VENANCIO GUERRERO, NORBERTO H. ESCULLAR, JOAQUIN C. SAMSON, EMERITO C. DORADO, IRENEO CONSIGNADO, RUPERTO REFRACCIO, ANTONIO FIESTA, JOSE M. CAGUICLA, AMADO SALONGA, CONSTANCIO AMBRAD, ROLANDO N. ABENIO, ROGELIO E. ABENIO, ROMELITO M. ARIZOBAL, TEODORO M. CAAMOAN, JR., VS. NATIONAL LABOR RELATIONS C

Ruling

WHEREFORE, premises considered, the above-entitled cases are now hereby dismissed for lack of merit. Respondents (sic) R.O.H. Auto Products Phils. Inc. is, however, ordered to pay each complainant an additional financial assistance equivalent to their one month salary. [2] This was affirmed by the NLRC in its Decision dated March 10, 1995. [3] Hence, this petition. The issue is whether petitioners were illegally dismissed. We rule in the affirmative. The law gives an employer the right to terminate the services of its employees to obviate or to minimize business losses. This right, however, may not be exercised arbitrarily or whimsically. Article 283 of the Labor Code lays down the conditions for the exercise of such rights, thus: Art. 283. Closure of establishment and reduction or personnel. -- 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 operation 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 Ministry 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 separation pay equivalent to at least his 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 one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year. (emphasis supplied) The requisites for valid retrenchment under the foregoing provision are: (1) necessity of the retrenchment to prevent losses and proof of such losses; (2) written notice to the employees and to the Department of Labor and Employment at least one month prior to the intended date of retrenchment; and (3) payment of separation pay equivalent to one month pay or at least 1/2 month pay for every year or service, whichever is higher. [4] Considering the circumstances in the case at bar, we find that respondent company did not satisfy the legal requirements for valid retrenchment. First, respondent company did not present sufficient evidence to prove the extent of its losses. To justify the employees' termination of service, the losses must be serious, actual and real, and they must be supported by sufficient and convincing evidence. [5] The burden of proof rests on the employer.[6] Respondent company alleged that the strike paralyzed its operations and resulted in the withdrawal of its clients' orders. Respondent company, h