manlimos v nlrc

7/21/2019 Manlimos v NLRC

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Manlimos v. NLRC

Facts The petitioners were among the regular employees of the Super

Mahogany Plywood Corporation hired as patchers taper!graders and

receivers dryers. "n # Septem$er #%%# a new owner&management

group headed $y 'lfredo Ro(as ac)uired complete ownership of the

corporation. The petitioners were advised of such change of ownership*

however the petitioners continued to wor+ for the new owner and were

considered terminated with their conformity. ,ach of them then

e(ecuted on #- ecem$er #%%# a Release and /aiver which they

ac+nowledged $efore 'tty. Nolasco iscipulo 0earing "1cer of the

2utuan City istrict "1ce of the epartment of La$or and ,mployment

3"L,4.

The new owner caused the pu$lication of a notice for the hiring ofwor+ers indicating therein who of the separated employees could $e

accepted on pro$ationary $asis. The petitioners then 5led their

applications for employment.

For their alleged a$sence without leave Perla Cumpay and 6irginia ,tic

were considered as of 7 May #%%8 to have a$andoned their wor+. The

rest were dismissed on #9 :une #%%8 $ecause they allegedly committed

acts pre;udicial to the interest of the new management which consisted

of their <including unrepaired veneers in their reported productions on

output as well as untapped corestoc+ or whole sheets in their supposedtaped veneers&corestoc+.< Two cases were 5led $y the dismissed

employees for non!payment of wages underpayment of wages

incentive leave pay non!payment of holiday pay overtime pay #9th

month pay separation pay reinstatement with $ac+wages illegal

termination and damages.

The petitioners maintained that they remained regular employees

regardless of the change of management in Septem$er #%%# and their

e(ecution of the Release and /aiver. They argue that $eing a

corporation the private respondent=s ;uridical personality was

una>ected even if ownership of its shares of stoc+ changed hands and)uit claims e(ecuted $y la$orers are frowned upon for $eing contrary to

pu$lic policy.

"n the other hand the private respondent contended that the

petitioners were deemed legally terminated from their previous

employment as evidenced $y the e(ecution of the Release and /aiver



and the 5ling of their applications for employment with the new owner*

that the new owner was well within its legal right or prerogative in

considering as terminated the petitioners= pro$ationary&temporary

appointment.

L' ruled in favor of the petitioner ?t is the thesis of the La$or 'r$iterthat the transfer of ownership partoo+ of a cessation of $usiness

operation not due to $usiness reverses under 'rticle 8@9 of the La$or

Code and pursuant to the doctrine laid down in Mo$il ,mployees

'ssociation vs. National La$or Relations Commission. The La$or 'r$iter

ruled that the 5rst and third re)uisites were present in this case* she

e(plicitly held that each of the petitioners signed freely and voluntarily

the Release and /aiver and that the termination and payment of

separation pay $y the previous owner of the corporation were done in

good faith. The La$or 'r$iter however ruled that there was no

<cessation of operations which would lead to the dismissal of the

employees.<

NLRC reversed the ;udgment of the La$or 'r$iter. ?t found that the

change of ownership in this case was made in good faith since there

was no evidence on record that <the former owners conspired with the

new owners to insulate the former management of any lia$ility to its

wor+ers.< Citing Central 'Aucarera del anao Bsale or disposition of a

$usiness enterprise which has $een motivated $y good faith is <an

element of e(emption from lia$ility.< Thus <an innocent transferee of a

$usiness has no lia$ility to the employees of the transferor to continue

employing them. Nor is the transferee lia$le for past unfair la$orpractices of the previous owner e(cept when the lia$ility is assumed

$y the new employer under the contract of sale or when lia$ility arises

$ecause the new owners participated in thwarting or defeating the

rights of the employees.D?ssue /hether the employees were validly dismissed.Ruling The change in ownership of the management was done $ona 5de and

the petitioners did not for any moment $efore the 5ling of their

complaints raise any dou$t on the motive for the change. "n the

contrary upon $eing informed thereof and of their eventual termination

from employment they freely and voluntarily accepted their separationpay and other $ene5ts and individually e(ecuted the Release or /aiver

which they ac+nowledged $efore no less than a hearing o1cer of the

"L,.

/here such transfer of ownership is in good faith the transferee is

under no legal duty to a$sor$ the transferor=s employees as there is no

law compelling such a$sorption.



Since the petitioners were e>ectively separated from wor+ due to a

$ona 5de change of ownership and they were accordingly paid their

separation pay which they freely and voluntarily accepted the private

respondent corporation was under no o$ligation to employ them* it

may however give them preference in the hiring. The hiring ofemployees on a pro$ationary $asis is an e(clusive management

prerogative. The employer has the right or privilege to choose who will

$e hired and who will $e denied employment.

?t is settled that while pro$ationary employees do not en;oy permanent

status they are accorded the constitutional protection of security of

tenure. They may only $e terminated for ;ust cause or when they fail to

)ualify as regular employees in accordance with reasona$le standards

made +nown to them $y the employer at the time of their engagement.

This constitutional protection however ends upon the e(piration of the

period provided for in their pro$ationary contract of employment.

Thereafter the parties are free to renew the contract or not.

' di>erent conclusion would have to $e reached with respect to Perla

Cumpay and 6irginia ,tic who were dismissed for having allegedly

a$andoned their wor+. ?n this case the private respondent not only

failed to prove such intent it as well violated the due process rule in

dismissal of employees. These re)uirements not having $een met with

respect to Cumpay and ,tic their dismissal was conse)uently illegal.ispositio

n

Partly Eranted. "nly petitioners Perla Cumpay and 6irginia ,tic were

entitled to reinstatement and $ac+wages.

manlimos v nlrc

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