On the EYCO Group of Companies issued to its employees a

On the eyco group of companies issued to its

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On October 10, 1997, the EYCO Group of Companies issued to its employees aMemorandum announcing the formal entry of the Receiver Group and the functionsthereof. Nothing more was said in the Memorandum. On October 22, 1997, CLARION informed Miclat by telephone that her employmentcontract had been terminated effective October 23, 1997. Miclat filed a case for Illegal Dismissal against CLARION and Yutingco before theNLRC.On January 7, 1998 CLARION issued a Memorandum informing their companymanagers that the company had to shut down some operations of the company dueto “numerous external factors such as slowdown in business and consumerdemand”.Miclat’s Assertions before the L.A (Labor Arbiter) March, 1998:1.She was a regular employee since CLARION never informed her of thestandards to qualify as a regular EE.2.The claims of CLARION regarding their financial status is disputable.3.Irregardless, assuming that her termination was necessary, it was done inviolation of her right to due process since the requirement for notice was notfollowed, she being informed of her termination only a day before it took effect.4.Miclat claims separation pay, 13th month pay and salaries for October 21, 22and 23, 1997. ON the other hand, CLARION claims that:1.Their financial status, as can be deduced from their state of receivership,justified their retrenchment. They were only following the “Last In, First One Out”Policy.2.They sufficiently complied with due process, referring to a July 21, 1997Memorandum where notice of the company’s state of receivership and an offer forvoluntary separation to any EE who was interested. This Memo, constituted asnotice issued more than a month before Miclat’s termination on October 23.The Labor Arbiter decided in favor of Miclat and ordered her reinstatement,backwages and proportionate 13th month pay. CLARION appealed to the NLRC emphasizing that the dismissal of Miclat was done ingood faith and in accordance with law thus she did not deserve the award given bythe LA. In addition, CLARION presented their balance sheets from 1997 to 1998 andthe fact that they had to shut down on 1998 as evidence of a reverse in theirfinancial situation. The NLRC affirmed the LA’s decision:There are three (3) valid requisites for valid retrenchment: (1) the retrenchment isnecessary to prevent losses and such losses are proven; (2) written notices to theemployees and to the Department of Labor and Employment at least one (1) monthprior to the intended date of retrenchment; and (3) payment of separation payequivalent to one (1) month pay or at least ½ month pay for every year of service,whichever is higher.
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The two notices are mandatory. If the notice to the workers is later than the noticessent to DOLE, the date of termination should be at least one month from the date ofnotice to the workers.
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