Question:

Is the seniority rule or “last in first out” policy to be strictly followed in effecting a retrenchment or redundancy program?

(2001)

Suggested Answer:

There is no law that mandates the adoption of “first in, last out” policy in effecting retrenchment or redundacy program. A host of relevant factors come into play in determining cost efficient measures and in choosing the employees who will be retained or separated to save the company from closing shop. In determining these issues, management plays a pre-eminent role. The characterization of positions as redundant is an exercise of business judgment on the part of the employer. It will be upheld as long as it passes the test of arbitrariness. (See Asian Alcohol Corp. vs. NLRC, G.R. No. 131108, March 25,1999.)

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