Henson v. Voyager Innovations, Inc.

THIRD DIVISION

[G.R. No. 249658. September 30, 2020.]

PACITA P. HENSON, petitioner,vs. VOYAGER INNOVATIONS, INC. AND ANGELITO MESANA VILLANUEVA, respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Third Division, issued a Resolution dated September 30, 2020, which reads as follows:

"G.R. No. 249658 (Pacita P. Henson v. Voyager Innovations, Inc.and Angelito Mesana Villanueva). — Before this Court is a Petition for Review on Certiorari1 filed by petitioner Pacita P. Henson (Henson) to assail the Decision 2 dated July 12, 2019 and the Resolution 3 dated September 27, 2019 of the Court of Appeals (CA) in CA-G.R. SP No. 158847. The CA annulled and set aside the Decision 4 dated October 22, 2018 and the Resolution 5 dated November 26, 2018 of the National Labor Relations Commission (NLRC) in NLRC LAC No. 05-001619-18. The NLRC reversed and set aside the Decision 6 dated March 14, 2018 of the Labor Arbiter in NLRC NCR-09-13830-17, which dismissed Henson's complaint 7 for illegal dismissal, underpayment of salary, non-payment of 13th month pay, separation pay, retirement benefits, illegal deduction, discrimination, damages, attorney's fees, and incorrect computation of book value against respondents Voyager Innovations, Inc. (Voyager) and Angelita Mesana Villanueva (Villanueva; collectively, respondents) but ordered them to pay her one month salary as separation pay, pro-rated 13th month pay, leave conversion, and unpaid salaries. HTcADC

Voyager is a corporation that is engaged in the development and sale of software, digital technologies, systems, devices, and applications, including maintenance and support and other products and services related thereto. 8 Some of Voyager's platforms are Smart Padala, Lendr, and Paymaya. It owns various companies that are responsible for managing these platforms, one of which is FINTQnologies Corporation (FINTQnologies). 9

Voyager hired Henson as its Associate Director for Financial Innovations on April 13, 2016. 10 On June 2016, Villanueva, head of FINTQnologies and Henson's immediate superior, informed Henson that she will be assigned to work on FINTQnologies' digital insurance business. She was tasked to replicate what she did for PhilCare, 11 another insurance company that offers its products through digital and traditional distribution channels. 12 FINTQInventures Insurance Agency (FINTQ) was incorporated on December 19, 2016. It is owned by FINTQnologies and intended to engage in the insurance business. 13

Henson led the creation of Surelite Insurance (Surelite), a digital insurance product for FINTQnologies. She cleared all decisions regarding Surelite with Villanueva. The initial target launch of Surelite was mid-March 2017 but it was rescheduled to mid-May and then to the end of May due to various issues regarding product development and delays caused by internal requirements of Voyager. On May 19, 2017, Henson assured Villanueva that Surelite will be launched by the end of May. On May 26, 2017, the day before she left for vacation to the United States of America, Henson asked Villanueva if they needed a last-minute discussion on the launching of Surelite but was told that it was unnecessary. 14

Villanueva sent a message 15 through Viber to members of the FINTQnologies group on June 1, 2017. He informed them that the launching of Surelite was postponed due its various issues. Thus, certain employees were reassigned to other projects. Villanueva made no mention of Henson. 16 On June 13, 2017, Carla Lanza (Lanza), Head of Voyager's People Group, told Henson that Villanueva no longer wanted to work with her and that the positions available in other units were suited for those less experienced than her. Two days later, Henson received a severance package worth P190,760.67. 17

Villanueva, Lanza, and Henson had a meeting on June 19, 2017 where Villanueva declared that Henson's performance was a failure because Surelite was not launched. Lanza gave Henson a notice of termination on account of redundancy with a, separation package inclusive of: (1) separation pay equivalent to one month salary; and (2) non-taxable leaves conversion. Two days later, Henson sent Lanza an email 18 stating that her dismissal was not in good faith. Thus, she submitted a counter-proposal of her severance package. 19 In response, Lanza gave her a computation of her estimated separation pay which amounted to P1,680,014.31. 20 Henson once again countered with her own computation amounting to P3,412,586.67. 21 Lanza denied her proposal. 22 Thereafter, Henson filed a complaint 23 for illegal dismissal, underpayment of salary, nonpayment of 13th month pay, separation pay, retirement benefits, illegal deduction, discrimination, damages, attorney's fees, and incorrect computation of book value against respondents.

On March 14, 2018, the Labor Arbiter rendered its Decision, 24 disposing as follows:

WHEREFORE, a Decision is hereby rendered dismissing the claim for illegal dismissal for lack of merit. However, Respondents are hereby ordered to pay Complainant one (1) month salary as separation pay, pro-rated 13th month pay, leave conversion and unpaid salaries, the computation of which is as follows:

 

SEPARATION PAY
4/15/16-6/13/17 = 1 yr.
P290,000 x 1.0 mo.	P290,000.00
Estimated Pro-rated 13th-month pay	167,777.78
Leave Conversion (2017)	266,666.67
Unpaid Salaries (June 19-Aug. 31, 2017)	725,000.00
	––––––––––––
Total	P1,449,444.45

 

All other claims are DISMISSED for lack of merit.

SO ORDERED.25 (Emphasis in the original)

The Labor Arbiter held that Henson's assignment to FINTQnologies was a valid decision of Voyager because when Henson was assigned to FINTQnologies, she was made responsible for Surelite's creation and launching and thus was responsible for the failure to launch Surelite, which caused Voyager to suffer losses in the form of expenses in the creation of Surelite and unrealized income which could have been generated by Surelite. Voyager was compelled to undertake measures to lessen its losses, eventually deciding that the functions of Henson's office could be handled by the Office of the Managing Director of FINTQnologies, in effect rendering Henson's position superfluous and redundant. Hence, Voyager had an authorized cause to dismiss her. FINTQnologies complied with the requirement by sending notice to Henson and the Department of Labor and Employment (DOLE). Upholding the validity of Henson's dismissal, the Labor Arbiter ordered the payment of separation pay, 13th month pay, leave conversion, and unpaid wages, but denied her claim for retirement benefits, damages, and attorney's fees for lack of basis. 26 Henson appealed 27 to the NLRC. aScITE

The NLRC issued its Decision 28 on October 22, 2018 granting Henson's petition, to wit:

WHEREFORE, the instant appeal is GRANTED and the Labor Arbiter's Decision dated March 14, 2018 is REVERSEDandSET ASIDE. A new one is entered declaring complainant-appellant Pacita P. Henson to have been illegally dismissed.

Accordingly, respondent-appellee Voyager Innovations, Inc. is hereby ordered to pay complainant Pacita P. Henson the following:

 

(A) Backwages
a. Basic Salary
9/1/17 – 10/22/18 = 13.70 mos. (date given)
P290,000.00 x 13.70 = P3,973,000.00
b. 13th Month pay
P3,973,000.00/12 = P331,083.33		P4,304,083.33
(B) Separation Pay
4/13/16 – 10/22/18 = 3 yrs.
P290,000.00 x 3 =		P870,000.00
(C) 13th month pay
4/13/16 – 8/31/17 = 12.60 mos.
P290,000.00 x 12.60/12 =		P304,500.00
(D) Moral Damages		P10,000.00
(E) Exemplary Damages		P10,000.00
		––––––––––––
	P5,498,583.33
(F) Attorney's Fees (10%)		P549,858.33
		––––––––––––

TOTAL AWARD	P6,048,441.66
	––––––––––––

 

SO ORDERED.29 (Emphasis in the original)

The NLRC agreed with the Labor Arbiter that respondents complied with the requirement of notice and payment of separation pay. However, it disagreed that respondents exercised good faith and applied fair and reasonable criteria in determining that Henson's position is redundant. In addition, Voyager did not submit a copy of the review of its existing personnel requirement or proof of Voyager or FINTQnologies' staffing patterns showing the non-availability of other positions for Henson in the company. Moreover, the NLRC cannot consider the nonrealization of the P25,000,000.00 profit from Surelite as proof of loss because it is inchoate. As such, Henson's dismissal was illegal and she is entitled to backwages, separation pay in lieu of reinstatement, moral damages, exemplary damages, and attorney's fees. 30

Respondents filed a Motion for Reconsideration, 31 which was denied by the NLRC. 32 Consequently, they filed a Petition for Certiorari 33 with the CA to reverse the ruling of the NLRC.

The CA granted respondents' petition, annulled and set aside the ruling of the NLRC, and reinstated the Decision dated March 14, 2018 of the Labor Arbiter in its July 12, 2019 Decision. 34 The dispositive portion of its Decision states:

WHEREFORE, premises considered, the instant petition is GRANTED. The Decision and Resolution promulgated on October 22, 2018 and November 26, 2018, respectively, by the National Labor Relations Commission — Fifth Division, are deemed ANNULLED and SET ASIDE.

Accordingly, the March 18, 2018 Decision of the Labor Arbiter is REINSTATED.

SO ORDERED. 35 (Emphasis in the original)

The CA held that all the elements for the valid implementation of a redundancy program were established in this case. First, written notices were served to Henson and the DOLE at least one month prior to the intended date of retrenchment. 36Second, Voyager offered to pay Henson separation pay equivalent to one month pay or one month pay for every year of her service, which is higher. They even offered more than what is required by law. 37Third, respondents employed good faith and used a fair and reasonable criteria in abolishing Henson's position. The downsizing and streamlining were justified by the decrease in business which was a consequence of the failure to launch Surelite. Respondents simply exercised their business judgment and management prerogative in declaring Henson's position redundant. Since Henson occupied a managerial position, respondents had a wider discretion in terminating her. 38 As for the monetary awards granted by the Labor Arbiter, the CA found no reason to disturb it because respondents already expressed their willingness to pay similar amounts in Henson's separation pay computation sheet. 39

Henson filed a Motion for Reconsideration, 40 which was denied by the CA in its Resolution 41 dated September 27, 2019. She filed a petition for review on certiorari before this Court. Henson argues that Voyager did not present evidence on the following: (1) the criteria used in determining that her position was redundant; (2) how the inclusion of her office in Villanueva's office benefited Voyager; (3) Voyager's staffing pattern showing that she cannot be assigned elsewhere; (4) review of existing personnel and valid restructuring within the company; and (5) losses suffered by Voyager as a result of the temporary deferment of Surelite. 42 Henson pointed out that Voyager had assets amounting to P3,849,521,717.00 in 2017. 43 Moreover, Henson was not employed as a project employee for Surelite. She performed other tasks that are not directly related to Surelite or the establishment of an online insurance distribution platform. Further, it was Villanueva who decided to defer the launch of Surelite. 44 Voyager also posted an advertisement looking for an employee who will perform functions similar to the functions of Henson as Associate Director-Financial Innovations. This negates Voyager's claim that Henson's position has become redundant. 45 HEITAD

Voyager also failed to send a notice at least one month prior to Henson's termination. As early as June 1, 2017, Villanueva made it clear in his Viber message 46 that Henson will not be reassigned to other projects. Nonetheless, Voyager gave her notice of termination only on June 19, 2017. The effectivity date of her termination was supposed to be on July 31, 2017 but a notice to the DOLE was sent only on July 20, 2017. Voyager's belated effort to change the effectivity date of termination to August 31, 2017 was a mere afterthought. 47 Considering that her dismissal was illegal and attended with bad faith, Henson claims that she is entitled to backwages, separation pay, moral damages, exemplary damages, and attorney's fees. She prays for the reinstatement of the ruling of the NLRC. 48

Respondents filed their Comment 49 dated March 13, 2020. They argued that the CA did not commit grave abuse of discretion in ruling that Henson was legally dismissed. Henson was given a notice of dismissal on June 19, 2017. Since it was meant to be effective on July 31, 2019, the notice is compliant with the one month requirement under the law. Voyager also notified the DOLE on July 20, 2017. They opted to delay sending the notice hoping that they could amicably settle with Henson. When it became apparent that she only wanted to receive an exorbitant amount of money, Voyager finally sent the notice of termination, moving the effectivity of Henson's termination of employment to August 31, 2017. 50

Respondents also argued that they acted in good faith in abolishing Henson's position. Henson's email to Lanza on June 13, 2017, which she submitted to prove that she was discriminated upon, was self-serving. 51 The disagreement between Henson and the other members of the team, as shown in the screenshot of the Viber messages, is common. Moreover, Villanueva was simply demanding accountability from Henson. 52 As for the product developer position posted after Henson's retrenchment, it was not meant to replace her. Henson was hired because of her experience in the financial and insurance industry while the functions of a product developer are aligned with internet technology and services. The product developer position was created as a result of the reorganization of Voyager. 53

Respondents further argued that it used fair and reasonable criteria in abolishing Henson's position. The failure to launch Surelite forced FINTQ to be conservative in its financial projections and declare losses. It had to resort to cost-saving measures to save its company. To do so, it deemed necessary to remove superfluous positions. The primary consideration was what position/s could be abolished and whose functions can be absorbed or distributed to other positions, regardless of who was occupying those positions. Henson's tasks as an Associate Director-Financial Innovations could be performed by the Managing Director and the other employees of Voyager. FINTQ, being a small start-up company, had to arrive at this decision promptly. Respondents aver that the law does not specify a set of criteria but only requires that it be fair and reasonable. This was certainly done by respondents in exercising their management prerogative to abolish Henson's position. Respondents also claim that financial losses are not necessary for redundancy. Therefore, they pray for the denial of Henson's petition. 54

The issue before Us is whether the CA erred in ruling that Henson's dismissal was valid and that she was only entitled to separation pay, 13th month pay, leave conversion, and unpaid salaries amounting to P1,449,444.45.

We deny the petition.

The issue of whether Henson's dismissal was valid is essentially factual in nature because it requires the review of the sufficiency of the evidence presented by both parties in this case. We would have refrained from ruling on this issue if not for the conflicting findings of fact of the Labor Arbiter and the CA on one hand and the NLRC on the other hand. 55

Article 298 of the Labor Code provides:

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.

Respondents claim that Henson's employment was terminated on the ground of its redundancy. Redundancy exists when the services of an employee are in excess of what is reasonably demanded by the actual requirements of the business. Based on the foregoing provision, a written notice must be served on both the employee and the DOLE at least one month prior to the intended date of termination, and separation pay equivalent to at least one month pay or at least one month pay for every year of service, whichever is higher, must be paid to the employee. ATICcS

Voyager sent a notice of dismissal to Henson on June 19, 2017 and a notice to the DOLE on July 20, 2017. Originally, Henson's dismissal was scheduled to be effective on July 31, 2017. Due to the belated notice to the DOLE, Voyager moved the effectivity date to August 31, 2017. 56 On July 23, 2017, Voyager, through Lanza, sent an email 57 to Henson informing her that the effectivity of her termination has been moved to August 31, 2017. Henson has not showed that her termination became effective prior to this date. In fact, she admitted that she continued to receive her salary until August 31, 2017. 58 As such, We find that Voyager substantially complied with the requirement for a one month prior notice to Henson and to the DOLE.

As for the requirement of separation pay, Henson admitted that Voyager offered a severance package of P1,680,014.31. She was employed in Voyager for one year, four months, and eighteen days. Accordingly, she is entitled to receive her one month's salary of P290,000.00. 59 Voyager's offer 60 is clearly greater than this amount, so it has complied with the second requirement.

Aside from the requirements of notice and separation pay, Henson also argues that Voyager failed to comply with the requirements of acting in good faith in abolishing her position and in applying a fair and reasonable criteria in determining that her position was redundant. The Court applied the requirement of fair and reasonable criteria for a valid dismissal on the ground of redundancy in Capitol Wireless, Inc. v. Sec. Confesor. 61 In CapitolWireless, Inc., 8 out of 11 couriers were dismissed on the ground of redundancy. This Court held that a fair reasonable criteria, such as but not limited to: (a) less preferred status; (b) efficiency; and (c) seniority, must be used in selecting which employees should be dismissed. 62 The necessity of the criteria in Capitol Wireless, Inc. is apparent because there are several employees occupying the same position. In comparison, Henson's position is one of its kind in Voyager. There is simply no other employee that Henson could be compared to.

Nonetheless, the fact that there was no other person that occupied the same position as Henson does not mean that her position cannot be redundant. 63 In Wiltshire File Co., Inc. v. National Labor RelationsCommission, 64 We upheld the decision of the employer to abolish the position of private respondent as Sales Manager and add his duties to the General Manager. We recognized that the employer has the prerogative to determine the necessity of retaining a position and courts will not interfere with the exercise of this prerogative unless there is abuse of discretion or merely arbitrary or malicious action. 65

Henson has not shown that Voyager acted arbitrarily or with malicious intent in declaring her position redundant. She admitted that she became acquainted with Villanueva's team while she was working on the e-commerce site of PhilCare. When she was being recruited, she was made aware that she will be working at FINTQ. 66 Villanueva stated in his Affidavit 67 that Henson was hired for her previous experience in the insurance business. It is thus clear that the primary consideration for hiring Henson was so that she could aid FINTQ in its digital insurance business. Consequently, Henson's position became unnecessary when the launch of Surelite was aborted. We reiterate our ruling that "the characterization of an employee's services as superfluous or no longer necessary and, therefore, properly terminable, is an exercise of business judgment on the part of the employer." 68 And since Henson was a managerial employee, Voyager had a wider latitude of discretion in deciding to abolish her position. This is because officers in key positions perform functions that require the employer's full trust and confidence and spell the success or failure of a business. 69 Voyager simply exercised its business judgment when it decided to transfer Henson's functions to the Office of the Managing Director, thus making her position superfluous.

The CA did not commit any reversible error in upholding the validity of Henson's dismissal and reinstating the decision of the Labor Arbiter. Nonetheless, the ruling of the Labor Arbiter must be modified insofar as it held both respondents liable to Henson. There is no basis to hold Villanueva solidarily liable with Voyager because Henson was validly dismissed. There was no bad faith on the part respondents.

WHEREFORE, the petition is DENIED. The Decision dated July 12, 2019 and the Resolution dated September 27, 2019 of the Court of Appeals in CA-G.R. SP No. 158847 are AFFIRMED with MODIFICATION in that only respondent Voyager Innovations, Inc. is held liable to pay petitioner Pacita P. Henson separation pay, 13th month pay, leave conversion, and unpaid salaries. TIADCc

SO ORDERED."

By authority of the Court:

(SGD.) MISAEL DOMINGO C. BATTUNG IIIDivision Clerk of Court

 

Footnotes

1.Rollo, pp. 9-43.

2. Penned by Associate Justice Stephen C. Cruz, with the concurrence of Associate Justices Pedro B. Corales and Ruben Reynaldo G. Roxas; id. at 48-65a.

3.Id. at 67-69.

4. Penned by Commissioner Mercedes R. Posada-Lacap, with the concurrence of Presiding Commissioner Grace E. Maniquiz-Tan and Dolores M. Peralta-Beley; id. at 394-409.

5.Id. at 422-424.

6. Penned by Labor Arbiter Lilia S. Savari; id. at 288-312.

7.Id. at 123-124.

8.Id. at 128.

9.Id. at 395.

10.Id. at 104-106.

11.Id. at 50.

12.Id. at 290.

13.Id. at 318-319.

14.Id. at 51.

15.Id. at 113.

16.Id.

17.Id. at 51-52.

18.Id. at 117.

19.Id.

20.Id. at 118.

21.Id. at 119-120.

22.Id. at 121-122.

23.Id. at 123-124.

24.Supra note 6.

25.Rollo, pp. 311-312.

26.Id. at 308-311.

27.Id. at 313-340.

28.Supra note 4.

29.Rollo, pp. 408-409.

30.Id. at 404-408.

31.Id. at 410-419.

32.Supra note 5.

33.Rollo, pp. 426-451.

34.Supra note 2.

35.Rollo, p. 65

36.Id. at 59-60.

37.Id. at 60-61.

38.Id. at 62-64.

39.Id. at 65.

40.Id. at 531-541.

41.Supra note 3.

42.Rollo, pp. 27-28, 34-36.

43.Id. at 29, 32.

44.Id. at 30-31.

45.Id. at 33.

46.Id. at 113.

47.Id. at 37.

48.Id. at 39-42.

49.Id. at 552-576.

50.Id. at 560-562.

51.Id. at 562.

52.Id. at 564.

53.Id. at 564-565.

54.Id. at 567-573.

55.Societe Internationale De Telecommunications Aeronautiques v. Huliganga, G.R. No. 215504, August 20, 2018.

56.Rollo, p. 561.

57.Id. at 242-243.

58.Id. at 83.

59.Id. at 72-73.

60. P1,680,014.31; id. at 118.

61. 332 Phil. 78 (1996).

62.Id. at 84.

63.Wiltshire File Co., Inc. v. NLRC, 271 Phil. 694, 703 (1991).

64. 271 Phil. 694 (1991).

65.Id. at 703-704.

66.Rollo, p. 72.

67.Id. at 244.

68.Smart Communications, Inc. v. Astorga, 566 Phil. 422, 437 (2008).

69.Lowe, Inc. v. Court of Appeals, 612 Phil. 1044, 1059 (2009).