3Republic of tbe ~bilippines

~upreme Qt:ourt
;fflanila

SECOND DIVISION

3M PHILIPPINES, INC., G.R. No. 248941

Petitioner,
Members:

PERLAS-BERNABE, J., Chairperson,

GESMUNDO,
-versus- LAZARO-JAVIER,
LOPEZ, and
ROSARIO,* JJ

Promulgated:
LAURO D. YUSECO,
Respondent.

X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ::--::--;:-_ - - - - - - - - - - - - - - - X

DECISION

LAZARO-JAVIER, J.:

The Case

This petition for review on certiorari' seeks to reverse and set aside
the following dispositions of the Court of Appeals in CA-G.R. SP No.
149264:

1. Decision2 dated January 18, 2019 which reversed the decision of

the National Labor Relations Commission (NLRC) and declared respondent
Lauro D. Yuseco to have been illegally dismissed; and

Designated as additional member per S.O. No. 2797 dated November 5, 2020.
Rollo [Vol. I], pp. 3-44.
Penned by now Supreme Court Associate Justice Samuel H. Gaerlan and concurred in by Associate
Justice Celia C. Librea-Leagogo and Associate Justice Pablito A. Perez, id. at 5 1-66.

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Decision 2 G.R. No. 248941

2. Resolution 3 dated August 14, 2019 which denied petitioner 3M

Philippines, Inc. 's motion for reconsideration.

Antecedents

Respondent filed a complaint against petitioner for illegal dismissal,

non-payment of salary and service incentive leave, separation pay, and
damages.

Respondent's Position4

Respondent started working with pet1t1oner in 1997. He was the

company's Country Business Leader when he got terminated in 2015. He
was paid a monthly salary of P27 l ,000.00. He had a flexible work schedule
but often rendered more than eight (8) hours of work a day.

On November 25, 2015, around 12 o'clock noon, petitioner's

Managing Director, Anthony J. Bolzan (Bolzan) called him to a meeting for
an undisclosed agenda. When he went to Bolzan's office, Human Resource
Manager Maria Theresa Chiongbian (Chiongbian) was also there. He got
surprised when he was asked to conform to an agreement in which the
company was supposedly accepting his so called request to avail of a
separation package, effective January 1, 2016. He was also asked to sign
a waiver and quitclaim. He refused, hence, Bolzan instructed him not to
report for work anymore.

The next day, he was shocked to learn that Bolzan had announced
through electronic mail to all the employees of the company that he would
already be pursuing other opportunities outside of petitioner. This untruthful
and malicious announcement got him embarrassed and humiliated before his
co-workers, friends, clients, and relatives. With the help of his counsel, he
demanded an explanation of Bo lzan' s announcement.

On December 1, 2015, he received a letter from the Human Resource

Department informing him that his position as Country Business Leader
would be considered redundant as of January 1, 2016. He was also asked to
indicate his conforme to the letter.

Meantime, during a conference with petitioner, the latter offered him

a separation package of PS,254,402.12. His counter offer was a separation
package equivalent to his salary for twenty-five (25) years or the length of
time he would have served had he not been illegally terminated.

Id. at 69-70.
Id. at 369-377.

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Decision 3 GR. No. 248941

On January 1, 2016, he was no longer allowed to enter petitioner's

premises. Worse, on January 21 , 2016, he received a letter from petitioner
demanding the return of company properties in his possession.

Petitioner's Position5

Petitioner is a subsidiary of 3M Company (3M), an American

multinational conglomerate corporation engaged in the manufacture and
distribution of products such as adhesives, abrasives, laminates, passive fire
protection, dental and medical products, electronic materials, car care
products, and optical films. 3M operates in more than sixty-five (65)
countries, including the Philippines.

Initially, its marketing and sales arm was divided into several
Business Groups, each headed by Country Business Leader. Each Group
was further divided into divisions, each headed by a division head. In
2015, it decided to align its business model with some of the other 3M
subsidiaries in South East Asian regions in order to enhance its marketing
and sales capabilities. Accordingly, from being a "Business Group"
organization, it shifted to being a "Market Focused" organization. It,
thereafter, implemented a series of changes in its marketing and sales arm.

One of the changes was the merger of the Industrial Business

Group headed by respondent and the Safety & Graphics Business
Group headed by Country Business Leader Tommee Lopez (Lopez) into the
new Industrial & Safety Market Center to be headed by only one ( 1) Country
Business Leader. For this position, it was a toss between respondent and
Lopez.

After a thorough evaluation of their qualifications, work experience,

and performance ratings over the past three (3) years, it eventually chose
Lopez over respondent. It took into account Lopez' s broad work experience
traversing both Industrial Division and Safety & Graphics Division. In
contrast, respondent's work experience was only confined to the Industrial
Division. Also, Lopez had higher performance ratings over the past three
(3) years compared to respondent.

But it did not at once terminate respondent's employment on ground

of redundancy. It tried to look for other available position for respondent
within the company but its effort failed. Thus, in the end, it was constrained
to terminate respondent's employment on ground of redundancy effective
January 1, 2016.

Id. at 152-18 I.

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Decision 4 G.R. No. 248941

On November 25, 2015, Chiongbian and Bolzan met with respondent

to inform him of this decision. Chiongbian explained to respondent that
because he was being let go on ground of redundancy, the company would
pay him appropriate separation pay. Also, considering his position and
tenure, the company came up with a special separation package giving him
more than what the law requires, thus:

(1) PS, 173,825.21 as separation pay;

(2) P80,576.9 l as retirement plan;
(3) Pl ,880,000.00 as additional pay out in consideration of his long
service in the company;
(4) Two (2) years extension of his health coverage which
included executive check-up, hospitalization, and outpatient
reimbursements; and
(5) Two (2) years worth of life insurance coverage.

Chiongbian and Bolzan also reminded respondent that per company

practice, the separation of high-ranking officers should be announced
through electronic mai l to the entire organization. Respondent acknowledged
this company practice but requested that he be allowed first to personally
inform his team, to which Chiongbian and Bolzan acceded. Meantime, to
give respondent time to find a new employment before his actual separation
on January l , 2016, Bolzan gave him an option not to report for work
anymore until the day of his actual separation.

After the meeting, respondent approached Chiongbian to clarify

some details about his separation pay, particularly its tax implications and
whether he still ought to fi le vacation leave should he chose not to report to
office anymore. On that day, too, respondent and Chiongbian exchanged
text messages on what respondent should do before his actual separation and
what to tell his team.

After informing his team of his separation, respondent gave the go

signal to Chiongbian to make the online announcement which the company
did on November 26, 2015.

On December 1, 2015, Chiongbian served respondent a formal Notice

of Separation due to redundancy. Respondent's additional pay-out was also
increased from the gross value of Pl,880,000.00 to P2,350,000.00 to cover
his tax liability.

By then, however, respondent had a change of heart. He refused to

acknowledge receipt of the notice and to undergo the clearance process to
facilitate the release of his separation package.

to
Decision 5 G.R. No. 24894 I

Meanwhile, it sent a notice to the Department of Labor and

Employment (DOLE) of the separation of respondent and another
employee due to redundancy. It thus came as a surprise when it learned
that respondent had sued for illegal dismissal .

The Labor Arbiter's Ruling

By Decision dated April 22, 2016, 6 Labor Arbiter Pablo A. Gajardo,

Jr. (Labor Arbiter Gajardo, Jr.), ruled in favor of respondent, viz.:

WHEREFORE, premises considered, judgment is hereby

rendered declaring respondents guilty of illegal dismissal. Accordingly,
respondents are ordered to pay jointly and severall y complainant as
follows:

l. Separation pay
(till promulgation only) PS, 173,825.21

2. Full backwages
(benefits not included and
till promulgation only) Pl, 100,345.55

3. Moral damages Pl ,000,000.00

4. Exemplary damages P 500,000.00

5. 10% [a]ttorney's [f]ees P 777,417.07

All other claims are dismissed for lack of merit.

SO ORDEREO. 7

Labor Arbiter Gajardo, Jr. held that petitioner's redundancy program

was arbitrary, and its implementation, tainted with bad faith. It was a
mere afterthought to justify respondent's termination. Petitioner's November
25 , 2015 and December 1, 2015 letters were contradictory. The first said
that petitioner was accepting respondent's request for a separation package;
while the second stated that respondent was being terminated due to
redundancy. This inconsistency indicated petitioner's bad faith in effecting
its so-called redundancy program.

Labor Arbiter Gajardo, Jr. also held that petitioner had no fair and
reasonable criteria in ascertaining which positions were to be declared
redundant. It was clear that the criterion used for determining who to retain
between respondent and Lopez was pre-determined to favor Lopez. Bolzan
was the one who promoted Lopez as Country Business Leader and gave the

6 Id. at 41 1-425.
Id. at 424-425.

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Decision 6 G.R. No. 248941

performance ratings to respondent and Lopez. Clearly, Bolzan favored

Lopez over respondent. Also, petitioner failed to present proof that there
was indeed a merger between the Industrial Business Group and Safety &
Graphics Business Group. It was obvious though that only respondent's
position was declared redundant.

The NLRC's Ruling

On petitioner's appeal, the NLRC reversed through its Decision8 dated

October 21, 2016, to wit:

WHEREFORE, premises considered, this instant appeal is hereby

GRANTED.

The Decision of the Labor Arbiter dated April 22, 2016 is

REVERSED and SET ASIDE and a new one is entered DISMISSING
the complaint for lack of merit.

SO ORDERED. 9

The NLRC held that respondent's separation was due to redundancy

which was carried out only after a serious study. It was foolhardy for
petitioner to think of redundancy on the spur of the moment and make
drastic changes to its organization without regard to its viability and
profitability just so it could get rid of respondent. Petitioner decided to
reorganize in order to enhance its marketing and sales capability. The
changes were inspired by business performances and organizational
structures of other 3M subsidiaries in other parts of the South East Asia.

In choosing Lopez over respondent as head of the new group,

petitioner considered the work experience and perfonnance ratings of
Lopez and respondent. Records showed that Lopez not only had work
experience in safety and graphics operations, but also in petitioner's
industrial operations having been part of its Industrial Group from 1997
to 2005. Lopez even worked in the company's E lectronics and Energy
Business Group. Respondent's employment records, on the other hand,
showed that he only had work experience in the industrial operations of the
company. Respondent's stint in marketing and sales was also relatively
sho1ter than Lopez's. Their respective performance ratings over the past
three (3) years yielded a higher rating for Lopez.

In the implementation of its redundancy program, petitioner complied

w ith the notice requirement, giving respondent and the DOLE separate

Penned by Commissioner Erlinda T. Agus and concuITed in by Presiding Commissioner Gregorio 0.

Bi log Ill, id. [Vol. 2], pp. 5 17-547.
Id. at 546.

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Decis ion 7 G.R. No. 248941

notices one ( 1) month before its intended implementation. Petitioner also

offered a special separation package to respondent.

Contrary to Labor Arbiter Gajardo, Jr. ' s findings, the November 25 ,

2015 and December 1, 2015 letters were not contradictory when read
together and in light of what was discussed during the meeting on November
25, 2015. In any case, both letters specifically stated that respondent's
separation was due to redundancy.

Lastly, it cannot be said that respondent was not informed of

his separation and the reasons therefor prior to the company-wide
announcement. The exchange of text messages between respondent and
Chiongbian clearly established the fact that the former was already informed
of his separation due to redundancy. He even sought advice from
Chiongbian on the next steps he should take and a clarification regarding
his separation benefits. Respondent never refuted this communication
between him and Chiongbian.

Respondent's motion for reconsideration was denied per Resolution 10

dated December 20, 2016.

Proceedings Before the Court of Appeals

Respondent's Position

Respondent charged the NLRC with grave abuse of discretion

amounting to lack or excess of jurisdiction when it relied heavily on the text
messages between him and Chiongbian from whom he sought advice on
what he should do if he opted to accept the company's offer, which by the
way Bolzan was already pressuring him to accept. His act of filing the
complaint for illegal dismissal effectively repudiated his alleged acceptance
of the company's offer. 11

The November 25 , 2015 and the December 1, 2015 letters were

suspiciously different. In the former, it was made to appear that he had
agreed to avail of the separation package, but in the latter, he was already
being tenninated on ground of redundancy. Worse, the November 25, 2015
letter which Bolzan already signed was also accompanied by a waiver and
quitclaim indicating the company's desire to terminate his employment. 12

Bolzan had clear intent to terminate his employment. Bolzan harped

on his 2014 "poor" rating. In his nineteen (19) years of service, however,
it was only in 2014 that he got rated as a "poor" performer. And it was

10
Id. at 597-599.
II
Id. [Vol. I], pp. 78-79.
12
Id. at 79-80.

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Decision 8 G.R. No. 248941

Bolzan, then only a new managing director, who gave him that rating. His
performance as Country Business Leader should not have been compared
to that of Lopez because the latter was promoted as Country Business
Leader only in 2015. Before that, Lopez was a mere Division Head of the
Industrial Business Group in charge of only a few divisions way below the
number of divisions he was handling. There were, therefore, no practical
bases to compare the two (2) of them. 13

In the merger of the Industrial Business Group and the Safety &
Graphics Business Group, petitioner had a preconceived intent to ease
him out. 14 In any case, petitioner failed to prove the existence of a valid
redundancy program. Petitioner merely informed him that his position was
declared redundant without actually proving that redundancy did exist. 15

In sum, he was terminated from employment without any valid

ground. He did not voluntarily avail of or accept any separation package.
Also, he did not forge any agreement with the company after he received
the second letter because they could not agree on the separation package. 16

Petitioner's Position

Resort to redundancy is a management prerogative consistently

recognized by the Supreme Court. It has been held that whenever an
employer decides to reorganize its departments and impose on the
employees of one department the duties performed by the employees in
another department, the services of the latter may be validly terminated on
ground of redundancy. 17

Petitioner had valid business reasons to merge the Safety & Graphics
Business Department and the Industrial Business Department. This shift
would improve the efficiency of its operations, enhance its sales and
marketing capabilities, and align the company's business in the Philippines
with the market growth opportunity in international market. 18

Contrary to respondent's allegations, the two (2) letters complemented

each other. The first letter was presented to respondent after the company
had explained to him about the company's restructuring and its effects on
him. The second letter, on the other hand, was a mere confirmation of
what was discussed during the November 25, 2015 meeting. Too, while
respondent was presented with copy of the release waiver and quitclaim
during the meeting held on November 25 , 2015, he was never asked to sign
the same right then and there. These documents were merely presented to

I:,
Id. at 8 1.
14
Id. at 82.
15
Id. at 83-84.
16
Id. at 84-85.
17
Id. [Vol. 2], p. 62 1.
IR
Id. at 622-623.

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Decision 9 G.R. No. 248941

him for purposes of discussion. Respondent was never forced or intimidated

by the company. In fact, he was given every chance to review the
documents, which he did. He even negotiated for additional pay out with
Chiongbian right after the meeting. 19

Petitioner complied with all the requirements for its redundancy

program. It adopted reasonable criteria for determining who between
respondent and Lopez should stay and should go. The company looked into
their relevant work experience and their recent performance ratings. Since
the merger concerned the Safety & Graphics Business and the Industrial
Business Groups, petitioner needed someone with experience on both
fields. Respondent only had experience in the Industrial Business; Lopez,
on the other hand, had experience in both fields. Lopez also had higher
performance rating than respondent over the past three (3) years. 20

Further, the abolition of respondent's position was done in good faith.

As stated, petitioner's decision to change its market approach justified the
organizational restructure. 2 1

Respondent's termination was done in accordance with the procedural

requirements under the Labor Code, i.e., it sent a written notice to the DOLE
regarding the termination of respondent's employment due to redundancy
at least one ( 1) month before the intended date, and approved a generous
separation package for him. In order to give respondent ample time to seek
new employment, he was no longer required to report for work with pay
until the effectivity of his retrenchment. 22 It cannot be said, therefore, that
the termination of respondent's employment was done arbitrarily. 23

The Court of Appeals' Ruling

On respondent's petition for certiorari, the Court of Appeals reversed

by its assailed Decision24 dated January 18, 2019, viz.:

WHEREFORE, premises considered, the petition is GRANTED.

The Decision and Resolution (dated 21 October 2016 and 20 December
2016, respectively) of the National Labor Relations Commission - Second
Division are SET ASIDE. In lieu thereof, a new decision is hereby
entered declaring petitioner Lauro D. Yuseco's dismissal as ILLEGAL.
Accordingly, private respondent 3M Philippines, Inc. is directed to
reinstate petitioner without loss of seniority rights and other privileges,
with full backwages inclusive of allowances and other benefits, computed
from the time he was dismissed on 1 January 2016 up to actual
reinstatement.

19
Id. at 633.
20
Id. [Vol. 2), pp. 626-63 1.
21
Id.
22
Id. at 634-636.
23
Id. at 625.
24
Penned by now Supreme Court Associate Justice Samuel H. Gaerlan and concurred in by Associate
Justice Celia C. Librea-Leagogo and Associate Justice Pablito A. Perez, id. [Vol. I], pp. 51-66.

r(
Decision 10 G.R. No. 248941

However, if reinstatement is no longer feasible or practical,

petitioner is entitled to separation pay, the amount of which is subject to
the proper determination of the LA.

In either case, petitioner is entitled to the payment of attorney's

fees in an amount equivalent to ten percent (10%) of his monetary awards.

Lastly, petitioner' s total monetary awards shall earn legal interest

at the rate of six percent (6%) p er annum from finality of this Decision
until full satisfaction.

SO ORDERED. 25

The Court of Appeals held that in case of termination due to

redundancy, it is not enough for the company to merely declare that it had
become overmanned. It must produce adequate proof of such redundancy
to justify the dismissal of the affected employees. In respondent's case,
however, there was no proof of the redundancy other than Chongbian's
affidavit. Although the same explained the reasons for the abolition of
respondent's position, this affidavit alone cannot be considered adequate
proof of redundancy. Petitioner should have submitted supporting
documents of the company's purported decision to adopt a new business
and marketing approach. 26

Petitioner's motion for reconsideration was denied per Resolution 27

dated August 14, 2019.

The Present Petition

Petitioner now seeks affirmative relief from the Court and prays that
the dispositions of the Court of Appeals be reversed and set aside.

Petitioner reiterates its arguments below and additionally argues that

Chiongbian's affidavit in fact discussed in detail the rationale underlying its
redundancy program and the reorganization of its various business groups. 28

Contrary to the Court of Appeals' ruling, the redundancy program

may be proved by evidence other than just a presentation of new staffing
patterns or feasibi Iity studies and proposals. In several instances, the
Supreme Court declared the admissible affidavits as adequate proof of
redundancy. As head of the company's Human Resource Department,
Chiongbian has personal knowledge of the circumstances surrounding the
redundancy and respondent' s employment.

25
Id. at 65-66.
26
Id. at 64.
27
Id. at 69-70.
28
I d. at 2 1.

ef
Decision 11 GR. No. 248941

Respondent was well aware of petitioner's redundancy program as

shown by the exchange of communications between Chiongbian and the
former and the Notice of Separation sent to him and the DOLE. Petitioner
also took pains to explain to respondent the company' s decision to
reorganize and its effect on him. 29

Respondent, on the other hand, insists that he was illegally dismissed.

His communication with Chiongbian should not be interpreted to mean he
was consenting to his alleged termination on ground of redundancy. He
merely exchanged text messages with Chiongbian seeking the latter's advice
on what to do in case he opted to accept petitioner's separation package
which Bolzan at that time was already pressing him to accept. Deep inside
him though, he could not accept the insults and harassment, especially those
coming from Bolzan. The pressure being exerted on him to accept
petitioner' s offer was reinforced by the first letter, together with the attached
waiver and quitclaim. It all amounted to forced resignation or illegal
dismissai.3°

Petitioner, together with Bolzan, simply concocted a way to ease him

out. The fact of redundancy was not even sufficiently proven. He was,
therefore, illegally dismissed, hence, he is entitled to his money claims.
Bolzan should also be held solidarily liable with the company for his illegal
termination from employment. 31

Issue

Was respondent legally dismissed on ground of redundancy?

Ruling

The Court is not a trier of facts, hence, only questions of law may be
raised in a petition for review on certiorari under Rule 45. It is not the
Court's function to analyze or weigh evidence all over again in view of the
corollary legal precept that factual findings of the lower tribunals are
conclusive and binding on this Court, especially when the same carry the full
concurrence of the Court of Appeals. As an exception, however, the Court
may resolve factual issues presented before it, as in this case, when the
findings of the Court of Appeals and the labor arbiter, on one hand, are
contrary to those of the NLRC, on the other.32

Both Labor Arbiter Gajardo, Jr. and the Court of Appeals held that
petitioner failed to prove the existence of redundancy as ground for the

29 Id. at 25-26.
30
Id. [Vol. 2], pp. 736-73 8.
31
Id. at 739-745.
32
See Status Maritime Corporation, et al. v. Sps. De/a/amon, 740 Phil. 175, 189 (2014).

/4
Decision 12 G.R. No. 248941

termination of respondent's employment. In contrast, the NLRC held that

respondent's employment was validly terminated on ground of redundancy.

Redundancy is one of the authorized causes for the termination of

employment provided for in Article 298 33 of the Labor Code, as amended:

Article 298. 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 year of service, whichever is higher. A fraction of at least six (6)
months shall be considered one (1 ) whole year.

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. A position is redundant where it had become superfluous.
Superfluity of a position or positions may be the outcome of a number of
factors such as over-hiring of workers, decrease in volume of business,
or dropping a particular product line or service activity previously
manufactured or undertaken by the enterprise. 34

A valid redundancy program must comply with the following

requisites: (a) written notice served on both the employees and the
DOLE at least one (1) month prior to the intended date of termination
of employment; (b) payment of separation pay equivalent to at least one
(1) month pay for every year of service; (c) good faith in abolishing the
redundant positions; and (d) fair and reasonable criteria in ascertaining
what positions are to be declared redundant and accordingly abolished,
taking into consideration such factors as (i) preferred status; (ii) efficiency;
and (iii) seniority, among others. 35

The Court of Appeals held that the third (3 rd ) requ1s1te - good

faith - was lacking in this case, hence, the redundancy program and
respondent's termination by reason thereof were both invalid. It stressed
that aside from Chiongbian's affidavit, petitioner did not present any other

33
Former Article 283 of the Labor Code, as renumbered under DOLE's Department Advisory No. I,
Series of20 15.
34
See Soriano, J,: v. NLRC, et al., 550 Phil. 111 , 126 (2007).
35
See Philippine National Bank v. Dalmacio, 813 Phil. 127, 134, (20 17).

ID
Decision 13 GR. No. 248941

proof to substantiate its claim that respondent's pos1tl0n had become

redundant. Thus, petitioner ''failed to prove, by substantial evidence, the
existence of redundancy." 36

The Court does not agree.

Chiongbian's Affidavit37 dated March 31, 2016, Supplemental

Affidavit 38 dated April 7, 2016, and Supplemental Affidavit 39 dated June
30, 2016 bore petitioner's innovative thrust to enhance its marketing and
sales capability by aligning its business model with some of the 3M
subsidiaries in South East Asian Region. Toward this end, petitioner ought
to merge its Industrial Business Group and the Safety & Graphics Business
Group to maximize the capabilities and efficiency of the workforce and
remove their overlapping of functions. The redundancy program had thus
become an essential tool for this purpose, viz.:

3. In order to market and sell its products, the Company's

marketing and sales arm was initially divided into Business Groups
headed by a CBL. Each Business Group, in turn, is composed of major
and minor Divisions headed by a Division Head. The number of these
Divisions per Business Group varies depending on the number of product
types a particular Business Group carries. x x x

4. In 2015, the Company decided to align its business model like

some 3M subsidiaries in the South East Asian Region so as to enhance its
marketing and sales capabilities. This involved the adoption of a different
business and marketing approach which focused more on the demands of
the market. Accordingly, from being a "Business Group" organization, the
Company shifted to being a "Market Focused" organization. In this regard,
the Company conducted a series of changes in its marketing and sales arm.

5. One of the changes effected by the Company was the

integration/merging of the Industrial Business Group w ith the Safety &
Graphics Business Group, headed by Mr. Tommee Lopez as CBL, in order
to create a market focused group known as the Industrial & Safety Market
Center. Notably, the integration/merging not only resulted in the
reorganization of both groups, but also of the Divisions within each group.

6. T he aforesaid changes, regrettably, resulted to excess

manpower and superfluity of certain positions. For instance, since the
Industrial Business Group was integrated/merged with the Safety &
Graphics Business Group to create a new group known as the Industrial &
Safety Market Center, the Company would need only one (1) individual to
head the same as the Market Leader and abolish the position of CBL. This
meant that the Company had an excess group leader since only one (1) of
the two (2) group leaders of the affected groups - Messrs. Yuseco and
Lopez - will be chosen to become the Market Leader of the Industrial &
Safety Market Center. 40

36
Rollo [Vol. I], p. 64.
37
Id. at 182-185.
38
Id. at 2 16-222.
39
Id. at 493 -495.
40
Id. at 182-183.

t{
Decision 14 G.R. No. 248941

Too, petitioner submitted other documentary evidence showing that

respondent's employment was terminated due to redundancy, viz.:

1) Letter dated November 25, 2015, 41 informing respondent the

termination of his service due to redundancy:

Payments are subject to normal taxes and standard wage withholdings,

except for your vested retirement benefit, which will be tax-free since this
will legally fall under the category ofredundancy.

2) The draft Release Waiver and Quitclaim 42 and Separation

Benefit Computation 43 presented to respondent during the November 25,
2015 meeting.

3) Letter 44 dated December 1, 2015 serving as the formal one

(1) month notice to respondent of the impending termination of his
service due to redundancy in accordance with Article 298 of the Labor
Code, viz.:

As discussed last 25 November 2015, in line with the Company's effort

to align its organization with corporate business strategy, economically
and operationally, and in the exercise of its management prerogative, the
Company conducted a review of its organizational structure, which
resulted, among others, in the abolition of your position, Country Business
Leader for the Industrial Business Group, because of said local corporate
restructuring and change of business direction, which included merging
of the Industrial Business Group and the Safety & Graphics Business
Group.

As such, your position is considered redundant effective 1 January 2016.

4) Letter45 dated December 1, 2015 notifying the Director of the

DOLE-NCR of respondent's impending termination from work, along
with another employee, on ground of redundancy. The letter contained the
reasons therefor. This letter was received by the DOLE-NCR as evidenced
by the stamp mark receipt of said Office.

5) Print out of text messages between Chiongbian and respondent

showing that the latter even sought advice from the former on the steps he
should take regarding the impending termination of his service on ground of
redundancy. 46 Notably, respondent never refuted these messages.

41
Id. at 379.
42
Id. at 380-381.
43
Id. at 382 .
44
Id. at 188.
45
Id. at 190-193.
46
Id. at 186-187.

A
Decision 15 G.R. No. 248941

Records show that the company called respondent to a meeting

on November 25, 2015 precisely to inform him of this development,
specifically the merger of the Industrial Business Group with the Safety
& Graphics Business Groups, one of which he used to be the department
head.47

On this score, Soriano v. NLRC, et al.,48 is apropos, thus:

In upholding the legality of petitioner's dismissal from work, the

NLRC relied on the documents submitted by the respondent PLOT
showing compliance with the requirements above stated, to wit: 1) a letter
notifying the Director of the DOLE-NCR of the impending termination
from work of the petitioner by reason of redundancy and stating the
grounds/reasons for the implementation of the redundancy program; 2) a
letter apprising the petitioner of his dismissal from employment due to
redundancy; 3) a receipt certifying that the petitioner had already
received his separation pay from the respondent PLOT; 4) a
release/waiver/quitclaim executed by the petitioner in favor of the
respondent PLOT; and 5) affidavits executed by the officers of the
respondent PLDT explaining the reasons and necessities for the
implementation of the redundancy program. Petitioner failed to
question, impeach or refute the existence, genuineness, and validity of
these documents.

It is clear that the foregoing documentary evidence constituted

substantial evidence to support the findings of Labor Arbiter
Lustria and the NLRC that petitioner's employment was terminated
by respondent PLDT due to a valid or legal redundancy program
since substantial evidence merely refers to that amount of evidence
which a reasonable mind might accept as adequate to support a
conclusion.

XXX X XX XXX

Anent the second issue, petitioner contends that there was no

substantial evidence showing that the position of Switchman had become
redundant; that the affidavits of the respondent PLDT's officers have no
probative value and should not have been considered by the NLRC
because the said officers are not competent to testify on the technical
aspects and effects of respondent PLDT's adoption of new technology;
that the existence of redundancy was belied by the respondent PLDT's
acts of employing outside plant personnel as Switchmen and Framemen,
and of hiring contractual employees to perform the functions of
Switchmen; and that the respondent PLOT did not present proof of the
method and criteria it used in determining the Switchman to be terminated
from work.

XXX XX X XXX

The records show that respondent PLOT had sufficiently

established the existence of redundancy in the position of Switchman. In

47
Id. at 183 and 216.
48
Supranote34,at 122-1 23, 125- 126, 129.

1
Decision 16 G.R. No. 24894 l

his affidavit dated 27 September 1999, Roberto D. Lazam (Lazam), Senior

Manager of GMM Network Surveillance Division of respondent PLDT,
explained:

XXX XXX XXX

It is evident from the foregoing facts that respondent PLDT's

utilization of high technology equipment in its operation such as
computers and digital switches necessarily resulted in the reduction
of the demand for the services of a Switchman since computers and
digital switches can aptly perform the function of several Switchmen.
Indubitably, the position of Switchman has become redundant.

As to whether Lazam was competent to testify on the effects of

respondent PLDT's adoption of new technology vis-a-vis the petitioner's
position of Switchman, the records show that Lazam was highly qualified
to do so. He is a licensed electrical engineer and has been employed by
the respondent PLDT since 197 1. He was a Senior Manager for
Switching Division in several offices of the respondent PLDT, and had
attended multiple training programs on Electronic Switching Systems in
progressive countries. He was also a training instructor of Switchmen in
the respondent's office. (Emphasis supplied)

In sum, petitioner sufficiently proved by substantial evidence that

redundancy truly existed and its adoption and implementation conformed
with the requirements of the law. As the NLRC aptly ruled:

Based on the record of this case, We find that the separation of

complainant from employment was due to redundancy which was carried
out after a serious study. It is difficult to convince Us that the redundancy
was thought out on the spur of the moment or only during the meeting
of November 25, 2015. It would be foolhardy for the respondent company
to have come out with a drastic change in its organization without regard
to its viability and profitability, just to get rid of complainant. Precisely,
in 20 15, the company made a decision to enhance its marketing and
sales capabilities, inspired by the business performance of some 3M
subsidiaries in the South East Asian Region. The company focused
more on the demands of the market. Thus, from being a "Business
Group" organization, the company shifted to being a "Market Focused
Organization." This led to a series of changes in its marketing and
sales arms. One of the changes effected by the company was the
integration/ merging of the Industrial Business Group with the Safety and
Graphics Business Group x x x.49

Respondent, however, alleges that petitioner's November 25, 2015

and December 1, 2015 letters to him bore inconsistent contents indicative of
the company's scheme to easily oust him from his employment. In the first
letter, he had supposedly agreed to avail of the separation package, but in the
second letter, he was already being terminated on ground of redundancy. 50

49
Id. [Vol. 2], pp. 539-540.
50 Id. [Vol. l ], pp. 79-80.

~
Deci sion 17 G.R. No. 248941

Petitioner's argument is specious.

The NLRC correctly concluded that the November 25, 2015 and
December 1, 2015 letter were actually complementary, not contradictory.
The letters must be read together and in the context of what was discussed in
the November 25, 2015 meeting between the parties, thus:

xx x The November 25, 2015 [letter] showed the impending dismissal of

complainant due to redundancy and the separation package available to
complainant incident thereto. The third paragraph of the November 25,
2015 letter stated that " Payments are subject to normal taxes and standard
wage withholdings, except for your vested retirement benefit, which ·will
be tax-ji-ee since this will legally fall under the categol'y of redundancy".
Likewise, the first paragraph of the Release Waiver and Quitclaim given
to complainant in tandem with the November 25, 2015 letter, stated that
the separation package is "part of redundancy effective January 1, 2016".

The December 1, 2015 letter made reference to the meeting held

on November 25, 2015 as well as the separation package offered in the
same letter of November 25, 20 15. The letter dated December 1, 2015
informed complainant that "as such, your position is considered redundant
effective 1 January 2016." Thus, both letters referred to the redundancy of
the position of complainant. xx x 51

In fine, the alleged contradiction in the two (2) letters 1s more

imagined than real.

As for the requirements of notice, separation pay, and fair and

reasonable criteria, records bear petitioner's strict compliance.

Written Notice

As stated, petitioner sent respondent and the DOLE-NCR separate

letters both dated December 1, 2015, informing them of respondent's
termination from work effective January 1, 2016 on ground of redundancy.

NOTTCETORESPONDENT

Dear Lany,

As discussed last 25 November 2015, in line with the Company's effort

to align its organization with corporate business strategy, economically
and operationally, and in the exercise of its management prerogative, the
Company conducted a review of its organizational structure, which
resulted, among others, in the abolition of your position, Country Business
Leader for the Industrial Business Group, because of said local corporate

51
Id. [Vol. 2], pp. 544-545.

((
Decision 18 G.R. No. 24894 I

restructuring and change of business direction, which included merging of

the Industrial Business Group and the Safety & Graphics Business Group.

As such, your position is considered redundant effective 1 January 20 16.

During the same meeting on 25 November 20 15, you were offered a

special package as indicated in the letter dated 25 November 2015. The
terms of this separation package is attached to this letter, for your
reference. T his offer complies with the separation pay requirement under
the Philippine Labor Code.

The company will release your salary, separation pay and other payments
due to you after you return all company prope11ies and complete the exit
clearance process. Upon receipt of these amounts, you will be asked to
acknowledge their receipt and to execute a release, waiver and quitclaim
in favor of the company.

X XX XXX XXX

NOTICE TO THE DOLE

XXX X XX XXX

In line with the Company ' s effort to align its organization w ith
corporate business strategy, economically and operationally, and in the
exercise of its management prerogative, the Company conducted a review
of its organizational structure, which resulted, among others, in the
abolition of the positions of Country Business Leader and Abrasives
Systems Division Manager for the Industrial Business Group, because
their positions have become superfluous.

In light of the foregoing, the Company will effect the separation of

the incumbents, Lauro D. Yuseco and Jaime D. Comia, effective close of
business hours on December 31, 2015 on the ground of redundancy under
Article 283 of the Labor Code, as amended. They have been served 30-day
advance notice. Also, please be advised that the affected employees [will]
be paid their separation pay in accordance w ith the Labor Code, along
with their accrued salaries and other benefits.

XXX X XX XX X

Separation Pay

Petitioner's Separation Benefit Computation for respondent totalled

PS,254,402.12, an amount more than what is mandated by law. Petitioner
has explained that the amount already covers the respondent's tax payments
to the government. Again, respondent has not refuted this. Under this
Separation Benefit Computation, respondent would receive the fo llowing:

(1) PS,173,825 .21 as separation pay;

(2) ? 80,576 .9 1 as retirement plan;

~
Decision 19 G.R. No. 248941

(3) Pl,880,000.00 as additional pay out in consideration of

his long service in the company;
( 4) Two (2) years extension of his health coverage which
included executive check up, hospitalization, and
outpatient reimbursements; and
(5) Two (2) years worth of life insurance coverage.

Fair and Reasonable Criteria

Petitioner set the reasonable criteria for determining who between

Lopez and respondent should head the newly created office which came
about as a result of the merger. Petitioner posits that since there was a
merger of two (2) groups or departments, Lopez's extensive and broader
experience in the company's Safety & Graphics operations as well as its
Industrial operations gave him a big edge over respondent whose experience
was limited to Industrial operations only. Their respective employment
histories 52 speaks volumes of this disparity.

Another. Their performance ratings also show that over the last three
(3) years, Lopez had better ratings than respondent: 53

Year Respondent Lopez

2015 2 3

2014 2 3
2013 3 4

Respondent though accuses the rater Bolzan of bias, and petitioner,

of unfairly comparing his experience with that of Lopez, albeit the scopes
or ranges of their assignments were allegedly different. Surely, these bare
allegations cannot prevail over the records showing petitioner's reasonable
assessment of the respective merits of Lopez and respondent. While it
may be true that respondent had several awards and achievements over
his nineteen ( 19) years of service in the company, the same is true for
Lopez. 54

All told, the Court holds that respondent's employment was validly
terminated on ground of redundancy. Time and again, it has been ruled
that an employer has no legal obligation to keep more employees than are
necessary for the operation of its business. 55 In fact, even if a business is
doing well, an employer can still validly dismiss an employee from the

52 Id. (Vo l. I], pp. 223-224.

53
Id. at 225 -226, 30.
5~
Id. at 496-500.
55
Philippine National Bank v. Dalmacio, supra note 35, at 134.

rl
Decision 20 G.R. No. 248941

service due to redundancy if that employee's position has already become in

excess of what the employer's enterprise requires. 56

ACCORDINGLY, the petition is GRANTED. The Decision dated

January 18, 2019 and Resolution dated August 14, 2019 of the Court of
Appeals in CA-G.R. SP No. 149264 are REVERSED and SET ASIDE.
The complaint of respondent Lauro D. Yuseco for illegal dismissal is
DISMISSED.

Petitioner 3M Philippines, Inc. is ORDERED to PAY Lauro D.

Yuseco his separation package in accordance with its Separation Benefit
Computation as heretofore shown.

SO ORDERED.

('

WE CONCUR:

IAO r1JJJ/
ESTELA M:VPERLAS-BERNABE
Chairperson

,r

RICAR

56 Ocean East Agency Corporation v. Lopez, 771 flhil. 179, 190 (20 15).
Decision 21 G.R. No. 248941

ATTESTATION

I attest that the conclusions in the above Decision had been reached
in consultation before the case was assigned to the writer of the opinion
of the Court's Division.

AAO.~
ESTELA M~IlERLAS-BERNABE
Senior Associate Justice
Chairperson, Second Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the above
Division Chairperson's Attestation, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Court's Division.

~
M. PERALTA
Justice