Case Digest: General Milling vs. Viajar

G.R. No. 181738 : January 30, 2013



Violeta Viajar received a Letter-Memorandum from General Milling Corporation (GMC) informing her that her services are no longer needed because her position as Purchasing Staff was deemed redundant. When Viajar reported for work on October 31, 2003, a month prior the effectivity from her severance from GMC, the guard on duty prevented her from entering the companys premises. She was also asked to sign an Application for Retirement and Benefits. Viajar refused to sign. Thus, she filed a complaint for illegal dismissal.

The Labor Arbiter ruled in favor of GMC and held that the latter acted in good faith in terminating Viajar. On appeal, the NLRC affirmed LAs decision.

Viajar filed a petition before the Court of Appeals. The CA granted the petition. Thus, GMC filed this instant petition for review before the Supreme Court.

ISSUE: Whether or not Viajar was validly terminated from GMC?

HELD: The petition is denied.

LABOR LAW: redundancy; retirement; termination

Art. 283 of the Labor Code provides that redundancy is one of the authorized causes for dismissal. It is imperative that the employer must comply with the requirements for a valid implementation of the companys redundancy program, to wit: (a) the employer must serve a written notice to the affected employees and the DOLE at least one (1) month before the intended date of retrenchment; (b) the employer must pay the employees a separation pay equivalent to at least one month pay or at least one month pay for every year of service, whichever is higher; (c) the employer must abolish the redundant positions in good faith; and (d) the employer must set fair and reasonable criteria in ascertaining which positions are redundant and may be abolished.

In the case of Wiltshire File Co., Inc. v. NLRC, the Court ruled that redundancy in an employers personnel force necessarily or even ordinarily refers to duplication of work. Redundancy, for purposes of the Labor Code, exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. Succinctly put, a position is redundant where it is superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as overhiring of workers, decreased volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise.

While it is true that the characterization of an employees services as superfluous or no longer necessary and, therefore, properly terminable, is an exercise of business judgment on the part of the employer, the exercise of such judgment, however, must not be in violation of the law, and must not be arbitrary or malicious.

To exhibit its good faith and that there was a fair and reasonable criteria in ascertaining redundant positions, a company claiming to be over manned must produce adequate proof of the same. Here, GMC failed to present substantial proof to support its general allegations of redundancy. It must, however, be pointed out that in termination cases, like the one before us, the burden of proving that the dismissal of the employees was for a valid and authorized cause rests on the employer.

In Quevedo v. Benguet Electric Cooperative, Inc., the Court explained the difference between retirement and termination due to redundancy. Retirement from service is contractual (i.e. based on the bilateral agreement of the employer and employee), while termination of employment is statutory (i.e. governed by the Labor Code and other related laws as to its grounds, benefits and procedure).

Voluntary retirement cuts employment ties leaving no residual employer liability; involuntary retirement amounts to a discharge, rendering the employer liable for termination without cause.