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Clarion Printing v. NLRC

Michelle Miclat was hired as a probationary marketing assistant by Clarion Printing House. Clarion's parent company, EYCO Group, filed for receivership with the SEC due to financial difficulties. This led to Clarion retrenching employees, including Miclat, without providing the one month notice required by law. Miclat filed a complaint claiming illegal dismissal. The NLRC ruled in Miclat's favor, but the Court of Appeals found the retrenchment was justified due to EYCO's financial problems, though Clarion failed to give proper notice. The Supreme Court upheld the Court of Appeals' decision.

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187 views2 pages

Clarion Printing v. NLRC

Michelle Miclat was hired as a probationary marketing assistant by Clarion Printing House. Clarion's parent company, EYCO Group, filed for receivership with the SEC due to financial difficulties. This led to Clarion retrenching employees, including Miclat, without providing the one month notice required by law. Miclat filed a complaint claiming illegal dismissal. The NLRC ruled in Miclat's favor, but the Court of Appeals found the retrenchment was justified due to EYCO's financial problems, though Clarion failed to give proper notice. The Supreme Court upheld the Court of Appeals' decision.

Uploaded by

Mariah
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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CLARION PRINTING HOUSE, INC. vs.

NATIONAL LABOR RELATIONS


COMMISSION
June 27, 2005
Termination by Employer

Facts: Clarion Printing House (Clarion), a company owned by EYCO Group of


Companies (EYCO) hired Michelle Miclat (Miclat) as marketing assistant on a
probationary basis. During that time, she was not informed of the standards that she
should meet to qualify as a regular employee.

EYCO subsequently filed a petition for suspension of payment as well as an


appointment of a rehabilitation receivership committee before SEC on the ground that
they are suffering financial difficulty. Pursuant to this, a retrenchment occurred, thus
terminating Miclat.

Conversely, Miclat filed a complaint for illegal dismissal before the NLRC. Miclat
contends that assuming her termination is necessary, it was not done in a proper
manner; there was no notice that was given to her. On the other hand, Clarion contends
that they are not liable for retrenching some employees because EYCO is being placed
under receivership, and a memorandum was given to employees, hence they
substantially complied with the notice requirement.

NLRC rendered its decision in favor of Miclat and found that she was illegally dismissed.
On appeal, the Court of Appeals held that Clarion failed to prove its ground for
retrenchment as well as compliance with the mandated procedure. It further ruled that
Miclat should be reinstated and paid backwages. Hence, this petition.

Issue: Whether or not Miclat was illegally dismissed.

Ruling: NO, Miclat’s termination is justified. It is a well-settled rule 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.

Further, from the provisions of P.D. No. 902-A, as amended, the appointment of a
receiver or management committee by the SEC presupposes a finding that 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.”

On the other hand, Article 283 of the Labor Code states: 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 worker and the Ministry of Labor and
Employment at least one (1) month before the intended date thereof.

In this case, Clarion failed to comply with the notice requirement provided for in Article
283 of the Labor Code. However, Miclat’s termination is justified, because of financial
difficulties of the company, but failure to give the required notice by Clarion is sufficient
to entitle her to payment of 13th month pay, separation pay and others.

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