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Republic of the Philippines

Department of Labor and Employment

National Capital Region
Quezon City


versus NLRC RAB No. NCR 11 14204 11


Johhny Paek.


COMES NOW, respondents by the undersigned counsel unto the Honorable

Labor Arbiter most respectfully state:

Respondents will only answer three major arguments advanced by the

complainant in his Position Paper namely:

a. that he was illegally retrenched;

b. that he is supposed to be paid his full backwages;

c. That he is ought to be paid SILP, 13th month pay and other money


In his Position Paper, complainant alleged that he was illegally retrenched;

On this issue, respondents care to discuss herein what is retrenchment, to


“… Retrenchment to prevent losses is one of the

authorized causes for dismissal of employees. Article 283 of the
Labor Code states:

Art. 283. Closure of establishment and reduction of

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 a
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 (112) 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.
In Genuino Ice Company, Inc. v. Lava,1 the Court held that:
There are three (3) basic requisites for a valid
retrenchment, namely: (a) proof that the retrenchment is
necessary to prevent losses or impending losses; (b) service of
written notices to the employees and to the Department of
Labor and Employment at least one (1) month prior to the
intended date of retrenchment; and (c) payment of separation
pay equivalent to one (1) month pay, or at least one-half (1/2)
month pay for every year of service, whichever is higher.
In Anabe v. Asian Construction (ASIAKONSTRUKT),7 the
Court held that,
"The losses must be supported by sufficient and
convincing evidence, the normal method of discharging this is

the submission of financial statements duly audited by
independent external auditors."8 In the case of impending
losses, financial statements duly audited by independent
external auditors are not necessarily the best proof.
But it is not correct to say that in all cases of retrenchment, the
company concerned must already be losing or in the state of bankruptcy;
Retrenchment can also be had to prevent losses and still it is deemed
Under this condition of retrenchment to prevent losses, proof of
bankruptcy need not be submitted by the company;
To reiterate, there two kinds of losses which can justify retrenchment,
namely, incurred losses and impending losses;
Incurred losses refer to losses that have already occurred. Since they
have already occurred, they should be reflected in the financial statements;
On the other hand, impending losses refer to losses that have not yet
occurred. They are also termed as future or expected losses.
Since they have not yet occurred, they are not reflected in the
financial statements;
Thus, the argument of the complainant that respondent will not be
able to substantiate its retrenchment claim is misplaced;
It is only incurred losses which must be substantiated by financial
Obviously, impending, expected or future losses which employers
seek to prevent through retrenchment could not yet be reflected in the
financial statements;
In fact, if the retrenchment adequately serves its purpose, then the
impending losses would never be reflected in the financial statements;
` Noteworthy to mention that complainant was hired by the respondent
to become its Sales and Business Development Manager on January 6, 2014;
As such, he was charged to bring in clients that will bring forth
earnings for the company;
This is the obligation of the complainant on the day that he was hired;
But complainant run short on his commitment as he was not able to
garner any client pursuant to his function as a Sales Development Manager;
No client means no profit for the respondent giving it shivers on the
possibility of being bankrupt;
The logical conclusion to retrench the complainant was ultimately
decided by the respondents;

If complainant cannot deliver his obligation to bring in clients then it
is only logical to weed him out and replace him with another employee who
can do his job;
This is a matter of self-preservation on the part of the respondents;
Thus respondents was constrained to talk to the complainant for his
eventual retrenchment with a separation package of Php 214,766.57;
This package was unreasonably refused by the complainant prompting
the respondents to write him a Memorandum that in essence declare that he
was retrenched to prevent losses;
(Photocopy of the said Memorandum is attached herein as ANNEX “1” to
form an integral part hereof);
In the said Memo, complainant was assured of his separation pay and
a notice that he will not be required to work but still will be paid in lieu of
notice. To quote the same:
“… We confirm that your employment with the company
will terminate on October 6, 2014 – Monday due to
retrenchment to prevent loss. This letter serves as notice of
termination due to retrenchment.
You will not be required to work your notice period and
you will be paid in lieu of notice.

Upon leaving the company, you will be paid the following:

Final salary
Separation Pay
13th Month Pay
Income Tax Return…”
This completes the retrenchment of the complainant which was made
in full fealty with the law;
His claim therefore of being illegally retrenched should not be given
any consideration;


Complainant argued in his Position Paper that he must be paid
backwages yet he did not bother to specify the reckoning period for its

Respondents thus supplement the said argument by saying that said
backwages should be counted only from the time that complainant was
retrenched, which was on October 6, 2014, until February 13, 2015, or the
day that he was given an Unconditional Offer to Return to Work by the
Noteworthy to mention that the respondents made a reservation in the
Memorandum that it issued the complainant which pertain to the possibility
of taking him back in;
The said Memo, states:

“… In the event of future vacancies arising within a

period of six (6) months of the date of this letter, for which,
given your past experience and the nature of the position, you
may be suitable, you will be notified thereof by the company,
and may be offered such employment …”

Owing this reservation, respondents did give the complainant an

Unconditional Offer for Actual Reinstatement before the Office of the
Honorable Labor Arbiter on the hearing of February 13, 2015;
(Photocopy of the said document is attached herein as ANNEX “2” to form
an integral part hereof);
The said offer was witnessed by the Labor Associate who presided
the aforementioned hearing and in fact captured the said incident in the
The said Minutes bear out:
“… Parties appeared and submitted their Position
Papers. Respondent likewise filed before this Office copy of
Unconditional Offer for Actual Reinstatement – copy of which
was received by complainant…”
(Photocopy of the said Minutes is attached herein as ANNEX “3” to form
an integral part hereof);
However, the complainant vehemently refused to go back to his
It is thus unfair to award him backwages for all the time that he could
have worked but on his own volition chose to forego the same;
The Supreme Court time and again declared that “backwages, in
general, are granted on grounds of equity for earnings which a worker or
employee has lost due to his dismissal from work (New Manila Candy
Workers Union (NACONWA-PAFLU v. CIR, 86 SCRA 37).
The general principle is that an employee is entitled to receive as
backwages all the amounts he may have lost starting from the date of his

dismissal up to the time of his reinstatement (Capital Garment Corporation
v. Ople, 117 SCRA 473; New Manila Candy Workers' Union (NACONWA-
PAFLU) v. CIR, supra).
In the case, of the complainant, he was offered reinstatement by the
respondents which he refused;
Must his backwages then should be computed from the time he was
terminated up to the time he was offered reinstatement or up to the time his
complaint for illegal dismissal was finally decided?
This issue was somewhat settled in the case of Five J Taxi and Juan
S. Armamento vs. National Labor Relations Commissin (G.R. No. 100138,
August 5, 1992) where the Supreme Court sustained the ruling of the trial
arbiter who declared that the reason why the complainant is ought to be paid
backwages from the time of his dismissal up to the time that his case was
finally decided is because there was no bona fide offer on the part of the
employer to reinstate the complainant;
In the said case, the employer only announced that he is amenable to
accept back the employee but he did not actually tell the employee that he
can already return to his work;
There the Supreme Court ruled:
“.. The petitioners' position on the cut-off period
for the reckoning of private respondents' backwages had
thoroughly been passed upon and consistently been
rejected by the NLRC and the Labor Arbiter below.
In this regard, what the NLRC found in its assailed
resolution need not be further elaborated upon —
We have painstakingly gone over the entire records
of the case and, sad to say, We could not find any hard
and solid proof that respondents had, indeed, made an
unconditional offer of reinstatement to complainants,
except the bare manifestation it filed on December 13,
1989. In fact, there was no subsequent attempt made by
respondents to complainants of their alleged offer of
reinstatement. Conferences were scheduled wherein
respondents could have made it of record that
complainants have simply refused to go back to work.
But despite opportunities to do so, respondents have
done nothing to fully express a clear intent to reinstate
complainants as the records is bare of any evidence to
this effect. Therefore, its allegation that computation of
the award should stop when it filed a manifestation on
December 13, 1988 cannot prosper. Besides, it's too late
in the day to argue the issue as such has been long
disposed of in the resolutions dated October 31, 1989

and March 7, 1990. (Resolution dated January 18, 1991,
pp. 80(b)-81, Rollo)
We find no supervening event nor any meritorious
reason to disturb the amount of backwages awarded to
the private respondents which have repeatedly been
computed by the Research and Information Unit of the
Labor Arbiter…”
It is clear from the said pronouncement that had the employer actually
offered reinstatement to the employee then the computation of his
backwages should have stop there;
Going back to the case of the complainant, assuming just for the sake
of argument that he was illegal retrenched by the respondents, his
backwages should be computed only from the time he was actually offered
reinstatement which he refused;
Said the Supreme Court in this regard” The age-old rule governing the
relation between labor and capital, or management and employee of a "fair
day's wage for a fair day's labor" remains as the basic factor in determining
employees' wages, and for that matter backwages. If there is no work
performed by the employee there can be no wage or pay unless, of course,
the laborer was able, willing and ready to work but was illegally locked out,
or suspended (SSS v. SSS Supervisors Union-CUGCO, 117 SCRA 746);
His refusal to be reinstated gives him no right to be given additional
WHEREFORE, premises considered, respondents reiterate their
prayer as found in their Position Paper.
Quezon City March 3, 2015

Suite B. 2nd Floor Overland Park Bldg.,
No. 245 Banawe St. cor Quezon Ave., Quezon City
PTR 0560706 1-5-15 QC
IBP 888280 2-03-12 Pasig City
Roll No. 37522
MCLE Compliance No. IV-0018064 4-25-13 Pasig City.

Republic of the Philippines)

Quezon City ) s.s.


I, Romulo A. Reyes, of legal age, under oath depose and state:

That I am the authorized representative of the respondent company;
That I have caused the preparation and filing of the foregoing pleading;
That I have read and understood the allegations therein and they are true and
correct based on my own personal knowledge and documents in my possession;

Romulo A. Reyes

SUBSCRIBED AND sworn to before me this 3 rd day of March 2015 affiant

is personally known to the Notary Public.

Doc No. ____;

Page No. ___;
Book No. ___;
Series of 2015