International Harvester v. IAC Digest

International Harvester v. IAC

Facts: 

1. Private respondent Diosdado Joson was first employed as assistant attorney by the petitioner and was thereafter promoted to various positions until he became the GRO for Government Sales Department with a salary of P2,500.

2. After 17 years, the private respondent was informed of his transfer to Fleet Account Sales on the ground of redundancy caused by the phase out of his department. It was a lesser position with less salary and without allowances although there is commission. The petitioner refused to transfer which resulted to his termination. He then filed a complaint for damages against the petitioner.

Lower Court: Found the dismissal illegal and ordered the payment of damages

Court of Appeals: Affirmed the decision.

3. Hence this appeal.

Issue: W/N there was a valid ground for the reduction of personnel (due to redundancy)

RULING: Yes, it is part of management prerogative to determine the need for ht existence of a department and thereby order the reduction of its personnel when necessary. The employer has therefore the right to demote or dismiss an employee provided it is not tainted with unfair labor practice or ULP. Herein, there was not bad faith in the part of the petitioner since it notified the employees of the management's decision to phase out the department.