MA. FININA E. VICENTE Petitioner v.

CA, Former Seventeenth Division and CINDERELLA MARKETING

CORPORATION, Respondents.
GR NO. 175988 August 24, 2007
YNARES-SANTIAGO, J.:

DOCTRINE:
General rule in termination cases, burden of proof rests upon the employer to show that the dismissal is for
a just and valid cause and failure to do so would necessarily mean that the dismissal was illegal.

In St. Michael Academy v. NLRC mere allegations of threat or force do not constitute substantial evidence to support
a finding of forced resignation. The SC enumerated the requisites for intimidation to vitiate consent as follows:
(1) that the intimidation caused the consent to be given;
(2) that the threatened act be unjust or unlawful;
(3) that the threat be real or serious, there being evident disproportion between the evil and the resistance which
all men can offer, leading to the choice of doing the act which is forced on the person to do as the lesser evil;
and
(4) that it produces a well-grounded fear from the fact that the person from whom it comes has the necessary
means or ability to inflict the threatened injury to his person or property. x x x

FACTS:

Petitioner Finina E. Vicente was employed by respondent Cinderella Marketing Corpo (Cinderella) as
Management Coordinator in Jan 1990. Prior to her resignation in Feb 2000, she held the position of Consignment
Operations Manager. She was tasked with the oversight, supervision and management of the Consignment Department
dealing directly with Cinderellas consignors. Petitioner alleged that it has been a practice among the employees of
Cinderella to obtain cash advances by charging the amount from the net sales of Cinderellas suppliers/consignors. Mr.
Miguel Tecson (AVP-Finance) approves the requests for cash advances, Mr. Arthur Coronel (AVP-Merchandising) issues
the memos instructing the accounting department to issue the corporate checks and finally, Ms. Theresa Santos
(General Manager) rediscounts them by issuing her personal checks. After some time, one of Cinderellas suppliers
complained about the unauthorized deductions from the net sales due them. An investigation was conducted and upon
initial review of respondents business records, it appears that petitioner was among those involved in the irregular and
fraudulent preparation and encashment of respondents corporate checks amounting to at least P500,000.00. Petitioner
alleged that Mr. Tecson demanded her resignation on several occasions. As a result of alleged force and intimidation
from Mr. Tecson, petitioner tendered her resignation letter.

3 years after her resignation, petitioner filed a complaint against Cinderella alleging that her severance from
employment was involuntary amounting to constructive dismissal. Cinderella denied the charge of constructive
dismissal. It claimed that petitioner voluntarily resigned from office before the internal audit was completed and before
any formal investigation was initiated. She tendered her resignation on February 7, 2000, then submitted another
resignation letter on February 15, 2000 where she confirmed the first resignation letter.

ISSUE: Whether petitioner was constructively dismissed.

HELD: NO.

Petitioner argues that the employer bears the burden of proof that the resignation is voluntary and not the
product of coercion or intimidation. The Court agrees that in termination cases, burden of proof rests upon the employer
to show that the dismissal is for a just and valid cause and failure to do so would necessarily mean that the dismissal
was illegal.

From the totality of evidence on record, it was clearly demonstrated that respondent Cinderella has sufficiently
discharged its burden to prove that petitioners resignation was voluntary. In voluntary resignation, the employee is
compelled by personal reason(s) to disassociate himself from employment. It is done with the intention of relinquishing
an office, accompanied by the act of abandonment. To determine whether the employee indeed intended to relinquish
such employment, the act of the employee before and after the alleged resignation must be considered.

Petitioner relinquished her position when she submitted the letters of resignation. The resignation letter submitted on
Feb 15, 2000 confirmed the earlier resignation letter she submitted on Feb 7, 2000. The resignation letter contained
words of gratitude which can hardly come from an employee forced to resign.

The petitioner admitted having submitted the said letter, although, due to an alleged intimidation. Subsequently,
petitioner stopped reporting for work though she met with the officers of the corporation to settle her accountabilities
but never raised the alleged intimidation employed on her. Also, though the complaint was filed within the 4-year
prescriptive period, its belated filing supports the contention of respondent that it was a mere afterthought. Taken
together, these circumstances are substantial proof that petitioners resignation was voluntary.

Hence, petitioner cannot take refuge in the argument that it is the employer who bears the burden of proof that the
resignation is voluntary and not the product of coercion or intimidation. Having submitted a resignation letter, it is then
incumbent upon her to prove that the resignation was not voluntary but was actually a case of constructive dismissal
with clear, positive, and convincing evidence. Petitioner failed to substantiate her claim of constructive dismissal.

Bare allegations of constructive dismissal, when uncorroborated by the evidence on record, cannot be given credence.
In St. Michael Academy v. NLRC, we ruled that mere allegations of threat or force do not constitute substantial evidence
to support a finding of forced resignation. We enumerated the requisites for intimidation to vitiate consent as follows:
(1) that the intimidation caused the consent to be given;
(2) that the threatened act be unjust or unlawful;
(3) that the threat be real or serious, there being evident disproportion between the evil and the resistance which
all men can offer, leading to the choice of doing the act which is forced on the person to do as the lesser evil;
and
(4) that it produces a well-grounded fear from the fact that the person from whom it comes has the necessary
means or ability to inflict the threatened injury to his person or property. x x x

None of the above requisites was established by petitioner. Other than the allegation that Mr. Tecson intimidated
petitioner into resigning, there were no other proofs presented to support a finding of forced resignation to stand
against respondents denial and proof against dismissal. Neither can the court consider the conduct of audits and other
internal investigations as a form of harassment against petitioner. Said investigation was legitimate and justified,
conducted in view of the discovery of the anomalous transaction involving the employees of the respondent including
petitioner.

Moreover, the Court notes that petitioner is holding a managerial position with a salary of P27,000.00 a month. Hence,
she is not an ordinary employee with limited understanding such that she would be easily maneuvered or coerced to
resign against her will.
G.R. No. 106256 December 28, 1994
MAYA FARMS EMPLOYEES ORGANIZATION, MAYA REALTY AND LIVESTOCK SUPERVISORY UNION, MAYA
FARMS EMPLOYEES ASSOCIATION, and MAYA FARMS, INC. SUPERVISORY UNION, petitioners,
vs. NLRC, MAYA REALTY & LIVESTOCK, INC., MAYA FARMS, INC., and LIBERTY FLOUR MILLS, INC.,
respondents.

G.R. No. 106256 December 28, 1994

KAPUNAN, J.:

DOCTRINE: The LIFO (Last-in-First-Out) rule applies to termination of employment in the line of work. Verily, what
is contemplated in the LIFO rule is that when there are two or more employees occupying the same position in the
company affected by the retrenchment program, the last one employed will necessarily be the first to go.

FACTS:
Private respondents Maya Farms, Inc. and Maya Realty and Livestock Corpo belong to the Liberty Mills group
of companies whose undertakings include the operation of a meat processing plant which produces ham, bacon, and
other meat and poultry products. Petitioners are the exclusive bargaining agents of the employees of Maya Farms, Inc.
and the Maya Realty and Livestock Corporation.On April 12, 1991, private respondents announced the adoption of an
early retirement program as a cost-cutting measure considering that their business operations suffered major setbacks
over the years. The program was voluntary and could be availed of only by employees with at least 8 years of service.
Accordingly, the program was amended to reduce the minimum requirement of 8 years of service to only 5 years.
However, there were only a few takers. To avert further losses, the early retirement program was converted into a
special redundancy program intended to reduce the work force to an optimum number so as to make operations more
viable. On Jan 17, 1992, the 2 companies sent letters to 66 employees informing them that their respective positions
had been declared redundant. The notices likewise stated that their services would be terminated effective 30 days
from receipt thereof. Separation benefits, other benefits due under existing CBAs were thereafter paid to those affected.
On Jan 24, 1992, a notice of strike was filed by the petitioners which accused private respondents of unfair labor
practice, violation of CBA and discrimination. On Feb 6, 1992, the two companies filed a petition with the SOLE asking
the latter to assume jurisdiction over the case and/or certify the same for compulsory arbitration. Thus, on Feb 12,
1992, the then Acting Labor Secretary (now Secretary) Nieves Confesor certified the case to herein public respondent
for compulsory arbitration.

Petitioners’ averred that in the dismissal of 66 union officers and members on the ground of redundancy, private
respondents circumvented the provisions in their CBA, more particularly, Section 2, Article III thereof. Said provision
reads:

Sec. 2. LIFO RULE. — In all cases of lay-off or retrenchment resulting in termination of employment in the
line of work, the Last-In-First-Out (LIFO) Rule must always be strictly observed.

Petitioners also alleged that the companies' claim that they were in economic crisis was fabricated because in 1990, a
net income of over 83 million pesos was realized by Liberty Flour Mills Group of Companies. Invoking the workers'
constitutional right to security of tenure, petitioners prayed for the reinstatement of the 66 employees and the payment
of attorney's fees as they were constrained to hire the services of counsel in order to protect the workers' rights.
On their part, private respondents contend that their decision to implement a special redundancy program was an
exercise of management prerogative which could not be interfered with unless it is shown to be tainted with bad faith
and ill motive.

The NLRC On June 29, 1992, affirmed the legality of the separation of the 66 employees of management thereby
dismissing the charges of violation of CBA and unfair labor practice on the part of management.

ISSUE: Was the NLRC wrong in affirming the legality of the separation of the 66 employees?

RULING: NO

The termination of the 66 employees was done in accordance with Art 283 of the Labor Code. The basis for
this was the companies' study to streamline operations so as to make them more viable. Positions which overlapped
each other, or which are in excess of the requirements of the service, were declared redundant.
 Article 283 provides:
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 devises, 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 in the
provisions of this title, by serving a written notice on the workers and the Department of Labor and Employment at least 1
month before the intended date thereof. In case of retrenchment to prevent losses of operations of establishment or
undertaking not due to serious business losses or financial reverses, the 1 month pay or at least ½ pay for every year of
service, whichever is higher. A fraction of at least 6 months shall be considered 1 whole year.

The Court agrees with the findings of the NLRC on the issue of termination, which: was to sustain the companies'
prerogative to adopt the alleged redundancy/retrenchment program to minimize if not, to avert losses in the conduct
of its operations. In subject case, the 66 complaining employees were separated from service as a result of the decision
of management to limit its operations and streamline positions and personnel requirements.

In the case of Maya Farms, Inc. its meat processing department, prior to the adoption of special redundancy program
had 4 sections each of which is headed by an assistant superintendent. These 3 sections are: (a) meat processing; (b)
slaughterhouse; (c) packing.

With the implementation of the decision of management to limit meat processing with sausages as the only output,
only one position for assistant superintendent was retained that of Asst. Superintendent for meat processing. Likewise,
positions of slicer/seater operator, debonner/skinner, ham and bacon operative, were scrapped. Similarly, positions for
packers were decreased retaining only 5 positions out of 21 packers. Also affected were the positions of egg
sorters/stockers as only 4 positions were retained out of 10 positions.

A close examination of the positions retained by management show that said positions such as egg sorter, debonner
were but the minimal positions required to sustain the limited functions/operations of the meat processing department.

In the absence of any evidence to prove bad faith on the part of management in arriving at such decision, which
records on hand failed to show in instant case, the rationality of the act of management in this regard must be
sustained. While it may be true that the Liberty Flour Mills Group of Companies as a whole posted a net income of
P83.3 Million, it is admitted that with respect to operations of the meat processing and livestock which were undertaken
by herein companies sustained losses in the sum of P2,257,649.88 This is the reason, as advanced by management,
for its decision to streamline positions resulting in the reduction of manpower compliment.

The NLRC correctly held that private respondents did not violate the LIFO rule under Section 2, Article III of the CBA
which provides:
Sec. 2. LIFO RULE. In all cases of lay-off or retrenchment resulting in termination of employment in the line
of work, the Last-in-First-Out (LIFO) Rule must always be strictly observed.

It is not disputed that the LIFO rule applies to termination of employment in the line of work. Verily, what is
contemplated in the LIFO rule is that when there are two or more employees occupying the same position in
the company affected by the retrenchment program, the last one employed will necessarily be the first to go.

Moreover, the reason why there was no violation of the LIFO rule was amply explained by public respondent
in this wise:

. . . . The LIFO rule under the CBA is explicit. It is ordained that in cases of retrenchment resulting in termination of
employment in line of work, the employee who was employed on the latest date must be the first one to go. The
provision speaks of termination in the line of work. This contemplates a situation where employees occupying the same
position in the company are to be affected by the retrenchment program. Since there ought to be a reduction in the
number of personnel in such positions, the length of service of each employees is the determining factor, such that the
employee who has a longer period of employment will be retained.

In the case under consideration, specifically with respect to Maya Farms, several positions were affected by the special
involuntary redundancy program. These are packers, egg sorters/stockers, drivers. In the case of packers, prior to the
involuntary redundancy program, 21 employees occupied the position of packers. Out of this number, only 5 were
retained. In this group of employees, the earliest date of employment was Oct 27, 1969, and the latest packer was
employed in 1989.
All the other packers employed after June 2, 1975 were separated from the service. The same is true with respect to
egg sorters. The egg sorters employed on or before April 26, 1972 were retained. All those employed after said date
were separated.

With respect to the position of drivers, there were eight drivers prior to the involuntary redundancy program. Thereafter
only 3 positions were retained. Accordingly, the three drivers who were most senior in terms of period of employment,
were retained.

Finally, contrary to petitioners' contention, there is nothing on record to show that the 30-day notice of termination to
the workers was disregarded and that the same substituted with separation pay by private respondents. As found by
public respondent, written notices of separation were sent to the employees on Jan 17, 1992. The notices expressly
stated that the termination of employment was to take effect one month from receipt thereof. Therefore, the allegation
that separation pay was given in lieu of the 30-day notice required by law is baseless.
FARLE P. ALMODIEL, petitioner vs. NLRC, RAYTHEON PHILS., INC., respondents, G.R. No. 100641 June 14,
1993

DOCTRINE: Termination of an employee's services because of 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 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 worker and the Department 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 one (1) month pay for every year of
service, whichever is higher. In case of retrenchment to prevent losses and in cases of closure or cessation of operations
of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be
equivalent to at least 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 as one (1) whole year.

Redundancy, for purposes of our Labor Code, exists where the services of an employee are in excess of what is
reasonably demanded by the actual requirements of the enterprise. The characterization of an employee's services as
no longer necessary or sustainable, and therefore, properly terminable, was an exercise of business judgment on the
part of the employer. The wisdom or soundness of such characterization or decision was not subject to discretionary
review on the part of the Labor Arbiter nor of the NLRC so long, of course, as violation of law or merely arbitrary and
malicious action is not shown.

FACTS: Petitioner F. Almodiel, a CPA, was hired as Cost Accounting Manager of Raytheon Philippines, Inc. He started
as a probationary or temporary employee. His major duties were: (1) plan, coordinate and carry out year - end and
physical inventory; (2) formulate and issue out hard copies of Standard Product costing and other cost/pricing analysis
if needed and required and (3) set up the written Cost Accounting System for the whole company. After a few months,
he was given a regularization increase of P1,600.00 a month.

On Aug 17, 1988, he recommended and submitted a Cost Accounting/Finance Reorganization, affecting the whole
finance group but the same was disapproved by the Controller. However, he was assured by the Controller that should
his position or department which was apparently a one-man department with no staff becomes untenable or unable to
deliver the needed service due to manpower constraint, he would be given a 3 year advance notice.

On Jan 27, 1989, petitioner was summoned by his immediate boss and in the presence of IRD Manager, Mr. Rolando
Estrada, he was told of the abolition of his position on the ground of redundancy. He pleaded with management to
defer its action or transfer him to another department, but he was told that the decision of management was final and
that the same has been conveyed to the DOLE. Thus, he was constrained to file the complaint for illegal dismissal
before the Arbitration Branch of the National Capital Region, NLRC, DOLE.

Labor Arbiter’s Ruling: 1989 - declared that complainant's termination on the ground of redundancy is
highly irregular and without legal and factual basis, thus ordering the respondents to reinstate complainant to his
former position with full backwages without lost of seniority rights and other benefits.

Raytheon appealed on the grounds that the Labor Arbiter committed grave abuse of discretion in denying its rights to
dismiss petitioner on the ground of redundancy.

NLRC’s Ruling: 1991 - reversed the decision and directed Raytheon to pay petitioner the total sum of
P100,000.00 as separation pay/financial assistance.

ISSUES: 1. Whether NLRC committed grave abuse of discretion amounting to (lack of) or in excess of jurisdiction in
declaring as valid and justified the termination of petitioner on the ground of redundancy.

2. Whether bad faith, malice and irregularity crept in the abolition of petitioner's position of Cost Accounting
Manager on the ground of redundancy.
RULING:

1. No. There is no dispute that petitioner was duly advised, one (1) month before, of the termination of his employment
on the ground of redundancy in a written notice by his immediate superior in Jan 27, 1989. He was issued a check
representing separation pay but in view of his refusal to acknowledge the notice and the check, they were sent to him
thru registered mail on January 30, 1989. The Department of Labor and Employment was served a copy of the notice
of termination of petitioner in accordance with the pertinent provisions of the Labor Code and the implementing rules.

2. No. Whether petitioner's functions as Cost Accounting Manager have been dispensed with or merely absorbed by
another is however immaterial. For even conceding that the functions of petitioner's position were merely transferred,
no malice or bad faith can be imputed from said act. This Court said that redundancy, for purposes of our Labor Code,
exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of
the enterprise. The characterization of an employee's services as no longer necessary or sustainable, and therefore,
properly terminable, was an exercise of business judgment on the part of the employer. The wisdom or soundness of
such characterization or decision was not subject to discretionary review on the part of the Labor Arbiter nor of the
NLRC so long, of course, as violation of law or merely arbitrary and malicious action is not shown.

Indeed, an employer has no legal obligation to keep more employees than are necessary for the operation of its
business. Petitioner does not dispute the fact that a cost accounting system was installed and used at Raytheon
subsidiaries and plants worldwide; and that the functions of his position involve the submission of periodic reports
utilizing computerized forms designed and prescribed by the head office with the installation of said accounting system.
Petitioner attempts to controvert these realities by alleging that some of the functions of his position were still
indispensable and were actually dispersed to another department. What these indispensable functions that were
dispersed, he failed however, to specify and point out. Besides, the fact that the functions of a position were simply
added to the duties of another does not affect the legitimacy of the employer's right to abolish a position when done
in the normal exercise of its prerogative to adopt sound business practices in the management of its affairs.

Considering further that petitioner held a position which was definitely managerial in character, Raytheon had a broad
latitude of discretion in abolishing his position. An employer has a much wider discretion in terminating employment
relationship of managerial personnel compared to rank and file employees. The reason is that officers in such key
positions perform not only functions which by nature require the employer's full trust and confidence but also functions
that spell the success or failure of an enterprise.

 Petitioner claims that the functions of his position were absorbed by the Payroll/Mis/Finance Department under Ang Tan
Chai, a resident alien without any working permit from the DOLE as required by law. Almodiel also claims that he is better
qualified than Ang Tan Chai, a B.S. Industrial Engineer, hired merely as a Systems Analyst Programmer or its equivalent in
early 1987, promoted as MIS Manager only during the middle part of 1988 and a resident alien.
 On the other hand, Raytheon insists that petitioner's functions as Cost Accounting Manager had not been absorbed by Ang
Tan Chai, a permanent resident born in this country. It claims to have established below that Ang Tan Chai did not displace
petitioner or absorb his functions and duties as they were occupying entirely different and distinct positions requiring
different sets of expertise or qualifications and discharging functions altogether different and foreign from that of petitioner's
abolished position.

Destitute of merit is petitioner's imputation of unlawful discrimination when Raytheon caused corollary functions
appertaining to cost accounting to be absorbed by Danny Ang Tan Chai, a resident alien without a working permit.
Article 40 of the Labor Code which requires employment permit refers to non-resident aliens. The employment permit
is required for entry into the country for employment purposes and is issued after determination of the non-availability
of a person in the Philippines who is competent, able and willing at the time of application to perform the services for
which the alien is desired. Since Ang Tan Chai is a resident alien, he does not fall within the ambit of the provision.

Petitioner also assails that he is better qualified for the position. It should be noted, however, that Ang Tan Chai was
promoted to the position during the middle part of 1988 or before the abolition of petitioner's position in early 1989.
Besides the fact that Ang Tan Chai's promotion thereto is a settled matter, it has been consistently held that an
objection founded on the ground that one has better credentials over the appointee is frowned upon so long as the
latter possesses the minimum qualifications for the position. In the case at bar, since petitioner does not allege that
Ang Tan Chai does not qualify for the position, the Court cannot substitute its discretion and judgment for that which
is clearly and exclusively management prerogative.
It is a well-settled rule that labor laws do not authorize interference with the employer's judgment in the conduct of
his business. The determination of the qualification and fitness of workers for hiring and firing, promotion or
reassignment are exclusive prerogatives of management. The Labor Code and its implementing Rules do not vest in
the Labor Arbiters nor in the different Divisions of the NLRC (nor in the courts) managerial authority. The employer is
free to determine, using his own discretion and business judgment, all elements of employment, "from hiring to firing"
except in cases of unlawful discrimination or those which may be provided by law.