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G.R. No. 172846, July 24, 2013

MANILA POLO CLUB EMPLOYEES UNION !MPCEU" #UR$%UCP,Petitioner, v. MANILA POLO CLUB,

INC.,Respondent.

& E C I S I O N

PERAL%A,J.'

Challenged in this Petition for Review on Certiorariunder Rule 45 of the 1997 Rules of Civil Procedure are

the February , !!" #ecision1and $ay 9, !!" Resolutionof the Court of %&&eals 'C%( in C%)*.R. +P o.7-17 affiring in totothe %ugust /, !! #ecision-and +e&teber 1-, !! Resolution4of 0oluntary

%rbitrator esus 2. #iaonon '0% #iaonon(, which disissed the co&laint for illegal retrenchent filedby &etitioner.

3he facts are unco&licated.

Petitioner $anila Polo Club &loyees nion '$PC(, which is affiliated with the Federation of nions ofRi6al 'FR()3CP, is a legitiate labor organi6ation duly registered with the #e&artent of abor and&loyent '#8(, while res&ondent $anila Polo Club, nc. is a non)&rofit and &ro&rietary ebershi&organi6ation which &rovides recreation and s&orts facilities to its &ro&rietary ebers, their de&endents,and guests.

8n #eceber 1-, !!1, the 2oard of #irectors of res&ondent unaniously resolved to co&letely terinatethe entire o&erations of its Food and 2everage 'F : 2( outlets, e;ce&t the ast Chu

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%t least 15 years of service 1.5 onth's( &ay for everyyear of service

%t least ! years of service 1.5 onth's( &ay for everyyear of service/

8n even date, res&ondent sent notices to the &etitioner and the affected e&loyees 'via registered ail( aswell as subitted an stablishent 3erination Re&ort to the #8.9Res&ondent infored, aong others,of the retrenchent of 1- e&loyees1!in the F : 2 #ivision and those whose functions are related to its

o&erationsB the discontinuance of the F : 2 o&erations effective $arch 5, !!B the terination of thee&loyent relationshi& on %&ril -!, !!B and, the continued &ayent of the e&loyees salaries des&ite

the directive not to re&ort to wor< effective iediately.

naware yet of the terination notice sent to the by res&ondent, the affected e&loyees of &etitionerwere sur&rised when they were &revented fro entering the Club &reises as they re&orted for wor< on

$arch 5, !!. 3hey later learned that the F : 2 o&erations of res&ondent had been awarded to $a

; ; ; ?hile retrenchent and closure of a business establishent or underta

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Closure of a business or undertakindue to business losses is the reversal of fortune of the e&loyerwhereby there is a complete cessation of business operationsto &revent further financial drain u&on an

e&loyer who cannot &ay anyore his e&loyees since business has already sto&&ed.

8ne of the &rerogatives of anageent is the decision to close the entire establishent or to close orabolish a de&artent or section thereof for econoic reasons, such as to inii6e e;&enses and reduceca&itali6ation.

?hile the abor Code &rovides for the &ayent of se&aration &ac

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cases of closures or cessation of o&erations of establishent or underta

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ore e;&ensive through the years. %n evaluation of the financial figures a&&earing in the audited financialstateents &re&ared by the +*0 : Co. shows that ninety)one to ninety)si; '91I)9"I( &ercent of the actual

revenues earned by the F : 2 #e&artent co&rised the costs and e;&enses in aintaining the de&artent.PetitionerHs decision to &lace its F : 2 o&erations under a concessionaire ust then be res&ected, absent a

showing of bad faith on its &art.

n fine, anageentHs e;ercise of its &rerogative to close a section, branch, de&artent, &lant or sho& will

be u&held as long as it is done in good faith to advance the e&loyerHs interest and not for the &ur&ose ofdefeating or circuventing the rights of e&loyees under the law or a valid agreeent.9

8n the other hand, in 1astride 7olf Club# 6nc$#co&lainants were

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. Closure or cessation of o&erations of establishent or underta

'1( it was done in good faith to advance the e&loyerHs interest and not for the &ur&ose of defeatingor circuventing the rights of e&loyees under the law or a valid agreeentB and '( a written

notice on the affected e&loyees and the #8 is served at least one onth before the intendeddate of terination of e&loyent.

-. 3he e&loyer can lawfully close sho& even if not due to serious business losses or financial reversesbut se&aration &ay, which is e=uivalent to at least one onth &ay as &rovided for by %rticle /- of

the abor Code, as aended, ust be given to all the affected e&loyees.

4. f the closure or cessation of o&erations of establishent or underta

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after %&ril -!, !!. n fact, a $eorandu of %greeent was e;ecuted before the C$2 between&etitioner and res&ondent on une 1!, !! whereby the &arties agreed, aong others, to aintain the

e;isting &rovisions of the C2%, e;ce&t those &ertaining to wage increases and signing bonus.-5

Finally, even if the ebers of &etitioner are not considered as illegally disissed, they are entitled tose&aration &ay &ursuant to %rticle /- of the abor Code, as aended. Per res&ondentHs inforation,however, the se&aration &ac