Republic of the
Supreme Court
THIRD DIVISION
CALTEX
(PHILS.), INC. (now
CHEVRON
PHILIPPINES, INC.),* G.R. No.
159641
Petitioner,
Present:
YNARES-SANTIAGO, J.,
Chairperson,
- versus - AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA,
and
REYES,
JJ.
NATIONAL
LABOR RELATIONS
COMMISSION
AND
ROMEO T. STO. TOMAS,
Respondents.** Promulgated:
October
15, 2007
x-
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D E C I S I O N
AUSTRIA-MARTINEZ,
J.:
Before us is a Petition for Review
on Certiorari under Rule 45 filed by Caltex
(Philippines) Inc., now Chevron Philippines, Inc. (petitioner) seeking to annul
and set aside the Decision[1]
dated May 15, 2003, and the Resolution[2]
dated August 21, 2003 of the Court of Appeals (CA) in CA-G.R. SP No.
65405.
Romeo T. Sto
Tomas (private respondent) was a regular employee of petitioner since P29,860.00 at the time of his
termination on
In a letter[3]
dated
Petitioner, through a letter[4]
dated P559,458.90 consisting of the following:
Regular
separation/retirement benefits P352,721.25
under the New Retirement Plan; and
Ex-gratia payment computed at ½ month’s
basic
pay for every year of service 206,737.65
TOTAL P559,458.90[5]
On
In
its position paper, petitioner and Mr. Hon averred that private respondent’s
dismissal from the service was due to redundancy of his position which was
determined after petitioner’s business process re-engineering study and organization
review, conducted with private respondent’s knowledge; that redundancy is an
authorized cause to terminate an employee which is a management prerogative and
cannot be interfered with absent any abuse of discretion; and that there is
nothing in the law that requires petitioner to conduct impartial investigation
or hearing to terminate an employee due to redundancy.
On
The LA found that private
respondent's dismissal from the service on the ground of redundancy was done in
good faith and a valid exercise of management prerogative; that redundancy did
not deter the employer to hire additional workers when it is deemed best for
proper management; and that there is no need for petitioner to conduct an
impartial investigation or hearing since private respondent’s dismissal was not
related to his blameworthy act or omission. While the LA found that petitioner failed to
give notice to DOLE one month before the intended date of private respondent’s
termination, the LA ruled that non-compliance with the procedural requirement
will not per se make the termination illegal and held that requirement of
procedural process was not totally disregarded.
Respondent filed his appeal with the
National Labor Relations Commission (NLRC) which in a Decision[8]
dated
WHEREFORE, the decision of the Labor Arbiter is hereby VACATED and SET ASIDE and judgment is hereby rendered:
All other claims of complainant are hereby DISMISSED for lack of merit.[9]
In
so ruling, the NLRC expounded that although Article 283 of the Labor Code authorizes termination due to redundancy,
there must be factual basis; that the records did not disclose any evidence to
show basis for respondent’s termination;
that neither did petitioner send notice to DOLE one month prior to respondent’s
dismissal.
Petitioner’s
Motion for Reconsideration was denied in a Resolution[10]
dated
Petitioner filed with the CA a Petition
for Certiorari alleging grave abuse of discretion committed by the NLRC
in finding respondent’s termination illegal.
In a Decision dated
The CA further found that petitioner
failed to send DOLE a written notice of its implementation of the redundancy
program one month prior to the intended date thereof since petitioner had
admitted such failure in its Answer to
respondent’s appeal to the NLRC.
The CA likewise found that petitioner’s
belated submission to the CA of the letter dated June 30, 1997 purportedly
notifying DOLE of the plan to implement a redundancy program is dubious because
of petitioner’s earlier admission that it did not send DOLE a written notice of
termination; that petitioner should have submitted the evidence at the earliest
opportunity; and that the letter was self-serving since it did not bear any
proof of receipt by the DOLE.
The CA denied petitioner’s Motion for
Reconsideration in a Resolution dated
Hence, herein petition filed by
petitioner on the following grounds:
THE PUBLIC RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF OR IN EXCESS OF ITS JURISDICTION WHEN IT ISSUED THE DECISION DATED MAY 15, 2003 AND THE RESOLUTION DATED AUGUST 21, 2003 AFFIRMING THE ORDERS DATED JANUARY 30, 2001 AND MARCH 27, 2001 OF THE RESPONDENT NLRC CONSIDERING THAT THEY ARE NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.
THE PUBLIC RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION WHEN IT AFFIRMED THE FINDING OF THE RESPONDENT NLRC THAT THE DISMISSAL OF THE PRIVATE RESPONDENT WAS WITHOUT JUST AND AUTHORIZED CAUSE.
THE PUBLIC RESPONDENT COURT OF
APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS OF
ITS JURISDICTION WHEN IT AFFIRMED THE FINDING OF THE RESPONDENT NLRC DIRECTING
THE REINSTATEMENT OF THE PRIVATE RESPONDENT AND THE PAYMENT OF HIS BACKWAGES
COMPUTED FROM
Petitioner insists that it had already
informed the DOLE Secretary through a letter-notice dated October 21, 1996 of
its plan to implement a redundancy program which was received on October 24, 1996; that the CA ignored such earlier
notice and concentrated on its alleged failure to send notice one month prior
to private respondent’s termination; that the June 30, 1997 notice to DOLE was
belatedly submitted since it was not easily located; that the belated
submission should not be taken against petitioner; that the subsequent notice
to the DOLE was only a follow up to the earlier notice dated October 21, 1996;
and that there was substantial
compliance with the notice requirement of the Labor Code for a valid redundancy
program.
Petitioner further argues that private
respondent’s termination due to redundancy is valid considering that he
consented to his termination by accepting and benefiting from the package given
by petitioner in the total amount of P559,458.90;
that his separation package is equivalent to 1.39 month’s basic pay for every
year of service, way above the minimum
separation pay required by law; that if private respondent’s termination is
indeed illegal and that he should be reinstated with full backwages,
he should be ordered to pay back petitioner the benefits he received on account
of its redundancy program as he unjustly enriched himself in the amount of P206,737.65 representing ex-gratia benefit paid only to terminated employees on account of the redundancy program.
Petitioner further claims that private
respondent was not retrenched but dismissed on account of petitioner’s
redundancy program, thus, the finding that “petitioner was not able to provide
proof that it truly had an extensive engineering study on account of business
losses arising out of massive oil deregulation” is misplaced; that retrenchment
and redundancy are two different authorized causes terminating employment
relationship and the elements of one do not apply to the other; that its right
to terminate respondent’s employment is embodied under Article 283 of the Labor
Code which required employers to give notice of redundancy to the worker and
the DOLE one month before the intended date of
actual termination; that the twin notice requirement is the only
condition precedent mandated by law before any valid redundancy may be effected
which petitioner had duly complied with; that termination due to redundancy is
a valid exercise of management prerogative which courts ordinarily hesitate to
interfere with unless the act is marked with bad faith.
The issues for resolution are (1)
whether private respondent’s termination on the ground of redundancy was valid,
and (2) whether petitioner gave a written notice to DOLE as required under
Article 283 of the Labor Code.
Under
Rule 45 of the Rules of Court, only questions of law may be raised in this
Court. However, factual issues may be considered and resolved when the findings
of facts and the conclusions of the Labor Arbiter are inconsistent with those
of the NLRC and the CA,[12]
as obtaining in the present case.
The CA correctly dismissed herein petitioner’s
petition for certiorari. The NLRC
did not commit grave abuse of discretion in finding that respondent was
illegally dismissed.
Private respondent was dismissed by petitioner on the ground of
redundancy, one of the authorized causes for dismissal under Article 283 of the
Labor Code, to wit:
Article 283. Closure of establishment and reduction of personnel.- The employer may also terminate the employment of any employee due to the installment 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 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 reverses, the separation pay shall be equivalent to one (1) month pay or at least one half (1/2) 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 (emphasis supplied).
In Becton Dickinson Phils., Inc. v.
National Labor Relations Commission,[13]
citing the leading case, Wiltshire File Co., Inc. v. National Labor
Relations Commission,[14]
we explained the nature of redundancy as an authorized cause for dismissal in
the following manner:
x x x redundancy in an employer’s personnel force necessarily or even ordinarily refers to duplication of work. That no other person was holding the same position that private respondent held prior to the termination of his services, does not show that his position had not become redundant. Indeed, in any well organized business enterprise, it would be surprising to find duplication of work and two (2) or more people doing the work of one person. We believe that redundancy, for purposes of the Labor Code, exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. Succinctly put, a position is redundant where it is superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as overhiring of workers, decrease in volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise.[15]
We
are mindful of the rule that the characterization of an employee’s services as
no longer necessary or sustainable, and therefore, properly terminable, is an
exercise of business judgment on the part of the employer, and that the wisdom
or soundness of such characterization or decision is not subject to
discretionary review. However, such
characterization may be rejected if the same is found to be in violation of law
or is arbitrary or malicious.[16]
We
have held that the employer must comply with the following requisites to ensure
the validity of the implementation of a redundancy program: 1) a written notice
served on both the employees and the Department of Labor and Employment (DOLE) at
least one month prior to the intended date of retrenchment; 2) payment of
separation pay equivalent to at least one month pay or at least one month pay
for every year of service, whichever is higher; 3) good faith in abolishing the
redundant positions; and 4) fair and reasonable criteria in ascertaining what
positions are to be declared redundant and accordingly abolished.[17]
In Asufrin,
Jr. v. San Miguel Corporation,[18] we ruled that it is not enough for a company
to merely declare that it has become overmanned. It must produce adequate proof of such
redundancy to justify the dismissal of the affected employees.
In Panlilio
v. National Labor Relations Commission,[19]
we held that evidence must be presented to substantiate redundancy such as but
not limited to the new staffing pattern, feasibility studies/proposal, on the
viability of the newly created positions, job description and the approval by
the management of the restructuring.
In the instant case, we find no
reversible error committed by the CA in upholding the findings of the NLRC that
there was no substantial evidence presented by petitioner to justify private
respondent's dismissal due to redundancy. As correctly found by the CA, petitioner’s
evidence to show redundancy merely consisted of a copy of petitioner’s letter
to the DOLE informing the latter of its intention to implement a redundancy
program and nothing more. The letter
which merely stated that petitioner undertook a review, restructuring and
streamlining of its organization which resulted in consolidation, abolition and
outsourcing of certain functions; and which resulted in identified and
redundant positions instead of simplifying its business process restructuring,
does not satisfy the requirement of substantial evidence, that is, the amount
of evidence which a reasonable mind might accept as adequate to justify a
conclusion.[20]
Petitioner failed to demonstrate the
superfluity of private respondent’s position as there was nothing in the
records that would establish any concrete and real factors recognized by law
and relevant jurisprudence,[21]
such as overhiring of workers, decreased volume of
business, or dropping of a particular product line or service activity
previously manufactured or undertaken by the enterprise, which were adopted by
petitioner in implementing the redundancy program.
Petitioner also failed to show any fair
and reasonable criteria in ascertaining what positions are redundant and how
the selection of employees to be dismissed was made.
In Capitol Wireless, Inc. v. Confesor,[22]
we have held that in selecting the employee to be dismissed, fair and
reasonable criteria must be used such as but not limited to (a) less preferred
status, e.g. temporary employee; (b) efficiency; and (c) seniority. No such appraisal was done in the present
case. The absence of criteria in the
selection of an employee to be dismissed renders the dismissal arbitrary.
Moreover,
petitioner failed to refute private respondent’s assertion that it opened
positions of accountants for hiring to which he could have qualified rather
than be dismissed. In petitioner’s
Memorandum dated
In fact,
petitioner expressly stated in its Answer to private respondent’s Appeal
Memorandum filed with the NLRC that “it may still hire additional employees so
long as it is not for the position previously declared and determined to be
redundant.”[25]
As we
ruled, redundancy exists where the services of an employee are in excess of
what is reasonably demanded by the actual requirement of the enterprise.[26] It is the burden of petitioner, as employer, to prove the
factual and legal basis for the dismissal of its employees on the ground of
redundancy.[27]
The CA committed no reversible error
when it found that petitioner failed to discharge the burden of proving
respondent’s dismissal as valid.
There is merit in petitioner’s claim
that the CA’s finding “that it (petitioner) failed to provide proof that it
truly had an extensive reengineering study on account of business losses
arising out of massive oil deregulation” is misplaced considering that Article
283 of the Labor Code does not require that the employer should be suffering
financial losses before he can terminate the services of the employee on the
ground of redundancy.[28] Nevertheless, the CA finding on this matter
does not detract from the fact that petitioner failed to show proof of fair and
reasonable criteria for the implementation of a valid redundancy program. Thus, whether it is retrenchment or
redundancy, or any of the other authorized causes, no employee may be dismissed
without observance of the fundamentals of fair play.[29]
Petitioner committed a fatal error when
it failed to give a written notice to DOLE as required under Article 283 of the
Labor Code. All three, the LA, NLRC and
the CA, found the absence of notice sent by petitioner to DOLE one month before
the intended date of private respondent’s termination. While petitioner claims that it sent a notice
to the DOLE through a letter dated
Petitioner’s insistence that its written notice of
redundancy program per its October 1996 letter addressed to DOLE is a
substantial compliance with the notice requirement, is not persuasive since the
said letter merely stated its plan of implementing a redundancy program
but did not contain the details necessary to effect the program such as the
reason for finding certain portions as redundant, the name of the employees to
be terminated and the actual date of termination. In fact, petitioner in its October letter
wrote that it would provide DOLE with a list of affected employees as it
implements each phase of the redundancy program which it failed to do.
Petitioner’s failure to show an authorized cause for private
respondent’s termination is sufficient to declare the dismissal illegal.
Petitioner’s claim that private
respondent consented to his termination by accepting his separation pay
deserves scant consideration. Private
respondent had no other recourse but to accept his separation pay since
petitioner’s letter made it clear that his position had been determined to be
redundant and his services shall be terminated effective
Petitioner
asserts that private respondent’s reinstatement is no longer possible since his
former position was already abolished when it was declared redundant. Notably, this matter was only raised for the
first time in petitioner’s motion for reconsideration[32]
of the assailed CA decision dated
The issue
of whether private respondent’s reinstatement to his former or substantially
equivalent position is no longer possible, is a
factual matter which is not a proper subject of the present petition for review
on certiorari since we are not a trier of
facts. The parties’ conflicting claims on
this matter can be best determined by the Labor Arbiter upon the execution of
the judgment after our Decision shall have become final and executory.
Finally,
we find merit in petitioner’s claim that private respondent should return the
amount of P206,737.65 representing ex-gratia
benefit paid only to terminated employees on account of the redundancy
program. While we note that this matter
is raised only for the first time, we have ample authority to review and
resolve it if we find the consideration and determination of the same essential
and indispensable in order[34]
to arrive at a just decision in the case. The ex-gratia
benefit should be returned following the principle against unjust enrichment
which is held applicable in labor cases.[35]
WHEREFORE,
the petition is DENIED. The
Decision dated P206,737.65, representing the ex-gratia
benefit paid to him by petitioner.
No
costs.
SO ORDERED.
MA. ALICIA AUSTRIA-MARTINEZ
Associate
Justice
WE CONCUR:
CONSUELO
YNARES-SANTIAGO
Associate Justice
Chairperson
MINITA V.
Associate Justice Associate Justice
RUBEN T. REYES
Associate Justice
ATTESTATION
I attest that the conclusions in the
above Decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Court’s Division.
CONSUELO
YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division
C
E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of
the Constitution, and the Division Chairperson’s attestation, it is hereby
certified that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
REYNATO S. PUNO
Chief Justice
* Per
Resolution dated
**
The Court of Appeals named as
co-respondent is deleted from the title pursuant to Section 4, Rule 45 of the Rules of Court.
[1] Penned by Associate Justice Romeo A. Brawner (retired) concurred in by Justices Eliezer R.delos Santos and Regalado E. Maambong, CA rollo, pp. 159-167.
[2] CA rollo, p. 195.
[3]
[4]
[5]
[6] Docketed as NLRC NCR Case No. 00-06-04687-98.
[7] CA rollo, pp. 52-63.
[8]
[9]
[10]
[11] Rollo, pp. 20-21.
[12]
Lopez Sugar Corporation v.
Franco, G.R. No. 148195,
[13] G.R. Nos. 159969 & 160116,
[14] G.R. No. 82249,
[15] Becton Dickinson Phils., Inc. v. National Labor Relations Commission, supra note 13, at 143.
[16] Becton Dickinson Phils., Inc. v. National Labor Relations Commission, supra note 13, at 144.
[17] Lopez Sugar Corporation v. Franco, supra note 12, at 529 citing Capitol Wireless, Inc. v. Confesor, 332 Phil. 78 (1996).
[18] G.R. No. 156658,
[19] 346 Phil. 30 (1997).
[20] Reno Foods, Inc. v. National Labor Relations Commission, 319 Phil. 500, 506-507 (1995).
[21] Becton Dickinson Phils., Inc. v. National Labor Relations Commission, supra note 13, at 143.
[22] Supra note 17, at 78.
[23] CA rollo, p. 132.
[24]
[25] Rollo, p. 115.
[26] Wiltshire File Co., Inc. v. National Labor Relations Commission, supra note 14, at 672.
[27] Lopez Sugar Corporation v. Franco, supra note 12, at 529.
[28]
Escareal
v. National Labor Relations Commission, G.R. No. 99359,
[29]
[30] Serrano v. National Labor Relations Commission, 387 Phil. 345, 355 (2000).
[31] Rollo, p. 125.
[32] CA rollo, p. 181.
[33]
[34]
The Insular Life Assurance
Co., Ltd. Employees Assoc.-NATU v. Insular Life Assurance Co., Inc., Ltd., 166 Phil. 505, 518-519 (1977).
[35]
Olacao
v. National Labor Relations Commission, G.R. No. 81390,