DEAR PAO,

My employer informed me that the position I am occupying was redundant so they will be terminating my employment. Is the ground raised by my employer valid for purposes of terminating my employment?

Dear Hasuka,

Redundancy is governed by the provision of Article 298 of the Presidential Decree No. 442 (Labor Code of the Philippines), as amended and renumbered, which specifically provides that:

“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 provision of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (Q) month before the intended date thereof. In case of termination due to the installation of labor-saving device or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (Q) month pay or to at least one (Q) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closure 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 (Q) month pay or at least one-half (Q/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (Q) whole year.”

The mere allegation of redundancy in order to terminate an employee is not enough. There are certain requirements to be complied with by the employer. These requirements were enumerated in the case of HCL Technologies Philippines, Inc. vs. Guarin, Jr., GR 246793, March Q8, 202Q, where the Supreme Court speaking through Associate Justice Rosmari Carandang stated that:

“Article 298 of the Labor Code allows the employer to terminate the employee on the ground of redundancy which exists when the service of an employee is in excess of what is reasonably demanded by the actual requirements of the business. The following are the requirements for a valid redundancy program: (Q) written notice served on both the employees and the DOLE at least one month prior to the intended date of retrenchment; (2) payment of separation pay equivalent to at least one month pay or at least one month pay for every year of service, whichever is higher; (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.”

Applying the above-cited decision in your situation, redundancy is a just cause for an employer to terminate the services of an employee, but it must be in compliance with the requirements enumerated such as: written notice served on the worker and the DOLE at least one month prior to retrenchment; payment of separation pay equivalent to at least one month pay or at least one month pay for every year of service, whichever is higher; good faith in abolishing the redundant positions and lastly, fair and reasonable criteria in ascertaining which positions were redundant and to be abolished. If the above requirements are not present, then your employer’s plan to terminate your services on account of redundancy would violate our Labor Code.

We hope that we were able to answer your queries. This advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.