ASIAN ALCOHOL CORPORATION vs. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

G.R. No. 131108. March 25, 1999

Management Prerogative

Facts: In September, 1991, the Parsons family, who originally owned the controlling stocks in Asian Alcohol, were driven by mounting business losses to sell their majority rights to Prior Holdings, Inc. The next month, Prior Holdings took over its management and operation. To thwart further losses of Asian Alcohol, Prior Holdings implemented a re-organizational plan and other cost-saving measures. 117 out of 360 employees were separated. The private respondents (water pump tenders, machine shop mechanic, briquetting plant operator, plant helper) are among those union members whose positions were abolished due to redundancy. Private respondents filed with the NLRC complaints for illegal dismissal alleging that Asian Alcohol used the retrenchment program as a subterfuge for the union busting. They claimed that they were singled out for separation by reason for their active participation in the union. They also asseverated that Asian Alcohol was not bankrupt as it has engaged in an aggressive scheme of contractual hiring.

Issue: Whether private respondents have been illegally dismissed

Held: No. The law allows an employer to downsize his business to meet clear and continuing economic threats. The right of management to dismiss workers during periods of business recession and to install labor saving devices to prevent losses is governed by Art. 283 of the Labor Code, as amended. 

Prior Holdings took over the operations of Asian Alcohol in October 1991. They were incurred under the management of the Parsons family and continued to be suffered under the new management of Prior Holdings. Ultimately, it is Prior Holding that will absorb all the losses, including those incurred under the former owners of the company. The law gives the new management every right to undertake measures to save the company from bankruptcy. We find that the re-organizational plan and comprehensive cost-saving program to turn the business around were nor designed to bust the union of the private respondent.

Private respondent failed to proffer any proof that the management acted in a malicious or arbitrary manner in engaging the services of an independent contractor to operate the Laura wells. Absent such proof, the Court has no basis to interfere with the bona fide decision of management to effect more economic and efficient methods of production.

IN VIEW WHEREOF, the petition is GRANTED. The Decision of the National Labor Relations Commission dated May 30, 1997 and its Resolution dated September 25, 1997 are ANNULED AND SET ASIDE. The Decision of the Executive Labor Arbiter dated January 10, 1996 in RAB Case No. 06-12-10893-92 is ORDERED REINSTATED. The complaints for illegal dismissal filed by private respondents against Asian Alcohol Corporation are hereby ORDERED DISMISSED FOR LACK OF MERIT. No cost.