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Pantoja vs. SCA Hygiene Products Corporation, GR No.

163554, 10 April 2010, Second Division, Del


Castillo

Parties:
Petitioner – Pantoja
Respondent – SCA Hygiene Products Corporation

Court uphold the employer's exercise of its management prerogative because it was done for the
advancement of its interest and not for the purpose of defeating the lawful rights of an employee.

Petitioner was a utility man at Respondent’s Paper Mill No. 4. Respondent then informed Petitioner of its reorganization
plan and offered him a position at Paper Mill No. 5 under the same terms and conditions of employment in anticipation
of the permanent closure of Paper Mill No. 4. Petitioner rejected the offer. Thus, a notice of termination of employment
was sent to petitioner as his position was redundant by the closure of Paper Mill No. 4. Petitioner filed a complaint for
illegal dismissal against Respondent alleging that alleged redundancy never occurred as there was no permanent
shutdown of Paper Mill No. 4. Respondent argued that petitioner voluntarily separated himself from service by availing
of the separation benefits instead of accepting the transfer. Was respondent’s contention correct?

Yes. The abolishment of Paper Mill No. 4 was a business judgment because of the low demand for the production of
industrial paper at that time. Respondent did not proceed directly to retrench the workers affected by the closure of
Paper Mill No. 4 but gave them option to be transferred to posts of equal rank and pay. Retrenchment was the last
option in case the employee refuse the transfer. This is an indication of good faith on the part of Respondent as it
exhausted other measures other than retrenchment. Moreover, the resumption of the industrial paper manufacturing
operations does not make the reorganization plan illegal because the abolishment of the Paper Mill No. 4 was a business
judgment to prevent financial drain at that time. Furthermore, petitioner opted to be separated by executing a release
and quitclaim for which he received separation pay instead of accepting the reassignment involving similar rank and
pay. Such quitclaim is credible and constituted a valid and binding waiver.