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RepublicofthePhilippinesSUPREMECOURT

Manila

FIRSTDIVISION

G.R.No.106256December28,1994

MAYAFARMSEMPLOYEESORGANIZATION,MAYAREALTYANDLIVESTOCKSUPERVISORYUNION,MAYAFARMSEMPLOYEESASSOCIATION,andMAYAFARMS,INC.SUPERVISORYUNION,petitioners,vs.NATIONALLABORRELATIONSCOMMISSION,MAYAREALTY&LIVESTOCK,INC.,MAYAFARMS,INC.,andLIBERTYFLOURMILLS,INC.,respondents.

PaternoD.MenzonLawOfficeforpetitioners.

Angara,Abello,Concepcion,Regala&Cruzforprivaterespondents.

KAPUNAN,J.:

ThispetitionforreviewoncertiorariseekstosetasidethedecisionofpublicrespondentNationalLaborRelationsCommission(NLRC)whichupheldthelegalityoftheseparationofsixtysix(66)employeeswhoaremembersofpetitionerunions, therebydismissingpetitioners'complaintagainstprivaterespondents forviolationofcollectivebargainingagreement(CBA)andunfairlaborpractice.

Private respondentsMaya Farms, Inc. andMayaRealty and LivestockCorporation belong to the LibertyMillsgroupofcompanieswhoseundertakingsincludetheoperationofameatprocessingplantwhichproducesham,bacon,coldcuts,sausagesandothermeatandpoultryproducts.

Petitioners,ontheotherhand,aretheexclusivebargainingagentsoftheemployeesofMayaFarms,Inc.andtheMayaRealtyandLivestockCorporation.

OnApril12,1991,privaterespondentsannouncedtheadoptionofanearlyretirementprogramasacostcuttingmeasure considering that their businessoperations sufferedmajor setbacksover the years.Theprogramwasvoluntary and could be availed of only by employees with at least eight (8) years of service. 1Dialogues werethereafterconductedtogivethepartiesanopportunitytodiscussthedetailsoftheprogram.Accordingly,theprogramwasamendedtoreducetheminimumrequirementofeight(8)yearsofservicetoonlyfive(5)years.

However, the response to the programwasnil. Therewere only a few takers. To avert further losses, privaterespondentswereconstrainedtolookintothecompanies'organizationalsetupinordertostreamlineoperations.Consequently,theearlyretirementprogramwasconvertedintoaspecialredundancyprogramintendedtoreducetheworkforcetoanoptimumnumbersoastomakeoperationsmoreviable.

InDecember1991,atotalofsixtynine(69)employeesfromthetwocompaniesavailedofthespecialredundancyprogram.

On January 17, 1992, the two companies sent letters to sixtysix (66) employees informing them that theirrespective positions had been declared redundant. The notices likewise stated that their services would beterminated effective thirty (30) days from receipt thereof. Separation benefits, including the conversion of allearnedleavecreditsandotherbenefitsdueunderexistingCBAswerethereafterpaidtothoseaffected.

OnJanuary24,1992,anoticeofstrikewas filedby thepetitionerswhichaccusedprivaterespondents,amongothers, of unfair labor practice, violation ofCBA and discrimination.Conciliation proceedingswere held by theNationalConciliationandMediationBoard(NCMB)butthepartiesfailedtoarriveatasettlement.

OnFebruary6,1992,thetwocompaniesfiledapetitionwiththeSecretaryofLaborandEmploymentaskingthe

lattertoassumejurisdictionoverthecaseand/orcertifythesameforcompulsoryarbitration.Thus,onFebruary12,1992, the thenActingLaborSecretary (nowSecretary)NievesConfesor certified thecase tohereinpublicrespondentforcompulsoryarbitration.

OnMarch4,1992,thepartieswerecalledtoahearingtoidentifytheissuesinvolvedinthecase.Thereafter,theywereorderedtosubmittheirrespectivepositionpapers.

Intheirpositionpaper,petitionersaverredthatinthedismissalofsixtysix (66)unionofficersandmemberson thegroundof redundancy,private respondents circumvented theprovisionsintheirCBA,moreparticularly,Section2,ArticleIIIthereof.Saidprovisionreads:

Sec.2.LIFORULE.Inallcasesoflayofforretrenchmentresultinginterminationofemploymentinthelineofwork,theLastInFirstOut(LIFO)Rulemustalwaysbestrictlyobserved.

Petitionersalsoalleged that the companies' claim that theywere in economic crisiswas fabricatedbecause in1990, a net income of over 83 million pesos was realized by Liberty Flour Mills Group of Companies. 2Furthermore,withtheterminationofthesixtysix(66)employeespursuanttothespecialredundancyprogram,theremainingwork force, especially the drivers, became overworked and overburdened somuch so that they found themselves doingovertimeworkandreportingfordutyevenduringrestdays.

Invokingtheworkers'constitutionalrighttosecurityoftenure,petitionersprayedforthereinstatementofthesixtysix(66)employeesandthepaymentofattorney'sfeesastheywereconstrainedtohiretheservicesofcounselinordertoprotecttheworkers'rights.

Ontheirpart,privaterespondentscontendthattheirdecisiontoimplementaspecialredundancyprogramwasanexerciseofmanagementprerogativewhichcouldnotbeinterferedwithunlessitisshowntobetaintedwithbadfaith and ill motive. Private respondents explained that they had no choice but to reduce their work force,otherwise,theywouldsuffermorelosses.Furthermore,theydeniedthattheprogramviolatedCBAprovisions.

OnJune29,1992,publicrespondentrenderedadecision,3thedispositiveportionofwhichreads:

WHEREFORE, inviewof the foregoing, judgment ishereby renderedconfirming the legalityof theseparationofthe66employeesofmanagementtherebydismissingthechargesofviolationofCBAand unfair labor practice on the part ofmanagement. Accordingly,Maya Farms Incorporated andMaya Realty and Livestocks Inc. are hereby ordered to comply with its (sic) undertaking per thenotice of termination dated January 17, 1992 issued to the remaining fifty three (53) employeespaying them their respectiveseparationbenefitsas listed in theattachedsheet consideredpartofthisDecision.Saidawards(sic)isinadditiontootherbenefitsasextendedbythecompaniesintheletteroftermination.

SOORDERED.4

Notsatisfiedwiththeabovequoteddecision,petitionersinterposedtheinstantpetition.

Petitionersmaintainthatpublicrespondentgrosslyerredandgravelyabuseditsdiscretionwhenitruledthat:(a)the termination of the sixtysix (66) employees was in accordance with the LIFO rule in the CBA (b) thetermination of the sixtysix (66) employeeswas in accordancewithArticle 283of the LaborCode and (c) thepaymentorofferofpaymentcansubstituteforthe30dayrequirednoticepriortotermination.5

Aclosescrutinyoftheseassignederrorshowever,showsthatthesameprimarilydealwiththefactualfindingsofpublicrespondentwhichwearenotatlibertytosetasideintheabsenceofgraveabuseofdiscretionamountingtolackorinexcessofjurisdiction.

ThisCourthasconsistently ruled that findingsof factofadministrativeagenciesandquasijudicialbodieswhichhaveacquiredexpertisebecausetheirjurisdictionisconfinedtospecificmattersaregenerallyaccordednotonlyrespectbuteven finality6andare binding upon thisCourt unless there is a showingof graveabuseof discretion,7 orwhereitisclearlyshownthattheywerearrivedatarbitrarilyorindisregardoftheevidenceonrecord.8

Nevertheless,wewill look into the factual findingsofpublic respondent if only todeterminewhether therewasgraveabuseofdiscretionamountingtolackorinexcessofjurisdiction.

TheterminationofthesixtysixemployeeswasdoneinaccordancewithArticle283oftheLaborCode.Thebasisfor this was the companies' study to streamline operations so as to make themmore viable. Positions whichoverlappedeachother,orwhichareinexcessoftherequirementsoftheservice,weredeclaredredundant.

Article283provides:

Art.283.Closureofestablishmentandreductionofpersonnel.Theemployermayalsoterminatethe employment of any employee due to the installation of laborsaving devises, redundancy,retrenchment to prevent losses or the closing or cessation of operation of the establishment orundertakingunless theclosing is for thepurposeof circumventing in theprovisionsof this title,byservingawrittennoticeontheworkersandtheDepartmentofLaborandEmploymentat leastone(1)monthbeforetheintendeddatethereof.Incaseofretrenchmenttopreventlossesofoperationsofestablishmentorundertakingnotduetoseriousbusinesslossesorfinancialreverses,theone(1)monthpayoratleastonehalf(1/2)payforeveryyearofservice,whicheverishigher.Afractionofatleastsix(6)monthsshallbeconsideredone(1)wholeyear.

Wefullyagreewiththefindingsandconclusionsofthepublicrespondentontheissueoftermination,towit:

We sustain the companies' prerogative to adopt the alleged redundancy/retrenchment program tominimizeifnot,toavertlossesintheconductofitsoperations.Thishasbeenrecognizedinalineofcases.(WiltshireFileCo.vs.NLRC,G.R.No.L82249,February7,1991).However,thecompanies'decisiononthismatterisnotabsolute.Thebasisforsuchanactionmustbefarfrombeingwhimsicaland the samemust be proved by substantial evidence. In addition, the implementation of such adecisionorpolicymustbe inaccordancewithexisting laws, rulesandprocedureandprovisionsoftheCBAbetweentheparties,iftherebeany.Shortofanyoftheseconditions,managementpolicytopursueandterminateitsemployeesallegedlytoavertlosses,mustfail.

In subject case, the 66 complaining employees were separated from service as a result of thedecisionofmanagementtolimititsoperationsandstreamlinepositionsandpersonnelrequirements.

In the case ofMaya Farms, Inc. itsmeat processing department, prior to the adoption of specialredundancyprogramhadfour(4)sectionseachofwhichisheadedbyanassistantsuperintendent.These3sectionsare:(a)meatprocessing(b)slaughterhouse(c)packing.Withtheimplementationofthedecisionofmanagementtolimitmeatprocessingwithsausagesastheonlyoutput,onlyoneposition forassistantsuperintendentwasretained thatofAsst.Superintendent formeatprocessingheld by Lydia Bandong. (Plantilla attached to the letter ofMay 24, 1992 also Exh. "E." Likewise,positions of slicer/seater operator, debonner/skinner, ham and bacon operative, were scrapped.Similarly,positions forpackersweredecreasedretainingonly fivepositionsoutof21packers.Alsoaffectedwerethepositionsofeggsorters/stockersasonly4positionswereretainedoutoften(10)positions.

Acloseexaminationofthepositionsretainedbymanagementshowthatsaidpositionssuchaseggsorter,debonnerwerebut theminimalpositionsrequiredtosustain the limitedfunctions/operationsofthemeatprocessingdepartment.Intheabsenceofanyevidencetoprovebadfaithonthepartofmanagement inarrivingatsuchdecision,whichrecordsonhandfailedtoshowin instantcase,therationalityoftheactofmanagementinthisregardmustbesustained.WhileitmaybetruethattheLiberty Flour Mills Group of Companies as a whole posted a net income of P83.3 Million, it isadmittedthatwithrespecttooperationsofthemeatprocessingandlivestockwhichwereundertakenbyhereincompaniessustainedlossesinthesumofP2,257,649.88(Exh."3").Thisisthereason,asadvanced by management, for its decision to streamline positions resulting in the reduction ofmanpowercompliment(sic).9

InAbbottLaboratories (Phils.) Inc.vs.NLRC,10wehad occasion to uphold the employer in its exercise ofwhat areclearlymanagementprerogatives,thus:

Thehiring,firing,transfer,demotion,andpromotionofemployeeshasbeentraditionally,identifiedasamanagementprerogativesubject to limitations found in law,acollectivebargainingagreementorgeneralprinciplesoffairplayandjustice.This isafunctionassociatedwiththeemployer's inherentright tocontrolandmanageeffectively itsenterprise.Evenas the law issolicitousof thewelfareofthe employees, it must also protect the right of an employer to exercise what are clearlymanagement prerogatives. The free will of management to conduct its own business affairs toachieve itspurposecannotbedenied (seeDanganvs.NationalLaborRelationsCommission,127SCRA706).

Theruleiswellsettledthatlaborlawsdiscourageinterferencewithanemployer'sjudgmentintheconductofhisbusiness.Evenasthelawissolicitousofthewelfareofemployees,itmustalsoprotecttherightofanemployertoexercisewhatareclearlymanagementprerogatives.As longasthecompany'sexerciseof thesameis ingoodfaithtoadvanceitsinterestandnotforthepurposeofdefeatingorcircumventingtherightsofemployeesunderthelawsorvalidagreements,suchexercisewillbeupheld.11

TheNLRCcorrectlyheldthatprivaterespondentsdidnotviolatetheLIFOruleunderSection2,ArticleIIIofthe

CBAwhichprovides:

Sec.2.LIFORULE.Inallcasesoflayofforretrenchmentresultinginterminationofemploymentinthelineofwork,theLastinFirstOut(LIFO)Rulemustalwaysbestrictlyobserved.

It is not disputed that theLIFO ruleapplies to terminationof employment in the line ofwork. 12Verily, what iscontemplated in theLIFOrule is thatwhentherearetwoormoreemployeesoccupyingthesameposition in thecompanyaffectedbytheretrenchmentprogram,thelastoneemployedwillnecessarilybethefirsttogo.

Moreover, thereasonwhytherewasnoviolationof theLIFOrulewasamplyexplainedbypublicrespondent inthiswise:

....TheLIFOruleundertheCBAisexplicit.Itisordainedthatincasesofretrenchmentresultinginterminationofemploymentinlineofwork,theemployeewhowasemployedonthelatestdatemustbe the firstone togo.Theprovisionspeaksof termination in the lineofwork.Thiscontemplatesasituationwhereemployeesoccupying the sameposition in the companyare tobeaffectedby theretrenchment program. Since there ought to be a reduction in the number of personnel in suchpositions,thelengthofserviceofeachemployeesisthedeterminingfactor,suchthattheemployeewhohasalongerperiodofemploymentwillberetained.

In the case under consideration, specifically with respect to Maya Farms, several positions wereaffectedby the special involuntary redundancyprogram.Thesearepackers, egg sorters/stockers,drivers.Inthecaseofpackers,priortotheinvoluntaryredundancyprogram,twentyoneemployeesoccupiedthepositionofpackers.Outofthisnumber,only5wereretained.Inthis group of employees, the earliest date of employment was October 27, 1969, and the latestpackerwasemployed in1989.Themostsenioremployeesoccupying thepositionofpackerswhowereretainedareasfollows:

Santos,LauraC.Oct.27,1969Estrada,MercedesAug.20,1970Hortaleza,LitaJune11,1971Jimenez,LolitaApril25,1972Aquino,TeresitaJune25,1975

AlltheotherpackersemployedafterJune2,1975(sic)wereseparatedfromtheservice.

Thesameistruewithrespecttoeggsorters.TheeggsortersemployedonorbeforeApril26,1972wereretained.Allthoseemployedaftersaiddatewereseparated.

With respect to thepositionofdrivers, therewereeightdriversprior to the involuntary redundancyprogram.Thereafter only 3 positionswere retained.Accordingly, the three driverswhoweremostseniorintermsofperiodofemployment,wereretained.Theyare:CeferinoD.Narag,EfrenMacaraigandPablitoMacaraig.

The case of Roberta Cabrera and Lydia C. Bandong, Asst. Superintendent for packing and Asst.Superintendent formeatprocessingrespectivelywaspresentedbytheunionasan instancewheretheLIFOrulewasnotobservedbymanagement.TheunionpointedoutthatLydiaBandongwhowasretainedbymanagementwasemployedonamuch laterdate thanRobertaCabrera,andbothareAssistant Superintendent.We cannot sustain the union's argument. It is indeed true that RobertaCabrerawasemployedearlier(January28,1961)and(sic)LydiaBandong(July9,1966).However,itismaintainedthatinmeatprocessingdepartmenttherewere3Asst.Superintendentsassignedasheadofthe3sectionsthereat.ThereasonadvancedbythecompanyinretainingBandongwasthatasAsst.Superintendent formeatprocessingshecould "already takecareof theoperationsof theother sections." The nature of work of each assistant superintendent as well as experience weretaken into account bymanagement. Such criteria was not shown to be whimsical nor carpricious(sic).13(Emphasissupplied).

Finally,contrarytopetitioners'contention,thereisnothingonrecordtoshowthatthe30daynoticeofterminationto theworkerswasdisregardedand that the samesubstitutedwith separationpaybyprivate respondents.Asfoundbypublicrespondent,writtennoticesofseparationweresenttotheemployeesonJanuary17,1992.Thenoticesexpresslystated that the terminationofemploymentwas to takeeffectonemonth fromreceipt thereof.Therefore,theallegationthatseparationpaywasgiveninlieuofthe30daynoticerequiredbylawisbaseless.

WHEREFORE, findingnograveabuseofdiscretionamounting to lackor inexcessof jurisdictionon thepartofpublicrespondent,theinstantpetitionisherebyDISMISSED.

SOORDERED.

Padilla,Davide,Jr.,BellosilloandQuiason,JJ.,concur.

#Footnotes

1Exhibit162.

2Rollo,p.48.

3DecisionpennedbyNLRCPresidingCommissionerLourdesC.Javier.

4Id.,atpp.2324.

5Petition,p.3Rollo,p.4.

6FiveJTaxiv.NLRC,212SCRA225SanMiguelCorporationv.Javate,Jr.,205SCRA469ReyesandLimCo.v.NLRC,201SCRA772FilipinasPortServices,Inc.v.NLRC,200SCRA773Rabagov.NLRC,200SCRA158AboitizShippingCorporationv.DelaSerna,199SCRA568PanPacificIndustrialSalesCo.,Inc.v.NLRC,194SCRA633.

7Evangelistav.NLRC,195SCRA603.

8Icasianov.OfficeofthePresident,209SCRA25DeVerav.NLRC,191SCRA632EternitEmployeesandWorkersUnionv.JesusdeVeyra,189SCRA752PhilippineAirlinesEmployees'Association(PALEA)v.FerrerCalleja,162SCRA426Mantrade/FMMCDivisionEmployeesandWorkersUnionv.Bacungan,144SCRA510ZamboangaCityWaterDistrictv.Bartolome,140SCRA432.

9NLRCDecision,pp.1719Rollo,pp.3032.

10154SCRA713[1987].

11UnionCarbideLaborUnionv.UnionCarbidePhilippines,215SCRA554NationalFederationofLaborUnions(NAFLU)v.NLRC,202SCRA346PhilippineTelegraphandTelephoneCorporationv.Laplana,199SCRA485Cruzv.Medina,177SCRA565SanMiguelBrewerySalesForceUnion(PTGWO)v.Ople,170SCRA25.

12Rollo,p.33.

13Rollo,pp.3336.

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