BY ATTY. JULIUS GREGORY B. DELGADO

PAOLO ARAGONES VS. ALLTECH BIOTECHNOLOGY CORPORATION, ET AL., G.R. NO. 251736 (APRIL 2, 2025): EMPLOYER-EMPLOYEE RELATIONSHIP ESTABLISHED THE MOMENT THE EMPLOYEE ACCEPTED THE OFFER OF THE EMPLOYER AND THE ACCEPTANCE WAS MADE KNOWN TO THE LATTER

This case is a labor dispute between employee Paolo Aragones (“Aragones”) and Alltech Biotechnology Corporation (“Alltech”). On April 1, 2026, Aragones was offered and signed the Offer Letter of even date of Alltech for the position of Swine Technical Manager – Pacific (STMP) with commencement date to start on July 1, 2016 and probationary period of six (6) months. On April 25, 2016, Aragones resigned and severed his employment with his current employer, Cargill Philippines, Inc. In the meantime, Alltech’s Head Office supposedly implemented a global restructuring program in May 2016. As a result, the position of Swine Technical Manager – Pacific (STMP), along with other similar positions across the Alltech Group, allegedly became redundant and was abolished. Alltech informed Aragones of this development through a Letter dated June 10, 2016, and offered him Php140,000.00, an amount equivalent to one-month salary, as a gesture of goodwill. Aragones did not reply to the Letter and instead filed a complaint for non-payment of wages, moral and exemplary damages, attorney’s fees, other causes of action, interest, expenses, money claims and backwages. 

The Labor Arbiter rendered a decision in favor of Aragones ruling that he was illegally dismissed considering that employer-employee relationship was supposedly established when Aragones accepted Alltech’s offer, the four-fold test in determining existence of employer-employee relationship was adequately established, and Alltech supposedly failed to substantiate the ground of redundancy. The National Labor Relations Commission reversed the ruling of the Labor Arbiter stating that “illegal dismissal” was not one of the causes of action of Aragones. Moreover, the NLRC held that while Aragones accepted the Offer Letter, his employment would only commence on July 1, 2016, and he has yet to sign an employment contract. The Court of Appeals denied the Petition for Certiorari of Aragones; hence, he filed a Petition for Review on Certiorari before the Supreme Court. 

The Supreme Court reversed and set aside the ruling of the Court of Appeals. The Court held that the moment Aragones accepted the offer of Alltech and was made known to the latter, a valid and binding contract was perfected. The Court restated the requisites of a perfected contract, to wit: (1) the consent of the contracting parties; (2) an object certain, which is the subject matter of the contract; and (3) the cause of the obligation. The Court held that “consent” is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. For consent to be valid, the “offer” must be certain, and the “acceptance” must be absolute. 

In this case, the Supreme Court held that a contract of employment was already perfected between Aragones and Alltech on April 18, 2016. The Court held that this conclusion is supported by the following undisputed facts: (a) Alltech made an offer that is certain through the Job Offer; (b) Aragones unequivocally accepted this offer by affixing his signature thereon on April 18, 2016; and (c) he informed Alltech of his acceptance by sending a copy of the signed Job Offer to respondent Octavio Eckhardt (Eckhardt) via e-mail on the same day. Thus, Alltech cannot claim that it validly withdrew its job offer in view of the general rule that an offer, once accepted, cannot be withdrawn.

Moreover, the Supreme Court characterized their contract to be one with a period, a specific date agreed for the commencement of the obligation which is on July 1, 2016. The Court held that a period refers to a “day certain…which must necessarily come, although it may not be known when.” The Civil Code provides that “obligations for whose fulfillment a day certain has been fixed, shall be demandable only when that day comes.” Unlike a condition, which may or may not happen, a period must necessarily come. Hence, the period does not affect the existence of the obligation, and it merely affects when the obligation is demandable. The Court held that while July 1, 2016, was the commencement date agreed upon by the parties, it is a suspensive period which merely deferred the demandability of the respective obligations as employer and employee – namely, the employee’s obligation to render services and the employer’s obligation to pay wages. The Court held that it did not affect the existence or birth of those obligations. 

The next issue that the Supreme Court resolved is whether Alltech can unilaterally cancel the employment contract on the basis of redundancy. The Court, citing Article 1186 of the Civil Code, i.e., the condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment, held that if the commencement date of July 1, 2016, partakes a suspensive condition, such condition was constructively fulfilled as Alltech prevented its fulfillment when it withdrew the offer before that date arrived. Thus, for all intents and purposes, Aragones would still be considered as employee of Alltech. 

The final issue resolves is whether the redundancy was validly substantiated to which the Supreme Court ruled in the negative and in favor of Aragones. The Court held: 

However, in making such decision the management must not violate the law or act arbitrarily. It is not enough for a company to merely declare redundancy; it must produce adequate proof of such redundancy to justify the dismissal of the affected employees, such as but not limited to the new staffing pattern, feasibility studies/proposal, on the viability of the newly created positions, job description, and the approval by the management of the restructuring. Nonetheless, there have been cases where the Court found affidavits executed by the employer’s officers sufficient to prove a valid redundancy program. For instance, in Soriano, Jr. v. NLRC (Soriano), the Court found the affidavit executed by the company’s Senior Manager as sufficient proof of redundancy because it explained in great detail the reasons and necessities for the implementation of the redundancy program; particularly, how the company’s adoption of new technology and equipment in its operations affected the functions of a Switchman, the position held by the employee. Similarly, in 3M Philippines, Inc. v. Yuseco (3M), the Court gave credence to the affidavits executed by the Human Resource Manager as proof of the redundancy program after finding that these affidavits show the company’s thrust to enhance its marketing and sales capability by merging its Industrial Business Group and Safety & Graphics Group, which consequently resulted to excess in manpower and superfluity of certain positions. Here, Alltech’s claim of redundancy is supported solely by the Affidavit dated September 26, 2016 executed by respondent Matthew Smith (Smith Affidavit), the Vice President – Asia Pacific and director of Alltech New Zealand. Unlike in Soriano and 3M, however, the uncorroborated Smith Affidavit merely stated that Alltech’s Head Office conducted a review of its affiliates’ business operations and determined that it had to shift their technical and marketing support focus from a regional to local coverage to better respond to the needs of their customers: x x x 

The Smith Affidavit then went on to list the positions in Alltech-affiliated entities affected by the purported restructuring program. As shown in the excerpt above, the Smith Affidavit is vague and general. It failed to demonstrate how the alleged restructuring program led to the abolition of specific positions, specifically how it affected particular positions or why these positions were identified for abolition. Thus, the Smith Affidavit alone is not sufficient to prove the existence of redundancy in this case.”

The Supreme Court ordered the payment of backwages in favor of Aragnoes from July 1, 2016 until finality of the Decision, and one month per year of service as separation pay in lieu of reinstatement from July 1, 2016 until finality of the Decision, ten percent (10%) of all monetary award as Attorney’s Fees, and six percent (6%) legal interest computed from finality of the Decision until full payment. Claims for moral and exemplary damages were dismissed as Alltech believed in good faith it validly declared Aragones as redundant.