108 OG No. 5, 518 (January 30, 2012)
'WHEREFORE, premises considered, respondent's (sic) appeal is hereby GRANTED. Accordingly, the award of separation pay is hereby deleted and the grant of proportionate 13th month pay is hereby limited to year 2005 only.Resolution dated August 28, 2009[4]
Furthermore, while respondent (sic) succeeded in proving closure due to serious business losses, he is however liable to pay each complainant the amount of P1,000.00 as penalty for non-compliance with the one-month notice requirement to the DOLE.
SO ORDERED."[3]
"WHEREFORE, the Motion for Reconsideration is hereby DENIED for lack of merit.The facts are:
SO ORDERED.[5]"
"WHEREFORE, premises considered, the complaint for illegal termination is dismissed.In the computation of the judgment award of the Labor Arbiter, it appeared that private respondents were adjudged to pay a total amount of P3,910,376.40 in favor of the petitioners. Private respondents appealed the said decision to the NLRC and posted a cash bond in the amount of P50,000.00.
However, respondent Leandro Enriquez should pay the complainants their 13th month pays (sic) and separation pays (sic), (see Annex A)
SO ORDERED."[10]
The petition lacks merit.I.
PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION IN GRANTING PRIVATE RESPONDENTS (sic) APPEAL DESPITE THE LATTER POSTED AN APPEAL BOND OF P50,000.00 WHILE THE TOTAL JUDGMENT AWARD OF THE LABOR ARBITER WAS P3,910,376.40;II.
PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION IN MODIFYING THE DECISION OF LABOR ARBITER GAUDENCIO DEMAISIP, JR., WHO DIRECTED PRIVATE RESPONDENT LEANDRO ENRIQUEZ TO PAY PETITIONERS SEPARATION PAY AND 13TH MONTH PAY.
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 devises, 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 to a 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[12] 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.The NLRC correctly ruled that the financial statements submitted by private respondents present fairly the latter's dire financial position. Such documents[12] were prepared by an independent auditor who used generally accepted auditing standards. Thus:
In North Davao Mining Corporation v. National Labor Relations Commission, this Court held that Article 283 governs the grant of separation benefits "in case of closures or cessation of operation" of business establishments "NOT due to serious business losses or financial reverses... "Where, the closure then is due to serious business losses, the Labor Code does not impose any obligation upon the employer to pay separation benefits.
Explaining the policy distinction in Article 283 of the Labor Code, this Court, in Cama v. Joni's Food Services, Inc., declared:
The Constitution, while affording full protection to labor, nonetheless, recognizes "the right of enterprises to reasonable returns on investments, and to expansion and growth." In line with this protection afforded to business by the fundamental law, Article 283 of the Labor Code clearly makes a policy distinction. It is only in instances 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" that employees whose employment has been terminated as a result are entitled to separation pay. In other words, Article 283 of the Labor Code does not obligate an employer to pay separation benefits when the closure is due to serious losses. To require an employer to be generous when it is no longer in a position to do so, in our view, would be unduly oppressive, unjust, and unfair to the employer. Ours is a system of laws, and the law in protecting the rights of the working man, authorizes neither the oppression nor the self-destruction of the employer.... (Emphasis supplied)
The denial of petitioners' claim for separation pay was thus in order.
"Contrary thereto however, We are persuaded that based on the balance sheets as well as the establishment's income statements for the years 2003 and 2004 which were presented by the respondent, that the latter is suffering from serious business losses. The documents were attached to the latter of an independent auditor who had indicated that he (sic) has conducted an audit of the same, and in her opinion, the financial statements present fairly the financial position of the establishment as of the end of the said years.In establishing a unilateral claim of actual or potential losses, financial statements audited by independent external auditors constitute the normal method of proof of profit and loss performance of a company. The condition of business losses justifying retrenchment is normally shown by audited financial statements like yearly balance sheets and profit and loss statements as well as annual income tax returns. Financial statements must be prepared and signed by independent auditors, otherwise, they may be assailed as self-serving. A Statement of Profit and Loss submitted to prove alleged losses, without the accompanying signature of a certified public accountant or audited by an independent auditor, is nothing but a self-serving document which ought to be treated as a mere scrap of paper devoid of any probative value.[14]
As provided in the income statements, Florian Laundry incurred a net loss of four million four thousand eight hundred twelve pesos (P4,004,812) and five million six hundred sixteen thousand eight hundred fifteen pesos (P5,616,815.00) for the years 2003 and 2004, respectively. (Pp 121-123, record)[13]
"*** We have constantly ruled that financial statements audited by independent external auditors constitute the normal method of proof of the profit and loss performance of a company. Any less exacting standard of proof would render too easy the abuse of this ground for termination of services of employees."In this case, private respondents sufficiently proved their financial losses incurred for several years which then led to its closure. The audit report which was made by an independent auditor fairly reflects the dire financial situation of private respondents.
"Thus, the posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from the decision of the labor arbiter. The intention of the lawmakers to make the bond a mandatory requisite for the perfection of an appeal by the employer is clearly expressed in the provision that an appeal by the employer may be perfected "only upon the posting of a cash or surety bond." The word "only" makes it unmistakably plain that the lawmakers intended the posting of a cash or surety bond by the employer to be the essential and exclusive means by which an employer's appeal may be perfected. The word "may" refers to the perfection of an appeal as optional on the part of the defeated party, but not to the compulsory posting of an appeal bond, if he desires to appeal. The meaning and the intention of the legislature in enacting a statute must be determined from the language employed; and where there is no ambiguity in the words used, then there is no room for construction. The filing of the bond is not only mandatory but also a jurisdictional requirement that must be complied with in order to confer jurisdiction upon the NLRC. Non-compliance with the requirement renders the decision of the labor arbiter final and executory. This requirement is intended to assure the workers that if they prevail in the case, they will receive the money judgment in their favor upon the dismissal of the employers appeal. It is intended to discourage employer's from using an appeal to delay or evade their obligation to satisfy their employees' just and lawful claims.While the bond requirement on appeals involving monetary award has been relaxed in certain cases, this can only be done where there was substantial compliance with the Rules or where the appellants at the very least, exhibited willingness to pay by posting a partial bond.[17]
However, Section 6 of the New Rules of Procedure of the NLRC also mandates, among others, that no motion to reduce bond shall be entertained except on meritorious grounds and upon the posting of a bond in a reasonable amount in relation to the monetary award. Hence, the NLRC has the full discretion to grant or deny the motion to reduce the amount of the appeal bond.
In addition, while the bond requirement on appeals involving a monetary award has been relaxed in certain cases, this can only be done where there was substantial compliance with the Rules; or where the appellants. At the very least, exhibited willingness to pay by posting a partial bond." (italics supplied)