THE Supreme Court has affirmed that an employer-employee relationship is established upon the signing of an employment contract, rejecting an employer’s claim of redundancy as justification for dismissal.
In a decision penned by Associate Justice Alfredo Benjamin S. Caguioa, the Court’s Third Division ruled that Alltech Biotechnology’s (Alltech) dismissal of Paolo Landayan Aragones was illegal due to insufficient evidence of redundancy.
Aragones had accepted Alltech’s offer for the position of Swine Technical Manager – Pacific, with a monthly salary of P140,000. However, before Aragones could commence his duties, Alltech rescinded the offer, citing global restructuring and offering a P140,000 goodwill payment.
Aragones subsequently filed a complaint for illegal dismissal. While a Labor Arbiter initially ruled in his favor, the National Labor Relations Commission (NLRC) reversed the decision. The Court of Appeals upheld the NLRC’s ruling.
The Supreme Court reversed the appellate court’s decision, finding that the employment contract was perfected upon Aragones’ signing of the offer letter.
The three-month delay before the intended start date merely postponed the parties’ obligations – Aragones to work and Alltech to pay his salary. Therefore, an employer-employee relationship existed when Alltech withdrew its offer.
The Court emphasized that under the Labor Code, redundancy refers to a situation where an employee’s position is no longer necessary due to the actual business needs of the company.
However, employers must provide substantial evidence to justify dismissal based on redundancy. In this case, Alltech only submitted an affidavit from its Vice President stating that the company decided to shift from regional to local support to better address customer needs.
metrosundaily
