010 GENERAL MILLING vs. VLAJAR of redundancy.

The GMC only advanced a self-serving general claim that it was

30 Jan 2013 | Reyes J. | Authorized causes: Redundancy experiencing business reverses and that there was a need to reduce its manpower
PETITIONER: General Milling Corporation complement. Vlajar also presented proof that the GMC had been hiring new
employees while it was firing the old ones, negating the claim of redundancy. It
RESPONDENT: Violeta L. Viajar must, however, be pointed out that in termination cases, like the one before us, the
burden of proving that the dismissal of the employees was for a valid and
SUMMARY: GMC terminated the services of thirteen (13) employees for authorized cause rests on the employer.
redundancy, including Violeta Vlajar. GMC alleged that it has been gradually The SC cannot overlook the fact that Vlajar was prohibited from entering the
downsizing its Vismin (Visayas-Mindanao) Operations in Cebu where a sizeable company premises even before the effectivity date of termination; and was
number of positions became redundant over a period of time. Viajar filed a compelled to sign an "Application for Retirement and Benefits." These acts exhibit
Complaint for Illegal Dismissal with damages against GMC. Viajar received a GMC’s bad faith.
Letter-Memorandum dated October 27, 2003 from GMC, through Almocera,
informing her that her services were no longer needed. When Viajar reported for
work on October 31, 2003, almost a month before the effectivity of her severance DOCTRINE: Sufficient evidence to prove good faith in redundancy: (such as
from the company, the guard on duty barred her from entering GMC’s premises. new staffing pattern, feasibility studies or proposal, viability of newly created
Viajar was invited to the HRD Cebu Office where she was asked to sign certain positions, job description and the approval of the management of the restructuring,
documents, which turned out to be an "Application for Retirement and audited financial documents like balance sheets, annual income tax returns and
Benefits." The Vlajar refused to sign and sought clarification. . GMC reasoned others).
out that it was forced to terminate the services of the Vlajar because of the Shows Bad faith when: Vlajar was prohibited from entering the company premises
economic setbacks the company was suffering which affected the company’s even before the effectivity date of termination; and was compelled to sign an
profitability, and the continuing rise of its operating and interest expenditures. "Application for Retirement and Benefits."
Redundancy was part of the GMC’s concrete and actual cost reduction measures.
GMC justified it with presenting pieces of evidence (see fact no. 11). LA found
FACTS:
good faith and justified authorized cause for determined. NLRC affirmed. CA
reversed the finding of LA and NLRC and found that there is bad faith and it was 1. GMC is a domestic corporation with principal office in Makati City and a
an illegal dismissal. manufacturing plant in Lapu-Lapu City.
2. In October 2003, GMC terminated the services of thirteen (13) employees
Issue: Whether the factual findings of LA and NLRC should be disturbed? -
for redundancy, including herein respondent, Violeta Viajar (Viajar). GMC
YES. They are not infallible. , the Court agrees with the CA that the conclusions
alleged that it has been gradually downsizing its Vismin (Visayas-
arrived at by the LA and the NLRC are manifestly erroneous.
Mindanao) Operations in Cebu where a sizeable number of positions
Whether the dismissal of Vlajar was valid/ justified by authorized cause of became redundant over a period of time.
redundancy? – NO. GM simply presented as its evidence of good faith and 3. On December, Viajar filed a Complaint for Illegal Dismissal with damages
compliance with the law the notification letter to Vlajar; the "Establishment against GMC, its Human Resource Department (HRD) Manager, Johnny T.
Termination Report" it submitted to the DOLE Office; the two (2) checks issued Almocera (Almocera), and Purchasing Manager, Joel Paulino before the
in the Vlajar’s name amounting; and the list of terminated employees as of June 6, Regional Arbitration Branch (RAB) No. VII, NLRC, Cebu City.
2006.  These are not enough proof for the valid termination of Vlajar’s 4. In her Position Paper, Viajar alleged that she was employed by GMC on
employment on the ground of redundancy. August 6, 1979 as Invoicing Clerk. Through the years, the Vlajar held
While the GMC had been harping that it was on a "reduction mode" of its various positions in the company until she became Purchasing Staff.
employees, it has not presented any evidence (such as new staffing pattern, 5. On October 30, 2003, Viajar received a Letter-Memorandum dated October
feasibility studies or proposal, viability of newly created positions, job 27, 2003 from GMC, through Almocera, informing her that her services
description and the approval of the management of the restructuring, audited were no longer needed, effective November 30, 2003 because her position
financial documents like balance sheets, annual income tax returns and as Purchasing Staff at the Purchasing Group, Cebu Operations was deemed
others) which could readily show that the company’s declaration of redundant.
redundant positions was justified. Such proofs, if presented, would suffice to 6. Immediately thereafter, Vlajar consulted her immediate superior at that
show the good faith on the part of the employer or that this business prerogative time, Thaddeus Oyas, who told her that he too was shocked upon learning
was not whimsically exercised in terminating Vlajar’s employment on the ground about it.
7. When Viajar reported for work on October 31, 2003, almost a month before redundancy before the DOLE Regional Office, Region VII, Cebu City. It
the effectivity of her severance from the company, the guard on duty barred was not imperative for Viajar to challenge the validity of her termination
her from entering GMC’s premises. She was also denied access to her office due to redundancy. Notwithstanding, the NLRC affirmed the findings of the
computer and was restricted from punching her daily time record in the LA that Viajar’s dismissal was legal considering that GMC complied with
bundy clock. the requirements provided for under Article 283 of the Labor Code and
8. On November 7, 2003, Viajar was invited to the HRD Cebu Office where existing jurisprudence, particularly citing Asian Alcohol Corporation v.
she was asked to sign certain documents, which turned out to be an NLRC. The NLRC further stated that Viajar was aware of GMC’s
"Application for Retirement and Benefits." The Vlajar refused to sign "reduction mode"
and sought clarification because she did not apply for retirement and instead 18. The NLRC stated that the characterization of positions as redundant is an
asserted that her services were terminated for alleged redundancy. exercise of the employer’s business judgment and prerogative. It also ruled
9. Almocera told her that her signature on the Application for Retirement and that the GMC did not exercise this prerogative in bad faith and that the
Benefits was needed to process her separation pay. The Vlajar also claimed payment of separation pay was in compliance with Article 283 of the Labor
that between the period of July 4, 2003 and October 13, 2003, GMC hired Code.
fifteen (15) new employees which aroused her suspicion that her dismissal 19. Respondent Viajar filed a Motion for Reconsideration which was denied by
was not necessary. At the time of her termination, Vlajar was receiving the the NLRC
salary rate of ₱19,651.41 per month. 20. Undaunted, Viajar filed a petition for certiorari before the CA. In the now
10. For its part, the General Milling insisted that Viajar’s dismissal was due to assailed Decision dated September 21, 2007, the CA granted her petition;
the redundancy of her position. GMC reasoned out that it was forced to declared the dismissal ILLEGAL and ordering Vlajar to reinstate GMC
terminate the services of the Vlajar because of the economic setbacks the without loss of seniority rights and other privileges with full backwages
company was suffering which affected the company’s profitability, and inclusive of allowances.
the continuing rise of its operating and interest expenditures. Redundancy 21. Aggrieved by the reversal of the NLRC decision, GMC filed a motion for
was part of the GMC’s concrete and actual cost reduction measures. reconsideration. However, CA denied, hence, this petition.
11. To justify the Vlajar’s dismissal, the GMC presented:
a. the notification Letter-Memorandum dated October 27, 2003 ISSUES:
addressed to the Vlajar which was received on October 30, 2003;
b. "Establishment Termination Report" as prescribed by the DOLE; 1. Whether the factual findings of LA and NLRC should be disturbed? - YES.
c. the two (2) checks issued in the Vlajar’s name amounting to They are not infallible. , the Court agrees with the CA that the conclusions
₱440,253.02 and ₱21,211.35 as separation pay; and arrived at by the LA and the NLRC are manifestly erroneous.
d. the list of dismissed employees as of June 6, 2006 to show that 2. Whether the dismissal of Vlajar was valid/ justified by authorized cause of
GMC was in a "reduction mode." redundancy? – NO. GM simply presented as its evidence of good faith
12. LA finds good faith on the part of General Milling and the find the reason and compliance. These are not enough proof for the valid termination
of redundancy as valid. of Viajar’s employment on the ground of redundancy.
13. The LA found that the Vlajarwas properly notified on October 30, 2003
through a Letter-Memorandum dated October 27, 2003, signed by GMC’s RULING: WHEREFORE, the petition is DENIED. The Decision dated September
HRD Manager Almocera, that her position as Purchasing Staff had been 21, 2007 of the Court of Appeals, as well as its Resolution dated January 30, 2008 in
declared redundant. It also found that the GMC submitted to the DOLE on CA-G.R. SP No. 01734, are hereby AFFIRMED.
October 28, 2003 the "Establishment Termination Report."
14. The LA even faulted the Vlajar for not questioning the company’s action RATIO:
before the DOLE Regional Office, so as to compel the company to prove
On the factual findings:
that Viajar’s position was indeed redundant.
15. It ruled that the GMC complied with the requirements under Article 283 of 1. GMC argues that the factual findings of the NLRC, affirming that of the LA
the Labor Code, considering that the nation was then experiencing an must be accorded respect and finality as it is supported by evidence on
economic downturn and that GMC must adopt measures for its survival. record. Both the LA and the NLRC found the GMC’s evidence sufficient to
16. Vlajar appealed to the NLRC. NLRC affirmed LA’s decision. terminate the employment of Vlajar on the ground of redundancy. The
17. The NLRC, however, stated that it did not agree with the LA that Viajar evidence also shows that GMC has complied with the procedural and
should be faulted for failing to question the petitioner’s declaration of substantive requirements for a valid termination.
 2. The rule is that factual findings of quasi-judicial agencies such as the NLRC exercise of business judgment on the part of the employer," the exercise of
are generally accorded not only respect, but at times, even finality because such judgment, however, must not be in violation of the law, and must
of the special knowledge and expertise gained by these agencies from not be arbitrary or malicious. The Court has always stressed that a
handling matters falling under their specialized jurisdiction. It is also settled company cannot simply declare redundancy without basis. To exhibit
that this Court is not a trier of facts. This rule, however, allows for its good faith and that there was a fair and reasonable criteria in
exceptions. One of these exceptions covers instances when the findings of ascertaining redundant positions, a company claiming to be over
fact of the trial court, or of the quasi-judicial agencies concerned, are manned must produce adequate proof of the same.
conflicting or contradictory with those of the CA. When there is a variance 6. It must not be merely overmanned. SC held that evidence must be presented
in the factual findings, it is incumbent upon the Court to re-examine the to substantiate redundancy such as but not limited to the new staffing
facts once again. pattern, feasibility studies/proposal, on the viability of the newly created
3. Furthermore, another exception to the general rule is when the said findings positions, job description and the approval by the management of the
are not supported by substantial evidence or if on the basis of the available restructuring.
facts, the inference or conclusion arrived at is manifestly erroneous. GMC has no sufficient evidence to justify Redundancy
On the dismissal of Vlajar: 7. In the instant case, the Court agrees with the CA when it held that the GMC
1. GMC claims that Viajar was validly dismissed on the ground of redundancy failed to present substantial proof to support GMC’s general allegations of
which is one of the authorized causes for termination of employment. GM redundancy. As shown from the records, the GM simply presented as its
asserts that it has observed the procedure provided by law and that the same evidence of good faith and compliance with the law the notification
was done in good faith. letter to Viajar; the "Establishment Termination Report" it submitted to the
2. From the above provision, Based on Art. 283 of the Labor Code, it is DOLE Office; the two (2) checks issued in the Vlajar’s name amounting;
imperative to comply with the requirements for a valid implementation of and the list of terminated employees as of June 6, 2006. 
the company’s redundancy program, to wit: 8. These are not enough proof for the valid termination of Viajar’s
a. the employer must serve a written notice to the affected employment on the ground of redundancy.
employees and the DOLE at least one (1) month before the 9. The letter-memorandum which contains general allegations is not enough to
intended date of retrenchment; convince this Court that Viajar’s termination of employment due to
b. the employer must pay the employees a separation pay equivalent redundancy was warranted under the circumstances. There is no showing
to at least one month pay or at least one month pay for every year that GMC made an evaluation of the existing positions and their effect to
of service, whichever is higher; the company. Neither did GMC exert efforts to present tangible proof that it
c. the employer must abolish the redundant positions in good faith; was experiencing business slow down or over hiring. The "Establishment
and Termination Report" it submitted to the DOLE Office did not account for
d. the employer must set fair and reasonable criteria in ascertaining anything to justify declaring the positions redundant.
which positions are redundant and may be abolished. 10. The Court notes that the list of terminated employees presented by GMC
3. SC believe that redundancy, for purposes of the Labor Code, exists where was a list taken as of June 6, 2006 or almost three years after the Vlajar was
the services of an employee are in excess of what is reasonably demanded illegally dismissed and almost a year after the LA promulgated its decision.
by the actual requirements of the enterprise. Succinctly put, a position is 11. While the GMC had been harping that it was on a "reduction mode" of
redundant where it is superfluous, and superfluity of a position or positions its employees, it has not presented any evidence (such as new staffing
may be the outcome of a number of factors, such as overhiring of workers, pattern, feasibility studies or proposal, viability of newly created
decreased volume of business, or dropping of a particular product line or positions, job description and the approval of the management of the
service activity previously manufactured or undertaken by the enterprise. restructuring, audited financial documents like balance sheets, annual
4. The characterization of an employee’s services as superfluous or no longer income tax returns and others) which could readily show that the
necessary and, therefore, properly terminable, is an exercise of business company’s declaration of redundant positions was justified.
judgment on the part of the employer. The wisdom and soundness of such 12. Such proofs, if presented, would suffice to show the good faith on the part
characterization or decision is not subject to discretionary review provided, of the employer or that this business prerogative was not whimsically
of course, that a violation of law or arbitrary or malicious action is not exercised in terminating Vlajar’s employment on the ground of redundancy.
shown. 13. Unfortunately, these are wanting in the instant case. The GMC only
5. While it is true that the "characterization of an employee’s services as advanced a self-serving general claim that it was experiencing business
superfluous or no longer necessary and, therefore, properly terminable, is an reverses and that there was a need to reduce its manpower complement.
14. On the other hand, Vlajar presented proof that the GMC had been hiring termination cases when bad faith, malice or fraud attend the employee’s
new employees while it was firing the old ones, negating the claim of dismissal or where the act oppresses labor, or where it was done in a
redundancy. It must, however, be pointed out that in termination cases, like manner contrary to morals, good customs or public policy.
the one before us, the burden of proving that the dismissal of the employees
was for a valid and authorized cause rests on the employer. It was
incumbent upon the GMC to show by substantial evidence that the
termination of the employment of Vlajar was validly made and failure to
discharge that duty would mean that the dismissal is not justified and
therefore illegal.
15. Furthermore, the Court cannot overlook the fact that Vlajar was prohibited
from entering the company premises even before the effectivity date of
termination; and was compelled to sign an "Application for Retirement and
Benefits." These acts exhibit GMC’s bad faith since it cannot be denied that
Vlajar was still entitled to report for work until November 30, 2003. The
demand for her to sign the "Application for Retirement and Benefits" also
contravenes the fact that she was terminated due to redundancy. Indeed,
there is a difference between voluntary retirement of an employee and
forced termination due to authorized causes.
16. In Quevedo v. Benguet Electric Cooperative, Incorporated, this Court
explained the difference between retirement and termination due to
redundancy:
TERMINATION DUE TO RETIREMENT
REDUNDANCY
they are mutually exclusive, with varying juridical bases and resulting benefits
while termination of employment is Retirement from service is contractual (i.e. based
statutory (i.e. governed by the Labor on the bilateral agreement of the employer and
Code and other related laws as to its employee);
grounds, benefits and procedure). The
benefits resulting from termination Article 287 of the Labor Code gives leeway to the
vary, depending on the cause. parties to stipulate above a floor of benefits.
Voluntary involuntary retirement
retirement cuts amounts to a discharge,
employment ties rendering the employer
leaving no liable for termination
residual employer without cause
liability

 In determining such intent, the fairness of the process governing

the retirement decision, the payment of stipulated benefits, and the
absence of badges of intimidation or coercion are relevant
parameters.
17. Clearly, the instant case is not about retirement since the term has its
peculiar meaning and is governed by Article 287 of the Labor Code. Rather,
this is a case of termination due to redundancy under Article 283 of the
Labor Code. Thus, the demand of GMC for the Vlajar to sign an
"Application for Retirement and Benefits" is really suspect
18. Finally, the Court agrees with the CA that the award of moral and
exemplary damages is proper. The Court has awarded moral damages in