[ G.R. No.
232870, June 03, 2019 ]
MANUEL G. ACOSTA, PETITIONER, VS. MATIERE SAS AND PHILIPPE GOUVARY, RESPONDENTS.
In redundancy, an employer must show that it applied fair and reasonable criteria in determining what
positions have to be declared redundant. Otherwise, it will be held liable for illegally dismissing the employee
affected by the redundancy.
This Court resolves a Petition for Review on Certiorari [1] assailing the April 7, 2017 Decision[2] and July 12, 2017
Resolution[3] of the Court of Appeals in CA-G.R. SP No. 140108. [4] The Court of Appeals upheld the January 30,
2015 Decision[5] and February 27, 2015 Resolution[6] of the National Labor Relations Commission, which had
reversed and set aside the Labor Arbiter's August 18, 2014 Decision [7] holding petitioner Manuel G. Acosta's
(Acosta) dismissal illegal.
Matiere SAS is a French company "engaged m the fabrication, supply[,] and delivery of unibridges and
flyovers[.]"[8]
On October 29, 2008, Matiere SAS and the Department of Public Works and Highways executed a contract for
the construction of flyovers and bridges. [9] On March 19, 2009, Matiere SAS also entered into a contract with
the Department of Agrarian Reform to construct bridges for better access to agricultural lands. [10]
On November 1, 2009, Matiere SAS, represented by its resident manager Philippe Gouvary (Gouvary),
executed a Consulting Agreement[11] with Acosta. Per the agreement, Matiere SAS engaged Acosta as its
technical consultant for 12 months, with a monthly salary of P70,000.00. [12] Upon the Consulting Agreement's
expiration, Matiere SAS hired Acosta as its technical assistant with the same P70,000.00 monthly salary. [13]
Under the Employment Agreement[14] dated November 1, 2010, Acosta was tasked to:
1. Prepare reports regarding WCI [Woodfields Consultants, Inc.] consultants.
2. Be the intermediary between the CAD operators in WCI and the management in the office.
3. Attend coordination meetings with consultant.
4. Evaluate billings.
5. Follow the SIT and prepare reports.
6. Prepare various reports as required by the resident manager.
7. Site visits.[15]
On December 14, 2011, Matiere SAS wrote Acosta a letter, [16] increasing his salary from P70,000.00 to
P76,000.00, effective January 1, 2012. On the same day, Matiere SAS wrote Acosta another letter, [17] giving
him a bonus of P30,000.00 for his good performance in the second half of 2011. [18]
On June 27, 2013, Matiere SAS sent Acosta a letter [19] with the subject, "Ending of the employment
agreement[.]"[20] It read:
We have to inform you that your employment contract within the company MATIERE/EIFFAGE will end July 31,
2013.
This decision is due to the cessation of our delivery operations and the diminution of our activities. We cannot
find any reinstatement at the office. Nevertheless[,] we would like to thank you for your cooperation since the
01, November 2009.
You are authorized not to report at the office starting July 1, 2013.
Regarding the calculation of your separation pay, we will signify you the amount as soon as possible. [21]
In a June 26, 2013 letter, [22] Matiere SAS informed the Department of Labor and Employment that because its
last shipment had been delivered, [23] it would have to terminate the employment of its five (5) workers: Wilson
G. Comia (Wilson), Richard E. Comia (Richard), Alexander M. Menor (Menor), Alvin P. Roselim (Roselim), and
Acosta. Matiere SAS stated that Wilson, Richard, and Menor were all based in Subic, while Roselim was based
in Cagayan de Oro.[24] All four (4) of them were "assigned to the stripping operations[.]" [25] Meanwhile, Acosta,
who was based in the office, was "primarily in charge [of] the monitoring of shipments." [26]
On June 28, 2013, Matiere SAS filed before the Department of Labor and Employment: (1) an Establishment
Employment Report,[27] citing redundancy and the completion of delivery of supplies as its reasons for
dismissing its employees; and (2) a List of Affected Workers by Displacements/Flexible Work Arrangements,
[28]
enumerating the five (5) dismissed employees. The employment termination was made effective on July 31,
2013.[29]
On July 23, 2013, Acosta filed before the National Labor Relations Commission a Complaint [30] for illegal
dismissal against Matiere SAS and Gouvary. [31]
Mediation conferences were conducted but the parties failed to arrive at a settlement. Thus, they were required
to submit their respective pleadings.[32]
While the case was pending, Matiere SAS and Gouvary, through their counsel, wrote Acosta a letter [33] dated
July 29, 2013, offering him a separation pay of P322,998.60. Acosta, however, refused the offer. [34]
In her August 18, 2014 Decision, [35] Labor Arbiter Vivian Magsino Gonzalez found Acosta's dismissal illegal. She
held that Matiere SAS and Gouvary failed to prove the factual bases for the reduction of its workforce. She
pointed out that while Matiere SAS submitted a Certificate of Completion from the Department of Public Works
and Highways to support its claim of project completion, it submitted no such certificate from the Department
of Agrarian Reform.[36]
Moreover, the Labor Arbiter noted that Matiere SAS failed to submit any redundancy plan. [37] It also failed to
provide "fair and reasonable criteria in ascertaining what positions are redundant and how the selection of
employees to be dismissed was made."[38] The Labor Arbiter pointed out:
[I]f there are employees who should be affected by the reduction of workforce due to completion of deliveries,
the field engineers in-charge of deliveries in the projects, and who supervised the stripping works/removing the
unibridges parts from the container vans, may be the first ones to go. These field engineers, however, are
undisputedly retained by respondents.
. . . While Alvin Roselim is a forklift operator, [Wilson, Richard, and Menor] are helpers who work under the
supervision of field engineers. The latter were the ones in charge of deliveries and respondents may have had
reasons to terminate them on [the] ground of redundancy. As a Technical Assistant whose duties include
monitoring of projects until completion, there is no substantial basis why complainant was also affected by
respondents' redundancy plan.[39]
The dispositive portion of the Labor Arbiter's Decision read:
WHEREFORE, foregoing considered, complainant is hereby found to have been illegally dismissed. Respondent
Matiere SAS is hereby ordered to pay complainant separation pay with backwages totaling Php241,793.62,
inclusive of attorney's fees.
Other claims are dismissed for lack of basis.
SO ORDERED.[40] (Emphasis in the original)
Both parties appealed the Labor Arbiter's Decision before the National Labor Relations Commission. [41] Praying
that the award be modified to P1,846,389.44, Acosta argued in his Partial Memorandum of Appeal [42] that the
computation of the Labor Arbiter's award should be based on his monthly salary before his employment
termination, which was P78,280.00. [43] Meanwhile, in their Memorandum of Appeal, [44] Matiere SAS and
Gouvary contended that Acosta's employment termination was valid and that they implemented the
redundancy based on fair and reasonable criteria. [45]
In its January 30, 2015 Decision, [46] the National Labor Relations Commission reversed the Labor Arbiter's
Decision.[47] It found that Matiere SAS and Gouvary proved that there was a significant decrease in the volume
of their business when they presented before the National Labor Relations Commission a Certificate of
Completion from the Department of Agrarian Reform. It noted that the completion of the government contracts
would render unnecessary the services offered by Acosta, whose "main function was to monitor the delivery of
materials . . . from France to the Philippines." [48]
The National Labor Relations Commission found that Acosta and the four (4) other employees were similarly
situated, noting that even if Acosta had a higher position, their tasks were all related to the shipment of
materials.[49] Moreover, since Acosta's dismissal was not done with ill motive or in bad faith, Matiere SAS and
Gouvary's decision should be respected "as a valid exercise of a management prerogative." [50]
The dispositive portion of the National Labor Relations Commission Decision read:
WHEREFORE, premises considered, the appeal of respondents Matiere SAS and Philippe Gouvary
is GRANTED and the assailed Decision of the Labor Arbiter dated August 18, 2014 is REVERSED and SET
ASIDE. Accordingly, the instant complaint for illegal dismissal is hereby DISMISSED for lack of merit.
The Partial Appeal of complainant-appellant Manuel G. Acosta is DENIED.
SO ORDERED.[51] (Emphasis in the original)
Acosta moved for reconsideration. [52] He submitted a certification [53] from Woodfields Consultants, Inc. and a
certification[54] from the Department of Public Works and Highways to support his claim that his task was not
limited to monitoring shipments. He also alleged that Matiere SAS hired a certain Charlie Desamito as his
replacement.[55]
In its February 27, 2015 Resolution,[56] the National Labor Relations Commission partially granted Acosta's
Motion. It amended the dispositive portion of its January 30, 2015 Decision to include the payment of Acosta's
separation pay:
IN VIEW OF THE FOREGOING, complainant's motion for reconsideration is partially granted and the
dispositive portion of Our decision dated January 30, 2015 is hereby amended to read as follows:
"WHEREFORE, premises considered, the appeal of respondents [Matiere] SAS and Philippe Gouvary
is GRANTED and the assailed Decision of the Labor Arbiter dated August 18, 2014 is REVERSED and SET
ASIDE. Accordingly, the instant complaint for illegal dismissal is hereby DISMISSED for lack of merit.
Respondent-appellants are, however, ordered to pay complainant-appellant Manuel G. Acosta separation pay
as provided by law.
The Partial Appeal of complainant-appellant Manuel G. Acosta is DENIED."
SO ORDERED.[57] (Emphasis in the original)
Thus, Acosta filed before the Court of Appeals a Petition for Certiorari. [58]
In its April 7, 2017 Decision, [59] the Court of Appeals denied Acosta's Petition. It held that Matiere SAS and
Gouvary were able to establish that Acosta's position became redundant upon the completion of its contracts
with the Department of Public Works and Highways and the Department of Agrarian Reform. [60] It added:
Even assuming that Acosta's functions included reporting and coordination, he completely failed to show that
these particular functions were not incidental only to the supply and delivery of the bridges. Acosta does not
dispute the completion of the shipments for the covered projects. Neither did he ever dispute that the DPWH
and the DAR projects were Matiere's only activities locally. It follows clearly that with the completion of the
shipments, Acosta's role became unnecessary. Despite the continuation of installation and erection of the
bridges, Acosta cannot pretend any involvement in such activities. His task was indubitably office- and table-
bound and not field work.[61]
Acosta moved for reconsideration, but his Motion was denied by the Court of Appeals in its July 12, 2017
Resolution.[62]
Hence, Acosta filed this Petition for Review on Certiorari [63] against Matiere SAS and Gouvary. Maintaining that
the declaration of redundancy of his position was not based on fair and reasonable criteria, petitioner pointed
out that he, the most senior engineer, was dismissed while the other engineers remained. [64]
As to the certifications from the Department of Public Works and Highways and the Department of Agrarian
Reform, petitioner states that the completeness of delivery merely pertained to one (1) of his tasks as technical
assistant. Thus, he claims that it was wrong to dismiss him based only on these certifications: [65]
The supply contract of the Respondents could not have ended up upon completion of delivery. The supply
contract satisfies only the delivery of the Supply of Bridging Material. The design, technical supervision during
the erection, installation and commissioning were still ongoing and to be completed in 2016. Petitioner checks
on the designs of the Design Consultants, coordinate[s] with them, evaluate[s] their billings. Such activities
were still ongoing when the Petitioner was terminated.
It is important to note that contracts of the Respondents they entered with the DPWH and DAR comprise of the
following:
1. Supply of Bridging Materials.
2. Supply of Goods for the design, manufacture and delivery of modular steel unibridges.
3. Supply of Technical Advise / Services and Materials.
4. As well as variable services within the maximum provision for installation and commissioning of
the Bridges.
Beyond completeness of the delivery of bridging materials to the projects, other aspects of the contracts have
to be accomplished. The actual approved accomplishment for the design of DAR Bridges alone as of June 2013
was only 16%, or 68 out of 418 bridges. Petitioner then was still doing the checking, coordinating with the
consultants and certifying billings of Woodfields Consultants, Inc[.] and Design Sciences, Inc. He could have
continued doing his assign[ed] tasks if not for his untimely and unjustified termination. [66] (Citation omitted)
In their Comment,[67] respondents insist that they sufficiently established that petitioner's position was already
redundant.[68] They cite the certifications from the Department of Agrarian Reform and the Department of
Public Works and Highways to prove that "there was a significant diminution in the volume of materials
business."[69] Claiming that the completion of the shipments rendered petitioner's position irrelevant, they
argue that he failed to prove that his other tasks were not merely incidental to his main function. Thus, they
were left with no choice but to legally dismiss him. [70]
Respondents further argue that they did not dismiss petitioner in bad faith, contending that they complied with
labor law requirements in terminating his employment. They point out that he was given a notice of
termination with computation of his separation pay, and that the Department of Labor and Employment was
also notified.[71]
Lastly, respondents claim that petitioner did not deny that the shipments for their projects were already
completed. Neither did he dispute that respondent Matiere SAS' projects in the Philippines were only those with
the Department of Agrarian Reform and the Department of Public Works and Highways. [72]
The sole issue for this Court's resolution is whether or not petitioner Manuel G. Acosta was validly dismissed
from employment on the ground of redundancy.
Redundancy is recognized as one (1) of the authorized causes for dismissing an employee under the Labor
Code.[73] Article 298 of the Labor Code provides:
ARTICLE 298. [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. (Emphasis supplied)
In Wiltshire File Company, Inc. v. National Labor Relations Commission,[74] this Court explained:
[R]edundancy, for purposes of our 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. The employer has no legal obligation to keep
in its payroll more employees than are necessary for the operation of its business. [75] (Emphasis supplied,
citation omitted)
The requirements for a valid redundancy program were laid down in Asian Alcohol Corporation v. National
Labor Relations Commission:[76]
For the implementation of a redundancy program to be valid, the employer must comply with the following
requisites: (1) 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. [77] (Citations omitted)
Assuming that respondents can declare some positions redundant due to the alleged decrease in volume of
their business, they still had to comply with the above-cited requisites. This, they failed to do.
Respondents complied with the first and second requisites. There is no contention that they notified both
petitioner and the Department of Labor and Employment at least a month before the planned redundancy. [78]
Petitioner also received a computation of his separation pay corresponding to at least one (1) month pay for
every year of service with additional payment for economic assistance. [79]
However, as to the third and fourth requisites, this Court held that "[t]o establish good faith, the company
must provide substantial proof that the services of the employees are in excess of what is required of the
company, and that fair and reasonable criteria were used to determine the redundant positions." [80]
Here, respondents' only basis for declaring petitioner's position redundant was that his function, which was to
monitor the delivery of supplies, became unnecessary upon completion of the shipments. However, upon
careful scrutiny, this Court finds that the Employment Agreement itself contradicts respondents' allegation. Its
pertinent provisions read:
Dear Mr Acosta:
In connection with your position as Technical Assistant, please be informed that you are subject to the
following terms and condition:
1. ....
2. The Employee shall be employed in the capacity of Technical Assistant, the current duties and
responsibilities of which are set out in Schedule "A" annexed hereto and forming part of this
agreement. These duties and responsibilities may be amended from time to time in the sole
discretion of the Employer, subject to formal notification of same being provided to the
Employee.[81] (Emphasis in the original)
Under Schedule "A," petitioner's job description listed his tasks as a technical assistant:
1. Prepare reports regarding WCI [Woodfields Consultants, Inc.] consultants.
2. Be the intermediary between the CAD operators in WCI and the management in the office.
3. Attend coordination meetings with consultant.
4. Evaluate billings.
5. Follow the SIT and prepare reports.
6. Prepare various reports as required by the resident manager.
7. Site visits.[82]
There was no mention of monitoring shipments as part of petitioner's tasks. If his work pertains mainly to the
delivery of supplies, it should have been specifically stated in his job description. Respondents did not even
present any evidence to support their claim or to contradict petitioner's documentary evidence. There was,
hence:, no basis for respondents to consider his position irrelevant when the shipments had been completed.
Likewise, respondents failed to show that they used fair and reasonable criteria in determining what positions
should be declared redundant.
In Panlilio v. National Labor Relations Commission,[83] this Court held that fair and reasonable criteria may take
into account the preferred status, efficiency, and seniority of employees to be dismissed due to redundancy.
[84]
Yet, respondents never showed that they used any of these in choosing petitioner as among the employees
affected by redundancy.
Although he was among the five (5) employees dismissed, petitioner cannot be similarly situated with the other
employees. Roselim was a forklift operator, while Richard, Wilson, and Menor were helpers assigned to field
engineers. The four (4) employees work directly with the delivery of supplies. On the other hand, as already
discussed, petitioner's duty is not limited to the monitoring of deliveries. Accordingly, this Court declares
petitioner to have been illegally dismissed.
WHEREFORE, the Petition for Review on Certiorari is GRANTED. The April 7, 2017 Decision and July 12, 2017
Resolution of the Court of Appeals are REVERSED and SET ASIDE. Respondent Matiere SAS is ordered to pay
petitioner Manuel G. Acosta the following:
1. full backwages and other benefits, both based on petitioner's last monthly salary, computed from the
date his employment was illegally terminated until the finality of this Decision;
2. separation pay based on petitioner's last monthly salary, computed from the date he commenced
employment until the finality of this Decision at the rate of one (1) month's salary for every year of
service, with a fraction of a year of at least six (6) months being counted as one (1) whole year; and
3. attorney's fees equivalent to ten percent (10%) of the total award.
The total judgment award shall be subject to interest at the rate of six percent (6%) per annum from the
finality of this Decision until its full satisfaction. [85]
This case is REMANDED to the Labor Arbiter to make a detailed computation of the amounts due to petitioner,
which must be paid without delay, and for the immediate execution of this Decision.
SO ORDERED.
