Supreme Court finds that the employer failed to provide proof of a valid redundancy programme
The Philippine Supreme Court has ordered an employer to pay back wages and separation pay to an employee after finding that it illegally dismissed him in 2016.
Alltech Biotechnology Corporation was found to have illegally dismissed Paolo Aragones because it failed to provide proof of a valid redundancy programme, according to the Supreme Court.
Aragones was made redundant by Alltech in June 2016, just months after he signed an Offer Letter in April for the position of Swine Technical Manager - Pacific (STMP), and right before he was due to start work in July.
The company offered Aragones P140,000, which is equivalent to his one-month salary, as a "gesture of goodwill" following the redundancy.
The Labour Arbiter ruled in favour of Aragones when he filed a complaint with them, but the National Labour Relations Commission (NLRC) reversed the ruling.
According to the NLRC, there was no employer-employee relationship at that time because Aragones was not yet working for Alltech.
"The NLRC noted that, although Aragones accepted the Offer Letter, it came with a clear provision that his employment would only commence on July 1, 2016," the Philippine Supreme Court heard.
"Additionally, without a definitive employment contract duly signed by the parties, there could be no employment relationship to speak of."
Aragones filed an appeal to the Court of Appeals, but it only upheld the NLRC's decision.
"Since the position of STMP was abolished due to redundancy before Aragones' intended start date of July 1, 2016, no employer-employee relationship was established," the Court of Appeals ruled, as heard by the Supreme Court.
But the SC reversed these decisions in a ruling last month: "Aragones' acceptance of the job offer established an employment relationship between the parties."
According to the Supreme Court, the July commencement date was a "suspensive period that deferred the demandability of their respective obligations as employer and employee."
"It did not affect the existence or birth of those obligations. In other words, while the employer-employee relationship was already established when the contract was entered into on April 18, 2016, the demandability of their respective obligations as employer and employee was deferred until July 1, 2016."
With the employer-employee relationship established, the Supreme Court then emphasised that employers must provide solid evidence to justify an employee's termination from a redundancy under the Labour Code.
"It is not enough for a company to merely declare redundancy; it must produce adequate proof of such redundancy to justify the dismissal of the affected employees, such as but not limited to the new staffing pattern, feasibility studies/proposal, on the viability of the newly created positions, job description, and the approval by the management of the restructuring," the Supreme Court said in its decision.
It then ordered Alltech to pay Aragones back wages computed from July 2016 until the finality of the decision. It also ordered separation pay equivalent to one month's salary for every year from July 2016 until the finality of the decision.
