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SUPREME COURT
Manila

THIRD DIVISION

ABBOTT LABO RATORIES G.R. No. 229746

(PHILIPPINES), INC. and
STEPHANE LANGEVIN, Present:
Petitioners,
VELASCO, JR., J., Chairperson,
BERSAMIN,
- versus - LEONEN,
MARTIRES, * and
GESMUNDO, JJ.
MANUEL F. TORRALBA,
ROSELLE P. ALMAZAR, and Promulgated:
REDEL ULYSSES M. NAVARRO,
Respondents. ~~
x------------------------------------------------------~-----~- ~-----x
DECISION

VELASCO, JR., J.:

Nature of the Case

For consideration is the Petition for Review on Certiorari under Rule

45 of the Rules of Court, filed by Abbott Laboratories (Philippines), Inc.
(Abbott), and Stephane Langevin (Langevin), seeking to nullify the April 26,
2016 1 Decision and the partial reversal of the January 25, 2017 Resolution2
of the Court of Appeals (CA) in CA-G.R. SP No. 136213. The challenged
rulings held that petitioners' redundancy program was invalid, and that
respondents were illegally dismissed from employment.

The Facts

Respondent Roselle P. Almazar (Almazar) was employed by Abbott

as the National Sales Manager of its PediaSure Division, while respondents
Redel Ulysses M. Navarro (Navarro) and Manuel F. Torralba (Torralba)
were Regional Sales Managers of the same department. The further details
of their employment can be summarized as follows:

• On wellness leave.
1
Rollo, pp. 49-62. Penned by Associate Justice Rodil V. Zalameda and concurred in by Associate
Justices Sesinando E. Villon and Pedro B. Corales.
2

/
Id. at 64-66.
Decision 2 G.R. No. 229746

Employee Date of Hiring Monthly Salary

Roselle P. Almazar June 1, 1992 Php98,938.28
Manuel F. Torralba July 4, 1988 Php109,645.34
Redel Ulysses M. Navarro June 1, 1993 Php87 ,092.78

Sometime in November 2012, Abbott decided to integrate into one

sales unit its PediaSure Division and its Medical Nutrition Division, both
under the Specialty Nutrition Group. The decision was made after a study,
entitled "Specialty Nutrition Group Sales Force Restructure Philippines,"
(Study) revealed that both departments have similar business models and
sales execution methods. As a result of the merger, respondents' positions
were declared redundant. 3

On February 18, 2013, Abbott informed both the Department of Labor

and Employment (DOLE) and respondents of the latter's termination
effective March 22, 2013 due to redundancy. Thereafter, the company
offered respondents the District Sales Manager positions, with a lower job
rate and with duties and responsibilities different from that of a National or
Regional Sales Manager.

Respondents rejected the offer and, on May 10, 2013, signed their
respective Deeds of Waiver, Release, and Quitclaim (Deeds)4 after receiving
the following amounts:

a. Torralba - PhP4,111,700.25 as separation pay and

PhP549,022.33 as his last pay;
b. Navarro - PhP2,612,783.40 as separation pay and
PhP440,070.62 as his last pay; and
c. Almazar - PhP3,l 16,555.82 as separation pay.

On September 20, 2013, respondents filed a complaint for illegal

dismissal on the ground that Abbott allegedly did not observe the criteria of
preference of status, efficiency, and seniority in determining who among its
redundant employees are to be retained. They also filed a claim for
underpayment of separation pay and discrimination because other former
employees who were terminated due to redundancy allegedly received 250%
of their monthly salaries per year of service as separation pay, while they
only received 150o/o thereof. Likewise included in the complaint was a claim
for moral and exemplary damages and attorney's fees.

Abbott maintained that respondents were terminated for authorized

cause; that respondents' functions as sales managers were redundant because
they were already being performed by the Medical Nutrition Division; that
respondents' separation pays were equivalent to one-and-a-half month pay

3
Id. at 51.
4
Id. at 168.
Decision 3 G.R. No. 229746

for every year of service plus three (3) months gratuity, which is more than
what the Labor Code requires; that in addition to their separation pays,
respondents were able to acquire their service vehicles at a big discount; and
that respondents voluntarily signed the Deeds.

Ruling of the Labor Arbiter

On February 4, 2014, Labor Arbiter Madjayran H. Ajan rendered a

Decision5 holding that respondents were illegally dismissed, and granted the
complaint thusly:

WHEREFORE, premises considered, complainants were illegally

terminated and respondent Abbott Laboratories is hereby directed as
follows:

1. To reinstate complainants to their former positions without loss

of seniority rights and benefits within ten (I 0) days from
receipt hereof and to full backwages from the time they were
dismissed until finality of this decision, which as of this date,
[are] computed as follows:

Backwages:

a. Roselle P. Almazar- P990,000.00

b. Manuel F. Torralba- Pl,096,453.40
c. Redel Ulysses M. Navarro -P870,927.80

2. To pay moral damages of PS00,000.00 and exemplary damages

of P200,000.00 or a total of P800,000.00 (sic) to each
complainants (sic);

3. To pay attorney's fees in the amount equivalent to 10% of the

total judgment award.

Other claims are dismissed for lack of merits (sic).

6
SO ORDERED.

According to the Labor Arbiter, Abbott failed to overcome the burden

of proving that the adoption and implementation of the redundancy program
was not in violation of law, and that it was not attended by malice or
arbitrariness. The Labor Arbiter found wanting the evidence presented to
establish that Abbott followed the required preference criteria of status,
efficiency, and proficiency in determining who among the employees are
going to be retained. There being no job evaluation conducted to gauge how
the allegedly redundant employees would fare against the criteria, the Labor
Arbiter deemed that respondents were arbitrarily and illegally dismissed.
Moreover, the Labor Arbiter ruled that the execution of the Deeds did not
bar respondents from contesting the validity of their termination.

5
Id. at 80-85.
6
Id. at 85.
Decision 4 G.R. No. 229746

Aggrieved, Abbott appealed the Labor Arbiter's Decision to the

National Labor Relations Commission (NLRC). Simultaneously therewith,
and in compliance with the Labor Arbiter's order of reinstatement,
7
petitioners furnished respondents with Return to Work Notices directing
them to personally appear for work. In the same month, respondents
discussed with petitioners the terms of the employment that the former
would be returning to. However, respondents rejected the offer of
reinstatement on the ground that the proposed positions were not equivalent
to the ones they were previously occupying. It also appears that the offer
was preconditioned on the respondents' returning the amounts they
previously received when they executed the Deeds.

Ruling of the NLRC

On May 20, 2014, the NLRC promulgated its Decision8 reversing the
Labor Arbiter's findings in the following wise:

WHEREFORE, upon the premises, the appealed Decision dated 4

February 2014 of Labor Arbiter Madjayran H. Ajan is REVERSED and
SET ASIDE. In lieu thereof, judgment is hereby rendered DISMISSING
the Complaint for lack of merit.
9
SO ORDERED.

The NLRC was in agreement with the Labor Arbiter that Abbott
failed to prove that respondents' positions were superfluous or unnecessary.
However, the NLRC nevertheless ruled that the Deeds precluded them from
claiming that they were illegally dismissed. It then affirmed its Decision
through its June 23, 2014 Resolution 10 denying petitioners' motion for
reconsideration therefrom. Thus, respondents elevated the case to the CA on
certiorari.

Ruling of the CA

On April 26, 2016, the appellate court rendered the assailed Decision
reinstating, with modification, the ruling of the Labor Arbiter, viz:

WHEREFORE, premises considered, the instant Petition for

Certiorari is hereby GRANTED. Accordingly, the assailed Decision dated
20 May 2014 and RESOLUTION dated 23 June 2014 of the National
Labor Relations Commission are hereby ANNULLED and SET ASIDE
and the Decision of the Labor Arbiter dated 04 February 2014 is
REINSTATED, with the MODIFICATION that backwages are to be
computed from the time the petitioners were illegally dismissed up to their
actual reinstatement.

7
Id. at 472-477.
8
Id. at 68-75.
9
Id. at 74-75.
10
Id. at 77-78.
Decision 5 G.R. No. 229746

In consonance with the prevailing jurisprudence, the monetary

judgment due to the petitioners shall earn legal interest at the rate of six
percent (6%) per annum from finality of the Decision until fully satisfied.

SO ORDERED. I I

In justifying its ruling, the CA noted first that the Labor Arbiter and
the NLRC are in concurrence that there was no valid redundancy program
because Abbott failed to prove one of its requisites - that it used a fair and
reasonable criteria in the selection of the employees who will be dismissed.
Thus, as the ground for termination of employment was illegal, the Deeds
signed by respondents could not also be valid, vitiated as they were by either
mistake or fraud. With the annulment of the Deeds, respondents are then
entitled to reinstatement, so the CA held.

Petitioners timely moved for reconsideration, assailing the consistent

findings that the records are bereft of any evidence to prove that Abbott
adopted a fair and reasonable criteria in the implementation of the
redundancy program. They argued, on the main, that the criteria to be used
in determining who among the employees are to be retained is part of
management prerogative, and that they are not constrained to resolve the
issue on retention based solely on its employees' status, efficiency, and
proficiency.

A second set of Return to Work Notices, 12 dated June 9, 2016, was

also furnished by petitioners to respondents, appointing them to positions
equivalent to their old ones and allowing them to maintain their ranks in the
company and receive the same salaries and benefits that they were
previously receiving. In the letter addressed to Torralba, petitioner stated
that his "district assignment shall be determined on the basis of a territory
deliberation to be conducted by management on July 1, 2016, following the
product refresher modules and evaluation that [Torralba] will undergo until
June 30, 2016." 13

The improved offers, however, were also flatly refused by Torralba

and Navarro on July 12, 2016, and by Almazar on July 18, 2016. 14
Respondents deemed the offer of reinstatement to be violative of the ruling
of the Labor Arbiter, as upheld by the CA. 15 They averred that the District
Sales Manager positions are not equivalent to their former ones and, hence,
could not be considered as a valid offer of reinstatement. Payroll
reinstatement should have then been carried out.

11
Id. at 61.
12
Id. at 530-532.
13
Id. at 533.
14
Id. at 65.
15
Id. at 534.
Decision 6 G.R. No. 229746

Petitioner, for its part, advised respondents that they can no longer be
reinstated to their original posts since those were already abolished effective
March 22, 2013. The company admitted that the Regional Sales Manager
positions no longer exist, which is why it offered respondents the posts of
District Sales Manager in lieu thereof. Petitioner added that respondents
would have realized that they are equivalents had they pen1sed the
onboarding plan that it prepared upon their return to work. And anent
respondents' claim of payroll reinstatement, petitioner claimed that,
although the award of reinstatement is self-executory, the option to exercise
actual reinstatement or payroll reinstatement belongs to the employer. 16

On account of petitioners' earnest efforts to reinstate respondents to

17
their former positions, albeit futile, they filed a Manifestation with Motion
on July 27, 2016 praying that respondents' entitlement to backwages be
tolled up until the date of respondents' refusal.

Subsequently, on January 25, 2017, the CA resolved the pending

incidents thusly:

WHEREFORE, premises considered, private respondents'

Motion for Reconsideration is hereby DENIED.

As to the Manifestation with Motion filed by private respondents,

the same is GRANTED. Accordingly, the award of back.wages of
Torralba and Navarro is computed from 22 March 2013 to 12 July 2016,
while the backwages of Almazar is computed from 22 March 2013 to 18
July 2016.
18
SO ORDERED.

Hence, the instant recourse.

The Issues

In arguing for the reversal of the challenged rulings, petitioners assign

to the CA the following errors:

I. THE COURT OF APPEALS ERRED IN AFFIRMING THE

FINDING OF THE LABOR ARBITER AND THE NLRC THAT
THE REDUNDANCY IMPLEMENTED BY PETITIONERS
WAS INVALID.

II. THE COURT OF APPEALS ERRED IN REVERSING THE

NLRC'S FINDING THAT PRIVATE RESPONDENTS
VALIDLY EXECUTED QUITCLAIMS AFTER THEY WERE
REDUNDATED.

16
Id. at 536-537.
17
Id. at 1153-1166.
18
Id. at 65.

/
Decision 7 G.R. No. 229746

III. THE COURT OF APPEALS ERRED IN AFFIRMING THE

LABOR ARBITER'S AW ARD OF FULL BACKWAGES TO
PRIVATE RESPONDENTS.

IV. THE COURT OF APPEALS ERRED IN AFFIRMING THE

LABOR ARBITER'S AWARD OF DAMAGES TO PRIVATE
RESPONDENTS. 19

Petitioners argue that the conclusion of the courts a quo - that the
company allegedly did not utilize a substantive criteria in deciding who
among its employees would be retained following its restructuring - is not
supported by evidence on record. On the contrary, petitioners point to the
Study, which recommended the streamlining of its processes to improve the
delivery of its services and to save Php4,000,000.00 per annum. The
company also insisted that determining who to redundate and who to retain
are within the sphere of management prerogative that the Court cannot
encroach on. Lastly, petitioners also maintain that the Deeds executed by
respondents are valid, precluding the latter from filing a complaint for illegal
dismissal.

Respondents filed their Comment to the petition, reiterating, on the

main, the discussions of the Labor Arbiter and the CA.

The Court's Ruling

We deny the petition.

No fair and reasonable criteria was

utilized in determining who among
the employees are to be redundated

The burden of proving that the dismissal of the employees was for a
valid and authorized cause rests on the employer. It is incumbent upon the
petitioners to show by substantial evidence that the terminations of the
employment of the respondents were validly made. Failure to discharge this
duty would mean that the dismissal is illegal. 20

In the controversy before Us, Abbott attempts to persuade the Court

that the respondents' dismissal is justified under its redundancy program.
Indeed, redundancy is a recognized authorized cause for validly terminating
employment. This much is clear under Art. 298 (formerly Art. 283) of the
Labor Code, viz:

Art. 283. Closure of establishment and reduction of personnel. The

employer may also terminate the employment of any employee due to the
installation of labor-saving devices, redundancy, retrenchment to prevent

19
Id. at 20.
20
General Milling Corporation v. Viajar, G.R. No. 181738, January 30, 2013, 689 SCRA 598,
612.
Decision 8 G.R. No. 229746

losses or the closing or cessation of operation of the establishment or

undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the workers and the
Ministry of Labor and Employment at least one (1) month before the
intended date thereof. In case of termination due to the installation of
labor-saving devices or redundancy, the worker affected thereby shall be
entitled to a separation pay equivalent to at least his one (1) month pay or
to at least one (1) month pay for every year of service; whichever is
higher.

Redundancy exists where the services of an employee are in excess of

what is reasonably demanded by the actual requirement of the
enterprise. 21 For a valid implementation of a redundancy program, the
employer must comply with the following requisites: (1) written notice
served on both the employee and the DOLE at least one month prior to the
intended date of termination; (2) payment of separation pay equivalent to at
least one month pay or at least one month pay for every year of service,
whichever is higher; (3) good faith in abolishing the redundant position; and
(4) fair and reasonable criteria in ascertaining what positions are to be
declared redundant. 22 The burden is on the employer to prove by substantial
evidence the factual and legal basis for the dismissal of its employees on the
ground of redundancy. 23 Substantial evidence, in tum, is defined as that
amount of relevant evidence which a reasonable mind might accept as
adequate to justify a conclusion. 24

The Labor Arbiter, NLRC, and the CA are in unison in declaring that
petitioner failed to establish compliance with the fourth requirement since
Abbott did not gauge the redundant employees against the preference criteria
of status, efficiency, and proficiency as re3uired in Golden Thread Knitting
Industries, Inc. v. NLRC (Golden Thread). 2 However, petitioners are correct
in pointing out that the list of indices in Golden Thread is not exhaustive.
Quoting the pertinent portion of the case:

Furthermore, we have laid down the principle in selecting the

employees to be dismissed, a fair and reasonable criteria must be used,
such as but not limited to: (a) less preferred status (e.g., temporary
employee), (b) efficiency, and (c) seniority. 26 (emphasis added)

It was then erroneous for the courts a quo to have harped on the three
indices as the basis for ruling that petitioner failed to comply with the fourth
requirement. An integral portion of management prerogative is the adoption
of the criteria against which the employees will be measured for purposes of
implementing a redundancy program. Abbott may then resort to using other

21
Caltex (Phils.), Inc. (now Chevron Phils. Inc.) v. NLRC, 562 Phil. 167, 183 (2007).
22
SP! Technologies, Inc. v. Mapua, G.R. No. 191154, April 7, 2014, 720 SCRA 743, 755-756.
23
Supra note 21, at 183-184.
24
Tenazas v. R Villegas Taxi Transport, G.R. No. 192998, April 2, 2014, 720 SCRA 467, 480-
481.
25
Rollo, p. 56; 364 Phil. 215 (1999), as cited in the CA Decision, p. 8.
26
Id. at 228.
Decision 9 G.R. No. 229746

indicators in determining who will remain with the company upon

downsizing its payroll.

In this case, Abbott attempted to justify the terminations based on the

2013 Study recommending the restructuring of the Sales Force of the
Specialty Nutrition Group under which the PediaSure and Medical Nutrition
Divisions used to belong. Based on the study, the Medical Nutrition Group
sells six (6) products and accounts for 63% of the combined sales of the two
divisions, whereas PediaSure only markets one (1) product with its sales
comprising 37% of the total. Thus, petitioner claims that "[the Medical
Nutrition Group] clearly generates a larger share in the market in the
Philippines, both for number of brands and sales, as compared to [the
PediaSure Division]. Hence, if the two divisions under [the Specialty
Nutrition Group} would be merged into one, it is both logical and
reasonable for the structure of [the Medical Nutrition Group} to be retained
by Abbott. " 27

On this point, We disagree with petitioner.

The data presented in the Study, by itself, does not satisfy the
evidentiary requirement to prove that respondents' positions should be
redundated. As found by the NLRC and the CA, the graphical presentations
in the Study "are mere allegations and conclusions not supported by other
evidence" that do not explain in detail why it considered respondents'
positions superfluous or unnecessary. 28

And while there may be basis for integrating the PediaSure Division
and Medical Nutrition Division into one unit as demonstrated in the Study,
there is no sufficient basis offered for retaining all the employees in one unit
while dismissing those from the other. It may be that there are similarities in
the functions and responsibilities attached to the positions in both divisions
that resulted in superfluity, but determining who will occupy the newly-
merged position is a different matter altogether. This required, on the part of
the employer, an evaluation of not just the performance of the divisions, but
of the individual employees who may be affected by the redundancy
program.

Evidence that this job appraisal was actually conducted is severely

wanting in the records of this case. Rather, Abbott relied on general
averments about logic and reason to justify its choice of division to retain.
Absent substantial evidence tending to prove that the employees that would
have been affected by the merger of the two departments were measured
against specific criteria, the termination of the redundated employees cannot
be sustained. On the contrary, such terminations are products of caprice and

27
Rollo, p. 29.
28
Id. at 57.
Decision 10 G.R. No. 229746

whimsy, and do not constitute a valid exercise of management prerogative

beyond the Court's power of review.

Bad faith in implementing the

redundancy program and the
consequence thereof

To dispel any lingering doubt, we have invariably held in a plethora of

cases that the employer's subsequent act of hiring additional employees is
29
inconsistent with the termination on the ground of redundancy. In this
light, We find the observation of the Labor Arbiter quite telling:

What puzzled this office is that respondents claimed that they offered
complainants to apply for job openings for the opposition of district sales
manager. Such offer only puts cloud to the wisdom and validity of the
redundancy program as the essence of redundancy is that the existing
manpower exceeds more than what is necessary in their operation, why
did they open new jobs for sales manager. 30

In the notice furnished by Abbott to the DOLE, the company declared

that the reason for the redundancy program, affecting four (4) of its
employees, is to reduce the company's manpower 31 by eliminating positions
that were allegedly superfluous. However, this proffered justification is
readily contradicted by the fact that the affected employees were offered
newly-created District Sales Manager positions that were entitled to lower
pay and benefits. To Our mind, the redundancy program is then a mere
subterfuge to circumvent respondents' right to security of tenure. Hence, just
as uniformly found by the Labor Arbiter, NLRC, and the CA, the
redundancy program cannot be considered lawful.

Consequently, the Deeds signed by the respondents could not

therefore be deemed valid, premised as they were on an invalid termination.
The case of Philippine Carpet Manufacturing Corporation v. Tagyamon
(Philippine Carpet) 32 is illustrative on this point.

In the said case, the Court listed three specific instances wherein a
waiver cannot estop a terminated employee from questioning the validity of
his or her dismissal, to wit: (1) the employer used fraud or deceit in
obtaining the waivers; (2) the consideration the employer paid is incredible
and unreasonable; or (3) the terms of the waiver are contrary to law, public
order, public policy, morals, or good customs or prejudicial to a third person
with a right recognized by law. 33 Verily, before the Court can even consider
the validity of the waiver, the legality of the termination itself should be able

29
See Caltex (Phils.), Inc. (now Chevron Phils. Inc.) v. NLR.C, supra note 21, and San Miguel
Corporation v. Del Rosario, 513 Phil. 740 (2005).
30
Rollo, p. 84.
31
Id. at 441.
32
G.R. No. 191475, December 11, 2013, 712 SCRA 489.
33
Id at. 506, citing Quevedo v. Benguet Electric Cooperative, Inc., 599 Phil. 438, 451 (2009).
Decision 11 G.R. No. 229746

to withstand judicial scrutiny. Should the Court find that either of the carved
exceptions is attendant, the dismissed employee cannot be deemed barred
from contesting the validity of the termination.

In the extant case, Abbott's bad faith in implementing the redundancy

program places it squarely under the first recognized exception. For
perspective, Abbott had already decided to sever respondents' employment
with the company. Faced with no other option than to sign the Deeds,
respondents acceded to the terms of petitioners' proposal. The Deeds,
however, could not automatically be taken at face value to preclude
respondents from asserting their right to security of tenure, and neither
would their acceptance of the benefits thereunder automatically operate as
the full satisfaction of their claims. To elucidate:

As the ground for termination of employment was illegal, the

quitclaims are deemed illegal as the employees' consent had been
vitiated by mistake or fraud. The law looks with disfavor upon
quitclaims and releases by employees pressured into signing by
unscrupulous employers minded to evade legal responsibilities. The
circumstances show that petitioner's misrepresentation led its employees,
specifically respondents herein, to believe that the company was suffering
losses which necessitated the implementation of the voluntary retirement
and retrenchment programs, and eventually the execution of the deeds of
release, waiver and quitclaim. 34 (emphasis added)

That the respondents are educated individuals who were occupying

supervisory positions is immaterial. The Court has allowed supervisory
employees to seek payment of benefits and a manager to sue for illegal
dismissal even though, for a consideration, they executed deeds of
quitclaims releasing their employers from liability. 35 Such circumstance does
not make them any less susceptible to financial offers, faced as they were
with the prospect of unemployment. Economic necessity constrained them to
accept petitioners' monetary offer and sign the deeds of release, waiver and
quitclaim. 36

Respondents' entitlement to
monetary awards

The right of employees to security of tenure, as enshrined under Art.

XIII, Sec. 3 of the Constitution, is further guarded by Art. 294 (formerly Art.
279) of the Labor Code, which states:

Art. 294. Security of tenure. In cases of regular employment, the

employer shall not terminate the services of an employee except for a just
cause or when authorized by this Title. An employee who is unjustly
dismissed from work shall be entitled to reinstatement without loss of
seniority rights and other privileges and to his full backwages, inclusive of

34 Id.
35
Id at. 506-507, citing Ario/av. Phi/ex Mining Corp., 503 Phil. 765, 780 (2005)
36 Id.
Decision 12 G.R. No. 229746

allowances, and to his other benefits or their monetary equivalent

computed from the time his compensation was withheld from him up to
the time of his actual reinstatement.

As can be gleaned, employees who are illegally dismissed are entitled

to full backwages, inclusive of allowances and other benefits, computed
from the time their actual compensation was withheld from them up to the
time of their actual reinstatement. But if reinstatement is no longer possible,
the backwages shall be computed from the time of their illegal termination
up to the finality of the decision. 37

Nevertheless, jurisprudence extrapolated from this provision instructs

that separation pay may be awarded to an illegally dismissed employee in
lieu of reinstatement. Over time, the following reasons have been advanced
by the Court for allowing this alternative remedy: that reinstatement can no
longer be effected in view of the long passage of time or because of the
realities of the situation; or that it would be 'inimical to the employer's
interest;' or that reinstatement may no longer be feasible; or, that it will not
serve the best interests of the parties involved; or that the company would be
prejudiced by the workers' continued employment; or that it will not serve
any prudent purpose as when supervening facts have transpired which make
execution on that score unjust or inequitable or, to an increasing extent, due
to the resultant atmosphere of 'antipathy and antagonism' or 'strained
relations' or 'irretrievable estrangement' between the employer and the
employee. 38

Here, the CA tolled the respondents' entitlement to backwages up

until the date respondents refused Abbott's offer to return to work in July
2016. To the CA, respondents had effectively foregone their right to be
restored to their former posts when they chose to retain the sums they
received upon execution of the Deeds, despite the order of reinstatement
from the courts.

Regrettably, this Court cannot sustain the CA' s finding.

Respondents' rejection of Abbott's offer of reinstatement cannot be

treated as a waiver of the right to be so reinstated nor as opting to receive
separation pay in lieu thereof, simply because the positions offered to them
are different from those they previously occupied. It is, therefore, not the
"actual reinstatement" contemplated under the Labor Code. A perusal of the
second set of Return to Work Orders addressed to the respondents readily
evinces that, although the respondents would be receiving the same
compensations as before, they would be performing functions different from
their prior posts. This was even admitted by the company when it attempted

37
Session Delights Ice Cream and Fastfoods v. Court of Appeals (Sixth Division), G.R. No.
172149, February 8, 2010, 612 SCRA 10, 24-25.
38
Emeritus Security and Maintenance Systems, Inc. v. Dailig, G.R. No. 204761, April 2, 2014,
720 SCRA 572, 579-580.
Decision 13 G.R. No. 229746

to justify placing them as District Sales Managers by saying that their

erstwhile positions have already been abolished.

Such feeble attempt must necessarily fail. Although the Return to

Work Orders state that respondents would be entitled to the same benefits
they used to receive, there was no proof that the functions they will be
performing are the equivalents of what they used to perform. Petitioners'
reply to the respondents' rejection mentioned an onboarding plan that would
have established the similarities between the two posts, but no copy of the
supposed plan was ever attached to the records of this case. There is then no
basis for this Court to rule that the District Sales Manager jobs offered to
respondents are so substantially similar to the National and Regional Sales
Manager positions they previously occupied, that the rejection of the offer
could have tolled the accrual of backwages. Following the general rule,
backwages shall be computed from the time of their illegal termination up to
actual reinstatement, which have not yet been effected in this case.

It does not escape the Court's attention, however, that the rulings of
the tribunals a quo are silent as to the treatment of the amount of separation
pay respondents already received. Hence, We rule herein that such amounts
should be considered as partial satisfaction of the award for backwages, and
should consequently be credited therefrom. 39

Anent the award of moral and exemplary damages to each respondent

in the amounts of PhP500,000.00 and PhP200,000.00, respectively, the
Court deems such sums to be excessive. A downward modification of the
award for moral and exemplary damages to PhPl00,000.00 and P50,000.00,
respectively, for every respondent is therefore proper. Meanwhile, the award
of attorney's fees at ten percent (10%) of the total monetary award and the
imposition of the six percent (6%) legal interest computed from finality of
judgment are hereby sustained.

WHEREFORE, premises considered, the petition is hereby

DENIED for lack of merit. The April 26, 2016 Decision and the January 25,
2017 Resolution of the Court of Appeals (CA) in CA-G.R. SP No. 136213
are hereby AFFIRMED with MODIFICATION as follows:

1. Petitioners are hereby ordered to reinstate respondents to

their former positions without loss of seniority rights and
benefits within ten (10) days from receipt hereof and to full
backwages from the time they were dismissed until actual
reinstatement;

2. To pay moral damages of Pl00,000.00 and exemplary

damages of P50,000.00 or a total of P150,000:oo to each
respondent;

39
Emco Plywood Corporation v. Abe/gas, 471 Phil. 460 (2004).
Decision 14 G.R. No. 229746

3. To pay attorney's fees in the amount equivalent to ten

percent (10%) of the total judgment award; and

4. To pay legal interest at the rate of six percent (6%) per

annum of the total monetary award computed from finality
of this Decision until full satisfaction thereof.

The case is hereby REMANDED to the National Labor Relations

Commission for proper computation of the monetary awards, with the
instruction that the amounts received by the respondents from petitioner as
separation pay are to be deducted before determining the award for
attorney's fees and the legal interest due.

SO ORDERED.

PRESBITE~ J. VELASCO, JR.

AsSociate Justice
Decision 15 G.R. No. 229746

WE CONCUR:

'
(On wellness leave)
MARVIt: M. V.F. LEONEN "\ SAMUEL R MARTIRES
/ Associate Justice Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been rec¢hed in
consultation before the case was assigned to the writer of the opiru6n of the
Court's Division.

PRESBITER9 J. VELASCO, JR.

As~ciate Justice
hairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the

Division Chairperson's Attestation, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Court's Division.

. .... ' "Qj) A

~i-~ MARIA LOURDES P.A. SERENO

Chief Justice
N·av· 1o 2017