Republic of the
Philippines
Supreme Court
Manila
FIRST DIVISION
|
COCA-COLA
BOTTLERS PHILIPPINES, INC., Petitioner, - versus - ANGEL U. DEL
VILLAR, Respondent. |
|
G.R. No. 163091 Present: CORONA, C.J.,
Chairperson, VELASCO, JR., LEONARDO-DE
CASTRO, DEL
CASTILLO, and PEREZ, JJ. Promulgated: October
6, 2010 |
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D E C I S
I O N
LEONARDO-DE CASTRO, J.:
Petitioner
Coca-Cola Bottlers Philippines, Inc. (the Company) filed this Petition for
Review on Certiorari, under Rule 45
of the Rules of Court, seeking the reversal of (1) the Decision[1]
dated October 30, 2003 of the Court of Appeals in CA-G.R. SP No. 53815, which reversed and set aside the Decision[2]
dated February 26, 1999 of the National Labor Relations Commission (NLRC) in
NLRC CN. NCR-00-12-07634-96; and (2) the Resolution[3]
dated March 29, 2004 of the appellate court in the same case, which denied for
lack of merit the Motion for Reconsideration of the Company.
The
antecedent facts are as follows:
The
Company, one of the leading and largest manufacturers of beverages in the
country, initially hired respondent Angel U. del Villar (Del Villar) on May 1,
1990 as Physical Distribution Fleet Manager with a job grade of S-7 and monthly
salary of P50,000.00, aside from the use of a company car, gasoline
allowance, and annual foreign travel, among other benefits. In 1992, as part of the reorganization of the
Company, Del Villar became the Transportation Services Manager, under the
Business Logistic Directorate, headed by Director Edgardo I. San Juan (San
Juan). As Transportation Services
Manager, Del Villar prepares the budget for the vehicles of the Company
nationwide.
While serving as
Transportation Services Manager, Del Villar submitted a Report dated January 4,
1996 to the Company President, Natale J. Di Cosmo (Di Cosmo), detailing an
alleged fraudulent scheme undertaken by certain Company officials in conspiracy
with local truck manufacturers, overpricing the trucks purchased by the Company
by as much as P70,000.00 each. In
the same Report, Del Villar implicated San Juan and Jose L. Pineda, Jr.
(Pineda), among other Company officials, as part of the conspiracy. Pineda then served as the Executive Assistant
in the Business Logistic Directorate in charge of the Refrigeration Services of
the Company.
In
1996, the Company embarked on a reorganization of the Business Logistic
Directorate. As a result, the functions
related to Refrigeration were assigned to the Transportation Services Manager,
which was renamed the Transportation and Refrigeration Services Manager. Mr. Nathaniel L. Evangelista, the Physical
Distribution Superintendent of the Zamboanga Plant, was appointed the Corporate
Transportation and Refrigeration Services Manager, replacing both Del Villar
and Pineda, who were in charge of the Transportation Services and Refrigeration
Services of the Company, respectively.
Pineda was then appointed as the Corporate Purchasing and Materials
Control Manager, while Del Villar as Pineda’s Staff Assistant. These new appointments took effect on May 1,
1996.[4]
On July 8, 1996,
seven months after the submission of his Report on the fraudulent scheme of
several company officials, Del Villar received a Memorandum[5]
from San Juan. Through said Memorandum,
San Juan informed Del Villar that (1) Del Villar was designated as Staff
Assistant to the Corporate Purchasing and Materials Control Manager, with a job
grade of NS-VII; (2) with Del Villar’s new assignment, he ceased to be entitled
to the benefits accruing to an S-7 position under existing company rules and
policies; and (3) Del Villar was to turn over the vehicle assigned to him as
Transportation Services Manager to Pineda by July 10, 1996.
Although as the
Staff Assistant of the Corporate Purchasing and Materials Control Manager, Del
Villar continued to receive the same salary as Transportation Services Manager,
but his car and other privileges were withdrawn and he spent his time at his
new post sitting “at a desk with no meaningful work whatsoever.”[6] Del Villar believed that he was demoted by
the Company to force him to resign.
Unable to endure any further the harassment, Del Villar filed with the
Arbitration Branch of the NLRC on November 11, 1996 a complaint against the
Company for illegal demotion and forfeiture of company privileges. Del Villar also impleaded in his complaint
Company President Di Cosmo, Vice-President and General Manager Jaime G. Oracion
(Oracion), Senior Vice-President and Human Resources Director Rosa Maria Chua
(Chua), San Juan, and Pineda. The
complaint was docketed as NLRC CN. NCR-00-12-07634-96, assigned to Labor
Arbiter Felipe Pati.
The Company
failed to appear, despite due notice, at the scheduled preliminary conference
before the NLRC Arbitration Branch.
Del Villar filed
his Position Paper, supported by his Complaint Affidavit.
The Company
filed a Motion to Dismiss, instead of a position paper, praying for the
dismissal of Del Villar’s complaint on the ground that Del Villar had no cause
of action. The Company reasoned that in
appointing Del Villar as the Staff Assistant of the Corporate Purchasing and
Materials Control Manager, from his former position as Transportation Services
Manager, the Company was merely exercising its inherent management prerogative
to transfer an employee from one position to another. The Company also contended that Del Villar
had no vested right to the privileges he previously enjoyed as Transportation
Services Manager. In an Order dated July
24, 1997, the Labor Arbiter deferred action on the Motion to Dismiss until
after submission by the Company of its Position Paper within 15 days from
receipt of said order.
The Company
filed on October 13, 1997 a Manifestation in which it stated that it was
adopting its Motion to Dismiss as its Position Paper.
Thereafter, NLRC
CN. NCR-00-12-07634-96 was submitted for resolution.
On March 3,
1998, the Labor Arbiter rendered a Decision in Del Villar’s favor. The Labor Arbiter held that the allegations
in Del Villar’s complaint sufficiently presented a cause of action against the
Company. The Company, in filing a Motion to Dismiss, hypothetically admitted
the truth of the facts alleged in the complaint, and the failure of the Company
to deny or rebut Del Villar’s allegations of bad faith on the part of the
Company, gave rise to the presumption against the latter.
The
Labor Arbiter proceeded to rule:
The
issue as to whether or not [the Company] acted illegally in demoting [Del Villar]
is, therefore, answered in the affirmative.
This
office is inclined to believe and so holds that the reorganization of [the
Company] appears to have been done sans the necessary requisite of good faith,
after [Del Villar] had filed his complaint to the company President detailing
the scam involving the purchase of the truck fleet of 1996.
[Del
Villar] was not outrightly dismissed; instead, he was removed from his former
position as Transportation Services Manager, and demoted to Staff Assistant to
the Corporate Purchasing and Materials Control Manager. Furthermore, as “Staff Assistant” [Del
Villar] allegedly receives his usual salary but his car privileges, gasoline
allowances, and foreign travel were withdrawn and he now sits at a desk “with
no meaningful work whatsoever.”
[Del
Villar] appears to have been singled out or discriminated upon due to his
having reported the 1996 truck scam, and his present isolation can be seen as a
punishment for acting in a righteous and forthright manner. Otherwise, as a “Staff Assistant” [Del
Villar] should have been given some meaningful or responsible work appurtenant
to the job designation.
x
x x x
This
Office finds and so holds that in all the foregoing rulings, the concept of
management prerogative is limited or otherwise qualified. Procedurally and substantively, [the Company]
through its named officers appears to have acted illegally and in bad faith in
its purported “reorganization”, in demoting [Del Villar] and in removing [Del
Villar’s] company privileges.
Had
[Del Villar] resigned under the circumstances, he could be said to have been
constructively discharged because a constructive discharge is defined as “a
quitting because continued employment is rendered impossible, unreasonable and
unlikely, as an offer involving demotion in rank and a diminution in pay”.
(Philippine Japan Active Carbon Corporation and Tukuichi Satofuka vs. NLRC,
G.R. 83239, Mar. 1989).[7]
For demoting Del
Villar without justifiable cause, the Labor Arbiter ruled that the Company was
liable for the following:
As
a consequence of [the Company’s] acts [Del Villar] suffered the effects of
humiliation, a besmirched repurtation, serious anxiety and sleepless nights
which justify an award of moral damages.
In
order to serve as an example to other companies who may be so inclined as to
emulate [the Company’s] act of punishing their employee’s honesty and sense of
fair play, [the Company] must per force be assessed exemplary damages.
In
order to protect and vindicate his rights under the Labor Code, [Del Villar]
was constrained to retain counsel for which [the Company] should be assessed
attorney’s fees of not less than ten percent (10%) of the awarded sum.
In
the matter of the unlawful withdrawal of [Del Villar’s] car, gasoline allowance
and foreign travel by [the Company], it is obligated to rectify the withdrawal
of privileges by returning to [Del Villar] the said Toyota car, and if that is
not possible, its value as of the time said car was withdrawn including the
value of the gasoline allowance and foreign travel due him.[8]
In
the end, the Labor Arbiter decreed:
WHEREFORE,
premises considered judgment is hereby rendered against [the Company and the
impleaded Company officials] and in favor of [Del Villar] ordering [the
Company] to (1) reinstate [Del Villar] to his former job level; (2) to return
the car to [Del Villar] or to compensate [Del Villar] for the loss of his
privileges such as the value of the Toyota car as of the time of taking including
the value of the gasoline allowance and the foreign travel due [Del Villar];
(3) indemnify [Del Villar] moral damages of P1,000,000.00 Pesos and
exemplary damages of P1,000,000.00 Pesos, aside from attorney’s fees of
10% of sums herein awarded.[9]
The Company expectedly appealed to the
NLRC.
While the case was still pending appeal before the NLRC, Del Villar
received a letter dated April 28, 1998, signed by one Virgilio B. Jimeno for
the Company, which read:
Dear Mr. Del Villar:
Presently,
the Company is implementing various programs to ensure the accomplishment of
its corporate goals and objectives, and to increase the productivity of its
workforce.
Since
the various programs will affect some of its employees, the Company has
initiated a special program called “Project New Start”. This program is intended to assist employees
whose positions will be declared redundant with the implementation of new
distribution systems, utilization of improved operational processes and
functional re-organizations.
Your
position has been determined as no longer necessary due to the reorganization
of the Business Logistics Directorate.
The Transportation and Refrigeration Services Department of the
Technical Operations Directorate has absorbed your function and our efforts to
transfer you to a similar position within the organization have not been
successful. Thus, you are considered
separated from [the Company] effective May 31, 1998.
Thank
you for your kind understanding. We wish
you success and God’s blessings in all your future undertakings.[10]
In a Decision dated February 26, 1999, the NLRC reversed the Labor Arbiter, reasoning that:
Contrary
to the Labor Arbiter’s pronouncement that [the Company] should have rebutted
allegations of bad faith and malice, we are more inclined to apply the
presumption of good faith. Mere
conclusions of fact and law should not be used as bases for an automatic
finding of bad faith. As it is, we do
not even see any disclosure of the scam and his alleged demotion. If indeed the so-called “great grandmother of
Coca cola scams of 1996” were true, the logical consequence of such disclosure
is for the president of the company to dismiss the erring employees and
officers for their highly irregular acts and not to penalize [Del Villar] for
making such disclosure. This is amply
supported by the fact that the [the Company] conducted a thorough investigation
of the reported scam and even obtained the services of an independent auditor
to determine whether the alleged anomalous transactions were actually irregular
and/or questionable. This manifests that
[Del Villar’s] disclosure was taken seriously contrary to his claims of
discrimination. Accordingly, it cannot
be said that the act of the [Company] was retaliatory or penal in nature nor
tainted with bad faith and/or malice.
Otherwise, [the Company] would not have given grave attention to the
disclosure of [Del Villar].
On
the issue of whether there was a demotion, we are of the view that it was
improper to conclude that [Del Villar’s] movement from the position of
Transportation Services Manager to Staff Assistant to the Corporate Purchasing
and Materials Control Manager necessarily indicated a demotion. The records show that there was no diminution
of salary. While it appears that his
transportation benefits were withheld, it does not follow that his position as
Staff Assistant is inferior to that of a Transportation Services Manager. We take notice of the fact that certain
positions in a company involve traveling from one place to another, hence the
necessity to provide for a car, and related benefits like allowances for
gasoline and maintenance. A company
cannot, however, be reasonably expected to provide the same benefits to an employee
whose position for example, requires that he stays in the office during working
hours. Benefits, privileges and
perquisites that attach to a certain position do not provide sufficient bases
for determining the superiority or inferiority of the position so held.[11]
Hence, the NLRC concluded:
In
fine We find that [Del Villar] was not demoted and that the [Company] has not
acted in bad faith or with malice.
WHEREFORE,
in view of the foregoing, the Decision dated March 3, 1998 rendered by Labor
Arbiter Felipe R. Pati is hereby REVERSED and SET ASIDE and a new one rendered
DISMISSING the complaint for lack of merit.[12]
Del Villar moved
for the reconsideration of the foregoing NLRC Decision, but the NLRC denied
such motion for lack of merit in a Resolution dated April 26, 1999.[13]
Unsatisfied, Del
Villar brought his case before the Court of Appeals via a Petition for Certiorari under Rule 65 of the Rules of
Court, docketed as CA-G.R. SP No. 53815.
On October 30,
2003, the Court of Appeals promulgated its Decision favoring Del Villar. According to the Court of Appeals, the NLRC committed grave
abuse of discretion by turning a blind eye on several indicia that clearly
showed Del Villar was demoted without any lawful reason: (1) the very
nomenclature used by the Company designating Del Villar’s new job: from
Transportation Services Manager, Del Villar was suddenly designated as staff
assistant to another manager; (2) the diminution in the benefits being enjoyed
by Del Villar prior to his transfer, such as the use of the company car,
gasoline allowance, and annual foreign travel; and (3) Del Villar’s new post in
the Company did not require him to perform any meaningful work, a far cry from
his previous responsibilities as Transportation Services Manager which include
the preparation of the budget of the Company for all of its vehicles
nationwide.
The Court of
Appeals also made a finding of bad faith against the Company:
It
is true that Labor Arbiters cannot dictate business owners on how to run their
enterprises. Concededly, employers and
their managers have all the leeway to make the necessary adjustments in their
organizations. But the prerogative is
not absolute. It must be accompanied by
good faith. x x x.
x
x x x
We
have reasonable ground to believe that the reorganization theory poised by [the
Company] was a mere afterthought. If
indeed [Del Villar] was a casualty of a valid reorganization, officials of [the
Company] could have easily told him in the several memos they issued to [Del
Villar]. Edgardo San Juan, in a memo
dated April 29, 1996, merely informed [Del Villar] the name of his replacement
as Transportation Services Manager (Rollo, p. 53). In his second memo dated May 8, 1996, San
Juan informed [Del Villar] that he would be “under
the direct supervision of Mr. Jose L. Pineda, Jr. until an assignment, if any,
would have been determined” for [Del Villar].
Two
(2) subsequent memos were received by [Del Villar] but still no hint on the
reason behind his relief. Rosa Marie
Chua, in a memo dated June 11, 1996, simply ordered [Del Villar] to return the
company car (Rollo, p. 56). Again, Chua
sent a memo dated June 17, 1996, telling [Del Villar] that the car was part of
“perquisites” of a Transportation Services Manager and must be returned
as he was already relieved of his position (Rollo, 56).
In
all four (4) memos, officials of [the Company] never once attributed to company
reorganization as the reason behind [Del Villar’s] relief as Transportation
Services Manager. Instead, [the Company]
waited for [Del Villar] to file a complaint before it declared publicly its
reason for relieving him from his post.
It
is unfortunate enough for [the Company] to give San Juan, the very person
charged by [Del Villar] of committing fraud against the company, the free hand
to deal with his accuser. And whatever
remains of [the Company’s] tattered claim to good faith towards [Del Villar]
evaporated by its absence of forthrightness to the latter. [The Company’s] lack of candor clearly lends
support to a conclusion that [Del Villar’s] relief was occasioned by a reason
alien to an alleged company reorganization.
The evidence presented by [Del Villar] tend to show that he was demoted,
not because of company reorganization, but because of his authorship of the report
about the fraud being committed by certain officials of [the Company].[14]
Just like the
Labor Arbiter, the Court of Appeals held the Company liable for the following
but in reduced amounts:
Albeit
We are inclined to reinstate the decision
dated March 3, 1998 of the Labor Arbiter, We feel, however, that the amount
of moral and exemplary damages thereunder awarded to [Del Villar] to the tune
of P1 million each was excessive.
To Our mind, the liability of [the Company] is mitigated when it
continued providing [Del Villar] despite his demotion with the salary he was
receiving as Transportation Services Manager. The moral and exemplary damages should thus
be reduced to the reasonable amount of P500,000.00, for each item.[15]
The dispositive
portion of the assailed Decision of the appellate court stated:
WHER[E]FORE, the instant petition is hereby GRANTED. Accordingly, the assailed Decision dated February 26, 1999 and Resolution dated April 26, 1999 of the
National Labor Relations Commission are hereby SET ASIDE. Subject to the modification reducing to P500,000.00
the amount of moral damages and to P500,000.00 the amount of exemplary
damages, the decision dated March 3,
1998 of the Labor Arbiter is hereby REINSTATED.[16]
Del Villar filed on November 20, 2003 a Motion
for Partial Reconsideration of the above-mentioned decision of the appellate
court, praying for the award of backwages to be reckoned from May 31, 1998, the
day he had been dropped from the payroll.
The Company also moved for the reconsideration of the same judgment,
asserting, among other arguments, that Del Villar’s Petition for Certiorari in CA-G.R.
SP No. 53815,
was filed out of time and should have been dismissed.
In
its Resolution dated March 29, 2004, the Court of Appeals denied the Motions
for Reconsideration of both parties for lack of merit.[17]
In this Petition for Review, the Company
raises three grounds for consideration of this Court:
A.
THE HONORABLE COURT OF APPEALS GAVE DUE COURSE TO
THE PETITION DESPITE THE FACT THAT IT WAS CLEARLY FILED BEYOND THE REGLEMENTARY
PERIOD PRESCRIBED BY LAW.
B.
THE HONORABLE COURT OF APPEALS GAVE DUE COURSE TO
THE [Court of Appeals] PETITION DESPITE THE FACT THAT [Del Villar] FAILED TO
ESTABLISH THAT THE NATIONAL LABOR RELATIONS COMMISSION COMMITTED GRAVE ABUSE OF
DISCRETION IN RENDERING THE 26 FEBRUARY 1999 DECISION AND 26 APRIL 1999
RESOLUTION.
C.
THE HONORABLE COURT OF APPEALS EFFECTIVELY DIRECTED
[Del Villar’s] REINSTATEMENT TO HIS FORMER JOB LEVEL DESPITE ITS IMPOSSIBILITY
SINCE HE HAD ALREADY BEEN VALIDLY SEPARATED FROM SERVICE.[18]
The Company
avers that the Court of Appeals erred in giving due course to Del Villar’s
Petition for Certiorari in CA-G.R. SP
No. 53815 as the said remedy was filed out of time. Rule 65, Section 4 of the Rules of Court, as
amended by Supreme Court Circular No. 39-98 on September 1, 1998, provided:
Sec. 4. Where
and when petition to be filed. – The petition may be filed not later than sixty (60) days from notice
of the judgment, order or resolution sought to be assailed in the Supreme
Court or, if it relates to the acts or omissions of a lower court or of a
corporation, board, officer or person, in the Regional Trial Court exercising
jurisdiction over the territorial area as defined by the Supreme Court. It may also be filed in the Court of Appeals
whether or not the same is in aid of its appellate jurisdiction, or in the Sandiganbayan
if it is in aid of its jurisdiction.
If it involves the acts or omissions of a quasi-judicial agency, and
unless otherwise provided by law or these Rules, the petition shall be filed in
and cognizable only by the Court of Appeals.
If the petitioner had filed a motion
for new trial or reconsideration in due time after notice of said judgment,
order or resolution, the period herein fixed shall be interrupted. If the
motion is denied, the aggrieved party may file the petition within the remaining period, but which
shall not be less than five (5) days in any event, reckoned from notice of such
denial. No extension of time to file the petition shall be granted except
for the most compelling reason and in no case to exceed fifteen (15) days. (Emphases
ours.)
The Company
points out that Del Villar received a copy of the NLRC Decision dated February
26, 1999 on March 17, 1999. Twelve days later, on March 29, 1999, Del Villar filed a Motion for Reconsideration,
thus, interrupting the 60-day reglementary period for filing a petition for certiorari. The NLRC denied Del Villar’s Motion for
Reconsideration in a Resolution dated April 26, 1999, a copy of which Del
Villar received on May 21, 1999. From May 21, 1999, Del Villar only had 48
days more, or until July 8, 1999, within which to file his petition for certiorari; but he only did so 60 days
later, on July 20, 1999. Clearly, Del Villar’s Petition for Certiorari in CA-G.R. SP No. 53815 was
filed 12 days late and way beyond the reglementary period as provided under the
Rules of Court.
We
do not agree.
While CA-G.R. SP
No. 53815 was pending before the Court of Appeals, Section 4 of Rule 65 of the
Rules of Court was amended anew by Supreme Court Circular No. 56-2000, which
took effect on September 1, 2000, to read:
Sec. 4. When and
where petition filed. — The petition shall be filed not later than sixty (60) days from notice of the judgment, order or
resolution. In case a motion for reconsideration
or new trial is timely filed, whether such motion is required or not, the sixty (60) day period shall be counted from
notice of the denial of the said motion.
The petition shall be filed in the Supreme Court or, if it relates
to the acts or omissions of a lower court or of a corporation, board, officer
or person, in the Regional Trial Court exercising jurisdiction over the
territorial area as defined by the Supreme Court. It may also be filed in the
Court of Appeals whether or not the same is in the aid of its appellate
jurisdiction, or in the Sandiganbayan if it is in aid of its appellate
jurisdiction. If it involves the acts or omissions of a quasi-judicial agency,
unless otherwise provided by law or these rules, the petition shall be filed in
and cognizable only by the Court of Appeals.
No extension of time to file the petition shall be granted except
for compelling reason and in no case exceeding fifteen (15) days. (Emphases
ours.)
It is clear that
under Supreme Court Circular No. 56-2000, in case a motion for reconsideration
of the judgment, order, or resolution sought to be assailed has been filed, the
60-day period to file a petition for certiorari
shall be computed from notice of the denial of such motion.
The crucial
question now is whether Supreme Court Circular No. 56-2000 should be applied
retroactively to Del Villar’s Petition in CA-G.R. SP No. 53815.
We answer
affirmatively. As we explained in Perez v. Hermano[19]:
Under
this amendment, the 60-day period within which to file the petition starts to
run from receipt of notice of the denial of the motion for reconsideration, if
one is filed.
In
Narzoles v. National Labor Relations Commission [G.R.
No. 141959, 29 September 2000, 341 SCRA 533-538], we described this latest amendment as curative in nature as it
remedied the confusion brought about by Circular No. 39-98 because,
“historically, i.e., even before the 1997 revision to the Rules of Civil
Procedure, a party had a fresh period from receipt of the order denying the motion
for reconsideration to file a petition for certiorari.” Curative
statutes, which are enacted to cure defects in a prior law or to validate legal
proceedings which would otherwise be void for want of conformity with certain
legal requirements, by their very essence, are retroactive and, being a
procedural rule, we held in Sps. Ma. Carmen and Victor Javellana v. Hon.
Presiding Judge Benito Legarda (G.R. No. 139067, 23 November 2004] that
“procedural laws are construed to be applicable to actions pending and
undetermined at the time of their passage, and are deemed retroactive in that
sense and to that extent.”[20]
In the instant
case, Del Villar filed a Motion for Reconsideration of the NLRC Decision dated
February 26, 1999. Del Villar received a
copy of the NLRC Resolution dated April 26, 1999, denying his Motion for
Reconsideration, on May 21, 1999. As
already settled by jurisprudence, Del Villar had a fresh period of 60 days from
May 21, 1999 within which to file his Petition for Certiorari before the Court of Appeals. Keeping in mind the rule that in computing a
period, the first day shall be excluded and the last day included,[21]
exactly 60 days had elapsed from May 21, 1999 when Del Villar filed his
Petition with the appellate court on July 20, 1999. Hence, without a doubt, Del Villar’s Petition
for Certiorari in CA-G.R. SP No.
53815 was seasonably filed.
We now turn our
attention to the merits of the case.
The Company
asserts that the Court of Appeals should not have issued a writ of certiorari in Del Villar’s favor as
there was no grave abuse of discretion on the part of the NLRC in finding that
Del Villar was not demoted and that the Company had not acted in bad faith or
with malice.
The
issue of whether the Company, in transferring Del Villar from the position of
Transportation Services Manager to Staff Assistant to the Corporate Purchasing
and Materials Control Manager, validly exercised its management prerogative or
committed constructive dismissal, is a factual matter. It is a settled rule that factual findings of
labor officials, who are deemed to have acquired expertise in matters within
their respective jurisdictions, are generally accorded not only respect but
even finality. Moreover, in a petition
for review on certiorari under Rule
45 of the Rules of Court, the Supreme Court reviews only errors of law and not
errors of facts. However, where there is
divergence in the findings and conclusions of the NLRC, on the one hand, from
those of the Labor Arbiter and the Court of Appeals, on the other, the Court is
constrained to examine the evidence,[22]
to determine which findings and conclusion are more conformable with the
evidentiary facts. Hence, in the instant
Petition, we embark on addressing not only the legal, but the factual issues as
well.
Jurisprudence
recognizes the exercise of management prerogative. For this reason,
courts often decline to interfere in legitimate business decisions of
employers. In fact, labor laws discourage interference in employers’
judgment concerning the conduct of their business.[23]
In
the pursuit of its legitimate business interest, management has the prerogative
to transfer or assign employees from one office or area of operation to another
– provided there is no demotion in rank or diminution of salary, benefits, and
other privileges; and the action is not motivated by discrimination, made in
bad faith, or effected as a form of punishment or demotion without sufficient
cause. The right of employees to security
of tenure does not give them vested rights to their positions to the extent of
depriving management of its prerogative to change their assignments or to
transfer them.[24]
Managerial
prerogatives, however, are subject to limitations provided by law, collective
bargaining agreements, and general principles of fair play and justice.[25] In the case of Blue Dairy Corporation v. National Labor Relations Commission,[26]
we described in more detail the limitations on the right of management to
transfer employees:
But, like other rights, there are
limits thereto. The managerial prerogative to transfer personnel must be
exercised without grave abuse of discretion, bearing in mind the basic elements
of justice and fair play. Having the right should not be confused with
the manner in which that right is exercised. Thus, it cannot be used as a
subterfuge by the employer to rid himself of an undesirable worker. In
particular, the employer must be able to show that the transfer is not
unreasonable, inconvenient or prejudicial to the employee; nor does it involve
a demotion in rank or a diminution of his salaries, privileges and other
benefits. Should the employer fail to overcome this burden of proof, the
employee’s transfer shall be tantamount to constructive dismissal, which has
been defined as a quitting because continued employment is rendered impossible,
unreasonable or unlikely; as an offer involving a demotion in rank and
diminution in pay. Likewise, constructive dismissal exists when an act of
clear discrimination, insensibility or disdain by an employer has become so
unbearable to the employee leaving him with no option but to forego with his
continued employment.[27]
In the case at bar,
there is no dispute that Del Villar was transferred by the Company from the
position of Transportation Services Manager to the position of Staff Assistant
to the Corporate Purchasing and Materials Control Manager. The burden thus falls upon the Company to
prove that Del Villar’s transfer was not tantamount to constructive dismissal. After a careful scrutiny
of the records, we agree with the Labor Arbiter and the Court of Appeals that
the Company failed to discharge this burden of proof.
The
Company and its officials attempt to justify the transfer of Del Villar by
alleging his unsatisfactory performance as Transportation Services
Manager. In its Petition, the Company
disclosed that:
4.1.
As Transportation Services Manager,
[Del Villar] displayed an utterly woeful performance. He was unable to submit basic data as to type
and brand of vehicles with highest/lowest maintenance cost as requested. [Del Villar] could not even update the
records of his office. He never complied
with his commitments on submission of reports and his claims of the
availability of such reports were never substantiated.
4.2. [Del Villar] could not work with minimum
or no supervision. His activities needed
to be closely and constantly monitored by his superiors. [Del Villar] lacked initiative and had to be
constantly reminded of what to do. The
work he performed and/or submitted, more often than not, had to be redone. In his Performance and Potential Evaluation
Sheet for 1995, [Del Villar] merited a mediocre grade of 2 in a scale of one
(1) to five (5), the latter number being the highest grade. Copies of the Affidavit of Edgardo I. San
Juan [“San Juan”], the Company’s then Business Logistic Director, and
respondent’s Performance and Potential Evaluation Sheet for 1995 are attached
as Annexes “B” and “C”, respectively.[28]
San Juan averred
in his Affidavit that Del Villar was inept and incompetent as Transportation
Services Manager; and was even more unqualified to take over the new position
of Transportation and Refrigeration Services Manager, which involved additional
functions related to Refrigeration. It
was for this reason that Del Villar was transferred to the position of Staff
Assistant to the Corporate Purchasing and Materials Control Manager.
In his
Counter-Affidavit submitted before the NLRC, Pineda, the Corporate Purchasing
and Materials Control Manager, claimed that:
3. As his evaluation would show, Mr. del
Villar was not a well-motivated employee.
He could not perform his job well and promptly with minimum or no
supervision and follow-up from his superiors.
He repeatedly failed to observe the deadlines which I set for the
submission of his reports and often procrastinates. His work product likewise suffered from
accuracy and thoroughness. Despite
several admonitions and guidance from me as his immediate superior, he simply
refused to change his work attitude.[29]
We are unconvinced. The dismal performance evaluations of Del
Villar were prepared by San Juan and Pineda after Del Villar already implicated
his two superiors in his Report dated January 4, 1996 in an alleged fraudulent
scheme against the Company. More
importantly, we give weight to the following instances establishing that Del
Villar was not merely transferred
from the position of Transportation Services Manager to the position of Staff
Assistant to the Corporate Purchasing and Materials Control Manager; he was
evidently demoted.
A transfer is a movement from one position to another which is of
equivalent rank, level or salary, without break in service. Promotion,
on the other hand, is the advancement from one position to another with an
increase in duties and responsibilities as authorized by law, and usually
accompanied by an increase in salary.
Conversely, demotion involves
a situation where an employee is relegated to a subordinate or less important
position constituting a reduction to a lower grade or rank, with a
corresponding decrease in duties and responsibilities, and usually accompanied
by a decrease in salary.[30]
First,
as the Court of Appeals observed, Del Villar’s demotion is readily apparent in
his new designation. Formerly, he was
the Transportation Services Manager;
then he was made a Staff Assistant –
a subordinate – to another manager, particularly, the Corporate Purchasing and
Materials Control Manager.
Second,
the two posts are not of the same weight in terms of duties and responsibilities. Del Villar’s position as Transportation
Services Manager involved a high degree of responsibility, he being in charge
of preparing the budget for all of the vehicles of the Company nationwide. As Staff Assistant of the Corporate Purchasing
and Materials Control Manager, Del Villar contended that he was not assigned
any meaningful work at all. The Company
utterly failed to rebut Del Villar’s contention. It did not even present, at the very least,
the job description of such a Staff Assistant.
The change in the nature of work resulted in a degrading work condition
and reduction of duties and responsibility constitute a demotion in rank. In
Globe Telecom, Inc. v. Florendo-Flores,[31]
we found that there was a demotion in rank even when the respondent therein
continued to enjoy the rank of a supervisor, but her function was reduced to a
mere house-to-house or direct sales agent.
Third,
while Del Villar’s transfer did not result in the reduction of his salary,
there was a diminution in his benefits.
The Company admits that as Staff Assistant of the Corporate Purchasing
and Materials Control Manager, Del Villar could no longer enjoy the use of a
company car, gasoline allowance, and annual foreign travel, which Del Villar
previously enjoyed as Transportation Services Manager.
Fourth, it was not bad enough that Del
Villar was demoted, but he was even placed by the Company under the control and supervision
of Pineda as the latter’s Staff Assistant.
To recall, Pineda was one of the Company officials who Del Villar
accused of defrauding the Company in his Report dated January
4, 1996. It is not too difficult to
imagine that the working relations between Del Villar, the accuser, and Pineda,
the accused, had been strained and hostile.
The situation would be more oppressive for Del Villar because of his
subordinate position vis-à-vis Pineda.
Fifth,
all the foregoing caused Del Villar inconvenience and prejudice, so unbearable
for him that he was constrained to seek remedy from the NLRC. The Labor Arbiter was correct in his
observation that had Del Villar resigned immediately after his “transfer,” he
could be said to have been constructively dismissed. There is constructive dismissal when there is
a demotion in rank and/or diminution in pay; or when a clear discrimination,
insensibility or disdain by an employer becomes unbearable to the employee.[32]
Eventually, however, the Company
actually terminated Del Villar’s services effective May 31, 1998, as his
position was no longer necessary or was considered redundant due to the
reorganization of the Business Logistic Directorate.
Redundancy is one of the authorized
causes for the dismissal of an employee.
It is governed by Article 283 of the Labor Code, which reads:
ART. 283. 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 workers and the
Department 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 his 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 financial reverses, the separation pay shall be equivalent to one (1) month
pay or to 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.
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, decreased volume
of business, or dropping of a particular product line or service activity
previously manufactured or undertaken by the enterprise.[33]
The determination that the employee's services are no longer necessary or sustainable and, therefore, properly terminable for being redundant is an exercise of business judgment of the employer. The wisdom or soundness of this judgment is not subject to discretionary review of the Labor Arbiter and the NLRC, provided there is no violation of law and no showing that it was prompted by an arbitrary or malicious act. In other words, 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.[34]
We mentioned in Panlilio v. National Labor Relations
Commission[35] that an
employer may proffer “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” as evidence of redundancy. We further explained in AMA Computer College Inc. v. Garcia[36]
what constitutes substantial evidence of redundancy:
ACC attempted to establish its
streamlining program by presenting its new table of organization. ACC also
submitted a certification by its Human Resources Supervisor, Ma. Jazmin
Reginaldo, that the functions and duties of many rank and file employees,
including the positions of Garcia and Balla as Library Aide and Guidance
Assistant, respectively, are now being performed by the supervisory employees.
These, however, do not satisfy the requirement of substantial evidence that a
reasonable mind might accept as adequate to support a conclusion. As they are,
they are grossly inadequate and mainly self-serving. More compelling evidence would have been a comparison of the old and
new staffing patterns, a description of the abolished and newly created
positions, and proof of the set business targets and failure to attain the same
which necessitated the reorganization or streamlining.[37] (Emphases ours.)
In this case, other than its own
bare and self-serving allegation that Del Villar’s position as Staff Assistant
of Corporate Purchasing and Materials Control Manager had already become
redundant, no other evidence was presented by the Company. Neither did the Company present proof that it
had complied with the procedural requirement in Article 283 of prior notice to
the Department of Labor and Employment (DOLE) of the termination of Del Villar’s
employment due to redundancy one month prior to May 31, 1998. The notice to the DOLE would have afforded
the labor department the opportunity to look into and verify whether there is
truth as to the claim of the Company that Del Villar’s position had become
redundant “with the implementation of new distribution systems, utilization of
improved operational processes, and functional reorganization” of the
Company. Compliance with the required notices would have also established
that the Company abolished Del Villar’s position in good faith.[38]
Del Villar’s poor
employee performance is irrelevant as regards the issue on redundancy. Redundancy arises because there is no more
need for the employee’s position in relation to the whole business
organization, and not because the employee unsatisfactorily performed the
duties and responsibilities required by his position.[39]
There being no
authorized cause for the termination of Del Villar’s employment, then he was
illegally dismissed.
An employee who is illegally
dismissed is entitled to the twin reliefs of full backwages and
reinstatement. If reinstatement is not
viable, separation pay is awarded to the employee. In awarding separation pay to an illegally
dismissed employee, in lieu of reinstatement, the amount to be awarded shall be
equivalent to one month salary for every year of service.[40] Under Republic Act No. 6715, employees who
are illegally dismissed are entitled to full backwages, inclusive of allowances
and other benefits or their monetary equivalent, computed from the time their
actual compensation was withheld from them up to the time of their actual
reinstatement but if reinstatement is no longer possible, the backwages shall
be computed from the time of their illegal termination up to the finality of
the decision. We note that Del Villar’s
reinstatement is no longer possible because the position he previously occupied
no longer exists, per San Juan’s Affidavit dated October 15, 1998.[41] Also, Del Villar had already received his
separation pay sometime in October 1998.[42]
Because of his unjustified dismissal, we
likewise award in Del Villar’s favor moral and exemplary damages. Award of moral and exemplary damages for an
illegally dismissed employee is proper where the employee had been harrassed
and arbitrarily terminated by the employer. Moral damages may be awarded to
compensate one for diverse injuries such as mental anguish, besmirched
reputation, wounded feelings, and social humiliation occasioned by the
employer’s unreasonable dismissal of the employee. We have consistently accorded the working
class a right to recover damages for unjust dismissals tainted with bad faith;
where the motive of the employer in dismissing the employee is far from noble. The award of such damages is based not on the
Labor Code but on Article 220 of the Civil Code.[43] These damages, however, are not intended to
enrich the illegally dismissed employee, such that, after deliberations, we
find the amount of P100,000.00 for moral damages and P50,000.00
for exemplary damages sufficient to
assuage the sufferings experienced by Del Villar and by way of example or
correction for the public good.
WHEREFORE,
premises considered, the instant petition is DENIED for lack of
merit. The Decision dated October 30, 2003 and Resolution dated March 29,
2004 of the Court of Appeals in CA-G.R. SP No. 53815 are hereby AFFIRMED
with the following MODIFICATIONS:
1) the amount of backwages shall be computed from the date of Del Villar’s
illegal dismissal until the finality of this judgment; and 2) the amount of
moral and exemplary damages are reduced to P100,000.00 and P50,000.00,
respectively. For this purpose,
the case is hereby REMANDED to the Labor Arbiter for the computation of
the amounts due Angel U. del Villar.
SO ORDERED.
Associate Justice
WE CONCUR:
Chief Justice
Chairperson
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PRESBITERO J. VELASCO, JR. Associate Justice
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MARIANO C. DEL CASTILLO Associate Justice
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JOSE PORTUGAL PEREZ Associate
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Chief Justice
[1] Rollo, pp. 158-173; penned by Presiding Justice Cancio C. Garcia with Associate Justices Renato C. Dacudao and Danilo B. Pine, concurring.
[2] Id. at 89-100.
[3] Id. at 190-193.
[4] CA rollo, p. 53.
[5] Id. at 57.
[6] Id. at 51.
[7] Rollo, pp. 62-65.
[8] Id. at 65-66.
[9] Id. at 66.
[10] CA rollo, p. 130.
[11] Rollo, pp. 96-98.
[12] Id. at 100.
[13] Id. at 117-118.
[14] Id. at 169-171.
[15] Id. at 172.
[16] Id.
[17] Id. at 190-193.
[18] Id. at 11-12.
[19] 501 Phil. 397 (2005).
[20] Id. at 404.
[21] Article 13, Civil Code of the Philippines.
[22] Philippine Long Distance Telephone Company, Inc. v. Tiamson, G.R. Nos. 164684-85, November 11, 2005, 474 SCRA 761, 770-771.
[23] Philippine Industrial Security Agency Corporation v. Aquinaldo, 499 Phil. 215, 225 (2005).
[24] Mendoza v. Rural Bank of Lucban, G.R. No. 155421, July 7, 2004, 433 SCRA 756, 766.
[25] The Philippine American Life and General Insurance Co. v. Gramaje, G.R. No. 156963, November 11, 2004, 442 SCRA 274, 288.
[26] 373 Phil. 179 (1999).
[27] Id. at 186.
[28] Rollo, pp. 5-6.
[29] Id. at 39.
[30] Tinio v. Court of Appeals, G.R. No.
171764, June 8, 2007, 524 SCRA 533, 541.
[31] Id.
[32] Dusit Hotel Nikko v. National Union of Workers in Hotel, Restaurant and Allied Industries (NUWHRAIN)-Dusit Hotel Nikko Chapter, 503 Phil. 980, 995 (2005).
[33] San Miguel Corporation v. Del Rosario, G.R. No. 168194, December 13, 2005, 477 SCRA 604, 614.
[34] AMA Computer College, Inc. v. Garcia, G.R. No. 166703, April 14, 2008, 551 SCRA 254, 264.
[35] 346 Phil. 30, 34 (1997).
[36] Supra note 34.
[37] Id. at 265.
[38] Id.
[39] Id.
[40] General Milling Corporation v. Casio and Pino, G.R. No. 149552, March 10, 2010; Mt. Carmel College v. Resuena, G.R. No. 173076, October 10, 2007, 535 SCRA 518, 541.
[41] Rollo, p. 32.
[42] Id at 7.
[43] Cruz v. National Labor Relations Commission, 381 Phil. 775, 790 (2000).