G.R. No. 190389 - Manggagawa ng Komunikasyon sa Pilipinas vs. Philippine Long Distance Telephone Co., Inc.

On June 27, 2002, the labor organization Manggagawa ng Komunikasyong sa Pilipinas (MKP) representing PLDT employees filed a notice of strike with the National Conciliation and Mediation Board (NCMB).
MKP leveled multiple charges of unfair labor practices against Philippine Long Distance Telephone Company (PLDT), including the transfer of employees from its Provisioning Support Division and the subsequent declaration of redundancy.

In its first amended notice (dated November 4, 2002, NCMB-NCR-NS No. 11-405-02), MKP accused PLDT of:

Abolishing the Provisioning Support Division, causing redundancy and the substitution of regular employees with casual and contractual workers.
Failing to provide a comprehensive plan regarding personnel downsizing/reorganization as previously committed.
Hiring contractual, temporary, project, and casual employees for regular positions, thereby undermining union membership.

In a subsequent notice (November 11, 2002, docketed as NCMB-NCR-NS No. 11-412-02), MKP added allegations concerning:

The restructuring of PLDT’s Greater Metropolitan Manila Operator Services and the closure of several regional operator services effective December 31, 2002.
The imperilment of job security for 503 union members and the violation of the collective bargaining agreement due to the lack of proper notice and commitment adherence.

On December 31, 2002, PLDT declared a subset of its employees redundant, officially terminating 323 employees while redeploying 180 of the 503 affected employees.
On January 2, 2003, the Secretary of Labor and Employment (Secretary Sto. Tomas) certified the labor dispute for compulsory arbitration, simultaneously issuing a return-to-work order requiring all striking workers to resume work subject to an exclusion for those terminated due to redundancy.
MKP subsequently filed a Petition for Certiorari before the Court of Appeals challenging the Secretary’s order, which was initially set aside and later appealed by PLDT.

The National Labor Relations Commission (NLRC) and its resolutions (dated October 28, 2005, and January 31, 2006) upheld PLDT’s redundancy program, finding that the program was based on substantial evidence.
The Court of Appeals, consolidating cases CA-G.R. SP Nos. 94365 and 98975, confirmed:

That the redundancy declaration was justified given the decline in demand for operator-assisted calls, further evidenced by statistical data from 1996 to 2002 indicating a significant drop in call volume and subscribers.
That the return-to-work order became moot once the NLRC upheld the redundancy measures, as it invalidated the grounds to reinstate the dismissed employees.

Discrepancies arose over the separation pay provided to employees terminated due to redundancy, particularly concerning:

The statutory requirement under Article 298 of the Labor Code of a separation pay of at least one month’s pay or one month’s pay per year of service, whichever is higher.
Whether the additional retirement benefits improperly bundled with separation pay resulted in a payout exceeding the statutory minimum.

Documentation, such as termination notices, revealed variations in the separation packages based on length of service (with different formulas for those with more or less than 15 years of service), thus raising issues about the compliance with the legal standard.

The concept that redundancy is a valid cause for dismissal when supported by substantial evidence evidencing that an employee’s services exceed the company’s actual requirements.
The distinction between return-to-work orders (interlocutory acts meant to maintain the status quo) and orders of reinstatement (judgments on the merits awarding backwages).

MKP argued that unresolved issues related to redundancy, including failure to transfer affected employees and the lack of full disclosure regarding the affected positions beyond operator services, constituted grave abuse of discretion by the NLRC.

Whether the Court of Appeals committed grave abuse of discretion in upholding the validity of PLDT’s 2002 redundancy program by:

Relying on substantial evidence such as the data showing a consistent decline in operator-assisted calls and subscriber base.
Assessing the legitimacy of the redundancy measures in light of technological advancements and market competition.

Whether the return-to-work order issued by the Secretary of Labor and Employment became moot following the NLRC’s resolution upholding PLDT’s redundancy program, particularly regarding:

The exclusion of employees terminated due to redundancy from the reinstatement order.
The implications for the pecuniary rights of the affected employees, specifically with respect to separation pay and backwages pending appeal.