Wednesday, August 9, 2017

Philippine Carpet Manufacturing Corp. v. Tagyamon

Facts:
Petitioner Philippine Carpet Manufacturing Corporation (PCMC) is a corporation registered in the Philippines engaged in the business of manufacturing wool and yarn carpets and rugs. Respondents were its regular and permanent employees, but were affected by petitioner's retrenchment and voluntary retirement programs.

On March 15, 2004, Tagyamon, Luna, Badayos, Dela Cruz, and Comandao received a uniformly worded Memorandum of dismissal, to wit:

This is to inform you that in view of a slump in the market demand for our products due to the un-competitiveness of our price, the company is constrained to reduce the number of its workforce. The long-term effects of September 11 and the war in the Middle East have greatly affected the viability of our business and we are left with no recourse but to reorganize and downsize our organizational structure.

We wish to inform you that we are implementing a retrenchment program in accordance with Article 283 of the Labor Code of the Philippines, as amended, and its implementing rules and regulations.

In this connection, we regret to advise you that you are one of those affected by the said exercise, and your employment shall be terminated effective at the close of working hours on April 15, 2004.

Accordingly, you shall be paid your separation pay as mandated by law. You will no longer be required to report for work during the 30-day notice period in order to give you more time to look for alternative employment. However, you will be paid the salary corresponding to the said period. We shall process your clearance and other documents and you may claim the payables due you on March 31, 2004.

Thank you for your services and good luck to your future endeavors.

Claiming that they were aggrieved by PCMC's decision to terminate their employment, respondents filed separate complaints for illegal dismissal against PCMC, Pacific Carpet Manufacturing Corporation, Mr. Patricio Lim and Mr. David Lim.

PCMC, for its part, defended its decision to terminate the services of respondents being a necessary management prerogative. It pointed out that as an employer, it had no obligation to keep in its employ more workers than are necessary for the operation of his business. Thus, there was an authorized cause for dismissal.

Citing the Court's decision in the Philcea case, the CA applied the doctrine of stare decisis, in view of the similar factual circumstances of the cases. As to Ilao, Nemis and Marcos, while acknowledging their voluntary resignation, the CA found the same not a bar to the illegal dismissal case because they did so on the mistaken belief that PCMC was losing money. With the foregoing findings, the CA ordered that respondents be reinstated with full backwages less the amounts they received as separation pay. In case of impossibility of reinstatement, the CA ordered PCMC to pay respondents backwages and in lieu of reinstatement, separation pay equal to one month pay or 1⁄2 month pay for every year of service whichever is higher, plus moral damages.

Ruling:

Laches

Laches has been defined as the failure or neglect for an unreasonable and unexplained length of time to do that which by exercising due diligence, could or should have been done earlier, thus, giving rise to a presumption that the party entitled to assert it either has abandoned or declined to assert it. It has been repeatedly held by the Court that:

x x x Laches is a doctrine in equity while prescription is based on law. Our courts are basically courts of law not courts of equity. Thus, laches cannot be invoked to resist the enforcement of an existing legal right. x x x Courts exercising equity jurisdiction are bound by rules of law and have no arbitrary discretion to disregard them. In Zabat Jr. v. Court of Appeals x x x, this Court was more emphatic in upholding the rules of procedure. We said therein:

As for equity which has been aptly described as a "justice outside legality," this is applied only in the absence of, and never against, statutory law or, as in this case, judicial rules of procedure. Aequetas nunguam contravenit legis. The pertinent positive rules being present here, they should preempt and prevail over all abstract arguments based only on equity.
Thus, where the claim was filed within the [four-year] statutory period, recovery therefore cannot be barred by laches. Courts should never apply the doctrine of laches earlier than the expiration of time limited for the commencement of actions at law."

An action for reinstatement by reason of illegal dismissal is one based on an injury to the complainants' rights which should be brought within four years from the time of their dismissal pursuant to Article 1146[33] of the Civil Code. Respondents' complaint filed almost 3 years after their alleged illegal dismissal was still well within the prescriptive period. Laches cannot, therefore, be invoked yet. To be sure, laches may be applied only upon the most convincing evidence of deliberate inaction, for the rights of laborers are protected under the social justice provisions of the Constitution and under the Civil Code.

Stare Decisis

The main issue sought to be determined in this case is the validity of respondents' dismissal from employment. Petitioners contend that they either voluntarily retired from the service or terminated from employment based on an authorized cause. The LA and the NLRC are one in saying that the dismissal was legal. The CA, however, no longer discussed the validity of the ground of termination. Rather, it applied the Court's decision in the Philcea case where the same ground was thoroughly discussed. In other words, the appellate court applied the doctrine of stare decisis and reached the same conclusion as the earlier case.

Under the doctrine of stare decisis, when a court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases in which the facts are substantially the same, even though the parties may be different.[36] Where the facts are essentially different, however, stare decisis does not apply, for a perfectly sound principle as applied to one set of facts might be entirely inappropriate when a factual variant is introduced.

The question, therefore, is whether the factual circumstances of this present case are substantially the same as the Philcea case.

We answer in the affirmative.

This case and the Philcea case involve the same period which is March to April 2004; the issuance of Memorandum to employees informing them of the implementation of the cost reduction program; the implementation of the voluntary retirement program and retrenchment program, except that this case involves different employees; the execution of deeds of release, waiver, and quitclaim, and the acceptance of separation pay by the affected employees.

The illegality of the basis of the implementation of both voluntary retirement and retrenchment programs of petitioners had been thoroughly ruled upon by the Court in the Philcea case. It discussed the requisites of both retrenchment and redundancy as authorized causes of termination and that petitioners failed to substantiate them. In ascertaining the bases of the termination of employees, it took into consideration petitioners' claim of business losses; the purchase of machinery and equipment after the termination, the declaration of cash dividends to stockholders, the hiring of 100 new employees after the retrenchment, and the authorization of full blast overtime work for six hours daily. These, said the Court, are inconsistent with petitioners' claim that there was a slump in the demand for its products which compelled them to implement the termination programs. In arriving at its conclusions, the Court took note of petitioners' net sales, gross and net profits, as well as net income. The Court, thus, reached the conclusion that the retrenchment effected by PCMC is invalid due to a substantive defect. We quote hereunder the Court's pronouncement in the Philcea case, to wit:

Respondents failed to adduce clear and convincing evidence to prove the confluence of the essential requisites for a valid retrenchment of its employees. We believe that respondents acted in bad faith in terminating the employment of the members of petitioner Union.

In contrast, in this case, the retrenchment effected by respondent Corporation is invalid due to a substantive defect, non-compliance with the substantial requirements to effect a valid retrenchment; it necessarily follows that the termination of the employment of petitioner Union's members on such ground is, likewise, illegal. As such, they (petitioner Union's members) are entitled to reinstatement with full backwages.

We find no reason to depart from the above conclusions which are based on the Court's examination of the evidence presented by the parties therein. As the respondents here were similarly situated as the union members in the Philcea case, and considering that the questioned dismissal from the service was based on the same grounds under the same circumstances, there is no need to relitigate the issues presented herein. In short, we adopt the Court's earlier findings that there was no valid ground to terminate the employees.

Indeed, in Abaria v. National Labor Relations Commission, although the Court was confronted with the same issue of the legality of a strike that has already been determined in a previous case, the Court refused to apply the doctrine of stare decisis insofar as the award of backwages was concerned because of the clear erroneous application of the law. We held therein that the Court abandons or overrules precedents whenever it realizes that it erred in the prior decision. The Court's pronouncement in that case is instructive:

The doctrine though is not cast in stone for upon a showing that circumstances attendant in a particular case override the great benefits derived by our judicial system from the doctrine of stare decisis, the Court is justified in setting it aside. For the Court, as the highest court of the land, may be guided but is not controlled by precedent. Thus, the Court, especially with a new membership, is not obliged to follow blindly a particular decision that it determines, after re-examination, to call for a rectification.

The Abaria case, however, is not applicable in this case. There is no reason to abandon the Court's ruling in the Philcea case.

WHEREFORE, premises considered, the petition is hereby DENIED. The Court of Appeals Decision dated July 7, 2009 and Resolution dated February 26, 2010 in CA-G.R. SP No. 105236 are AFFIRMED.


No comments:

Post a Comment