Title
Abbott Laboratories , Inc. vs. Torralba
Case
G.R. No. 229746
Decision Date
Oct 11, 2017
Abbott employees dismissed under a redundancy program deemed invalid; SC ruled illegal dismissal, voided quitclaims, awarded backwages, reduced damages, and ordered reinstatement.
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Case Digest (G.R. No. 229746)

Facts:

  1. Employment Details:

    • Roselle P. Almazar: Hired on June 1, 1992, as National Sales Manager of Abbott's PediaSure Division, with a monthly salary of Php98,938.28.
    • Manuel F. Torralba: Hired on July 4, 1988, as Regional Sales Manager, with a monthly salary of Php109,645.34.
    • Redel Ulysses M. Navarro: Hired on June 1, 1993, as Regional Sales Manager, with a monthly salary of Php87,092.78.
  2. Redundancy Program:

    • In November 2012, Abbott decided to merge its PediaSure Division and Medical Nutrition Division under the Specialty Nutrition Group, citing similar business models and sales execution methods.
    • As a result, respondents' positions were declared redundant.
    • On February 18, 2013, Abbott informed the DOLE and respondents of their termination effective March 22, 2013, due to redundancy.
    • Abbott offered respondents District Sales Manager positions with lower pay and different responsibilities, which they rejected.
  3. Deeds of Waiver, Release, and Quitclaim:

    • On May 10, 2013, respondents signed Deeds after receiving separation pay and last pay:
      • Torralba: Php4,111,700.25 (separation pay) and Php549,022.33 (last pay).
      • Navarro: Php2,612,783.40 (separation pay) and Php440,070.62 (last pay).
      • Almazar: Php3,116,555.82 (separation pay).
  4. Complaint for Illegal Dismissal:

    • On September 20, 2013, respondents filed a complaint for illegal dismissal, claiming Abbott did not observe the criteria of preference of status, efficiency, and seniority in determining redundancy.
    • They also claimed underpayment of separation pay and discrimination, as other employees allegedly received 250% of their monthly salaries per year of service, while they received only 150%.
  5. Labor Arbiter's Ruling:

    • On February 4, 2014, the Labor Arbiter ruled that respondents were illegally dismissed and ordered their reinstatement with full backwages, moral damages, exemplary damages, and attorney's fees.
  6. NLRC Ruling:

    • On May 20, 2014, the NLRC reversed the Labor Arbiter's decision, dismissing the complaint based on the validity of the Deeds signed by respondents.
  7. Court of Appeals Ruling:

    • On April 26, 2016, the CA reinstated the Labor Arbiter's decision with modifications, ruling that the redundancy program was invalid and that the Deeds were vitiated by mistake or fraud.
    • The CA also tolled the backwages until the date respondents refused Abbott's offer of reinstatement in July 2016.

Issue:

  1. Whether the redundancy program implemented by Abbott was valid.
  2. Whether the Deeds of Waiver, Release, and Quitclaim executed by respondents were valid.
  3. Whether the award of full backwages to respondents was proper.
  4. Whether the award of damages to respondents was proper.

Ruling:

  1. Invalidity of Redundancy Program:

    • The Supreme Court ruled that Abbott failed to prove the redundancy program was valid. The company did not use a fair and reasonable criteria in determining which employees to retain, as required by law.
    • The Court found that Abbott's redundancy program was a mere subterfuge to circumvent respondents' right to security of tenure.
  2. Invalidity of Deeds:

    • The Court held that the Deeds signed by respondents were invalid because they were based on an illegal termination. The Deeds were vitiated by mistake or fraud, and respondents were not estopped from contesting their dismissal.
  3. Award of Backwages:

    • The Court ruled that respondents are entitled to full backwages from the time of their illegal dismissal until actual reinstatement. The amounts received as separation pay should be deducted from the total backwages.
  4. Award of Damages:

    • The Court modified the award of moral and exemplary damages, reducing them to Php100,000.00 and Php50,000.00, respectively, for each respondent. The award of attorney's fees at 10% of the total monetary award and legal interest at 6% per annum were sustained.

Ratio:

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