G.R. No. 165381 ; February 9, 2011
NELSON A. CULILI, Petitioner, vs. EASTERN TELECOMMUNICATIONS PHILIPPINES, INC., SALVADOR HIZON, EMILIANO JURADO, VIRGILIO GARCIA and STELLA GARCIA, Respondents.

FACTS

Petitioner Nelson A. Culili was employed by respondent Eastern Telecommunications Philippines, Inc. (ETPI) in 1981 and was promoted to Senior Technician in 1996. Due to business troubles and losses, ETPI implemented a two-phase Right-Sizing Program in 1998. The first phase was a Special Retirement Program offered to employees with at least 15 years of service, which Culili rejected. The second phase involved a company-wide reorganization. As a result, the Service Quality Department, where Culili was assigned, was abolished, and its functions were absorbed by the Business and Consumer Accounts Department. Culili’s position was declared redundant, and his functions were absorbed by another employee. On March 8, 1999, ETPI informed Culili of his termination effective April 8, 1999, due to the Right-Sizing Program. Culili filed a complaint for illegal dismissal and unfair labor practice, alleging that ETPI had already decided to dismiss him earlier (as evidenced by a similar December 7, 1998 letter), that his functions were contracted out to a labor-only contractor, and that he was discriminated against for not receiving additional benefits offered to others. The Labor Arbiter found ETPI guilty of illegal dismissal. The National Labor Relations Commission (NLRC) affirmed this decision. The Court of Appeals reversed the NLRC, finding the dismissal valid due to redundancy.

ISSUE

Whether the Court of Appeals erred in reversing the NLRC and in ruling that petitioner Nelson A. Culili was validly dismissed on the ground of redundancy.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Decision of the Court of Appeals. The dismissal was valid due to redundancy. The Court held that redundancy exists when the service capability of the workforce is in excess of what is reasonably needed to meet the demands of the enterprise. ETPI sufficiently proved that it was suffering serious business losses, necessitating the Right-Sizing Program. The abolition of Culili’s department and the absorption of its functions by another more economical and versatile department were done in good faith to streamline operations and cut costs. The fact that Culili alone was dismissed from his department did not negate redundancy, as the determination of redundant positions is a management prerogative. The Court found no evidence of bad faith, unfair labor practice, or discrimination. The prior December 7, 1998 letter was merely preparatory and was not implemented because ETPI first offered the voluntary retirement program. The claim of contracting out was unsubstantiated. Consequently, Culili was entitled only to separation pay and other accrued benefits, which ETPI had already tendered.