Genuino Ice Co v. Lava, et al.

G.R. No. 190001 : March 23, 2011

GENIUNO ICE COMPANY, INC., ET AL., Petitioner, v. ERIC Y. LAVA, ET AL., Respondents.



Petitioner GICI hired the respondents Eric Y. Lava and Eddie Boy Sodela (respondents)as ice plant machine operators. Sometime in March 2005, due to the continuous decline of demand for ice products, the company was forced to shut down a part of its plant facilities and operations, and to implement a work rotation or reduction of work days program affecting its seven (7) workers (including the present respondents).

OnSeptember 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 LA ruled that the respondents were validly retrenched. The LA reasoned out that due to the continuous decline in the sales output of the ice plant, the temporary shutdown had become permanent and GICI had no alternative but to trim-down its manpower requirements. However, the LA also found that GICI failed to comply with the procedural requirements for a valid retrenchment. Hence, he awarded the respondents their separation pay equivalent to one-half (1/2) month salary for every year of service in accordance with Art. 283 of the Labor Code.

The NLRC reversed, which the CA affirmed.

ISSUE: Whether or not a valid retrenchment occurred, and corollarily, whether the respondents were legally dismissed from service


The petition is denied.

LABOR LAW: Requisites of a valid retrenchment.

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.

There is 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.

The CA was also correct in awarding them full backwages and separation pay in lieu of reinstatement since the positions the respondents formerly held no longer exist.However, the CA decision must be modified to reflect the correct monetary award due to the respondents. The dispositive portion of the CA decision is incomplete as it failed to specify the separation pay to be awarded to the respondents as well as the reckoning point for the computation of the backwages.FF Marine Corporationtells us that the separation pay shall be computed at one (1) month pay (for those with one year or less of service), or one-half (1/2) month pay for every year of service (for those with more than a year of service), whichever is higher, a fraction of at least six (6) months being considered one whole year. The backwages shall be computed from the date of termination of service (September 30, 2005) until the finality of this Courts decision.

Petition is DENIED.

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