G.R. No. 199469 - Mejila vs. Wrigley Philippines, Inc.

Wrigley Philippines, Inc. (WPI), a manufacturer and marketer of chewing gum, engaged Gertrudes D. Mejila as an occupational health practitioner for its Antipolo manufacturing facility.
Mejila was initially employed on a contractual basis beginning in April 2002 and was later regularized effective January 1, 2007.

On October 26, 2007, WPI issued a memorandum to Mejila informing her that her position was being abolished due to the company’s manpower rationalization (Headcount Optimization Program).
The memorandum stated that her employment would be terminated effective November 26, 2007, though she was excused from reporting for work immediately (a practice often referred to as “garden leave”).
Along with the notice, WPI required the prompt return of all company properties, while promising separation pay, cash conversion of unused leaves, a one-year extension of medical insurance, and proportional benefits such as 13th month pay and other bonuses.

On the same day the memorandum was issued, WPI notified the Department of Labor and Employment’s (DOLE) Rizal Field Office regarding the decision to terminate Mejila and two other employees on grounds of redundancy.
Simultaneously, WPI engaged Activeone Health, Inc. to assume the operations previously handled by its in-house occupational health practitioners, effective November 1, 2007.
The decision to outsource clinic operations was part of WPI’s strategy to enhance cost efficiency and focus on its core business, as clinic management was not considered integral to gum manufacturing.

Mejila filed a complaint for illegal dismissal against WPI and certain company officers, alleging that the dismissal was invalid and that due process had not been observed.
The Labor Arbiter ruled in favor of Mejila, holding that WPI had failed to satisfy procedural due process requirements, notably by giving notice to DOLE’s Rizal Field Office instead of the proper Regional Office, and ordered her reinstatement along with payment of backwages, moral damages, exemplary damages, and attorney’s fees.
The National Labor Relations Commission (NLRC) reversed the Labor Arbiter’s decision on the merits of the redundancy dismissal, ruling that WPI’s program was a valid exercise of business judgment and that the outsourcing resulted in overall cost savings. However, the NLRC noted the sufficiency of the notice to the Rizal Field Office.
The Court of Appeals (CA), in its final decision, affirmed the NLRC’s findings regarding the validity of redundancy but concluded that WPI failed to comply with the specific procedural requirement (i.e., serving the notice to the appropriate DOLE Regional Office), thereby warranting an award of nominal damages. Yet, the CA modified the award by deleting attorney’s fees due to the absence of proof of bad faith or unlawful withholding of wages.

The case discussion references Article 298 of the Labor Code, which allows termination due to redundancy provided proper written notice is served to both the affected employees and DOLE at least one month prior to termination.
Jurisprudence, notably the Wiltshire File Co., Inc. v. NLRC decision, was cited for the definition of redundancy as existing when an employee’s services are in excess of the actual requirements of the enterprise.
Other cases and legal sources were cited to underscore that redundancy is a matter of business judgment and that strict compliance with procedural requirements (such as proper notice service) is mandatory.

Whether the termination on the ground of redundancy, as part of WPI’s Headcount Optimization Program, was a valid exercise of management’s business judgment given the evidence of increased productivity and cost efficiency.
Whether Mejila’s claim that the termination was unauthorized and implemented with an ill motive was supported by sufficient evidence.

Whether WPI adequately complied with the requirement to provide a written notice to the DOLE Regional Office as mandated by the Implementing Rules and Regulations of the Labor Code.
Whether the practice of “garden leave” negates or affects the need for proper service of termination notice.

Whether the failure to serve the termination notice to the appropriate DOLE Regional Office warrants the awarding of nominal damages.
Whether there is any basis for awarding attorney’s fees, particularly under Article 111 of the Labor Code or Article 2208 of the Civil Code, considering the absence of evidence of bad faith or unlawful withholding of wages by WPI.