Supreme Court Affirms Employer Employee Relationship on Job Acceptance
The Supreme Court has emphasized that once workers accept job offers, an employer employee relationship is established. Employers cannot simply terminate employees by citing redundancy without sufficient proof. This ruling reinforces that redundancy, while a valid ground for dismissal under the labor code, must be properly justified in the exercise of business judgment.
According to local experts, employers must not act arbitrarily or violate legal standards when declaring redundancy. They must provide clear evidence such as updated staffing patterns, feasibility studies, new job descriptions, and management approvals for restructuring to support dismissals based on redundancy.
Case Background: Alltech Biotechnology and Paolo Aragones
The case involved Paolo Landayan Aragones and Alltech Biotechnology, a company engaged in animal feed, meat, brewing, and agricultural product development. Aragones was offered the position of Swine Technical Manager-Pacific (STMP) on April 1, 2016, and he accepted the offer on April 18, 2016, with employment to start July 1, 2016. He resigned from his previous job in preparation for this role.
However, Alltech later underwent global restructuring, declaring the STMP position redundant. The company informed Aragones of this on June 10, 2016, offering him a month’s salary as a goodwill gesture, which he rejected. Aragones then filed a case claiming illegal dismissal.
Legal Proceedings and Court Decisions
The labor arbiter ruled in favor of Aragones, recognizing the employer employee relationship from the time he accepted the offer and awarding him backwages and damages. However, the National Labor Relations Commission (NLRC) reversed this decision, stating no employment relationship existed since the employment was set to begin only on July 1, 2016, and no signed contract was in place.
The Court of Appeals upheld the NLRC ruling, reasoning that since the position was abolished before Aragones’ start date, no employment relationship was established, and thus no illegal dismissal occurred.
Supreme Court’s Final Ruling on Employer Employee Relationship and Redundancy
Aragones elevated his petition to the Supreme Court, insisting that acceptance of the job offer created an employment relationship regardless of the official start date. He argued the requirement to sign a contract on his first day was merely a formality.
The Supreme Court examined whether Alltech validly implemented its redundancy program. It found the company’s evidence insufficient, relying solely on a vague affidavit from a company officer that failed to prove how the restructuring affected specific positions or justified abolishing Aragones’ role.
The Court ruled that this lack of concrete proof invalidated the redundancy claim. Therefore, Aragones was deemed illegally dismissed and entitled to separation pay in lieu of reinstatement since he no longer sought to return to the company.
The Court ordered Alltech to pay backwages from July 1, 2016, separation pay equivalent to one month’s salary for every year of service, attorney’s fees amounting to 10% of the total award, and legal interest of 6% per annum until full payment.
Key Takeaways on Employer Employee Relationship and Redundancy
This ruling clarifies that an employer employee relationship can arise once a job offer is accepted, even if the employment start date is in the future. Employers must provide substantial proof to justify redundancy claims and avoid arbitrary dismissals.
Local labor analysts note that this decision reinforces worker protections and stresses the importance of clear, documented restructuring processes when reducing workforce positions.
For more news and updates on employer employee relationship and redundancy, visit Filipinokami.com.