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    Lowe Inc v. CA

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    Nina
    1. Lowe Inc. terminated Mutuc's employment as a Creative Director due to redundancy after most of Lowe's clients reduced their advertising budgets. 2. The court found that Lowe validly implemented a redundancy program by providing one month notice to Mutuc and the DOLE, offering separation pay, and using fair criteria such as seniority and efficiency in determining Mutuc's position was redundant as she was the most junior. 3. The determination of necessary positions during reorganization is a management prerogative that courts will not interfere with unless arbitrary or malicious actions are shown, and Lowe's termination of Mutuc for redundancy was a valid exercise of this prerogative.

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    Lowe Inc v. CA

    Uploaded by

    Nina
    140 views2 pages
    1. Lowe Inc. terminated Mutuc's employment as a Creative Director due to redundancy after most of Lowe's clients reduced their advertising budgets. 2. The court found that Lowe validly implemented a redundancy program by providing one month notice to Mutuc and the DOLE, offering separation pay, and using fair criteria such as seniority and efficiency in determining Mutuc's position was redundant as she was the most junior. 3. The determination of necessary positions during reorganization is a management prerogative that courts will not interfere with unless arbitrary or malicious actions are shown, and Lowe's termination of Mutuc for redundancy was a valid exercise of this prerogative.

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    Lowe Inc v. CA , Labor digest

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    1. Lowe Inc. terminated Mutuc's employment as a Creative Director due to redundancy after most of Lowe's clients reduced their advertising budgets. 2. The court found that Lowe validly implemented a redundancy program by providing one month notice to Mutuc and the DOLE, offering separation pay, and using fair criteria such as seniority and efficiency in determining Mutuc's position was redundant as she was the most junior. 3. The determination of necessary positions during reorganization is a management prerogative that courts will not interfere with unless arbitrary or malicious actions are shown, and Lowe's termination of Mutuc for redundancy was a valid exercise of this prerogative.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    140 views2 pages

    Lowe Inc v. CA

    Uploaded by

    Nina
    1. Lowe Inc. terminated Mutuc's employment as a Creative Director due to redundancy after most of Lowe's clients reduced their advertising budgets. 2. The court found that Lowe validly implemented a redundancy program by providing one month notice to Mutuc and the DOLE, offering separation pay, and using fair criteria such as seniority and efficiency in determining Mutuc's position was redundant as she was the most junior. 3. The determination of necessary positions during reorganization is a management prerogative that courts will not interfere with unless arbitrary or malicious actions are shown, and Lowe's termination of Mutuc for redundancy was a valid exercise of this prerogative.

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    © All Rights Reserved
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    of 2

    Lowe Inc., Gustilo and Castro v.

    CA and Mutuc
    G.R. Nos. 164813 and 174590. August 14, 2009
    Facts:
    1. Lowe is an advertising agency, duly organized and
    existing under the laws of the Philippines. Gustilo is
    the Chief Executive officer and President of Lowe.
    Castro is the executive creative director of Lowe.
    Gustilo and Castro were included in the complaint for
    illegal dismissal in their capacity as officers of Lowe.
    2. Lowe hired Mutuc as a Creative Director to help out
    the four other Creative Directors of Lowe. Mutuc was
    given a salary of P100,000 a month. Later on, she
    became a regular employee of Lowe.
    3. A year later, most of Lowes clients reduced their
    advertising budget. In response to this, Lowe
    implemented cost-cutting measures including a
    redundancy program. Lowe terminated Mutucs
    services because her position was declared
    redundant.
    4. Subsequently, Mutuc filed a complaint for illegal
    dismissal, nonpayment of 13th month pay with prayer
    for the award of moral and exemplary damages plus
    attorneys fees against Lowe.
    5. LA: dismissed the complaint, Lowe validly dismissed
    Mutuc from service.
    6. NLRC: declared Mutuc was illegally dismissed by
    Lowe. It ruled that the selection of Mutuc for
    redundancy was done in bad faith.
    Issue: WON Mutuc was validly dismissed by reason of
    redundancy. YES.
    Held:
    1. Redundancy, which is one of the authorized causes
    for the dismissal of an employee, is governed by
    Article 283 of the Labor Code

    2. Redundancy exists when the service of an employee


    is in excess of what is reasonably demanded by the
    actual requirements of the business. A redundant
    position is one rendered superfluous by any number
    of factors, such as overhiring of workers, decreased
    volume of business, dropping of a particular product
    line previously manufactured by the company or
    phasing out of a service activity formerly undertaken
    by the enterprise.
    3. For a valid implementation of a redundancy program,
    the employer must comply with the following
    requisites: (1) written notice served on both the
    employee and the DOLE at least one month prior to
    the intended date of termination; (2) payment of
    separation pay equivalent to at least one month pay
    or at least one month pay for every year of service,
    whichever is higher; (3) good faith in abolishing the
    redundant position; and (4) fair and reasonable
    criteria in ascertaining what positions are to be
    declared redundant.
    4. In this case, there is no dispute that, on 28
    September 2001, Mutuc was duly advised of the
    termination of her services on the ground of
    redundancy. On the same date, the DOLE was also
    served a copy of Mutucs notice of termination.
    Likewise, Lowe made available to Mutuc her
    separation pay equivalent to one month salary for
    every year of service and her proportionate 13th
    month pay upon completion of her clearance.
    However, Mutuc did not accomplish her clearance
    and instead filed a complaint for illegal dismissal.
    5. Lowe employed fair and reasonable criteria in
    declaring Mutucs position redundant. The Court
    recognizes that a host of relevant factors comes into
    play in determining who among the employees
    should be retained or separated. Among the
    accepted
    criteria
    in
    implementing
    a

    redundancy program are: (1) preferred status;


    (2) efficiency; and (3) seniority.
    6. Mutuc, who was hired only on 23 June 2000, did not
    deny that she was the most junior of all the
    executives of Lowe. Mutuc also did not present
    contrary evidence to disprove that she was the least
    efficient and least competent among all the Creative
    Directors.

    7. The determination of the continuing necessity of a


    particular officer or position in a business corporation
    is a management prerogative, and the courts will not
    interfere unless arbitrary or malicious action on the
    part of management is shown. It is also within the
    exclusive prerogative of management to determine
    the qualification and fitness of an employee for hiring
    and firing, promotion or reassignment.

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