RADIO COMMUNICATIONS OF THE PHILIPPINES, INC. (RCPI), AND/OR HERNANI BUENO, PETITIONERS, VS. NATIONAL LABOR RELATIONS COMMISSION, LUZ MENDERO, REBECCA GABATO, MERCEDES ABERILLA …

This is a petition for certiorari^[1] of
the decision^[2]
of respondent National Labor Relations Commission affirming the decision^[3]
of its Labor Arbiter, and its Order^[4]
denying petitioners’ motion for reconsideration, both rendered in consolidated
NLRC Cases Nos. RAB V11-0336-87, RAB VII-0370-87, RAB VII-0398-87 and RAB
VII-0429-87^[5]
entitled “Luz Mendero, et al. vs. Radio Communications of the Philippines, Inc.
(RCPI), and/or Hernani Bueno.”

The Labor Arbiter in his decision of July 11, 1988, ordered
petitioners to pay complainants Luz Mendero, Rebecca Gabato^[6] and
Mercedes Aberilla^[7]
P15,390.00 each, and complainant Norma Rojo,^[8]
P16,740.00, representing their separation pays and ECOLA differentials, and the
sum of P6,291.00 as attorney’s fees, or the aggregate amount of SIXTY-NINE
THOUSAND TWO HUNDRED ONE PESOS (P69,201.00).

It appears that sometime in April 1987, petitioner Radio
Communications of the Philippines, Inc. (RCPI), Cebu City Branch, on the ground
of retrenchment occasioned by alleged severe economic losses, terminated the
employment of private respondents Luz Mendero, Rebecca Gabato and Norma
Rojo. Subsequently, in June 1987, private
respondent Mercedes Aberilla was also retrenched.

Disputing the basis of their retrenchment, private respondents
filed complaints against petitioners for illegal dismissal. On July 11, 1988, after hearing in Regional
Arbitration Branch No. VII of Cebu City, the Labor Arbiter rendered a decision
which was subsequently affirmed by respondent Commission. Hence, this petition.

Petitioners contend before Us that respondent NLRC acted with
grave abuse of discretion amounting to lack or excess of jurisdiction in
ordering them to award separation pays, ECOLA differentials and attorney’s fees
to private respondents when their evidence clearly shows that their
retrenchment/lay-off is valid and legal; that in view of the extreme financial
reverses they suffered (Annexes “A”, “A-1” and “A-2” of Annex “H”, and Annex
“B-3” of Annex “C”, Petition), petitioners had no alternative but to retrench
employees, even as they closed several of their branches.

Petitioners also claim that under Article 283 of the Labor Code
retrenchment is possible when it is availed of to prevent huge economic losses
as in their case. They further claim
that under their Collective Bargaining Agreement, retrenchment is not included
as one of the grounds upon which termination pay of one (1) month could be
awarded.

Of course, petitioners’ contentions are devoid of merit. The retrenchment of private respondents
cannot be justified because petitioners failed: (a) to serve on the Department of Labor and Employment (DOLE) a
written notice of termination at least one (1) month before the intended date
thereof^[9]
although it served notice on private respondents; (b) to observe fair and
reasonable standards to effect the retrechment of private respondents;^[10]
and, (c) to show that it first instituted cost reduction measures in other
areas of production before undertaking retrenchment as a last resort.^[11]

Considering that under the circumstances the retrenchment of
private respondents is not authorized by law, it must follow that their
termination is illegal. Accordingly, it
has been held that where the employee is illegally dismissed, he must be
reinstated to his former position without loss of seniority rights and
backwages not exceeding three (3) years.^[12]
Separation pay may be awarded in favor of illegally dismissed employee if
reinstatement is no longer feasible or appropriate.^[13]

In the case before Us, the Labor Arbiter did not direct
the reinstatement of private respondents because of their so-called “strained
relations” with petitioners. We do not
agree. As correctly observed by the
Solicitor General, the filing of a complaint for illegal dismissal should not
be considered the kind of “strained relations” that would make reinstatement
impracticable, otherwise, the employee would be deprived of the right of
security of tenure and reinstatement accorded by law the very moment he invokes
such right with the filing of the complaint. In fact, the records of this case do not indicate any strained relations
between petitioners and private respondents.

Quite significantly, private respondents did not appeal from the
award made by the Labor Arbiter directing payment of separation pay at the rate
of one (1) month for every year of service. Thus, invoking the time-honored procedural rule that “a party who did
not appeal cannot assign errors as are designed to have the judgment modified,”^[14] public respondent disregarded the efforts of private
respondents expressed through their appellees’ memorandum filed with the NLRC
to have the decision modified to include their reinstatement with payment of
backwages.

Indeed, We find persuasive and meritorious the argument of the
Solicitor General that while the rule is that no error which does not affect
jurisdiction will be considered unless stated in the assignment of errors, the
trend of modern-day procedure is to accord the courts broad discretionary power
under which the appellate court may consider matters having some bearing on the
issues submitted which the parties failed to raise, or the lower court ignored.^[15]
Squarely in point is Vda. de
Javellana vs. Court of Appeals,^[16] where We ruled:

“The general rule is that only errors which have been stated in the
assignment of errors and properly argued in the brief will be considered,
except errors affecting jurisdiction over the subject-matter and plain, as well
as clerical, errors.

But while the petitioner Javellana did not assign as error the
failure of the trial court to adjudge recovery and to award damages, we feel
that there is sufficient justification to set aside the judgment in this
respect. For, the error is patent. x x x x

Besides, an unassigned error closely related to the error properly
assigned, or upon which the determination of the question raised by the error
properly assigned is dependent, will be considered by the appellate court
notwithstanding the failure to assign it as error (Hernandez vs. Andal, 78
Phil. 196).

At any rate, the Court is clothed with authority to review matters,
even if they are not assigned as errors in their appeal, if it finds that their
consideration is necessary in arriving at a just decision of the case (Ortigas
vs. Lufthansa German Airlines, 64 SCRA 610), and, we find it unfair and unjust
to deprive the petitioner of the rentals on her property due to a mere
technicality.”

Rules of procedure are mere tools designed to facilitate the
attainment of justice. Their strict and
rigid application, which would result in technicalities that tend to frustrate
rather than promote substantial justice, must always be avoided.^[17]
Thus, substantive rights like reinstatement and award of backwages resulting
from illegal dismissal must not be prejudiced by a rigid and technical
application of the rules.

In the instant case, We hold that there is sufficient
justification to order the reinstatement of private respondents although they
failed to bring this matter up to public respondent on appeal.^[18]
For it is clear that the Labor Arbiter erred in simply awarding separation pay
equivalent to one (1) month salary for every year of service despite his
finding that the retrenchment was not justified, and in invoking, albeit
erroneously, “strained relations” for withholding reinstatement when the
records fail to disclose any ill-will between the parties except perhaps what
would normally go with ordinary litigations. In other words, the mere filing of a complaint by an employee for
illegal dismissal should not be treated as the kind of “strained relations” that would make reinstatement “impracticable”,
for, he is merely exercising a right under the law. Certainly, it is unfair and unjust to deprive the private
respondents of their just due by reason of a mere technicality.

Consequently, the retrenchment effected by petitioners being
legally infirm, hence, ineffective, private respondents should be reinstated
with payment of their backwages equivalent to their respective salaries for
three (3) years, without qualification or deduction in accordance with the
three-year rule.^[19]
Where reinstatement is no longer possible, such as when the establishment has
closed or ceased operations at the time the workers should be reinstated or the
position to which the employee should be reinstated no longer exists for
reasons not attributable to the fault of the employer, the employees shall, in
lieu of reinstatement, be entitled to severance compensation equivalent to at
least one (1) month pay for every year of service.^[20]
In the computation of backwages and separation pay, account must be taken not
only of the basic salary of the employee but also of her transportation and
emergency allowances,^[21]
vacation or service incentive leaves and sick leaves,^[22] and thirteenth month pay.^[23]

As regards attorneys fees, We refrain from disturbing the award
made by the Labor Arbiter as affirmed by public respondent. Unlike the issue of reinstatement and
backwages that are necessarily intertwined with the promotion of substantial
justice as to justify deviation from the rule that an unassigned error cannot
be considered by an appellate court, We find no compelling reason to modify the
award of attorney’s fees which has not been raised on appeal.

WHEREFORE, the petition is dismissed for being devoid of
merit.

Nonetheless, We RESOLVE, consistent with jurisprudence and
substantial justice, to MODIFY the decision of public respondent NLRC by
directing petitioners to reinstate immediately private respondents Lus Mendero,
Rebecca Gabato, Mercedes Aberilla and Norma Rojo, and to pay them backwages
equivalent to their salaries for three (3) years without qualification or
deduction. In the event that
reinstatement is no longer practicable as the positions may no longer be
available, petitioners are directed to pay private respondents, in addition to
the backwages equivalent to three (3) years herein mentioned, separation pay
equivalent to one (1) month for every year of service.

Petitioners are further directed to pay private respondents
attorney’s fees fixed by the Labor Arbiter in the amount of P6,291.00 and
affirmed by public respondent. Costs
against petitioners.

SO ORDERED.

Cruz, (Chairman), Griño-Aquino, and
Medialdea, JJ., concur.

^[1]
Under Rule 65, Rules of Court.

^[2]
Annex “A”, Petition, Rollo p. 14.

^[3]
Annex “G”, Petition, Rollo p. 66.

^[4]
Annex “B”, Petition, Rollo p. 24.

^[5]
Complainant Rodolfo Antolo in RAB VII-0370-87 entered into settlement with
petitioners, hence, only the remaining three (3) NLRC cases, namely, RAB
VII-0336-87, RAB VII-039­8-87 and RAB VII-0429-87 are involved herein. See Annex “A”, Petition, Rollo,
pp. 14-15.

^[6]
Luz Mendero and Rebecca Gabato are complainants in NLRC Case No. RAB
VII-0336-87.

^[7]
Mercedes Aberilla is complainant in NLRC Case No. RAB VII-0398-87

^[8]
Norma Rojo is complainant in NLRC No. RAB VII-0429-87

^[9]
Art. 283, Labor Code.

^[10]
Asiaworld Publishing House, Inc. vs. Ople, G.R. No. 56398, July 23, 1987; 152 SCRA 219.

^[11]
Lopez Sugar Corporation vs. Federation of Free Workers, G.R. No.
75700-01, Aug. 30, 1990; 189 SCRA 179.

^[12]
Gubac vs. NLRC, G.R. No. 81946, July 13, 1990; Lepanto Consolidated
Mining Company vs. Encarnacion, G.R. Nos. 67002-03, April 30, 1985, 136
SCRA 256; Atlas Consolidated Mining and Development Corp. vs. National Labor
Relations Commission, G.R. No. 75755, Nov. 24, 1988, 167 SCRA 758.

^[13]
Torillo vs. Leogardo, Jr., G.R. No. 77205, May 27, 1991; 197 SCRA 471.

^[14]
Dizon vs. NLRC, G.R. No. 69018, Jan. 29, 1990; 181 SCRA 472.

^[15]
Baquiran vs. Court of Appeals, No. L-14551, July 31, 1961; 2 SCRA 873.

^[16]
G.R. No. 60129, July 29, 1983; 123 SCRA 799.

^[17]
Piczon vs. Court of Appeals, G.R. 76378-81, Sept. 24, 1990; 190 SCRA 31.

^[18]
It should be noted however that private respondents in their appellees’
Memorandum filed before respondent Commission prayed for the modification of
the decision of the Labor Arbiter to include reinstatement with backwages as
well as their other money claims. See
Annex “A”, Petition, Rollo, p. 17.

^[19]
Panday vs. National Labor Relations Commission, G.R. No. 67664, May 20,
1992; Feati University Faculty Club (Paflu) vs. Feati University, No.
L-31508, August 15, 1974, 58 SCRA 395; Lepanto Consolidated Mining Company
vs. Encarnacion, G.R. Nos. 67002-03, April 30, 1985, 136 SCRA ???56;
Mariners Polytechnic School vs. Leogardo, G.R. No. 74271, March 31,
1989, 171 SCRA 597; see also concurring and dissenting opinion of Teehankee, J.,
in Mercury Drug Co., Inc. vs. Court of Industrial Relations, No.
L-23357, April 30, 1974; 56 SCRA 694.

^[20]
Sec. 4(b), Rule 1, Book VI, Implementing Rules and Regulations; Tajonera vs.
Lamaroza, Nos. L-48907 & 49035, December 19, 1981; 110 SCRA 438.

^[21]
Santos vs. NLRC, G.R. No. 76721, September 21, 1987, 154 SCRA 166; Soriano
vs. NLRC, G.R. No. 75510, October 27, 1987, 155 SCRA 124.

^[22]
St. Louis College of Tuguegarao vs. NLRC, G.R. No. 74214, August 31,
1989; 177 SCRA 151.

^[23]
Paramount Vinyl Products Corporation vs. NLRC, G.R. No. 81200, October 17, 1990; 190 SCRA 525.