Honda Phils., Inc. v. Samahan ng Malayang Manggagawa sa Honda, G.R. No.

145561, June 15, 2005

Issue: whether the pro-rated computation of the 13th month pay and the other bonuses in question is valid and lawful.

Held: The petition lacks merit.

A collective bargaining agreement refers to the negotiated contract between a legitimate labor organization and the employer
concerning wages, hours of work and all other terms and conditions of employment in a bargaining unit. As in all contracts, the
parties in a CBA may establish such stipulations, clauses, terms and conditions as they may deem convenient provided these are
not contrary to law, morals, good customs, public order or public policy. Thus, where the CBA is clear and unambiguous, it
becomes the law between the parties and compliance therewith is mandated by the express policy of the law.

In some instances, however, the provisions of a CBA may become contentious, as in this case. Honda wanted to implement a
pro-rated computation of the benefits based on the no work, no pay rule. According to the company, the phrase present
practice as mentioned in the CBA refers to the manner and requisites with respect to the payment of the bonuses, i.e., 50% to
be given in May and the other 50% in December of each year. Respondent union, however, insists that the CBA provisions
relating to the implementation of the 13th month pay necessarily relate to the computation of the same.

We agree with the findings of the arbitrator that the assailed CBA provisions are far from being unequivocal. A cursory reading
of the provisions will show that they did not state categorically whether the computation of the 13th month pay, 14th month
pay and the financial assistance would be based on one full months basic salary of the employees, or pro-rated based on the
compensation actually received. The arbitrator thus properly resolved the ambiguity in favor of labor as mandated by Article
1702 of the Civil Code. The Court of Appeals affirmed the arbitrators finding and added that the computation of the 13th month
pay should be based on the length of service and not on the actual wage earned by the worker.

We uphold the rulings of the arbitrator and the Court of Appeals. Factual findings of labor officials, who are deemed to have
acquired expertise in matters within their respective jurisdiction, are generally accorded not only respect but even finality, and
bind us when supported by substantial evidence. It is not our function to assess and evaluate the evidence all over again,
particularly where the findings of both the arbiter and the Court of Appeals coincide.

Presidential Decree No. 851, otherwise known as the 13th Month Pay Law, which required all employers to pay their employees
a 13thmonth pay, was issued to protect the level of real wages from the ravages of worldwide inflation. It was enacted on
December 16, 1975 after it was noted that there had been no increase in the minimum wage since 1970 and the Christmas
season was an opportune time for society to show its concern for the plight of the working masses so that they may properly
celebrate Christmas and New Year.

Under the Revised Guidelines on the Implementation of the 13th month pay issued on November 16, 1987, the salary ceiling of
P1,000.00 under P.D. No. 851 was removed. It further provided that the minimum 13th month pay required by law shall not be
less than one-twelfth (1/12) of the total basic salary earned by an employee within a calendar year. The guidelines pertinently
provides:

The basic salary of an employee for the purpose of computing the 13th month pay shall include all remunerations or earnings
paid by his employer for services rendered but does not include allowances and monetary benefits which are not considered or
integrated as part of the regular or basic salary, such as the cash equivalent of unused vacation and sick leave credits, overtime
premium, night differential and holiday pay, and cost-of-living allowances.

For employees receiving regular wage, we have interpreted basic salary to mean, not the amount actually received by an
employee, but 1/12 of their standard monthly wage multiplied by their length of service within a given calendar year. Thus, we
exclude from the computation of basic salary payments for sick, vacation and maternity leaves, night differentials, regular
holiday pay and premiums for work done on rest days and special holidays. In Hagonoy Rural Bank v. NLRC, St. Michael
Academy v. NLRC, Consolidated Food Corporation v. NLRC, and similar cases, the 13th month pay due an employee was
computed based on the employees basic monthly wage multiplied by the number of months worked in a calendar year prior to
separation from employment.
The revised guidelines also provided for a pro-ration of this benefit only in cases of resignation or separation from work. As the
rules state, under these circumstances, an employee is entitled to a pay in proportion to the length of time he worked during
the year, reckoned from the time he started working during the calendar year. The Court of Appeals thus held that:

Considering the foregoing, the computation of the 13th month pay should be based on the length of service and not on the
actual wage earned by the worker. In the present case, there being no gap in the service of the workers during the calendar
year in question, the computation of the 13th month pay should not be pro-rated but should be given in full.

More importantly, it has not been refuted that Honda has not implemented any pro-rating of the 13th month pay before the
instant case. Honda did not adduce evidence to show that the 13th month, 14th month and financial assistance benefits were
previously subject to deductions or pro-rating or that these were dependent upon the companys financial standing. As held by
the Voluntary Arbitrator:

The Company (Honda) explicitly accepted that it was the strike held that prompt[ed] them to adopt a pro-rata computation,
aside [from] being in [a] state of rehabilitation due to 227M substantial losses in 1997, 114M in 1998 and 215M lost of sales in
1999 due to strike. This is an implicit acceptance that prior to the strike, a full month basic pay computation was the present
practice intended to be maintained in the CBA.

The memorandum dated November 22, 1999 which Honda issued shows that it was the first time a pro-rating scheme was to
be implemented in the company. It was a convenient coincidence for the company that the work stoppage held by the
employees lasted for thirty-one (31) days or exactly one month. This enabled them to devise a formula using 11/12 of the total
annual salary as base amount for computation instead of the entire amount for a 12-month period.

That a full month payment of the 13th month pay is the established practice at Honda is further bolstered by the affidavits
executed by Feliteo Bautista and Edgardo Cruzada. Both attested that when they were absent from work due to motorcycle
accidents, and after they have exhausted all their leave credits and were no longer receiving their monthly salary from Honda,
they still received the full amount of their 13th month, 14thmonth and financial assistance pay.

The case of Davao Fruits Corporation v. Associated Labor Unions, et al. presented an example of a voluntary act of the employer
that has ripened into a company practice. In that case, the employer, from 1975 to 1981, freely and continuously included in
the computation of the 13th month pay those items that were expressly excluded by the law. We have held that this act, which
was favorable to the employees though not conforming to law, has ripened into a practice and therefore can no longer be
withdrawn, reduced, diminished, discontinued or eliminated. Furthermore, in Sevilla Trading Company v. Semana, we stated:

With regard to the length of time the company practice should have been exercised to constitute voluntary employer practice
which cannot be unilaterally withdrawn by the employer, we hold that jurisprudence has not laid down any rule requiring a
specific minimum number of years. In the above quoted case of Davao Fruits Corporation vs. Associated Labor Unions, the
company practice lasted for six (6) years. In another case, Davao Integrated Port Stevedoring Services vs. Abarquez, the
employer, for three (3) years and nine (9) months, approved the commutation to cash of the unenjoyed portion of the sick
leave with pay benefits of its intermittent workers. While in Tiangco vs. Leogardo, Jr. the employer carried on the practice of
giving a fixed monthly emergency allowance from November 1976 to February 1980, or three (3) years and four (4) months. In
all these cases, this Court held that the grant of these benefits has ripened into company practice or policy which cannot be
peremptorily withdrawn. In the case at bar, petitioner Sevilla Trading kept the practice of including non-basic benefits such as
paid leaves for unused sick leave and vacation leave in the computation of their 13th-month pay for at least two (2) years. This,
we rule likewise constitutes voluntary employer practice which cannot be unilaterally withdrawn by the employer without
violating Art. 100 of the Labor Code

Lastly, the foregoing interpretation of law and jurisprudence is more in keeping with the underlying principle for the grant of
this benefit. It is primarily given to alleviate the plight of workers and to help them cope with the exorbitant increases in the
cost of living. To allow the pro-ration of the 13th month pay in this case is to undermine the wisdom behind the law and the
mandate that the workingmans welfare should be the primordial and paramount consideration. What is more, the factual
milieu of this case is such that to rule otherwise inevitably results to dissuasion, if not a deterrent, for workers from the free
exercise of their constitutional rights to self-organization and to strike in accordance with law.
Lexal Laboratories, Inc. v. CIR, G.R. No. L-24632, Oct. 26, 1968

Issue: Whether or not CIR erred in including per diems in the back wages due and payable to Guillermo
Ponseca.

Held: Our attention has not been drawn to a rule of law or jurisprudence which holds that per diems are
integral parts of regular wages or salaries. Neither is it suggested in the record that per diems formed
part of the terms of employment between petitioners and respondent union (of which Ponseca is a
member), or with Ponseca himself for that matter. Nor was pronouncement made either in the original
decision or in the questioned order and resolution of CIR that per diems are part of back wages. CIR
simply hit upon the idea that per diems should be paid as part of the back wages because they were
"paid to him regularly."

Per diem, the dictionary definition tells us, is "a daily allowance" given "for each day he (an officer or
employee) was away from his home base".3 It would seem to us that per diem is intended to cover the
cost of lodging and subsistence of officers and employees when the latter are on duty outside of their
permanent station.4 Lexal concedes that whenever its employee, Guillermo Ponseca, was out of Manila,
he was allowed a per diem of P4.00 broken down as follows: P1.00 for breakfast; P1.00 for lunch; P1.00
for dinner; and P1.00 for lodging. Ponseca — during the period involved — did not leave Manila.
Therefore, he spent nothing for meals and lodging outside of Manila. Because he spent nothing, there is
nothing to be reimbursed. Since per diems are in the nature of reimbursement, Ponseca should not be
entitled to per diems.

Besides, back wages are what an employee has lost "in the way of wages" due to his dismissal. So that,
because Ponseca earned P4.50 a day, "then that is the amount which he lost daily by reason of his
dismissal, nothing more nothing less:"5

We, accordingly, rule that CIR erred in including per diems in the back wages due and payable to
Guillermo Ponseca. The rest is a matter of mathematical computation but first to the facts. The union's
evidence is that since the last part of October, 1958 Ponseca had been reporting everyday to the bodega
of respondents.6 Anyway, prior to Ponseca's dismissal, he worked daily either in Manila or in the
provinces.7

But the order of February 15, 1965 credits Ponseca with 1,856 days for the period from November 5,
1958 to November 24, 1963. We checked the accuracy of this figure. We found that there should only be
1,846 days from November 5, 1958 to November 24, 1963, For the foregoing reasons, the order of
February 16, 1965, and the resolution of May 22, 1965, both of the Court of Industrial Relations, in its
Case No. 2002-ULP, entitled "National Chemical Industries Workers Union-PAFLU (Lexal Laboratories
Chapter), Complainant, versus Lexal Laboratories and Jose Angeles, its Manager, Respondents", are
hereby modified; and

Judgment is hereby rendered ordering petitioner Lexal Laboratories to pay Guillermo Ponseca, by way of
net backpay.
Bank of Commerce v. manalo, G.R. No. 158149, Feb 9, 2006

Issue: whether the factual issues raised by the petitioner are proper; whether petitioner or its predecessors-in-
interest, the XEI or the OBM, as seller, and the respondents, as buyers, forged a perfect contract to sell over the
property; whether
petitioner is estopped from contending that no such contract was forged by the parties; and whether respondents
has a cause of action against the petitioner for specific performance.

Held: In this case, the issue of whether XEI had agreed to allow the respondents to pay the purchase price of the
property was raised by the parties. The trial court ruled that the parties had perfected a contract to sell, as against
petitioners claim that no such contract existed. However, in resolving the issue of whether the petitioner was
obliged to sell the property to the respondents, while the CA declared that XEI or OBM and the respondents failed
to agree on the schedule of payment of the balance of the purchase price of the property, it ruled that XEI and the
respondents had forged a contract to sell; hence, petitioner is entitled to ventilate the issue before this Court.

We agree with petitioners contention that, for a perfected contract of sale or contract to sell to exist in law, there
must be an agreement of the parties, not only on the price of the property sold, but also on the manner the price
is to be paid by the vendee. Based on these two letters, the determination of the terms of payment of
the P278,448.00 had yet to be agreed upon on or before December 31, 1972, or even afterwards, when the parties
sign the corresponding contract of conditional sale. So long as an essential element entering into the proposed
obligation of either of the parties remains to be determined by an agreement which they are to make, the contract
is incomplete and unenforceable. The reason is that such a contract is lacking in the necessary qualities of
definiteness, certainty and mutuality. There is no evidence on record to prove that XEI or OBM and the
respondents had agreed, after December 31, 1972, on the terms of payment of the balance of the purchase price
of the property and the other substantial terms and conditions relative to the sale. Indeed, the parties are in
agreement that there had been no contract of conditional sale ever executed by XEI, OBM or petitioner, as vendor,
and the respondents, as vendees. We reject the submission of respondents that they and Ramos had intended to
incorporate the terms of payment contained in the three contracts of conditional sale executed by XEI and other
lot buyers in the corresponding contract of conditional sale, which would later be signed by them. We have
meticulously reviewed the respondents complaint and find no such allegation therein. Indeed, respondents merely
alleged in their complaint that they were bound to pay the balance of the purchase price of the property in
installments. When respondent Manalo, Jr. testified, he was never asked, on direct examination or even on cross-
examination, whether the terms of payment of the balance of the purchase price of the lots under the contracts of
conditional sale executed by XEI and other lot buyers would form part of the corresponding contract of conditional
sale to be signed by them simultaneously with the payment of the balance of the downpayment on the purchase
price. owever, respondents failed to allege and prove, in the trial court, that, as a matter of business usage, habit
or pattern of conduct, XEI granted all lot buyers the right to pay the balance of the purchase price in installments
of 120 months of fixed amounts with pre-computed interests, and that XEI and the respondents had intended to
adopt such terms of payment relative to the sale of the two lots in question. Indeed, respondents adduced in
evidence the three contracts of conditional sale executed by XEI and other lot buyers merely to prove that XEI
continued to sell lots in the subdivision as sales agent of OBM after it acquired said lots, not to prove usage, habit
or pattern of conduct on the part of XEI to require all lot buyers in the subdivision to pay the balance of the
purchase price of said lots in 120 months. It further failed to prive that the trial court admitted the said deedsas
part of the testimony of respondent Manalo, Jr. It bears stressing that the respondents failed and refused to pay
the balance of the downpayment and of the purchase price of the property amounting to P278,448.00 despite
notice to them of the resumption by XEI of its selling operations. The respondents enjoyed possession of the
property without paying a centavo. On the other hand, XEI and OBM failed and refused to transmit a contract of
conditional sale to the respondents. The respondents could have at least consigned the balance of the
downpayment after notice of the resumption of the selling operations of XEI and filed an action to compel XEI or
OBM to transmit to them the said contract; however, they failed to do so.

As a consequence, respondents and XEI (or OBM for that matter) failed to forge a perfected contract to sell the
two lots; hence, respondents have no cause of action for specific performance against petitioner. Republic Act No.
6552 applies only to a perfected contract to sell and not to a contract with no binding and enforceable effect.
Pag-Asa Steel Works, Inc. v. CA, G.R. No. 166647, March 31, 2006

Issue: Whether the honorable court of appeals committed a grave reversible error in not finding that the increases
provided for under wage order no. 8 cannot be demanded by the respondent union as a matter of practice.

Held: We agree with petitioners contention that the issue on the ambiguity of the CBA and its failure to express the true
intention of the parties has not been expressly raised before the voluntary arbitration proceedings. The parties
specifically confined the issue for resolution by the VA to whether or not the petitioner is obliged to grant an increase to
its employees as a matter of practice. Respondent did not anchor its claim for an across-the-board wage increase under
Wage Order No. NCR-08 on the CBA. The error of the CA lies in its considering only the CBA in interpreting the wage
adjustment provision, without taking into account Wage Order No. NCR-08, and the fact that the members of
respondent Union were already receiving salaries higher than P250.00 a day when it was issued. The CBA cannot be
considered independently of the wage order which respondent Union relied on for its claim.

Wage Order No. NCR-08 clearly states that only those employees receiving salaries below the prescribed minimum wage
are entitled to the wage increase provided therein, and not all employees across-the-board as respondent Union would
want petitioner to do. Considering therefore that none of the members of respondent Union are receiving salaries below
the P250.00 minimum wage, petitioner is not obliged to grant the wage increase to them. We have reviewed the records
meticulously and find no evidence to prove that the grant of a wage-order-mandated increase to all the employees
regardless of their salary rates on an agreement collateral to the CBA had ripened into company practice before the
effectivity of Wage Order No. NCR-08. Respondent Union failed to adduce proof on the salaries of the employees prior to
the issuance of each wage order to establish its allegation that, even if the employees were receiving salaries above the
minimum wage and there was no wage distortion, they were still granted salary increase. Only the following lists of
salaries of respondent Unions members were presented in evidence: (1) before Wage Order No. NCR-06 was issued; (2)
after Wage Order No. NCR-06 was implemented; (3) after the grant of the first year increase under the CBA; (4) after
Wage Order No. NCR-07 was implemented; and (5) after the second year increase in the CBA was implemented.

The list of the employees salaries before Wage Order No. NCR-06 was implemented belie respondent Unions claim that
the wage-order-mandated increases were given to employees despite the fact that they were receiving salaries above
the minimum wage. This list proves that some employees were in fact receiving salaries below the P198.00 minimum
wage rate prescribed by the wage order two rank-and-file employees in particular. As petitioner explains, a wage
distortion occurred as a result of granting the increase to those employees who were receiving salaries below the
prescribed minimum wage. The wage distortion necessitated the upward adjustment of the salaries of the other
employees and not because it was a matter of company practice or usage. The situation of the employees before Wage
Order No. NCR-08, however, was different. Not one of the members of respondent Union was then receiving less
than P250.00 per day, the minimum wage requirement in said wage order.

The only instance when petitioner admittedly implemented a wage order despite the fact that the employees were not
receiving salaries below the minimum wage was under Wage Order No. NCR-07. Petitioner, however, explains that it did
so because it was agreed upon in the CBA that should a wage increase be ordered within six months from its signing,
petitioner would give the increase to the employees in addition to the CBA-mandated increases. Respondents isolated
act could hardly be classified as a company practice or company usage that may be considered an enforceable obligation.

Moreover, to ripen into a company practice that is demandable as a matter of right, the giving of the increase should not
be by reason of a strict legal or contractual obligation, but by reason of an act of liberality on the part of the
employer. Hence, even if the company continuously grants a wage increase as mandated by a wage order or pursuant to
a CBA, the same would not automatically ripen into a company practice. In this case, petitioner granted the increase
under Wage Order No. NCR-07 on its belief that it was obliged to do so under the CBA.
Traders Royal Bank v. NLRC, G.R. No. 88168, Aug 30, 1990

Issue: Whether or not the NLRC gravely abused its discretion in ordering it to pay mid-year/year-end
bonus differential for 1986 to its employees.

Held: There is merit in the petitioner's contention that the NLRC gravely abused its discretion in ordering
it to pay mid-year/year-end bonus differential for 1986 to its employees.

A bonus is "a gratuity or act of liberality of the giver which the recipient has no right to demand as a
matter of right" (Aragon vs. Cebu Portland Cement Co., 61 O.G. 4597). "It is something given in addition
to what is ordinarily received by or strictly due the recipient." The granting of a bonus is basically a
management prerogative which cannot be forced upon the employer "who may not be obliged to
assume the onerous burden of granting bonuses or other benefits aside from the employee's basic
salaries or wages" . . . (Kamaya Point Hotel vs. National Labor Relations Commission, Federation of Free
Workers and Nemia Quiambao, G.R. No. 75289, August 31, 1989).

It is clear from the above-cited rulings that the petitioner may not be obliged to pay bonuses to its
employees. The matter of giving them bonuses over and above their lawful salaries and allowances is
entirely dependent on the profits, if any, realized by the Bank from its operations during the past year.

From 1979-1985, the bonuses were less because the income of the Bank had decreased. In 1986, the
income of the Bank was only 20.2 million pesos, but the Bank still gave out the usual two (2) months
basic mid-year and two months gross year-end bonuses. The petitioner pointed out, however, that the
Bank weakened considerably after 1986 on account of political developments in the country. Suspected
to be a Marcos-owned or controlled bank, it was placed under sequestration by the present
administration and is now managed by the Presidential Commission on Good Government (PCGG).

In the light of these submissions of the petitioner, the contention of the Union that the granting of
bonuses to the employees had ripened into a company practice that may not be adjusted to the
prevailing financial condition of the Bank has no legal and moral bases. Its fiscal condition having
declined, the Bank may not be forced to distribute bonuses which it can no longer afford to pay and, in
effect, be penalized for its past generosity to its employees.

Private respondent's contention, that the decrease in the midyear and year-end bonuses constituted a
diminution of the employees' salaries, is not correct, for bonuses are not part of labor standards in the
same class as salaries, cost of living allowances, holiday pay, and leave benefits, which are provided by
the Labor Code.
Villarama v. NLRC, G.R. No. 106341, Sept 2, 1994

Issue: Whether or not the public respondent's judgment in awarding 13th month pay in the amount of
P6,635.96 in favor of private respondent, and in dismissing its counter-complaint is erroneous.

Held: According to No. 4(a) of the Revised Guidelines on the implementation of the 13th Month Pay Law
(Presidential Decree No. 851) dated November 16, 1987, the 13th month pay of an individual is (not less
than) one-twelfth (1/12) of the total basic salary earned by an employee within a calendar year. Moreover, in
No. 6 thereof, it is provided that an employee who has resigned or whose services were terminated at any
time before the time for payment of the 13th month pay is entitled to this monetary benefit in proportion to
the length of time he worked during the year, reckoned from the time he started working during the calendar
year up to the time of his resignation or termination from the service. Thus, if he worked only from January
up to September, his proportionate 13th month pay should be equivalent to the total basic salary he earned
during that period. Since no evidence was adduced by private respondent that petitioners observe a different
formula in the computation of the 13th month pay for their employees, the aforementioned mode of
computation should be applied. Thus, considering that in 1989 private respondent rendered service for only 6
months, her 13th month pay should be one-twelfth (1/12) of the total compensation she received for that
year, that is, P7,319.00. Consequently her 13th month pay for the year 1989 should be P610.00.

Following the same formula, private respondent should receive a 13th month pay of P850,00 for the year
1990 for services rendered for three months wherein she received a total compensation of P10,205.00, that
is, P10,205.00 divided by 12 equals P850.00.

On this particular aspect, therefore, the Court takes exception to the rule that the findings on technical
matters by administrative bodies like respondent NLRC are accorded respect and finality on appeal,12 since it
is clear that a palpable and demonstrable mistake has been committed and should be rectified. Petitioners
should, therefore, pay private respondent the total amount of P1,460,00, instead or P6,635.96, as her 13th
month pay for 1989 and 1990.

With regard to the second issue, on whether or not petitioners are entitled to damages in view of private
respondent's abandonment of her job, the Court upholds and approvingly quotes respondent NLRC's ruling
on this matter which affirmed that of the labor arbiter, to wit:

As regards respondents' counterclaim on the allegation that complainant is guilty of having abandoned her
job, we likewise vote for a dismissal thereof. It is a well-settled rule that to constitute abandonment, there
must be a deliberate unjustified refusal of the employee to resume his employment. This circumstance does
not however exist in complainant's case, the assertions in her testimony given during the hearing standing
unrebutted,

Had respondents been free from any participation in the adverted cause for complainant's failure to report
for work, this Commission could have taken a different course from that of the Labor Arbiter. It appears,
however, that respondents are not free from any wrong as it is also clear from the records of the case that
they have been remiss in fully observing the letter of the law concerning labor standards provisions. As such,
we concur with the Labor Arbiter in invoking the principle in equity that he who comes to court must do so
with "clean hands." Accordingly, respondents do not deserve the remedial relief asked.
Clarion Printing House, Inc. v. NLRC, G.R. No.148372, June 27, 2005

Issue: Whether or not the honorable court of appeals gravely erred in sustaining the assailed decisions of honorable public respondent
commission: in holding that private respondent miclat was illegally dismissed; andordering the reinstatement of private respondent
miclat to her former or equivalent position without loss of seniority rights and benefits and payment of backwages, 13th month pay
and two days salary.

Held: The petition is partly meritorious.

Contrary to the CAs ruling, petitioners could present evidence for the first time on appeal to the NLRC. It is well-settled that the NLRC is
not precluded from receiving evidence, even for the first time on appeal, because technical rules of procedure are not binding in labor
cases.

The settled rule is that the NLRC is not precluded from receiving evidence on appeal as technical rules of evidence are not binding in
labor cases. In fact, labor officials are mandated by the Labor Code to use every and all reasonable means to ascertain the facts in each
case speedily and objectively, without regard to technicalities of law or procedure, all in the interest of due process. Thus, in Lawin
Security Services v. NLRC, and Bristol Laboratories Employees Association-DFA v. NLRC, we held that even if the evidence was not
submitted to the labor arbiter, the fact that it was duly introduced on appeal to the NLRC is enough basis for the latter to be more
judicious in admitting the same, instead of falling back on the mere technicality that said evidence can no longer be considered on
appeal. Certainly, the first course of action would be more consistent with equity and the basic notions of fairness. It is likewise well-
settled that for retrenchment to be justified, any claim of actual or potential business losses must satisfy the following standards: (1)
the losses are substantial and not de minimis; (2) the losses are actual or reasonably imminent; (3) the retrenchment is reasonably
necessary and is likely to be effective in preventing expected losses; and (4) the alleged losses, if already incurred, or the expected
imminent losses sought to be forestalled, are proven by sufficient and convincing evidence. And it is the employer who has the onus of
proving the presence of these standards. rom the above-quoted provisions of P.D. No. 902-A, as amended, the appointment of a
receiver or management committee by the SEC presupposes a finding that, inter alia, a company possesses sufficient property to cover
all its debts but foresees the impossibility of meeting them when they respectively fall due and there is imminent danger of dissipation,
loss, wastage or destruction of assets of other properties or paralization of business operations.

That the SEC, mandated by law to have regulatory functions over corporations, partnerships or associations, appointed an
interim receiver for the EYCO Group of Companies on its petition in light of, as quoted above, the therein enumerated factors beyond
the control and anticipation of the management rendering it unable to meet its obligation as they fall due, and thus resulting to
complications and problems . . . to arise that would impair and affect [its] operations . . . shows that CLARION, together with the other
member-companies of the EYCO Group of Companies, was suffering business reverses justifying, among other things, the
retrenchment of its employees. his Court thus deems it proper to award the amount equivalent to Miclats one (1) month salary
of P6,500.00 as nominal damages to deter employers from future violations of the statutory due process rights of employees.[31]

Since Article 283 of the Labor Code also provides that [i]n case of retrenchment to prevent losses, . . . 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 [being] considered one (1) whole year, this Court holds that Miclat is entitled to separation pay equivalent to one
(1) month salary.

An employee whose services were terminated any time before the time for payment of the 13th month pay is entitled to this
monetary benefit in proportion to the length of time he worked during the calendar year up to the time of his resignation or
termination from the service. Thus if he worked only from January up to September his proportionate 13th month pay shall be
equivalent to 1/12 of his total basic salary he earned during that period. With the appointment of a management receiver in
September 1997, however, all claims and proceedings against CLARION, including labor claims,]were deemed suspended during the
existence of the receivership.] The labor arbiter, the NLRC, as well as the CA should not have proceeded to resolve respondents
complaint for illegal dismissal and should instead have directed respondent to lodge her claim before the then duly-appointed receiver
of CLARION. To still require respondent, however, at this time to refile her labor claim against CLARION under the peculiar
circumstances of the case that 8 years have lapsed since her termination and that all the arguments and defenses of both parties were
already ventilated before the labor arbiter, NLRC and the CA; and that CLARION is already in the course of liquidation this Court deems
it most expedient and advantageous for both parties that CLARIONs liability be determined with finality, instead of still requiring
respondent to lodge her claim at this time before the liquidators of CLARION which would just entail a mere reiteration of what has
been already argued and pleaded. Furthermore, it would be in the best interest of the other creditors of CLARION that claims against
the company be finally settled and determined so as to further expedite the liquidation proceedings. For the lesser number of claims to
be proved, the sooner the claims of all creditors of CLARION are processed and settled.