G.R. No. 188828 - CO SAY COCO PRODUCTS PHILS., INC., TANAWAN PORT SERVICES, EFREN CO SAY AND YVETTE SALAZAR, VS. BENJAMIN BALTASAR, MARVIN A. BALTASAR, RAYMUNDO A. BOTALON, NILO B. BORDEOS, JR., CARLO B. BOTALON AND GERONIMO B. BAS.D E C I S I O N - Supreme Court E-Library

Ruling

accordingly given their corresponding separation pay and 13th month pay in the following amounts: Name Separation Pay 13th Month Pay TOTAL Carlo Botalon P 18,000.00 P 3,750.00 P 21,750.00 Raymundo Botalon 18,000.00 4,125.00 22,125.00 Marvin Baltasar 12,000.00 2,500.00 14,500.00 Nilo Bordeos 10,000.00 2,291.69 12,291.69 Geronimo Bas 14,000.00 1,749.99 15,749.99 P 72,000.00 P 14,416.68 P 86,416.68 [7] Barely a month after they received their separation pay, respondents filed complaints [8] for illegal dismissal and non-payment of labor standard benefits against petitioners Tanawan Port, Salazar, Co Say and Efren Co Say before the Labor Arbiter. In their Position Papers, respondents alleged that Tanawan Port was merely feigning losses in order to ease out employees, pointing out the absence of evidence to prove business reverses. Respondents also punctuated Tanawan Ports failure to comply with the procedural requirement of sending notices to employees concerned and to the Department of Labor and Employment (DOLE) one month before the intended date of closure as required by law. Tanawan Port, for its part, asserted that respondents severance from employment was brought about by closure or cessation of business operation which is an authorized cause for termination of employment under the Labor Code. To dispute the allegation of respondents that the closure was done in bad faith, Tanawan Port insisted that the lack of clientele caused serious financial drain to the company leaving the management with no other option but to shutdown its operations. [9] On 7 August 2003, the Labor Arbiter rendered a Joint Decision [10] in favor of respondents and held that petitioners are liable for illegal dismissal for failure to comply with the procedural and substantive requirements of terminating employment due to closure of business operations. It was found that while Tanawan Port claimed that it was suffering from serious business losses, it failed to adduce its financial statements to prove that its withdrawal from operation was bona fide in character. A similar failure to comply with the notice requirement was likewise observed by the labor officer resulting in the violation of respondents right to due process of law. Finally, the Labor Arbiter declared that Tanawan Port is engaged in labor-only contracting and is merely an extension of the business personality of Co Say, which is thus, solidarily liable with the former, the labor-only contractor, for the rightful claims of the employees. The decretal portion of the Labor Arbiter Decision reads: WHEREFORE, premises considered, judgment is hereby rendered declaring the dismissal of complainants as illegal, and directing respondent Co Say [C]oco Products Phil., Inc., and Efren Co Say being their employer, to reinstate them to their former positions without loss of seniority rights and privileges with full backwages from September 21, 2002 with earlier amount paid to the complainants to be deducted therefrom as