Case Digest: Serrano v. NLRC & Isetann, G.R. No. 117040 January 27, 2000

  • Ruben Serrano was employed by Isetann Department Store as a security checker.
  • As a cost-cutting measure, Isetann decided to phase out its entire security section and engage the services of an independent security agency. Petitioner received a termination notice.
  • Petitioner filed a complaint alleging illegal dismissal, illegal layoff, unfair labor practice, underpayment of wages, nonpayment of salary, and overtime pay.
  • LA: Ruled in favor of petitioner, finding his dismissal illegal.
  • NLRC: Reversed the Labor Arbiter's decision, and considered Isetann's decision to phase out the security section and hire an independent security agency as a legitimate business decision, not subject to inquiry.

WoN the hiring of an independent security agency by Isetann to replace its current security section is a valid ground of dismissal. YES

The Court upheld the abolition of the regular positions and their being contracted out.

Citing past decisions, the Court reiterated that the employer has the right to "promote efficiency and attain economy" and to determine whether services "should be performed by its personnel or contracted to outside agencies."

Unless it is proved that management acted in a malicious or arbitrary manner, the Court will not interfere with the exercise of judgment by an employer.

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