NDMC and APT

vs.
NLRC and GUILLEMA
By Richard Troy A. Colmenares
G.R. No. 112546 March 13, 1996
USA College of Law
6/24/14 10:48:09 PM

Nature of the Case
A petition for certiorari seeking reversal and disregard of the resolution promulgated by NLRC.

Facts
Petitioner NDMC and APT (North Davao Mining Corporation and Asset Privatization Trust), partly private and partly government owned,
operating since 1981 closed down on 31 May 1992 due to business losses (~PhP 20B). Private-respondent is among the employees who
were separated during the companys closure. These employees were given 12.5 days pay for every year of service, less than what the
company usually awards as separation pay in the past 30 days pay per year. The salaries of the employees were also claimed at a bank
58 km or 2 ! hours away via public transport from the company. Together with 271 other separated employees, private-respondent received
from the Labor Arbiter (LA) a favorable resolution in terms of benefits the same being affirmed in its entirety by the NLRC on appeal and
motion for reconsideration. The benefits amounted to 10,240,517.75 plus 10% attorneys fees. [(1) additional separation pay of 17.5 days (on
top of the 12.5 days) for every year of service; (2) backwages to 2 days a month times the number of years in service but not to exceed 3
years; (3) transportation allowance at P80 times the number of years in service but not to exceed 3 years]. NLRC sustained the award on
additional separation pay because this company policy and practice has become an obligation, otherwise it would constitute impermissible
discrimination [Businessday Information Systems and Services, Inc. (BISSI) vs. NLRC]. Art. 283 of the Labor Code also protects workers lest
closure of establishment and reduction of personnel. As to the transportation allowance and backwages, the petitioner showed no proof that
it was them who incurred transportation expenses, nor is there any legal basis for the contention that the transportation expenses is
uncompensable because it is official company time. Hence, this petition for certiorari.

Issue(s)
(1). Is an employer obliged to pay separation pay when it ceased operations due to serious business reverses?
(2). Is official time [company paid] used in collecting wages outside the office compensable?
(3). Absent evidences for expenses incurred, can transportation expenses be awarded?

Held
(1). No.

Art. 283 of the Labor Code requires a company to award separation pay for reasons other than serious business losses or financial
reverses. On the other hand, reliance on the BISSI case is also of no merit, for the facts were different. In that case, the company
was faulted for impermissible discrimination due to awarding of a higher separation pay [equivalent to a months salary times the
number of years plus mid-year bonus] for the retained employees compared to the earlier retrenched employees when the
company finally decided to close its operations implying that BISSI was financially capable of paying its retrenched employees
the same amount as that of the retained employees, thus making it exercise of management prerogatives contrary to the general
principles of justice and fair play. The same cannot be said in the case at bar for petitioner could no longer afford to pay its
remaining employees. Petitioners generosity should be admired, but to compel it to pay when his means do not permit him to do so
would be oppressive, and the law, in protecting the rights of the laborer, authorizes neither oppression nor self-destruction of the
employer.

Thus, the additional separation pay is set aside.

[In re: Comment of Solicitor General that petitioner could afford to award such benefits to employees. While the government is
stockholder (at 81.8%) of NDMC through APT, a stock holder is not directly, individually and or personally liable for indebtedness of
the corporation. Neither can it be said that the government is the employer of the private-respondent and co-complainants].

The Court did not decide on Issues (2) and (3) because it is a question of fact the same being within the expertise of the quasi-
judicial agency, absent any capriciousness. Thus, the court upheld the LAs resolution as regards backwages and transportation
allowance. In this case, the labor arbiter ruled that:
(2). Yes.

On-site inspection of the office shows petitioner violated the provision on place of payment. The labor arbiter issued a
resolution giving two options for the petitioner: (1) to pay separated employees at the plant site or (2) outside the plant site
as practiced, subject to provisions on existing labor standards. Since petitioner continued paying outside the place of
work, the law operates in favor of the private respondent and co-complainants which justifies that the hours spent in
collecting their salaries is compensable

(3). Yes.

The burden of proving that transportation was provided for employees to collect their salaries is with the employer
[petitioner]. Here, petitioner did not show proof. Thus, the award for transportation allowance is justified.