457 Phil. 993
PANGANIBAN, J.:
"WHEREFORE, premises considered, the present petition is hereby DENIED DUE COURSE and accordingly DISMISSED for lack of merit. Consequently, the Resolution dated August 31, 2001 issued by the National Labor Relations Commission in CA No. 026604-00/NCR-30-11-00567-99 is hereby AFFIRMED with MODIFICATION in the sense that in the event petitioner Prudencio J. Tanjuan is absolved from any liability arising from the act or omission complained of in OMB-0-98-2342 filed before the Office of the Ombudsman, respondent Philippine Postal Savings Bank, Inc. is hereby ordered to promptly release his separation pay, after the usual clearance/s as required by law."[4]The assailed Resolution denied petitioner's Motion for Reconsideration.
"Petitioner Prudencio J. Tanjuan (petitioner for brevity) was employed by respondent Philippine Postal Savings Bank, Inc. (respondent PPSBI for brevity), a government financing institution and a subsidiary of the Philippine Postal Corporation (Philpost), as Property Appraisal Specialist and Officer-in-Charge of its Credit Supervision and Control Department. At the time material to this case, he was on his fourth year of service.Dissatisfied with the NLRC Decision, petitioner elevated the case to the CA.
"On November 13, 1998, respondent Pedrito Torres (respondent Torres for brevity), PPSBI's President and Chief Executive Officer, issued Memorandum 145-98 addressed to petitioner and five (5) other employees belonging to its Accounts Management Department and Credit Supervision and Control Department charging them with negligence in the performance of duties and misrepresentation in violation of Article VI, Sections 2 (d) and 3 (d) of the bank's rules and regulations for approving the applications for loan of Corinthian de Tagaytay and Clavecilla Marine Service. They were given five (5) days within which to submit their written explanations otherwise they shall be considered to have waived the filing of the same.
"On November 27, 1998, petitioner submitted his written explanation alleging that he merely reviewed and validated the findings of the Property Appraiser.
"On January 11, 1999, OP Order No. 003-99 was issued by respondent Torres to petitioner informing him of his preventive suspension for a period of ninety (90) days in view of the pending administrative investigation against him. The next day, petitioner, represented by counsel, wrote respondent Torres asking for the lifting of the order of preventive suspension on the ground that pursuant to Secs. 24 and 36 of The Ombudsman Act of 1989 (R.A. No. 6770), only the Ombudsman may preventively order his suspension. Respondent Torres, on January 14, 1999, replied that the preventive suspension was an internal decision of respondent PPSBI in connection with the pending administrative case against petitioner and not pursuant to any complaint filed with the Office of the Ombudsman. Moreover, being a subsidiary of a government-owned and controlled corporation with [an] original charter, the pertinent civil service rules and regulations are not applicable to respondent PPSBI.
"In riposte, petitioner countered that his preventive suspension should therefore not exceed thirty (30) days in accordance with the provisions of the Labor Code, as amended.
"As a result of petitioner's manifestation, on February 1, 1999, respondent Torres issued OP Order No. 011-99 ordering the amendment of the order of preventive suspension against the former from ninety (90) days to thirty (30) days. Consequently, petitioner's suspension would only be up to February 11, 1999, after which he could already report back to work.
"On April 27, 1999, the Board of Directors of respondent PPSBI issued Board Resolution No. 99-14 approving the bank's reorganization via retrenchment of employees and re-alignment of functions and positions for the purpose of preventing further serious losses. In furtherance of the Board's decision, a letter dated July 15, 1999 was released by respondent Torres addressed to all employees of respondent PPSBI, informing them of the impending reorganization and enjoining them to apply for their desired plantilla positions under the new organizational set-up not later than July 20, 1999, otherwise they shall not be included in the selection process and shall be deemed to have opted to be separated instead. Petitioner did not apply for any position in the new organizational set-up.
"On October 5, 1999, petitioner received a Notice of Termination dated October 4, 1999 informing him that pursuant to respondent PPSBI's adoption of a new organizational structure under Board Resolution No. 99-14, his employment therewith shall cease [at] the close of office hours on November 4, 1999 or thirty (30) calendar days from date of receipt of the notice on the ground of abolition of position. The Department of Labor and Employment was likewise seasonably notified prior to the effectivity date of petitioner's termination as required by law. However, the release of his separation pay of one and a half (1 1/2) months salary for every year of service was withheld in view of the pendency of a criminal case against him with the Office of the Ombudsman for alleged irregularities in the granting of loans for which he could likewise be held pecuniarily liable.
"Displeased with his termination, petitioner filed a complaint for illegal dismissal with money claims against respondent on November 15, 1999.
"Petitioner alleged that there was no just or authorized cause to warrant his termination from service and that the procedural requirements as mandated by law were not complied with. He pointed out that no other measures were first taken before resort to retrenchment or any other mode of reducing personnel was made. Moreover, respondents were guilty of bad faith in terminating its employees considering that despite the retrenchment, new positions were created for which they were invited to apply.
"In refutation, respondents averred that in view of the dwindling financial position of the bank, the Board of Directors approved the bank's reorganization plan to prevent or minimize business losses which involved the retrenchment of employees and the subsequent right-sizing of the organization through elimination or merger of overlapping functions or divisions which resulted to the abolition of thirty-six (36) positions, one (1) of which was then occupied by petitioner. Consequently, petitioner and the DOLE were served the required termination notice one (1) month before the effectivity date of his separation from service. However, the payment of his separation pay was deferred in view of the case against him which is pending resolution before the Office of the Ombudsman [and] which could x x x find him pecuniarily liable aside from the penalty of forfeiture of benefits x x x. In the event though that he is exonerated, they manifested that his separation pay and other benefits shall be promptly released to him.
"As to the required proof of business losses, a reservation was made as to its submission on the ground of confidentiality of records due to the nature of respondent PPSBI's business. However, respondents avowed that the same shall be presented if and when required by the Labor Arbiter to do so.
"On June 30, 2000, Labor Arbiter Isabel G. Panganiban-Ortiguerra rendered a Decision, the dispositive portion of which reads:`WHEREFORE, premises considered, judgment is hereby rendered declaring Philippine Postal Savings Bank, Inc. guilty of illegal dismissal and it is hereby ordered as follows:"Aggrieved, respondents appealed to the x x x NLRC asseverating that they were denied due process of law when Labor Arbiter Panganiban-Ortiguerra allegedly hastily decided that they did not adduce evidence to support their claim of business losses to justify retrenchment. In support of their appeal, respondents submitted in evidence the following documents: (A) Audited Consolidated Statements of Condition, Income and Loss Statements for the periods 1996-1997, 1997-1998 and 1998-1999; (B) Statement of Financial Condition for the periods June 23, 1998, December 24, 1998 and December 21, 1999; (C) COA Annual Audit Report for the years ended December 31, 1997 and 1996; (D) COA Annual Audit Report for the years ended December 31, 1998 and 1997; (E) COA Annual Audit Report for the years ended December 31, 1999 and 1998; (F) PDIC Preliminary Findings as of March 31, 1996; (G) PDIC Results of Follow-Through Examination as of March 31, 1997; (H) PDIC Preliminary Findings as of May 31, 1998; (I) BSP Letter to the PPSBI Board of Directors dated December 28, 1995; (J) BSP Letter to the PPSBI Board of Directors dated March 18, 1997, with attached detailed report; (K) BSP Letter to the PPSBI Board of Directors dated May 14, 1997; and (L) BSP Letter to the PPSBI Board of Directors dated October 25, 1999.
`1. To reinstate complainant to his former position which may now have a different title, without loss of seniority rights and with full backwages reckoned from the date of his dismissal up to his actual or payroll reinstatement as of this date is in the amount of P124,638.40; and
`2. To pay complainant's attorney's fee in an amount equivalent to 10% of whatever he may receive by virtue of this decision.
`The claims for moral and exemplary damages are dismissed for lack of merit.
`SO ORDERED.'
"Petitioner duly opposed the presentation of the aforesaid documents contending that [these] cannot be presented for the first time on appeal. Moreover, even if the same can be admitted on appeal, the aforesaid documents are insufficient to prove the existence of business losses. Finally, petitioner posits that if serious losses were in fact incurred by respondent PPSBI, the same was due to the mismanagement of its officers which should not be borne by its rank and file employees.
"On August 31, 2001, x x x NLRC issued a Resolution admitting the evidence presented by respondents on appeal and finding the same adequate to prove the existence of business losses on the part of respondent PPSBI. x x x."
Since the question of whether petitioner was validly retrenched hinges on the admission of evidence proving alleged business losses, we shall discuss issues A and B in reverse sequence.
"A. Whether or not the petitioner was illegally dismissed by respondents;"B. Whether or not the Court of Appeals can disregard the findings of the Labor Arbiter [that] there was no valid retrenchment;"C. Whether or not respondents are estopped from attaching [as] annexes to the Memorandum on Appeal evidenc[e] not submitted to the Labor Arbiter x x x after they were given opportunity to do so."[7]
"Thus, even if the evidence was not submitted to the labor arbiter, the fact that it was duly introduced on appeal to respondent commission is enough basis for the latter to have been more judicious in admitting the same, instead of falling back on the mere technicality that said evidence can no longer be considered on appeal. Certainly, the first course of action would be more consistent with equity and the basic notions of fairness."[13]As to petitioner's claim that he was denied due process because of the belated admission of the evidence, suffice it to say that he was given every opportunity to refute it and to submit counter-evidence. The essence of due process consists simply in according parties reasonable opportunity to be heard and to submit any evidence they may have in support of their defense.[14]
Section 9 of Batas Pambansa Blg. 129, as amended by Republic Act No. 7902,[19] expanded the jurisdiction of the CA as follows:Verily, the appellate court, pursuant to the exercise of its original jurisdiction over petitions for certiorari, has the power to review NLRC cases. Such review extends to the factual findings of the labor arbiter when, as in this case, these are at variance with those of the NLRC.[20]
"SEC. 9. Jurisdiction. - The Court of Appeals shall exercise:
"(1) Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus, and quo warranto, and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction;x x x x x x x x x
"The Court of Appeals shall have the power to try cases and conduct hearings, receive evidence and perform any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction, including the power to grant and conduct new trials or further proceedings. x x x."
"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 worker 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 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 (½) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered as one (1) whole year." (Italics supplied)Thus, the requisites for valid retrenchment are the following: (1) necessity of the retrenchment to prevent losses, and proof of such losses; (2) written notice to the employees and to the Department of Labor and Employment (DOLE) at least one month prior to the intended date of retrenchment; and (3) payment of separation pay equivalent to one-month pay or at least one-half month pay for every year of service, whichever is higher.[24]
"A perusal of respondent PPSBI's audit reports conducted by no less than the Commission on Audit (COA) pursuant to Section 4, Article IX-D of the Constitution and Section 43 of Presidential Decree No. 1445, otherwise known as the Government Auditing Code of the Philippines, for the years 1996, 1997, 1998 and 1999 reveal the following significant facts:The findings of the CA affirming those of the NLRC showed real and grave financial reverses, which made downsizing the only recourse for the bank to follow.[29] Indeed, the retrenchment of petitioner was the consequence of the bank's reorganization and a cost-saving device recognized by jurisprudence.[30]
Surplus (Deficit) Undivided profits (net loss) 1996 P 11,413,884.00 P 22,617,592.00 1997 33,569,370.00 2,950,989.00 1998 35,875,290.00 31,374,806.00 1999 66,274,745.00 79,588,715.00
"Based on the foregoing, the losses alleged by respondents to have been the primary reason for the Board of Directors' decision to effect retrenchment and reorganization were clearly not at all fictitious, imaginary or mere conjectures as claimed by petitioner. Furthermore, the fact that respondent PPSBI was being regularly monitored by the Bangko Sentral ng Pilipinas (BSP) and the Philippine Deposit Insurance Corporation (PDIC) due to its precarious financial position for several years positively affirms respondents' asseveration of continuous serious business losses. There is then no doubt that respondent PPSBI, prior to, at the time [of], and immediately after the termination of petitioner, was suffering from real and serious business losses."[28]
"ART. 221. Technical rules not binding and prior resort to amicable settlement. -- In any proceeding before the Commission or any of the Labor Arbiters, the rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit and intention of this Code that the Commission and its members and the Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of law or procedure, all in the interest of due process. In any proceeding before the Commission or any Labor Arbiter, the parties may be represented by legal counsel but it shall be the duty of the Chairman, any Presiding Commissioner or Commissioner or any Labor Arbiter to exercise complete control of the proceedings at all stages.[6] The case was deemed submitted for decision on July 3, 2003, upon the Court's receipt of respondents' Memorandum signed by Atty. Giovanni S. Manzala. Petitioner's Memorandum, which was received on June 18, 2003, was signed by Atty. Vicente C. Angeles.
"Any provision of law to the contrary notwithstanding, the Labor Arbiter shall exert all efforts towards the amicable settlement of a labor dispute within his jurisdiction on or before the first hearing. The same rule shall apply to the Commission in the exercise of its original jurisdiction."