Industrial Timber Corporation v. Ababon

Summary

This consolidated case involves Industrial Timber Corporation's closure of its Stanply Plant affecting 97 employees who challenged the validity of their termination. The Supreme Court upheld the business closure as valid authorized cause, recognizing the company's genuine financial difficulties including raw material shortages, expired permits, and poor market conditions. While the closure was valid, the Court awarded separation pay and nominal damages for procedural violations in the termination process. Initially awarding P50,000 nominal damages per employee, the Court reduced this to P10,000 upon reconsideration, considering the company's financial incapacity, cessation of income since 1990, and good faith compliance with CBA benefits. The decision balances employee protection with practical considerations of employer financial capacity in business closure situations.