G.R. No. 115414 - PHILIPPINE TUBERCULOSIS SOCIETY, INC., VS. NATIONAL LABOR UNION AND NATIONAL LABOR RELATIONS COMMISSION.

Ruling

WHEREFORE, the resolution of this Commission promulgated on August 31, 1993 is hereby modified by dropping/deleting the herein above-named employees who executed quitclaims as party complainants. [4] In its present petition, the Society charges that: RESPONDENT COMMISSION COMMITTED PALPABLE AND PATENT ERROR IN DECLARING AS INVALID THE RETRENCHMENT PROGRAM IMPLEMENTED BY RESPONDENT FOR FAILURE TO EMPLOY THE CRITERIUM OF SENIORITY IN THE SELECTION PROCESS OF THE EMPLOYEES TO BE RETRENCHED. [5] Article 283 of the Labor Code provides: The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operations of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this title, by serving a written notice on the workers and the Department of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to at least one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is hig her. A fraction of at least six (6) months shall be considered as one (1) whole year. Clearly, retrenchment or reduction of the workforce in cases of financial difficulties is recognized as a ground for the termination of employment. In Sebuguero v. NLRC , [6] this Court essayed on the nature of this form of termination of employment, thus: Retrenchment . . . is the termination of employment initiated by the employer through no fault of the employees and without prejudice to the latter, resorted to by management during periods of business recession, industrial depression, or seasonal fluctuations, or during lulls occasioned by lack of orders, shortage of materials, conversion of the plant for a new production program or the introduction of new methods or more efficient machinery or of automation. Simply put, it is an act of the employer of dismissing employees because of losses in the operation of a business, lack of work, and considerable reduction on the volume of his business, a right consistently recognized and affirmed by this Court. Although petitioner is a non-stock and non-profit organization, retrenchment as a measure adopted to stave off threats to its existence is available to it. Article 278 of the Labor Code states that the fiscal measures recognized therein which an employer may validly adopt apply to all establishments or undertakings, whether for profit o