G.R. No. 177816 ; August 3, 2011
NIPPON HOUSING PHIL. INC., and/or TADASHI OTA, HOROSHI TAKADA, YUSUHIRO KAWATA, MR. NOBOYUSHI and JOEL REYES, Petitioners, vs. MAIAH ANGELA LEYNES, Respondent.

FACTS

Respondent Maiah Angela Leynes was hired as Property Manager by petitioner Nippon Housing Philippines, Inc. (NHPI) for its Bay Gardens Condominium Project. On February 6, 2002, a misunderstanding occurred between Leynes and Building Engineer Honesto Cantuba. Leynes instructed security to bar Cantuba and reported his insubordination to HRD Head Joel Reyes. After Cantuba submitted a reply accusing Leynes of poor managerial skills, NHPI Vice President Hiroshi Takada issued a memorandum attributing the incident to “simple personal differences” and directed Leynes to allow Cantuba to return to work. Disappointed, Leynes submitted a letter on February 12, 2002, asking for emergency leave to coordinate with her lawyer regarding her resignation. On February 13, 2002, NHPI offered the Property Manager position to Engr. Carlos Jose. On the same day, Leynes sent another letter expressing her intention to return to work on February 15 and to call off her planned resignation. After resuming work, Leynes protested a verbal report from Reyes that a substitute had been hired. On February 22, 2002, she was served a letter and memorandum relieving her from her position and directing her to report to the main office on floating status. Leynes filed a complaint for illegal dismissal. During the pendency of the case, Reyes served a notice on August 8, 2002, terminating Leynes’ services effective August 22, 2002, on the ground of redundancy. The Labor Arbiter found illegal dismissal and awarded reinstatement, backwages, damages, and attorney’s fees. The NLRC reversed the decision, ruling the floating status was justified due to the client’s request for her relief. The Court of Appeals reinstated the Labor Arbiter’s decision, finding constructive dismissal and bad faith.

ISSUE

Whether the Court of Appeals erred in ruling that: (1) placing respondent on floating status was tantamount to constructive dismissal, and (2) the termination on the ground of redundancy was unjustified.

RULING

The Supreme Court found the petition meritorious and reversed the Court of Appeals. On the first issue, the Court held that placing an employee on floating status is not automatically constructive dismissal. It is allowed under Article 286 of the Labor Code for a period not exceeding six months when the suspension of work is bona fide. In this case, Leynes’ floating status was a consequence of the client’s contractually guaranteed right to request her relief, which constituted a bona fide suspension of work. On the second issue, the Court found the termination due to redundancy valid. Redundancy exists when the service capability of the workforce is in excess of what is reasonably needed. NHPI sufficiently proved that after losing its only building maintenance client (the Bay Gardens project), Leynes’ position as Property Manager for that specific project became redundant. The Court also found that NHPI complied with the substantive and procedural requirements for termination due to redundancy, including serving a written notice on both the employee and the Department of Labor and Employment. The award of damages and attorney’s fees was deleted due to the absence of bad faith.