BUSINESSDAY INFORMATION SYSTEMS AND SERVICES, INC., AND RAUL LOCSIN, PETITIONERS, VS. NATIONAL LABOR RELATIONS COMMISSION, NEMESIO MOYA, ALFREDO AMANTE, EDWIN BERSAMINA, SAMUEL …

In this petition for Certiorari, the Businessday
Information Systems and Services Inc. (or BSSI for brevity) and its
president/manager, Raul Locsin, seek to annul and set aside the decision dated
February 13, 1991 of the National Labor Relations Commission (NLRC) which
affirmed the Labor Arbiter’s finding that they (petitioners) are liable to pay
the private respondents separation pay differentials and mid-year bonus.

BSSI was engaged in the manufacture and sale of computer
forms. Due to financial reverses, its
creditors, the Development Bank of the Philippines (DBP) and the Asset
Privatization Trust (APT), took possession of its assets, including a
manufacturing plant in Marilao, Bulacan.

As a retrenchment measure, some plant employees, including the
private respondents, were laid off on May 16, 1988, after prior notice, and
were paid separation pay equivalent to one-half (1/2) month pay for every year
of service. Upon receipt of their
separation pay, the private respondents signed individual releases and
quitclaims in favor of BSSI.

BSSI retained some employees in an attempt to rehabilitate its
business as a trading company.

However, barely two and a half months later, these remaining
employees were likewise discharged because the company decided to cease
business operations altogether. Unlike the private respondents, that batch
of employees received separation pay equivalent to a full month’s salary for
every year of service plus mid-year bonus.

Protesting against the discrimination in the payment of their
separation benefits, the twenty-seven (27) private respondents filed three (3)
separate complaints against the BSSI and Raul Locsin. These cases were later consolidated.

At the conciliation proceedings before Labor Arbiter Manuel P.
Asuncion, petitioners denied that there was unlawful discrimination in the
payment of separation benefits to the employees. They argued that the first batch of employees was paid
“retrenchment” benefits mandated by law, while the remaining
employees were granted higher “separation” benefits because their
termination was on account of the closure of the business.

Based on the pleadings of the parties, Labor Arbiter Asuncion
rendered a decision on April 25, 1989 in favor of the complainants, now private
respondents, the dispositive portion of which reads:

“WHEREFORE, the respondents are hereby ordered to pay the
complainants their separation pay differentials and mid-year bonus for the year
1988.” (p. 38, Rollo).

Upon appeal by the company to the NLRC, the Second Division on
February 13, 1991, affirmed the decision of the Labor Arbiter.

Petitioners’ motion for reconsideration of the resolution having
been denied, they have taken the present recourse.

In case of retrenchment of a company to prevent losses and
closure of business operation, the law provides:

“Art. 283. Closure of
establishment and reduction of personnel.–The employer may also terminate the
employment of any employee due to the installation of labor saving devices, redundancy, retrenchment to prevent
losses or the closing or cessation of operations of the establishment or
undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the workers and the
Ministry of Labor and Employment at least one (1) month before the intended
date thereof. In case of termination
due to the installation of labor saving devices or redundancy, the worker
affected thereby shall be entitled to a separation pay equivalent to at least
his one (1) month pay or to at least one (1) month pay for every year of
service, whichever is higher. In case
of retenchment to prevent losses and in cases of closures
or cessation of operations of establishment
or undertaking not due to serious business losses or financial reverses, the separation
pay shall be equivalent to one (1) month pay
or at least one half (1/2) month
pay for every year of service, whichever
is higher. A fraction of
at least six (6) months shall be considered one (1) whole year.” (Labor
Code; emphasis supplied.)

Undoubtedly, petitioners’ right to terminate employees on account
of retrenchment to prevent losses or closure of business operations, is recognized by law, but it may not pay
separation benefits unequally for such discrimination breeds resentment and
ill-will among those who have been treated less generously than others.

The following observations of the Commission are relevant:

“The respondents cited financial business difficulties to
justify their termination of the complainants’ employment on 16 May 1988. They were given one-half (1/2) month of
their salary for every year of service. Due to continuing losses, which is a sign that business, after the
termination did not improve, they closed operations on 31 July 1989, where they
dismissed the second batch of employees who were given one (1) month pay for
every year they served. The third batch
of employees were terminated on
28 February 1989, who were likewise given one (1) month pay for every year of
service. The business climate obtaining
on 16 May 1988 when the complainants were terminated did not at all defer (sic)
improvement-wise, with that of 31 July 1988 nor to 28 February 1989. The interval between the dates of
termination was so closed to each other, so that, no improvement in business
maybe likely expected. In fact, the
respondents suffered continuous losses, hence, there is no difference in the
circumstances of the business to distinguish.

“Granting that the 16 May 1988 termination was a retrenchment
scheme, and the 31 July 1988 and the 28 February 1989 were due to closure, the law
requires the granting of the same amount
of separation benefits to the affected employees in any of
the cases. The respondent argued that
the giving of more separation benefit to the second and third batches of
employees separated was their expression of gratitude and benevolence to the remaining employees who have tried to
save and make the company viable in the remaining days of operations. This justification is not
plausible. There are
workers in the first batch who have
rendered more years of service and could
even be said to be more efficient
than those separated subsequently, yet, they
did not receive the same recognition. Understandably, their being retained longer
in their job and be not included in the batch that was first terminated, was a
concession enough and may already be considered as favor granted by the
respondents to the prejudice of the complainants. As it happened, there are workers in the first batch who have
rendered more years in service but received lesser separation pay, because of
that arrangement made by the respondents in paying their termination
benefits. x x x” (pp. 36-37, Rollo)

Clearly, there was impermissible discrimination against the
private respondents in the payment of their separation benefits. The law requires an employer to extend equal
treatment to its employees. It may not,
in the guise of exercising management prerogatives, grant greater benefits to
some and less to others. Management
prerogatives are not absolute prerogatives but are subject to legal limits,
collective bargaining agreements, or general principles of fair play and
justice (UST vs. NLRC, 190 SCRA
758). Article 283 of the Labor Code, as
amended, protects workers whose employment is
terminated because of closure of the establishment
or reduction of personnel (Abella vs. NLRC, 152
SCRA 141, 145).

With regard to the private respondents’ claim for the mid-year
bonus, it is settled doctrine that the grant of a bonus is a prerogative, not
an obligation, of the employer (Traders Royal Bank vs. NLRC, 189 SCRA
274). The matter of giving a bonus over
and above the worker’s lawful salaries and allowances is entirely dependent on
the financial capability of the employer to give it. The fact that the company’s business was no longer profitable (it
was in fact moribund) plus the fact that the private respondents did not work
up to the middle of the year (they were discharge in May 1988) were valid
reasons for not granting them a mid-year bonus. Requiring the company to pay a mid-year bonus to them also would
in effect penalize the company for its generosity to those workers who remained
with the company “till the end” of its days. (Traders Royal Bank vs. NLRC, supra.) The award must therefore be deleted.

There is merit in the contention of petitioner Raul Locsin that
the complaint against him should be dismissed. A corporate officer is not personally liable for the money claims of
discharged corporate employees unless he acted with evident malice and bad
faith in terminating their employment. There is no evidence in this case that Locsin acted in bad faith or with
malice in carrying out the retrenchment and eventual closure of the company
(Garcia. vs. NLRC, 153 SCRA 640), hence, he may not be held personally and
solidarily liable with the company for the satisfaction of the judgment in
favor of the retrenched employees.

WHEREFORE, the resolution of the NLRC ordering the
petitioner company to pay separation pay differentials to the private
respondents is AFFIRMED. However, the
award of mid-year bonus to them is hereby deleted and set aside. Petitioner Raul Locsin is absolved from any
personal liability to the respondent
emloyees. No costs.

SO ORDERED.

Cruz, (Chairman), Bellosillo, and
Quiason, JJ., concur.