TIERRA INTERNATIONAL V. NLRC (LABOR)

FACTS: Olivar, a shift supervisor for shipping company was dismissed from service and repatriated to the Philippines 6 months before his contract expired. Ground for dismissal: promotion of economy, efficiency, and profitability in operations and reduction of personnel whose positions are redundant or surplusage and/or reassignment of personnel to other available useful positions.

ISSUE: Was the termination of Olivar for just and valid cause:

HELD: YES. Olivar's position was deleted due to a decrease in scope of work assigned to the company. Unfortunately, there were no other available positions for which he could qualify. Other positions were also abolished, showing that he was not singled out and his termination was not arbitrary or malicious.

Redundancy exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. A position is redundant where it is superfluous and superfluity of a position may be the outcome of a number of factors such as overhiring or workers, decreased volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise.

The law does not make any distinction between a technical and non-technical position for purposes of determining the validity of termination due to redundancy. Neither does the law nor the employment contract here involved require that junior employees should first be terminated. In redundancy, what is looked into is the position itself, the nature of the services performed by the employee, and the necessity of such position.

LOPEZ SUGAR CORP V. FRANCO (LABOR)

FACTS: Lopez Sugar issued a Memorandum for the adoption of a special retirement program for selected supervisory and middle-level managers, allegedly due to over-staffing and duplication of functions. Private respondents, all supervisory employees who organized a labor union which was currently undergoing CBA negotiations with Lopez Sugar were included in its coverage and terminated from employment.

ISSUE: Was the termination of respondents by virtue of the special retirement program valid?

HELD: NO. The corporation illegally dismissed the private respondents by including them in its special retirement program, this debilitating the union, rendering it pliant by decapacitating its leadership. No standards, criteria, or guidelines for the selection of the employees to be dismisses were made known to them, and all they were told was that they had been selected for termination.

ESCAREAL V. NLRC (LABOR)

FACTS: Escareal's position as Pollution Control and Safety Manager was declared redundant.

HELD: Dismissal was illegal. PRC had no valid and acceptable basis to declare the position redundant.

If the aim was to generate savings in terms of the salaries that PRC would not be paying the employee anymore as a result of the streamlining of operations for improved efficiency, such move could hardly be justified in the face of PRC's hiring of fresh graduates for various positions. Besides, there would seem no compelling reason to save money by removing such an important position. As shown by their recent financial statements, PRC's net profits have steadily increased.

While concededly, Article 283 of the Labor Code does not require that the employer should be suffering financial losses before it could terminate the services of an employee on the ground of redundancy, it does not mean wither that a company which is doing well can effect such a dismissal whimsically or capriciously.

The position of Pollution Control and Safety Manager is required by law. Thus, it cannot be said that the services of employee are in excess of what is reasonably required by the enterprise.
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SORIANO V. NLRC (LABOR)

FACTS: PLDT utilized high technology equipment in its operations such as computers and digital switches which necessarily resulted in the reduction of the demand for the services of a switchman.

HELD: Dismissal was valid. PLDT submitted the relevant documents attesting redundancy of employing switchmen and it has also paid separation pay to the dismisses workers.

PLDT as employer, has the recognized right and prerogative to select persons to be hired and to designate the work as well as the employees to perform it. This includes the right of PLDT to determine the employees to be retained or discharged and who among the applicants are qualified and competent for a vacant position. The rationale for this principle is that PLDT is in the best position to ascertain what is proper for the advancement of its business interest. Thus, this Court cannot interfere with the wisdom and soundness of PLDT's decision as to who among the switchmen should be retained or discharged or who should be transferred to vacant positions, as long as such was made in good faith and not for the purpose of curbing the rights of the employees.

ASUFRIN V. SAN MIGUEL (LABOR)

FACTS: An illegal dismissal case which stemmed from SMC's new marketing system known as pre-selling scheme. As a consequence, all positions of route sales and warehouse personnel were declared redundant.

HELD: Dismissal was invalid. In selecting employees to be dismissed, a fair and reasonable criteria must be used such as but not limited to

1. less preferred status (e.g., temporary employee);
2. efficiency; and
3. seniority.

In the case at bar, no criterion whatsoever was adopted by the employee. Furthermore, SMC has not shown how the cessation of the employees' services would contribute to the ways and means of improving efficiency and cutting distribution overhead and other related costs.

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.