G.R. No. 229746 October 11, 2017
ABBOTT LABORATORIES (PHILIPPINES), INC. and STEPHANE LANGEVIN, Petitioners vs. MANUEL F. TORRALBA, ROSELLE P. ALMAZAR, and REDEL ULYSSES M. NAVARRO, Respondents

FACTS

Respondents, holding managerial positions in Abbott Laboratories’ PediaSure Division, were terminated in March 2013 due to a declared redundancy following the company’s decision to merge the PediaSure and Medical Nutrition Divisions. Abbott informed the DOLE and the employees, offering them lower-ranking District Sales Manager positions, which they rejected. Subsequently, respondents executed Deeds of Waiver, Release, and Quitclaim after receiving separation pay equivalent to 150% of their monthly salary per year of service, plus other benefits. Months later, they filed a complaint for illegal dismissal, arguing Abbott failed to observe the lawful criteria of status, efficiency, and seniority in selecting employees for redundancy and that they were underpaid separation pay compared to other terminated employees.
The Labor Arbiter ruled in favor of the respondents, declaring the dismissal illegal due to Abbott’s failure to prove the redundancy was valid and not arbitrary, particularly the lack of a job evaluation against the required criteria. The NLRC reversed this, dismissing the complaint on the ground that the quitclaims barred the claim. The Court of Appeals reinstated the Labor Arbiter’s decision, finding the redundancy invalid and the quitclaims ineffective due to the illegality of the dismissal.

ISSUE

Whether the Court of Appeals erred in ruling that respondents were illegally dismissed and that their executed quitclaims did not bar their complaint.

RULING

The Supreme Court denied the petition and affirmed the CA decision. On the validity of the redundancy, the Court held that while management possesses the prerogative to implement redundancy programs, it must be exercised in good faith and with due process. The employer bears the burden of proving that the redundancy is genuine and that fair and reasonable criteria were used in selecting the employees to be terminated. Here, Abbott failed to discharge this burden. The “Study” presented as justification merely recommended a merger but did not establish that respondents’ positions had become superfluous. Crucially, Abbott did not present any evidence, such as a comparative assessment or matrix, to demonstrate that it applied the lawful criteria of status, efficiency, and seniority in choosing respondents for termination over other employees in the merged division. This failure rendered the redundancy program invalid and the dismissal illegal.
Regarding the quitclaims, the Court ruled they did not preclude respondents from seeking relief. A quitclaim is generally binding unless executed due to fraud, misrepresentation, or a wrongful act by the employer. Since the dismissal was founded on an invalid redundancy, it constituted a wrongful act. The amounts received, while exceeding the statutory minimum, were contested as being less than what other employees allegedly received, casting doubt on the voluntariness of the signing. Consequently, the quitclaims were void for being based on an illegal termination. The Court upheld the awards for reinstatement, backwages, and damages, subject to deduction of the separation pay already received.