G.R. No. 142875 ; September 7, 2001
EDGAR AGUSTILO, petitioner, vs. COURT OF APPEALS, SAN MIGUEL CORPORATION, FRANCISCO MANZON, JR., VICE PRESIDENT and DIRECTOR, LEONOR CANEJA, PERSONNEL OFFICER, and RODRIGO GURREA, ENGINEERING DEPARTMENT MANAGER, respondents.

FACTS

Petitioner Edgar Agustilo was hired by respondent San Miguel Corporation (SMC) on July 1, 1979. He became a permanent employee on October 1, 1979, and was later transferred to the Engineering Department as an administrative secretary on May 1, 1982. In 1991, SMC Mandaue Brewery adopted a policy abolishing secretarial positions for managers, leading to petitioner’s transfer to the Plant Director’s Office-Quality Improvement Team (PDO QIT) on August 5, 1991. On February 7, 1992, petitioner was informed that he, along with 583 other employees, would be retrenched due to the company’s modernization program, with termination effective March 15, 1992. On April 8, 1992, petitioner received separation pay of P302,450.38, representing 175% of his entitlements under the Labor Code, and signed a “Receipt and Release” quitclaim before a DOLE officer. Petitioner filed a complaint for unfair labor practice, illegal dismissal, and payment of separation pay and attorney’s fees, alleging his dismissal was due to his union activities. The executive labor arbiter dismissed the complaint, finding the dismissal justified due to the installation of labor-saving devices under the modernization program and noting the validity of the quitclaim. The National Labor Relations Commission (NLRC) reversed this decision, declaring the dismissal illegal and ordering reinstatement with backwages. The Court of Appeals subsequently reversed the NLRC and reinstated the labor arbiter’s decision.

ISSUE

The primary issue is whether petitioner Edgar Agustilo was illegally dismissed by respondent San Miguel Corporation.

RULING

The Supreme Court denied the petition, affirming the decision of the Court of Appeals. The Court held that petitioner’s dismissal was for an authorized cause under Article 283 of the Labor Code, specifically the installation of labor-saving devices as part of SMC’s modernization program. The Court found that the company undertook substantial changes and invested significant funds (P2.6 Billion) in the program, justifying the reduction in personnel. The Court also upheld the validity of the quitclaim (“Receipt and Release”) signed by petitioner, noting he was a college graduate and law student who signed the document without any qualification after receiving a substantial amount exceeding his legal entitlements. The Court further ruled that the complaint for unfair labor practice was barred for being filed almost two years after the termination, beyond the one-year prescriptive period under Article 290 of the Labor Code.