Case Digest: Plastimer Industrial Corp. & Teo Kee Bin v. Gopo, et al.
G.R. No. 183390: February 16, 2011
PLASTIMER INDUSTRIAL CORPORATION and TEO KEE BIN, Petitioners, v. NATALIA C. GOPO, KLEENIA R. VELEZ, FILEDELFA T. AMPARADO, MIGNON H. JOSEPH, AMELIA L. CANDA, MARISSA D. LABUNOS, MELANIE T. CAYABYAB, MA. CORAZON DELA CRUZ, and LUZVIMINDA CABASA, Respondents.
CARPIO, J.:
FACTS:
In 2004, the Personnel and Administration Manager of Plastimer Industrial Corporation (Plastimer) issued a Memorandum informing all its employees of the decision of the Board of Directors to downsize and reorganize its business operations due to withdrawal of investments and shares of stocks which resulted in the change of its corporate structure. Respondents were served written notices of their termination.
Respondents filed a complaint against Plastimer and its President Teo Kee Bin (petitioners) before the Labor Arbiter for illegal dismissal with prayer for reinstatement and full backwages, underpayment of separation pay, moral and exemplary damages and attorney’s fees. Respondents alleged that they did not voluntarily relinquish their jobs and that they were required to sign the waivers and quitclaims without giving them an opportunity to read them and without explaining their contents. Respondents further alleged that Plastimer failed to establish the causes/valid reasons for the retrenchment.
The Labor Arbiter and the NLRC ruled that petitioners were able to prove that there was a substantial withdrawal of stocks that led to the downsizing of the workforce.
The Court of Appeals reversed the NLRC decision. The Court of Appeals ruled that there was no valid cause for retrenchment. The Court of Appeals noted that the change of management and majority stock ownership was brought about by execution of deeds of assignment by several stockholders in favor of other stockholders. Further, the Court of Appeals noted that while Plastimer claimed financial losses from 2001 to 2004, records showed an improvement of its finances in 2003.
ISSUE: Whether or not the respondents were illegally retrenched by petitioners.
HELD:
The petition is meritorious.
LABOR LAW: Retrenchment
The fact that there was a net income in 2003 does not justify the Court of Appeals’ ruling that there was no valid reason for the retrenchment. Records showed that the net income of for 2003 was not even enough for petitioners to recover from the loss in 2002. Article 283 of the Labor Code recognizes retrenchment to prevent losses as a right of the management to meet clear and continuing economic threats or during periods of economic recession to prevent losses. There is no need for the employer to wait for substantial losses to materialize before exercising ultimate and drastic option to prevent such losses.
Petition is GRANTED. The CA decision is SET ASIDE.
PLASTIMER INDUSTRIAL CORPORATION and TEO KEE BIN, Petitioners, v. NATALIA C. GOPO, KLEENIA R. VELEZ, FILEDELFA T. AMPARADO, MIGNON H. JOSEPH, AMELIA L. CANDA, MARISSA D. LABUNOS, MELANIE T. CAYABYAB, MA. CORAZON DELA CRUZ, and LUZVIMINDA CABASA, Respondents.
CARPIO, J.:
FACTS:
In 2004, the Personnel and Administration Manager of Plastimer Industrial Corporation (Plastimer) issued a Memorandum informing all its employees of the decision of the Board of Directors to downsize and reorganize its business operations due to withdrawal of investments and shares of stocks which resulted in the change of its corporate structure. Respondents were served written notices of their termination.
Respondents filed a complaint against Plastimer and its President Teo Kee Bin (petitioners) before the Labor Arbiter for illegal dismissal with prayer for reinstatement and full backwages, underpayment of separation pay, moral and exemplary damages and attorney’s fees. Respondents alleged that they did not voluntarily relinquish their jobs and that they were required to sign the waivers and quitclaims without giving them an opportunity to read them and without explaining their contents. Respondents further alleged that Plastimer failed to establish the causes/valid reasons for the retrenchment.
The Labor Arbiter and the NLRC ruled that petitioners were able to prove that there was a substantial withdrawal of stocks that led to the downsizing of the workforce.
The Court of Appeals reversed the NLRC decision. The Court of Appeals ruled that there was no valid cause for retrenchment. The Court of Appeals noted that the change of management and majority stock ownership was brought about by execution of deeds of assignment by several stockholders in favor of other stockholders. Further, the Court of Appeals noted that while Plastimer claimed financial losses from 2001 to 2004, records showed an improvement of its finances in 2003.
ISSUE: Whether or not the respondents were illegally retrenched by petitioners.
HELD:
The petition is meritorious.
LABOR LAW: Retrenchment
The fact that there was a net income in 2003 does not justify the Court of Appeals’ ruling that there was no valid reason for the retrenchment. Records showed that the net income of for 2003 was not even enough for petitioners to recover from the loss in 2002. Article 283 of the Labor Code recognizes retrenchment to prevent losses as a right of the management to meet clear and continuing economic threats or during periods of economic recession to prevent losses. There is no need for the employer to wait for substantial losses to materialize before exercising ultimate and drastic option to prevent such losses.
Petition is GRANTED. The CA decision is SET ASIDE.
