FARLE P. ALMODIEL, petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION
(First Division), RAYTHEON PHILS., INC., respondents. 1993-06-14 | G.R. No.
100641
Petitioner Farle P. Almodiel is a certified public accountant who was hired in
October, 1987 as Cost Accounting Manager of respondent Raytheon Philippines,
Inc. through a reputable placement firm, John Clements Consultants, Inc. with a
starting monthly salary of P18,000.00. Before said employment, he was the
accounts executive of Integrated Microelectronics, Inc. for several years. He lef
his lucrative job therein in view of the promising career offered by Raytheon. He
started as a probationary or temporary employee. As Cost Accounting Manager,
his major duties were: (1) plan, coordinate and carry out year and physical
inventory; (2) formulate and issue out hard copies of Standard Product costing
and other cost/pricing analysis if needed and required and (3) set up the written
Cost Accounting System for the whole company. Afer a few months, he was given
a regularization increase of P1,600.00 a month. Not long thereafer, his salary was
increased to P21,600.00 a month. On August 17, 1988, he recommended and
submitted a Cost Accounting/Finance Reorganization, affecting the whole finance
group but the same was disapproved by the Controller. However, he was assured
by the Controller that should his position or department which was apparently a
one-man department with no staff becomes untenable or unable to deliver the
needed service due to manpower constraint, he would be given a three (3) year
advance notice. In the meantime, the standard cost accounting system was
installed and used at the Raytheon plants and subsidiaries worldwide. It was
likewise adopted and installed in the Philippine operations. As a consequence, the
services of a Cost Accounting Manager allegedly entailed only the submission of
periodic reports that would use computerized forms prescribed and designed by
the international head office of the Raytheon Company in California, USA. On
January 27, 1989, petitioner was summoned by his immediate boss and in the
presence of IRD Manager, Mr. Rolando Estrada, he was told of the abolition of his
position on the ground of redundancy. He pleaded with management to defer its
action or transfer him to another department, but he was told that the decision of
management was final and that the same has been conveyed to the Department
of Labor and Employment. Thus, he was constrained to file the complaint for
illegal dismissal before the Arbitration Branch of the National Capital Region,
NLRC, Department of Labor and Employment.
Issue: W or not respondent Raytheon was exercising its exclusive prerogative
management when it ordered the abolition of petitioner’s position?
Ruling:
In the case of International Macleod, Inc. v. Intermediate Appellate Court, 5 this
Court also considered the position of Government Relations Officer to have
become redundant in view of the appointment of the International Heavy
Equipment Corporation as the company's dealer with the government. It held
therein that the determination of the need for the phasing out of a department as
a labor and cost saving device because it was no longer economical to retain said
services is a management prerogative and the courts will not interfere with the
exercise thereof as long as no abuse of discretion or merely arbitrary or malicious
action on the part of management is shown.
In the same vein, this Court ruled in Bondoc v. People's Bank and Trust Co., 6 that
the bank's board of directors possessed the power to remove a department
manager whose position depended on the retention of the trust and confidence
of management and whether there was need for his services. Although some
vindictive motivation might have impelled the abolition of his position, this Court
expounded that it is undeniable that the bank's board of directors possessed the
power to remove him and to determine whether the interest of the bank justified
the existence of his department.
Considering further that petitioner herein held a position which was definitely
managerial in character. Raytheon had a broad latitude of discretion in abolishing
his position. An employer has a much wider discretion in terminating employment
relationship of managerial personnel compared to rank and file employees. 7 The
reason obviously is that officers in such key positions perform not only functions
which by nature require the employer's full trust and confidence but also
functions that spell the success or failure of an enterprise.
"It is a well-settled rule that labor laws do not authorize interference with the
employer's judgment in the conduct of his business. The determination of the
qualification and fitness of workers for hiring and firing, promotion or
reassignment are exclusive prerogatives of management. The Labor Code and its
implementing Rules do not vest in the Labor Arbiters nor in the different
Divisions of the NLRC (nor in the courts) managerial authority. The employer is
free to determine, using his own discretion and business judgment, all elements
of employment, "from hiring to firing" except in cases of unlawful discrimination
or those which may be provided by law.
