LOPEZ SUGAR CORP vs.

FRANCO
G.R. No. 148195
May 16, 2005

FACTS:
Respondent Franco et al. were hired in 1974 to 1976 and after 2 decades of
services, they rose to supervisory positions. Lopez Sugar issued a
Memorandum for the adoption of a special retirement program for selected
supervisory and middle-level managers, allegedly due to over-staffing and
duplication of functions. Private respondents received their notice of
termination a month and a1 day after meeting with management, with the
latter posting that the special retirement program was due to the over-
staffing. All supervisory employees who organized a labor union which was
currently undergoing CBA negotiations with Lopez Sugar were included in its
coverage and terminated from employment.

Respondents received their separation pay and executed Release waivers

and Quitclaims but they still filed a separate complaints for illegal dismissal,
unfair labor practice, reinstatement, and damages. Alleging that they were
not informed of the criteria for the implementation of the special retirement
program and the same was merely a scheme to thwart collective bargaining
with 32 union members representing 1/3 of the company’s supervisors
dismissed, with respondents offered contractual employment.

ISSUE:
1) WON the termination of respondents by virtue of the special retirement
program valid?
2) WON Lopez Sugar failed to prove redundancy?

RULING:
1) NO. The corporation illegally dismissed the private respondents by
including them in its special retirement program, this debilitating the
union, rendering it pliant by decapacitating its leadership. No standards,
criteria, or guidelines for the selection of the employees to be dismisses
were made known to them, and all they were told was that they had
been selected for termination.

3) NO. Under the Labor Code, the burden of proof is in the employer to
prove factual and legal basis for dismissal of employees based on
redundancy. Moreover, jurisprudence has held that the following
requisites ensure validity of a redundancy program: (1) written notice to
employees and DOLE at least 1 month prior the retrenchment; (2)
payment of separation pay of at least 1 month or 1 month pay for every
 year of service; (3) good faith; and (4) fair and reasonable criteria in
ascertaining redundant positions to be abolished.

In this case, Lopez Sugar failed to comply with the 4th requisite as it
gave no standard or criteria to respondents that may justify their inclusion
in the special retirement program.