417 Phil. 218; 99 OG No. 9, 14 (March 3, 2003)
MENDOZA, J.:
In the [latter] part of 1990 and the early part of 1991, the respondent company [herein respondent SMC] conducted a study on the possible modernization program which will automate the processes of brewing, bottling and auxiliary services. This study was approved for implementation by management, in fact, actually implemented [in] April 1991. As a result of this modernization program, the manning levels of the Mandaue Brewery Plant was reduced by 584 personnel. The reduction was implemented in two (2) phases, the first on March 15, 1992, the second on November 5, 1992. Complainant [herein petitioner] was included in the first batch.
The foremost issue here is whether or not petitioner was illegally dismissed.
We find for the respondents. Evidence in the records prove that complainant's termination was justified and that respondents adhered to the procedural requirements governing the same. We have noted very clearly that petitioner's separation from employment was brought about by the installation of labor saving devices and machineries pursuant to the employer's reorganizational and expansion program. The law in this regard allows such a state of change. Art. 283 of the Labor Code allows the reduction of personnel with the installation of labor saving devices.
Complainant claims that his separation was not valid because in reality respondent firm had not carried on its program of modernization. As a matter of fact, after three (3) years from the time he was separated, the equipment and machineries installed have not yet been operational as certified to by the respective government agencies concerned (Rebuttal Affidavit Exh. "A-6"). This implies that complainant was merely deceived into believing that an impending change was about to take place, but which, in reality, did not materialize. We went over the records on this claim and we find that while respondent firm had not fully accomplished the projected physical changes, nevertheless, we noted that there were indeed changes undertaken and these were substantial enough to justify the respondents' act. To our mind, with the huge funding involved (P2.6 Billion), we could not see any reason why respondent company will not pursue its modernization program to a successful end. Its non-operational status is merely temporary. And it is our view that these machineries and equipment installed will not be kept idle for long or merely laid to total waste.
While we sympathize with the complainant recognizing the considerable period of his employment of more than 11 years, yet equally too, we recognize the respondents' judgment in the conduct of its business for which the laws do not authorize interference. As a matter of fact, the Labor Code and its Implementing Rules do not vest in the Labor Arbiters nor in the different divisions of the NLRC managerial authority. The employer is free to determine, using his own discretion and business judgment, all elements of employment "from hiring to firing" (National Federation of Labor Union v. NLRC, 202 SCRA 346 (1991)). Moreover, the freedom of management to conduct its business operations to achieve its purpose cannot be denied (Yuco Chemical Industries v. Min. of Labor, 185 SCRA 727 (1990)). For as we see in the case at bench, complainant was not discriminated against. In the respondents' program of modernization, more than 500 others, to be precise, 583 workers, were likewise affected. And we cannot view this as a manifestation of bad faith and insincerity of respondents taking into account the installation of machineries and equipment pursuant to the program as a means of streamlining the personnel structure. In a program like this, the eventuality of personnel being removed cannot be avoided. To contend otherwise would be to intrude into the conduct of an enterprise whose main reason for being is the profitability of its operations.[5]
WHEREFORE, the decision appealed from is hereby ANNULLED and SET ASIDE and judgment is hereby rendered:
1. Declaring the dismissal of complainant to be without any just or authorized cause and, therefore, illegal;
2. Ordering respondent San Miguel Corporation to reinstate the complainant to his former or equivalent position without loss of seniority rights and other privileges, and with full backwages from March 16, 1992 up to the time of his actual reinstatement. However, should reinstatement be no longer possible due to some valid reasons, respondent San Miguel Corporation is ordered to pay the complainant separation pay of one (1) month pay for every year of service, in addition to complainant's full backwages;
3. Ordering respondent San Miguel Corporation to pay complainant moral damages of P300,000.00 and exemplary damages of P150,000.00, plus ten (10%) percent of the total monetary awards, as attorney's fees.
SO ORDERED.[7]
In the event that the application for preliminary injunction is denied or not resolved within the said period, the temporary restraining order is deemed automatically vacated. The effectivity of a temporary restraining order is not extendible without need of any judicial declaration to that effect and no court shall have authority to extend or renew the same on the same ground for which it was issued.
However, if issued by the Court of Appeals or a member thereof, the temporary restraining order shall be effective for sixty (60) days from service on the party or person sought to be enjoined. A restraining order issued by the Supreme Court or a member thereof shall be effective until further orders. (Emphasis added)
2.0. GRANT the petitioners' prayer for a TEMPORARY RESTRAINING ORDER, pending Our resolution of the case on its merits, so as not to frustrate the ends of justice, prohibiting respondents from executing the Decision, dated 25 May 1998, and the Resolution, dated 11 January 1999, in NLRC Case No. V-0138-96.[15]
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 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 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 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.
February 7, 1992
MR. EDGAR G. AGUSTILO
Mandaue Brewery
Mandaue City
Dear Mr. Agustilo:
As previously discussed with you, the PDO-QIT GROUP has been abolished after a thorough study. Consequently, your position therein has also been abolished.
The company is, therefore, constrained to separate you from service effective at [the] close of business hours, March 15, 1992. This very difficult decision has been taken as a last recourse and only after exhausting all possible alternatives.
During the period from February 16, 1992 to March 15, 1992, you will be paid your regular compensation, however, you will not be required to report for work, unless requested by the company, to enable you to make the necessary preparations for your separation. In this connection, you are urged to attend the Total Assistance Plan Seminars, sponsored by the company for your benefit, from February 17, 1992 to April 30, 1992.
All benefits due you in this regard will be released within thirty (30) days from the date of your separation upon your accomplishment of the required clearances. Please call the Head of HR Operations Services, Mr. Leo L. Ypil, at telephone numbers 87100 or 87439, for the final arrangements.
We would like to thank you for your past services to the company and wish you success in your future undertakings.Very truly yours,
SAN MIGUEL CORPORATIONBy:(Sgd.)FRANCISCO B. MANZON, JR.
Vice President & Director
Mandaue Plant Operations
Received copy:__________________ __________________Name & Signature Date
February 13, 1992
HON. BARTOLOME AMOGUIS
Director
Department of Labor and Employment
Region VII
Dear Hon. Director Amoguis:
San Miguel Corporation constantly reviews its various businesses in terms of viability and strategic fit. Along this direction, the company's Mandaue Brewery plant has embarked into a "Modernization Program" -- bringing in new technology in beer processing with high-tech, state-of-the-art machines, a much improved layout/process and multi-skilled employees.
In anticipation of this modernization effort, the plant has been reorganized and restructured to determine the appropriate manning requirement necessary to efficiently run a modern plant. This consequently resulted into a reduction in manning.
The excess employees will be separated from service in two batches: the first batch of 205 employees will be separated at [the] close of business hours on March 15, 1992 and the second batch will be separated in September when the new machines and equipment will be operational.
The Company, before coming with this inevitable decision, has exerted all efforts to find suitable placements for the affected employees within the company. However, no positions are available, considering all other units are also undergoing streamlining of their organizations. Hence, the Company had to resort to declaring them redundant.
However, to minimize the negative impact of losing employment, the Company has prepared the Total Assistance Plan which covers the following:a. Financial package of 100% basic for every year of service plus an additional premium of up to 75% of basic rate;
b. 3-year free hospitalization coverage.
In the implementation of this decision, our Company will comply with all pertinent provisions of the Labor Code and undertakes to respect accrued employees' rights, benefits and privileges under our established policies, practices and existing Collective Bargaining Agreements.
Attached is the list of affected employees.Very truly yours,
SAN MIGUEL CORPORATION
By:
BALDOMERO C. ESTENZO
Assistant Vice President & Head
Mandaue Legal Unit
In the case at bar, We are of the opinion, and so hold that petitioners have demonstrated before the Labor Arbiter by clear and convincing evidence that the Mandaue plant where private respondent used to work had instituted a modernization program which consisted of, among others, "a 45 million cases per year capacity brewhouse; a 1,400 HI per hour filtration system; a complete cellaring system with six cylindro-conical tanks at 10,000 HI each to include other tankages and accessories; a 1,000 bottles per minute liter bottling line; and support systems such as three 1,000 HP NH3 compressors with two liquid overfeed NH3 separators; an 80,000 lbs. per hour water tube steam generator and a 700 HO air compressor" the operations of which are "all automated using microprocessor and electronic process controllers and instrumentation systems through intelligent interfacing with Siemens Industrial computers." All of these high-technology innovations, at the cost of 2.6 billion pesos, truly render the functions of the Plant Director's Office Quality Control Unit, where private respondent was transferred after his post as Administrative Secretary to the plant manager was validly abolished, upon management prerogative that the same "did not add value to the organization."[19]
RECEIPT AND RELEASE
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, I, EDGAR G. AGUSTILO, Filipino, of legal age, with residence at 38 A. S. FORTUNA ST., MANDAUE CITY, has been employed by San Miguel Corporation as ADMINISTRATIVE SECRETARY at its Mandaue Brewery;
WHEREAS, I am fully aware of the streamlining of San Miguel Corporation's Mandaue Brewery operations due to merger of some functions, closure of some operating lines, equipment upgrading and reorganization which resulted to reduction of its workforce;
WHEREAS, I have accepted to be separated from the service of San Miguel Corporation effective at the close of business hours of March 15, 1992;
NOW THEREFORE, for and in consideration of the premises and of the sum of THREE HUNDRED TWO THOUSAND FOUR HUNDRED FIFTY & 38/00 ONLY (P302,450.38), Philippine Currency, receipt of which is hereby acknowledged, in full payment and settlement of all the compensation, benefits, and privileges due me in connection with my employment in and separation from San Miguel Corporation, I, the said EDGAR G. AGUSTILO, have remised, released, and forever discharged the said San Miguel Corporation, its successors and assigns, and/or any of its directors, officers, and employees, of and from any manner of action or actions, cause or causes of action, sum or sums of money; accounts, damages, claims and demands whatsoever, in law or equity which [may be filed] against said San Miguel Corporation, its successors and assigns, and/or directors, officers, and employees, I ever had, now have, or which my heirs, executors, and administrators shall or may have upon and by reason upon any matter, cause or thing whatsoever in connection with my employment in and separation from the said San Miguel Corporation;
I do hereby acknowledge and declare that I have been paid by San Miguel Corporation all amounts due me by way of salaries or wages, overtime compensation, Sunday and holiday and/or night differential pay or other compensation arising out and in the course of my employment; and that I signed these presents after having read and fully understood its content.
IN WITNESS WHEREOF, I have hereunto set my hand this 8th day of April, 1992, at Cebu City, Philippines.(Sgd.)
EDGAR G. AGUSTILO SIGNED IN THE PRESENCE OF:
(Sgd.) ______________ (Sgd.) __________________