Cases: Installation of Labor-Saving Devices

1. Management prerogative

ABAPO v. CA, G.R. No. 114952, 29 January 1996

[Background]

• Sometime in 1991, [the Company] conducted a viability study of its business operations and adopted a modernization program. Respondent then brought into the Mandaue plant high-speed machines to be used in the manufacture of its beer. These machines were installed in bottling lines 6 and 7. The main line operation known as lines 1, 2, 3, 4, and 5 ceased to operate. As a consequence, several functions of the employees were declared redundant.

• On February 13, 1992, [the Company] sent to Office of Region VII, Department of Labor and Employment (DOLE), two letters with the information that it was terminating the services of the employees named in the attached list. On February 7, 1992 and September 28, 1992, [the Company] sent notices to the affected employees informing them that they would be given a separation pay amounting to 175% of their respective monthly salaries for every year of service, a 3-year free hospitalization coverage, and free training and consultation for livelihood programs and small-scale business enterprises, as well as assistance in local and overseas job placements.

• Accordingly, the employees concerned received the said amounts and executed their respective quitclaims before the Officers of Region VII of the DOLE.

[Resolution]

• In a similar case (involving the same issue – the validity of the termination of [the Company] employees at the Mandaue...

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