Coca-Cola Bottlers Philippines, Inc. v. Guanzon

FIRST DIVISION

[G.R. No. 241691. July 14, 2021.]

COCA-COLA BOTTLERS PHILIPPINES, INC. [NOW COCA-COLA FEMSA PHILIPPINES], petitioner, vs.GILBERT B. GUANZON, PEDRO SAN DIEGO ACOSTA, IRENEO MULE PAZ, AND VIVENCIO VEGA VILLAMIN [JR.], 1respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution datedJuly 14, 2021which reads as follows:

"G.R. No. 241691 (Coca-Cola Bottlers Philippines, Inc. [now Coca-Cola FEMSA Philippines], Petitioner, v. Gilbert B. Guanzon, Pedro San Diego Acosta, Ireneo Mule Paz, and Vivencio Vega Villamin [Jr.], Respondents.) — This Petition for Review on Certiorari2 (Petition) seeks to reverse and set aside the Decision 3 dated 15 March 2018 and Resolution 4 dated 20 August 2018 of the Court of Appeals (CA) in CA-G.R. SP No. 147598. The CA granted the petition for certiorari filed by Gilbert B. Guanzon (Guanzon), Pedro San Diego Acosta (Acosta), Ireneo Mule Paz (Paz), and Vivencio Vega Villamin, Jr. 5 (Villamin) (collectively, respondents).

Antecedents

Respondents were employed by petitioner Coca-Cola Bottlers Phils., Inc., now Coca-Cola FEMSA Philippines (CCBPI), as Sales Route Drivers and Helpers in the latter's Calamba plant. In 2007, the company abolished the designation, "Sales Route Drivers and Helpers," and created new positions called Account Developers which respondents held. 6

In the first quarter of 2012, CCBPI implemented a redundancy program called "Project Everest." Consequently, all the positions in the sales team were abolished, including Account Developers. The redesigned sales team created new positions, which includes General Sales Executive (GSE), among others. The CCBPI thereafter assessed the affected employees to determine skills, competencies, and qualifications to the new streamlined positions. After assessment and evaluation, the company, in separate letters of termination/offer dated 13 February 2012, informed Acosta, Paz, and Villamin that they possessed the required competencies and qualifications of a GSE, and thus, they would be appointed as such. However, said respondents declined the appointment. Thus, CCBPI informed them that inasmuch as their positions as Account Developers had been declared redundant, they would be separated from employment effective 31 March 2012. 7

Guanzon, on the other hand, refused to undergo the assessment for the new position. In a letter dated 17 February 2012, he was informed by CCBPI that his current position as Account Developer had been rendered redundant. Considering that CCBPI was unable to find a suitable alternative employment for him within the new organizational set-up, Guanzon's employment was to be terminated effective 31 March 2012. 8

Respondents received a separation package with the following components: 175% separation pay per year of service (below 15 years); 200% separation pay per year of service (15 years and above); commutation of earned and unused sick leave/vacation leave (SL/VL); proportionate 13th month pay; health maintenance organization (HMO) coverage for five (5) years (or until 65 years old, whichever comes first); and, Managing Change Workshop. Thereafter, respondents executed their respective Deed of Receipt, Release, Waiver and Quitclaim. Notice of the redundancy program was also sent to the Department of Labor and Employment (DOLE) thirty (30) days prior to the effective date of respondents' separation. 9

Respondents subsequently filed a complaint for illegal dismissal with prayer for full backwages, reinstatement, damages, and attorney's fees. They contended that they were compelled to sign the letters dated 13 February 2012 (for Acosta, Paz, and Villamin) and 17 February 2012 (for Guanzon) confirming that they were terminated because they were told that there were no available positions to which they could be transferred. They later found out that their former job positions had been occupied by newly-hired employees deployed by CCBPI through The Redsystems Company, Inc. (TRCI) which was acting as its labor-only contracting agency and solely servicing CCBPI nationwide. In addition, they claimed that CCBPI offered to transfer them to TRCI, thus, they were dismissed in the guise of redundancy in order to undermine their security of tenure and their benefits as long-time regular employees of the company. 10

CCBPI, for its part, denied contracting out the services previously performed by its former employees on the sales team. Rather, it was the logistics functions of the Product Availability Group that were contracted out to TRCI, not the sales. It likewise denied the claim that it offered to transfer respondents to TRCI. In fact, respondents Acosta, Paz, and Villamin were offered the new position of GSE but they declined. The company further alleged that it strictly complied with the requirements of the law by serving respondents a written notice, notifying the DOLE, and paying separation pay. It acted in good faith in the implementation of its redundancy program. 11

Ruling of the LA

In his Decision 12 dated 25 November 2015, the Labor Arbiter (LA) dismissed the complaint for lack of merit. The LA found that the termination of the services of respondents due to redundancy was not only legal but done in good faith, in accordance with the procedural requirement set by law. 13

Aggrieved, respondents filed an appeal with the National Labor Relations Commission (NLRC). 14

Ruling of the NLRC

In its Decision 15 dated 29 April 2016, the NLRC denied the appeal. The redundancy program was an exercise of management prerogative which was implemented in good faith. The company applied fair and reasonable criteria in the selection of employees who will be dismissed due to redundancy when it declared as redundant all the previous positions in the sales team. 16

Dissatisfied with the ruling of the NLRC, respondents filed a motion for reconsideration, which the NLRC denied in its Resolution 17 dated 20 June 2016. Respondents, thereafter, sought recourse to the CA by filing a petition for certiorari. 18

Ruling of the CA

In its Decision dated 15 March 2018, the CA reversed and set aside the decision and resolution of the NLRC. The CA held that the company failed to show substantial evidence showing that respondents' positions were superfluous or that their services were in excess of what was required by the company. 19 The dispositive portion of the Decision reads:

WHEREFORE, the petition is GRANTED. The 29 April 2016 Decision and the 20 June 2016 Resolution of the National Labor Relations Commission in NLRC SRAB-IV-06-06036-14-L NLRC LAC NO. 03-000775-16 are hereby REVERSED and SET ASIDE. Accordingly, petitioners' dismissal is declared illegal, and respondent company is ordered to reinstate them to their former or equivalent positions, with full backwages without loss of seniority rights, which include allowances and other benefits or their monetary equivalent, from the time their compensation was withheld until their actual reinstatement. However, in the higher interest of justice, petitioners are ordered to return the separation pay paid to them by respondent company.

The case is REMANDED to the Labor Arbiter for execution and for the proper determination of petitioners' full backwages, less the separation pay they have received from respondent company.

SO ORDERED.20

The company subsequently moved for reconsideration, but the CA denied the motion in its Resolution 21 dated 20 August 2018. Hence, the filing of the instant petition before this Court.

Issue

The sole issue in this case is whether or not respondents were legally dismissed from employment on the ground of redundancy.

Ruling of the Court

Preliminarily, the Court notes that when a decision of the CA under a Rule 65 petition is brought to this court by way of a petition for review under Rule 45 only questions of law may be decided upon. 22 In ruling for legal correctness, we have to view the CA decision in the same context that the petition for certiorari it ruled upon was presented to it; we have to examine the CA decision from the prism of whether it correctly determined the presence or absence of grave abuse of discretion in the NLRC decision before it, not on the basis of whether the NLRC decision on the merits of the case was correct. In other words, we have to be keenly aware that the CA undertook a Rule 65 review, not a review on appeal, of the NLRC decision challenged before it. 23

In labor cases, grave abuse of discretion may be ascribed to the NLRC when its findings and conclusions are not supported by substantial evidence. Thus, if the NLRC's ruling has basis in the evidence and the applicable law and jurisprudence, then no grave abuse of discretion exists and the CA should so declare and, accordingly, dismiss the petition. 24 Otherwise stated, a Rule 45 petition can prosper only if the CA failed to correctly determine whether the NLRC gravely abused its discretion. 25

In the instant petition, both the LA and the NLRC recognized the existence of redundancy. The CA, however, found that the NLRC committed grave abuse of discretion considering that CCBPI failed to show that it utilized a fair and reasonable criterion in dismissing respondents.

The Court grants the Petition.

Article 298 26 of the Labor Code lists redundancy as an authorized cause for termination of employment. Employers resort to redundancy when "the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise." It can be due to "a number of factors, such as the overhiring of workers, a decrease in the volume of business or the dropping of a particular line or service previously manufactured or undertaken by the enterprise." The determination of whether the employees' services are no longer necessary or sustainable, and therefore, properly terminable for redundancy, is an exercise of business judgment. In making such decision, however, management must not violate the law nor declare redundancy without sufficient basis. To ensure that the dismissal is not implemented arbitrarily, jurisprudence requires the employer to prove, among others, its good faith in abolishing the redundant positions as well as the existence of fair and reasonable criteria in the selection of employees who will be dismissed from employment due to redundancy. Such fair and reasonable criteria may include, but are not limited to: (a) less preferred status, i.e., temporary employee; (b) efficiency; and (c) seniority. 27

A perusal of the affidavit 28 of Raoul Arnel M. Garcia (Garcia), CCBPI's HR Director, reveals the reason for the implementation of "Project Everest." Garcia explained that the company was experiencing difficulty in ascribing responsibilities to the different positions on its sales team. There were several layers in the hierarchy that made it difficult for managers to oversee the work product of the employees. This resulted in waste and misuse of company resources, imprecise work boundaries, and reduced efficiency among employees' performance. As a result, "Project Everest" was implemented in its attempt to sustain its business and to enhance its Route to Market strategy. To address the company's operational problems, the sales team was restructured by abolishing all the positions therein and rendering redundant the functions performed by the employees occupying said positions. In its stead, the company developed a streamlined sales team, resulting in the removal of unnecessary layers of control for efficiency, faster decision-making, and increased accountability.

Clearly, there was a need to improve the company's sales force effectiveness. Thus, the company, in the exercise of its management prerogative, streamlined and abolished all the positions in the sales team, including those held by respondents, and created new ones. The fair and reasonable criteria to determine which employees should be dismissed from service does not find any application in the instant case, considering that the services of all employees under the sales team had been terminated. Since all the positions in the sales team were abolished, the CA erred in ruling that the company still needed to choose who among the employees should be dismissed, to which the fair and reasonable criteria requisite is pertinent. 29

Aside from the affidavit of Garcia showing the need to implement a redundancy program, CCBPI submitted other documentary evidence showing that respondents' employment was terminated due to redundancy — (a) letters informing respondents of the termination of their services due to redundancy, (b) deeds of receipt, release, waiver and quitclaim executed by respondents upon receipt of the separation package, and (c) letters notifying the DOLE of respondents' impending termination from work, along with other employees, on ground of redundancy.

Respondents claim that the company had been hiring employees provided by its labor-only contractor, TRCI, who performed the same job functions previously carried out by them thus, negating redundancy. 30 This was denied by the company which countered that it was only the logistics functions which was being contracted out, not the one on sales. In any case, it was held in Coca-Cola Femsa Philippines v. Macapagal31 that the implementation of the redundancy program is not destroyed by the employer's act of availing the services of an independent contractor to replace the services of the terminated employees, as when the company availed of TRCI's services.

Furthermore, the Court finds that the quitclaims executed by respondents are valid. Case law provides that not all quitclaims are per se invalid or against public policy; they shall be recognized as valid and binding undertakings where it is shown that the persons making the waiver did so voluntarily, with full understanding of what they were doing, and the considerations therefor are sufficient and reasonable, as in this case. Notably, there was no showing that respondents were forced or tricked into signing the release documents pursuant to the valid redundancy program. Indeed, the law steps in to annul quitclaims only where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of the settlement are unconscionable on its face, but neither of these circumstances are present here. 32

As correctly observed by the NLRC, by signing the Deed of Receipt, Release, Waiver and Quitclaim, respondents duly acknowledged their separation from employment due to redundancy. There was no showing that they were forced or tricked by the company to sign the said document. It was not even established that they were gullible or unlearned persons. Respondents even received generous redundancy packages. 33

In all, there was no grave abuse of discretion on the part of the NLRC in holding that respondents were validly dismissed on the ground of redundancy.

WHEREFORE, premises considered, the instant Petition for Review on Certiorari is hereby GRANTED. Accordingly, the Decision dated 15 March 2018 and Resolution dated 20 August 2018 of the Court of Appeals in CA-G.R. SP No. 147598, are hereby REVERSED and SET ASIDE and a new one is hereby rendered REINSTATING the 29 April 2016 Decision and the 20 June 2016 Resolution of the National Labor Relations Commission in NLRC SRAB-IV-06-06036-14-L (NLRC LAC NO. 03-000775-16).

SO ORDERED."

By authority of the Court:

(SGD.) LIBRADA C. BUENADivision Clerk of Court

By:

MARIA TERESA B. SIBULODeputy Division Clerk of Court

 

Footnotes

1.Rollo, pp. 142, 169, 186.

2.Id. at 3-46.

3.Id. at 59-67; Penned by CA Associate Justice Socorro B. Inting and concurred in by Associate Justices Apolinario D. Bruselas, Jr. and Rafael Antonio M. Santos of the Twelfth (12th) Division, Court of Appeals, Manila.

4.Id. at 69-74.

5. Referred to as Vivencio Vega Villamin in some parts of the record.

6.Rollo, pp. 60-61.

7.Id. at 244, 302-303.

8.Id. at 303.

9.Id. at 304.

10.Id. at 61-62, 305.

11.Id. at 305-306.

12.Id. at 158-167; Penned by Labor Arbiter Rennell Joseph R. Dela Cruz.

13.Id. at 167.

14.Id. at 301.

15.Id. at 301-315; Penned by Commissioner Mercedes R. Posada-Lacap and concurred in by Presiding Commissioner Grace E. Maniquiz-Tan and Commissioner Dolores M. Peralta-Beley of the Fifth Division, National Labor Relations Commission, Quezon City.

16.Id. at 312-313.

17.Rollo, p. 60.

18.Records, p. 440.

19.Id. at 64.

20.Id. at 66.

21.Id. at 69-74.

22.Fuji Television Network, Inc. v. Espiritu, 749 Phil. 388 (2014), G.R. Nos. 204944-45, 03 December 2014 [Per J. Leonen].

23.Career Philippines Shipmanagement, Inc. v. Serna, 700 Phil. 1 (2012), G.R. No. 172086, 03 December 2012 [Per J. Brion], citing Montoya v. Transmed Manila Corporation, 613 Phil. 696 (2009), G.R. No. 183329, 27 August 2009 [Per J. Brion].

24.Coca-Cola Femsa Philippines v. Macapagal, G.R. No. 232669, 29 July 2019 [Per J. Perlas-Bernabe], citing Quebral v. Angbus Construction, Inc., 798 Phil. 179, 188 (2016), G.R. No. 221897, 07 November 2016 [Per J. Perlas-Bernabe].

25.Coca-Cola Femsa Philippines v. Macapagal, id., citing Manggagawa ng Komunikasyon sa Pilipinas v. Philippine Long Distant Telephone Co., Inc., G.R. Nos. 190389 & 190390, 19 April 2017, 823 SCRA 593, 611 [Per J. Leonen].

26. ARTICLE 298. [283] Closure of Establishment and Reduction of Personnel. — The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year.

27.Coca-Cola Femsa Philippines v. Macapagal, supra at note 24.

28.Rollo, pp. 240-243.

29.Coca-Cola Femsa Philippines v. Macapagal, supra at note 24.

30.Rollo, p. 65.

31.Coca-Cola Femsa Philippines v. Macapagal, supra at note 24.

32.Id.

33.Rollo, p. 314.