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GENERAL MILLING CORPORATION VS. VIOLETA L. VIAJAR

FACTS

General Milling Corporation terminated the services of thirteen (13) of its employees on the
grounds of REDUNDANCY. Said company claims that they had been gradually downsizing its
Visayas-Mindanao operations in Cebu which had been filled with a number of redundant
positions over a period of time. Violeta Viajar was hired as Invoicing Clerk by the company in
1979, and thereafter held various positions. Viajar was among those thirteen employees
terminated from work.

On October 30, 2003, the HRD Manager (Johhny Almocera) informed Viajar, through a LETTER-
MEMO that the latters services are no longer needed effective NOVEMBER 30, 2003. This is
because her current position as Purchasing Staff at the Purchasing group Cebu Operations was
deemed redundant. When Viajar reported for work the following day, the on-duty guard of the
company barred her from entering the office premises. Viajar was also denied access to her
office computer and resctricted from punching her DTR in the bundy clock. On November 7,
2003, she was invited to the HRD Cebu Office where she was asked to sign an Application for
Retirement and Benefits. Almocer (HRD manager) told her that such was required in order to
process her separation pay. Meanwhile, Viajar observed that between the period of July and
October 2003, General Milling hired fifteen (15) new employees.

In lieu of the aforementioned events, Viajar filed a case of ILLEGAL DISMISSAL, with claims for
damages and separation pay, against General Milling. The GMC averred that (1) Viajars
dismissal was due to redundancy of her position and the economic setbacks the company is
suffering at the moment, and that such act is part of the companys cost reduction measure; (2)
GMC presented the required Establishment Termination Report (involving the matter of
employment termination of Viajar and the other 13 employees) which it filed before the DOLE;
and (3) that GMC issued two (2) checks amounting to Php 440,253.02 and Php 21,211.35,
respectively as Viajars separation pay.

The Labor Arbiter (LA) ruled that GMC is not liable, hence, dismissing the illegal dismissal case.
The NLRC likewise affirmed the LAs decision, but with a modification ordering GMC to give
Viajar separation pay. Viajar appealed to the Court of Appeals. CA reversed the decision of the
NLRC. Aggrieved by the CA decision, GMC petitioned before the Honorable Supreme Court.


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ISSUE

Whether or not Viajar was terminated from her employment based on a justifiable cause (i.e.
based on redundancy).


RULE/LAW APPLICABLE

Article 282 of the Labor Code. Closure of establishment and reduction of personnel. The
employer may also terminate the employment of any employee due to the instalment 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 worker and the
Ministry of Labor and Employment at least one (1) month before the intended date thereof. In
case of termination due to 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. Xxx


APPLICATION OF THE RULE/LAW

As held by the SC, the test of whether compliance to Article 283 of the Labor Code had been
achieved or not is dependent on the following:

(a) Service of written notice to the affected employees and the DOLE at least a
month before the intended date of retrenchment;
(b) Payment of separation pay to the affected employees;
(c) Abolition of the redundant position should be done in good faith;
(d) Fair and reasonable criteria shall be set in ascertaining which positions are
deemed redundant and may be abolished.

Based on the facts, the Court ruled that the GMC failed to substantiate its claim that it
terminated Viajar from employment based on justifiable grounds, particularly invoking
redundancy. Notwithstanding the companys presentation of the notices required of and the
issuance of checks representing the alleged payment of Viajars separation pay, the former was
unable to show that the termination of employment was done in lieu of fair and reasonable
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criteria, by showing clear evidence to substantiate the presence of redundancy within the
company. (Read page nine of the actual decision for a more in-depth discussion.). Further,
the SC appreciated the presence of bad faith in GMCs end as exemplified by the following:
(a) It demanded Viajar to sign an Application of Retirement Benefis despite the fact that her
case involved redundancy, and which negates the GMCs averment that Viajar was
terminated due to redundancy;
(b) It prohibited Viajar from entering the company premises even before the effectivity of
the date of her termination from work


DISPOSITION OF THE HONORABLE COURT:

Wherefore, the petition is DENIED. The decision dated September 21, 2007 of the
Court of Appeals, as well as its Resolution dated January 30, 2008 in CA-GR SP
no. 01734, are hereby AFFIRMED.