Labor Woes and the NLRC -part 4-

Part 4:

The Verdict (transcript)
Republic of the Philippines
Department of Labor and Employment
National Capital Region Arbitration Branch Quezon City
NLRC CASE NO. NCR-00-06-05501-07
NLRC CASE NO. NCR-00-06-05718-07
Submitted for resolution is a consolidated case of money claims for unpaid salaries or wages, 13th month pays, separation pays, allowances, for an award of damages filed be the above-indicated complainants on various dates against the aforecited respondents.
Complainants Bacar, Reyes and Feliciano were all managerial employees while Emmanuel Feliciano worked as Quality Monitor. As such, they continuously performed their jobs as designated until April 30, 2007 when complainants as well as other employees received a memo issued by the Board informing the former of the corporation’s “temporary closure”. It turned out however, to be a permanent or total closure. Hence, firmly believing that complainants are entitled to their separation pays and other unpaid salaries, they filed the instant complaint with this forum.
Complainants strongly contend the closure effected by respondents was defective and runs contrary to law because of the following reasons: 1. There was no legal basis for such total closure. The financial statements of the company accountant showed that even at 50% depreciation, the remaining assets are still sufficient to cover the obligations which the company incurred as well as the severance pay of all employees; 2. The only reason why it was not done was because of the refusal of the remaining board members in the country (respondents Michelle Marin and Kristine Rodrigo) to cooperate with Daisy Bongais who is also a member of the Board to prepare the board resolution stating the liquidation of said assets; 3. Contrary to Marin’s defense that she acted in good faith, her vehement refusal to help out in the liquidation of the company’s assets considering that she is a corporate officer, is a manifestation of bad faith; and 4. Respondents did not comply with the mandatory notice requirement which is the sending of a simultaneous notice to the employees and to the DOLE at least 30 days before the intended closure.
The purpose of the notice requirement is for the employees to be able to seek substitute employment and for the DOLE to ascertain whether such closure is bona fide or not. Hence, complainants pray for the granting of all the reliefs which they seek to recover in their position papers.
On the other hand, respondent Marin argues that the complaint with respect to her should be dismissed due to the following reasons. 1. She is only holding the position of Administrative Manager, as such she was just a mere employee of respondent corporation and has no hand on the complaint filed by the complainants; 2. The liabilities and other money claims should be borne by the corporation and not its officers or stockholders because a corporation has a personality separate and distinct from the stockholders; and 3. Respondent corporation has already ceased totally its operations due to serious financial reverses as evidenced with the leaving of all corporate officers who are foreigners out of the country in April 2007, so she and the remaining officers should not be made liable to pay complainants’’ separation pays and other accountabilities of the corporation. Hence, respondent prays for the dismissal of the instant complaint for lack of merit.
The issues to be resolved in the instant case are the following:
1. Whether or not the closure of the respondent corporation’s business was bona fide or valid; and
2. Whether or not complaints are entitled to the money claims which they seek to recover.
There is no doubt that under Article 283 of the Labor Code, total or complete closure of a business due to serious financial reverses is one of the authorized causes for the termination of the employment of the affected employees and the business establishment is not obliged to pay the separation pays of the affected employees.
Nevertheless, for such closure to be legal or valid, it must comply with the mandatory requirement of sending simultaneous notices to both the affected employees and the nearest Department of labor and Employment which has the jurisdiction over the working place of the business establishment concerned, at least 30 days before the intended closure.
In the instant case, this forum finds no iota of evidence of compliance to the aforesaid requirements. The notice to the employees is intended to forewarn them of the impending closure in order that they could seek substitute employments and for the DOLE to investigate whether the closure is bona fide or was just concocted to circumvent the law and evade existing legitimate obligation to the affected employees. Hence, the total closure effected by the above indicated respondents is defective and was not bona fide as it was intended to circumvent the statutory law. The corporate officers impleaded are therefore obligated to pay the respective separation pays of herein complaint.
Besides, a close perusal of the affirmative allegation of both party-litigants shows that respondents did not refute or impugn the allegation or complainants as attested by the company’s accountant, that the assets of the company are still more than sufficient to cover the existing obligation and payment of separation pays but respondents Marin and Rodrigo simply refused to open the corporation’s bank accounts to settle even just the severance pay of complainants. Such attitude of the aforecited officers was a manifestation of their bad faith which under the law makes them liable for the unsettled obligations towards the employees-complainants.
Moreover, this forum cannot acquiesce with the defense of respondent Marin that as an Administrative Officer or Manager, she is a mere employee of the corporation, who cannot therefore, be made liable to the claims of complainant. She is estopped to deny she is an employee and a member of the board at the same time.
Since respondents did not controvert the claims of complainants that they were not paid their remaining salaries, 13th month pay and allowance, all of these should be integrated in their respective severance or separation pays.
WHEREFORE, premises all considered, judgment is hereby rendered ordering respondents jointly and severally liable to pay the respective separation pays of complainants at one half (1/2) month pay for every year of service, plus their unpaid salaries, 13th month pay and allowances, to wit:
{Payment computation for John Dale Bacar, Jesus Joseph Reyes, Richelle Ramas-Feliciano and Emmanuel Feliciano}
Quezon City, Philippines,
21 September 2007.
Labor Arbiter

Labor Woes and the NLRC -part 3-

Part 3:

Case Summary

NLRC Case No. NCR-06-05501-07

In this summary of our case against Gamepal International Corporation and the Members of its Board namely Eric Smith, Lars Lien, Kristine Rodrigo and Michelle Marin, the complainants would like to submit a copy of the Contract of Lease dated February 21, 2007 between Greenhills Properties Inc. and Gamepal International Corporation herein represented and signed for by Michelle Marin in her capacity as the company’s General Manager and company representative in the absence of Smith and Lien who were both out of the country when said contract was executed. In the said contract Complainant John Dale Bacar as a high ranking official but still an employee of the company of which Ms. Marin is a recognized incorporator is a witness.

This contract is only one of many signed for by Michelle Marin as the recognized GM of the company by Utility Providers and other such contacts of the company contrary to what she stated in her position paper dated 21 August 2007.

While Ms. Marin’s position was unofficially changed to Administrative Manager during the time when complainant Bacar was hired, and was asked to report to Bacar, Bacar was simply asked to audit her work along with other departments like Human Resources, IT and Quality Assurance as the role of Process Improvement entails. This was prompted by anomalous discrepancies in payroll and financial dealings of the company.

Also while it is true that Bacar took charge of the inventory of assets and preparation of the financial statement of the company to prepare it for closure, Bacar was simply helping out to ensure that legal steps of closure can be executed by the members of the board (for their own protection even) which is why he forwarded the said requirements to them as soon as they were completed.

Also, while Bacar was then willing to help out in the liquidation of the assets so all employees can be paid as stated in his conversation with Marin (attached), he relinquished the responsibility to the remaining Board as he was informed by the company’s legal counsel that they are the only ones that have the legal right to do so.

When this happened, Mr. Bacar and Daisy Bongais along with the company Lawyer tried coordinating with the two (Marin and Rodrigo) so that a Board resolution can be made to close the company, liquidate the assets to pay off all employees the severance pay required by law and finally re-open a company account to encash a refund check from Greenhills Properties.

Now, the goal of this case is simply to make sure that all hard work done by honest employees be given due credit and people who have the power to make things right, step up and do their jobs.

We do not intend to get Marin and Rodrigo in trouble but we do want them to realize that when they signed up as company incorporators, that it has certain responsibilities attached to it. One that cannot be neglected because their mother forbade them to do so; or because they are afraid to act; or they simply do not care.

We believe that the reason why it is legally required to have a 60% Filipino representation in such corporations is to make sure that Filipino employees do not get screwed up by foreign investors who can simply take off and leave the country. I do not think that it is acceptable to say that since the foreign heads have left the country, then it is futile to claim for what is rightfully for the employees even if the Filipino co-owners are here and are simply refusing to do the responsibility that they signed up for.

We have given attachments proving that the company has assets enough to cover all severance pay and all obligations with utilities and such. We have also given attachments proving that the defendants understood what they needed to do and attachments from the company’s legal counsel and other board member pleading for them to cooperate so the company can be shut down properly and all obligations be settled. We also have proof that Marin recognized that the company has assets which again is contrary to her claim in her position paper.

It is clear that the only reason for such claim is so that she cannot be prompted to do her DUTY along with Ms. Rodrigo. Duties that they both signed up for when they assumed the position and gave their share as company incorporators.

We pray that this Honorable office would recognize that this claim is intended not only for the rights of the named complainants but for all employees that have a right to get paid for by the company that closed down without warning. We also pray that this Honorable office does not allow the respondents to abandon their duties and claim untruths about the actual financial status of the company when they clearly know different.

For and on Behalf of All Complainants

John Dale Bacar

Labor Woes and the NLRC -part 2-

Part 2:

The Case.

One of the cases I filed got assigned to the sala of Arbiter Felipe Pati. This particular case is against the board members of a gaming company that already shut down operations due to the president exiting the country and refusing to send any more funds to continue operations due to the multitude of errors in decision that he himself made even before I joined the company – mistakes that we were trying to remedy at that point. As I was the highest ranking official left in the country, I arranged for the inventory of all assets and collectibles as well as the computation of all liabilities. The assets, even at 60% devalued worth turned out to be enough to cover all liabilities such as rent, utilities and severance pay for all employees. I arranged for all the figures to be forwarded to the board of directors so they can facilitate the filing of proper closure with the Department of Labor. With the president gone, the VP who initially promised to stay in the country to sort things out decided to suddenly leave the country as well. That left us with three remaining board members. One is the Board Secretary who is also the HR Manager, second is the Board Treasurer who is also the Administrative Manager and finally the Filipina girlfriend of the VP. At this point, the in-laws of the President as well as his personal lawyer showed up in the office to claim the assets of the company. I met up with these people to show them the list of liabilities and to make sure that the 200+ employees who abruptly lost their jobs will be properly compensated. When they expressed the plan to liquidate the assets to return the money to the president of the company as he claimed that he invested those anyway, I refused to give it to them as those assets are company property and at the event of the untimely closure, should be liquidated to pay off the liabilities of the company.
To cut the story short, I forwarded all needed data for proper closure to the remaining members of the board so that a resolution can be prepared for its liquidation and finally settle all the company obligations. To everyone’s dismay, the Board Secretary and Treasurer who are both Filipina refused to cooperate and went into hiding. Now I was left with one willing board member (the VP’s girlfriend) and the company lawyer who kept on trying to contact the remaining board members to cooperate so proper closure can be facilitated. Since majority of the board (60%) is composed of Filipinos, all we needed was a board resolution for the closure and the liquidation of the assets. I was willing at that point to help out with the leg work until every liability was paid.
When it was apparent that the two other Filipina Board Members were not going to help, a handful of agents and officers, including me headed off to the NLRC to file a case.
-end of part 2-

Labor Woes and the NLRC -part 1-

Part 1:

“…any employee can go the NLRC and claim illegal dismissal, and the employer has no choice but to spend for legal services to prove otherwise. The employer is presumed guilty, just by the mere say so of the employee.
The premise of this rule is that all employees are saints, and all employers are rich enough to pay for legal costs. The absurdity is staring at us. It’s time to get real.” – Marvin Aceron

In his blog called La Vida Lawyer, business litigator and advisor Marvin Aceron wrote a six-part entry detailing why the National Labor Relations Commission should be abolished based on grounds that it is biased towards the common employee and thus unfair to small and medium businesses that have the burden of proof in every case filed against them. He said, “The average legal cost for handling a labor case may be conservatively estimated at 50,000 pesos. Thus, the employer is already hit with a budget item. To big companies like PLDT or Ayala Corporation, 50,000 pesos is nothing. Unfortunately for this country, there are very few PLDTs and Ayala Corporations here. The average enterprise in this country will feel the hit of a 50,000 useless expense. That money is about the cost of two computers that could be used for operations, or about the cost of one payroll for eight employees. It would take only one whimsical foolish employee to fill out a pro-forma complaint for an employer to get hit with 50,000 pesos.” He also pointed out that since no proof nor lawyer is required to file a suit against one’s employer, that a barrage of baseless accusations is filed to the detriment of local businesses.

Atty. Aceron pointed out some very valid points in his blog, and while I disagree that employees have the unfair advantage over businesses in its current process, I do agree that a major overhaul has to be made at the NLRC, having filed two separate labor cases last year, let me point out a different point of view.

First, talking about getting real, if it will be required for employees to obtain legal counsel before filing a case in the NLRC, you can slash out 95% of those complainants already as majority of common employees will not be able to afford a lawyer. The “free” lawyers in the NLRC do not exactly bolster confidence especially if you know that you are up against a big-time company or even a medium scale one that can afford a real lawyer.
Secondly, in all my hanging out at the NLRC, employees do bring proof (contracts, termination letter, pay slips) when filing for a case. The grouchy old ladies to whom you submit the mimeographed tick-off forms will in fact ask you questions and even dissuade you from filing if they gather that you don’t actually have a legit case. Once convinced that you have a valid case, they then tell you to present that evidence to the labor arbiter. Interestingly though, the labor arbiters are an epic presence in their own offices. They are either gone from the office at 10 in the morning or are away for a long weekend… every week. Heck, mediation is 99% done by the personal assistants who may not have even set foot in a law school.

The Moral Revolution and the Catholic Church

Amid the country’s current political turmoil fueled by the doubtful legitimacy of President Gloria Arroyo to be the country’s chief of staff, her husband’s involvement in a kick-back scandal, accusations of kidnapping and political killings and the endless ping pong of scandals from the opposition and back, the Filipino people composed mainly of Roman Catholics have turned to the church for guidance and clarity. The church on the other hand has allowed the institution to be used by politicians in their unending quest for power, hurling public accusations and judgment to people who are yet to see trial. They even go as far as telling churchgoers whom to pray for. “He that is without sin among you, let him cast the first stone” the bible says. Clearly, the church has neglected to read this passage.
Despite the age old concept of separation between the church and the state, the Filipino Catholic Church over the last few years has marched the streets and announced their indignation and malcontent over national issues just like any other Juan dela Cruz. Who could easily forget the dramatic images of nuns giving flowers and rosaries to armed men with high powered rifles during the historic Edsa Revolution of 1986… of priests and clergy standing arm in arm with the masa blocking government tanks in what was termed as “the revolution that surprised the world.” 20 years of repressed fear and anger over widespread cheating, thievery and political killings were unleashed and taken to the streets of Edsa where three days of prayerful protests finally resulted in the departure of a dictator. That was also the day that Filipinos recognized the Catholic Church as a pillar of influence… one with enough power to draw the masses and overthrow a government.
Over two decades after the Edsa Revolution, the monumental role of the church in the country’s political arena has not only become obvious, it has become a staple for any honcho who wants to hold a public office. Endorsements were sought as well as approval for laws passed. If the church airs a gripe about something, you are sure to see a politician having a press conference addressing that matter right away and standing behind the church picket line, after all, you wouldn’t want to be enemies with the institution that calls forth the divine power – a power beyond any government – the power of the collective faith. And so it has become the most abused political move of the era – calling forth a mass action in the form of… well… a mass. A religious gathering disguised to support rebel soldiers or the opposition’s call for the current administration to step down. It is a tiring ritual – a shameless manipulation of the people’s faith.
But here lies a bright promise for us, on March 14, 2008, a pastoral statement was issued by Cardinal Gaudencio Rosales and 15 other bishops under the ecclesiastical province of Manila condemning both the corrupt and the whistle-blowers who were part of corruption themselves. It is a refreshing, non-partisan take on the country’s political status, putting the blame not only to those who are in power, but all those who want to be in power. For the first time in a while, a church leader stood up and refused to be used by politicians… sending a message to activist priests all over the country that lasting reforms and value formation should be held in parishes, homes and schools, not on the streets.
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