In the Philippine labor landscape, redundancy is a recognized "authorized cause" for termination under Article 298 of the Labor Code. However, the intersection of redundancy and the subsequent re-hiring of the same employee under a probationary status creates a complex legal scenario that demands strict adherence to jurisprudence to avoid claims of illegal dismissal.
I. Redundancy: The Employer’s Prerogative and Limits
Redundancy exists when the service of an employee is in excess of what is reasonably demanded by the actual requirements of the enterprise. This may be due to a decrease in volume of business, restructuring, or the introduction of labor-saving devices.
For a redundancy program to be valid, the employer must prove:
- Good Faith: The redundancy is not a whim or a tool to bypass security of tenure.
- Adequate Proof: Evidence such as new staffing patterns, feasibility studies, or declining sales must support the claim.
- Fair and Reasonable Criteria: Selection of who to let go must be based on objective standards (e.g., "Last In, First Out," efficiency ratings, or physical fitness).
- Notice Requirements: A written notice must be served to both the employee and the Department of Labor and Employment (DOLE) at least thirty (30) days before the intended date of termination.
- Separation Pay: The employee is entitled to separation pay equivalent to at least one (1) month's pay or at least one (1) month's pay for every year of service, whichever is higher. A fraction of at least six (6) months is considered as one (1) whole year.
II. Re-employment After Redundancy
There is no law that prohibits an employer from re-hiring a redundated employee. However, the timing and the terms of re-employment are scrutinized by the National Labor Relations Commission (NLRC).
The "Bona Fide" Requirement
If an employee is redundated today and the exact same position is advertised or filled tomorrow, the redundancy is likely sham. This suggests that the position was never actually redundant, and the termination was a pretext to remove a specific individual.
Re-hiring for a Different Position
If the employer opens a new, distinct position that requires a different skill set, the formerly redundated employee may apply. In this context, the employer is generally free to offer the position under new terms, provided there is no bad faith.
III. Can a Re-hired Employee be Placed on Probation?
This is the most contentious aspect of re-employment. Under Article 296 of the Labor Code, probationary employment shall not exceed six (6) months.
General Rule
A "probationary" status is intended to allow the employer to observe the fitness of a new employee for a regular position. If a redundated employee is re-hired for a substantially different role, a new probationary period may be legally permissible because the employee’s aptitude for that specific new role has not yet been tested.
The "Double Probation" Prohibition
Jurisprudence (notably Abbott Laboratories vs. Alcaraz) suggests that an employee cannot be subjected to a second probationary period for the same or a substantially similar job they previously held.
- If the tasks are essentially the same, the employee is deemed a regular employee from day one of the re-hire.
- Attempting to "reset" an employee’s seniority or security of tenure through redundancy followed by probationary re-hiring is often viewed as a circumvention of the law.
IV. Key Employee Rights and Safeguards
Employees facing this transition should be aware of the following protections:
- Right to Full Separation Pay: Accepting a new offer of employment (even a probationary one) does not waive the right to the full separation pay earned from the previous regular stint.
- Right against Waiver/Quitclaims: Signing a "Waiver and Quitclaim" as a condition for re-hiring is generally frowned upon. If the quitclaim is proved to be signed under duress or as a prerequisite for a new job, it may be declared null and void.
- Credit of Previous Service: If the re-hiring is found to be a continuation of the old employment (i.e., the redundancy was a sham), the employee’s years of service are cumulative, affecting retirement pay and other seniority-based benefits.
| Action | Legal Requirement |
|---|---|
| Termination Notice | 30 days prior to effectivity to both Employee and DOLE. |
| Separation Pay | 1 month pay or 1 month per year of service (whichever is higher). |
| Re-hiring Status | Probationary is only valid if the job is significantly different. |
| Security of Tenure | Re-hired regular employees cannot be dismissed without just or authorized cause. |
V. Summary of Risks for Employers
Employers who redundate and then immediately re-hire on probation face the following risks:
- Illegal Dismissal Suit: If the redundancy is proven to be a sham, the employer must pay backwages and reinstatement (or separation pay in lieu of reinstatement).
- Regularization by Operation of Law: If the probationary contract is found invalid because the work is the same as before, the employee is automatically considered regular.
- Moral and Exemplary Damages: Awarded if the redundancy was carried out in an oppressive or fraudulent manner.