Case Summary (G.R. No. 155097)
Applicable Law
The case was decided under the 1987 Philippine Constitution and relevant provisions of the Labor Code, primarily Article 298 (formerly Article 283), which governs termination due to redundancy. Under this article, an employer may terminate employees due to redundancy if certain requisites are met, including proper notice, payment of separation pay, good faith, and the use of fair and reasonable criteria.
Facts and Antecedents
Following the management change in May 2013, CCFPI informed Aguilera on August 6, 2013, that he failed the employee assessment and proceeded to serve him a termination notice due to redundancy, effective September 6, 2013. The company restructured the organizational setup by abolishing the Cold Drink Associate position and splitting it into two lower-paid positions: Cold Drink Operation Supervisor and Cold Drink Equipment Analyst. Despite Aguilera's long service of 18 years, good performance record—including merit increases and commendations—he was not transferred or retained.
Aguilera applied for the new Cold Drink Equipment Analyst position but was not selected; instead, new hires filled the role. He accepted a separation package and signed a Deed of Receipt, Waiver, and Quitclaim on September 11, 2013.
Company’s Defense
CCFPI asserted compliance with all legal requirements for redundancy. It claimed the redundancy was made in good faith, motivated by the need to improve business efficiency through organizational restructuring and outsourcing non-core operations. The company maintained that Aguilera failed the qualifying assessments based on performance ratings, credentials, and a psychometric test submitted belatedly during the appeal process. It argued that the separation pay exceeded labor standards and that the quitclaim barred further claims.
Labor Arbiter's Ruling
On September 30, 2014, the Labor Arbiter ruled in favor of Aguilera, holding that CCFPI showed bad faith and failed to adhere to fair and reasonable criteria in selecting positions for redundancy and determining affected employees. The job abolition was deemed a pretext, as the company created new similar positions with lower pay instead of truly eliminating redundant roles. The Labor Arbiter ordered Aguilera’s reinstatement with full backwages, moral and exemplary damages, and attorney’s fees, allowing the offset of these awards against the separation pay.
National Labor Relations Commission (NLRC) Decision
On June 30, 2016, the NLRC affirmed the Labor Arbiter’s ruling with modification, deleting the award of moral and exemplary damages due to lack of basis but granting attorney’s fees. It agreed that the company failed to prove good faith and the use of fair criteria in implementing redundancy.
Court of Appeals (CA) Decision and Resolution
The Court of Appeals reversed these findings on October 20, 2017, concluding that CCFPI met all legal requisites for valid redundancy termination: issuing timely notices to petitioner and the Department of Labor and Employment (DOLE); paying separation benefits exceeding legal requirements; acting in good faith driven by legitimate business necessity; and applying fair and reasonable criteria after consultation with management. It also ruled that Aguilera’s signed quitclaim barred further claims.
Petitioner’s motion for reconsideration was denied on March 8, 2018.
Issues Presented
Whether petitioner Bernilo Aguilera was validly dismissed on the ground of redundancy.
Supreme Court's Deliberation and Ruling
The Supreme Court emphasized that it is not a trier of facts, and generally upholds factual findings of lower courts unless conflicting. Here, conflict existed between the Labor Arbiter and NLRC’s findings of bad faith and the Court of Appeals’ contrary conclusion.
Redundancy, as a cause for termination under Article 298 of the Labor Code, requires:
- Written notice to employee and DOLE, at least one month prior;
- Payment of separation pay equivalent to at least one month per year of service;
- Good faith in abolishing redundant positions; and
- Fair and reasonable criteria in determining which positions and employees are redundant, considering factors like seniority, efficiency, and preferred status.
The Court found no dispute on the first two requisites, but significant disagreement on good faith and fairness of criteria.
The Court ruled for petitioner, holding that CCFPI failed to establish good faith and fair criteria because:
- The company's claim of restructuring was unsubstantiated beyond general assertions by the HR manager’s affidavit;
- The psychometric examination was submitted belatedly without explanatory context or comparison to justify retention decisions;
- Aguilera’s job functions remained substantially the same under the supposedly new position created after abolishing his;
- Two months prior to dismissal, Aguilera received merit increases and commendations, contradicting claims of unsatisfactory performance;
- The company hired new employees to perform the same functions, revealing bad faith and a subterfuge to circumvent security of tenure.
The Supreme Court reiterated precedents that an employer cannot declare redundancy without substantial proof such as documented criteria and evidence that the position is truly superfluous.
On the Quitclaim and Separation Package
The Court underscored three exceptions where a waiver or quitclaim does not bar claims:
- If obtained by fraud or deceit;
- If the consideration is unreasonable or incredible;
- If the terms are contrary to law, public policy, or prejudicial to third persons.
Because Aguilera was not g
Case Syllabus (G.R. No. 155097)
Case Background and Procedural History
- Petitioner Bernilo M. Aguilera was employed by Coca-Cola FEMSA Philippines, Inc. (CCFPI), formerly COCA-COLA BOTTLERS PHILIPPINES, INC., since July 1, 1995, initially as Refrigeration Technician and later promoted to Trade Asset Controller, Maintenance Coordinator, and ultimately Cold Drink Associate.
- Aguilera supervised maintenance work of third-party providers on electric coolers at customer stores.
- In May 2013, new management took over, renamed the company to CCFPI, and began reassessing employee positions and performances.
- In August 2013, Aguilera was informed by HR Manager Marge Del Rosario that he failed the assessment without disclosure of results and subsequently received a notice of termination effective September 6, 2013, on grounds of redundancy due to organizational restructuring and abolition of his Cold Drink Associate position.
- Petitioner contended bad faith and lack of fair justification, introducing that his position was merely split into two new positions with lower salaries but similar duties.
- Despite 18 years of loyal service and receiving a merit increase in April 2013, Aguilera’s dismissal proceeded, and he was compelled to accept a separation package and signed a Deed of Receipt, Waiver, and Quitclaim in September 2013.
- Aggrieved, Aguilera filed a complaint for illegal dismissal and money claims.
Company’s Defense and Position
- CCFPI asserted full compliance with Labor Code redundancy requisites, including:
- Conducting organizational reviews to improve efficiency and profitability.
- Outsourcing non-core activities causing redundancy.
- Assessing petitioner’s performance and qualifications, where he scored below satisfactory.
- Employing fair and reasonable criteria—assessment profiles, experience, performance ratings, salary, and location.
- Serving proper notice and submitting required reports to DOLE ahead of termination.
- Offering and paying a generous separation package exceeding the law’s minimum.
- CCFPI maintained petitioner’s quitclaim barred further claims against it.
Labor Arbiter’s and NLRC’s Findings
- Labor Arbiter Melchisedek A. Guan ruled the dismissal illegal due to:
- Lack of good faith by CCFPI in abolishing and restructuring petitioner’s position.
- Absence of fair and reasonable criteria in selecting positions declared redundant and employees dismissed.
- Noting that mere notice and quitclaim execution did not legitimize the redundancy claim.
- Ordered respondent to reinstate petitioner with payment of partial back wages, moral and exemplary damages, and attorney’s fees, offset against separation pay.
- The NLRC affirmed the Labor Arbiter’s decision with modification:
- Deleted moral and exemplary damages due to insufficient basis.
- Granted attorney’s fees.
- Confirmed company’s failure to show good faith and fair criteria.
- CCFPI’s partial motion for reconsideration was denied.
Court of Appeals’ Decision
- The Court of Appeals reversed the rulings, holding:
- CCFPI complied with all requisites for valid redundancy, notably:
- Timely notice to petitioner and DOLE.
- Payment of separation pay above statutory requirements.
- Goo
- CCFPI complied with all requisites for valid redundancy, notably: