JOSE L. GARCIA, EDUARDO ALAS, NOEL APAYA, RICARDO ARMAMENTO, MARCOS AVEJERO REYNALDO BANTIGUE, ROMEO BORRAS, MARGARITO CABICUELAS, ROLANDO CAMUA, JOSE DENNIS CASTILLO, DICOROSO …

The main issue before the Court in this petition for certiorari
is the validity of the retrenchment of the fifty-one petitioners by private
respondent National Service Corporation (NASECO) as upheld by the Labor Arbiter
and later by the National Labor Relations Commission.

NASECO is a government-owned or controlled corporation engaged in
providing manpower services such as security guards, radio operators, janitors
and clerks, principally for the Philippine National Bank.

The petitioners were its employees who were either members of the
NASECO Employees Union (NASECO – EU) or of the Alliance of Concerned Workers of
NASECO (ACW – NASECO). On November 19,
1988, they were among those who staged a strike and picketed the premises of
the PNB.

On November 21, 1988, the PNB filed a complaint for damages with
preliminary injunction against the labor unions with the Regional Trial Court
of Manila. It was docketed as Civil
Case No. 88-46938 in Branch 22. On
December 5, 1988, the court granted the application for a preliminary
injunction and issued the writ ordering the lifting of the picket.

NASECO also filed on November 21, 1988, a petition with the
National Labor Relations Commission to declare the strike illegal. This was docketed as NLRC Case No.
00-11-04766-88. On February 17, 1989,
the NLRC rendered its decision sustaining NASECO.^[1]
The union officers who knowingly and actively participated in the strike, as
well as the members of the respondent union who committed illegal acts in the
course of the strike, were deemed to have legally lost their employment status.

The rest of the striking members, including the herein fifty-one
petitioners, were ordered to report for work immediately.

The complaint of the labor union against the PNB for unfair labor
practice and illegal lockout was dismissed on the ground that there was no
employer-employee relationship between the PNB and the labor unions.^[2]

On March 1, 1989, the petitioners reported for work at the NASECO
office but they could not be given assignments because the PNB had meanwhile
contracted with another company to fill the positions formerly held by the
petitioners.

NASECO inquired from the PNB whether or not the petitioners could
still be accepted to their former positions in light of the Service Agreement
between NASECO and the PNB giving the latter the right to reject or replace any
and all of NASECO’s employees assigned to it, for inefficiency or other valid
reasons.

In reply, the PNB manifested that it was no longer accepting the
petitioners back to their former positions as these were no longer vacant.

NASECO then sought new assignments for the petitioners with its
other clients, but the petitioners insisted on their reassignment to the
PNB. In the meantime, starting April 1,
1989, NASECO paid the salaries and other benefits of the petitioners although
they were not actually working.^[3]

On October 13, 1989, the petitioners received notice of
separation from NASECO, effective thirty days thereafter. The reason given was the financial losses
NASECO was incurring at that time due mainly to the salaries being paid to the
employees who could not be posted despite efforts to place them.^[4]

Conformably to Art. 283 of the Labor Code, the Department of
Labor and Employment was likewise given a 30-day notice of the intended
retrenchment.

The management of NASECO even offered a better separation package
equivalent to three-fourths of the estimated new basic monthly salary for every
year of service, compared to the statutory requirement of only 1/2 month pay
for every year of service.^[5]

The petitioners refused to acknowledge receipt of the notice and
instead, on October 26, 1989, filed with NLRC a complaint against NASECO for
unfair labor practice, illegal dismissal, non-payment of wages and damages.^[6]

On November 13, 1989, NASECO sent notice to the petitioners that
their termination from the service would take effect not on November 16, 1989,
but on November 30, 1989, for humanitarian considerations. The effective date was again extended to
December 15, 1989, and finally to December 31, 1989.

On June 22, 1990, Labor Arbiter Potenciano Canizares Jr. rendered
a decision finding that the petitioners had been “fairly discharged by the
respondent (NASECO) in a valid act of simple retrenchment. “^[7]

On July 11, 1990, the petitioners appealed to the NLRC. On September 11, 1992, they filed a
manifestation that the private respondent had been hiring new personnel, but no
proof was offered to support the charge.

On December 21, 1992, the NLRC issued a resolution affirming the
decision of the labor arbiter.^[8]
A motion for reconsideration filed by the petitioners on January 15, 1993, was
denied by the NLRC on February 10, 1993.^[9]

It is now asserted in this petition that the NLRC gravely abused
its discretion in holding that the petitioners were validly dismissed on the
ground of retrenchment; that NASECO is not guilty of unfair labor practice; and
that their monetary claims for increases under Republic Acts 6640 and 6727, as
well as for moral and exemplary damages and attorney’s fees, should be denied.

On the first two issues, the petitioners fault the NLRC for
completely disregarding the requisites of a valid retrenchment as laid down in
Lopez Sugar Corporation vs. Federation of Free Workers.^[10]

The requisites are: 1)
the losses expected should be substantial and not merely de minimis in
extent; 2) the substantial losses apprehended must be reasonably imminent; 3)
the retrenchment must be reasonably necessary and likely to effectively prevent
the expected losses; and 4) the alleged losses, if already incurred, and the
expected imminent losses sought to be forestalled, must be proved by sufficient
and convincing evidence.

The petitioners assert that NASECO failed to show with convincing
evidence that the incurred losses, if any, were substantial. The claimed losses were belied by the fact
that NASECO hired new personnel before and after the dismissal of the
petitioners. NASECO also failed to
pursue other measures to forestall losses, short of dismissing the
petitioners. It did not follow the
“first in, last out” rule that in cases of retrenchment, employees
with long years of service with the company, like the petitioners, should not
be the first to be retrenched. They
attribute their dismissal to their participation in the strike of November 19,
1988. Thus, their dismissal was an act
of unfair labor practice for being discriminatory and violative of their rights
to self-organization and to engage in concerted activities.

We have to disagree.

The losses incurred by NASECO for the year 1989 amounted to
P1,457,700.42 and were adequately proved by it.^[11]
These losses were directly caused by the salaries and other benefits paid to
the petitioners during the period from April 1 to December 31, 1989. The amount of these payments is not
insubstantial in light of the economic difficulties of the country during that
year when several coups d’ etat adversely affected the nation’s economic
growth.

It is also not true that respondent NASECO did not look for other
measures to cut back on its losses. NASECO had in fact tried to place the petitioners with its other clients
but it was the petitioners themselves who refused reassignment.

The particular facts of this case preclude application of the
“first in, last out” rule in the retrenchment of employees. There was no discrimination against the
petitioners. NASECO could not compel
the PNB to take the petitioners back to their former positions in view of its
contractual right to reject any employee of NASECO for inefficiency and other
valid reasons. The PNB had already
filled the vacated positions of the petitioners during the strike, to ensure
the continued operation of its business.

The monetary claim under RA 6640 and RA 6727 is another
matter. RA 6640, which took effect on
December 14, 1987, and RA 6727, which took effect on July 1, 1989, provide for
P10.00 and a P25.00 increases respectively in the minimum wage of
laborers. The NLRC denied this claim on
the ground that the petitioners had failed to include it in their basic
complaint. This contention is not
acceptable because the claim was clearly included and prayed for in their
position paper.

The Revised Rules of the NLRC provide under Sec. 3, Rule V, that
parties should not be allowed to allege facts not referred to or included in
the complaint, or position paper, affidavits and other documents. This would mean that although not contained
in the complaint, any claim can still be averred in the position paper, as was
done by the petitioners, or in an affidavit or other documents.

We also hold that the increases in the petitioners’ minimum wage
under RA 6640 and RA 6720 should be granted since they became effective before
the petitioners’ retrenchment. Said
increases should be considered in the computation of their separation pay in
accordance with Art. 283 of the Labor Code.

Moral damages are recoverable only where the dismissal of the
employee was attended by bad faith or fraud or constituted an act oppressive to
labor or was done in a manner contrary to morals, good customs or public
policy.^[12]
Exemplary damages may be awarded only if the dismissal was effected in a
wanton, oppressive or malevolent manner.^[13]
None of these grounds has been proven. However, the Court will grant the claim for attorney’s fees in an amount
equivalent to 10% of the total amount awarded to the petitioner as authorized
by the Labor Code.^[14]

The constitutional policy of providing full protection to labor
is not intended to oppress or destroy management. The employer cannot be compelled to retain employees it no longer
needs, to be paid for work unreasonably refused and not actually
performed. NASECO bent over backward
and exerted every effort to help the petitioners look for other work, postponed
the effective date of their separation, and offered them a generous termination
pay package. The unflagging commitment
of this Court to the cause of labor will not prevent us from sustaining the
employer when it is in the right, as in this case.

WHEREFORE, the decision of the Labor Arbiter dated June
22, 1990, and the resolutions of the NLRC dated December 21, 1992, and February
10, 1993, are AFFIRMED, with the modification that the monetary claim under RA
6640 and RA 6720, and for attorney’s fees, should be and is hereby granted. The award of moral and exemplary damages is
disallowed.

SO ORDERED.

Davide Jr., Quiason, and Kapunan,
JJ., concur.

Bellosillo, J., on official
leave.

^[1]
Rollo, pp. 364-365.

^[2]
Ibid.

^[3]
Rollo, p. 341.

^[4]
Ibid., p. 343.

^[5]
Id.

^[6]
Rollo, p. 3.

^[7]
Rollo, pp. 336-348.

^[8]
Rollo, pp. 361-373.

^[9]
Annex G, Rollo, p. 378.

^[10]
189 SCRA 179.

^[11]
Rollo, pp. 342-343.

^[12]
Spartan Security & Detective Agency, Inc. v. NLRC, 213 SCRA 528
citing Art. 1701 in relation to Art. 21 of the Civil Code of the Phil., and
Primero v. IAC, 156 SCRA 435.

^[13]
Ibid., citing Art. 2232 of the Civil Code of the Phil., and NASECO v.
NLRC, 168 SCRA 122.

^[14]
Art. III.