G.R. No. 118432 . May 23, 1997.
CONRADO COSICO, JR., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, EVA AIRWAYS CORPORATION, LEWIS CHANG, and ALLEN SOONG, respondents.

FACTS

Petitioner Conrado Cosico, Jr. was hired by respondent Eva Airways Corporation as Assistant Station Manager for its Manila office. His responsibilities included supervising office construction and ensuring a target of at least sixty passengers per flight to maintain operational viability. After five months, a performance audit revealed the station averaged only twenty-five passengers per flight, significantly below target. Consequently, Eva Air decided to implement cost-efficiency measures, including the abolition of the Assistant Station Manager position. Cosico was notified of his termination due to the abolition of his position and was offered separation pay.
Cosico rejected the offer and filed a complaint for illegal dismissal. The Labor Arbiter ruled in his favor, ordering reinstatement with full backwages, moral and exemplary damages, and attorney’s fees. On appeal, the NLRC set aside the Labor Arbiter’s decision. It ruled the dismissal was not illegal but a valid exercise of management prerogative due to redundancy, ordering only the payment of separation benefits. Cosico filed this certiorari petition, arguing the NLRC gravely abused its discretion in giving due course to the appeal despite an allegedly insufficient appeal bond and in reversing the Labor Arbiter’s finding of illegal dismissal.

ISSUE

The primary issues were whether the NLRC gravely abused its discretion in: (1) accepting the appeal despite the posted supersedeas bond not covering the total monetary award for damages and attorney’s fees; and (2) ruling that Cosico’s dismissal was justified due to the valid abolition of his position.

RULING

The Supreme Court dismissed the petition, affirming the NLRC resolutions. On the procedural issue, the Court held there was no grave abuse of discretion in accepting the appeal. While Article 223 of the Labor Code requires a bond equivalent to the monetary award to perfect an appeal, the NLRC, under its rule-making power, had issued a resolution stating that moral and exemplary damages need not be included in the computation of the bond. The purpose of the bond is to ensure the employee receives the monetary award if the appeal fails; damages, being contingent and not primarily monetary awards in the same sense as backwages, were correctly excluded. Thus, the bond posted, covering backwages and separation pay, was sufficient.
On the substantive issue, the Court upheld the NLRC’s finding that the dismissal was for an authorized cause—redundancy. The company’s review showed the Manila station was underperforming, with passenger loads far below the break-even target. The decision to abolish the Assistant Station Manager position was a legitimate business judgment to make the station cost-efficient. The Court distinguished redundancy from retrenchment, noting redundancy exists when a position becomes superfluous due to a reorganization for economy. The employer has the management prerogative to introduce changes to ensure viability, provided it is done in good faith. Here, the abolition was due to genuine business losses and operational necessity, not a pretext to remove Cosico. Consequently, the dismissal was valid, negating any claim for reinstatement, backwages, or moral and exemplary damages. Only separation pay was due.