JURISPRUDENCE WON BY
MANAGEMENT WHICH MEANS THE
TERMINATION DUE TO THE CAUSE
IS LEGAL
TOPIC: REDUNDANCY
3M PHILIPPINES VS. LAURO D. YUSECO
G.R. NO. 248941
• November 9, 2020
• Ponente: Perlas-Bernabe, J
FACTS: Respondent Yuseco filed a complaint against the petitioner 3M for illegal dismissal, non-
payment of salary, service incentive leave, separation pay, and damages.
Yuseco’s position: Yuseco started working with 3M in 1997 and was the company’s Country
Business Leader when he got terminated in 2015. On November 25, 2015, 3M’s Managing Director,
Anthony Bolzan called him to a meeting for an undisclosed agenda. While at Bolzan’s office, 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, and was shocked to learn that Bolzan had
announced the following day that Bolzan would already be pursuing other opportunities outside of
petitioner. Yuseco then demanded an explanation of Bolzan’s announcement.
On December 1, 2015, he received a letter from the HR department informing him that his position as
Country Business Leader would be considered redundant as of January 1, 2016. Meantime, during a
conference with 3M, he was offered a separation package of Php5,254,402.12. He counter offered a
separation package equivalent to his salary for 25 years or the length of time he would have served
had he not been illegally terminated.
On January 1, 2016, he was no longer allowed to enter 3M’s premises. Worse, he received a letter
from petitioner on January 21, 2016 demanding the return of company properties in his possession.
3M’s position: In 2015, 3M Philippines 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 Yuseco and the Safety &
Graphics Business Group headed by Country Business Leader Tommee Lopez into the new
Industrial & Safety Market Center to be headed by only one Country Business Leader.
After a thorough evaluation of their qualifications, work experience and performance ratings, 3M
chose Lopez over Yuseco. But 3M did not at once terminate Yuseco’s employment on ground of
redundancy. It tried to look for other available position for Yuseco but its effort failed. Thus, it was
constrained to terminate Yuseco’s employment on ground of redundancy effective January 1, 2016.
On November 5, 2015, Chiongbian and Bolzan met with Yuseco to inform him of the decision and the
company would pay him appropriate separation pay. Considering his position and tenure, he also will
also receive a special separation package giving him more than what the law requires. Yuseco was
also reminded that the separation of high-ranking officers should be announced through electronic
mail to the entire organization. Yuseco acknowledged it but requested that he be allowed first to
personally inform his team. Meantime, to give him time to find new employment, he was given an
option not to report for work anymore until the day of his actual separation. On December 1, 2015, he
was served a formal Notice of Separation due to redundancy. His additional pay-out was also
increased to cover his tax liability. However, Yuseco had a change of heart. Meanwhile, 3M sent a
notice to the DOLE of the separation due to redundancy.
The Labor Arbiter ruled in favor of Yuseco, finding that the redundancy program was arbitrary and that its
implementation was tainted with bad faith. It also ruled that the November 25, 2015 and December 1,
2015 letters were contradictory and that there was no fair and reasonable criteria in ascertaining which
positions were to be declared redundant.
On appeal, the NLRC reversed the Labor Arbiter’s decision. It ruled, among others, that the letters were
not contradictory when read together and in light of what was discussed during the meeting on November
25, 2015. The NLRC also ruled that the exchange of text messages between Yuseco and Chiongbian
clearly established the fact that the former was already informed of his separation due to redundancy.
On Petition for Certiorari, the Court of Appeals reversed the NLRC decision and directed to reinstate
Yuseco without loss of seniority rights and other privileges and with full backwages and allowances and
benefits.
Hence, this Petition for Review on Certiorari under Rule 45.
ISSUE: Whether or not Yuseco was legally dismissed on the ground of redundancy.
HELD: Yes.
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.
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.
In sum, petitioner sufficiently proved by substantial evidence that redundancy truly existed, and its
adoption and implementation conformed with the requirements of the law.
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. In fact, even if a business is doing
well, an employer can still validly dismiss an employee from the service due to redundancy if that
employee's position has already become in excess of what the employer's enterprise requires.
