FACTS:
Continental Steel implemented a redundancy program and dismissed several employees, including Montaño. Montaño challenged his dismissal, claiming that the redundancy was a mere pretext and that due process was not observed.
The Labor Arbiter upheld the dismissal as valid. The NLRC reversed, ruling that the redundancy program was not proven to be bona fide.
The Court of Appeals affirmed the NLRC. Continental Steel elevated the case to the Supreme Court.
ISSUE:
Was Montaño’s dismissal due to redundancy valid under the Labor Code?
RULING:
No. The dismissal was invalid.
REASONING:
For a redundancy program to be valid, the employer must show:
1. Written notice to the employee and DOLE at least 1 month prior,
2. Payment of separation pay,
3. Good faith in abolishing redundant positions,
4. Fair and reasonable criteria in determining which employees are redundant.
Continental Steel failed to prove good faith and fair criteria. The evidence did not show that Montaño’s position was unnecessary or superfluous. Redundancy is not a prerogative to ease out employees arbitrarily; it must be backed by substantial proof.
Thus, Montaño’s dismissal was declared illegal.
DOCTRINE:
A valid redundancy program requires compliance with the substantive and procedural requisites under the Labor Code. Employers must prove good faith and use fair, reasonable criteria in dismissing employees.