letter reads:
I have reviewed your Profit and Loss Statement for the period January
to September 2002 and the Accompanying Projected Profit and Loss Statement for
the last quarter of 2002. Net Loss for
the period ending amounted to CHF337,616.
Average Operating Expenses per month amounted to CHF100,117 and Average
Actual Revenue per month amounted to CHF63,163.
Based on existing clients, revenue for the last quarter is projected at
CHF191,400 and Operating Expenses for the last quarter is projected at CHF341,507
resulting to a projected Net Loss of CHF150,107 at the end of year 2002.
To minimize net
loss and cash deficiency, I recommend cost cutting measures on your Payroll
Expenses Account which makes 41% of your Total Operating Expenses. I suggest that you review contribution margin
per consultant and compensation packages of personnel in the executive and
support group. [underscoring supplied]
As the CA noted, the
standard proof of a company’s financial standing is its financial statements
duly audited by credible external auditors.[41] We see nothing in the records which impugns
Villanueva's assessment of the financial condition of TSFI at the time material
to the case.
Second. The cost-cutting
measure recommended involved reduction of TSFI’s payroll expense account which,
as the auditor found, makes up 41% of the company’s total operating
expenses. Talam insinuates that the
share in the company’s operating costs of personnel expenses is misleading,
contending that the bulk of the expense goes into management fees. While this may be so, it cannot be denied
that the management group is still part of the personnel component of the
company, and absent any showing of bad faith, the choice of who should be
retrenched must be conceded to the company for as long as there exists a basis
for it.
In the present case, we
note that the auditor suggested that TSFI “review the contribution margin
per consultant and compensation packages of personnel in the executive and
support group.” Again, absent any
showing of bad faith, we cannot fault the company for choosing the option of
looking at the margins of contribution of the consultants to the income of the
company as primary retrenchment standard.
It is just unfortunate that based on this yardstick, Talam came out as
one of two consultants with very high negative contribution margins and was
therefore chosen for retrenchment.
Talam disputes the
unfavorable assessment of his performance as a consultant, arguing that among
nineteen (19) consultants of the company (not seventeen [17], as listed by
TSFI), there were four (4) employees who had lower contribution margins; he had
no contribution income for 2002 because he was assigned to do office work and was
not being given projects.
While Talam may not have
the least contribution margin, he himself admitted that he had no contribution
income for 2002 and tried to explain this away by saying that he was assigned
at the office and he was not being given projects. Management, however, countered that TSFI’s
clients did not choose him or ask for his services – a management claim Talam did
not dispute. The company satisfactorily
explained, too, how it viewed and compared the negative contribution
margin. In these lights, TSFI cannot be
blamed for choosing him after considering the employees’ respective contributions
to the company’s main business of computer consultancy.
Third. Talam was dismissed
due to a cause authorized by law – retrenchment to prevent losses.[42] At the time of Talam’s dismissal, TSFI’s
financial condition, as found by the external auditor, showed that it was not
just expecting losses, it already suffered a net income loss of P2,474,418.00
and retained earnings deficit of P7,424,250.00 for the period ending
December 31, 2002.[43]
Talam tried to negate
this dire financial picture claiming that the very financial statement cited by
TSFI showed a net income of P298,725.00,[44]
referring to the period ending on September 30, 2002. Such a claim, however, cannot erase the fact
that the company had suffered substantial accumulated losses of P2,474,418.00
as of the end of December 2002.[45] For a small company like TSFI (with only
twenty [20] employees), the losses it suffered were not merely de minimis in extent but were, at the
time Talam was dismissed, actual and with more losses reasonably imminent. Significantly, the employer objectively and
in good faith perceived the imminence of more losses as it was based on the
report of its external auditor.
Fourth. TSFI
resorted to other measures to abate its losses.
It claimed that during the crises period, it used as an office a
small-room (a mere cubicle) with only a two-person support staff in the persons
of Grapilon and Hermle; it reduced the salaries of its employees by as much as
30%. This submission by the company is
substantiated by the schedule of Operating Expenses for the year ended December
31, 2002 and September 30, 2002.[46] A quick glance at the schedule readily shows
a reduction of TSFI’s operating expenses across the board. The schedule indicates a substantial decrease
in the operating expenses, from P5,733,735.00 in September 2002 to P1,698,552.36
as of the end of December 2002.
On the whole, we find that
TSFI satisfied the requisites for a valid retrenchment.[47]
The Release and Quitclaim
Independently of the above
considerations, we note that Talam executed a Release and Quitclaim[48] on November
6, 2002 at about the time his separation from the service was to take effect,
in consideration of P89,954.00
in compensation and other benefits.[49] The labor arbiter and the NLRC did not consider
the release and quitclaim as a bar to the filing of the complaint, saying that
Talam had no choice but to sign the document out of necessity. The CA chose to be silent about it; in
effect, affirming the labor tribunal's findings on the matter.
The CA erred in glossing
over the legal effect of Talam's release and quitclaim. It should not have been nullified. Talam was not an unlettered employee;[50] he was
an information technology consultant and must have been fully aware of the
consequences of what he was entering into.[51] The quitclaim was a voluntary act as there is
no showing that he was coerced into executing the instrument; he received a
valuable consideration for his less than two years of service with the
company. Thus, from all indications, the
release and quitclaim was a valid and binding undertaking that should have been
recognized by the labor authorities and the CA.
While the law looks with disfavor upon releases
and quitclaims by employees who are inveigled or pressured into signing them by
unscrupulous employers seeking to evade their legal responsibilities, a legitimate
waiver representing a voluntary settlement of a laborer's claims should be
respected by the courts as the law between the parties.[52] In our view, Talam's release and quitclaim
fall into the category of legitimate waivers as defined by the Court.
In executing the release
and quitclaim, Talam had unquivocably signified his acceptance of his
separation from the service as communicated to him in writing by TSFI on October
1, 2002,[53] after the company management verbally
discussed the matter with him. In fact,
on the day he received the written notice of his separation (October 4, 2002),
he was issued, upon his request, a certification[54] that he
“is a former employee of The Software Factory Inc.” who joined the
company “on April 15, 2001 until October 31, 2002 as a Programmer.”
With the foregoing
backdrop in Talam’s execution of the release and quitclaim, we find the filing
of the illegal dismissal case tainted with bad faith on his part for he has
already “released and forever discharged” the company “from any and all
claims of damages and other liability, any from any and all manner of claims,
cause or causes of actions whatsoever x x x against them.”[55]
Given the release and
quitclaim, we do not see how TSFI can be made to answer for failure to afford
Talam procedural due process. The release
and quitclaim, to our mind, erased whatever infirmities there might have been
in the notice of termination as Talam had already voluntarily accepted his
dismissal through the release and quitclaim.
With this acceptance, the written notice became academic; the notice, after
all, is merely a protective measure put in place by law and serves no useful
purpose after protection has been assured.
We thus find no basis for the conclusion that TSFI violated procedural
due process and should pay nominal damages.
All told, we find the
petition to be without merit. The
complaint should be dismissed.
WHEREFORE, premises considered, the petition is hereby DENIED.
The assailed decision and resolution of the Court of Appeals are AFFIRMED but MODIFIED to DELETE
the award of nominal damages.
Accordingly, the complaint is DISMISSED. Costs against the petitioner.
SO
ORDERED.
ARTURO D. BRION
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice Chairperson |
|
|
MARIANO C. Associate
Justice |
ROBERTO A.
ABAD Associate Justice |
JOSE
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.
ANTONIO
T. CARPIO
Associate Justice
Chairperson
CERTIFICATION
REYNATO
S. PUNO
Chief Justice
[1] Rollo, pp. 3-24; filed under Rule 45 of the Rules of Court.
[2]
[3]
[4] Francis
Ray Talam v. NLRC, 4th Division, et al.
[5] Rollo, p. 106.
[6]
[7]
[8]
[9]
[10]
[11]
[12]
[13]
[14] 494 Phil. 114 (2005).
[15] Rollo, pp. 326-327.
[16]
[17] Supra note 2.
[18] Rollo, pp. 162-193; TSFI's Appeal to the NLRC, Annex “O.”
[19] LABOR CODE, Article 283.
[20] Rollo, pp. 154-158.
[21]
[22] Supra note 14.
[23] G.R. No. 158693, November 17, 2004, 442 SCRA 573; 485 Phil 248 (2004).
[24] Supra note 3.
[25] Rollo, pp. 192-193; TSFI's Appeal to the NLRC, Annex “14.”
[26]
[27]
[28]
[29] Rule 45, Section 1.
[30] Supra note 13.
[31] Rollo, p. 351; Petition for Certiorari, p. 23.
[32]
[33] Id. at 429; TSFI erroneously computed
the percentage ratio between the accumulated losses of P2,475,418.00 and the stockholders’
equity of P7,700,000.00;
the figure was overstated at 96.41% when it should have been 32.14%.
[34] Supra note 23.
[35] Fujitsu Computer Products Corporation of the Philippines v. Court of Appeals, G.R. No. 158232, March 31, 2005, 454 SCRA 737; see also Rosario Textile Mills v. CA, 456 Phil. 828 (2003).
[36] Supra note 31.
[37] Rollo, p. 436; TSFI's Memorandum, p. 22, pars. 4.37 & 4.38.
[38]
[39] G.R. No. 87530, June 13, 1990, 186 SCRA 491.
[40] Supra note 5.
[41]
[42] LABOR CODE, Article 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. 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 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 undertaking 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.
[43] Rollo, p. 184; Statement of Income and Retirement Earnings (deficit) for the year ended December 31, 2002 and September 2002.
[44] Id., column 2 under net income.
[45] Id. at 156, Establishment Termination Report.
[46] Id. at 186.
[47] Juvy M. Manatad v. Philippine Telegraph and Telephone Corporation, G.R. No. 1723, March 7, 2008, 548 SCRA 64 citing F.F. Marine Corporation v. NLRC, 435 SCRA 154.
[48] Supra note 8.
[49] Supra note 9.
[50] Periquet v. NLRC, G.R. No. 91298, June 22, 1990, 186 SCRA 724.
[51] Alcosero v. NLRC, 351 Phil 368 (1998).
[52] Veloso and Liguaton v. DOLE, et. al., G.R. No. 87297, August 5, 1992, 200 SCRA 201.
[53] Supra note 7.
[54] Rollo, p. 103.
[55] RELEASE and QUITCLAIM, par. 2.