036. ALMODIEL V.

NLRC
Farle Almodiel vs. NLRC (First Division) and Raytheon Phils., Inc.
Petition for certiorari of the decision of the NLRC
June 14, 1993
Nocon, J.

Facts
Farle is a certified public accountant hired in Oct. 1987 as Cost Accounting Manager of Raytheon through John
Clements Consultants, Inc., a placement firm, with a starting monthly salary of P18,000. Before that, he was the
accounts executive of Integrated Microelectronics for several years and left that job for the promising career
offered by Raytheon.

He started as a probationary employee. As Cost Accounting Manager (CAM), he was to plan, coordinate and
carry out year and physical inventory; formulate and issue hard copies of Standard Product costing and other
cost analysis; and set up the written Cost Accounting System for the whole company. After a few months, he was
given a regularization increase of P1,600 a month, and then his salary was increased to P21,600 a month.

Aug. 17, 1988 – Farle recommended and submitted a Cost Accounting/Finance Reorganization, but it was
disapproved by the Controller, who assured him that should his position, which was a one-man department,
becomes unable to deliver the service due to manpower constraint, he would be given a 3-year advance notice.

The standard cost accounting system was installed and used at Raytheon plants and subsidiaries worldwide, and
the services of a CAM entailed only the submission of periodic reports that would use computerized forms
prescribed by the international head office of the Raytheon Company in California.

Jan. 27, 1989 – He was summoned by his immediate boss and in the presence of IRD Manager Rolando Estrada,
and was told of the abolition of his position due to redundancy. Farle pleaded with management to defer its
action or transfer him, but the decision was final and had been conveyed to DOLE. Thus he filed the complaint
for illegal dismissal.

LA ordered Farle's reinstatement with full backwages and damages. Raytheon appealed, and the NLRC reversed
the decision. Farle then filed the instant petition.

Issue
Whether or not NLRC committed grave abuse of discretion in justifying Farle's termination, which was tainted
with bad faith, on the ground of redundancy

Ruling
No. Petition dismissed for lack of merit.

Reasoning
Termination on the ground of redundancy is governed by Art. 283 of the Labor Code. A written notice must be
served upon the employee and DOLE at least 1 month before the intended date, and the worker is entitled to
separation pay equivalent to at least 1 month pay for every year of service. Farle was duly advised 1 month before
of his termination of employment in a written notice by immediate superior Magdalena Lopez. He was given a
check for P54,863 representing separation pay but he refused to acknowledge either the notice or the check,
which were sent to him through registered mail. DOLE was also served a copy of the notice of termination.

Farle contends that the functions of his position were absorbed by the Payroll/Mis/Finance Department under
Danny Ang Tan Chai, an alleged resident alien without a working permit. Whether or not Farle's functions as
CAM have been dispensed with or absorbed by another is immaterial. No malice can be imputed from the act. In
Wiltshire File Co., Inc. v. NLRC, the Court said that redundancy exists where the services of an employee are in
excess of what is reasonably demanded by the actual requirements of the enterprise. Characterizing an
employee's services as unnecessary and properly terminable was an exercise of business judgment on the part of
the employer.

International Macleod, Inc. v. IAC – A position may be phased out to save costs and if it is no longer economical
to retain said services, and the court cannot interfere with the exercise of this prerogative as long as no abuse of
discretion is shown.
An employer has no legal obligation to keep more employees than what is necessary for the business. Farle failed
to point out the functions of his position which were still indispensable, and the fact that the functions of a
position were added to the duties of another does not affect the legitimacy of the employer's right to abolish a
position when done in the normal exercise of its prerogative. And as Farle held a managerial position, Raytheon
had a broad latitude of discretion in abolishing his position, because officers perform not only functions which
require the employer's full trust and confidence but also those that spell success or failure for the enterprise.

Farle's contention that there was unlawful discrimination when corollary functions related to cost accounting
were absorbed by Danny Ang Tan Chai is untenable. Art. 40 of the Labor Code requires employment permits of
non-resident aliens. The employment permit is required for entry into the country for employment and is issued
after determination of the non-availability of a person in the Philippines who is able to perform the services for
which the alien is desired. Ang Tan Chai is a resident alien and therefore Art. 40 does not apply to him.

Farle also claims that he is more qualified to head the Payroll/Mis/Finance Department than Ang Tan Chai.
However, the latter was promoted in the middle of 1988, which was before the abolition of Farle's position. An
objection on the ground that one has better credentials than the appointee is frowned upon so long as the latter
possesses minimum qualifications for the position. Farle does not allege that Ang Tan Chai does not qualify, so
the Court cannot substitute its judgment for that which is clearly and exclusively management prerogative.