CASE #116
MANGGAGAWA NG KOMUNIKASYON SA PILIPINAS (MKP)
vs. PHILIPPINE LONG DISTANCE TELEPHONE (PLDT), G.R. No. 190389, April 19, 2017
FACTS:
This pertains to 2002 redundancy declaration of Philippine Long Distance Telephone Company
(PLDT), which was based on the decline of subscribers, the decline in long distance local and
international calls, and the decline in landline or fixed line services, constraining PLDT to declare
certain positions redundant. On December 23, 2002, petitioner labor organization Manggagawa ng
Komunikasyon sa Pilipinas (MKP), which represented the employees of PLDT, went on strike. On
December 31, 2002, PLDT declared 323 employees as redundant as it was able to redeploy 180 of
the 503 affected employees to other positions. Several cases were filed.
1. MKP filed a Petition for Certiorari before the Court of Appeals, challenging the Secretary of Labor
and Employment's Order insofar as it created a distinction among the striking workers in the
return-to-work order. On November 25, 2003, the Court of Appeals granted the Petition
for Certiorari, setting aside and nullifying the Secretary of Labor and Employment's assailed
Order. On July 14, 2005, the Supreme Court upheld the Court of Appeals' Decision, and directed
Philippine Long Distance Telephone Company to readmit all striking workers under the same
terms and conditions prevailing before the strike.
2. The Court of Appeals consolidated CA-G.R. SP No. 94365 with CAG.R. SP No. 98975, and
dismissed MKP's appeals on August 28, 2008.
a. For CA-G.R. SP No. 94365, the Court of Appeals ruled that the National Labor Relations
Commission did not commit grave abuse of discretion when it found that Philippine Long
Distance Telephone Company's declaration of redundancy was justified and valid, as the
redundancy program was based on substantial evidence.
b. As for CA-G.R. SP No. 98975, the Court of Appeals confirmed that its assailed order of
reinstatement indicated that all employees, even those declared separated effective
December 31, 2002, should be reinstated pendentelite. However, the Court of Appeals
stated that the order of reinstatement became moot due to the National Labor Relations
Commission's October 28, 2005 Decision, which upheld the validity of the dismissal of the
employees affected by the redundancy program.
ISSUES:
1. Whether the 2002 redundancy declaration of PLDT was justified and valid.
2. Whether the return-to-work order of the Secretary of Labor and Employment was rendered
moot when the National Labor Relations Commission upheld the validity of the redundancy
program.
HELD:
On Issue #1:
Yes. 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.
PLDT's declaration of redundancy was backed by substantial evidence showing a consistent
decline for operator-assisted calls for both local and international calls because of cheaper
alternatives like direct dialing services, and the growth of wireless communication. While the Court
agreed that PLDT complied with the notice requirement, the same cannot be said as regards the
separation pay received by some of the affected workers. The facts show that instead of the legally
required one (1) month salary for every year of service rendered, the terminated workers who were
with Philippine Long Distance Telephone Company for more than 15 years received a separation pay
of only 75% of their basic pay for every year of service, despite the clear wording of the law. Hence,
PLDT was ordered to pay the workers, who were terminated from employment as a result of
redundancy, are entitled to the separation pay due them under the law.
On Issue #2:
Yes. There was no order of reinstatement from a Labor Arbiter in this case, instead, what was
at issue is the return-to-work order from the Secretary of Labor and Employment. An order of
reinstatement is different from a return-to-work order. These differ in the sense that:
1. If actual reinstatement is no longer possible, the employee becomes entitled to separation pay in
lieu of reinstatement.
2. On the other hand, a return-to-work order is issued by the Secretary of Labor and Employment
when he or she assumes jurisdiction over a labor dispute in an industry that is considered
indispensable to the national interest. Article 278(g) of the Labor Code provides that the
assumption and certification of the Secretary of Labor and Employment shall automatically enjoin
the intended or impending strike. When a strike has already taken place at the time the Secretary
of Labor and Employment assumes jurisdiction over the labor dispute, all striking employees shall
immediately return to work. Moreover, the employer shall immediately resume operations, and
readmit all workers under the same terms and conditions prevailing before the strike.
3. Return-to-work and reinstatement orders are both immediately executory; however, a return-to-
work order is interlocutory in nature, and is merely meant to maintain status quo while the main
issue is being threshed out in the proper forum.
4. In contrast, an order of reinstatement is a judgment on the merits handed down by the Labor
Arbiter pursuant to the original and exclusive jurisdiction provided for under Article 224(a) of the
Labor Code. Clearly, there is no basis to reinstate the employees who were terminated as a result
of redundancy.
