Case Digest (G.R. No. 228328)
Facts:
Aire ne T. Unera et al. v. Shin Heung Electrodigital, Inc., G.R. No. 228328, March 11, 2020, Supreme Court Third Division, Zalameda, J., writing for the Court.Petitioners are former employees of Shin Heung Electrodigital, Inc. (Shin Heung); respondents are Shin Heung, its president (Mr. Seung Rae Cho) and an officer (Jennifer Villamayor). Shin Heung was principally engaged in manufacturing a computer part (“deck”) exclusively for Smart Electronics Manufacturing Service Philippines, Inc. (SEPHIL). Due to falling orders and revenue, Shin Heung reduced its workforce from about 2,000 to 991 employees and, after SEPHIL formally terminated its contract, issued a memorandum dated 18 April 2013 announcing total cessation of operations effective 31 July 2013 and notifying employees and DOLE accordingly.
Following the notice, some employees volunteered to resign and were paid separation pay; others were served 30-day notices and were dismissed by 31 July 2013. Shin Heung sold some assets, borrowed funds to pay separation pay (totaling about P28,973,250.00), and later sought buyers or investors for its plant. On 29 July 2013 it wrote DOLE to recall its closure notice after it found limited new clients (Canon, Brother, Panasonic) and contemplated capital infusion; nevertheless, those new orders were small and required only the press, mold and injection sections. Shin Heung thus resumed a small portion of operations, rehired employees needed for those sections, and leased most of its premises to THN Autoparts Philippines, Inc.
Claiming the closure was a pretext to circumvent tenurial rights, petitioners filed separate illegal dismissal complaints with claims for reinstatement, backwages, additional separation pay and damages before the Labor Arbiter. The Labor Arbiter (11 September 2014) largely upheld Shin Heung’s cessation of business as a valid authorized cause and dismissed most complaints, awarding relief only to three claimants for backwages. On appeal, the National Labor Relations Commission (NLRC) reversed (31 March 2015), ruling that Shin Heung failed to prove substantial losses and that resumption of operations evidenced bad faith; it ordered reinstatement and backwages for complainants. The Court of Appeals, however, in a decision dated 23 May 2016, found grave abuse by the NLRC, reinstated the Labor Arbiter’s decision, and held that Shin Heung’s closure was bona ...(Subscriber-Only)
Issues:
- Whether the Supreme Court may review factual findings in this Rule 45 petition (i.e., whether exceptions to the prohibition on factual review apply).
- Whether Shin Heung validly closed its business in good faith so as to make petitioners’ di...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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