Redundancy and additional requirements, when invalid

Teletech’s failure to prove redundancy, coupled with the imposition of a prejudicial condition to retain employment, rendered the offer of transfer invalid

Just around a month ago, a good friend consulted me. He asked if his wife, who is a regular employee in a corporation, can be promoted but subject to passing certain requirements. He further added that his wife was informed that failure to pass them meant removal from employment. Quite harsh, is it not?

I told him that such imposition cannot be made. His wife is already a regular employee. No further conditions or requirements must be had for her advancement. Otherwise, terminating her would make a case of illegal dismissal, surely making the employer liable.

I was going over new cases promulgated by the Supreme Court. Lo and behold, I found a case that is quite on all fours with his wife’s. In this case, Mario Gerona Jr. was employed in Teletech Customer Care Management Philippines

Inc., a business process outsourcing entity. After becoming a regular employee, he was informed that he was going to be transferred to another department. But to do so, he must undergo training, assessment and examination. Failure in such meant termination on ground of redundancy.

Mr. Gerona refused to comply with the conditions. He believed that he was a regular employee, entitled to security of tenure. Holding firm in his belief, he received a notice of termination based on redundancy.

Obviously, he lost no time in filing with the National Labor Relations Commission (NLRC) a case for illegal dismissal. The labor arbiter, however, after reviewing the evidence, did not commiserate with him. He contended that Mr. Gerona was validly dismissed for failure to prove that it was done illegally. On appeal, the Commission affirmed the arbiter.

Still believing in his principles, he went to the Court of Appeals. Said Court reversed the findings of the NLRC and held for Mr. Gerona. This certainly prompted the employer to question said decision with the Supreme Court.

In this challenge, the Highest Court ruled in favor of Mr. Gerona. It opined, ‘[a]s to the legality of Gerona’s dismissal on the ground of redundancy, we find the evidence presented by Teletech insufficient to support its claim... Redundancy exists when an employee’s services are in excess of what is reasonably demanded by the actual requirements of the business. To successfully invoke a valid dismissal due to redundancy, there must be: (1) a written notice served on both the employees and the Department of Labor and Employment at least one month prior to the intended date of termination of employment; (2) payment of separation pay equivalent to at least one month pay for every year of service; (3) good faith in abolishing the redundant positions; and (4) fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished. Moreover, the company must provide substantial proof that the services of the employees are in excess of what is required of the company ... After careful evaluation of the records, this Court finds that the evidence presented by Teletech fails to convincingly show the alleged decline in Accenture’s business and that the expected volume of calls for its Accenture account would not materialize. In other words, redundancy was not proven.”

Do take note when redundancy can be invoked. Courts strictly follow the criteria above.

He believed that he was a regular employee, entitled to security of tenure.

Now you may be wondering how this case relates to my friend’s query as discussed at the beginning. Oh yes, the additional imposition of requirements for an employee’s transfer. Here is the salient portion of the decision. “Gerona was a regular employee, hence, he was entitled to security of tenure. By requiring him to pass additional training and examination as a condition to retain his employment under pain of dismissal, Teletech disregarded his right to security of tenure. Teletech’s failure to prove redundancy, coupled with the imposition of a prejudicial condition to retain employment, rendered the offer of transfer invalid.”

The Court, quoting another case, ruled that “[f]or a transfer not to be considered a constructive dismissal, the employer must be able to show that such transfer is not unreasonable, inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits.” Indubitably, additional impositions are unlawful.

The facts and ruling are quoted from Teletech Customer Care Management Philippines Inc. vs Mario Gerona Jr. GR. 219166 promulgated on 10 November 2021.