Larga vida al rey Petromin

prerogative of management that is usually not interfered with by the State as no business can be required to continue operating at a loss simply to maintain the workers in employment. That would be a taking of property without due process of law which the Er has a right to resist. But where it is manifest that the closure is motivated not by a desire to avoid further losses but to discourage the workers from organizing themselves into a union for more effective negotiations with management, the State is bound to intervene. The losses of less than Php 2,000 for a corporation capitalized at Php 3 million cannot be considered serious enough to call for the closure of the company [Carmelcraft Corp. vs. NLRC, G.R. No. 90634-35, (1990)].

Q: Is the transferee of the closed corporation required to absorb the employees of the old corporation?

A: GR: There is no law requiring a bona fide purchaser of assets of an on-going concern to absorb in its employ the Ee’s of the latter except when the transaction between the parties is colored or clothed with bad faith. [Sundowner Dev’t Corp. vs. Drilon, G.R. No. 82341, (1989)]

XPNs:

1. Where the transferee was found to be merely an alter ego of the different merging firms [Filipinas Port Services, Inc. vs. NLRC, G.R. No. 97237, (1991)].

2. Where the transferee voluntarily agrees to do so [Marina Port Services, Inc. vs. Iniego, G.R. No. 77853, (1990)].

Q: Marikina Dairy Industries, Inc. decided to sell its assets and close operations on the ground of heavy losses. The unions alleged that the financial losses were imaginary and the dissolution was a scheme maliciously designed to evade its legal and social obligations to its employees. The unions want the buyers of the corporations assets restrained to operate unless the members of the unions are hired to operate the plant under the terms and conditions specified in the collective bargaining agreements. Is the buyer of a company’s assets required to absorb the employees of the seller?

A: There is no law requiring that the purchaser of a company’s assets should absorb its Ees and the most that can be done for reasons of public policy and social justice was to direct that buyers of such assets to give preference to the qualified separated Ees in

the filling up of vacancies in the facilities of the buyer [MDII Supervisors & Confidential Ees Ass’n (FFW) vs. residential Assistant on Legal Affairs, G.R. Nos. L- 45421-23, (1977)].

Q: What is the difference between closure and retrenchment? A: CLOSURE RETRENCHMENT It is the reversal of fortune of the Er whereby there is a complete cessation of business operations to prevent further financial drain upon an Er who cannot pay anymore his Ees since business has already stopped.

Is the reduction of personnel for the purpose of cutting down on costs of operations in terms of salaries and wages resorted to by an Er because of losses in operation of a business occasioned by lack of work and considerable reduction in the volume of business.

One of the prerogatives of management is the decision to close the entire establishment or to close or abolish a department or section thereof for economic reasons, such as to minimize expenses and reduce capitalization.

In the case of retrenchment, however, for the closure of a business or a department due to serious business losses to be regarded as an authorized cause for terminating Ees, it must be proven that the losses incurred are substantial and actual or reasonably imminent; that the same increased through a period of time; and that the condition of the company is not likely to improve in the near future.

Does not obligate the Er for the payment of separation package if there is closure of business due to serious losses.

LC provides for the payment of separation package in case of retrenchment to prevent losses.

Q: When is disease a ground for dismissal? A: Where the Ee suffers from a disease, and:

1. His continued employment is prohibited by law or prejudicial to his health or to the health of his co-Ees. (Sec.8, Rule I, Book VI, IRR)

2. With a certification by competent public health authority that the disease is incurable within 6 months despite due medication and treatment [Solis vs. NLRC, GR No. 116175, (1996)].

Note: The requirement for a medical certification cannot be

dispensed with; otherwise, it would sanction the unilateral and arbitrary determination by the Er of the gravity or extent of the Ee’s illness and thus defeat the public policy on the protection of labor [Manly Express vs.Payong, G.R.

No. 167462, (2005)].

Termination of services for health reasons must be effected only upon compliance with the above requisites. The requirement for a medical certificate under Art. 284 of the LC cannot be dispensed with; otherwise, it would sanction the unilateral and arbitrary determination by the Er of the gravity or extent of the Ee’s illness and thus defeat the public policy on the protection of labor [Sy et. al vs. CA, G.R.

No. 142293, (2003)].

Q: What is the procedure in terminating an employee on the ground of disease?

A:

1. The Er shall not terminate his employment unless:

a. There is a certification by a competent public health authority

b. That the disease is of such nature or at such a stage that it cannot be cured within a period of 6 months even with proper medical treatment.

2. If the disease or ailment can be cured within the period, the Er shall not terminate the Ee but shall ask the Ee to take a leave. The Er shall reinstate such Ee to his former position immediately upon the restoration of his normal health. (Sec. 8, Rule I, Book VI, IRR)

Q: Is an employee suffering from a disease entitled to reinstatement?

A: Yes, provided he presents a certification by a competent public health authority that he is fit to return to work [Cebu Royal Plant vs. Deputy Minister, G.R. No. L-58639, (1987)].

Q: Is the requirements of a medical certificate mandatory?

A: Yes, it is only where there is a prior certification from a competent public authority that the disease afflicting the Ee sought to be dismissed is of such nature or at such stage that it cannot be cured within 6 months even with proper medical treatment that

the latter could be validly terminated from his job [Tan vs. NLRC, G. R. No. 116807, (1997)].

Note: Termination from work on the sole basis of actual

perceived or suspected HIV status is deemed unlawful. (Sec.

35, R.A. 8504 HIV/AIDS Law)

Q: Anna Ferrer has been working as a book keeper at Great Foods, Inc., which operates a chain of high- end restaurants throughout the country, since 1970 when it was still a small eatery at Binondo. In the early part of the year 2003, Anna, who was already 50 years old, reported for work after a week-long vacation in her province. It was the height of the SARS scare, and management learned that the first confirmed SARS death case in the Phils, a

“balikbayan” nurse from Canada, is a townmate of

Anna. Immediately, a memorandum was issued by management terminating the services of Anna on the ground that she is a probable carrier of SARS virus and that her continued employment is prejudicial to the health of her co-Ees. Is the action taken by the employer justified? (2004 Bar Question)

A: The Er’s act of terminating the employment of Anna is not justified. There is no showing that said Ee is sick with SARS, or that she associated or had contact with the deceased nurse. They are merely town mates. Furthermore, there is no certification by a competent public health authority that the disease is of such a nature or such a stage that it cannot be cured within a period of 6 months even with proper medical treatment. (Implementing Rules, Book VI, Rule 1, Sec. 8, LC)

Q: Discuss the rules on separation pay with regard to each cause of termination.

A: CAUSE OF

TERMINATION SEPARATION PAY

Automation

Equivalent to at least 1 month pay or at least 1 month pay for every year of service, whichever is higher Redundancy

Equivalent to at least 1 month pay or at least 1 month pay for every year of service, whichever is higher Retrenchment

Equivalent to 1 month pay or at least ½ month pay for every year or service Closures or

cessation of operation not due

Equivalent to at least 1 month pay or at least 1 month pay for every year of

U S T