SERRANO VS NLRC

FACTS:

Serrano was a regular employee of Isetann Department Store as the head of Security Checker. In 1991, as
a cost-cutting measure, Isetann phased out its entire security section and engaged the services of an
independent security agency. Petitioner filed a complaint for illegal dismissal among others. Labor arbiter
ruled in his favor as Isetann failed to establish that it had retrenched its security section to prevent or
minimize losses to its business; that private respondent failed to accord due process to petitioner; that
private respondent failed to use reasonable standards in selecting employees whose employment would
be terminated. NLRC reversed the decision and ordered petitioner to be given separation pay.

ISSUE:

Whether or not the hiring of an independent security agency by the private respondent to replace its
current security section a valid ground for the dismissal of the employees classed under the latter.

RULING:

An employer’s good faith in implementing a redundancy program is not necessarily put in doubt by the
availment of the services of an independent contractor to replace the services of the terminated
employees to promote economy and efficiency. Absent proof that management acted in a malicious or
arbitrary manner, the Court will not interfere with the exercise of judgment by an employer.

If termination of employment is not for any of the cause provided by law, it is illegal and the employee
should be reinstated and paid backwages. To contend that even if the termination is for a just cause, the
employee concerned should be reinstated and paid backwages would be to amend Art 279 by adding
another ground for considering dismissal illegal.

If it is shown that the employee was dismissed for any of the causes mentioned in Art 282, the in
accordance with that article, he should not be reinstated but must be paid backwages from the time his
employment was terminated until it is determined that the termination of employment is for a just cause
because the failure to hear him before he is dismissed renders the termination without legal effect.