Use of Criteria in Termination due to Redundancy and the LIFO Method
In several instances, the Court has held that it is important for a company to have fair and reasonable criteria in implementing its redundancy program, such as but not limited to, (a) preferred status, (b) efficiency and (c) seniority.
CBA may dictate the rules to be followed in case of redundancy. Parties may stipulate that LIFO rule shall apply in case of termination in the line of work.
However, where two positions are involved, last in first out rule may yield to the nature of work and experience.
There is nothing though that absolutely mandates the use of LIFO. A host of relevant factors come into play in determining cost-efficient measures and in choosing the employees who will be retained or separated to save the company from closing shop. In determining these issues, management has to enjoy a preeminent role.
Although the LIFO method is a recognized basis for redundancy, the union, during negotiation cannot insist on its adoption since the company is at liberty to factor in other basis which is purely an exercise of management prerogative.
Thus, when the union insisted that the LIFO method should be used in the event of lay-off, termination due to retrenchment and transfer of employees, the Supreme Court rejected the idea ruling that the employer has the right to adopt valid and equitable grounds as basis for terminating or transferring
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employees. An employer is free to regulate, according to his own discretion and judgment
When the option given to the employees was either to retire, be retrenched or dismissed, they were made to understand that they had no choice but to leave the company. More bluntly stated, they were forced to swallow the bitter pill of dismissal but afforded a chance to sweeten their separation from employment. They either had to voluntarily retire, be retrenched with benefits, or be dismissed without receiving any benefit at all.
In essence, the true nature of employer’s offer to employees was in reality a Hobson’s choice. All that the private employees were offered was a choice on the means or method of terminating their services but never as to the status of their employment. In short, they were never asked if they still wanted to work for employer.
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In balancing the interest between labor and capital, the prudent recourse in termination cases is to safeguard the prized security of tenure of employees and to require employers to present the best evidence obtainable, especially so because in most cases, the documents or proof needed to resolve the validity of the termination, are in the possession of employers. A contrary ruling would encourage employers to utilize redundancy as a means of dismissing employees when no valid grounds for termination are shown by simply invoking a feigned or unsubstantiated redundancy program.
It is not enough for a company to merely declare that it has become overmanned. It must produce adequate proof that such is the actual situation to justify the dismissal of the affected employees for redundancy.
It is not difficult for employers to abolish positions in the guise of a cost-cutting measure and the Court should not be easily swayed by such schemes which all too often reduce to near nothing what is left of the rubble of rights of the exploited workers.
In balancing the interest between labor and capital, the prudent recourse in termination cases is to safeguard the prized security of tenure of employees and to require employers to present the best 
evidence obtainable, especially so because in most cases, the documents or proof needed to resolve the validity of the termination, are in the possession of employers. A contrary ruling would encourage employers to prevent the regularization of an employee by simply invoking a feigned or unsubstantiated redundancy program.
Another fact which disproves validity of the alleged redundancy advanced is the failure of the company to refute employee’s assertion that after her dismissal, it hired new recruits and re-employed two of her batch mates. Other than the lame excuse that it is the employee who has the burden of proving the same, the company presented no proof to fortify its denial. Again, the company has in its possession the documents that would disprove the fact of hiring new employees, but instead of presenting evidence to belie employee’s contentions, it refrained from doing so and conveniently passed the burden to the employee.
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