Bernilo M. Aguilera, Petitioner, vs. Coca-Cola FEMSA Philippines,
Inc., Respondent, G.R. No. 238941 | September 29, 2021
Facts:
Bernilo M. Aguilera was hired by Coca-Cola FEMSA Philippines Inc. (CCFPI) as a Refrigeration
Technician in 1995. Over the years, he was promoted multiple times, eventually becoming a Cold
Drink Associate. In May 2013, new management took over, leading to an organizational review. On
August 6, 2013, Aguilera was informed that he failed the company’s assessment and that his position
would be terminated due to redundancy. His termination was set for September 6, 2013.
Aguilera contested his dismissal, claiming that the redundancy program was taintedwith bad faith.
He pointed out that his position was essentially split into two new positions with the same functions
but lower salaries. Despite his request for reconsideration and his application for a new position, he
was not rehired, while new employees filled the vacancies. Aguilera eventually accepted a separation
package and signed a quitclaim.
The company argued that it had complied with the redundancy requirements under the Labor Code,
including notifying Aguilera and the Department of Labor and Employment (DOLE) about the
termination and providing separation pay. The company asserted that the redundancy was part of a
valid management prerogative to streamline operations and improve efficiency.
The Labor Arbiter ruled in favor of Aguilera, declaring his dismissal illegal due to the company’s
failure to prove good faith in implementing the redundancy program. The National Labor Relations
Commission (NLRC) affirmed the Labor Arbiter’s decision, though it removed the award of moral and
exemplary damages. However, the Court of Appeals reversed the decision, finding that the company
had followed all legal requirements for a valid redundancy program, and the quitclaim barred
Aguilera from pursuing further claims.
Issue:
Was Aguilera's dismissal on the ground of redundancy valid, or did it violate his right to security of
tenure?
Ruling:
The Supreme Court ruled in favor of Aguilera, declaring that his dismissal was illegal. The Court found
that Coca-Cola FEMSA Philippines Inc. did not follow a clear set of criteria in determining which
positions would be declared redundant.
Additionally, the company acted in bad faith by simply renaming Aguilera's position and hiring new
employees to perform the same tasks under a different job title with lower pay.
The Court emphasized that an employer must demonstrate good faith in the implementation of a
redundancy program and provide substantial evidence to justify the termination of positions. In this
case, Coca-Cola FEMSA failed to provide adequate proof that Aguilera’s position had truly become
redundant. Furthermore, Aguilera’s quitclaim was rendered invalid as it was executed under
economic duress, highlighting the unequal bargaining power between the employer and employee.
The Supreme Court ordered the following:
1. Aguilera is declared illegally dismissed.
2. Coca-Cola FEMSA Philippines Inc. is ordered to reinstate Aguilera to his former or equivalent
position without loss of seniority rights and pay him full backwages from the time of his illegal
dismissal in November 2017 until actual reinstatement.
3. If reinstatement is no longer feasible, Coca-Cola FEMSA Philippines Inc. is ordered to pay Aguilera
separation pay equivalent to one (1) month salary for every year of service, less the separation
package already received.
4. Coca-Cola FEMSA Philippines Inc. is also ordered to pay Aguilera moral damages of ₱50,000.00,
exemplary damages of ₱50,000.00, and attorney's fees equivalent to 10% of the total monetary
award.
5. The monetary awards shall accrue legal interest of 6% per annum from the finality of the decision
until full payment.
Important Doctrines:
1. Redundancy and Good Faith: Redundancy exists when the service capability of the workforce is in
excess of what is reasonably required. However, employers must show good faith and follow fair and
reasonable criteria when declaring a position redundant.
2. Quitclaim Invalidity: A quitclaim is not automatically valid and may be considered void if signed
under economic duress or if the employer failed to follow legal requirements in dismissing the
employee.
3. Burden of Proof on Employer: The employer bears the burden of proving that the redundancy was
implemented in good faith and based on reasonable criteria.