FIRST DIVISION
[G.R. Nos. 227521-22. May 14, 2021.]
BERNARD M. TAMAYAO, EDWIN M. ANDRES, and MARILOU L. GAMMAD, petitioners,vs. COCA-COLA BOTTLERS PHILIPPINES, INC., MANUEL S. DIZON, JR., BILL SCHULTZ, and NATIONAL LABOR RELATIONS COMMISSION, respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, First Division, issued a Resolution dated May 14, 2021 which reads as follows:
"G.R. Nos. 227521-22 (Bernard M. Tamayao, Edwin M. Andres, and Marilou L. Gammad v. Coca-Cola Bottlers Philippines, Inc., Manuel S. Dizon, Jr., Bill Schultz, and National Labor Relations Commission).
This appeal assails the May 23, 2016 Decision 1 in CA-G.R. SP Nos. 137354 and 138145 promulgated by the Court of Appeals (CA) which found no grave abuse of discretion on the part of the National Labor Relations Commission (NLRC) in ruling that Bernard Tamayao (Tamayao), Edwin Andres (Andres), and Marilou Gammad (Gammad) (collectively, petitioners) were validly dismissed by respondent Coca-Cola Bottlers Philippines, Inc., through its Group Commercial Operations Director, respondent Manuel S. Dizon, Jr., and its Chief Executive Officer, respondent Bill Schultz (collectively, Coca-Cola). 2
Tamayao and Andres were District Team Leaders, while Gammad was an Administrative Assistant at Coca-Cola's Ilagan, Isabela Plant. On different dates in 2012, they each received a letter from Coca-Cola, informing them that their employment will be terminated by reason of redundancy. 3 Petitioners were offered a separation package consisting of, among others: (a) 175% separation pay per year of service for those who have served the company for less than 15 years, (b) 200% separation pay per year of service for those who have rendered service for 15 years or more, (c) commutation of earned and unused sick and vacation leaves, (d) proportionate 13th month pay, and (e) HMO coverage for 5 years, or until 65 years old, whichever comes first. 4 Coca-Cola advised the Department of Labor and Employment (DOLE) of its decision to terminate the employment of petitioners thirty (30) days prior to the effective date of their separation from the company. Subsequently, petitioners received their separation benefits and signed Deeds of Receipt, Release, Waiver and Quitclaim in favor of Coca-Cola. 5
On February 1, 2013, petitioners filed with the NLRC complaints for illegal dismissal with a prayer for reinstatement with full backwages and payment of monetary claims, damages and attorney's fees against Coca-Cola.
Petitioners Tamayao and Andres claimed that prior to the reorganization of the sales force, they were trying to organize the nineteen district team leaders to form a supervisory union. As a pre-emptive measure to the brewing unionization, Coca-Cola devised a bogus plan for all employees to take an online assessment test. However, they were not properly informed of how the test would impact their eligibility for continued employment. In this regard, Gammad claimed that she was required to take the online assessment test despite having recently given birth and undergone surgery. 6
Coca-Cola countered that it intended to improve the efficiency of its sales force. Hence, it implemented Project Everest, which aimed to redesign the job description of each position in the company's sales team to incorporate its route to market strategy and prevent the overlapping of functions. Upon implementation of this project, twelve positions were declared redundant and thus abolished, among which were the positions held by petitioners. 7 In line with its objective to retain as many employees as possible, it offered the employees holding positions that were declared redundant the opportunity to take a series of assessment tests to determine if they qualify for newly-streamlined positions. Unfortunately, Tamayao and Andres failed to yield the average score of at least 65.70, and were thus deemed unqualified. On the other hand, the position of administrative assistant previously held by Gammad was also abolished under Project Everest, after it was considered in excess of the actual needs to the sales force. 8
On October 30, 2013, Labor Arbiter Ma. Lourdes R. Baricaua (LA Baricaua) rendered a Decision 9 in favor of petitioners. She held that there was no evidence presented to prove that an objective procedure was undertaken on the conduct and implementation of Coca-Cola's redundancy scheme. The only criteria that the company employed in terminating petitioners' employment was that they did not pass the assessment tests. However, the results of the assessment tests were not even shown to them. 10 Moreover, Coca-Cola cannot claim that petitioners were estopped from questioning the validity of their dismissal since they had been paid generous amounts as severance benefits and had signed the deeds of receipt, release, waiver and quitclaim discharging the company from all claims that they may have arising from their employment. LA Baricaua opined that petitioners did not have any choice but to accept Coca-Cola's offer since they have families to support. 11 The dispositive portion of the LA's decision states:
IN VIEW THEREOF, respondent COCA-COLA BOTTLERS PHILS., INC. (CCBPI), is directed to pay complainant BERNARD M. TAMAYAO the amount of P944,134.86, complainant EDWIN M. ANDRES, the amount of P1,002,120.16 and complainant MARILOU L. GAMMAD the amount of P264,460.62, inclusive of attorney's fees, representing their backwages and proportionate 13th month pay, all in the amount of TWO MILLION TWO HUNDRED TEN THOUSAND SEVEN HUNDRED FIFTEEN PESOS & 64/100 (Php2,210,715.64), within ten (10) days from receipt hereof.
The reinstatement aspect which could either be actual or on the payroll at the option of respondents is immediately executory even pending appeal, without the need of a writ of execution.
The amount received by complainants as severance pay shall be deducted from the award of complainants.
SO ORDERED.12
Coca-Cola filed an appeal with the NLRC, which, on May 20, 2014 rendered a Decision 13 in its favor. The NLRC held that redundancy is one of the authorized causes for dismissal under Article 283 of the Labor Code. Coca-Cola complied with all the requirements for the valid implementation of its redundancy program. First, the restructuring and streamlining of petitioners' sales group were driven by the desire of Coca-Cola to maximize the efficiency and productivity of their employees and improve the company's overall operation and output. 14Second, Coca-Cola utilized fair and reasonable criteria in ascertaining which positions to declare redundant and which to abolish. 15Third, Coca-Cola complied with the notice requirement to petitioners and DOLE. 16Fourth, petitioners were paid a generous separation package which was way above the requirement of the law. 17Finally, the deeds of receipt, release, waiver and quitclaim signed by petitioners precluded them from assailing the validity of their dismissal inasmuch as these were notarized and there was no evidence indicating that their signatures were obtained through force, coercion, intimidation, threat, or stealth. 18 The dispositive portion of the NLRC decision states:
WHEREFORE, respondents' appeal is GRANTED and the Decision promulgated on 30 October 2013 is REVERSEDANDSETASIDE. A new one is hereby issued DISMISSING the complaint for lack of merit.
SO ORDERED.19
Petitioners consequently filed a petition before the CA, alleging grave abuse of discretion on the part of the NLRC in reversing the LA's decision. 20
On May 23, 2016, the CA promulgated the assailed Decision dismissing the petition. It held that the NLRC did not commit grave abuse of discretion in finding that petitioners were validly dismissed, since Coca-Cola complied with all the requisites for a valid implementation of its redundancy program. 21 The first two (2) requisites, namely, that written notice is served on both the employee and the DOLE at least a month prior to the date of termination, and payment of separation pay in the required amounts, were indisputably present. The third and fourth requisites, namely, that Coca-Cola exercised good faith and adopted fair and reasonable criteria in ascertaining which positions to be declared redundant, were also complied with. Coca-Cola fully explained in its pleadings why petitioners' positions were redundant. The employees whose positions were abolished were given the opportunity to take assessment tests to determine their competencies and qualifications. However, petitioners were deemed not qualified after they failed to reach the required average. In addition, the changes implemented affected 446 employees nationwide, which circumstance negates bad faith and arbitrariness on the part of Coca-Cola. This also showed that petitioners were not singled out due to their plan of forming a union. 22
The CA also upheld the validity of the deeds of receipt, release, waiver and quitclaim executed by petitioners. It ruled that petitioners were not coerced into signing the deeds and that there is no allegation that Coca-Cola employed fraud or deceit in making petitioners sign them. Moreover, the deeds represent a reasonable and fair settlement of petitioners' claims considering that they received more than what they were entitled to receive under the law. 23
The dispositive portion of the CA decision states:
WHEREFORE, premises considered, the Consolidated Petitions are DISMISSED.
In CA-G.R. SP No. 137354, the Decision dated 20 May 2014 and the Resolution dated 16 July 2014 of the NLRC in NLRC LAC No. 12-003409-13 are AFFIRMED.
xxx xxx xxx
SO ORDERED. 24
Hence, this petition, which essentially raises the sole issue of whether the CA erred in not finding that the NLRC acted with grave abuse of discretion amounting to lack or excess of jurisdiction in overturning the decision of the LA.
The Court's Ruling
We deny the petition.
In a Rule 45 review, We 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, and not on the basis of whether the NLRC decision on the merits of the case was correct. 25 If the NLRC ruling has basis in the evidence and the applicable law and jurisprudence, then no grave abuse of discretion exists, and the CA should accordingly dismiss the petition. If grave abuse of discretion exists, then the CA must grant the petition and nullify the NLRC ruling. In our Rule 45 review, We must deny the petition if the CA correctly acted, 26 as in this case.
Redundancy is one of the authorized causes for dismissal under Article 298 of the Labor Code. The determination that an employee's services are no longer necessary or sustainable and, therefore, properly terminable, is an exercise of business judgment of the employer. The wisdom or soundness of this judgment is not subject to discretionary review of the LA and the NLRC, provided there is no violation of law and no showing that it was prompted by an arbitrary or malicious act. In other words, it is not enough for a company to merely declare that it has become overmanned. It must produce adequate proof that such is the actual situation to justify the dismissal of the affected employees for redundancy. 27
Jurisprudence has laid down the following conditions for a dismissal on account of redundancy to be a valid exercise of management's prerogative: (1) written notice is served on both the employee and the DOLE at least one month prior to the intended date of retrenchment; (2) payment of separation pay equivalent to at least one month pay or at least one month pay for every year of service, whichever is higher; (3) good faith in abolishing the redundant position; and (4) fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished. 28
We agree with the CA's finding that Coca-Cola had satisfied all of the foregoing conditions. The first two conditions have indubitably been established, and on these petitioners raise no issue. As regards the third requisite, petitioners argue that Coca-Cola was in bad faith since it targeted Tamayao and Andres, who were on the verge of forming a union. Gammad's employment, on the other hand, was terminated even if her position was not specifically targeted by Project Everest. 29
It must be emphasized that while the company bears the burden of proving that the dismissal of employees on the ground of redundancy is justified, the onus of establishing that the company acted in bad faith lies with the employee making such allegation. This follows the basic precept that bad faith can never be presumed; it must be proved by clear and convincing evidence. 30
Here, petitioners failed to discharge their burden to prove bad faith on the part of Coca-Cola. Their allegation that the company acted with ill motive in implementing its redundancy program is speculative at best. Records show that Coca-Cola implemented a nationwide reorganization, which precludes a finding that petitioners' employment had been handpicked for termination. As found by the CA:
In addition, the changes implemented affected about four hundred [forty-six] (446) employees nationwide. Hence, We find that Tamayao, et al., were never singled out due to their plan of forming a union when they were dismissed; negating bad faith and arbitrariness on the part of CCBPI. In this connection, Pantoja v. SCA Hygiene Products Corporation is instructive:
"As long as no arbitrary or malicious action on the part of an employer is shown, the wisdom of a business judgment to implement a cost saving device is beyond this court's determination. After all, the free will of management to conduct its own business affairs to achieve its purpose cannot be denied." 31
The fourth and final requisite for the validity of an employee's dismissal on account of redundancy, namely, that a fair and reasonable criteria in ascertaining what positions are to be declared redundant, has also been satisfied in this case. Coca-Cola explained that all twelve (12) positions in the sales team, including the district team leader positions held by Tamayao and Andres, have been abolished and the functions performed by the employees holding those positions declared redundant. The company developed a streamlined sales team by simplifying the roles of the various positions. 32 The result is the creation of six (6) positions. The functions of the district team leader and three other abolished positions were assumed by the new position of field sales manager. 33
Likewise, the position of administrative assistant formerly held by Gammad was abolished under Project Everest, and its functions assumed by the Group Sales Operations Specialists. By simplifying and combining the roles of the administrative assistant and Group Sales Operation Specialist, Gammad's position was considered in excess of the actual needs of the sales force. 34
It is thus clear that the positions held by petitioners were declared redundant pursuant to the nationwide restructuring of Coca-Cola's sales force under Project Everest. Coca-Cola did not specifically target the positions held by petitioners, nor the petitioners themselves. On the contrary, the move was in line with the overall strategy adopted by the company to reduce costs and improve the efficiency of its sales operations, which in themselves are fair and reasonable criteria.
It is settled that the employer has no legal obligation to keep in its payroll more employees than are necessary for the operation of its business. The determination of the continuing necessity of a particular office or position in a business corporation is management's prerogative, and the courts will not interfere with the exercise of such so long as no abuse of discretion or merely arbitrary or malicious action on the part of management is shown. 35
Petitioners' argument that Coca-Cola did not employ fair and reasonable criteria in ascertaining the positions to be declared redundant failed to consider the larger-scale and legitimate business interest of the company. On the contrary, the argument zeroed-in on the assessment tests that petitioners were required to take. Coca-Cola allegedly compelled them to take these tests without any clear explanation of their purpose, as well as the formula to compute the passing mark. There was also no transparency on the scope and coverage of the tests, and individual ratings were not shown to the examinees. 36
As established by the record, however, the restructuring of Coca-Cola's sales force was not determined by the results of these assessment tests. Stated another way, even if the tests were not administered to petitioners, Project Everest would still have existed, in which petitioners' former positions are abolished and their functions considered redundant. Coca-Cola explained that the assessment tests were mere accommodations given to redundated employees to determine whether they qualified for the newly-created positions. 37 In other words, to see whether they may be retained or rehired. It is settled that under the doctrine of management prerogative, every employer has the inherent right to regulate, according to his own discretion and judgment, all aspects of employment, including the hiring of employees. 38 Thus, as with the implementation of Coca-Cola's redundancy program, dispensing of the assessment tests is an exercise in business judgment, the wisdom or soundness of which is already beyond the discretionary review of the courts.
As a final argument, petitioners attribute error on the part of the CA in sustaining the NLRC's view that the deeds of receipt, release, waiver and quitclaim precluded petitioners from assailing the validity of their dismissal. 39
In Philippine Carpet Manufacturing Corporation v. Tagyamon40 We have held that, as a rule, deeds of release and quitclaim cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal. The acceptance of those benefits would not amount to estoppels. But, to excuse employees from complying with the terms of their waivers, they must locate their case within any of the following three narrow grounds, namely: (1) the employer used fraud or deceit in obtaining the waivers; (2) the consideration the employer paid is incredible and unreasonable; or (3) the terms of the waiver are contrary to law, public order, public policy, morals, or good customs or prejudicial to a third person with a right recognized by law. None of these circumstances obtain in the case at bar.
In sum, the NLRC arrived at its decision based on the evidence presented before it, and made conclusions based on the law and prevailing jurisprudence. We thus agree with the CA that the challenged NLRC decision is not tainted with grave abuse of discretion.
WHEREFORE, the petition is DENIED. The Court of Appeals May 23, 2016 Decision and October 5, 2016 Resolution in CA-G.R. SP Nos. 137354 and 138145, are AFFIRMED.
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. 9-29; penned by Associate Justice Renato C. Francisco, with Associate Justices Apolinario D. Bruselas, Jr. and Danton Q. Bueser, concurring.
2.Id. at 626.
3.Id. at 11.
4.Id. at 13-14.
5.Id. at 14.
6.Id. at 12.
7.Id. at 12-13.
8.Id. at 13.
9.Id. at 626-634.
10.Id. at 631-632.
11.Id. at 632.
12.Id. at 634.
13.Id. at 376-387.
14.Id. at 382.
15.Id. at 383.
16.Id. at 384.
17.Id.
18.Id.
19.Id. at 387.
20.Id. at 18-19.
21.Id. at 21-23.
22.Id. at 23-24.
23.Id. at 24-25.
24.Id. at 32.
25.Career Philippines Shipmanagement, Inc. v. Serna, 700 Phil. 1, 9 (2012).
26.Manggagawa ng Komunikasyon sa Pilipinas v. PLDT, 809 Phil. 106, 122 (2017).
27.Asufrin Jr. v. San Miguel Corporation, 469 Phil. 237, 244-245 (2004).
28.Abbott Laboratories (Phils.), Inc. v. Torralba, 820 Phil. 196, 211 (2017).
29.Rollo, p. 72.
30.Mejila v. Wrigley Philippines, Inc., G.R. No. 199469, September 11, 2019.
31.Rollo, pp. 23-24.
32.Id. at 755.
33.Id. at 756.
34.Id. at 757.
35.Wiltshire File Co. v. NLRC, 271 Phil. 694, 704 (1991).
36.Rollo, pp. 73-76.
37.Id. at 772-773.
38.Rural Bank of Cantilan, Inc. v. Julve, 545 Phil. 619, 624 (2007).
39.Rollo, p. 81
40. 723 Phil. 562 (2013).