WHY PREFER REDUNDANCY OVER RETRENCHMENT?

By Jemuel D. Caburian

            The Republic Act No. 10533 was enacted in 2013. This is the “Enhanced Basic Education Act of 2013”, which is popularly known as the K to 12 Program. The K to 12 Program covers Kindergarten and 12 years of Basic Education. It introduced a Universal Kindergarten in School Year (SY) 2011-2012 and retained the six years of Elementary Education which is Grades 1 to 6. It also lengthened Secondary Education from four to six years comprised of Junior High School (JHS or Grades 7 to 10) and Senior High School (SHS or Grades 11 and 12).

 

            Under the K to 12 Program, the phased implementation of the new curriculum began in SY 2012-2013 with the rollout of the enhanced curriculum for Grades 1 and 7, followed by Grades 2 and 8 in SY 2013-2014 and Grades 3 and 9 in SY 2014-2015. Grade 11 will be rolled out in SY 2016-2017 and Grade 12 will follow in SY 2017-2018.  The first batch of high school students to go through SHS will graduate in March 2018.

 

            One major concern of stakeholders in Higher Educational Institutions (HEIs) is the job movements that will occur during the interim period of the K to 12 Program (2016-2021). During this period, there will be foregone enrolment in HEIs that may result in displacement of some teaching and non-teaching personnel. To cushion the impact of the implementation of the K to 12 Program, can an HEI resort to the termination of employment of its teaching and non-teaching personnel before the first semester of 2016?

 

            The Labor Code recognizes the institutional academic freedom and management prerogative of an HEI, being the employer. It has the right to regulate all aspects of employment and to exercise the freedom to lay-off workers, among other things. As such, it may retrench or redundate its teaching and non-teaching personnel. The right to retrench or redundate employees, however, must be in good faith and must not be used as a pretext to defeat the rights of employees under the laws and applicable contracts. It should not be tainted with abuse of discretion. Thus in the case of Bataan Shipyard and Engineering Co., Inc. vs. NLRC [161 SCRA 271], the Supreme Court held: “…Labor is a person’s means of livelihood. He cannot be deprived of his labor or work without due process of law. Retrenchment strikes at the very heart of one’s employment. While the right of an employer to dismiss an employee is conceded in a valid retrenchment, the right differed from and should not be confused with the manner in which such right is exercised. It should not be oppressive and abusive since it affects one’s person and property. Due process of law demands nothing less.”


 

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The activity culminated at the Jose Rizal University Auditorium with

The effect of redundancy and retrenchment on one’s employment may be the same --- that is, termination of employment. As stated, these authorized causes of termination may be resorted to by HEIs in preparation to the adverse effect of the K to 12 Program during its interim period. Though such exercise of management prerogative to terminate employment must be exercised essentially as a measure of last resort (Lopez Sugar Corporation vs. Federation of Free Workers, 189 SCRA 179), labor unions must be ready for the worst case scenario where they will chose between the two measures: redundancy or retrenchment.

 

            Under the Labor Code, redundancy exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. A position is redundant where it is superfluous, and superfluity of a position or positions may be overcome of a number of factors, such as overhiring or workers, decreased volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise (Wiltshire File Co., Inc. vs. NLRC, G.R. No. 82249, Feb. 7, 1991). Retrenchment, on the other hand, is the process of cutting expenses involving the reduction of the work force. To be an authorized cause for dismissal under Article 283 of the Labor Code, it must be effected in good faith and for the purpose of preventing losses (Sarmiento III, 2002 citing the case of Lopez Sugar Corporation vs. Federation of Free Workers, 189 SCRA 179).

 

            When worst comes to worst, why labor unions should prefer redundancy over retrenchment? In redundancy, under Article 283 of the Labor Code, the employer has to pay the employees separation pay equivalent to one (1) month pay for every year of service; a fraction of at least six (6) months being considered as one (1) whole year. Under the same Article, in retrenchment the employer has to pay employees separation pay equivalent to at least one-half (1/2) month pay for every year of service; a fraction of at least six (6) months being considered as one (1) whole year.

 

            Res Ipsa Loquitur. The reason for preferring redundancy over retrenchment is obvious.