G.R. No. L-28554 - Unno Commercial Enterprises, Inc. vs. General Milling Corp.

Lambert Pawnbrokers and Jewelry Corporation, operating primarily in Cebu and Bohol.
Lambert Lim, a Malaysian national and key operator of the businesses, also connected by familial ties to respondent.

Helen Binamira, employed as an appraiser since July 1995 and later designated as vault custodian in 1996 at the Tagbilaran Branch of the corporation.
Familial Link: Daughter of Atty. Boler Binamira, Sr., which later became a subject of dispute regarding representation.

On September 14, 1998, Lambert Lim issued a termination letter to Helen Binamira.
The termination was justified on the basis of alleged “business losses” that necessitated retrenchment.
Helen contended that she was dismissed without just or authorized cause and without the benefit of due process, alleging that her termination was instead a casualty in a family power struggle.

Held that the dismissal was valid retrenchment due to economic reverses.
Directed payment of a retrenchment benefit computed based on the employee’s salary and length of service (7,500 pesos based on three years of service).

On appeal, the NLRC reversed the Labor Arbiter’s decision by emphasizing the requirement for a written notice (to both the employee and DOLE at least one month prior) as a precondition for valid retrenchment.
The NLRC ordered Helen’s reinstatement with full backwages, finding that procedural requirements were not met.
Upon a subsequent Motion for Reconsideration, the NLRC set aside its prior finding and entered a new decision declaring the termination valid on the ground of redundancy, citing overstaffing at the Tagbilaran branch, and awarding redundancy pay plus an additional month’s salary as indemnity.

The CA reversed the NLRC decision based on the evaluation of conflicting findings regarding the actual justification for the dismissal.
It ruled that there was neither a valid retrenchment (due to lack of requisite notice and absence of substantive business losses) nor a valid redundancy (as the position of vault custodian was essential in the pawnshop business).
The CA declared Helen’s dismissal illegal and ordered:

Full backwages from the time of illegal dismissal up to reinstatement (if feasible).
Separation pay at one month’s salary per year of service, in lieu of reinstatement given the strained relations.

While moral and exemplary damages were initially awarded, these were later deleted owing to insufficient evidence of malice or bad faith.

Petitioners submitted a Statement of Income and Expenses showing a drop in gross income from 1,000,000 pesos to 665,000 pesos in 1998.
The financial statement, however, was prepared on January 12, 1999—raising doubts about the immediacy and veracity of the alleged business losses on September 14, 1998.
No evidence was presented to conclusively prove that the economic downturn was serious, sustained, and real—a requirement under the Labor Code for valid retrenchment.

Whether the CA gravely erred in reversing the factual findings of both the Labor Arbiter and the NLRC by reviewing the evidence of the exercise of management prerogative in the dismissal of Helen Binamira.
Whether the CA erred in overruling the unanimous findings of the labor tribunals that the dismissal was not executed with bad faith or fraud, despite conflicting evidence.
Whether the CA improperly reversed the labor tribunal determinations based principally on allegations and evidence submitted by individuals who were formerly connected to the petitioners (former counsel, adviser, and business partner).