Redundancy Due to Abolition of Position During COVID-19 Pandemic

Redundancy Due to Abolition of Position During COVID-19 Pandemic

Redundancy exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. Succinctly put, a position is redundant where it is superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as over hiring of workers, decreased volume of business, or dropping of a particular product line or service activity previously manufacture or undertaken by the enterprise. (See page 221, Guide to Valid Dismissal of Employees, 2nd Edition by Atty. Villanueva citing Asian Alcohol Corporation vs. National Labor Relations Commission, 364 Phil. 912 926-927 (1999)).

Abolition of position can be one of the effects of redundancy. It must be done in good faith.

In Asian Alcohol Corporation the Supreme Court listed down the elements for the valid implementation of a redundancy program:

For the implementation of a redundancy program to be valid, the employer must comply with the following requisites: (1) written notice served on both the employees and the Department of Labor and Employment at least one month prior to the intended date of retrenchment; (2) payment of separation pay equivalent to at least one month pay or at least one month pay for every year of service, whichever is higher; (3) good faith in abolishing the redundant positions; and (4) fair and reasonable criteria in ascertaining what

Acquire Mastery of HR/Labor Doctrines, Rules and Principles with Atty. Elvin’s HR Bundle Books at Discounted Rate

positions are to be declared redundant and accordingly abolished.

To establish good faith, the company must provide substantial proof that the services of the employees are in excess of what is required of the company, and that fair and reasonable criteria were used to determine the redundant positions. (General Milling Corp. vs. Viajar, 702 Phil. 532, 543 (2013) [Per J. Reyes, First Division].)

A PLDT case decided by the Supreme Court (SC) provides an example of redundancy resulting from the abolition of position. The cause for redundancy is the decline in the number of subscribers. The SC agreed with the findings of the labor tribunal that PLDT discharged the burden of proving that the declaration or implementation of redundancy measures have basis.

For one, PLDT experienced a decline of subscribers, long distance calls, operated both local and abroad, has declined, landline or fixed line services also declined. This decrease of the need of PLDT services resulted from the advent of wireless telephone, of texting as means of communication, the use of direct dialing including prepaid telesulit and teletipid measures introduced in the communication services. For another, PLDT has a debt burden of ₱70 billion pesos and it cannot subsidize the salaries of employees whose positions are redundant.

Redundancy is ultimately a management prerogative, and the wisdom or soundness of such business judgment is not subject to discretionary review by labor tribunals or even this Court, as long as the law was followed and malicious or arbitrary action was not shown. (Manggagawa ng Komunikasyon sa Pilipinas vs. NLRC, G.R. No. 190389, April 19, 2017)

The employer has no legal obligation to keep in its payroll more employees than are necessary for the operation of its business. (Wiltshire File Co., Inc. vs. NLRC, 193 SCRA 672)

While tilting the scales of justice in favor of workers, the fundamental law also guarantees the right of the employer to reasonable returns for his investment. (Smart Communications, Inc. vs. Astorga, G.R. No. 148132, January 28, 2008.)

In this light, the Supreme Court acknowledges the prerogative of the employer to adopt such measures as will promote greater efficiency, reduce overhead costs and enhance prospects of economic gains, albeit always within the framework of existing laws.

The employer has the prerogative to determine who among employees should be terminated for redundancy. The SC also recognizes that a host of relevant factors comes into play in determining cost-efficient saving measures and in choosing who among the employees should be retained or separated. It is well settled that the characterization of an employee’s services as no longer necessary or sustainable, and, therefore, properly terminable, is an exercise of business judgment on the part of the employer. (Dole Phils. Inc. vs. NLRC, 417 Phil. 428, 440 (2001).)

However, the wisdom or soundness of such characterization or decision is not subject to discretionary review provided, of course, that violation of law or arbitrary or malicious action is not shown.

Thus, the company can abolish a particular position as an exercise of its management if the demands for its business have declined. In this time of pandemic, this course of action is particularly relevant.

In the case of operations heavily dependent on public patronage, the decline of the number of customers, establishment visitors, and patrons. The government restrictions on community quarantine and the fear of the public of the viral infection naturally discourage people from going out. With the reduced market, it is fitting for most businesses to adopt lean staffing or scale down its manpower structure.

Share this post

Comments (12)

  • DevOps Automation Services

    … [Trackback]

    […] There you can find 59770 additional Information on that Topic: […]

    May 13, 2022 at 8:23 am
  • sbo

    … [Trackback]

    […] Find More Info here on that Topic: […]

    June 19, 2022 at 8:36 am
  • maxbet

    … [Trackback]

    […] Here you can find 28003 more Information to that Topic: […]

    August 1, 2022 at 4:41 am
  • sbobet

    … [Trackback]

    […] Here you can find 17673 additional Information to that Topic: […]

    August 4, 2022 at 6:48 am
  • สล็อตวอเลท ไม่มีขั้นต่ำ

    … [Trackback]

    […] Info on that Topic: […]

    August 16, 2022 at 11:31 pm
  • mp3juice

    … [Trackback]

    […] Find More on to that Topic: […]

    October 9, 2022 at 10:09 pm
  • sbo

    … [Trackback]

    […] Info on that Topic: […]

    October 13, 2022 at 6:10 pm
  • cvv2 shop

    … [Trackback]

    […] There you will find 22341 more Information to that Topic: […]

    October 14, 2022 at 10:40 pm
  • second brain template

    … [Trackback]

    […] There you will find 51106 more Information to that Topic: […]

    November 2, 2022 at 4:42 am
  • maxbet

    … [Trackback]

    […] There you will find 39233 more Information to that Topic: […]

    November 3, 2022 at 1:54 pm
  • earn passive income

    … [Trackback]

    […] Here you can find 39667 additional Info to that Topic: […]

    November 30, 2022 at 3:39 pm
  • 168moonlight

    … [Trackback]

    […] Read More on that Topic: […]

    March 4, 2023 at 6:37 am

Comments are closed.

error: Content is protected !!