497 Phil. 806
CALLEJO, SR., J.:
In line with the memorandum of the President dated August 8, 1995, announcing the adoption of a special retirement program for the supervisors and the middle level managers, and our earlier discussion with you, we wish to formalize our advice that you are one of the employees who will be covered by the Program. Your inclusion in the Program is primarily due to the fact that our study of our current organizational set-up reveals that the organization is presently over-staff[ed]. There are actually duplication of functions and responsibilities, and some duties could actually be performed by just one person. Management therefore had no choice but to reduce the present number of employees and you were selected as among those who will be separated from the service.The private respondents received their respective separation pays and executed their respective Release Waiver and Quitclaim after receiving their clearances from the Corporation.
As stated in the memorandum, you will be entitled to a separation package equivalent to two months pay for every year of service, in addition to the conversion of your unused/earned sick leave and vacation leave credits and pro-rated 13th month pay. This generous non-precedent setting separation package, which is twice what the law provides, is being offered in consideration of your acceptance of your separation, thereby relieving the company from the trouble of any court litigation.
12.0 Complainants' separation from employment was made pursuant to a legitimate exercise by the Company of its prerogatives to adopt measures to cut cost and to maintain its profitability and competitiveness.The Corporation also averred that in July 1995, it commissioned Sycip, Gorres, Velayo and Company (SGV) to conduct a study of the Corporation and its operations to identify changes that could be implemented to achieve cost effectiveness and global competitiveness.
13.0 The inclusion of the complainants in the special retirement or right sizing program has nothing to do with their exercise of their right to self-organization; hence, there is no unfair labor practice being committed by the Company.
14.0 Complainants' separation from service was done in good faith and in complete compliance with procedural and substantive legal requirements; hence, legal and justified.
15.0 Complainants are barred by the release waiver and quitclaim that they have executed in favor of the Company from further contesting the validity of their separation from service.
" Based on this study, the position and functions of fuel-in-charge, held by complainant Franco, are basically the same as that of Fuel Tenders and therefore his activities could well be done by existing Fuel Tenders who would be directly under the General Warehouse Supervisor. In the case of complainant Pabalan, whose position was Shift-in-Charge/Supervisor, it was observed that his tasks could be merged in the functions of the Property Warehouse Supervisor. With respect to complainants Perrin and Candelario, who were Planters" Service Representatives, it was observed that the job was more complementary to the marketing aspect, wherein they are tasked to maintain good and harmonious relations with the company's sugar planters, to ensure continued patronage of the mill's services. It was found that these PSR functions could well be handled by agents or consultants, who would be paid on commission basis.The Labor Arbiter noted that the complainants received their separation pay and other monetary benefits from the Corporation, and thereafter, voluntarily executed their respective Deeds of Release Waiver and Quitclaim in its favor.
PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT SET ASIDE AND OVERRULED THE DECISION OF THE LABOR ARBITER ON THE BASIS OF COINCIDENCES AND BASELESS ACCUSATION OF BAD FAITH, COMPLETELY MISAPPRECIATING THE SUBSTANTIAL EVIDENCE WHICH SUPPORTED THE LABOR ARBITER'S DECISION.On April 28, 2000, the CA rendered judgment dismissing the petition, on the ground that the NLRC did not commit grave abuse of discretion in rendering judgment against the Corporation. The Corporation's motion for reconsideration thereof was, likewise, denied by the CA.
PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION IN OVERRIDING THE LEGITIMATE EXERCISE BY THE PETITIONER OF ITS MANAGEMENT PREROGATIVE OF REDUCING ITS WORK FORCE TO ADDRESS CURRENT BUSINESS AND ECONOMIC REALITIES.
PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION IN DISREGARDING BASIC PRINCIPLES OF LAW AND JURISPRUDENCE LAID DOWN BY THE SUPREME COURT TO THE EFFECT THAT:
- The matter of evaluating the merits of the issues presented in a labor case is primarily addressed to the sound discretion of the Labor Arbiter. Thus, when the decision of the Labor Arbiter is amply supported by substantial evidence, his findings and conclusions should not be disturbed but must be accorded with respect by the NLRC and even by the Supreme Court.
- The determination that a position is redundant and therefore legally terminable, is basically an exercise of management prerogative, and for as long as it is done in good faith, the wisdom or soundness thereof is beyond the review power of the Labor Arbiter nor of the NLRC, which by law and jurisprudence are not vested with managerial functions.
- Termination on ground of redundancy is anchored on the superfluity of a position and not on the fact that actual loss is incurred by a company.
- A waiver and quitclaim, when voluntarily and intelligently executed, is binding upon the employee, more so if he is not just an ordinary employee.
(1) the separation of the Respondents from employment was for a valid and authorized cause;The petitioner further argues that the decision of the NLRC is essentially flawed because the private respondents were terminated on the ground of redundancy, and not retrenchment which is an entirely different concept. There is absolutely no evidence on record, save the bare allegations of the private respondents that they were singled out as victims of retrenchment. The other redundant positions were, likewise, eliminated. It insists that unlike retrenchment, redundancy does not require business losses to be an authorized cause for dismissal. Moreover, the law does not give any criteria, guidelines or standard for the selection of employees who are to be dismissed on the ground of redundancy. It insists that Article 283 of the Labor Code merely requires that "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."
(2) the positions of the Respondents were redundant;
(3) there was a real and factual basis to declare redundancy;
(4) there is no evidence to show that the right sizing program was deliberately intended to stifle union activities;
(5) the confluence of events was just a coincidence;
(6) there is no evidence of deviousness in the right sizing program;
(7) the Respondents received their individual separation benefits, and there is no evidence that either moral or physical compulsion or both made them accept the benefits offered; and
(8) Petitioner Company has complied with the legal requisites of terminating the employment of the Respondents.
A redundant position is one rendered superfluous by any number of factors, such as over-hiring of workers, decreased volume of business, dropping of a particular product line previously manufactured by the company or phasing out of a service activity priorly undertaken by the business. Under these conditions, the employer has no legal obligation to keep in its payroll more employees than are necessary for the operation of its business.Contrary to the petitioner's claim, 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 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.
Complainants are not in a position to anticipate how respondent will present its case for redundancy particular[ly] because no standard, criteria or guidelines for the selection of dismissed employees was made known to them, and all that they were told was that "you were selected as among those who will be separated from the service;" nonetheless, this early, it is possible to point out certain facts which throw light on the plausibility or want of it, of the ground relied upon.Foremost, the petitioner failed to formulate fair and reasonable criteria in ascertaining what positions were declared redundant and accordingly obsolete, such as preferred status, efficiency or seniority. It, likewise, failed to formulate fair and reasonable parameters to determine who among the supervisors and middle-level managers should be "retired" for redundancy. Using the SGV report as anchor, the petitioner came out with a special retirement program for its 108 supervisors and middle-level managers, making it clear that its decision to eliminate them was final and irrevocable. Moreover, the private respondents were not properly apprised of the existence of the special retirement program, as well as the criteria for the selection of the supervisors to be "retired," and those to be retained or transferred or demoted.
The above re-hiring in addition to other circumstances earlier mentioned, such as the hiring of 2 men PSRs after Candelario and [P]errin were terminated; the short-lived rehiring of the former and the offer to hire the latter which he refused, all indicate that there was no redundancy.
- No contingency has occurred, of the kind mentioned by the Supreme Court in the Wiltshire case, (over-hiring of workers, decreased volume of business or dropping of a particular service line) which would explain the dismissal on the ground of redundancy; over-hiring of workers cannot conceivably occur in the level of the supervisors; on the other hand, it would have required an event of cataclysmic proportion to justify the dismissal for redundancy of a full one-third of the supervisors in an establishment, and if such an event were to occur it would have resulted in tremendous losses which is not true here because the dismissal is not on account of or to prevent losses;
- In no other category of employees did positions suddenly become redundant except among the supervisors who have just organized themselves into a labor union and were working for their first-ever CBA in the establishment;
- The dismissal came at the precise time when the Lopez Sugar Central Supervisors Association (LSCA) had presented its CBA proposals and was expecting the company's reply as mandated by law; in fact, the reply was overdue, being required to be submitted by management within ten (10) days from receipt of the union proposal; there is no better proof that the dismissals have served their hidden purpose than that the CBA negotiation has ended to all intents and purpose, before management could even present its counterproposal. Certainly, it would be farfetched to say that the remaining union officers and members have abandoned its objective of having a CBA for reasons other than the fear of suffering the fate of those who had been dismissed.
The absence of criteria, guidelines, or standard for selection of dismissed employees renders the dismissals whimsical, capricious and vindictive; in the case of the complainants Franco and Pabalan, who are the Union President and Treasurer, respectively, the reason for their inclusion is obvious. Additionally, it must be mentioned that in the case of Pabalan, there were three shift supervisors, one for each 8-hour shift before the "program" was implemented, namely, Pabalan, Bitera and Lopez; Pabalan and Bitera (a union director) were terminated, leaving Lopez alone, who worked on 12-hour shift duty with Henry Villa, department head who was forced to perform the work of shift supervisor; Pabalan was offered to be rehired as an employee of BUGLAS, a labor-only contractor but he refused; an employee, Eugenio Bolanos was assigned from another department to do the work of shift supervisor and three of them (Lopez, Villa and Bolanos) now divide shift duties among themselves. There is no explanation why among the shift supervisors it was Pabalan and Bitera who were included in the program.
In the case of complainants [P]errin and Candelario, both Planter Service Representatives, the manipulation is even more apparent; one year before the "program" was instituted, two new PSRs were hired (Labrador and Cambate) bringing to six the total number of PSRs; after the termination of [P]errin and Candelario, who have served for nearly 20 years, two new PSRs were hired (Oropel and Jeres) on contractual basis and whose compensation is based on pakiao; additionally, Candelario was hired after his dismissal under the same arrangement as Oropel and Jeres, which lasted only up to January 1996 when management learned of the filing of the first of these cases; [P]errin, on his part, was offered the same arrangement but he refused.
- The rehiring of dismissed employees through a labor-only contractor exposes the "program" as a circumvention of the law. This is true in the case of the following supervisors who were terminated with complainant but were subsequently employed to do exactly the same work, but as employees of BUGLAS, a labor-only contractor which supplies laborers to respondent LSC:
- Juanito Lanos, Supervisor, Electrical Department.
- Raymundo Llenos, Community Development Officer.
- Joseph Nicolas, Supervisor, Refrigeration and Air Conditioning.
None of the work has been phased out or rendered obsolete by any event that took place. As to duplication of functions, it must be mentioned that the positions of complainants have existed for a long time judging from their years of service with respondent; the observation of the Supreme Court in the Wiltshire case to the effect that in a well-organized establishment, duplication of functions is hardly to be expected is pertinent.
2.4 Sugar and Molasses Storage
|2.4.1 Renovate old bulk warehouse to improve ventilation, lighting and raw sugar handling|
|2.4.2 Install a conveyor/scale before bag sewing of refined sugar to check weight conformity|
|2.4.3 Renovate bagging room of refined sugar to enforce strict hygiene/sanitation|
|2.4.4 Install a marking mechanism that would indicate production date on bagged refined sugar|
|2.4.5 Conduct weekly checks and adjustment on the bag sewing and conveyor equipment |
CANE MARKETING AND TRANSPORTAs can be gleaned from the above, the report recommended the beefing up of the petitioner's planter service representative force, while eliminating those who were ineffective. There is no showing in the record that respondents Perrin and Candelario were eliminated solely because they were inefficient. Neither is there any substantial evidence on record that the private respondents' performance had been deteriorating; on the contrary, they had been so far so efficient that they had been given promotions from time to time during their employment. Yet, the petitioner eliminated private respondents Perrin and Candelario and retained three PSRs, namely, Danilo Villanueva, Roberto Combate and Danilo Labrador, who were employed with the petitioner from one to three years and transferred Raymundo de la Rosa, who had been working there for only six years. Again, it is too much of a coincidence that Franco and Pabalan, the President and Treasurer, respectively, of the union, were included in the special retirement program.
1.0 Cane Marketing
1.1.1 Expand SC's farm leasing operations (by 6,292 hectares)
1.1.2 Establish cane supply planning system
1.1.3 Beef up SC's cane marketing efforts by hiring more effective PSRs to replace ineffective PSRs
1.1.4 Acquire 6 motorcycles instead of second-hand jeeps
1.1.5 Apply marketing techniques used by other companies/industries.
As evidenced by various documents attached to the affidavit of Leonito Franco and Rogelio Pabalan, as well as supporting affidavits of complainants, the supervisory employees of LSC organized a labor union called Lopez Sugar Corporation Supervisor's Associations which was issued a certificate of registration by the DOLE Regional Office No. VI, Iloilo City on December 29, 1994. Complainant Franco was elected President and complainant, Pabalan, Treasurer, during the organizational meeting. Complainants [P]errin and Candelario are active union members. Management was duly informed about this fact and in January 1995 a conference was conducted between the union and management where the status of the union was clarified and some problems in the workplace were discussed. The management was also informed subsequently that 105 out of 108 supervisory employees have joined the union and authorized check-off of the union dues starting March 1995. The check-off was effected.While it may be true that the private respondents signed separate Deeds of Release Waiver and Quitclaim and received separation pay, nonetheless, we find and so hold that the NLRC did not err in nullifying the decision of the Labor Arbiter, thus:
On July 24, 1995, the union formally submitted its CBA proposal to respondent with request for a reply in ten (10) days pursuant to the Labor Code. The management in a letter expressed willingness to meet the union panel on August 30, 1995, which the latter understood to mean that the management would present its counter-proposal during the said conference.
To the surprise of the complainants, they received instead on August 26, 1995 a letter of termination stating that, in accordance with the "special retirement program" of respondent, their services will be terminated effective September 27, 1995. The letter also stated that according to a study conducted by the respondent of its organizational set-up, it is over-staffed and there are duplications of functions which left it no choice but to reduce personnel.
As to the CBA counter-proposal, the management wrote the union on August 31, 1995 that the matter was referred to its external counsel for appropriate disposition "in the light of the recent development in this company."
The special retirement program affected 32 employees or roughly one-third of the supervisory personnel. They included the union President and Treasurer and majority of the Board of Directors and active union members. No clarification was made as to how the terminated employees were chosen, and no guidelines, criteria or standard was shown to lend coherence to the program.
As may be expected, the dismissals generated a general perception that management was sending a strong message that all employees hold their position at its pleasure, and that it was within its power to dismiss anyone anytime. With the dismissal of the union officers and with the membership now effectively threatened, the union virtually collapsed as an organization. Out of fear, no one would even assume the position of union President. An indication of this sad state of affairs into which the union has fallen is that nothing came out of its CBA proposal. It has been a year and three months as of this writing since the respondent informed the union that its proposal had been referred to the company's external counsel, but no counter-proposal has been submitted and no single conference has been held since then.
The Release Waiver and Quitclaim were not verified by the complainants. "Under prevailing jurisprudence, the fact that an employee has signed a satisfaction receipt of his claims does not necessarily result in the waiver thereof. The law does not consider as valid any agreement whereby a worker agrees to receive less compensation than what he is entitled to recover. A deed of release or quitclaim cannot bar an employee from demanding benefits to which he is legally entitled. We have herefore (sic) explained that the reason why quitclaims are commonly frowned upon as contrary to public policy and why they are held to be ineffective to bar claims for the full measures of the workers" legal rights is the fact the employer and the employee obviously do not stand on the same footing. The employer drove the employees to the wall. The latter must have to get hold of the money. Because out of job, they had to face the harsh necessities of life. x x x" (Marcos vs. NLRC, G.R. No. 111744, September 8, 1995)Private respondents Franco and Pabalan protested the termination of their employment. Private respondents Candelario and Perrin were shocked when, although they were on leave, they were invited to the Northeast Beach Resort by Juan Masa, Jr., the head of the Cane Marketing Department, on August 25, 1996, only to be told that, after spending a considerable number of years under the petitioner's employ, they were suddenly out of jobs. The private respondents had no other recourse but to execute the said Release Waiver and Quitclaim because the petitioner made it clear in its Memorandum dated August 8, 1995 that it had the final say on who would be included in its special retirement program. Their dismissal from the petitioner corporation was a fait accompli, solely because they organized a union that would bargain for reasonable terms and conditions of employment sought to be included in a CBA. In fine, the private respondents were left to fend for themselves, with no source of income from then on; prospects for new jobs were dim. Their backs against the wall, the private respondents were forced to sign the said documents and receive their separation pay.