Acosta V Gouvary DIGEST

MANUEL G.
ACOSTA – vs - MATIERE SAS AND PHILIPPE GOUVARY

[ G.R. No. 232870; June 03, 2019 ]
In redundancy, an employer must show that it applied fair and reasonable criteria in determining
what positions have to be declared redundant. Otherwise, it will be held liable for illegally dismissing
the employee affected by the redundancy.
Facts of the case:
Matiere SAS is a French company engaged in the fabrication, supply and delivery of unibridges and
flyovers duly represented by Philippe Gouvary. It contracted with the DPWH for the construction of
flyovers and bridges and also it entered into a contract with the DAR to construct bridges for better
access to agricultural lands.
Respondent Acosta was a technical assistant contract was terminated due to cessation of delivery
operations and diminution of activities. He filed before the NLRC for illegal dismissal against Matiere
SAS and Gouvary.
The LA found Acosta's dismissal illegal. It held that Matiere SAS and Gouvary failed to prove the
factual bases for the reduction of its workforce. Moreover, the Labor Arbiter noted that Matiere SAS
failed to submit any redundancy plan. It also failed to provide "fair and reasonable criteria in
ascertaining what positions are redundant and how the selection of employees to be dismissed was
made.
Both parties appealed before the NLRC. The NLRC reversed the LA’s Decision.
Acosta moved for reconsideration. The NLRC partially granted Acosta's Motion.
Thus, Acosta filed before the Court of Appeals a Petition for Certiorari. The CA denied the petition. It
held that Matiere SAS and Gouvary were able to establish that Acosta's position became redundant
upon the completion of its contracts with the DPWH and the DAR. Acosta moved for reconsideration,
but his Motion was denied. Hence, this petition.
Issue:
Whether or not petitioner was validly dismissed from employment on the ground of redundancy
Ruling:
Yes. Redundancy is recognized as one (1) of the authorized causes for dismissing an employee
under the Labor Code. In Wiltshire File Company, Inc. v. National Labor Relations Commission, this
Court explained:
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.
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 overhiring of workers,
decreased volume of business, or dropping of a particular product line or service activity
previously manufactured or undertaken by the enterprise. The employer has no legal
obligation to keep in its payroll more employees than are necessary for the operation of its
business.
1 Document1 | LABOR CASE BY J. LEONEN

The requirements for a valid redundancy program were laid down in Asian Alcohol Corporation v.
National Labor Relations Commission:
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 positions are to be
declared redundant and accordingly abolished.
Assuming that respondents can declare some positions redundant due to the alleged decrease in
volume of their business, they still had to comply with the above-cited requisites. This, they failed to
do. Respondents complied with the first and second requisites. However, as to the third and fourth
requisites, this Court held that "[t]o 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."
Here, respondents' only basis for declaring petitioner's position redundant was that his function,
which was to monitor the delivery of supplies, became unnecessary upon completion of the
shipments. There was no mention of monitoring shipments as part of petitioner's tasks. If his work
pertains mainly to the delivery of supplies, it should have been specifically stated in his job
description. Respondents did not even present any evidence to support their claim or to contradict
petitioner's documentary evidence. There was, hence:, no basis for respondents to consider his
position irrelevant when the shipments had been completed.
Respondents failed to show that they used fair and reasonable criteria in determining what positions
should be declared redundant.
In Panlilio v. National Labor Relations Commission, this Court held that fair and reasonable criteria
may take into account the preferred status, efficiency, and seniority of employees to be dismissed
due to redundancy. Yet, respondents never showed that they used any of these in choosing
petitioner as among the employees affected by redundancy.
Although he was among the five (5) employees dismissed, petitioner cannot be similarly situated
with the other employees. Roselim was a forklift operator, while Richard, Wilson, and Menor were
helpers assigned to field engineers. The four (4) employees work directly with the delivery of
supplies. On the other hand, as already discussed, petitioner's duty is not limited to the monitoring of
deliveries. Accordingly, this Court declares petitioner to have been illegally dismissed.
2 Document1 | LABOR CASE BY J. LEONEN

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MANUEL G.

ACOSTA – vs - MATIERE SAS AND PHILIPPE GOUVARY

Facts of the case:

1 Document1 | LABOR CASE BY J. LEONEN

2 Document1 | LABOR CASE BY J. LEONEN

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