PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION (PSBA MANILA), PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION (FIRST DIVISION) AND PSBA-EMPLOYEES UNION-FEDERATION OF FREE WORK…

Private respondents who are faculty members and administrative
staff employed with petitioner college are also members of the PSBA Employees
Union-FFW.

Petitioner school is located in a building it owns at R. Papa St.
and in two rented buildings at P. Paredes St. It also maintains a campus at Aurora Blvd., Quezon City (PSBA, Q.C.)
which, it claims, is an independent and distinct entity from that on its Manila
Campus. On September 25, 1985,
petitioner, through its President, Juan D. Lim, entered into a Memorandum of Agreement with Gunung
Sewi Foundation For Advancement of Management and Economics (G.S. FAME),
Jakarta for the purpose of establishing a school, contributing its expertise in
business education by sending qualified teachers and professors. For its contribution, it received royalty
and supervision fees.

On March 20, 1990, petitioner issued a memorandum informing its
faculty members and employees of the expiration of its lease contract on its
two buildings at P. Paredes St. and its non-extension in view of the increased
rental rate of P182,000 per month. However, it assured its personnel that it would still continue to
operate its school at R. Papa St. Petitioner also announced that it would undertake a retrenchment program
by reducing its teaching and
administrative staff. Consequently, on April 19, 1990, private respondents
received letters of termination effective on April 1, 1990.

Questioning said retrenchment, private respondents filed a
complaint for illegal dismissal. They
alleged that the retrenchment was unwarranted since there was no evidence showing
that petitioner experienced
financial losses and that actually, it was
aimed at busting their union.

On its part, petitioner alleged that it suffered business
reverses, as shown by a decrease in its enrollment by about 50%. In monetary terms, this decline translated
into P919,022.40, P998,452.29 and P430,007.32 for the years 1987, 1988 and
1989, respectively. This situation was
aggravated by the fact that a new rental rate of P182,000.00, as opposed to the
old rental rate of P16,000.00 a month, was imposed on its leased premises at P.
Paredes St. Petitioner also denied the
allegation of private respondents that PSBA Manila and PSBA Quezon City are one
and the same, since the latter was incorporated only in 1980.

In its decision dated November 2, 1990, the Labor Arbiter did not
give credence to petitioner’s allegations that it was suffering business
reverses. While there may have been
losses in its operations for the years 1987-88, the same was too insubstantial as
to warrant retrenchment. By failing to
observe a fair standard in the selection of employees to be retrenched,
petitioner committed an unfair labor practice which rendered nugatory the
existing CBA between petitioner and the union composed of private respondents. Although the Labor Arbiter declared the
retrenchment invalid, he found private respondents’ reinstatement no longer
feasible because of the closure of the P. Paredes campus. Accordingly, the Labor Arbiter ordered
petitioner to pay the dismissed union and faculty members full backwages and
other benefits from the date of their dismissal on June 1, 1990 up to
promulgation of its decision with separation pay equivalent to one (1) month
pay for every year of service. The total amount of the monetary
award was computed at P2,010,068.90.^[1]

Both parties appealed to the National Labor Relations Commission
(NLRC). In its decision dated March 18,
1992, the NLRC affirmed, with modification, the decision of the Labor Arbiter
by ordering petitioner to reinstate private respondents to their former or
equivalent positions with payment of backwages amounting to P2,764,402.00 from
date of dismissal. Separation pay was
deleted.^[2]

Hence, this appeal based on the following arguments that:

PUBLIC RESPONDENT GRAVELY ABUSED ITS
DISCRETION AND SERIOUSLY ERRED IN?

FINDING THAT AFORE-NAMED INDIVIDUAL PRIVATE
RESPONDENTS WERE UNLAWFULLY RETRENCHED FROM EMPLOYMENT.

FINDING THAT PETITIONER WAS GUILTY OF UNION
BUSTING IN RETRENCHING THE SERVICES OF THE PRIVATE INDIVIDUAL RESPONDENTS.^[3]

It is the principal argument of petitioner that retrenchment of
private respondents was justified as a cost-saving measure to insure
petitioner’s financial and commercial viability in view of the decrease in
enrollment of its student population and as an answer to redundancy occasioned
by the closure of its P. Paredes campus. Corollarily, petitioner avers that the NLRC cannot substitute its right
to make a business judgment.

We deny the petition. After a careful perusal of the pleadings before us, we find no reason to
deviate from public respondent’s conclusion that retrenchment was not a
justifiable ground in dismissing private respondents inasmuch as the program of
retrenchment was implemented in the third consecutive year when its losses had
already decreased by 43%. From a loss
of P919,022.40 in 1987, petitioner should have immediately implemented its
retrenchment in 1988 when its losses ballooned to P998,452.29. The succeeding year saw an increased
enrollment resulting in a marked decline in losses by 43%. Considering that the business had picked up,
retrenchment, being a drastic business move, should not have been resorted to.

To say that PSBA Manila’s financial operations are solely
confined to its Manila campus is an understatement, inasmuch as its income from
G.S. FAME Indonesia must be taken into account, too. Although PSBA Manila claims that it is an entirely separate
entity, this assertion does not inspire belief in view of its explicit
admission that revenues from said unit were reflected in its Income Statement
as “Other income.”^[4]
Petitioner’s statement that, “if not for the royalty fees remitted by G.
S. Fame, petitioner PSBA Manila would have incurred business losses from
operations totaling P3,389,065.53,”^[5] is an
admission that indeed G.S. Fame of Indonesia is part of the financial setup of
PSBA Manila.

Petitioner should be mindful that business losses, as a just
cause for retrenchment, must be proved, for they can be feigned.^[6]
In retrenching employees, employers are called upon to analyze the implications
of their decision so as not to jeopardize the livelihood of their employees.

On the matter of the increased rental on its two leased
buildings, we find it hard to believe that petitioner failed to take
anticipatory measures to prevent the closure of its school based on the
imminent expiration of its lease. A
closure of a school is a decision not to be taken lightly, for its implications
are far-reaching in terms of displaced teachers, administrative personnel and
students.

Denying the charge of union-busting, petitioner pointed out that
if this were the case, the retrenchment program would have affected only union
members, but in the case at bar, it affected also non-union members. In support of its position, petitioner cited
the names of non-union members it dismissed.^[7] We
are not persuaded. The Labor Arbiter
and the NLRC opined that petitioner committed acts constituting
union-busting. This conclusion, derived from facts at hand, can no
longer be changed because findings of administrative agencies, such as the NLRC,
are generally accorded, not only respect, but even finality.^[8]

WHEREFORE, the decision of the NLRC dated March 18, 1992
is hereby AFFIRMED. Petitioner is
hereby ordered to REINSTATE private respondents to their former or equivalent
positions with payment of backwages equivalent to three (3) years from the time
of their dismissal without qualification and deduction.

SO ORDERED.

Feliciano, (Chairman), Davide, Jr., and Melo, JJ., concur.

Bidin, J., on leave.

^[1]
Rollo, p. 36.

^[2]
Rollo, p. 52.

^[3]
Rollo, p. 9.

^[4]
Rollo, p. 14.

^[5]
Ibid.

^[6]
Villena v. NLRC, G. R. No. 90664, February 7, 1991, 193 SCRA 686; Garcia
v. NLRC, No. L-67825, September 4, 1987, 153 SCRA 639.

^[7]
Petition, p. 7.

^[8]
Reyes Lim Co. v. NLRC, G. R. No. 87012, September 25, 1991, 201 SCRA
772; Pan Pacific Industrial Sales Co. v. NLRC, G.R. No. 96191, March 4,
1991, 194 SCRA 633.