2. Permissible Contracting or Subcontracting; Non-Coverage

Not Guilty when Done as an Exercise of Business Judgment

An employer is not guilty of an unfair labor practice in contracting work out for business reasons such as decline in business, the inadequacy of his equipment, or the need to reduce the cost, even if the employer’s estimate of his cost is based on a projected increase attributable to unionization.

It is to be emphasized that contracting out of services is not illegal per se. It is an exercise of business judgment or management prerogative. Absent proof that the management acted in malicious or arbitrary manner, the Court will not interfere with the exercise of judgment by an employer. In this case, bad faith cannot be attributed to BPI because its actions were authorized by BSP Circular No. 1388, Series of 1993 issued by the Monetary Bank of BSP. (BPI Employees Union-Davao City-FUBU v. BPI, G.R. No. 174912, 2013)