Asufrin, Jr. vs. San Miguel Corporation

An employer claiming redundancy as an authorized cause for dismissal must produce adequate proof that the position is genuinely superfluous and must observe fair and reasonable criteria in selecting employees for termination; failure to do so renders the dismissal illegal.

Petitioner was hired by respondent San Miguel Corporation (SMC) in 1972, eventually becoming a regular monthly-paid Stock Clerk and later a Warehouse Checker at the Sum-ag Sales Office. In 1996, SMC implemented a "pre-selling scheme" at the Sum-ag office, declaring all route sales and warehouse personnel positions redundant. Employees were given the option to avail of an early retirement package or be redeployed. Petitioner explicitly manifested his willingness to be redeployed, even accepting a demotion, but was informed that he had availed of the early retirement package and was subsequently dismissed.

• Employment and Reorganization: Petitioner was hired by SMC in 1972, became a regular forklift operator in 1973, and was promoted to Stock Clerk in 1981. Following a 1984 reorganization, he was designated Warehouse Checker at the Sum-ag Sales Office.
• Pre-selling Scheme: On April 1, 1996, SMC implemented a "pre-selling scheme" at the Sum-ag Beer Sales Office, declaring all route sales and warehouse personnel positions redundant and notifying DOLE of the retirement of 22 personnel. The Sum-ag Sales Office was ordered closed effective April 30, 1996.
• Retirement vs. Redeployment: Affected employees were offered an early retirement package or redeployment to the Sta. Fe Brewery or other sales offices. Petitioner opted to remain and manifested his willingness to be assigned to any job, even accepting a demotion, as he had children in college.
• Alleged Retirement and Dismissal: Despite his manifestation, petitioner was informed by the Acting Personnel Manager that his name was included in the list of employees who availed of early retirement. His requests for assignment were ignored.
• Indicia of Bad Faith: Several circumstances undermined the validity of the redundancy. Other employees who did not request redeployment were absorbed or reassigned. Petitioner remained on the payroll of the Sta. Fe Brewery, where vacancies existed. The Sum-ag Warehouse continued to be used for warehousing activities and as a transit point. No fair criteria were used in selecting petitioner for dismissal. Furthermore, petitioner had previously incurred the ire of a superior for exposing irregularities.

• Not Singled Out: The appellate court erred in holding that petitioner was not singled out for termination, given that other similarly situated employees who did not request redeployment were reassigned.
• Misapprehension of Redundancy: The appellate court misapprehended the facts in affirming that petitioner's position became redundant, as warehousing operations at Sum-ag continued.
• Invalid Dismissal: The dismissal was invalid for lack of just or authorized cause and was effected in bad faith.
• Denial of Reliefs: The appellate court erred in dismissing the reliefs prayed for despite evidence of illegal dismissal.

• Authorized Cause: Dismissal was based on redundancy, an authorized cause under the Labor Code, arising from the implementation of the pre-selling scheme.
• Business Judgment: The determination of redundancy is an exercise of business judgment that is not subject to the discretionary review of labor tribunals, provided there is no violation of law or malice.
• No Singling Out: Petitioner was not singled out, as the redundancy program adversely affected 22 personnel in the sales department.

• Validity of Dismissal: Whether the dismissal of petitioner on the ground of redundancy was for a just and authorized cause.
• Conflicting Administrative Findings: Whether the conflicting factual findings of the Labor Arbiter and the NLRC warrant a review by the Supreme Court to determine which findings are more conformable to evidentiary facts.

• Validity of Dismissal: The dismissal was declared illegal. Redundancy as an authorized cause requires adequate proof that the position is superfluous. SMC failed to substantiate the redundancy given that warehousing operations at Sum-ag continued, and vacancies existed at the Sta. Fe Brewery where petitioner was assigned. Furthermore, SMC failed to observe fair and reasonable criteria in selecting employees for dismissal, violating the fundamentals of good faith. The early retirement offer was a "Hobson's choice" that did not genuinely offer continued employment.
• Conflicting Administrative Findings: The conflicting findings between the Labor Arbiter and the NLRC warranted the Court's exercise of equity jurisdiction to determine which findings aligned with the evidentiary facts, setting aside the general rule that administrative findings are binding.

• Redundancy as an Authorized Cause — 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, which may result from overhiring, decreased volume of business, or dropping of a product line. A mere declaration of being overmanned is insufficient; the employer must produce adequate proof that the redundancy is the actual situation to justify dismissal.
• Criteria for Selecting Employees for Dismissal — In selecting employees to be dismissed on the ground of redundancy, a fair and reasonable criteria must be used, such as: (a) less preferred status, e.g., temporary employee; (b) efficiency; and (c) seniority.
• Business Judgment in Termination — The determination that an employee's services are no longer necessary is an exercise of business judgment; however, it is not subject to discretionary review only provided there is no violation of law and no showing that it was prompted by an arbitrary or malicious act.

• "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."
• "We do not treat our workers as merchandise and their right to security of tenure cannot be valued in precise peso-and-centavo terms. It is a right which cannot be allowed to be devalued by the purchasing power of employers who are only too willing to bankroll the separation pay of their illegally dismissed employees to get rid of them."

• Dole Philippines, Inc. v. NLRC, 417 Phil. 428 (2001) — Followed; explained the nature of redundancy as an authorized cause, citing Wiltshire File.
• Wiltshire File Co., Inc. v. NLRC, G.R. No. 82249, Feb. 7, 1991 — Followed; leading case defining redundancy.
• San Miguel Corporation v. NLRC, G.R. No. 107693, July 23, 1998 — Followed; rejected SMC's termination reasons for the same Sum-ag Sales Office, establishing that the offer to employees was a "Hobson's choice."
• Capital Wireless, Inc. v. Confesor, 332 Phil. 78 (1996) — Followed; cited for the fair and reasonable criteria to be used in selecting employees for dismissal.
• Palmeria v. NLRC, G.R. Nos. 113290-91, Aug. 3, 1995 — Followed; cited for the principle that workers are not merchandise and security of tenure cannot be valued in monetary terms.

• Article 283, Labor Code — Governs authorized causes for termination, including redundancy. Applied as the statutory basis for the redundancy claim, which was ultimately rejected for lack of bona fides and failure to observe fair criteria.

Davide, Jr., C.J. (Chairman), Carpio, J., and Azcuna, J.