Republic of the Philippines

Court of Appeals
MANILA

SPECIAL TWELFTH DIVISION

*****

COGNIZANT TECHNOLOGY CA-G.R. SP No. 160607

SOLUTIONS PHILIPPINES,
INC. , Members:
Petitioner,

- versus - *
SORONGON, E.D.,
Acting Chairperson,
PABLO C. ESPIRITU, ALEX A.
LOPEZ and CECILIO
QUIJANO-PADILLA, M.L.C., and
ALEJANDRO C. ROXAS, R.R.G., JJ.:
VILLANUEVA, in their
capacities as Commissioners of
the Third Division of the
National Labor Relations Promulgated:
Commission, and MARK
ANTHONY PUBLICO
FERRER, NOVEMBER 12, 2019
Respondents.

XXX----------------------------------------------------------------------------------xxx

DECISION
QUIJANO-PADILLA, J. :

Before this Court is a Petition for Certiorari1 filed pursuant to

Rule 65 of the Rules of Court by petitioner Cognizant Technology
Solutions Philippines, Inc., (Cognizant) seeking to reverse and set
aside the twin Resolutions promulgated on November 29, 20182 and
February 20, 20193, rendered by the National Labor Relations
Commission (NLRC), in NLRC LAC No. 11-004251-18 (NLRC NCR
Case No. 02-02311-18).

*
Vice J. Mario V. Lopez per Office Order No. 553-19-FLP dated November 5, 2019.
1
Rollo, pp. 3-30.
2
Id at pp. 31-35.
3
Id at pp. 36-37.
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Factual Antecedents

Cognizant is a domestic corporation engaged in the business

of providing a wide range of information technology consulting,
processing, outsourcing, and other high-end operational and contact
center services to its clients.4

On August 30, 2016, Cognizant hired private respondent Mark

Anthony P. Ferrer (Ferrer) as its Service Delivery Manager under
the SCAN Program, tasked to perform highly essential functions for
petitioner's clients which include financial planning and ensuring
that the service level agreements and other operational deliveries
are met.5 However, in the course of his employment, Ferrer was
unable to perform the duties and responsibilities expected of him.6

In view of this, Cognizant furnished Ferrer with a Notice to

Explain7, enumerating therein fourteen (14) infractions which he
allegedly committed, to wit:8

1. Escalation received from SCAN client on June 13, 2017. It was reported that the
client's concerns were not getting any concrete plan of actions, stating that their
issues are going to deaf ears after the latter was given to your attention.

2. Non-attendance in the Process Training as noted by the client, making them

conclude that you are not knowledgeable in the process for Grievance and
Appeals.

3. No sense of urgency as evidenced in series of email follow up to provide

RCA/CAPA and implementations of the agreed/discussed mitigations.

4. Providing false information when asked about system access. Client noted that
you don't have access to CCMS application which is one of the required
application of GAD, HRA, SRA, ICT and MCR programs.

5. Compliance violations on OIG/GSA verification: Instances of no OIG/CSA

verification for 2 associates in the program due to incomplete/inaccurate listing
of associates that you have provided[.]

6. Compliance violations on the Physical/Logical Access deactivation: The

program has been noted for 2 consecutive months of non-compliance.

7. Not exhibiting professionalism as called out by Ms. Jill Veneracion. Apparently

you were complaining that you have to come for a client presentation during a
US holiday.

4
Id at pp. 5-6.
5
Id at p. 6.
6
Id at p. 7.
7
Id at p. 69-73.
8
Id at p. 69-70.
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8. Failure to attend the scheduled call client presentation with Accredo. You have
the capability to attend the said client presentation since it will be done via
Webex.

9. Did not follow the protocol for the Leave policy last June 1-2, 2017. You
informed the client that you will be on Vacation without getting prior approval
from your Superior.

10. No plan of action and follow through with regard to the concern of Maricris,
Director of HRA/ICT programs, raised in her email dated June 3, 2017 and
during the call with her in (sic) June 7, 2017.

11. Non-attendance on the product training for the new program, ICT where all
the staff are new which includes the assigned SME[.]

12. Did not follow through with the directive given (Case Status Monitoring), last
June 23, 2017, there were no reports given to the client. It was noted that you
went under time, however there was no advice provided[.]

13. Too many instances of not logging out in the T&L System since April 1 to
June 26, 2017 (see T&L report)

a. No Log Out: 24 times

b. No Log In: 4 times

14. Upon checking the T&L and the Badge reports from April 1 to June 26, 2017,
you have been working less than 9 hours per shift (see T&L and Badge Report).
This may mean that either you are coming late or you are leaving the office
before your shift ends

a. Total instances: 26

It was likewise stated in the Notice to Explain that Ferrer's

alleged infractions amounted to serious misconduct, gross habitual
neglect of duty, and loss of trust and confidence. Accordingly,
Ferrer was given five (5) days to explain his actions.9

On August 25, 2017, Ferrer gave his written reply10, admitting

all the charges against him and acknowledging that the same
warranted the penalty of dismissal. However, Ferrer pleaded with
Cognizant that he be moved to a different program instead, or if not,
be given a graceful exit from the company.11

On August 31, 2017, Cognizant conducted a clarificatory

hearing to afford Ferrer another opportunity to explain his side.
After due deliberation, Cognizant was prepared to dismiss Ferrer,

9
Id at p. 10.
10
Id at p. 85.
11
Id at p. 10.
CA-G.R. SP No. 160607 Page 4 of 11
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however this did not push through as the latter begged Ms. Lorela
Reyes (Cognizant's Human Resource Manager) to retain him in the
company because his wife was pregnant at that time.12 Thus, instead
of dismissing him from service, Cognizant decided to simply
suspend Ferrer and transfer him to a different program. Despite his
reduced sanction, Ferrer again pleaded with Ms. Reyes that his
suspension be lessened. In view of Ferrer's ardent pleas, petitioner
decided to lift his suspension and simply transferred him to another
program.13

On November 8, 2017, Ferrer was placed into the

redeployment pool and was made to sign a Redeployment
Agreement14. Under said agreement, if Ferrer was not successfully
redeployed in another program within the given period (November
8, 2017 to January 6, 2018), he shall be separated from service in
accordance with the Labor Code's provisions on redundancy. 15 After
several attempts, Cognizant failed to deploy Ferrer to a different
program as there were no available positions to match his
qualifications.16

On January 6, 2018, Cognizant decided to terminate the

services of Ferrer pursuant to the terms of the Redeployment
Agreement.17

To Cognizant's surprise, Ferrer filed a Complaint18 for illegal

dismissal, non-payment of separation pay and claims for moral and
exemplary damages and attorneys fees with the Labor Arbiter on
February 8, 2018.

In his Position Paper, Ferrer anchored his claim of illegal

dismissal on two (2) grounds: (1) that Cognizant failed to prove that
his previous position was redundant19; and (2) that his right to due
process was violated as he was merely given five (5) days to explain
the fourteen (14) infractions contained in the Notice to Explain. In this
connection, Ferrer argued that he was entitled to the payment of
12
Id at p. 10.
13
Id at p. 11.
14
Id at pp. 54-55.
15
Id at p. 11.
16
Id at p. 12.
17
Id at p. 12.
18
Id at p. 130.
19
Id at pp. 109-110.
CA-G.R. SP No. 160607 Page 5 of 11
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backwages and other benefits that were withheld from the time he
was dismissed from service as well as the payment of moral and
exemplary damages and attorneys fee.20

For its part, Cognizant averred that, from the very beginning,
it had every reason to dismiss Ferrer on account of his 14
infractions. However, out of compassion, it decided to retain him in
the company and granted his request to be transferred to a different
program instead. It was only when there were no other programs
available to accommodate Ferrer's transfer that he was given his
separation pay and dismissed from service on the ground of
redundancy.21 In view of this, Cognizant insists that Ferrer was
validly terminated on the ground of redundancy.

Ruling of the Labor Arbiter

On September 24, 2018, the Labor Arbiter rendered a Decision22

declaring Ferrer as illegally dismissed from service, to wit:23

WHEREFORE, premises considered, complainant is hereby

declared as ILLEGALLY DISMISSED. Respondent Cognizant
Technology Solutions Philippines, Inc. is ordered to pay
complainant the following:

a) Php 888,170.83 as backwages;

b) Php 95,000.00 separation pay; and
c) Php 98, 317.08 as attorneys fee.

Other claims are dismissed for lack of merit.

In so ruling, the Labor Arbiter explained that records of the

case are bereft of any evidence showing that Cognizant adopted
new staffing patterns or created new positions thereby making
Ferrer's continued employment as redundant.24 The Labor Arbiter
likewise held that Ferrer's 14 infractions are irrelevant to his claims
of illegal dismissal as the same were already considered condoned
when Cognizant decided to lift the sanctions imposed against him. 25

20
Id at p. 111-113.
21
Id at pp. 45-46.
22
Id at pp. 131-147.
23
Id at p. 146.
24
Id at p. 144.
25
Id at pp. 144-145.
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For these reasons, the Labor Arbiter granted the above-mentioned

monetary awards to Ferrer.

Undaunted, Cognizant elevated the case to the NLRC.

Ruling of the NLRC

On November 29, 2018, the NLRC issued its first assailed

Resolution dismissing Cognizant's appeal and affirming in toto the
Decision of the Labor Arbiter, to wit:26

WHEREFORE, the APPEAL is DENIED. The assailed 24

September 2018 Decision of Labor Arbiter Nicolas B. Nicolas is
hereby AFFIRMED.

SO ORDERED.

According to the NLRC, Cognizant failed to prove that

Ferrer's services were in excess of what is required by the company
and that it employed fair and reasonable criteria in determining
redundancy of his position. Moreover, the NLRC took note of the
fact that Ferrer's former position was neither abolished nor filled-in
by another employee. Finally, the NLRC held that the
unauthenticated e-mails presented by Cognizant were insufficient to
support its claim that no positions were available for Ferrer as these
do not satisfy the evidence required under prevailing
jurisprudence.27

On January 7, 2019, Ferrer filed a Motion for Execution28 with

the Labor Arbiter.

In the meantime, on January 18, 2019, Cognizant filed its

Motion for Reconsideration29 assailing the NLRC's first Resolution. This
was denied by the NLRC in its second assailed Resolution30.

Subsequently, on March 22, 2019, the twin Resolutions of the

NLRC became final and executory.31
26
See Note 2 at p. 35.
27
Id at p. 34.
28
Id at pp. 198-200.
29
Id at pp. 215-220.
30
See Note 3.
31
Rollo, p. 204.
CA-G.R. SP No. 160607 Page 7 of 11
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In view of this, the Labor Arbiter issued an Order 32 dated May

16, 2019, granting Ferrer's Motion for Execution. On even date, a Writ
of Execution33 was issued in favor of Ferrer.

Aggrieved, Cognizant filed the instant petition.

This Court's Ruling

The petition is without merit.

To begin, it is undisputed that Ferrer voluntarily entered into

the Redeployment Agreement with Cognizant. By affixing his
signature, Ferrer bound himself to its terms and conditions which
states that if he is not transferred to a different program within the
specified period (from November 8, 2017 to January 6, 2018), he
shall be dismissed from service on the ground of redundancy.
Moreover, Ferrer is considered to have agreed to be placed in the
redeployment pool while waiting for his transfer. Furthermore,
under the Redeployment Agreement, in the event that he is not
transferred to a different program, Ferrer shall receive the amount
of One Hundred Twenty Nine Thousand Seven Hundred Thirty
Two 91/100 Pesos (P129,732.91) as separation pay – a fact which he
did not deny. On the other hand, Cognizant bound itself to exert all
reasonable efforts to transfer Ferrer into a different program, and in
the event that transfer is not possible, to dismiss him on the ground
of redundancy. Considering that contracts have the force and effect
of law between the parties, both Ferrer and Cognizant can no longer
renege from the arrangement of their own making.34

This being said, We wish to impress that the evidence

presented by Cognizant pertaining to Ferrer's 14 infractions are
immaterial at this point inasmuch as they pertain to a ground
different from redundancy. Moreover, as correctly held by the Labor
Arbiter, Cognizant is deemed to have condoned Ferrer's infractions
when it decided to lift the sanctions against him.35

At this juncture, We shall resolve the validity of Ferrer's

32
Id at p. 206.
33
Id at pp. 207-209.
34
See Morla v. Belmonte, G.R. No. 171146, December 7, 2011.
35
Rollo at p. 145.
CA-G.R. SP No. 160607 Page 8 of 11
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dismissal solely on the ground of redundancy as contained under

the Redeployment Agreement.

Cognizant contends that it exerted all reasonable efforts to

find a program that suits Ferrer. However, since there were no
available vacancies that match his qualifications, he became a
redundant employee and was dismissed from service pursuant to
the terms of the Redeployment Agreement.36

We are unconvinced.

Redundancy exists when the service capability of the

workforce is in excess of what is reasonably needed to meet the
demands of the business enterprise.37 While an employer has no
legal obligation to retain a redundant employee,38 redundancy only
becomes a valid cause for dismissal when it is proven by substantial
evidence that the services of an employee is more than what is
reasonably demanded by the requirements of the business
enterprise.39 By inference, therefore, it is not enough for the
employer and the employee to simply agree that the latter be
terminated on the ground of redundancy. The employer's burden to
prove the fact of redundancy still remains and his failure to do so
would render the employee as having been illegally dismissed.

To prove that Ferrer is a redundant employee, Cognizant

presented printed copies of its email correspondence with its clients
allegedly showing that there are no available vacancies that match
Ferrer's qualification. However, upon careful consideration, We find
that these emails are insufficient to prove Cognizant's allegation.

A reading of these email correspondence shows that they are

material only in so far as proving that Cognizant sent Ferrer's profile
to its clients for the purpose of evaluating the same for possible
matches in any of the available vacancies. However, nowhere in
these emails did it appear that Cognizant's clients gave definite
answers that no vacancies are available for Ferrer. As it appears,

36
Id at p. 20.
37
See Ocean East Agency, Inc. v. Lopez, G.R. No. 194410, October 14, 2015, citing AMA Computer
College, Inc. v. Garcia, 574 Phil. 409, 422 (2008).
38
See Nippon Housing v. Leynes, G.R. No. 177816, August 3, 2011, citing Almodiel v. National Labor
Relations Commission, G.R. No. 100641, 14 June 1993, 223 SCRA 341, 348.
39
See Manggagawa Sa Komunikasyon Sa Pilipinas v. PLDT, G.R. No. 190389, April 19, 2017 citing
Wiltshire File Co. Inc. v. National Labor Relations Commission , 271 Phil. 694, 703 (1991).
CA-G.R. SP No. 160607 Page 9 of 11
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their responses only consist of an acknowledgment that they

received Ferrer's profile and that they will give their feedback
thereto at a later date. Verily, without express and categorical
answers from its clients, Cognizant had no basis to declare Ferrer as
a redundant employee.

It did not also escape Our attention that under the

Redeployment Agreement, Cognizant undertook the responsibility of
finding an available vacancy for Ferrer within the two-month period
starting November 8, 2017 to January 6, 2018. However, records
show that Cognizant sent the emails only on December 6, 2017, or
more or less a month later than it is supposed to do so. In Our mind,
this completely negates Cognizant's claim that it exerted all
reasonable efforts to find a vacancy for Ferrer, for if it were so, it
would have sent out the latter's profile early on. Certainly,
Cognizant cannot be said to be in complete good faith in its dealings
with Ferrer.

All told, the circumstances surrounding Ferrer's dismissal are

indicative of two things. First, that he was dismissed without a
concrete finding that he was a redundant employee. Second, that
Cognizant failed to efficiently exhaust the two-month period agreed
upon in the Redeployment Agreement to find a vacancy for Ferrer. For
these reasons, We find no cogent reason to reverse the rulings of the
Labor Arbiter and the NLRC that Ferrer was illegally dismissed
from service.

Accordingly, Ferrer is entitled to the reliefs of reinstatement

and payment of full backwages to be computed from the time his
compensation was withheld up to the time of his actual
reinstatement.40 However, considering that his relationship with
Cognizant is already strained, We sustain the labor tribunal's award
for the payment of separation pay in lieu of reinstatement as it will
be for the best interests of both parties.41

Anent the award of backwages, We wish to stress that aside

from his basic salary, the same shall likewise include the benefits
and allowances regularly received by Ferrer as of the time of the
illegal dismissal, as well as those granted under a Collective
40
See Ocean East Agency Corporation v. Lopez, supra, citing Dacuital v. L.M. Camus Engineering Corp.
644 Phil. 158, 173 (2010).
41
See Golden Ace Builders v. Talde, G.R. No. 187200, May 5, 2010 (citation omitted).
CA-G.R. SP No. 160607 Page 10 of 11
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Bargaining Agreement (CBA), if any.42 Moreover, as a natural

consequence of this relief, backwages shall to continue to add on
until it is fully satisfied. 43 Hence, Ferrer's backwages shall be
computed from the time of his dismissal up to the finality of this
decision. As for the award of separation pay, since Ferrer already
received the same in the amount of P129,732.9144, it shall no longer
be included in the computation of his total monetary award.

Finally, since Ferrer was compelled to litigate in order to

protect his rights against Cognizant's flippant treatment of his
employment status, the award of attorneys fees corresponding to
ten (10%) of the total monetary award is proper.45

In this connection, as held in the case of Nacar v. Gallery

Frames46, legal interest which is now six percent (6%) per annum47 is
also imposed upon the total monetary award, and shall commence
to run from the time this Court's decision becomes final and
executory until the same is fully satisfied.

Ultimately, to warrant the grant of the extraordinary remedy

of certiorari, petitioners must satisfactorily establish that the court or
quasi-judicial authority gravely abused its discretion. 48 Corollarily,
the NLRC may be said to have gravely abused its discretion when
its findings and conclusions are not supported by substantial
evidence.49 Considering, that the findings of the NLRC in this case
are duly supported by evidence on record, it cannot be said to have
gravely abused its discretion when it rendered the assailed twin
Resolutions. Hence, there is no other course of action for this Court
but to affirm the same.

WHEREFORE, premises considered, the instant petition is

DENIED. The Resolutions dated November 29, 2018 and February
20, 2019, rendered by the National Labor Relations Commission in
NLRC LAC No. 11-004251-18 (NLRC NCR Case No. 02-02311-18)
are hereby AFFIRMED with MODIFICATION that the amount of
42
See United Coconut Chemicals v. Valmores, G.R. No. 201018, July 12, 2017.
43
See Lim v. HMR Philippines, Inc., G.R. No. 201483, August 4, 2014.
44
Rollo at p. 57.
45
See Alva v. High Capacity Security Force, Inc. and Villanueva, G.R. No. 203328, November 8, 2017.
46
G.R. No. 189871, August 13, 2013.
47
BSP-MB Circular No. 799.
48
See Michelin Asia Pacific Application Center, Inc. v. Ortiz, G.R. No. 189861, November 19, 2014.
49
See Symex Security Services, Inc. v. Rivera Jr., G.R. No. 202613, November 8, 2017, citing Sta. Isabel
v. Perla Compañia De Seguros, Inc., G.R. No. 219430, November 7, 2016, p. 6 and other related cases.
CA-G.R. SP No. 160607 Page 11 of 11
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One Hundred Twenty Nine Thousand Seven Hundred Thirty Two

91/100 Pesos (P129,732.91) representing the separation pay already
received by Ferrer is deleted from the total amount of monetary
awards.

Let the case be remanded to the labor tribunal for the proper
computation of Ferrer's backwages and attorney's fees.

SO ORDERED.

ORIGINAL SIGNED
MA. LUISA C. QUIJANO-PADILLA
Associate Justice

WE CONCUR:

ORIGINAL SIGNED ORIGINAL SIGNED

EDWIN D. SORONGON RUBEN REYNALDO G. ROXAS
Associate Justice Associate Justice

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, it is

hereby certified that the conclusions in the above decision were
reached in consultation before the case was assigned to the writer of
the opinion of the Court.

ORIGINAL SIGNED
EDWIN D. SORONGON
Acting Chairperson
Special Twelfth Division