121. Wiltshire file Co. v. NLRC and Ong, GR No. 82249, Feb.

7, 1991

FACTS: Private respondent Vicente Ong was the Sales Manager of petitioner
Wiltshire File Co., Inc. (Wiltshire) from 1981 to 1985. In 1985, upon Ong’s return
from a trip abroad, he was informed thru a letter which formally informed him that
his services were being terminated upon the ground of redundancy. Ong filed a
complaint for illegal dismissal alleging that his position could not possibly be
redundant because nobody in the company was then performing the same duties,
but only him. Wiltshire contends that Ong’s dismissal was justified because the
company had been incurring business losses beginning 1984 and that it was
compelled to reduce the size of its personnel force. Hence, Ong’s position as Sales
Manager of the company became redundant. The Labor Arbiter declared the
termination of Ong’s services as illegal and ordered Wiltshire to pay Ong
backwages, unpaid salaries and other benefits. NLRC affirmed the decision of the
Labor Arbiter on the reason that the supposed duplication of work of Ong and Mr.
Deliva, the Vice-President is absent that would justify redundancy. Wiltshire
contends that redundancy as a cause for termination does not necessarily mean
duplication of work but “a situation where the services of an employee are in
excess of what is demanded by the needs of an undertaking.”
ISSUE: Was Ong illegally terminated?
DECISION: NO. Wiltshire had serious financial difficulties before, during and after
the termination of the services of Ong, which resulted to the latter’s retrenchment.
While Wiltshire’s termination letter used the word "redundant" as ground for Ong’s
termination, that letter also referred to the company having "incurred financial
losses which compelled it to resort to retrenchment to prevent further losses". In
effect, the letter states that because of financial losses, retrenchment was
necessary, which retrenchment in turn resulted in the redundancy of Ong’s position.
Redundancy in an employer’s personnel force does not necessarily or even
ordinarily refers to duplication of work. That no other person was holding the same
position that private respondent held prior to the termination of his services, does
not show that his position had not become redundant. 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.

NOTE; DUE PROCESS:

Termination of an employee's services because of retrenchment to prevent further

losses or redundancy, is governed by Article 283 of the Labor Code which provides
as follows:

Art. 283. Closure of establishment and reduction of personnel. –– The

employer may also terminate the employment of any employee due to the
installation of labor saving devices, redundancy, retrenchment to prevent
losses or the closing or cessation of operation of the establishment or
undertaking unless the closing is for the purpose of circumventing the
 provisions of this Title, by serving a written notice on the workers and the
Ministry of Labor and Employment at least one (1) month before the intended
date thereof. In case of termination due to the installation of labor saving
devices or redundancy, the worker affected thereby shall be entitled to a
separation pay equivalent to at least his one (1) month pay or to at least one
(1) month pay for every year of service, whichever is higher. In case of
retrenchment to prevent losses and in cases of closures or cessation of
operations of establishment or undertaking not due to serious business losses
or financial reverses, the separation pay shall be equivalent to one (1) month
pay or at least one-half (1/2) month pay for every of service, whichever is
higher. A fraction of at least six (6) months shall be considered one (1) whole
year.

Under Art. 283, the SC held that:

Where, as in the instant case, the ground for dismissal or termination of

services does not relate to a blameworthy act or omission on the part of the
employee, there appears to us no need for an investigation and hearing to be
conducted by the employer who does not, to begin with, allege any
malfeasance or non-feasance on the part of the employee. In such case,
there are no allegations which the employee should refute and defend
himself from. Thus, to require petitioner Wiltshire to hold a hearing, at which
private respondent would have had the right to be present, on the business
and financial circumstances compelling retrenchment and resulting in
redundancy, would be to impose upon the employer an unnecessary and
inutile hearing as a condition for legality of termination.