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[G.R. No. 159828. September 20, 2006]

KASAPIAN NG MALAYANG MANGGAGAWA SA COCA-COLA (KASAMMA-CCO)-CFW Local 245 vs. Court of Appeals and Coca-Cola Bottlers Philippines, Inc.

First Division

Sirs/Mesdames:

Quoted hereunder, for your information, is a resolution of this Court dated SEPT. 20, 2006 .

G.R. No. 159828 (Kasapian ng Malayang Manggagawa sa Coca-Cola (KASAMMA-CCO)-CFW Local 245 vs. Court of Appeals and Coca-Cola Bottlers Philippines, Inc.)

Before Us for Resolution are the Motions for Reconsideration of both parties seeking the modification of Our Decision dated 19 April 2006. Petitioner assails the Decision on the ground that respondent Coca-Cola Bottlers Philippines, Inc. (respondent company) failed to prove that the dismissal was for an authorized cause, as the evidence presented by respondent company was "insufficient to establish the factual basis for closing the Manila and Antipolo plants", and that respondent company failed to comply with the 30 days notice requirement. Respondent company, on the other hand, assails Our finding that the 61 subject employees should be considered regular employees as of 1 December 1998, thus entitled to the benefits under the collective bargaining agreement (CBA) and the Memorandum of Agreement (MOA), arguing that the phrase "effective 1 December 1998" contained in the MOA refers only to the reckoning date when the non-regular employees will be given priority in filling up vacant plantilla positions.

Conspicuously, the issues presented by petitioner have been undoubtedly passed upon, not only by the National Labor Relations Commission (NLRC) and the Court of Appeals, but also by this Court, all reaching the same conclusion that there is enough proof on record to support the finding that the closure of the two plants was for authorized cause. As concluded by the NLRC in its Decision dated 9 July 2001, sustained by the Court of Appeals in its own Decision dated 16 May 2003, and affirmed by Us in Our Decision:

We also hold that the allegedly redundant six hundred thirty-nine (639) employees were not illegally dismissed.

Initially, there was just cause for the employees' dismissal.

It bears to stress that, aimed at 1) attaining efficiency and cost effectiveness, 2) maximizing its production capacity and 3) ensuring that its customers obtain products manufactured only under the most stringent quality standards of CCBPI's modern, technologically advanced production plants, CCBPI conducted an extensive study on the operational mechanics of its Manila and Antipolo plants.

From this study, it was established that there was inadequate water supply at CCBPI's Manila and Antipolo plants. As a consequence, the company was constrained to transport water from several sources to its production line in Manila in 1998 and 1999. Worse, it was discovered that the quality of water supply was fast deteriorating due to the rise of its salt level. This reality prompted the company to reduce its production capacity. Moreover, the bottling process of treating this water of decadent quality resulted in higher production costs. Under these twin conditions, the company could not thus efficiently continue on with its operations.

The study also reveals the decadent state of the production equipment of CCBPI's Manila and Antipolo Plants. Their production lines were among the oldest and hence, had very low line efficiency. In comparison with the line efficiency of 71.18% of the company's other plants, the Manila and Antipolo Plants had only efficiency ratings of 61.09% and 58.39%, respectively. Whereas the other production lines had an average wastage rating of 1.01%, the twin plants had a higher average wastage ratings of 2.05% and 1.77%, respectively. The company's production studies in 1998 and 1999 likewise reveal substantial issues on Good Manufacturing Practice (GMP) and process control for such plants.

From this study, the impracticability of rehabilitating the twin plants was also found out. Although the problems cited may be remedied by way of a major reconstruction, this would, however, entail an investment of huge capital. Further, the congestion of the twin plants' sites would render impracticable such a major reconstruction. Besides, there was utter lack of effective solution to the retrograding water supply.

The foregoing significant facts are substantially evidenced by the Technical Evaluation of Production Requirements, Annex "20", CCBPI's Rejoinder; Affidavit of its Operations Manager dated 3 March 2000 , Annex "1", its Position Paper dated 20 July 2000 ; and Certification dated May 21, 2001 of Mr. Bruce A. Herbert, its Sur-Rejoinder.

To solve the problems cited, however, CCBPI, as soundly recommended by the study, integrated the production capacities of the different CCBPI modern and technologically advanced production facilities. This imperative integration indispensably prompted CCBPI to close, its production lines at the Manila and Antipolo Plants.

This measure taken by CCBPI indeed draws jurisprudential justification from the following sound pronouncement of the Supreme Court:

"Business enterprises today are faced with the pressures of economic recession, stiff competition and labor unrest. Thus, businessmen are always pressured to adopt certain changes and programs in order to enhance their profits and protect their investments. Such changes may take various forms. Management may even choose to close a branch, department, a plant, or a shop." (Philippine Engineering Corp. vs. CR, 41 SCRA 89)

x x x x

Another reason why the dismissal of the 639 employees was legal is that the same was attended by the observance of the requirements of due process. Indeed, as early as 9 December 1999 , more than thirty (30) days prior to their actual dismissal on 1 March 2000 , CCBPI served on the affected employees a written notice informing them of the closure of the two plants and subsequent redundation. Later, by 13 December 1999 , CCBPI filed with the DOLE the required written notice informing it of the subject closure and consequent redundation.

This finding is perfectly in line with the following applicable legal excerpts:

"ART. 283. Closure of establishment and reduction of personnel. ---The employer may also terminate the employment of any employee due to ....redundancy.... or the closing or cessation of operation of the establishment or undertaking ...by serving a written notice on the workers and the Department of Labor and Employment at least one (1) month before the intended date thereof."

"For termination of employment based on just causes defined in Article 282 of the Labor Code:

(1) A written notice served [on] the employee specifying the ground or grounds for termination, and giving said employee reasonable opportunity within which to explain his side;

(ii) A hearing or conference during which the employee concerned, with the assistance of counsel if he so desires is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him; and

(iii) a written notice of termination served on the employee, indicating that upon, due consideration of all the circumstances, grounds have been established to justify his termination.

"For termination of employment as defined in Article 283 of the Labor Code, the requirement of due process shall be deemed complied with upon the service of a written notice to the employee and the appropriate Regional Office of the Department of Labor and Employment at least thirty days before [effectivity] of the termination, specifically the ground or grounds for termination." (Par. D, Section 2, Rule 1, Book VI, Omnibus Rules Implementing the Labor Code)

Needless to state, having been lawfully redundated, as comprehensively discussed above, the affected employees are entitled to payment of separation pay equivalent to one (1) month pay for every year of service, pursuant to Article 283 of the Labor Code which provides:

"In case of termination due to the installation of labor saving devices or redundancy, the worker affected thereby shall be entitled to separation pay equivalent to at least his one (1) month pay or to at least One (1) month pay for every year of service, whichever is higher."

However, due to the economic adversity besetting our workers today brought about by the ever increasing standards of living, CCBPI realized that such a legal package was no longer conformable with such on obtaining economic reality. Accordingly, CCBPI granted the affected employees separation package much bigger than that legal separation package. Specifically, CCBPI paid affected employees with less than fifteen (15) years of service 150% monthly salary for every year of service and those with fifteen (15) years and above of service 195%. (Emphases supplied.)

Furthermore, the issue presented by petitioner would entail an inquiry into the factual veracity and the probative value of the evidence presented, the determination of which is the statutory function of the NLRC. Petitioner, therefore, is asking Us to sift through the evidence on record and pass upon whether, indeed, respondent company's Manila and Antipolo plants were inefficient. However, for this Court to do the same would be contrary to the well-settled principle that this Court is not a trier of facts, and cannot re-examine and re-evaluate the probative value of the evidence presented to the NLRC and the Court of Appeals, which formed the basis of the questioned decision. However, petitioner would have this Court apply an exception to the rule that findings of fact by administrative agencies are accorded great respect, if not finality by the courts, since, according to petitioner, the conclusion of the NLRC is not supported by substantial evidence. Petitioner insists that it is erroneous for this Court to uphold the findings of fact of the NLRC since respondent company failed to discharge its burden of proving that the closure was for authorized cause because of its failure to present credible evidence to prove the same.

To answer this contention, let Us first reiterate the discussion made in Our Decision regarding the respondent company's right to close its Manila and Antipolo plants, to wit:

As correctly pointed out by the NLRC, the Court has already resolved that the characterization of the employee's service as no longer necessary or sustainable and, therefore, properly terminable, is an exercise of business judgment on the part of the employer. The wisdom or soundness of such characterizing or decision is not subject to discretionary review on the part of the Labor Arbiter nor of the NLRC so long, of course, as violation of law or merely arbitrary and malicious action is not shown. The determination of the continuing necessity of a particular officer or position in a business corporation is management's prerogative, and the courts will not interfere with the exercise of such so long as no abuse of discretion or merely arbitrary or malicious action on the part of management is shown. In the case at bar, the closure of the Manila and Antipolo plants and the resulting termination of the employment of 646 employees is not tainted with bad faith. As found by the NLRC, the company's decision to close the plant was a result of a study conducted which established that the most prudent course of action for the company was to stop operations in said plants and transfer production to other more modern and technologically advanced CBBPI plants.

While the Constitution itself dictates that protection be accorded to labor, employers are also afforded rights and privileges to ensure their independence and reasonable return of capital. And one of the rights accorded an employer is the right to close an establishment or undertaking. The right to close the operation of an establishment or undertaking is explicitly recognized under the Labor Code as one of the authorized causes in terminating employment of the workers, the only limitation being that the closure must not be for the purpose of circumventing the provisions on termination of employment embodied in the Labor Code. [1] cralaw As long as the company's exercise of the same is in good faith to advance its interest and not for the purpose of defeating or circumventing the rights of the employees under the law or a valid agreement, such exercise will be upheld. [2] cralaw The ultimate test of the validity of closure or cessation of establishment or undertaking is that it must be bona fide in character. [3] cralaw The legitimacy of respondent company's decision to close its two plants, as found by the NLRC, are supported by the Technical Evaluation of Production Requirements, Annex "20" of respondent company's Rejoinder; the Affidavit of respondent company's Operations Manager, Mr. Damaso Agudelo, dated 3 March 2000, Annex "1" of its Position Paper dated 20 July 2000; and the Certification dated 21 May 2001 of Mr. Bruce A. Herbert.

In questioning this conclusion of the NLRC and the appellate court, petitioner disputes the credibility of the affidavit of Mr. Damaso Agudelo, arguing that the statements contained therein are "double hearsay" since petitioner was never given an opportunity to cross-examine the affiant as he was never presented as a witness, and that the self-serving statements contained in the affidavit is not substantiated or even corroborated by any evidence.

The first argument of petitioner, however, is not persuasive because the rules of evidence are not strictly observed in proceedings before administrative bodies like the NLRC where decisions may be reached on the basis of position papers only. [4] cralaw Apropos the second contention, although We agree with petitioner that by themselves, generalized and pro forma affidavits cannot constitute relevant evidence which a reasonable mind may accept as adequate, [5] cralaw and that there must be some other relevant evidence to corroborate such affidavits, [6] cralaw nonetheless, the same is not true in the case at bar. Indeed, the facts purported to in the affidavit of Mr. Damaso Agudelo as leading to the closure of the two plants are reflected in the Technical Evaluation of Production Requirements and the Certification of Mr. Bruce Herbert submitted by respondent company, and admitted by the NLRC as competent evidence. For the NLRC and the Court of Appeals, these pieces of evidence, although not numerous, are adequate to prove the legality of the closure of the Manila and Antipolo plants.

The quantum of proof required in determining the legality of an employee's dismissal is only substantial evidence, [7] cralaw which is more than a scintilla of evidence or relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise. [8] cralaw Accordingly, while there exists contrary opinion on the issue of whether or not there is substantial evidence to prove the existence of an authorized cause for the closure, We cannot concurrently dismiss the findings of fact arrived at by the NLRC, since said findings are based on "substantial evidence" as appreciated by said quasi-judicial body. Moreover, the conclusion that the closure of respondent's Manila and Antipolo plants were for an authorized cause must be upheld for the reason that said pronouncement was arrived at after the NLRC had evaluated all the pieces of evidence admitted on record. These findings of fact must be sustained by the Court given that the determination of such facts are within the technical expertise of the NLRC, and further strengthened by the upholding of such findings by the Court of Appeals.

With respect to the issue of the compliance with the notice requirement, We have elucidated in Our Decision that:

Anent the allegation that private respondent failed to comply with the notice requirements as provided by the Labor Code in the cessation of its operations, we have already settled this matter in a similar case which was accordingly cited by the appellate court. In the case of Serrano v. National Labor Relations Commission, [9] cralaw we held that:

In that case [Associate Labor Unions-VIMCONTU v. NLRC (204 SCRA 913)], the employees and the then Ministry of Labor and Employment (MOLE) were notified in writing on August 5, 1983 that the employees' services would cease on August 31, 1983 but that they would be paid their salaries and other benefits until September 5, 1983. It was held that such written notice was "more than substantial compliance" with the notice requirement of the Labor Code.

Indeed, there was "more than substantial compliance" with the law in that case because, in addition to the advance written notice required under Art. 284 (now Art. 283) of the Labor Code, the employees were paid for five days, from September1 to 5, 1993, even if they rendered no service for the period. x x x Had private respondent given a written notice to the petitioner on October 1, 1991, at the latest, that effective October 31, 1991 his employment would cease although from October 1 he would no longer be required to work, there would be basis for private respondent's boast that '[p]ayment of this salary even [if he is] no longer working is effective notice and is much better than 30 days formal notice but working until the end of the 30 days period." This is not the case here, however. What happened here was that on October 11, 1991, petitioner was given a memorandum terminating his employment effective on the same day on the ground of retrenchment (actually redundancy).

In the instant case, the employees were served notice on 9 December 1999 that their employment were being severed effective 1 March 2000; however they were no longer required to report for work but they will continue to receive their salary up to 29 February 2000. Therefore, as enunciated in the ruling in Serrano v. NLRC, said act of private respondent constitutes substantial compliance with the notice requirement of the Labor Code.

As pointed out in our Decision, the Court has explained in the Serrano v. National Labor Relations Commission [10] case the rule enunciated in the Associated Labor Unions-VIMCONTU v. National Labor Relations Commission [11] cralaw case on how there can be more than substantial compliance with the 30-day notice rule in instances wherein the employee is no longer required to report for work until the effective date of termination but would still be paid his salary for said time period. According to the Court, had the company given a written notice to its employees at least 30 days before the intended effectivity of his termination, although said employees may no longer be required to work from the day notice was given, there would be basis for the company to claim that payment of his salary, even if he is no longer working, is effective notice and is much better than 30 days formal notice wherein the employees are still required to report for work.

In the case at bar, it could be said that there was even more than 30 days notice given to the employees regarding the termination of their employment due to the closure of respondent company's Manila and Antipolo plants. In fact, the employees were informed of their impending separation from work on 9 December 1999, or almost three months before the effectivity of their termination on 1 March 2000, although they were no longer required to report for work and were considered on paid leave from 9 December 1999. In addition, respondent company notified the DOLE of the employees' termination on 13 December 1999, or more than two months before the effectivity of said termination. This situation is clearly far better than that prevailing in the Associated Labor Union case where the Court ruled that there was substantial compliance with the 30 days notice requirement.

The purpose of the 30 days notice is to enable the employees to look for other means of employment and therefore to ease the impact of the loss of their jobs and the corresponding income, [12] cralaw as well as provide the DOLE with the opportunity to ascertain the verity of the alleged authorized cause of termination. [13] cralaw In the case at bar, it cannot be gainsaid that this purpose was ultimately achieved when the employees were considered on paid leave for almost three months before their actual termination, thus, giving them the opportunity to prepare for the eventual loss of their job by looking for suitable employment during said period while, at the same time, enjoying the security that they will still receive income for said time period. Furthermore, there is no dispute as to the fact that the termination of the employees of respondent company is effective only on 1 March 2000, thus, it cannot be said that the DOLE, as claimed by petitioner, will no longer have an opportunity to investigate the validity of the authorized cause for termination, because in the instant case, the DOLE still had more than two months from notice on 13 December 1999 to scrutinize the allegations of respondent company that there exists an authorized cause for the termination of more than 600 employees.

Coming now to respondent company's Motion for Reconsideration, the ground relied upon by respondent company has already been passed upon this Court in Our Decision, to wit:

It is the contention of petitioner that the date 1 December 1998 refers to the effective date of regularization of said employees, while private respondent maintains that said date is merely the reckoning date from which the one year employment requirement shall be computed. We agree with petitioner. It is erroneous for the NLRC to conclude that the regularization of the 61 employees does not retroact to 1 December 1998. A fastidious reading of the above quoted provision will clearly point to the conclusion that what is pertained to by the phrase "effective December 1, 1998" is the phrase immediately preceding it which is "converting his non-regular employment status to regular employment status." It will be defying logic to adopt private respondent's contention that the phrase "effective December 1, 1998" designates the period when the non-regular employees will be given priority in filling-up the positions, simply because the MOA was signed only on 26 December 1998. Therefore, it is logically absurd that the company will only begin to extend priority to these employees on a date that has already passed, when in fact they have already extended priority to these employees by agreeing to the contents of the MOA and signing said agreement. Consequently, we hold that the effectivity date of the regularization of the 61 employees was 1 December 1998.

We, too, cannot agree with the NLRC's rationale that entitling the 61 regularized employees to the MOA benefits would certainly infringe the well-entrenched principle of "no-work-no-pay," since they only became regular, according to private respondent, on 1 May 1999 and 1 October 1999. As stated in the MOA, only those who have worked with the company for one year as of 1 December 1998 and are still working for the company as of the signing of the MOA, will be considered for regularization. Evidently, it is erroneous for the NLRC to conclude that extending to them the benefits of the MOA would violate the principle of "no-work-no-pay" as they are actually rendering service to the company even before 1 December 1998, and continued to do so thereafter. Truly, they were accorded the status of regular employees precisely because they were rendering service to the company for the required period.

Moreover, a perusal of both parties' Motions for Reconsideration will disclose that the issues raised therein are the very same issues that have been passed upon in Our Decision. Thus, We find no compelling reason to alter, much less reverse, the conclusions reached in the Decision sought to be reconsidered.

Therefore, based on the foregoing, We still maintain that the closure of respondent company's Manila and Antipolo plants was for an authorized cause and that respondent company had substantially complied with the notice requirement under the Labor Code. We also uphold that the 61 subject employees should be considered regular employees as of 1 December 1998, thus entitled to the CBA salary increase, mid-year gratuity pay, one sack of rice, overtime pay and thirteenth month pay as provided for in the MOA.

Accordingly, the Motions for Reconsideration of petitioner Kasapian ng Malayang Manggagawa sa Coca-Cola (KASAMMA-CCO)-CFW Local 245 and respondent Coca-Cola Bottlers Philippines, Inc. are hereby DENIED for lack of merit.

Very truly yours,

(Sgd.) ENRIQUETA ESGUERRA-VIDAL
Clerk of Court

First Division

DISSENTING OPINION

YNARES-SANTIAGO, J .:

In our Decision dated April 19, 2006, we held that the closure of the Manila and Antipolo plants was for an authorized cause and that private respondent complied with the notice requirements as provided by the Labor Code in terminating the employment of the 639 employees.

Both parties moved for reconsideration. Petitioner union insists that private respondent has failed to discharge its burden of proving that the closure of its two plants was for an authorized cause and that it complied with the notice requirements in terminating the services of its employees. On the other hand, private respondent avers that the subject 61 employees should not be considered as regular employees as of December 1, 1998.

In disposing the issue of whether the closure was authorized, we held that:

Relative to the issue of whether the closure of private respondent's Manila and Antipolo plants was legal, we agree in the conclusions of the NLRC and the Court of Appeals that the closure of said plants is for an authorized cause.

x x x As found by the NLRC, the private respondent's decision to close the plant was a result of a study conducted which established that the most prudent course of action for the private respondent was to stop operations in said plants and transfer production to other modern and technologically advanced plants of private respondent.

Other than its mere allegations, petitioner union failed to show that the closure of the two plants was without factual basis and done in utter bad faith. No evidence was presented by petitioner to prove its assertion that private respondent resorted to the closure of the Manila and Antipolo plants to prevent the renegotiations of the CBA entered into between the parties. As adequately explained by the NLRC, the subject closure and the resulting termination of the 639 employees was due to legitimate business considerations, as evidenced by the technical study conducted by private respondent.1

Upon re-examination of the records of the case, and the motions for reconsideration filed by both parties, I have second thoughts on the conclusion that the two plants were closed for authorized cause and that the employees were validly dismissed on the ground of redundancy.

In termination cases, like the present controversy, the burden of proving the circumstances that would justify the employees' dismissal rests with the employer.2 Failure to discharge this burden would mean that the dismissal is not justified and therefore illegal. 3 Thus, a party alleging a critical fact must support his allegation with substantial evidence for any decision based on unsubstantiated allegation cannot stand as it will offend due process.4

I believe that private respondent failed to discharge this burden.

The findings of the labor tribunals and the Court of Appeals that the closure of the two plants was for an authorized cause was anchored on the affidavit dated March 3, 20005 of its Operations Manager, Mr. Damaso T. Agudelo, Jr.,6 the Technical Evaluation of Production Requirements which was attached as Annex "20" to private respondent's Rejoinder, and the Certification dated May 21, 2001 of a certain Bruce A. Herbert.7

According to Agudelo's affidavit, private respondent conducted an extensive "study" showing that the production lines at the two plants had very low efficiency, that the quality of water was deteriorating, and that rehabilitation was not feasible. The affidavit reads:

4.� Based on an exhaustive study conducted by the Technical Operations Services of CCBPI, it became evident that the optimal approach for managing its resources is to integrate the various production facilities and retire the old production lines at CCBPI's Manila and Antipolo Plants.

5.� Among the many complex, technical, capital investment and cost management considerations taken into account were the water supply, state of the equipment and operations cost at different CCBPI Plants.

6.� The study established that there is no sufficient water supply at the Manila and Antipolo Plants. In fact, due to water shortage in 1998 and 1999, the Company had to transport water from various sources to its production line in Manila. On the other hand, the quality of water supply in Antipolo is rapidly deteriorating because of the rising salt level. As a consequence, the Company had to reduce its production capacity. Further, the bottling process to treat low quality water resulted in higher costs of production. Considering that water is one of the most vital components in the production of softdrinks, the Company certainly cannot efficiently continue on with its operations under these conditions.

7.� The state of the equipment at the Manila and Antipolo Plants was also one of the major concerns. The production lines at Manila and Antipolo are among the oldest and have very low line efficiency. Compare to the average line efficiency of the different CCBPI Plants of 71.18%, the Manila and Antipolo Plants can only operate at an efficiency rating of 61.07% and 58.39%, respectively. Manufacturing audits by the Company in 1998 and 1999 also showed significant issues on GMP (Good Manufacturing Practice) and process control for both plants.

8.� The rehabilitation of the two Plants were also considered. However, the problems cited can only be remedied through a major reconstruction which would entail a huge capital investment. Moreover, compounding the situation is the congestion of the two Plant sites making a major reconstruction impossible. Even more compelling is the lack of a feasible solution to the diminishing supply of quality water. More importantly, the study revealed that the combined production capacity of the different CCBPI modern and technologically-advanced production facilities could more than compensate for whatever lost capacity that would result from the cessation of operation of the Manila and Antipolo Plants.8

The NLRC merely reproduced the affidavit 9 and relied on the unsubstantiated claims of Agudelo in ruling that the closure was for authorized cause. Aside from the self-serving affidavit of Agudelo, the alleged study was never presented at any stage of the proceedings. Indeed, it appears from the records that it is nonexistent. It was not attached to the affidavit. Neither was it submitted with private respondent's Position Paper10 and Reply11 before the NLRC, its Comment12 and Memorandum13 before the Court of Appeals, or its Comment14 and Memorandum15 before this Court. It was not even shown when the study was conducted.

Moreover, the Technical Evaluation of Production Requirements was merely attached as Annex "20" to private respondent's Rejoinder but the persons who allegedly prepared the same were not identified. Regarding the Certification issued by a certain Bruce A. Herbert, the same was dated May 21, 2001, long after the closure of the two plants on December 9, 1999.

In sum, the factual findings of authorized cause in this case are founded merely, first, on the sweeping declarations of Agudelo whose judgment was biased in favor of private respondent's cause; second, on the alleged Technical Evaluation Production Requirements whose authorship was not even identified; and third, on the Certification by a certain Bruce A. Herbert issued more than one year after the plants' closure. These documents do not satisfy the requirement of substantial evidence. They are insufficient to establish the factual basis for closing the strong>Manila and Antipolo plants.

In the case of San Miguel Corporation v. Del Rosario,16 we held that an affidavit does not satisfy the requirement of substantial evidence that a reasonable mind might accept as adequate to support a conclusion. Thus:

In the case at bar, petitioner presented an affidavit of its Sales Manager and a memorandum of the company both to the effect that there is a need to redeploy its regular employees and terminate the employment of temporary employees, in view of an excess in manpower. These documents, however, do not satisfy the requirement of substantial evidence that a reasonable mind might accept as adequate to support a conclusion. For one, the other signatories to the memorandum were not even identified. For another, the said memorandum and affidavit are self-serving. These documents could have gained greater weight had petitioner presented its old and new staffing pattern, the newly created and abolished positions and the documents showing the target business, as well as the proof showing the failure to attain the same.

Applying the same rationale to the case at bar, the affidavit of Agudelo cannot be considered as substantial evidence to prove that the closure of the two plants was for an authorized cause. Without the study in support thereof, the truth regarding the low efficiency rating of the two plants, deteriorating water supply, and recommendation for closure, could not have possibly been ascertained.

There is nothing to sustain the conclusion that private respondent closed the two plants for legitimate business considerations. In balancing the interest between labor and capital, the prudent recourse in termination cases is to safeguard the prized security of tenure of employees and to require employers to present the best evidence obtainable, especially so because in most cases, the documents or proof needed to resolve the validity of the termination, are in the possession of employers.17 Any decision based on unsubstantiated allegation cannot stand as it will offend due process.18

I believe likewise that private respondent has not complied with the notice requirement in dismissing the employees. In disposing this issue, we held:

Anent the allegation that private respondent failed to comply with the notice requirements as provided by the Labor Code in the cessation of its operations, we have already settled this matter in a similar case which was accordingly cited by the appellate court. In the case of Serrano v. National Labor Relations Commission, we held that:

In that case [Associate Labor Unions-VIMCONTU v. NLRC (204 SCRA 913)], the employees and the then Ministry of Labor and Employment (MOLE) were notified in writing on August 5, 1983 that the employees' services would cease on August 31, 1983 but that they would be paid their salaries and other benefits until September 5, 1983. It was held that such written notice was "more than substantial compliance" with the notice requirement of the Labor Code.

Indeed, there was "more than substantial compliance" with the law in that case because, in addition to the advance written notice required under Art. 284 (now Art. 283) of the Labor Code, the employees were paid for five days, from September 1 to 5, 1993, even if they rendered no service for the period. x x x Had private respondent given a written notice to the petitioner on October 1, 1991, at the latest, that effective October 31, 1991 his employment would cease although from October 1 he would no longer be required to work, there would be basis for private respondent's boast that '[p]ayment of this salary even [if he is] no longer working is effective notice and is much better than 30 days formal notice but working until the end of the 30 days period." This is not the case here, however. What happened here was that on October 11, 1991, petitioner was given a memorandum terminating his employment effective on the same day on the ground of retrenchment (actually redundancy).

In the instant case, the employees were served notice on 9 December 1999 that their employment were being severed effective 1 March 2000; however they were no longer required to report for work but they will continue to receive their salary up to 29 February 2000. Therefore, as enunciated in the ruling in Serrano v. NLRC, said act of private respondent constitutes substantial compliance with the notice requirement of the Labor Code.19 [Emphasis supplied.]

The Manila and Antipolo Plants were closed on December 9, 1999. On the same date, the employees were given notices of termination signed by the same Damaso T. Agudelo, Jr. whose affidavit was relied upon by the labor tribunal. The notice of termination reads:

After a careful review of the directions of the business and the need to cost-effectively manage our business operations through the integration of production capacity, and in order to optimize investments made in production facilities supplying Metro Manila, Management has decided to retire the production lines in Manila Plant.

In view of this, your position is one of those which will no longer be needed and thus declared redundant. With much regret, we have to advise you that you shall be considered separated from CCBPI effective March 1, 2000 , and you will be on a paid leave from December 9, 1999 to February 29, 2000 .

In recognition of your service to the Company, you will be receiving a generous separation package that will assist you in making the necessary adjustments to your new situation. The Company shall also extend counseling support to help you in preparing for this period of transition.

We would like to take this opportunity to thank you for your service to the Company and wish you well in all you future undertakings.

Article 283 of the Labor Code provides that the employer may terminate the employment of any employee due to the closing or cessation of operation of the establishment by serving a written notice on the workers and the Department of Labor and Employment at least one month before the intended date thereof. Section 2, Rule I, Book VI of the Rules Implementing the Labor Code also provides that:

Section 2. Security of tenure. (a) In cases of regular employment, the employer shall not terminate the services of an employee except for just or authorized causes as provided by law, and subject to the requirements of due process.

x x x x

For termination of employment as defined in Article 283 of the Labor Code, the requirement of due process shall be deemed complied with upon service of a written notice to the employee and the appropriate Regional Office of the Department of Labor and Employment at least thirty days before effectivity of the termination, specifying the ground or grounds for termination.

In the instant case, the affected employees were notified of their termination on the same day that the plants were closed, while the DOLE was notified on December 13, 1999 20 or four days after the closure.

As can be gleaned from the foregoing, the employment of the workers was terminated on the same day they received the notice of termination, i.e. on December 9, 1999. This is not in accord with the law which requires that workers be notified at least 30 days prior to the intended date of termination. However, to circumvent the mandatory 30-day notice requirement, private respondent deemed the employees on paid leave starting December 9, 1999 up to February 29, 2000, to put semblance that it complied with the notice requirement. This practice should not be allowed otherwise this would be resorted to by unscrupulous employers to the prejudice of their workers. Likewise, the scheme effectively tied the hands of the DOLE in verifying whether the cessation of the business was valid. The one-month period would provide the DOLE with an opportunity to investigate on the validity of the proposed closure. However, in the instant case, this can no longer be done considering that the act is already fait accompli.

The closure of the two plants becomes more suspect considering the haste by which it was done. It was not shown when then study was conducted which precipitated the closure. In fact, the study on which the closure was based was not even presented in evidence. Likewise, the closure was done during the pendency of petitioner union's complaint before the NLRC for alleged violations of the Memorandum of Agreement which was later amended to include union busting, illegal dismissal, underpayment of salaries, overtime, premium pay for holiday, rest day, holiday pay, vacation/sick leaves, 13th month pay, moral and exemplary damages and attorney's fees.

All told, the facts and evidence of this case lead to the conclusion that there is no bona fide closure of business considering the failure of private respondent to prove by substantial evidence the factual basis of such closure.

There being no authorized cause, the dismissal of the employees is illegal.

I am well aware of the principle in labor law that discourages interference with an employer's judgment in the conduct of business. The hiring, firing or demotion of employees is usually left for the employer to decide. Nonetheless, we have likewise held that whether it is closure or redundancy or any of the authorized causes, no employee may be dismissed without observance of good faith. It is not difficult for employers to abolish positions in the guise of valid exercise of management prerogative and we should not be easily swayed by such schemes which all too often reduce to near nothing what is left of the rubble of rights of our exploited workers.21 Thus, in Philippine Airlines, Inc. v. Pascua,22 we stressed that:

It must be borne in mind that the exercise of management prerogative is not absolute. While it may be conceded that management is in the best position to know its operational needs, the exercise of management prerogative cannot be utilized to circumvent the law and public policy on labor and social justice. That prerogative accorded management could not defeat the very purpose for which our labor laws exist: to balance the conflicting interests of labor and management, not to tilt the scale in favor of one over the other, but to guaranty that labor and management stand on equal footing when bargaining in good faith with each other. By its very nature, encompassing as it could be, management prerogative must be exercised always with the principles of fair play at heart and justice in mind.

Under Article 279 of the Labor Code, an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full back wages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. In case reinstatement is no longer feasible, as in this case due to the closure of the establishment, the employee shall be entitled to separation pay.23 In the instant case, CCBPI awarded separation pay to its dismissed employees in the amount equivalent to 150% of their monthly salary for every year of service, for those whose length of service is less than 15 years, and 195% of their monthly salary for every year of service, for those who served the company for 15 years or more.24

ACCORDINGLY, I vote that petitioner's motion for reconsideration should be GRANTED. There being no authorized cause, the dismissal of the employees is illegal. Private respondent is ordered to pay the dismissed employees full backwages from the time of their illegal dismissal on December 9, 1999 up to the finality of this judgment. In addition, private respondent is ordered to pay the dismissed employees who have not yet received their separation pay in an amount equivalent to 150% of their monthly salary for every year of service, for those whose length of service is less than 15 years, and 195% of their monthly salary for every year of service, for those who served the company for 15 years or more.


Endnotes:

[1] cralaw Capitol Medical Center, Inc. v. Meris , G.R. No. 155098, 16 September 2005, 470 SCRA 125, 136.

[2] cralaw J.A.T. General Services v. National Labor Relations Commission, G.R. No. 148340, 26 January 2004, 421 SCRA 78, 89.

[3] cralaw Capitol Medical Center, Inc. v. Meris , supra note 1.

[4] cralaw Philippine Long Distance Telephone Company, Inc. v. Tiamson, G.R. Nos. 164684-85, 11 November 2005, 474 SCRA 761, 774.

[5] cralaw Mendoza v. National Labor Relations Commission, 369 Phil. 1113, 1130 (1999).

[6] cralaw Philippine Long Distance Telephone Company, Inc. v. Tiamson, supra note 4 at 776.

[7] cralaw Id. at 771.

[8] cralaw Id.

[9] cralaw 387 Phil. 345 (2000).

[10] cralaw 380 Phil. 416 (2000).

[11] cralaw 204 SCRA 913.

[12] cralaw Sebuguero v. National Labor Relations Commission, G.R. No. 115394, 27 September 1995, 248 SCRA 532, 545.

[13] cralaw Serrano v. National Labor Relations Commission, supra note 9 at 340.

1 Rollo , pp. 796-797.

2 Agoy v. National Labor Relations Commission, 322 Phil. 636, 648 (1996).

3 Great Southern Maritime Services Corporation v. Acu�a , G.R. No. 140189, February 28, 2005, 452 SCRA 422, 437.

4 De Paul/King Philip Customs Tailor v. National Labor Relations Commission, 364 Phil. 91, 102 (1999)

5 Rollo , p. 288.

6 Id. at 76 & 83.

7 Id. at 83.

8 Id. at 288-289.

9 Id. at 81-83.

10 Id. at 160-319.

11 Id. at 330-377.

12 Id. at 472-508.

13 Id. at 565-598.

14 Id. at 622-635.

15 Id. at 709-749.

16 G.R. Nos. 168194 & 168603, December 13, 2005, 477 SCRA 604, 615.

17 Id. at 616.

18 De Paul/King Philip Customs Tailor v. National Labor Relations Commission, supra note 4.

19 Rollo , pp. 797-798.

20 Id. at 292.

21 Asufrin, Jr. v. San Miguel Corporation, G.R. No. 156658, March 10, 2004, 425 SCRA 270, 276.

22 456 Phil. 425, 437 (2003).

23 See Section 4(b), Rule I, Book VI, Rules Implementing the Labor Code.

24 See rollo , p. 86.


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