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Case Digested By: Dawn Marie Angeli M. B.

4. NEC SYSTEM INTEGRATED CONSTRUCTION PHILS INC. V. RALPH


CRISOLOGO
GR NO 201535 OCTOBER 05. 2015
J. DEL CASTILLO

FACTS: In 1993, respondent Crisologo was employed by petitioner as


Manager of its Communication Facilities Engineering Department.
Due to his exemplary work performance, he was promoted for several
times. However, sometime in July 2001, he was appointed as Executive
Senior Manager of the Quality Control and Training, a rank lower than his
present position. Despite reluctance, he accepted the new position under few
reservations.
In August 2003, Executive Manager Amakawa announced the
implementation of cost- cutting measures specifically terminating all project
and contractual employees. Notwithstanding its cost-cutting measures,
petitioner revealed a P25, 814,677.00 losses for the year end on December
31, 2003.
In March 2004, petitioner announced its retrenchment program, and
notified the DOLE in writing of its retrenchment program, and submitted an
Establishment Termination Report, which included respondent as among the
17 employees it was terminating from employment. His employment was
alleged to be caused by the redundancy of services.
On March 12, 2004, respondent received P1,002,065.24 representing
his separation pay and other benefits up to March 2004. With this he
executed a Waiver and Quitclaim and a receipt for said amount. Later, he
sought reconsideration of his retrenchment but to no avail. He filed a
Complaint against petitioner and the Executive Manager Amakawa for illegal
dismissal and recovery of back wages, allowances, benefits, moral and
exemplary damages, and attorney’s fees.

Issues:
1. When is there redundancy?
2. What are the doctrinal requisites for a valid retrenchment?
3. Was there a valid Waiver and Quitclaim so to dismiss the illegal dismissal
complaint filed by respondent?

Resolution: 1. Redundancy exists where the services of an employee are in


excess of what is reasonably demanded from the actual requirement of the
enterprise. It is the burden of the employer to prove the factual and legal
basis for the dismissal of their employee (eg. New staffing pattern, feasibility
studies/ proposal on the viability of the new created positions, job description
and the approval of the management of the restructuring).
Case Digested By: Dawn Marie Angeli M. B.

2. The following are the requisites: (a) a written notice served on both the
employee and the DOLE at least one month prior to the intended date of
retrenchment; (b) payment of separation pay equivalent to at least one
month pay or at least one month pay for every year of services, whichever is
higher; (c) good faith in abolishing the redundant positions; and (d) fair and
reasonable criteria in ascertaining what positions are to be declared
redundant an accordingly abolished (eg. Preferred status, efficiency,
seniority).

3. Yes, there was a valid Waiver and Quitclaim, and consequently, there was
no illegal dismissal.
Not all waivers and quitclaims are invalid as against public policy. If
the agreement was voluntarily entered into and represents a reasonable
settlement, it is binding on the parties and may not later be disowned simply
because of a change of mind.
It is only where there is clear proof that the waiver was wangled from
an unsuspecting or gullible person, or the terms of settlement are
unconscionable on its face, that the law will step in to annul the questionable
transaction.
But where it is shown that the person making the waiver did so
voluntarily, with full understanding with what he was doing, and the
consideration for the quitclaim is credible and reasonable, the transaction
must be recognized as valid and binding undertaking.

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