G.R. No. 181738 January 30, Johnny T.

Almocera (Almocera), and and instead asserted that her services

2013 Purchasing Manager, Joel Paulino before were terminated for alleged redundancy.
the Regional Arbitration Branch (RAB) No. Almocera told her that her signature on
GENERAL MILLING
VII, NLRC, Cebu City. the Application for Retirement and
CORPORATION, Petitioner,
Benefits was needed to process her
vs. In her Position Paper,8 Viajar alleged that
separation pay. The respondent also
VIOLETA L. VIAJAR, Respondent. she was employed by GMC on August 6,
claimed that between the period of July 4,
1979 as Invoicing Clerk. Through the
DECISION 2003 and October 13, 2003, GMC hired
years, the respondent held various
fifteen (15) new employees which aroused
REYES, J.: positions in the company until she became
her suspicion that her dismissal was not
Purchasing Staff.
necessary.11 At the time of her
This is a Petition1 for Review on Certiorari
On October 30, 2003, Viajar received a termination, the respondent was receiving
under Rule 45 of the Rules of Court filed
Letter-Memorandum dated October 27, the salary rate of ₱19,651.41 per month.12
by petitioner General Milling Corporation
(GMC), asking the Court to set aside the 2003 from GMC, through Almocera,
For its part, the petitioner insisted that
Decision2 dated September 21, 2007 and informing her that her services were no
Viajar’s dismissal was due to the
the Resolution3 dated January 30, 2008 of longer needed, effective November 30,
redundancy of her position. GMC reasoned
the Court of Appeals (CA) in CA-G.R. SP 2003 because her position as Purchasing
out that it was forced to terminate the
No. 01734; and to reinstate the Staff at the Purchasing Group, Cebu
services of the respondent because of the
Decision4 dated October 28, 2005 and Operations was deemed redundant.
economic setbacks the company was
Resolution5 dated January 31, 2006 of the Immediately thereafter, the respondent
suffering which affected the company’s
National Labor Relations Commission consulted her immediate superior at that
profitability, and the continuing rise of its
(NLRC) in NLRC Case No. V-000416-05. time, Thaddeus Oyas, who told her that
operating and interest expenditures.
he too was shocked upon learning about
Redundancy was part of the petitioner’s
The antecedent facts are as follows: it.9
concrete and actual cost reduction
GMC is a domestic corporation with When Viajar reported for work on October measures. GMC also presented the
principal office in Makati City and a 31, 2003, almost a month before the required "Establishment Termination
manufacturing plant in Lapu-Lapu City. effectivity of her severance from the Report" which it filed before the
company, the guard on duty barred her Department of Labor and Employment
In October 2003, GMC terminated the (DOLE) on October 28, 2003, involving
from entering GMC’s premises. She was
services of thirteen (13) employees for thirteen (13) of its employees, including
also denied access to her office computer
redundancy, including herein respondent, Viajar. Subsequently, GMC issued to the
and was restricted from punching her
Violeta Viajar (Viajar). GMC alleged that it respondent two (2) checks respectively
daily time record in the bundy clock.10
has been gradually downsizing its Vismin amounting to ₱440,253.02 and
(Visayas-Mindanao) Operations in Cebu On November 7, 2003, Viajar was invited ₱21,211.35 as her separation pay.13
where a sizeable number of positions to the HRD Cebu Office where she was
became redundant over a period of time.6 asked to sign certain documents, which On April 18, 2005, the Labor Arbiter (LA)
turned out to be an "Application for of the NLRC RAB No. VII, Cebu City,
On December 2, 2003, Viajar filed a rendered a Decision, the decretal portion
Retirement and Benefits." The respondent
Complaint7 for Illegal Dismissal with of which reads:
refused to sign and sought clarification
damages against GMC, its Human
because she did not apply for retirement
Resource Department (HRD) Manager,
WHEREFORE, foregoing considered, promulgated its decision, the dispositive 2001 782
judgment is hereby rendered declaring portion of which reads:
that respondents acted in good faith in
WHEREFORE, premises considered, the 2002 736 41
terminating the complainant from the
Decision of the Labor Arbiter declaring the
service due to redundancy of works, thus,
validity of complainant’s termination due 2003 721 24
complainant’s refusal to accept the
to redundancy is hereby AFFIRMED.
payment of her allowed separation pay
Respondent General Milling Corporation is
and other benefits under the law is NOT 2004 697 16
hereby ordered to pay complainant’s
JUSTIFIED both in fact and law, and so,
separation pay in the amount of
therefore complainant’s case for illegal
₱461,464.37. 696 (As of
dismissal against the herein respondents
2005 June 0619
and so are complainant’s monetary claims SO ORDERED.16 2005)
are hereby ordered DISMISSED for lack of
merit. The NLRC, however, stated that it did not
agree with the LA that Viajar should be The NLRC stated that the characterization
SO ORDERED. 14
faulted for failing to question the of positions as redundant is an exercise of
petitioner’s declaration of redundancy the employer’s business judgment and
The LA found that the respondent was prerogative. It also ruled that the
before the DOLE Regional Office, Region
properly notified on October 30, 2003 petitioner did not exercise this prerogative
VII, Cebu City. It was not imperative for
through a Letter-Memorandum dated in bad faith and that the payment of
Viajar to challenge the validity of her
October 27, 2003, signed by GMC’s HRD separation pay in the amount of
termination due to
Manager Almocera, that her position as ₱461,464.37 was in compliance with
redundancy.17 Notwithstanding, the NLRC
Purchasing Staff had been declared Article 283 of the Labor Code.20
affirmed the findings of the LA that
redundant. It also found that the
Viajar’s dismissal was legal considering Respondent Viajar filed a Motion for
petitioner submitted to the DOLE on
that GMC complied with the requirements Reconsideration which was denied by the
October 28, 2003 the "Establishment
provided for under Article 283 of the Labor NLRC in its Resolution dated January 31,
Termination Report." The LA even faulted
Code and existing jurisprudence, 2006.
the respondent for not questioning the
particularly citing Asian Alcohol
company’s action before the DOLE
Corporation v. NLRC.18 The NLRC further Undaunted, Viajar filed a petition for
Regional Office, Region VII, Cebu City so
stated that Viajar was aware of GMC’s certiorari before the CA. In the now
as to compel the petitioner to prove that
"reduction mode," as shown in the GMC assailed Decision dated September 21,
Viajar’s position was indeed redundant. It
Vismin Manpower Complement, as 2007, the CA granted the petition,
ruled that the petitioner complied with the
follows: reversing the decision of the NLRC in the
requirements under Article 283 of the
following manner:
Labor Code, considering that the nation
was then experiencing an economic No. of
WHEREFORE, premises considered, this
downturn and that GMC must adopt Manpower Employees
Year Petition for Certiorari is GRANTED. The
Profile Terminated
measures for its survival.15 Decision, dated 28 October 2005, and
(Redundancy)
Resolution, dated 31 January 2006
Viajar appealed the aforesaid decision to
respectively, of public respondent National
the NLRC. On October 28, 2005, the NLRC 2000 795 Labor Relations Commission-Fourth
Division, Cebu City, in NLRC Case No. V- FINDINGS OF THE NATIONAL LABOR conflicting or contradictory with those of
000416-05 (RAB VII-12-2495-03) are SET RELATIONS COMMISSION. the CA. When there is a variance in the
ASIDE. A new judgment is entered factual findings, it is incumbent upon the
III. THE COURT OF APPEALS COMMITTED
DECLARING the dismissal ILLEGAL and Court to re-examine the facts once
GRAVE ABUSE OF DISCRETION IN ITS
ordering respondent to reinstate petitioner again.26
DECISION OF SEPTEMBER 21, 2007 AND
without loss of seniority rights and other
RESOLUTION OF JANUARY 30, 2008 AS Furthermore, another exception to the
privileges with full backwages inclusive of
THE SAME ARE CONTRARY TO THE general rule is when the said findings are
allowances and other benefits computed
EVIDENCE ON RECORD.22 not supported by substantial evidence or if
from the time she was dismissed on 30
on the basis of the available facts, the
November 2003 up to the date of actual The petition is denied.
inference or conclusion arrived at is
reinstatement. Further, moral and
The petitioner argues that the factual manifestly erroneous.27 Factual findings of
exemplary damages, in the amount of
findings of the NLRC, affirming that of the administrative agencies are not infallible
Fifty Thousand Pesos ([P]50,000.00)
LA must be accorded respect and finality and will be set aside when they fail the
each; and attorney’s fees equivalent to
as it is supported by evidence on record. test of arbitrariness.28 In the instant case,
ten percent (10%) of the total monetary
Both the LA and the NLRC found the the Court agrees with the CA that the
award, are awarded.
petitioner’s evidence sufficient to conclusions arrived at by the LA and the
Costs against respondent. terminate the employment of respondent NLRC are manifestly erroneous.
on the ground of redundancy. The
SO ORDERED.21 GMC claims that Viajar was validly
evidence also shows that GMC has
dismissed on the ground of redundancy
Aggrieved by the reversal of the NLRC complied with the procedural and
which is one of the authorized causes for
decision, GMC filed a motion for substantive requirements for a valid
termination of employment. The petitioner
reconsideration. However, in its Resolution termination. There was, therefore, no
asserts that it has observed the procedure
dated January 30, 2008, the CA denied reason for the CA to disturb the factual
provided by law and that the same was
the same; hence, this petition. findings of the NLRC.23
done in good faith. To justify the
The petitioner raises the following issues, The rule is that factual findings of quasi- respondent’s dismissal, the petitioner
to wit: judicial agencies such as the NLRC are presented: (i) the notification Letter-
generally accorded not only respect, but Memorandum dated October 27, 2003
I. THE DECISION OF SEPTEMBER 21, addressed to the respondent which was
at times, even finality because of the
2007 AND THE RESOLUTION OF JANUARY received on October 30, 2003;29 (ii) the
special knowledge and expertise gained by
30, 2008 OF THE COURT OF APPEALS ARE "Establishment Termination Report" as
these agencies from handling matters
CONTRARY TO LAW AND ESTABLISHED prescribed by the DOLE;30 (iii) the two (2)
falling under their specialized
JURISPRUDENCE. checks issued in the respondent’s name
jurisdiction.24 It is also settled that this
Court is not a trier of facts and does not amounting to ₱440,253.02 and
II. THE DECISION OF SEPTEMBER 21,
normally embark in the evaluation of ₱21,211.35 as separation pay;31 and (iv)
2007 AND THE RESOLUTION OF JANUARY
evidence adduced during trial.25 This rule, the list of dismissed employees as of June
30, 2008 OF THE COURT OF APPEALS
however, allows for exceptions. One of 6, 2006 to show that GMC was in a
VIOLATE THE LAW AND ESTABLISHED
these exceptions covers instances when "reduction mode."32 Both the LA and the
JURISPRUDENCE ON THE OBSERVANCE
the findings of fact of the trial court, or of NLRC found these sufficient to prove that
OF RESPECT AND FINALITY TO FACTUAL
the quasi-judicial agencies concerned, are the dismissal on the ground of redundancy
was done in good faith.
The Court does not agree. wit: (a) the employer must serve a be the outcome of a number of factors,
written notice to the affected employees such as overhiring of workers, decreased
Article 283 of the Labor Code provides
and the DOLE at least one (1) month volume of business, or dropping of a
that redundancy is one of the authorized
before the intended date of retrenchment; particular product line or service activity
causes for dismissal. It reads:
(b) the employer must pay the employees previously manufactured or undertaken by
Article 283. Closure of establishment and a separation pay equivalent to at least one the enterprise."
reduction of personnel. – The employer month pay or at least one month pay for
The characterization of an employee’s
may also terminate the employment of every year of service, whichever is higher;
services as superfluous or no longer
any employee due to the installment of (c) the employer must abolish the
necessary and, therefore, properly
labor-saving devices, redundancy, redundant positions in good faith; and (d)
terminable, is an exercise of business
retrenchment to prevent losses or the the employer must set fair and reasonable
judgment on the part of the employer.
closing or cessation of operation of the criteria in ascertaining which positions are
The wisdom and soundness of such
establishment or undertaking unless the redundant and may be abolished.33
characterization or decision is not subject
closing is for the purpose of circumventing
In Smart Communications, Inc., v. to discretionary review provided, of
the provisions of this Title, by serving a
Astorga,34 the Court held that: course, that a violation of law or arbitrary
written notice on the worker and the
or malicious action is not
Ministry of Labor and Employment at least The nature of redundancy as an
shown.35 (Emphasis supplied and citations
one (1) month before the intended date authorized cause for dismissal is explained
omitted)
thereof. In case of termination due to the in the leading case of Wiltshire File Co.,
installation of labor-saving devices or Inc. v. National Labor Relations While it is true that the "characterization
redundancy, the worker affected thereby Commission, viz: of an employee’s services as superfluous
shall be entitled to a separation pay or no longer necessary and, therefore,
"x x x redundancy in an employer’s
equivalent to at least his one (1) month properly terminable, is an exercise of
personnel force necessarily or even
pay or to at least one (1) month pay for business judgment on the part of the
ordinarily refers to duplication of work.
every year of service, whichever is higher. employer,"36 the exercise of such
That no other person was holding the
In case of retrenchment to prevent losses judgment, however, must not be in
same position that private respondent
and in cases of closures or cessation of violation of the law, and must not be
held prior to termination of his services
operations of establishment or arbitrary or malicious. The Court has
does not show that his position had not
undertaking not due to serious business always stressed that a company cannot
become redundant. Indeed, in any well
losses or reverses, the separation pay simply declare redundancy without basis.
organized business enterprise, it would be
shall be equivalent to one (1) month pay To exhibit its good faith and that there
surprising to find duplication of work and
or at least one-half (1/2) month pay for was a fair and reasonable criteria in
two (2) or more people doing the work of
every year of service, whichever is higher. ascertaining redundant positions, a
one person. We believe that redundancy,
A fraction of at least six (6) months shall company claiming to be over manned
for purposes of the Labor Code, exists
be considered one (1) whole year. must produce adequate proof of the same.
where the services of an employee are in
(Emphasis supplied)
excess of what is reasonably demanded We reiterate what was held in Caltex
From the above provision, it is imperative by the actual requirements of the (Phils.), Inc. v. NLRC:37
that the employer must comply with the enterprise. Succinctly put, a position is
In Asufrin, Jr. v. San Miguel Corporation,
requirements for a valid implementation redundant where it is superfluous, and
we ruled that it is not enough for a
of the company’s redundancy program, to superfluity of a position or positions may
company to merely declare that it has GMC made an evaluation of the existing been hiring new employees while it was
become overmanned (sic). It must positions and their effect to the company. firing the old ones,45 negating the claim of
produce adequate proof of such Neither did GMC exert efforts to present redundancy. It must, however, be pointed
redundancy to justify the dismissal of the tangible proof that it was experiencing out that in termination cases, like the one
affected employees. business slow down or over hiring. The before us, the burden of proving that the
"Establishment Termination Report" it dismissal of the employees was for a valid
In Panlilio v. National Labor Relations
submitted to the DOLE Office did not and authorized cause rests on the
Commission, we held that evidence must
account for anything to justify declaring employer. It was incumbent upon the
be presented to substantiate redundancy
the positions redundant. The Court notes petitioner to show by substantial evidence
such as but not limited to the new staffing
that the list of terminated employees that the termination of the employment of
pattern, feasibility studies/proposal, on
presented by GMC was a list taken as of the respondent was validly made and
the viability of the newly created
June 6, 2006 or almost three years after failure to discharge that duty would mean
positions, job description and the approval
the respondent was illegally dismissed and that the dismissal is not justified and
by the management of the
almost a year after the LA promulgated its therefore illegal.46
restructuring.38 (Emphasis supplied and
decision. While the petitioner had been
citations omitted) Furthermore, the Court cannot overlook
harping that it was on a "reduction mode"
the fact that Viajar was prohibited from
In the instant case, the Court agrees with of its employees, it has not presented any
entering the company premises even
the CA when it held that the petitioner evidence (such as new staffing pattern,
before the effectivity date of termination;
failed to present substantial proof to feasibility studies or proposal, viability of
and was compelled to sign an "Application
support GMC’s general allegations of newly created positions, job description
for Retirement and Benefits." These acts
redundancy. As shown from the records, and the approval of the management of
exhibit the petitioner’s bad faith since it
the petitioner simply presented as its the restructuring,43 audited financial
cannot be denied that the respondent was
evidence of good faith and compliance documents like balance sheets, annual
still entitled to report for work until
with the law the notification letter to income tax returns and others)44 which
November 30, 2003. The demand for her
respondent Viajar;39 the "Establishment could readily show that the company’s
to sign the "Application for Retirement and
Termination Report" it submitted to the declaration of redundant positions was
Benefits" also contravenes the fact that
DOLE Office;40 the two (2) checks issued justified. Such proofs, if presented, would
she was terminated due to redundancy.
in the respondent’s name amounting to suffice to show the good faith on the part
Indeed, there is a difference between
₱440,253.02 and ₱21,211.35;41 and the of the employer or that this business
voluntary retirement of an employee and
list of terminated employees as of June 6, prerogative was not whimsically exercised
forced termination due to authorized
2006.42 We agree with the CA that these in terminating respondent’s employment
causes.
are not enough proof for the valid on the ground of redundancy.
termination of Viajar’s employment on the Unfortunately, these are wanting in the In Quevedo v. Benguet Electric
ground of redundancy. instant case. The petitioner only advanced Cooperative, Incorporated,47 this Court
a self-serving general claim that it was explained the difference between
The letter-memorandum which contains experiencing business reverses and that retirement and termination due to
general allegations is not enough to there was a need to reduce its manpower redundancy, to wit:
convince this Court that Viajar’s complement.
termination of employment due to While termination of employment and
redundancy was warranted under the On the other hand, the respondent retirement from service are common
circumstances. There is no showing that presented proof that the petitioner had modes of ending employment, they are
mutually exclusive, with varying juridical Finally, the Court agrees with the CA that and suffering. She also learned about the
bases and resulting benefits. Retirement the award of moral and exemplary employment of a number of new
from service is contractual (i.e. based on damages is proper.1âwphi1 The Court has employees, several of whom were even
the bilateral agreement of the employer awarded moral damages in termination employed in her former department.
and employee), while termination of cases when bad faith, malice or fraud Petitioner likewise suffered mental torture
employment is statutory (i.e. governed by attend the employee’s dismissal or where brought about by her termination even
the Labor Code and other related laws as the act oppresses labor, or where it was though its cause was not clear and
to its grounds, benefits and procedure). done in a manner contrary to morals, substantiated.50 (Citations omitted)
The benefits resulting from termination good customs or public policy.49 We quote
WHEREFORE, the petition is DENIED. The
vary, depending on the cause. For with favor the findings of the CA:
Decision dated September 21, 2007 of the
retirement, Article 287 of the Labor Code
We also award moral and exemplary Court of Appeals, as well as its Resolution
gives leeway to the parties to stipulate
damages to petitioner. While it is true that dated January 30, 2008 in CA-G.R. SP No.
above a floor of benefits.
good faith is presumed, the circumstances 01734, are hereby AFFIRMED.
xxxx surrounding the dismissal of petitioner
SO ORDERED.
negate its existence. Moral damages may
The line between voluntary and
be recovered only where the dismissal of
involuntary retirement is thin but it is one
the employee was tainted by bad faith or
which this Court has drawn. Voluntary
fraud, or where it constituted an act
retirement cuts employment ties leaving
oppressive to labor, and done in a manner
no residual employer liability; involuntary
contrary to morals, good customs or
retirement amounts to a discharge,
public policy while exemplary damages
rendering the employer liable for
are recoverable only if the dismissal was
termination without cause. The
done in a wanton, oppressive, or
employee’s intent is the focal point of
malevolent manner. To reiterate,
analysis. In determining such intent, the
immediately after receipt of her
fairness of the process governing the
termination letter which was effective on
retirement decision, the payment of
30 November 2003, petitioner was no
stipulated benefits, and the absence of
longer treated as an employee of
badges of intimidation or coercion are
respondent as early as the 31st of October
relevant parameters.48 (Emphasis supplied
2003; she was already barred from
and citations omitted)
entering the company premises; she was
Clearly, the instant case is not about deprived access to her office computer;
retirement since the term has its peculiar and she was excluded from the bandy
meaning and is governed by Article 287 of [sic] clock. She was also made to sign
the Labor Code. Rather, this is a case of documents, including an "APPLICATION
termination due to redundancy under FOR RETIREMENT AND BENEFITS" in the
Article 283 of the Labor Code. Thus, the guise of payment of her separation pay.
demand of GMC for the respondent to sign When petitioner confronted her immediate
an "Application for Retirement and superior regarding her termination, the
Benefits" is really suspect. latter’s shock aggravated her confusion