006 Becton Dickinson Philippines Inc. v. NLRC (Lim) and now reporting to Country Manager instead of the VP.

Manager instead of the VP. As Business director,

Esmquel still exceeded sales target and was given incentive trip to Europe as well
Nov. 15, 2005 | Garcia, J. | Authorized Causes as Business Excellence Award. In 2000, another reorganization where Esmaquel
was designated as Director of Sales. He was responsible for the whole sales force
for all products of the company. He still achieved sales target and was given an
incentive trip to USA. He was also also appointed one of the members of the
PETITIONER: Becton Dickinson Phils. Inc.
Becton Dickinson (BD) Philippines Leadership Team, a group within Becton,
RESPONDENTS: NLRC Phils., which was responsible for the formulation of policies and rules of the
company. pursuant to its established policies and guidelines for terminating
employees, Becton, Phils. retrenched nine (9) employees, giving them separation
benefits in accordance with such guidelines. Its very own Country Manager, Jesus
SUMMARY: Fargas, was among those whose services were terminated. They were given
separation and retirement benefits and each executed release and quitclaim. Becton,
Becton Dickinson is a domestic corporation engaged in the business of
Asia announced the appointment of petitioner Wilfredo Joaquin, a former Filipino
importantion, warehousing, exportation, manufacture, assembly, sale at wholesale,
citizen who later acquired American citizenship, as the new Country Manager of
and promotion of health care products needed by hospitals, doctors, laboratories
Becton, Phils. Being a stranger to the company's operations, as well as to the
and pharmaceutical companies. The company is a wholly-owned subsidiary of
customers of Becton, Phils., Joaquin sought Esmaquel’s assistance to address
Becton Dickinson Worldwide based in New Jersey, USA and with operations in the
serious problems of the company, and to orient him in the mechanics of the
Asia Pacific Region under Becton Dickinson Asia Pacific based in Singapore.
company's sales and marketing efforts in the Philippines. Then, barely two (2)
Wilfredo Joaquin was formerly named Country Manager of Becton Phils., who
months from Joaquin's assumption of his position as Country Manager, Becton,
dismissed Reinerio Esmaquel for redundancy which the later filed an illegal
Phils. served upon respondent a notice of termination of employment effective
dismissal and underpayment of separation and retirement benefits with actual,
August 10, 2001, on the ground that his position has been declared redundant.
moral and exemplary damages and attorney’s fees and payment of backwages. LA
Esmaquel objected to his termination because, as member of the BD Philippines
found Becton and Joaquin to have acted jointly and in concert in terminating
Leadership Team, he was not aware of any meeting or discussion of the team about
Esmaquel’s employment and declared the latter’s dismissal illegal, but held Becton
the roles of his position in the organization. The roles of his position/function in the
solely liable for payment.
company have never been placed in the agenda for meeting of the BD Philippines
(Detailed Facts) Fargas headed the Medical division while Esmaquel started his Leadership Team. Esmaquel asked Joaquin why his position was declared
stint with Becton as Director of Sales and Marketing of Diagnostics Division from redundant but Joaquin could not give him any plausible reason except that the
1989-1998 and reported to Asia’s VP or Diagnostics Sector. He was in charge of redundancy of his position was due to restructuring of the company organization.
the overall supervision of twenty-three (23) employees working under the sales and He asked Joaquin if he had taken into consideration in declaring redundant his
marketing organization. He was responsible for the attainment of sales and profit position, the guidelines/rules for termination of employment as directed by Becton,
targets as well as the long term growth and development of the diagnostic business Asia's President, namely: (a) to retain the best employee; (b) consider the
of Becton, Phils. He reviewed and approved the company's country marketing plans performance of the employee for the last three (3) years; and (c) refrain from taking
and budget before submission to Becton, Asia. He oversaw the implementation of decision based on individual salary. Joaquin failed to answer this question. He
marketing plans through the sales and marketing managers. He represented the further protested when he was informed that the separation benefits to be paid to
company in the meeting of the Southeast Asia Steering Committee and Asia Pacific him was way below those received by the nine (9) employees previously
Supply Chain Management Committee of the different affiliates of Becton terminated. He demanded an equal treatment from the company, considering that
Dickinson Worldwide, Inc. in the Asia-Pacific Region. He received numerous he rendered exemplary service thereto and that he is being terminated involuntarily.
citations and awards for his commendable performance. In 1998, Fargas was He was terminated and required to sign a Release and Quitclaim, otherwise, his
promoted to Country Manager while Esmaquel was appointed Business Director separation pay and retirement benefits will be withheld. Esmaquel found no other
alternative but to give in, and reluctantly signed the document. He then instituted
the case in the LA
The factual and legal bases of the Labor Arbiter's ruling on the supposed Release
and Quitclaim are well established. We cannot subscribe to petitioners' reasoning
that the foregoing ruling on the validity and binding effect of releases and
Issue: Whether or not the Court of Appeals erred in not finding grave abuse of quitclaims apply only to rank-and-file workers, and find no application to
discretion on the part of the NLRC when the latter dismissed the same appeal on respondent in this case, who happens to be a highly intelligent man who once held
the additional ground of "being devoid of merit” the top sales position at petitioner company. There is no nexus between
intelligence, or even the position which the employee held in the company when it
concerns the pressure which the employer may exert upon the free will of the
Held: No, the Company and Joaquin disregarded totally the Company's guidelines employee who is asked to sign a release and quitclaim. A lowly employee or a sales
in declaring Esmaquel’s position redundant. The principal reason why his position manager, as in the present case, who is confronted with the same dilemma of
was declared redundant is the fact that he was the highest paid employee with a whether signing a release and quitclaim and accept what the company offers them,
monthly salary of P197,525.00. The Company's main purpose in terminating him or refusing to sign and walk out without receiving anything, may do succumb to the
was to cut down expenses and it did so by dismissing him in one fell swoop, same pressure, being very well aware that it is going to take quite a while before he
camouflaging its malice by using the ground of redundancy. Thus was violated the can recover whatever he is entitled to, because it is only after a protracted legal
Company rule that the decision to terminate must not be based on salary. The battle starting from the labor arbiter level, all the way to this Court, can he receive
Company certainly could not find fault with his performance. In 1999 his work anything at all. The Court understands that such a risk of not receiving anything
performance was "outstanding". In 2000 his work performance was "very good". whatsoever, coupled with the probability of not immediately getting any gainful
For the FY 2000, Esmaquel achieved 104% sales performance. Hence, there were employment or means of livelihood in the meantime, constitutes enough pressure
violations of the Company rules to retain the best employee; to consider the upon anyone who is asked to sign a release and quitclaim in exchange of some
performance of the employee for the last three years; protect the best people; and amount of money which may be way below what he may be entitled to based on
remove those who least contribute. company practice and policy or by law.

DOCTRINE:

Doctrine(1) Guidelines for terminating employees and petitioner Becton, Phils. (1) Redundancy is one of the authorized causes of dismissal, which, in the leading
applied these in previously laying off nine (9) of its employees, Becton, Phils. case of Wiltshire File Co., Inc. vs. NLRC: redundancy in an employer's personnel
committed grave abuse of discretion in not applying the same criteria in force necessarily or even ordinarily refers to duplication of work. That no other
respondent's case. There is reason and basis for the State, through the NLRC in this person was holding the same position that private respondent held prior to the
case, to intervene and reexamine the validity of petitioner company's exercise of its termination of his services, does not show that his position had not become
managerial prerogatives in declaring a certain position redundant insofar as in so redundant. Indeed, in any well organized business enterprise, it would be surprising
doing, the rights of respondent to said position is jeopardized. Court finds no valid to find duplication of work and two (2) or more people doing the work of one
and acceptable explanation for the unequal treatment by petitioner Becton, Phils. in person. We believe that redundancy, for purposes of the Labor Code, exists where
the manner of termination of the nine (9) employees and that of respondent, and the services of an employee are in excess of what is reasonably demanded by the
therefore agrees with the Labor Arbiter that such discriminatory act is abhorrent to actual requirements of the enterprise. Succinctly put, a position is redundant
the basic principles of social justice and protection of labor, akin to a violation of where it is superfluous, and superfluity of a position or positions may be the
the equal protection clause enshrined in the Constitution. outcome of a number of factors, such as overhiring of workers, decrease in
volume of business, or dropping of a particular product line or service activity
previously manufactured or undertaken by the enterprise.
5. On September 12, 1989, private respondent Reinerio Z. Esmaquel started
his stint with Becton, Phils. as Director of Sales and Marketing of the
Diagnostics Division. He held this position until March 1998.

6. As Sales and Marketing Director of the company's Diagnostics Division,

FACTS: respondent reported to Becton, Asia's Vice President of Diagnostics Sector.
He was in charge of the overall supervision of twenty-three (23) employees
1. Salas Petitioner Becton Dickinson Philippines, Inc. (Becton, Phils., for
working under the sales and marketing organization. He was responsible for
brevity), is a domestic corporation engaged in the business of importation,
the attainment of sales and profit targets as well as the long term growth and
warehousing, exportation, manufacture, assembly, sale at wholesale, and
development of the diagnostic business of Becton, Phils. He reviewed and
promotion of health care products needed by hospitals, doctors,
approved the company's country marketing plans and budget before
laboratories, and pharmaceutical companies. The company is a wholly-
submission to Becton, Asia. He oversaw the implementation of marketing
owned subsidiary of Becton Dickinson Worldwide, Inc., U.S.A. based in
plans through the sales and marketing managers. He represented the
New Jersey, United States of America (U.S.A.) and with operations in the
company in the meeting of the Southeast Asia Steering Committee and Asia
Asia Pacific Region under the charge of Becton Dickinson Asia Pacific
Pacific Supply Chain Management Committee of the different affiliates of
(Becton, Asia, for short), which is based in Singapore. On the other hand,
Becton Dickinson Worldwide, Inc. in the Asia-Pacific Region.
petitioner Wilfredo Joaquin (Joaquin, hereafter), was formerly the Country
Manager of Becton, Phils. when herein private respondent Reinerio Z.
7. For his commendable performance as Sales and Marketing Director,
Esmaquel filed On October 24, 2001 before the Labor Arbiter of the
respondent received numerous citations and awards, the most notable of
National Capital Region (South Sector) a single complaint for "Illegal
which was the President's Club Award which he received in 1993 with the
dismissal and underpayment of separation and retirement benefits with
distinction that he was the only recipient of this award in Becton's Asia
actual, moral and exemplary damages and attorney's fees and payment of
Pacific Region.
backwages from time of termination until final judgment", therein naming
both petitioners as respondents.
8. In March, 1998, Jesus Fargas was promoted to the position of Country
2. Labor Arbiter Edgardo M. Madriaga found Becton, Phils. and Joaquin to Manager for Becton, Phils. Respondent, on the other hand, was appointed
have acted jointly and in concert in terminating Esmaquel's employment Business Director thereof, reporting, this time, to the Country Manager
and declared the latter's dismissal illegal, but held Becton, Phils. solely instead of the Vice President of Diagnostics Sector of Becton, Asia.
liable for payment of backwages, separation pay and retirement benefit Respondent was responsible for sales and marketing of Infectious Disease
differential, moral and exemplary damages and attorney's fees. Joaquin Diagnostic, Immunocytometry System, and Instrument Service for the Asia
nevertheless joined Becton, Phils. in assailing the Labor Arbiter's decision Pacific Region. He held this position up to December, 1999.
by way of appeal to the NLRC.
9. As Business Director, respondent exceeded the sales target given him by the
3. NLRC dismissed their appeal and MR. CA also denied their appeal and Becton, Phils. for fiscal year 1999 and for which the Company gave his
MR. team free trip incentive to Europe. In 1999, respondent also received a
Business Excellence Award from Becton, Phils.
4. In 1989, Becton, Phils. had two (2) main divisions, namely: (a) the Medical
Division; and (b) the Diagnostics Division. Jesus Fargas headed the Medical 10. In January, 2000, Becton, Phils. reorganized under the concept of "Go To
Division, while the position of head of the Diagnostics Division was vacant. Market." For purposes of selling its products, Becton, Phils. had organized
Also vacant was the position of Country Manager of Becton, Phils. two (2) divisions, namely, the Sales Division and the Marketing Division,
 and designated respondent as the Director of Sales. As such, respondent was citizenship, as the new Country Manager of Becton, Phils.
responsible for the whole sales force for all products of the company. The
Marketing Division, on the other hand, was placed under the Office of the 17. Being a stranger to the company's operations, as well as to the customers of
Country Manager and the same was in charge of the preparation of Becton, Phils., Joaquin sought respondent's assistance to address serious
marketing plans, including advertising and promotional programs and in problems of the company, and to orient him in the mechanics of the
booking orders/sales to distributors of Becton, Phils. company's sales and marketing efforts in the Philippines.

11. Under the foregoing reorganization, the Sales Division was responsible for 18. Then, on that fateful day of July 10, 2001 or barely two (2) months from
in-market sales or the sale of all the products of the company to the Joaquin's assumption of his position as Country Manager, Becton, Phils.
distributors. The distributors who buy the products at wholesale, in turn, are served upon respondent a notice of termination of employment effective
the ones selling the products to the end users. The company is, however, August 10, 2001, on the ground that his position has been declared
generally responsible for the sale promotions of the company's products to redundant
the end users.
19. Respondent objected to his termination because, as member of the BD
Philippines Leadership Team, he was not aware of any meeting or
12. Consistent with his work performance, respondent achieved the sales target discussion of the team about the roles of his position in the organization.
assigned to him, for which reason, Becton, Phils. awarded his team free trip The roles of his position/function in the company have never been placed in
to the U.S.A. the agenda for meeting of the BD Philippines Leadership Team. Respondent
asked Joaquin why his position was declared redundant but Joaquin could
13. Eventually, respondent was also appointed one of the members of the not give him any plausible reason except that the redundancy of his position
Becton Dickinson (BD) Philippines Leadership Team, a group within was due to restructuring of the company organization.
Becton, Phils., which was responsible for the formulation of policies and
rules of the company. 20. Respondent asked Joaquin if he had taken into consideration in declaring
redundant his position, the guidelines/rules for termination of employment
14. In November, 2000, pursuant to its established policies and guidelines for as directed by Becton, Asia's President, namely: (a) to retain the best
terminating employees, Becton, Phils. retrenched nine (9) employees, employee; (b) consider the performance of the employee for the last three
giving them separation benefits in accordance with such guidelines. Its very (3) years; and (c) refrain from taking decision based on individual salary.
own Country Manager, Jesus Fargas, was among those whose services were Joaquin failed to answer this question.
terminated. They were given separation and retirement benefits and each
executed release and quitclaim. 21. Respondent further protested when he was informed that the separation
benefits to be paid to him was way below those received by the nine (9)
15. After Country Manager Jesus Fargas left the company, respondent was employees previously terminated. He demanded an equal treatment from
considered for said position. Pending the appointment of a Country the company, considering that he rendered exemplary service thereto and
Manager, Becton, Asia created a "Self-Managed Team" to run the day-to- that he is being terminated involuntarily.
day operations of the company. The "Self-Managed Team" was composed
of seven (7) members consisting of four (4) Filipinos and three (3) 22. This notwithstanding, he was terminated and required to sign a Release and
foreigners. Respondent was named one of the four (4) Filipino members of Quitclaim, otherwise, his separation pay and retirement benefits will be
the said team withheld. Respondent found no other alternative but to give in, and
reluctantly signed the document.
16. On May 16, 2001, Becton, Asia announced the appointment of petitioner
Wilfredo Joaquin, a former Filipino citizen who later acquired American
 23. On September 19, 2001, respondent, through counsel, sent Becton, Phils. a on salary. The Company certainly could not find fault with [respondent's]
letter protesting his termination from service and/or illegal dismissal and performance. In 1999 his work performance was "outstanding". In 2000 his
demanded full payment of his separation pay and retirement benefits. work performance was "very good". For the FY 2000, [respondent]
achieved 104% sales performance. Hence, there were violations of the
24. In its letter dated September 26, 2001, counsel of Becton, Phils. rejected Company rules to retain the best employee; to consider the performance of
respondent's claim, explaining that he had been given his full separation pay the employee for the last three years; protect the best people; and remove
and retirement benefits (net of outstanding retirement loan and 50% share in those who least contribute.
the car loan) in addition to which, he was also given a laptop computer, a
Nokia 8850 cellular phone, free of charge, and that he had already signed a 3. There is no clear proof that [respondent's] services are in excess of the
Release and Quitclaim. Company's reasonable demands and requirements; and that there is no other
alternative available to the Company except to dismiss [respondent]. The
25. Aggrieved, respondent filed on October 24, 2001 a complaint against superfluity of [respondent's] position has not been established. There has
Becton, Phils. and Wilfredo Joaquin with the Arbitration Branch of the been no previous overhiring of employees. On the contrary, the Company
NLRC for illegal dismissal, underpayment of separation pay and retirement had already terminated nine (9) employees. There is no proof of decreased
benefits, actual, moral, and exemplary damages, and attorney's fees. volume of business. Indeed, [respondent] had overshot the sales target — he
achieved 104% sales performance. Neither is there proof that the Company
had dropped a product line or service.
ISSUE/s:
4. Redundancy is one of the authorized causes of dismissal, which, in the
Whether or not the Court of Appeals erred in not finding grave abuse
leading case of Wiltshire File Co., Inc. vs. NLRC, this Court had occasion
of discretion on the part of the NLRC when the latter dismissed the
to explain the nature of, in the following manner:
same appeal on the additional ground of "being devoid of merit”
5. . . . redundancy in an employer's personnel force necessarily or even
ordinarily refers to duplication of work. That no other person was holding
RULING: WHEREFORE, the instant petitions are DENIED and the assailed the same position that private respondent held prior to the termination of his
Decision and Resolution of the Court of Appeals AFFIRMED. services, does not show that his position had not become redundant. Indeed,
in any well organized business enterprise, it would be surprising to find
duplication of work and two (2) or more people doing the work of one
person. We believe that redundancy, for purposes of the Labor Code, exists
RATIO:
where the services of an employee are in excess of what is reasonably
1. As The record supports the finding that the Company and Joaquin demanded by the actual requirements of the enterprise. Succinctly put, a
disregarded totally the Company's guidelines in declaring [respondent's] position is redundant where it is superfluous, and superfluity of a position or
position redundant. positions may be the outcome of a number of factors, such as overhiring of
workers, decrease in volume of business, or dropping of a particular product
2. The principal reason why [respondent's] position was declared redundant is line or service activity previously manufactured or undertaken by the
the fact that he was the highest paid employee with a monthly salary of enterprise.
P197,525.00. The Company's main purpose in terminating [respondent] was
to cut down expenses and it did so by dismissing him in one fell swoop, 6. Besides, although the Court is mindful, and thus held in Dole Philippines,
camouflaging its malice by using the ground of redundancy. Thus was Inc. vs. NLRC, that the characterization of an employee's services as no
violated the Company rule that the decision to terminate must not be based longer necessary or sustainable, and therefore, properly terminable, is an
 exercise of business judgment on the part of the employer, and that the release and quitclaim and accept what the company offers them, or refusing
wisdom or soundness of such characterization or decision is not subject to to sign and walk out without receiving anything, may do succumb to the
discretionary review, provided of course that violation of law or arbitrary or same pressure, being very well aware that it is going to take quite a while
malicious action is not shown. before he can recover whatever he is entitled to, because it is only after a
protracted legal battle starting from the labor arbiter level, all the way to
7. We agree with respondent that when Becton, Asia laid down guidelines for this Court, can he receive anything at all. The Court understands that such a
terminating employees and petitioner Becton, Phils. applied these in risk of not receiving anything whatsoever, coupled with the probability of
previously laying off nine (9) of its employees, Becton, Phils. committed not immediately getting any gainful employment or means of livelihood in
grave abuse of discretion in not applying the same criteria in respondent's the meantime, constitutes enough pressure upon anyone who is asked to
case. There is reason and basis for the State, through the NLRC in this case, sign a release and quitclaim in exchange of some amount of money which
to intervene and reexamine the validity of petitioner company's exercise of may be way below what he may be entitled to based on company practice
its managerial prerogatives in declaring a certain position redundant insofar and policy or by law.
as in so doing, the rights of respondent to said position is jeopardized.
11. It may likewise be noted that what respondent received when he signed the
8. Moreover, even after a thorough review of the records of this case, the Release and Quitclaim was less than half of what he is entitled to under the
Court finds no valid and acceptable explanation for the unequal treatment circumstances, as correctly computed by the Labor Arbiter in his March 26,
by petitioner Becton, Phils. in the manner of termination of the nine (9) 2002 decision. This is another reason why the Court cannot rely upon such
employees and that of respondent, and therefore agrees with the Labor Release and Quitclaim to validly bar respondent from thereafter claiming
Arbiter that such discriminatory act is abhorrent to the basic principles of additional benefits from petitioner Becton, Phils.
social justice and protection of labor, akin to a violation of the equal
protection clause enshrined in the Constitution. 12. Finding no merit in the substantive aspect of the present petitions, the Court
has no legal basis to rule in favor of liberal application of procedural rules
9. Indeed, it smacks of incredulity to believe that a topnotch employee who in this case by suspending the same and allowing due course to petitioners'
has contributed much to the growth of the company and for which the latter appeal before the NLRC despite violation of NLRC Resolution No. 01-02
even reciprocated him with honors and awards, suddenly in a span of less (Series of 2002) for lack of a certification of non-forum shopping.
than two (2) months from the time a new company Country Manager
assumed post, would wake up one morning with a notice that his position is 13. All told, the Court finds no reversible error with the assailed decision and
already superfluous and therefore he is no longer needed. resolution of the Court of Appeals. As it is, no grave abuse of discretion
may be imputed by said court upon the NLRC, which merely abides by its
10. The factual and legal bases of the Labor Arbiter's ruling on the supposed own rules of procedure.
Release and Quitclaim are well established. We cannot subscribe to
petitioners' reasoning that the foregoing ruling on the validity and binding 14. Worse, even if the aforesaid procedural and technical infirmities were to be
effect of releases and quitclaims apply only to rank-and-file workers, and ignored, the Court finds no cogent reason to depart from, much more nullify
find no application to respondent in this case, who happens to be a highly and set aside, the challenged decision and resolution of the Court of
intelligent man who once held the top sales position at petitioner company. Appeals because definitely, no grave abuse of discretion could be imputed
There is no nexus between intelligence, or even the position which the to the NLRC in affirming the decision of the Labor Arbiter on its merits.
employee held in the company when it concerns the pressure which the SEHaTC
employer may exert upon the free will of the employee who is asked to sign
a release and quitclaim. A lowly employee or a sales manager, as in the
present case, who is confronted with the same dilemma of whether signing a