Title
Ariola vs. Philex Mining Corp.
Case
G.R. No. 147756
Decision Date
Aug 9, 2005
Former Philex supervisors retrenched in 1993; Supreme Court ruled illegal dismissal due to inconsistent MOA criteria, invalid quitclaims, and ordered reinstatement or backwages.
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Case Digest (G.R. No. 147756)

Facts:

Background of the Case:
Petitioners Roberto Ariola, Franco Mallare, Benjamin Biete, and Hermogenes Mamayson were former supervisors of respondent Philex Mining Corporation ("Philex"). In 1992, Philex faced financial losses, leading to cost-cutting measures, including early voluntary retirement and retrenchment programs. A workforce audit revealed 310 "excess positions," with 241 positions ultimately slated for retrenchment.

Memorandum of Agreement (MOA):
On 29 April 1993, Philex and the rank-and-file employees' union signed a MOA outlining retrenchment criteria. The following day, Philex and the supervisory employees' union signed a similar MOA. On 14 May 1993, Philex informed the Department of Labor and Employment (DOLE) of its plan to retrench 241 employees.

Termination and Quitclaims:
On 1 June 1993, petitioners, along with six other supervisors and 49 rank-and-file employees, received termination notices effective 30 June 1993. They were paid separation pay and signed Deeds of Release and Quitclaim.

Voluntary Arbitration:
The rank-and-file employees' case (Case No. 01-93) was referred to Arbitrator Juan B. Valdez, who ruled their dismissal illegal. The supervisors' case (Case No. AC-528-RB-CAR 09-003-94) was referred to Arbitrator Norma B. Advincula, who upheld the retrenchment, citing financial losses and the validity of the quitclaims.

Appeals:
The rank-and-file employees' case was eventually upheld by the Supreme Court, while petitioners appealed to the Court of Appeals, which denied their petition, ruling that they voluntarily retired and were barred from questioning their separation due to the quitclaims.

Issue:

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Ruling:

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Ratio:

  1. Retrenchment vs. Retirement:
    The Court found that petitioners were retrenched, not retired. The "retirement gratuity" paid to them was actually separation pay under Philex's Retirement Gratuity Plan, applicable to retrenchment cases.

  2. Illegality of Retrenchment:
    The retrenchment was deemed illegal because the criteria in the supervisors' MOA were inconsistent with the CBA. Specifically, the MOA considered disciplinary actions that the CBA had removed from employees' records, making the retrenchment criteria unfair and unreasonable.

  3. Validity of Quitclaims:
    The Court ruled that the quitclaims signed by petitioners did not bar them from questioning their dismissal. The Court acknowledged that petitioners signed the documents under economic necessity, and their status as supervisors did not make them immune to coercion or undue influence.

  4. Law of the Case:
    The Court clarified that the Court of Appeals' Decision in the rank-and-file employees' case (CA-G.R. SP No. 39235) was not the "law of the case" for this petition, as the cases involved different MOAs and parties.


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