NextGen Day

MANILA, Philippines – The Supreme Court (SC) has dismissed an appeal filed by a food manufacturer’s union against the National Conciliation and Mediation Board’s (NCMB) and Court of Appeals’ (CA) decisions in a labor lawsuit it filed for terminated workers.

The SC first division denied a petition filed by General Milling Corporation (GMC) employees represented by their union, the Ilaw at Buklod ng Manggagawa sa GMC (IBM sa GMC), in connection with the company’s decision in 2012 to fire 33 employees and transfer 18 to a different department.

The Supreme Court upheld a 2015 decision of the Court of Appeals (CA) in the case, which found that GMC had legitimately terminated the impacted employees’ employment based on a valid redundancy scheme.

The company’s business strategy included outsourcing its bagging and loading departments to an independent contractor, PertServe, Inc., which resulted in the layoff and migration of employees.

The union filed a strike notice with the NCMB, alleging unfair labor practices and union-busting, and the dispute was later settled through voluntary arbitration. The Court of Appeals agreed with the voluntary arbitrator that GMC’s streamlining system “was a permissible labor-saving measure supported by jurisprudence.”

“Overall, the Court finds that respondent (GMC) implemented a valid redundancy program, having met all of the program’s requirements.” Indeed, contracting out of services is a legal exercise of business judgment or management prerogative,” the SC observed, adding that the SC will not interfere with a “business prerogative” unless there is proof of malevolent or arbitrary acts.

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