Pantoja v. SCA Hygiene Products April 23, 2010 G.R 163554 619 SCRA 216

Facts:

                Respondent, a corporation engaged in the manufacture, sale, and distribution of industrial paper and tissue products, employed petitioner as a utility man. Petitioner was eventually assigned at respondent’s Paper Mill No. 4, the section which manufactures the company’s industrial paper products, as a back tender in charge of the proper operation of the section’s machineries.

                In a Notice of Transfer, respondent informed the petitioner of its reorganization plan and offered hima  position at Paper Mill No. 5 under the same terms and conditions of employment in anticipation of the eventual closure and permanent shutdown of Paper Mill No. 4. The closure and concomitant reorganization is in line with respondent’s decision to streamline and have out the company’s industrial paper manufacturing operations due to financial difficulties brought about by the low volume of sales and orders for industrial paper products. However petitioner rejected the transfer, thus a notice of termination of employment was sent as his position was decalred redundant by the closure of Paper Mill No. 4.

                Petitioner filed a complaint for illegal dismissal against respondent assailing his termination as without any valid cause. He averred that the alleged redundancy never occurred as there was no permanent shutdown of Paper Mill no. 4 due to its continuous operation since his termination. In its defense, respondent refuted petitioner’s claim of illegal dismissal. It argued that petitioner has voluntarily separated himself from service by opting to avail of the separation benefits of the company instead of accepting reassignment/transfer to another position of equal rank and pay.

Issue: WON petitioner was illegally dismissed.

Ruling:

                No. Respondent’s right of management prerogative was exercised in good faith.

                In this case, the abolishment of Paper Mill No. 4 was undoubtedly a business judgment arrived at in the face of the low demand for the production of industrial paper at the time. Despite an apparent reason to implement a retrenchment program as a cost-cutting measure, respondent, however, did not outrightly dismiss the workers affected by the closure of Paper Mill No. 4 but gave them an option to be transferred to post of equal rank and pay. As can be seen, retrenchment was utilized by respondent only as an available option in case the effected employee would not want to be transferred. Respondent did not proceed directly to retrench. This, to our mind, is an indication of good faith on respondent’s part as it exhausted other possible measures other than retrenchment.

                Besides, the employer’s prerogative to bring down labor costs by retrenching must be exercised essentially as a measure of last resort, after less drastic means have been tried and found wanting. Giving the workers an option to be transferred without any diminution in rank and pay specifically belie petitioner’s allegation that the alleged streamlining scheme was implemented as a ploy to ease out employees, thus, the absence of bad faith. Apparently, respondent implemented its streamlining or reorganization plan with good faith, not in an arbitrary manner and without prejudicing the tenurial rights of its employees.