Case Digest: Morales v. Metrobank

G.R. No. 182475 : November 21, 2012




Sometime in August 1992, petitioner Lenn Morales (Morales) was hired by Solidbank as Teller for its Rizal Avenue Branch in Tacloban City. With said banks merger with respondent Metropolitan Bank & Trust Company (Metrobank), the latter absorbed Morales and assigned him to its Customer Service Relations-Reserve Pool (CSR-RP) which was composed of employees who, with no permanent places of assignment, acted as relievers whenever temporary vacancies arise in other branches.

Morales was later-on promoted as a Customer Service Representative (CSR). Federico Mariano, the Senior Manager of Metrobank, informed Morales that he was covered by the banks Special Separation Program (SSP) and that, in accordance therewith, his employment was going to be terminated on the ground of redundancy.

On 27 August 2003, Morales was furnished a copy of a memorandum of the same date informing him that, after a review of its organizational structure, Metrobank had found his services redundant and will consider him separated effective 1 October 2003. Assured that his termination was through no fault of his own but mainly due to business exigencies and developments in the banking industry, Morales was notified that he shall be paid the following: (a) a redundancy premium/separation pay, on top of his entitlements under the banks retirement plan; (b) proportionate 13th month pay; (c) cash conversion of his outstanding vacation and sick leave credits; and, if applicable, (d) the return of his Provident Fund contributions; and, (e) cash surrender value of his Insurance. Morales then executed Release, Waiver and Quitclaim acknowledging receipt of the sum of P158,496.95 as full payment of his monetary entitlements. However, Morales filed against Metrobank a complaint for illegal dismissal.

The Labor Arbiter ruled that Morales was illegally dismissed. The NLRC reversed the Labor Arbiter. On appeal, the Court of Appeals sustained the NLRC.

ISSUE: Whether or not Morales was illegally dismissed?

HELD: The petition is bereft of merit.

LABOR LAW: redundancy; quitclaim

One of the authorized causes for the dismissal of an employee, redundancy exists when the service capability of the workforce is in excess of what is reasonably needed to meet the demands of the business enterprise. For the implementation of a redundancy program to be valid, however, the employer must comply with the following requisites: (1) written notice served on both the employees and the DOLE at least one month prior to the intended date of termination of employment; (2) payment of separation pay equivalent to at least one month pay for every year of service; (3) good faith in abolishing the redundant positions; and (4) fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished.

Contrary to the first and second errors Morales imputes against the CA, our perusal of the record shows that Metrobank has more than amply proven compliance with the third and fourth of the above-enumerated requisites for the validity of his termination from service on the ground of redundancy. Under the SSP which Metrobank adopted in 1995, employees who voluntarily gave up their employment were paid the amount of separation pay they were entitled under the law and a premium equivalent to 50%-75% of their salaries. It appears that employees "whose work evaluation showed consistent poor performance and/or those who had not been promoted for five years" were also considered primary candidates for optional separation from service.

In implementing a redundancy program, it has been ruled that the employer is required to adopt a fair and reasonable criteria, taking into consideration such factors as (a) preferred status; (b) efficiency; and (c) seniority, among others. As these employees had no permanent place of assignment and merely acted as relievers whenever temporary vacancies arise in other branches, they were the most logical candidates for inclusion in the SSP.

Morales next insists that Metrobank failed to comply in good faith with the notice requirement under Article 283 of the Labor Code which allows the employer to terminate the employment of any employee due to redundancy by serving a written notice on the worker and the DOLE at least one (1) month before the intended date thereof. Intended to enable the employee to prepare himself for the legal battle to protect his tenure of employment and to find other means of employment and ease the impact of the loss of his job and his income, said notice requirement is also designed to allow the DOLE to ascertain the verity of the cause for the termination. As correctly determined by the CA, Metrobanks compliance with this requirement is evident from its service of the 27 August 2003 notice of termination upon Morales on the same date, effective 1 October 2003 or 30 days after the date of said notice.

While it may be accepted as ground to annul a quitclaim if the consideration is unconscionably low and the employee was tricked into accepting it, dire necessity is not, however, an acceptable ground for annulling the release when it is not shown that the employee has been forced to execute it. This Court has held that not all quitclaims are per se invalid or against public policy, except (1) where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or (2) where the terms of settlement are unconscionable on their face. These two instances are not present in this case.

Petition is DENIED.