Sep 122014

LAST Feb. 12, 2004, Sangwoo Philippines, Inc. (SPI) notified its employees who are members of Sangwoo Philippines, Inc. Employees Union (SPEU) of its permanent closure and cessation of business operation effective March 16, 2004 due to serious economic losses and financial reverses. The notice was posted in conspicuous places within the company premises. The Department of Labor and Employment (DOLE) was furnished a copy of the notice last Feb. 13, 2004, together with a separate letter notifying it of the company’s permanent closure. SPEU was also furnished with a copy.

In a case filed by SPEU against SPI, the labor arbiter (LA), the National Labor Relations Commission (NLRC) and the Court of Appeals (CA) found that SPI complied with the notice requirement before closure of business. Did they err?

The Supreme Court (Second Division) ruling: Yes.

Article 297 of the Labor Code provides that before any employee is terminated due to closure of business, it must give a one month’s prior written notice to the employee and to the DOLE. In this relation, case law instructs that it is the personal right of the employee to be personally informed of his proposed dismissal as well as the reasons for it; and such requirement of notice is not a mere technicality or formality which the employer may dispense with. Since the purpose of previous notice is to, among others, give the employee some time to prepare for the eventual loss of his job, the employer has the positive duty to inform each and every employee of their impending termination of employment. To this end, jurisprudence states that an employer’s act of posting notices to this effect in conspicuous areas in the workplace is not enough. Verily, for something as significant as the involuntary loss of one’s employment, nothing less than an individually-addressed notice of dismissal supplied to each worker is proper. x x x.

In keeping with these principles, the Court finds that the LA, NLRC, and CA erred in ruling that SPI complied with the notice requirement when it merely posted various copies of its notice of closure in conspicuous places within the business premises.

As earlier explained, SPI was required to serve written notices of termination to its employees, which it, however, failed to do. It is well to stress that while SPI had a valid ground to terminate its employees, i.e., closure of business, its failure to comply with the proper procedure for termination renders it liable to pay the employee nominal damages for such omission. Based on existing jurisprudence, an employer that has a valid cause for dismissing its employee but conducts the dismissal with procedural infirmity is liable to pay the employee nominal damages in the amount of P30,000 if the ground for dismissal is a just cause, or the amount of P50,000 if the ground for dismissal is an authorized cause. (Sangwoo Philippines, Inc., et. al. vs. Sangwoo Philippines, Inc. Employees Union, et. al., G.R. No. 173154, Dec. 9, 2013; SPEU vs. SPI, G.R. No. 173229, Dec. 9, 2013, quoting Abbott Laboratories, Philippines v. Alcaraz, G.R. No. 192571, July 23, 2013).

Published in the Sun.Star Cebu newspaper on September 13, 2014.

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