121. Wiltshire file Co. v. NLRC and Ong, GR No. 82249, Feb.

7, 1991

FACTS: Private respondent Vicente Ong was the Sales Manager of petitioner Wiltshire File Co., Inc.
(Wiltshire) from 1981 to 1985. In 1985, upon Ongs return from a trip abroad, he was informed thru a letter
which formally informed him that his services were being terminated upon the ground of redundancy. Ong
filed a complaint for illegal dismissal alleging that his position could not possibly be redundant because
nobody in the company was then performing the same duties, but only him. Wiltshire contends that Ongs
dismissal was justified because the company had been incurring business losses beginning 1984 and that it
was compelled to reduce the size of its personnel force. Hence, Ongs position as Sales Manager of the
company became redundant. The Labor Arbiter declared the termination of Ongs services as illegal and
ordered Wiltshire to pay Ong backwages, unpaid salaries and other benefits. NLRC affirmed the decision of
the Labor Arbiter on the reason that the supposed duplication of work of Ong and Mr. Deliva, the Vice-
President is absent that would justify redundancy. Wiltshire contends that redundancy as a cause for
termination does not necessarily mean duplication of work but a situation where the services of an
employee are in excess of what is demanded by the needs of an undertaking.

ISSUE: Was Ong illegally terminated?

DECISION: NO. Wiltshire had serious financial difficulties before, during and after the termination of the
services of Ong, which resulted to the latters retrenchment. While Wiltshires termination letter used the
word "redundant" as ground for Ongs termination, that letter also referred to the company having
"incurred financial losses which compelled it to resort to retrenchment to prevent further losses". In effect,
the letter states that because of financial losses, retrenchment was necessary, which retrenchment in turn
resulted in the redundancy of Ongs position. Redundancy in an employers personnel force does not
necessarily or even ordinarily refers to duplication of work. That no other person was holding the same
position that private respondent held prior to the termination of his services, does not show that his
position had not become redundant. Redundancy, for purposes of the Labor Code, exists where the services
of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise.

NOTE; DUE PROCESS:

Termination of an employee's services because of retrenchment to prevent further losses or redundancy,

is governed by Article 283 of the Labor Code which provides as follows:

Art. 283. Closure of establishment and reduction of personnel. The employer may also
terminate the employment of any employee due to the installation of labor saving devices,
redundancy, retrenchment to prevent losses or the closing or cessation of operation of the
establishment or undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and
Employment at least one (1) month before the intended date thereof. In case of termination due
to the installation of labor saving devices or redundancy, the worker affected thereby shall be
entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1)
month pay for every year of service, whichever is higher. In case of retrenchment to prevent
losses and in cases of closures or cessation of operations of establishment or undertaking not due
to serious business losses or financial reverses, the separation pay shall be equivalent to one (1)
 month pay or at least one-half (1/2) month pay for every of service, whichever is higher. A
fraction of at least six (6) months shall be considered one (1) whole year.

Under Art. 283, the SC held that:

Where, as in the instant case, the ground for dismissal or termination of services does not relate
to a blameworthy act or omission on the part of the employee, there appears to us no need for
an investigation and hearing to be conducted by the employer who does not, to begin with,
allege any malfeasance or non-feasance on the part of the employee. In such case, there are no
allegations which the employee should refute and defend himself from. Thus, to require
petitioner Wiltshire to hold a hearing, at which private respondent would have had the right to be
present, on the business and financial circumstances compelling retrenchment and resulting in
redundancy, would be to impose upon the employer an unnecessary and inutile hearing as a
condition for legality of termination.