ACE PROMOTION AND MARKETING CORPORATION VS REYNALDO URSABIA and JUVY M. MANATAD VS. PHILIPPINE TELEGRAPH AND TELEPHONE CORPORATION (PT & T)

TERMINATION ACE PROMOTION AND MARKETING CORPORATION VS REYNALDO URSABIA GR No. 171703 September 22, 2006 FACTS: Sometime in August 1994, Ace Promotion and Marketing Corporation, a company engaged in the promotion of various consumer products, commodities, and goods, hired Reynaldo Ursabia as a company driver assigned to pick up the products of Nestle Philippines Inc. for promotion and marketing. On July 6, 2001, Ursabia failed to report for work. The corporation through its supervisor, Gerry Garcia, issued a memorandum dated July 9, 2001. The memorandum contains an alleged violation of Ursabia of company rules and regulations of abandonment of work last July 06, 2001. Ursabia must explain within 24 hours upon receipt of the memorandum. Ursabia reported back to work on July 09, 2001. He was personally served with the foregoing memorandum but refused to acknowledge the same, hence the memorandum was sent through registered mail to his last known address. The following day, Garcia noticed some damage on the vehicle assigned to Ursabia, hence another memorandum was issued which requires that Ursabia must explain within 24 hours to explain his side. Failure to comply, the company will terminate him. The second memorandum was sent through registered mail. Sometime in July 2001, the company received an anonymous note which states “Be careful and save your life because there’s a time to come everybody will die”. The PNP Crime Laboratory allegedly showed that the handwriting of Ursabia has significant similarities with the handwritten on the note. On August 6, 2001, Ursabia went to the petitioner’s office and was served with a termination letter. Displeased with his termination, he filed a complaint for illegal dismissal and non-payment of monetary benefits. The Labor Arbiter grants the petition. Ursabis was illegally dismissed. The Company is liable to pay backwages, separation pay, 13 th month pay, and service incentive leave. However, the NLRC reversed the decision. The Court of Appeals set aside the decision of NLRC.

ISSUE: Whether Reynaldo Ursabia was illegally terminated?

RULING : No. Ursabia should be dismissed for willful disobedience. The reason is that he fails to comply with the memorandum issued by the company. To be validly dismissed on the grounds of willful disobedience the following requirements must concur: 1. the employee’s assailed conduct must have been willful or intentional, the willfulness being characterized by a wrongful or perverse attitude; and 2. the order violated must be reasonable, lawful, made know to the employee and must pertain to the duties which he had been engaged to discharged.

In this case, Ursabia fails to file his answer to the two memorandums that was issued. His failure to file an answer is clearly intentional. This shows Ursabia’s wrongful and perverse attitude to defy the reasonable orders of the company which undoubtedly pertains to his duties. Nevertheless, the court finds that the company failed to comply with the procedural due process. Following the Agabon doctrine, the dismissal is valid, but the company is liable to pay Ursabia, a nominal damage amounting to 30,000.

REDUDANCY JUVY M. MANATAD VS. PHILIPPINE TELEGRAPH AND TELEPHONE CORPORATION (PT & T) GR No. 172363 March 7, 2008

FACTS: In September 1988, petitioner was employed by respondent Philippine Telegraph and Telephone Corporation (PT&T) as junior clerk with a monthly salary of P3, 839.74. She was later promoted as Account Executive, the position she held until she was temporarily laid off from employment on September 1, 1998. Petitioner temporary separation from employment was pursuant to the Temporary Staff Reduction Program adopted by respondent due to serious business reverses. On November 16, 1998, petitioner received a letter from respondent inviting her to avail herself of its Staff Reduction Program Package equivalent to one-month salary for every year of service, one and one-half month salary, pro-rated 13th month pay, conversion to cash of unused vacation and sick leave credits, and Health Maintenance Organization and group life insurance coverage until full payment of the separation package. Petitioner, however, did not opt to avail herself of the said package. On February 26, 1999, petitioner received a Notice of Retrenchment from respondent permanently dismissing her from employment effective 16 February 1999.Petitioner filed illegal dismissal before the Labor Arbiter. Petitioner submitted evidence that the respondents have no grounds for retrenchment and that the company is not suffering from serious losses. However, the respondent also submitted financial reports to sustain its ground of a valid retrenchment. The Labor Arbiter held in favor of the petitioner which was affirmed by the NLRC. It further noted that the Department of Labor and Employment (DOLE) was not notified by the respondent of its retrenchment program as required by law. On appeal to CA, the decision of the NLRC was reversed. It held that the company is suffering serious financial losses as reflected on its financial statements submitted and prepared by independent auditors of the company. Hence, this petition.

ISSUE: Whether there is a valid retrenchment by the respondent company?

RULING: Pertinent provision is Article 283 of the Labor Code. For a valid retrenchment, the following requisites must be complied with: (a) the retrenchment is necessary to prevent losses and such losses are proven; (b) written notice to the employees and to the DOLE at least one month prior to the intended date of retrenchment; and (c) payment of separation pay equivalent to one-month pay or at least one- half month pay for every year of service, whichever is higher. The financial statements reflect that respondent suffered substantial loss in the amount of P558 Million by 30 June 1998. The Report of SGV & Co. substantiates the alleged precarious financial condition of the respondent. The financial statements audited by

independent external auditors constitute the normal method of proving the profit and loss performance of a company. The respondent complied with the requisite notices to the employee and the DOLE to effect a valid retrenchment. Petitioner failed to refute that she received the written notice of retrenchment from respondent on 16 November 1998.Although respondent failed to furnish DOLE with a formal letter notifying it of the retrenchment, it still substantially complied with the requirement. Since the National Conciliation and Mediation Board, the reconciliatory arm of DOLE, supervised the negotiation for separation package, we agree with the Court of Appeals that it would be superfluous to still require respondent to serve notice of the retrenchment to DOLE. In fact, even granting arguendo that respondent was not experiencing losses, it is still authorized by Article 283[26] of the Labor Code to cease its business operations. Explicit in the said provision is that closure or cessation of business operations is allowed even if the business is not undergoing economic losses. The owner, for any bona fide reason, can lawfully close. Just as no law forces anyone to go into business, no law can compel anybody to continue in it. It would indeed be stretching the intent and spirit of the law if we were to unjustly interfere with the management prerogative to close or cease its business operations, just because said business operations are not suffering any loss or simply to provide the workers continued employment