MARIE ANNE E. DEL ROSARIO, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION AND MAYNILAD WATER SERVICES, INC., RESPONDENTS.
REYES, J.:
Petitioner’s version:
On 01 February 1999, petitioner Marie Anne E. Del Rosario (“Del Rosario” for brevity) was hired by respondent Maynilad Water Services, Inc. (“Maynilad” for brevity) as Head of the Corporate Services Division with a rank of Senior Assistant Vice-President. Her Division had six departments under her control and supervision, namely: Facilities Management; Information Technology; Security Safety and Auxilliary Services; Change Management; Legal; and Records and Communication. (Rollo, p. 36)
On 15 October 1999, Mr. Rafael Alunan (“Mr. Alunan” for brevity) formally assumed his post as the President of respondent Maynilad vice Mr. Jose Gabriel D. Olives (“Mr. Olives” for brevity). And immediately thereafter, Mr. Alunan, removed one by one the departments from petitioner Del Rosario’s Division and transferred the same to his alleged favored new appointees. (Id. at p. 36)
On 06 November 1999, a Management Committee meeting was held and it was announced thereat that Mr. Ignacio Gimenez (“Mr. Gimenez” for brevity) would head the Purchasing and Logistics and later she learned from Mr. Gimenez that the Facilities Management Department had been placed under Purchasing and Logistics. In December 1999, at the meeting of the Non-Revenue Water Council, Mssrs. Alunan and Carlos Salonga, Vice-President for Human Resources presented a table of organization which showed Facilities Management under Mr. Gimenez and Change Management under Mr. Salonga; thus, petitioner Del Rosario was left with four (4) departments; that Mr. Alunan had never discussed the changes with petitioner Del Rosario. (Id. at p. 36)
In March 2000, the Billing Management was transferred to a newly created Customer Service Division headed by Mr. Luis Afable (“Mr. Afable” for brevity) while petitioner Del Rosario continued to serve the company. In October 2000, she recommended a person to fill up the vacancy for the manager position in the Information Technology (IT) department but Mr. Alunan did not consider her recommendation. (Id.)
On 09 February 2001, Mr. Alunan who was on his way out of his office, invited her (Del Rosario) to walk with him and told her that he would divest her of Information Technology and he would appoint another person to head it. Mr. Alunan directed her to discuss the details of the transfer of IT department with his Chief of Staff – Col. Arnulfo Ramirez. (Id.)
On 12 February 2001, Mr. Alunan issued a Memorandum appointing Mr. Romel O. Dimabuyu (“Mr. Dimabuyu” for brevity) as Chief Information Officer. When Mr. Dimabuyu went to see her and told her that he was taking the Systems and Methods group of employees to form part of his unit she expressed her opinion that the transfer was not necessary. Due to the impasse, a meeting was later held attended by Col. Ramirez, Mssrs. Dimabuyu and Salonga and petitioner Del Rosario where a resolution was reached that there was a standing issue on the wisdom of transferring the Systems and Methods group to Mr. Dimabuyu. From February to April 2001, her colleagues, staff and contractors asked her if she has resigned because Mr. Dimabuyu allegedly told them so. (Id. at pp. 36-37)
On 16 May 2001 she learned that a memorandum was circulated on 11 May 2001 transferring the Systems and Methods to Mr. Dimabuyu as Process Architecture; that said memorandum was also posted on the electronic bulletin board but she was not furnished a copy thereof; that she also learned that the people under the Systems and Methods groups were being asked to resign or transfer to another department or re-apply positions in the new Process Architecture group. (Id. at p. 37)
In June 2001, a colleague asked her if she had resigned because allegedly Mr. Afable would assume her position and the position of Mr. Afable was offered to the said colleague. (Id.)
On 19 July 2001, Col. Ramirez urged her to apply for the Special Separation Program (SSP), then being implemented by respondent Maynilad but she told Col. Ramirez that she has no intention of leaving the company and SSP was not applicable to her. Col. Ramirez retorted that if she would not resign, she would find herself without any position in the company, reiterating that Mr. Salonga would present her a special separation package. In one meeting, Mr. Dimabuyu announced that she was leaving the company and was just waiting for the computation of her benefits; and later on, one of the Vice-Presidents approached and invited her secretary to transfer to his division. (Id.)
On 25 July 2001, Mr. Salonga presented her a calculation of her separation benefits upon the instruction of Col. Ramirez but she clarified that she was not availing of the SSP; that respondent Maynilad allegedly continued to undermine her and made the condition of her employment intolerable wherein she was not invited to attend meetings and even social functions. Mr.Alunan and Col. Ramirez constantly bypassed her and they directly gave orders to her subordinates. (Id.)
Sometime in October 2001, Col. Ramirez had meetings with the Security Manager without her knowledge and she later learned from Col. Ramirez that the security manager would now be directly reporting to the Office of the President. (Id.)
In December 2001, she learned from a personnel notice form and a memo request for cellular phones which was routed to her that Col. Rene Silva had been appointed as Security Director/AVP way back in July 2001; that all the while she knew that Col. Silva was just a security consultant of the company; that with the foregoing oppressions and vexations against her, she went to see Col. Ramirez for an explanation but found none. (Id. at p. 37-38)
On 23 January 2001, a janitress personally delivered to her a letter from Mr. Alunan which turned out to be a termination letter and upon receipt thereof, she surrendered the company vehicle assigned to her on 31 January 2001 and after which she secured her clearance. Hence, a complaint for illegal dismissal with prayer for reinstatement and payment of full backwages, moral and exemplary damages and attorney’s fees was filed before the Labor Arbiter. (Id. at pp. 36-38)
Respondent’s version:
Respondent Maynilad contends that it is a public utility company which has a Concession Agreement with the Metropolitan Waterworks and Sewerage Systems (MWSS) since 01 August 1997 to deliver water to the areas specified in the Agreement. It has about 2,400 employees since it absorbed most of the employees of the MWSS. Through the years of its operations, it was burdened with a large number of employees which the management thought to be inefficient. The company was sustaining losses particularly in the years 2000 and 2001 at around P 2.4 billion and P1.1 billion pesos respectively; that many of the positions were found to be duplicitous, redundant or unnecessary or which could be absorbed by other departments. And in order to make the company cost efficient, the management took steps to streamline its operations and reorganize and there are positions which were abolished. It offered a special separation program for 1.5 months of basic salary for every year of service to the employees. The company offered said program: a) in January 1999, b) September 1999 for employees under the Engineering Department which was abolished in 1999 and again c) in July 1999 which offer was open to all the company employees regardless of rank or position; that aside from the SSP, a reorganization of the Operations Division has been on-going since 1988. (Id. at p. 38)
In regard to the abolition of Corporate Services Division, Maynilad contends that the said decision was reached after continuing evaluation of the organization and the needs of the company and after finding that the functions and positions thereof are redundant and may be done by other departments. The abolition thereof would save company money in the long run and it (company) would be more efficient and effective for its (Corporate Services Division) functions being performed by other departments. Maynilad avers that no other persons were appointed to a newly created same or similar position of petitioner Del Rosario; that before the reorganization, Corporate Services Division had the legal unit under it but it was best to transfer said unit to the Administration Group which is Human Resources under the said department. The functions of Corporate Services Division relating to security were absorbed by the Office of the President which has personnel with experience on security services. (Id. at pp. 38-39)
On 21 January 2001, Mr. Alunan issued a Memorandum informing all Maynilad employees of the Organizational Adjustment as part of the organizational streamlining efforts “aimed at higher operating efficiency and functional integration”. (Id. at p. 39)
As early as May 2001, petitioner Del Rosario already knew of the impending reorganization and in fact she met with her subordinates to inform them of this development. (Id.)
On 22 January 2002, Mr. Alunan wrote petitioner Del Rosario informing her in advance of the reorganization and the abolition of the Corporate Services Division and inviting her to discuss with Col. Ramirez and Mr. Salonga her benefits under company’s SSP. Consequently, petitioner Del Rosario wrote Mr. Alunan that she was contesting her alleged dismissal and she refused the SSP. Thereafter, a notice of termination dated 01 February 2002 was sent to petitioner Del Rosario by registered mail since she refused to receive the same personally. And on 12 March 2002, a notice of the said termination was sent to the Department of Labor and Employment (DOLE). Respondent Maynilad submits that the position of petitioner Del Rosario was redundant and no longer necessary for the efficient and effective operations of the company; that the company has the management prerogative to reorganize provided it complies with the requirements of the Labor Code; that the abolition of petitioner Del Rosario’s position and the Corporate Services Division were done in good faith and fully justified and not discriminatory; and that petitioner Del Rosario is not entitled to separation pay, damages and attorney’s fees and other costs. (Id.)
On 30 August 2002, the Labor Arbiter rendered a Decision, the dispositive portion of which reads:
“WHEREFORE, premises considered, judgment is hereby rendered declaring the complainant’s dismissal to be illegal. The respondent company is hereby ordered to immediately reinstate complainant to her former position or to a substantially equivalent position without loss of all benefits or seniority rights which she previously enjoyed prior to her dismissal and with full backwages from the time of dismissal until actual reinstatement. The respondent is further ordered to pay the complainant P3,984,426.60 by way of moral damages and P1,328,142.00 as exemplary damages plus attorney’s fees equivalent to ten percent (10%) of the total monetary award.
SO ORDERED”. (Id. at p. 245)
Disgruntled, respondent Maynilad filed an appeal before public respondent NLRC and on 28 November 2003, it issued a Resolution, the decretal text of which reads:
“WHEREFORE, premises considered, the appeal is GRANTED and the Decision dated 30 August 2002 is SET ASIDE. A new Decision is rendered finding complainant-appellee’s dismissal ineffectual hence; respondent-appellant company is hereby ordered to pay separation pay to complainant-appellee in accordance with the Special Separation Program it offered to other employees and to pay full backwages from the time compensation was withheld from complainant-appellee until the finality of this Resolution.
SO ORDERED”. (Id. at p. 49)
From the aforequoted Decision, respondent Maynilad sought reconsideration thereof and the same was denied in its Resolution dated 27 February 2004, the fallo of which reads:
“ACCORDINGLY, let this instant Motion for Reconsideration be, as it is hereby DENIED for lack of merit. The resolution of this Commission dated 28 November 2003 STANDS undisturbed.
No further motion of similar nature shall be entertained.
SO ORDERED”. (Id. at p. 52)
Hence, this recourse, wherein petitioner Del Rosario raised the following assigned errors, to wit:
I.
“THE PUBLIC RESPONDENT NLRC GRAVELY ABUSED ITS DISCRETION IN RULING THAT PETITIONER’S DISMISSAL WAS MERELY INEFFECTUAL AND NOT ILLEGAL”.
II.
“THE PUBLIC RESPONDENT NLRC GRAVELY ABUSED ITS DISCRETION WHEN IT CONSIDERED AFFIDAVITS SUBMITTED BY THE COMPANY FOR THE FIRST TIME ON APPEAL”.
III.
“THE PUBLIC RESPONDENT NLRC GRAVELY ABUSED ITS DISCRETION WHEN IT SHIFTED THE BURDEN OF PROOF TO THE PETITIONER”.
IV.
“THE PUBLIC RESPONDENT NLRC GRAVELY ABUSED ITS DISCRETION WHEN IT DELETED THE AWARD OF DAMAGES AND ATTORNEY’S FEES IN FAVOR OF THE PETITIONER”. (Id. at pp. 13, 23, 25 and 27)
The petition is devoid of merit.
While it appears that it was only during the pendency of the instant case on appeal before the NLRC that respondent Maynilad submitted the affidavits of its officers and employees; nonetheless, the same, does not deny petitioner Del Rosario of the due process of law since she was given the opportunity to controvert the same by strong and concrete evidence other than her bare assertions that the aforesaid affidavits should not have been admitted. Likewise, it is our considered view that the submission thereof did not prejudice petitioner Del Rosario’s rights since a perusal thereof reveal that there were no new issues raised therein; neither respondent Maynilad’s defenses were changed. Besides, it is settled that the NLRC is not precluded from receiving evidence, even for the first time on appeal, because technical rules of procedure are not binding in labor cases. (Tanjuan vs. Philippine Postal Savings Bank, Inc. 411 SCRA 168, 175) The rules of evidence prevailing in courts of law or equity are not controlling in proceedings before the Commission (Precision Electronics Corporation vs. NLRC, 178 SCRA 667, 670).
We now come to the resolution of the merits of the case.
Respondent Maynilad posits that petitioner Del Rosario’s position has become redundant and thus, the same was abolished in good faith in the legitimate exercise of management prerogative to make the company more efficient and effective. Based on its overall studies, research and evaluation, the functions of the Corporate Services Division could be performed and served by other departments. On the other hand, petitioner Del Rosario asserts that respondent Maynilad acted in bad faith when she was slowly stripped of her job in the Corporate Services Division on the pretext that her position is redundant.
In the light of foregoing conflicting and varied positions, the pivotal issue involved in the instant case is whether or not the position of petitioner Del Rosario as OIC of the Corporate Services Division has already become redundant in view of the reorganization made by respondent Maynilad. Such being the case, we hold that it involved factual matters which as a rule is not appropriate for certiorari under Rule 65 of the Rules of Court and therefore, beyond the province of this Court to resolve. The sole office of certiorari is the correction of errors of jurisdiction and does not include a review of public respondent’s evaluation of the evidence and factual findings. (Oro vs. Diaz, 361 SCRA 108, 117) Judicial review of the decisions of the National Labor Relations Commission by way of special civil action for certiorari under Rule 65, Rules of Court, is confined to issues of want or excess of jurisdiction and grave abuse of discretion on the part of the tribunal rendering them. (Sea Power Shipping Enterprises, Inc. vs. CA, 360 SCRA 173, 182) Factual issues are not proper subjects for certiorari which is limited to the issue of jurisdiction and grave abuse of discretion. (Negros Oriental Electric Cooperative I vs. Secretary of the Department of Labor and Employment, 357 SCRA 668, 673). However, this doctrine as earlier stated is not absolute. When the factual findings of the NLRC are contrary to those of the labor arbiter, the evidentiary facts may be reviewed by the appellate court (R & Transport, Inc. vs. Latag, 422 SCRA 698, 704; Agabon vs. NLRC, 442 SCRA supra at p.605), which we now tackle in the instant case.
It was established on record that when respondent Maynilad’s former President – Jose Gabriel D. Olives resigned sometime in 1999, some officers resigned with him, leaving vacant several positions, such as the Vice-President for Human Resources and Organizational Department (“HROD” for brevity) and the head of Logistics. When Mr. Alunan assumed the presidency, he appointed on 01 November 1999, Mr. Salonga as Vice-President of HROD and which is now one of the departments under the Administration Group. (Affidavit, Rollo, supra at pp. 251 and 263) Likewise, on 06 November 1999, Mr. Gimenez was also appointed to head the corporate Logistics Division with the rank of Senior Assistant Vice-President. Clearly, we could not agree with petitioner Del Rosario’s postulate that she was terminated purposely for Mr. Alunan to newly appoint Mr. Salonga as Vice-President for Administration. The fact remains that Mr. Salonga retained his rank and salary but took more functions as Vice-President for Administration. Also, the management decided to transfer Change Management under the Corporate Services to Mr. Salonga’s HROD as it properly belonged to his group. Change Management had been created to reengineer business processes in order to improve operation efficiency, specifically to help former MWSS employees in the transition from working in the public to the private sector. Change Management was tasked to conduct studies and to make recommendations that would be used in initiating or changing company policies that would affect organizational structures and corporate culture. These being better integrated with human resource interventions, the unit was folded into HROD to avoid a repeat of the previous incidents where changes were effected without considering the impact on people. (Id. at p. 251)
The Facilities Department of the Corporate Services Division was likewise transferred to Logistic group of Mr. Gimenez. Logistics is principally responsible for providing the support to all other operating units of the company, including repairs and maintenance functions and purchasing of supplies and materials. Since Facilities Management was tasked with the repair and maintenance of buildings and grounds, it was more efficient and logical to place the function under the Logistics. And another consideration for the transfer of Facilities Department to Logistic group was to redistribute its functions in order to achieve more balance in the workload. (Id. at pp. 251 & 361). Undoubtedly, there is no basis for us to believe petitioner Del Rosario’s assertion that Mr. Alunan hired new officers and/or created new positions purposely to systematically take over her functions.
The Billing Department under the Corporate Services was also included to the newly created Customer Services Division headed by Mr. Afable upon the strong advice of Maynilad’s technical partner Ondeo considering the size of Maynilad’s customer base which exceeds 500,000 accounts. (Id. at p. 264) In essence, Customer Services Group where the Billing Department belongs was created purposely to effectively serve its clientele.
The Information Technology under the Corporate Services Division was also transferred to another division – Corporate Information Management Office (“CIMO” for brevity) headed by Chief Information Officer – Mr. Dimabuyu under the Office of the President which is dedicated solely to information technology. Also, the Systems and Methods under the Corporate Services Division was also incorporated under the CIMO in order for the IT to function effectively. The creation of CIMO was in accordance with the IT Master Plan. The transfer of IT and Systems and Methods was not deliberately done in order to strip petitioner Del Rosario of her duties as head of the Corporate Services Division.
As regards the Legal and Records and Communication Department under the Corporate Services, the same were transferred to HROD under the existing Vice-President for HROD – Mr. Salonga who has the same rank and salary of a Vice-President. Contrary to petitioner Del Rosario’s allegation, Mr. Salonga was not newly hired by Mr. Alunan purposely to take over her functions. The remaining department – Safety Auxilliary and Security Department or SASD would be under the Office of the President.
All told, private respondent Maynilad was able to fully establish that the reorganization made on their company was for the purpose of streamlining its organization and as a cost saving measures and not motivated by ill-will or bad faith as suggested by petitioner Del Rosario. The decisions of streamlining and reorganizing the organization were the results of a slow, methodical and careful study. In fact, the functions of the Corporate Services Division were farmed out to other groups over a period of two years. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied (Abbot Laboratories vs. NLRC, 154 SCRA 713, 717). Even as the law is solicitous of the welfare of employees, it must also protect the right of an employer to exercise what are clearly management prerogative. In such cases, the company has the prerogative to abolish managerial and confidential positions or create new ones, as the necessity for them requires. (Wiltshire File Co., Inc, vs. NLRC, G.R. No. 82249, February 7, 1991)
Considering that the functions of the Corporate Services Division were already delegated to other groups, its continued existence would therefore create redundancy. Hence, logic dictates that the same should be abolished, as the same is no longer necessary to the organization. As aptly observed by public respondent NLRC in its Decision, viz:
“We find the characterization of complainant-appellee’s services as no longer necessary or sustainable and therefore properly terminated was an exercise of business judgment on the part of the respondent-appellant company. Considering that complainant-appellee failed to prove that her termination was a violation of a law or arbitrary and malicious action on the part of respondent-appellant was not shown, we cannot review the wisdom or soundness of such characterization or decision, x x x” (Rollo, supra at p. 47)
The existence of the Corporate Services Division has already become redundant or superfluous as the departments under it were already transferred to other groups; we thus, find no sufficient basis for petitioner Del Rosario to maintain her position as head thereof. Hence, she was ineffectually dismissed from employment based on authorized cause, i.e. redundancy. The employer may also terminate the employment of any employee due to x x x redundancy. (Article 283, Labor Code of the Philippines) However, her employer (Maynilad) failed to observe the statutory due process. If the dismissal is based on authorized cause under Articles 283 and 284, the employer must give the employee and the Department of Labor and Employment written notices thirty (30) days prior to the effectivity of his separation. (Agabon vs. NLRC, 442 SCRA 573, 608). In this case, Mr. Alunan issued a Memorandum dated 21 January 2002 to all employees concerning the Organizational Adjustment which was the reorganization of the Corporate Services Division effective immediately (Id. at p. 166). Also, a letter dated 22 January 2002 was personally received by petitioner Del Rosario informing the latter that the various functions of the Corporate Services Division would be farmed out to other units and would take effect before the end of said month and as such, her position as Head thereof would be declared redundant. (Id. at p. 98) Thereafter, petitioner Del Rosario received a letter dated 01 February 2002, informing her that the company has recently abolished the Corporate Services Division in view of its continuing effort to streamline business operations and thus, advising her that her services would be terminated within thirty (30) days from receipt thereof. (Id. at p. 167). Unfortunately, in the case at bar, the notice of termination was belatedly sent to DOLE only on 12 March 2002, after petitioner Del Rosario was already separated from her employment. Hence, the failure to observe due process in a dismissal for just or authorized cause does not invalidate the dismissal but makes the employer liable for non-compliance with the procedural requirements of due process. We hold therefore, that with respect to Art. 283 of the Labor Code, the employer’s failure to comply with the notice requirement does not constitute a denial of due process but a mere failure to observe a procedure for the termination of employment which makes the termination of employment merely ineffectual. (Serrano vs. NLRC, 323 SCRA 445, 472) And as enunciated by the Honorable Supreme Court in Viernes vs. NLRC, an employer is liable to pay indemnity in the form of nominal damages to an employee who has been dismissed if, in effecting such dismissal, the employer fails to comply with the requirements of due process. x x x (as cited in the case of Agabon vs. NLRC, 442 SCRA, supra at p. 617) The amount of such damages is addressed to the sound discretion of the court, taking into account the relevant circumstances. (Agabon vs. NLRC, Id.) Considering the prevailing circumstances in the case at bar, we deem it proper to fix it at P30,000.00. We believe this form of damages would serve to deter employers from future violations of the statutory due process rights of employees. At the very least, it provides a vindication or recognition of this fundamental right granted to the latter under the Labor Code and its Implementing Rules. (Agabon vs. NLRC, Id.) In addition to the payment of nominal damages in the amount of P30,000.00, respondent Maynilad should likewise pay her separation pay in accordance with its Special Separation Program.
With regard to the award of damages, the same should be disallowed since petitioner Del Rosario was lawfully terminated for authorized cause, i.e. redundancy. There is no showing on record that petitioner Del Rosario’s termination from employment was done in bad faith. Moral damages are recoverable when the dismissal of an employee is attended by bad faith or fraud or constitutes an act oppressive to labor, or is done in a manner contrary to good morals, good customs or public policy. (Lopez vs. NLRC 297 SCRA 508, 519) which is not present in this case.
With regard to attorney’s fees, the same should not likewise be granted for want of factual and legal basis.
WHEREFORE, premises considered, the instant PETITION FOR CERTIORARI is PARTLY GRANTED. Accordingly, the Resolutions dated 28 November 2003 and 27 February 2004 both rendered by public respondent NLRC are hereby AFFIRMED but with the modification that respondent Maynilad Water Services, Inc. is hereby ordered to pay the sum of P30,000.00 as nominal damages to petitioner Marie Anne E. Del Rosario.
SO ORDERED.
Lampas Peralta and Dimaranan Vidal, JJ., concur.