CAMARA SHOES, REPRESENTED BY LUCIA VDA. DE CAMARA, PETITIONER, VS. KAPISANAN NG MGA MANGGAGAWA SA CAMARA SHOES, HON. FRANCISCO ESTRELLA, HON. VICENTE LEGARDO, JR., AND NATIONAL …

The members of the respondent union numbering twenty (20), who
are themselves private respondents, were regular employees of the petitioner, Camara Shoes, a single proprietorship engaged in the
manufacture and sale of shoes.

On December 22, 1979,
the petitioner served notice to lay off the respondents effective January 31, 1980, subject to the
approval of the clearance application by the Ministry of Labor and Employment.

On December 28, 1979,
the petitioner filed its application for clearance to terminate the services of
the employees on grounds of financial losses, business reversals and lack of
work due to shortage of raw materials. 
This case was docketed as NCR-STF-1-281-80.

On January 11, 1980,
the respondent union, Kapisanan ng mga Manggagawa sa Camara Shoes
filed its opposition to said application. 
At the same time, the respondent union together with the individual
respondents filed a complaint for illegal lay-off, unpaid
wages and service incentive leave pay. 
This complaint was docketed as
NCR-STF-1-234- 80

On February
1, 1980, the
petitioner refused to allow the individual respondents
to continue working.

On March
28, 1980, the
respondent Director of Labor denied the petitioner’s application for clearance
due to lack of substantial proofs.  The dispositive portion of its decision in favor of the
individual respondents reads as follows:

“WHEREFORE, responsive to the foregoing, respondent is hereby
directed to reinstate Edna P. Villegas, Carlos Lapid,
Eustaquio Mariano, Remedios
Jacinto, Constancia Magbanua, Noel Pasco, Adelina Villanueva, Bienvenido Antionio,
Erving Rios, Saturnina
Capistrano, Benjamin Villafuerte, Mario Ongcal, Eliseo Martizo, Guivar Paloyo, Armando dela Cruz, Vicente
Lacsam, Reynaldo Escamis,
Zaldy Arpon, Myrna Manalo and Andres RamiIo to their
former or equivalent positions
with full backwages from February 1, 1980 up to
actual reinstatement.  Respondent is
further directed to pay individual complainants their respective five (5) days service
incentive leave for the year 1979.

Accordingly, respondent’s application
for clearance is hereby denied.” (Rollo, p. 22)

On April 18, 1980,
the petitioner appealed the above order
to the National Labor Relations
Commission (NLRC).

On June 11, 1980, pending said appeal, the petitioner moved to dismiss the aforecited cases (NCR-STF-1-281-80 and NCR-STF-234-80) because sixteen (16) individual respondents
except for Carlos Lapid, Eustaquio
Mariano, Adelina Villanueva and Erving
Rios had agreed to the settlement of their claims as shown in an affidavit of
release and quit-claim (Annex E, petition).

On July 3, 1980, the respondent
union moved to dismiss the appeal for having
been filed out of time.

On December 29, 1982, Deputy
Minister Vicente Leogardo issued an Order dismissing
the appeal, to wit:

“We find that the appeal was indeed filed out of time.  Respondent should have filed it
within ten working days from its
receipt (on 2 April) of the Order or not later than 16 April 1982. 
But as pointed out by complainants, the appeal was ‘dated April 18,
1980 (and) was filed on the same
date’.  Clearly, then, the case has gone beyond our power to review.

“WHEREFORE, the appeal
is hereby dismissed, and the
Order of 28 March 1980
declared final and executory.” (Rollo,
p. 43)

On the issue whether or not the appeal to the NLRC was filed on time, we rule in favor of the petitioner.

The applicable rule in
1980 was Sec. 7, Rule XIII of Book V which provides:

“Sec. 7.  When to appeal. – The aggrieved party may appeal the
decision of the Labor Arbiter or compulsory
arbitrator to the National Labor Relations Commission within ten (10) working days from receipt of the
decision on any of the following grounds:”

xxx                            xxx                               xxx

The records show that the decision of the Director of Labor
denying the application for clearance
was received by the petitioner on
April 2, 1980.  The appeal with the NLRC was filed on April 18, 1980.

The NLRC ruled that the appeal should have been filed within ten working days from its
receipt of the Order on April 2
or not later than April 16, 1980.  However, the NLRC failed to consider the
holidays which supervened during this period as pointed out by the petitioner.

The petitioner computes the period to appeal as follows:

“a)     April 2, 1980 –
is not counted for the reason
that on said date Respondent received the
said order;

“b)     April
3, which is a Maundy Thursday is not counted for it is a Holiday;

“c)     April 4,
it is a Good Friday and it is also a
Holiday not to be counted;

“d)     April 5,
is a Saturday not counted for it is not a working day;

“e)     April 6,
is Sunday, not counted for it is not a
working day;

“f)      April 7,
Monday, it is a working day;

“g)     April 8, Tuesday, it is a working day;

“h)     April 9, Wednesday, not counted, it is Bataan day and is a Holiday;

“i)      April 10, Thursday, is a
working day;

“j)      April 11, Friday, a working day;

“k)     April 12,
Saturday, not counted, is not a working day;

“l)      April 13, Sunday, not
counted, it is not a working day;

“m)    April 14, to April 18, 1980 from Monday to Friday, they are all
working days, or an equivalent of five (5) days;” (Rollo,
p. 30-31)

As held in the case of Bonifacio
Murillo v. Sun Valley Reality, Inc. (G.R. No. 67272, June 30, 1988):

“From Dec. 18, 1980
to Jan. 6, 1981 is exactly ten (10) working days
considering the holidays and the Saturdays and Sundays that supervened during that
period.  In other words, private respondent’s appeal to the NLRC having been filed
during the time that the prevailing period of appeal was ten (10) working days
and prior to the promulgation of the VIR-JEN Case on July 20, 1982, it must be held to have been timely filed.”

It was, therefore,
error for the NLRC to have dismissed the appeal which was seasonably filed within the 10 working days period for appeal.

The petitioner alleges
that “its business is in a state of bankruptcy.  All its properties are heavily mortgaged and
are endangered of being foreclosed.  For
this reason, the petitioner’s act in terminating the services
of individual respondents is to avoid or minimize business
losses in order that the mortgages of their properties as well as the debts
incurred in favor of the suppliers of raw materials be
paid.” (Rollo, p. 13)

We held in the case of Garcia v. National
Labor Relations Commission [153 SCRA 639
(1987)] that:

“Business reverses or losses
are recognized by law as a
just cause for terminating
employment.  (Columbia Development Corporation v. Minister of Labor and Employment, 146 SCRA 421
[1986]; LVN Pictures and Workers Association
v. LVN Pictures, Inc., 35 SCRA
147) Under Article 284 of the
Labor Code, as amended, retrenchment of personnel to prevent losses can only be
availed of by management if the
company is losing or meeting financial
reverses.  But it is essentially required
that the alleged losses in business operations must be proved.  (National Federation of
Labor Unions (NAFLU) v. Ople, 143 SCRA 124 [1986]).  Otherwise, said ground for termination would
be susceptible to abuse by scheming employers who might be merely feigning
business losses or reverses in their business ventures in order to ease out
employees.”

In the case at bar, the petitioner must be faulted for having
failed to substantiate its alIegations that the
business was indeed in a state of bankruptcy. 
The Director of Labor dismissed the petitioner’s application for
clearance precisely on the ground that adequate proof was not presented in
support of its application.  Moreover, we
find that the petitioner failed to appear during scheduled hearing for the
reception of the petitioner’s evidence on its application on January 28, 1980
despite due notice.  The hearing was
reset to February 6, 1980
but the petitioner appeared through Atty. Sergio R. Manzo
only to ask for another resetting
to February 15, 1980.  On February
20, 1980, the petitioner agreed to submit the application for its
resolution by merely filing a position paper. 
In its position paper, the petitioner alleged:

x x x                          x x
x                             x
x x

“3.     That respondent,
much as it would like to keep the said twenty (20) employees in its employ, was
left with no recourse but to terminate their services to prevent further losses
in their business.” (Rollo, p. 61)

The above statement was not backed by proof.  The failure to appear during the scheduled
hearings casts doubt on the validity of the petitioner’s application for
clearance.  If indeed it had a genuine
intention to terminate its employees to prevent further losses in their business
it should have been more aggressive in presenting its case.  The statement of assets and liabilities annexed to the petition filed with the
Ministry of Labor is not sufficient to justify the application for
clearance.  No other financial statements
or evidences were presented.

Absent any showing of substantial proof, we find no grave abuse
of discretion on the part of the Regional
Director in denying the application for clearance.

The petitioner finally alleges that the present labor cases do not survive considering that on January
13, 1979 the proprietor of
the petitioner company, Santos Camara, died
intestate.  As a result of the death of Mr. Camara, it is alleged that the labor
case was automatically
extinguished.  There is no merit to this contention.

We agree with the Solicitor General that:

“NCR-STF-1-234-80 sought reinstatement of individual respondents to their work. 
It was not a money claim, not to say it involved purely
employer-employee relationship, which fell under the exclusive authority of
respondent officials to hear and resolve. 
While it combined a claim for backwages and the like, the entitlement of individual
respondents thereto solely depended on their right to be reinstated.  Besides, Santos Camara
died on January 13, 1979.  Individual respondents were dismissed without
the required clearance on February 1, 1980.  Also, the backwages, that individual
respondents claimed in NCR-STF-1-234-80
covered the period from February, 1980 until actual reinstatement.  Moreover, they were claims against
petitioner, as business concern that
continued to operate after his death.” (Rollo,
p. 106)

Clearly then, the present case
was not extinguished because of the death
of the proprietor, Santos Camara who died long
before the application for clearance
to terminate was filed.  This case
falls under the jurisdiction of
the Ministry of Labor and not the civil courts as contended by the
petitioner.  Considering, however, that
sixteen (16) out of the original twenty (20)
claimants had agreed to the settlement of their claims, the petition is dismissed as academic insofar as they are concerned.

WHEREFORE, the
petition is hereby DISMISSED for lack of merit. 
The decision of the Director of Labor, dated March 28, 1980 is AFFIRMED with
MODIFICATION.  The petitioner Camara Shoes is ordered to reinstate the remaining
individual respondents Carlos Lapid, Eustaquio Mariano, Adelina
Villanueva and Erving Rios to their former or
equivalent positions with full backwages equivalent
to three (3) years without deductions or
qualifications and to pay them their respective five (5) days service
incentive leaves for the year 1979.

SO ORDERED.

Fernan, (Chairman), Feliciano, Bidin, and Cortes, JJ., concur.