CASE DIGEST : MCCONNELL DOWELL PHILS. v. ARCHIMEDES B. BERNAL GR No. 224685 GAERLAN

 FACTS : Archimedes Bernal, initially hired as an Estimator and later promoted as Manager of Business Development by McConnell Dowell Philippines, consistently received salary increases, bonuses, and commendations for securing major projects, including the Pililia Wind Farm Project. Despite his accomplishments, he became aware of negative perceptions from company directors in 2011, prompting him to seek performance evaluation, which was ignored. In 2012, he filed a grievance due to rude and antagonistic treatment from his superior, Colin Jenner. Around the same time, the company faced significant financial decline and implemented streamlining measures, abolishing several positions, including Bernal’s role, allegedly due to redundancy. Though offered alternative roles, Bernal declined, and he was terminated in June 2012, immediately stripped of company access despite a one-month notice period. Bernal filed a complaint for illegal dismissal. The Labor Arbiter ruled in his favor, declaring his dismissal illegal for lack of a bona fide redundancy program and awarding reinstatement, backwages, and attorney’s fees. On appeal, the NLRC reversed the decision, ruling the termination valid due to authorized redundancy, citing financial decline and organizational restructuring. Bernal’s motion for reconsideration was denied, leading him to elevate the case to the Court of Appeals via petition for certiorari. The CA reinstated the Labor Arbiter’s ruling with modifications, declaring Bernal illegally dismissed, deleting reinstatement due to strained relations but awarding moral and exemplary damages due to bad faith, and holding McConnell Dowell and Jenner jointly liable. The CA found that the employer failed to prove good faith, validity of redundancy, or application of fair criteria and noted oppressive treatment, including immediate revocation of Bernal’s access and failure to evaluate his performance despite his achievements.

ISSUE : WON Bernal's separation from MacDow was due to a valid redundancy program

HELD :  The Supreme Court ruled that although redundancy is a valid authorized cause for termination under Article 298 of the Labor Code, employers bear the burden of proving the existence of a legitimate redundancy program using substantial evidence, including proof of good faith and fair criteria in selecting affected employees. In this case, while MacDow complied with the procedural requirements of notice and payment of separation pay, it failed to substantiate the validity of its redundancy program, presenting only financial statements and organizational charts, which merely showed financial losses and positional restructuring but did not demonstrate the criteria or methods used to determine redundancy. Allegations of poor performance and transfer of functions were unsubstantiated and contradicted by evidence of Bernal's commendable performance. The Court affirmed that Bernal was illegally dismissed due to lack of substantial evidence proving a bona fide redundancy program. However, moral and exemplary damages were deleted because there was no proof of bad faith or arbitrary, malicious actions in carrying out the termination. Since reinstatement was no longer possible due to strained relations and nonexistence of the position, the Court ordered payment of separation pay in lieu of reinstatement, equivalent to one month salary for every year of service until finality of the decision, less the separation already received in 2012, along with full backwages.