(Arabit vs. Jardine Pacifc, Gr No. 181719, April 21, 2014

EUGENE S. ARABIT, !"GA#"$ %. &A"&A",

& A"&A", '$!'' %. )*N+AN$
)*N+AN$,,
G!#A#"$ ). P*NA'AN, )#!""-! . !N"$A, !-'-$ /. /!'!N, -$'!+A %.
"-*AN$ and / )-NAN%! !P'$!!& A&&$%-A+-$N )) %AP+!#
()!"!#A+-$N $) )#!! $#3!#&, Petitioners,
vs.
 JARDINE PACIFIC
PACIFIC FINAN CE, INC. ()$#!#' / )-NAN%!, #espondent.
FINANCE,

G.#. No. 181719, April 21, 20145

PRINCIPLE:

66#edndanc and #et

#etrenc:ent
renc:ent distin;ised<

 +e clear distinction bet=een tese t=o concepts =as discssed in

Andrada, et al., v. N'#%, >1 citin; te case o? &eb;ero v. N'#%, >2 =ere
tis %ort clarifed<

Redundancy e@ists =ere te services o? an e:ploee are in e@cess o? =at

is reaso
reasonab
nabll de:ande
de:anded d b te actal
actal rei
reire
re:en
:ents
ts o? te enter
enterpri
prise.
se. A
position is redndant =ere it is sperBos, and sperBit o? a position or
positions :a be te otco:e o? a n:ber o? ?actors, sc as over irin; o? 
=orCers, decreased vol:e o? bsiness, or droppin; o? a particlar prodct
line
line or serv
servic
ice
e acti
activi
vit
t prev
previo
ios
sl
l :a
:an
n?a
?act
ctr
red
ed or nde
ndert
rtaC
aCen
en b tte
e
enterprise.

Retrenchment, on te oter and, is sed intercan;eabl =it te ter:

DlaEo
DlaEoF.D
F.D -t is te ter:in
ter:inati
ation
on o? e:
e:plo
plo:e
:ent
nt initia
initiated
ted b te e:plo
e:ploer
er
tro;
tr o;
 no ?a
?alt
lt o? te e:plo
e:ploee
ees
s and =ito
=itott preH
preHdic
dice
e to te latter
latter,,
resorted to b :ana;e:ent drin; periods o? bsiness recession, indstrial
depression, or seasonal Bctations, or drin; llls occasioned b lacC o? 
orders, sorta;e o? :aterials, conversion o? te plant ?or a ne= prodction
pro;ra: or te introdction o? ne= :etods or :ore eIcient :aciner, or
o? ato:ation.

 +N< Gidelines in i:ple:entin;

i:ple:entin; redndanc (&!! /!'$

FACTS:

• Petitioners =ere ?or:er re;lar e:ploees o? respondent Jardine Pacifc

)inan
inance
ce,, -nc.
-nc. (?
(?or
or:e
:erl
rl
 / )inanc
inancee.. o
o =er
=ere alalso
so oIce
oIcersrs and
and
:e:ber
:e: berss o? / )ina inance
nce !:p
!:plo
loees
ees Associ
Associati
ationE
onE))
)) %ap
%apter
ter (te
(te
*nion EEEE a le;iti:ate labor nion and te sole e@clsive bar;ainin;
a;ent o? te e:ploees o? Jardine.
• "e to fnancial losses, Jardine decided to reor;anie and i:ple:ent a
red
edn
ndan
danc
c pr
pro;
o;ra
ra:
: a:a:onon;; its
its e:
e:pl plo
oee
ees.
s. +e
+e pe
peti
titi
tion
oner
erss =er
=ere
a:on; tose aFected b te redndanc pro;ra:. Jardine terea?ter
ir
ired cocont
ntra
ract
cta
all e:
e:plplo
oee
eess to ndendertrtaC
aCe
e te
te ?
?nc
nctition
ons
s tes
tese
e
e:ploees sed to per?or:.
•
 +e *nion fled a notice o? striCe =it te National %onciliation and
ediation /oard (N%/, estionin; te ter:ination o? e:plo:ent
o? te petit
petition
ioner
ers
s =o =ere
=ere als
also
o ni
nion
on oIcers
oIcers.. +e *nion
*nion alle;e
alle;ed
d
 

n?air labor practice on te part o? Jardine, as =ell as discri:ination in

te dis:issal o? its oIcers and :e:bers.
•  +ere =as ne;otiation bet=een *nion and Jardine nder N%/, and
parti
par ties
es rea
eac
ced
ed an a: a:ic
icabl
able e se
sett
ttle
le:e
:ent
nt.. -n t
te
e sett
settle
le:e
:ent
nt,, t
tee
petitioners accepted teir redndanc pa =itot preHdice to teir
ri;t to estion te le;alit o? teir dis:issal =it te N'#%.
•  Jardine paid te petitioners a separation pacCa;e co:posed o? teir
severance pa, pls teir ;rossed p transportation allo=ance.
• $n Jne
Jne 1, 191999
99,, t
te
e pe
peti
titi
tion
oner
erss an
and d t
tee *nio
*nionn fled
fled a co:p
co:pla lain
intt
a;ains
a;a instt Jardin
Jardine
e =it
=it te N'#
N'#% % ?or ille;a
ille;all dis:i
dis:issal
ssal and n?air
n?air labor
labor
practice.

La!"r Ar!#ter E 'A ' A rled in *nions ?avor

?a vor.. -n its decision, te eld tat te
irin; o? contractal e:ploees to replace te petitioners directl contradicts
te
te co
concncep
eptt o? red
edn
nda
danc
nc =ic
=ic
 invo
involvlves
es te
te tr
tri:
i::i
:in;
n; do=n
do=n o? te te
=orC
=o rC?o
?orrce beca
becas
se
e a tatasC
sC is bein
bein;
; carr
carrie
iedd ot
ot b too :an:an pe
peop
ople
le.. 'A
e@plained tat te co:pans action =as a circ:vention o? te ri;t o? te
petitioners to secrit o? tenre.
E it =as error ?or Jardine to si:pl l:p to;eter te seven petitioners
as e:ploees =ose positions ave beco:e redndant =itot e@plainin;
= teir respective positions beca:e sperBos in relation to te oter
positions and e:ploees o? te co:pan.

NLRC E dis:issed te appeals and aIr:ed te 'As decision in its entiret

CA E %A reversed te 'As and te N'#%s rlin;s, and ;ranted Jardines
petition ?or certiorari.
E %A ?on
?ond
d tat
tat Jar
Jardi
dine
nes
s ac
actt o? iri
irin;
n; cont
contra
ract
cta
all e:pl
e:plo
oee
ees
s in
replace:ent o? te petitioners does not rn conter to te ar;:ent tat
teir positions are alread sperBos. Accordin; to te %A, te irin; o? 
contractal e:ploees is a :ana;e:ent prero;ative tat Jardine as te
ri;t to e@ercise. -n te absence o? an so=in; o? :alice or arbitrariness on
te part o? Jardine in i:ple:entin; its redndanc pro;ra:, te corts :st
nott inte
no inter?
r?er
ere
e =i
=it
t te
te co
co:p
:panan
s
s e@erci
ercise
se o? a bona
bona fde
fde :ana
:ana;e
;e:e
:ent
nt
decision.
E %A ?rter eld tat Jardine sccess?ll establised tat ?or te ears
199K to 1998, te co:pan incrred serios losses. +e appellate cort also
observed tat te redction in te n:ber o? =orCers, :ade necessar b

te n
=e
=enintro
intnd
rodc
dctio
tion
ndert
ertaCneno?tote
aCen i: servi
ser:ent
i:ple vices
ple:ences o? an
t :ore
:or indepe
independe
e econo:
eco ndent
no:ic nt contra
ic andcontracto
eIcie
eI ctor,
ntr,:etod
cient is tods
:e Hstif
Hstifed
s ed
o? 
prodction.

ISSUE:

 $N %A corr
$N correc
ectl
tl
 r
rle
le tat
tat te
te N'
N'#
#% co::
co::ititte
ted
d ;r
;rav
ave
e abs
absee o? 
discretion =en it ?ond tat Jardine validl ter:inated te petitioners
e:plo:ent becase o? redndanc

RULING:

SC Granted te petition. it stated tat< e cannot accept Jardines

sallo= nderstandin; o? te concepts o? redndanc and retrenc:ent in
deterr:i
dete :ini
nin;
n; te
te va
vali
lidi
dit
t o? te
te seve
severa
ranc
nce
e o? an e:ple:plo
oer
erEe
Ee:p
:plo
loe
ee
e
relationsip. +e ?act tat te are ?ond to;eter in Hst one provision does
 

not necessaril ;ive rise to te conclsion tat te diFerence bet=een te:
is i::aterial.

#edndanc e@ists =ere te services o? an e:ploee are in e@cess o? 

=at is reasonabl de:anded b te actal reire:ents o? te enterprise. A
position is redndant =ere it is sperBos, and sperBit o? a position or
positions :a be te otco:e o? a n:ber o? ?actors, sc as over irin; o? 
=orCers, decreased vol:e o? bsiness, or droppin; o? a particlar prodct
line
line or serv
servic
ice
e acti
activi
vit
t prev
previo
ios
sl
l :a
:an
n?a
?act
ctr
red
ed or nde
ndert
rtaC
aCen
en b t te
e
enterprise.
#etrenc:ent, on te oter and, is sed intercan;eabl =it te
ter: DlaEoF.D -t is te ter:ination o? e:plo:ent initiated b te e:ploer
tro;
tro; no ?a
?alt
lt o? te e:plo
e:ploee
ees
s and =ito
=itott preH
preHdic
dice
e to te latter
latter,,
resorted to b :ana;e:ent drin; periods o? bsiness recession, indstrial
depression, or seasonal Bctations, or drin; llls occasioned b lacC o? 
orders, sorta;e o? :aterials, conversion o? te plant ?or a ne= prodction
pro;ra: or te introdction o? ne= :etods or :ore eIcient :aciner, or
o? ato:ation.

&i:p
&i:pl
l p
pt,
t, it is an ac
actt o? te
te e:
e:pl
plo
oer
er o? di
dis:
s:isissi
sin;
n; e:pl
e:plo
oee
ees
s
beca
becas
see o? loss
losse
es in te oper
operat
atiion o? a bsi
bsine
ness
ss,, la
lac
cC o? =ororC,
C, and
and
considerable redction on te vol:e o? is bsiness, a ri;t consistentl
reco;nied
reco;nied and aIr:ed b tis %ort.

In the ca$e at !ench, re$%"ndent$ d#d n"t d#$%ute that a&ter

'a
'ay#n
y#n()"
()"** c"m
c"m%'%'a#n
a#nant
ant$$ her
here#n
e#n,, they
they en(a(e
en(a(ed
d the $er+#c
$er+#ce$
e$ "& an
a(ency t" %er&"rm the ta$$ u$e -$#c t" !e d"ne !y c"m%'a#nant$.
Th#$ #$ /#n d#rect0 c"ntrad#ct#"n t" the c"nce%t "& redundancy 1h#ch
%rec#$e'y re2u#re$ the tr#mm#n( d"1n "& the /1"r&"rce0 !ecau$e a
ta$ #$ !e#n( carr#ed "ut !y 3u$t t"" many %e"%'e. The $u!$e2uent
c"ntract#n( "ut t" an a(ency the &unct#"n$ "r dut#e$ that u$ed t" !e
the d"ma#n "& #nd#+#dua' c"m%'a#nant$ here#n #$ a c#rcum+ent#"n "& 
the#
th e#r
r c"
c"n$
n$t#
t#tu
tut#
t#"n
"na'
a' r#(h
r#(ht$
t$ t" $e$ecu
cur#
r#ty
ty "& tenu
tenure
re,, an
andd th
ther
ere&
e&"r
"re
e
#''e(a'.

66 Aside ?ro: te ;idelines ?or te selection o? e:ploees =o =ill be
ter:i
ter:inat
nated,
ed, te %o
%ort
rt,, in Asian
Asian Alc
Alcoo
ooll %or
%orp.
p. v. N'#%,
N'#%, te Gidel
Gideline
ines
s in
i:ple:entin; redndanc are as ?ollo=s<

)or te i:
)or i:ple
ple:e
:entat
ntation
ion o? a redn
redndanc
danc pro;r
pro;ra:
a: to be valid,
valid, te
e:ploer :st co:pl =it te ?ollo=in; reisites<
(1 =ritten notice served on bot te e:ploees and te "epart:ent o? 
'abor and !:plo:ent at least one :ont prior to te intended date o? 
retrenc:entL
(2 pa:ent o? separation pa eivalent to at least one :ont pa or at
least one :ont pa ?or ever ear o? service, =icever is i;erL
(M ;ood ?ait in abolisin; te redndant positionsL and
(4
(4 ?ai
?airr and reaso
reasonab
nable
le criter
criteria
ia in ascert
ascertain
ainin;
in; =at
=at positi
positions
ons ar
are
e to be
declared redndant and accordin;l abolised.