CASE DIGEST: Genuino Ice v. Lava (G.R. No. 190001)

G.R. No. 190001: March 23, 2011 | GENUINO ICE COMPANY, INC., HECTOR S. GENUINO and EDGAR A. CARRIAGA, Petitioners, v. ERIC Y. LAVA and EDDIE BOY SODELA, Respondents. BRION, J.:

FACTS: Petitioners hired respondents as ice plant machine operators. Sometime in March 2005, the company was forced to shut down a part of its plant facilities and operations, due to the continuous decline for demand of ice products, and to implement a work rotation or reduction of workdays program affecting its seven (7) workers, including respondents.On September 30, 2005, GICI, through its personal manager, issued a memorandum ordering the deletion of the respondents names from the work schedule. The memorandum had the effect of banning the respondents from entering the company premises. The respondents reacted to this move by filing a complaint for illegal dismissal with the Labor Arbiter (LA).

The petitioners alleged that the respondents were contractual employees who were under the control of VICAR General Contractor & Management Services (VICAR), and L.C. Moreno General Contractor & Management Services (MORENO). And that there is no employer-employee relationship between GICI and the respondents so that the latter have no cause of action against the petitioners. Also, the petitioners reason that due to the partial shut-down of the company, GICI was excused from complying with the 30-day notice or clearance requirement under the law.

The LA ruled that respondents were not illegally dismissed but validly retrenched. On appeal, the NLRC reversed the LA decision and held that respondents were illegally dismissed. The petitioners responded to the NLRCs adverse decision through a petition for certiorariunder Rule 65 before the CA but the same saw no grave abuse of discretion in the NLRCs decision. After denial of their motion for reconsideration, the present petition is filed.

ISSUE: Whether or not respondents were illegally dismissed

HELD: Yes. CA Decision Affirmed. Under Article 283 of the Labor Code, there are three (3) basic requisites for a valid retrenchment, namely: (a) proof that the retrenchment is necessary to prevent losses or impending losses; (b) service of written notices to the employees and to the DOLE at least one (1) month prior to the intended date of retrenchment; and (c) payment of separation pay equivalent to one (1) month pay, or at least one-half (1/2) month pay for every year of service, whichever is higher.

We see no reason to reverse the NLRC and CA findings that no documentary evidence exists in the records to substantiate the claimed business losses; in fact, the petitioners also failed to show its financial conditions prior to and at the time GICI enforced its retrenchment program. In the absence of any attendant grave abuse of discretion, these findings are entitled not only to respect but to our final recognition in this appellate review.

In the present case, the respondents were illegally dismissed as the employer failed to prove that their dismissal was for a duly authorized cause. The CA was thus correct in awarding them full backwages and separation pay in lieu of reinstatement since the positions the respondents formerly held no longer exist. DISMISSED.

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