Wednesday, July 30, 2014

DE OCAMPO v NLRC GR 101539 September 4, 1992 PROJECT EMPLOYEES: RATIONALE

Cant find the actual meat of this case related to nature of work. There was a controversy regarding seasonal and regular
employment but was actually not tackled that much by the court and was only glossed over.
FACTS:
- Petitioners De Ocampo et al are employees of respondent company, Baliwag Mahogany Co with some serving as officers of
its union, Baliwag Mahogany Co Union - CFW
- 1988: Baliwag Mahogany entered into a CBA with its union
- 1989: Union made several requests from the company. Some were granted, others denied (cash conversion of leaves)
- 1990: Company issued suspension orders for 20 employees for failure to render overtime work, the union went on strike
the same day. Thereafter, the company issued a termination letter to De Ocampo, Villanueva, and Dela Cruz allegedly for
redundancy.
o Company contracted the services of another company to replace its machinery department which was were the
latter employees were working under.
- Union picketed the compound of the company. Company moved to declare the picket/strike to be illegal. De Ocampo is
now the president of the union.
- NLRC declared strike to be illegal.
- 1991: Upon petition, NLRC modified its decision declaring the strike illegal and terminating 20 employees including the first
three for participating in the said strike..
ISSUE:
WoN the original dismissal of De Ocampo etc are valid
RULING:
CA affirmed NLRC, SC sustained.
HELD:
- YES. The company has the prerogative in terminating employees based on redundancy as long as they follow the
requirements of the law which they did in this case. In this case, the company has the prerogative to contract with another
company in order to further its business:
The reduction of the number of workers in a company made necessary by the introduction of the services of
Gemac Machineries in the maintenance and repair of its industrial machinery is justified. There can be no
question as to the right of the company to contract the services of Gemac Machineries to replace the services
rendered by the terminated mechanics with a view to effecting more economic and efficient methods of production.

In the same case, We ruled that "(t)he characterization of (petitioners') services as no longer necessary or
sustainable, and therefore properly terminable, was an exercise of business judgment on the part of (private
respondent) company. The wisdom or soundness of such characterization or decision was not subject to
discretionary review on the part of the Labor Arbiter nor of the NLRC so long, of course, as violation of law or
merely arbitrary and malicious action is not shown" (ibid, p. 673).

In contracting the services of Gemac Machineries, as part of the company's cost-saving program, the services
rendered by the mechanics became redundant and superfluous, and therefore properly terminable. The company
merely exercised its business judgment or management prerogative. And in the absence of any proof that the
management abused its discretion or acted in a malicious or arbitrary manner, the court will not interfere with
the exercise of such prerogative.