G.R. No. 181738 ; January 30, 2013
General Milling Corporation vs. Violeta L. Viajar

FACTS

Petitioner General Milling Corporation (GMC) terminated the services of respondent Violeta Viajar, a Purchasing Staff with 24 years of service, on the ground of redundancy effective November 30, 2003. GMC cited economic setbacks and rising operational costs as reasons for its cost-reduction measures, which included downsizing its Visayas-Mindanao operations. It issued a termination memorandum and filed an Establishment Termination Report with the DOLE. Viajar, however, was barred from entering company premises and accessing her office a month before her termination date. She also refused to sign an “Application for Retirement and Benefits” presented to her, asserting she was terminated, not retired.
Viajar filed a complaint for illegal dismissal, alleging bad faith. She argued that GMC hired fifteen new employees around the time of her termination, casting doubt on the bona fides of the redundancy program. The Labor Arbiter and the NLRC upheld the dismissal as a valid exercise of management prerogative, finding that GMC complied with procedural requirements under Article 283 of the Labor Code by providing notice and separation pay.

ISSUE

Whether the Court of Appeals erred in reversing the NLRC and declaring Viajar’s dismissal illegal.

RULING

The Supreme Court affirmed the Court of Appeals’ decision declaring the dismissal illegal. The legal logic centers on the employer’s burden to prove the factual and good faith basis for a redundancy termination. While management has the prerogative to declare redundancy, this must be supported by adequate and convincing evidence of a legitimate business decision, not merely a pretext to remove an employee.
The Court found GMC’s evidence insufficient. The general claim of economic difficulty was not substantiated with financial documents or a clear showing that Viajar’s specific position had become superfluous. Critically, the hiring of fifteen new employees contemporaneously with the termination of thirteen others, including Viajar, created a serious doubt about the necessity of the redundancy. This hiring spree contradicted the claim of a downsizing program aimed at reducing costs. Furthermore, GMC’s act of barring Viajar from work a month early and presenting her with a retirement application demonstrated bad faith, treating her as immediately dismissed while attempting to recast the termination as a voluntary retirement. Consequently, the termination was deemed illegal, entitling Viajar to reinstatement or separation pay in lieu thereof, full backwages, and other benefits.