Dear Atty. Joji,
Our company is planning to implement a redundancy program due to a continued decline in project volume. Some positions have become excessive relative to our current workload. Can management choose which employees to declare redundant, especially when multiple employees hold the same position?
Irene
□□□□□
Dear Irene,
Implementation of a redundancy program is a management prerogative. In selecting the employees to be dismissed, the employer is required to adopt fair and reasonable criteria, taking into consideration factors like: a. preferred status; b. efficiency; and c. seniority, among others.
Redundancy exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. In the seminal case of Wiltshire File Co. Inc. v. NLRC, the Court, speaking through Justice Feliciano, held that:
“[R]edundancy in an employer’s personnel force 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. Indeed, in any well-organized business enterprise, it would be surprising to find duplication of work and two or more people doing the work of one person. We believe that redundancy, for purposes of our Labor Code, exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise.”
Succinctly put, a position is redundant where it is superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as overhiring of workers, decreased volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. The employer has no legal obligation to keep in its payroll more employees than are necessary for the operation of its business. Mejila v. Wrigley Philippines Inc., G.R. Nos. 199469 & 199505 (11 September 2019)
Of course, a company cannot simply declare redundancy without basis. It is not enough for a company to merely declare that it has become overmanned. It must produce adequate proof that such is the actual situation to justify the dismissal of the affected employees for redundancy. We have considered evidence such as the new staffing pattern, feasibility studies, proposal on the viability of the newly created positions, job description and the approval by the management of the restructuring, among others, as adequate to substantiate a claim for redundancy.
Hope this helps.
Atty. Joji Alonso