Cebu Royal Plant vs.

Deputy Minister of Labor

No. L-58639. August 12, 1987.*
CEBU ROYAL PLANT (SAN MIGUEL CORPORATION), petitioner, vs. THE
HONORABLE DEPUTY MINISTER OF LABOR and RAMON PILONES, respondents.
Labor; Illegal Dismissal; Probationary Period; An employee who is allowed to work after a
probationary period shall be considered a regular employee.As there is no mention of the
basis of the above order, we may assume it was the temporary payroll authority submitted
by the petitioner showing that the private respondent was employed on probation on
February 16, 1978. Even supposing that it is not self-serving, we find nevertheless that it is
self-defeating. The six-month period of probation started from the said date of appointment
and so ended on August 17, 1978, but it is not shown that the private respondent's
employment also ended then; on the contrary, he continued working as usual. Under Article
282 of the Labor Code, "an employee who is allowed to work after a probationary period
shall be considered a regular employee." Hence, Pilones was already on permanent status
when he was dismissed on August 21, 1978, or four days after he ceased to be a
probationer.
Same; Same; Reinstatement; Employer's protestations that reinstatement of the employee
would prejudice public health, not believed.The petitioner claims it could not have
dismissed the private respondent earlier because the x-ray examination was made only on
August 17, 1978, and the results were not immediately available. That excuse is untenable.
We note that when the petitioner had all of six months during which to conduct such
examination, it chose to wait until exactly the last day of the probation period. In the light of
such delay, its protestations now that reinstatement of Pilones would prejudice public
health cannot but sound hollow and hypocritical. By its own implied admission, the
petitioner had exposed its customers to the employee's disease because of its failure to
examine him before entrusting him with the functions of a "syrup man." Its belated concern
for the consuming public is hardly persuasive, if not clearly insincere and self-righteous.
Same; Same; Same; Constitution; Security of tenure; Since the private respondent was
already a regular employee when he was dismissed, he could validly claim the security of
tenure guaranteed to him by the Constitution and the Labor Code.We are satisfied that
whether his employment began on February 16, 1978, or even earlier as he claims, the
private respondent was already a regular employee when he was dismissed on August 21,
1978. As such, he could validly claim the security of tenure guaranteed to him by the
Constitution and the Labor Code.
Same; Same; Absence of a medical certificate from a competent public health authority,
indicates that the employee's disease is not of such a nature that it will not be cured within
a period of 6 months even with proper medical treatment, and thus his dismissal was a
severe and unlawful sanction.The record does not contain the certification required by
the above rule. The medical certificate offered by the petitioner came from its own
physician, who was not a "competent public health authority," and merely stated the
employee's disease, without more. We may surmise that if the required certification was
not presented, it was because the disease was not of such a nature or seriousness that it
could not be cured within a period of six months even with proper medical treatment. If so,
dismissal was unquestionably a severe and unlawful sanction.
Same; Same; Prior clearance rule in force at the time requires that it must be obtained prior
to the operative act of termination of an employee.It is also worth noting that the
petitioner's application for clearance to terminate the employment of the private respondent
was filed with the Ministry of Labor only on August 28, 1978, or seven days after his
dismissal. As the NLRC has repeatedly and correctly said, the prior clearance rule (which
was in force at that time) was not a "trivial technicality." It required "not just the mere filing
of a petition or the mere attempt to procure a clearance" but that "the said clearance be
obtained prior to the operative act of termination."

Same; Same; Same; Reinstatement; Employer's attempt to circumvent the law by

separating the employee after 5 months service to prevent him from becoming a regular
employee and then rehiring him on probation again without security of tenure, contrary to
the mandate of social justice; Reinstatement of employee, conditioned on his fitness to
resume his work as certified by competent authority.We agree that there was here an
attempt to circumvent the law by separating the employee after five months' service to
prevent him from becoming a regular employee, and then rehiring him on probation, again
without security of tenure. We cannot permit this subterfuge if we are to be true to the spirit
and mandate of social justice. On the other hand, we have also the health of the public and
of the dismissed employee himself to consider. Hence, although we must rule in favor of
his reinstatement, this must be conditioned on his fitness to resume his work, as certified
by competent authority.
Same; Same; Same; Concern for the lowly worker reaffirmed.We take this opportunity to
reaffirm our concern for the lowly worker who, often at the mercy of his employers, must
look up to the law for his protection. Fittingly, that law regards him with tenderness and
even favor and always with faith and hope in his capacity to help in shaping the nation's
future. It is error to take him for granted. He deserves our abiding respect. How society
treats him will determine whether the knife in his hands shall be a caring tool for beauty
and progress or an angry weapon of defiance and revenge. The choice is obvious, of
course. If we cherish him as we should, we must resolve to lighten "the weight of centuries"
of exploitation and disdain that bends his back but does not bow his head.
Same; Same; Same; Back wages for 3 years only and reinstatement only upon certification
by a competent public health authority that the employee is fit to return to work.The
petition is DISMISSED and the temporary restraining order of November 18,1981, is
LIFTED. The Order of the public respondent dated July 14, 1981, is AFFIRMED, but with
the modification that the back wages shall be limited to three years only and the private
respondent shall be reinstated only upon certification by a competent public health
authority that he is fit to return to work.
PETITION to review the order of the Ministry of Labor.
The facts are stated in the opinion of the Court.
CRUZ, J.:
The private respondent was removed by the petitioner and complained to the Ministry of
Labor. His complaint was dismissed by the regional director, who was, however, reversed
by the public respondent. Required to reinstate the separated employee and pay him back
wages, the petitioner has come to us, faulting the Deputy Minister with grave abuse of
discretion. We have issued in the meantime a temporary restraining order.
The public respondent held that Ramon Pilones, the private respondent, was already a
permanent employee at the time of his dismissal and so was entitled to security of tenure.
The alleged ground for his removal, to wit, "pulmonary tuberculosis minimal," was not
certified as incurable within six months as to justify his separation. Additionally, the private
respondent insists that the petitioner should have first obtained a clearance, as required by
the regulations then in force, for the termination of his employment.
The petitioner for its part claims that the private respondent was still on probation at the
time of his dismissal and so had no security of tenure. His dismissal was not only in
conformity with company policy but also necessary for the protection of the public health,
as he was handling ingredients in the processing of soft drinks which were being sold to
the public. It is also argued that the findings of the regional director, who had direct access
to the facts, should not have been disturbed on appeal. For these same reasons, it
contends, the employee's reinstatement as ordered by the public respondent should not be
allowed.
The original findings were contained in a one-page order3 reciting simply that "complainant
was employed on a probationary period of employment for six (6) months. After said

period, he underwent medical examination for qualification as regular employee but the
results showed that he is suffering from PTB minimal. Consequently, he was informed of
the termination of his employment by respondent." The order then concluded that the
termination was "justified." That was all.
As there is no mention of the basis of the above order, we may assume it was the
temporary payroll authority submitted by the petitioner showing that the private respondent
was employed on probation on February 16, 1978. Even supposing that it is not selfserving, we find nevertheless that it is self-defeating. The six-month period of probation
started from the said date of appointment and so ended on August 17, 1978, but it is not
shown that the private respondent's employment also ended then; on the contrary, he
continued working as usual. Under Article 282 of the Labor Code, "an employee who is
allowed to work after a probationary period shall be considered a regular employee."
Hence, Pilones was already on permanent status when he was dismissed on August 21,
1978, or four days after he ceased to be a probationer.
The petitioner claims it could not have dismissed the private respondent earlier because
the x-ray examination was made only on August 17, 1978, and the results were not
immediately available. That excuse is untenable. We note that when the petitioner had all
of six months during which to conduct such examination, it chose to wait until exactly the
last day of the probation period. In the light of such delay, its protestations now that
reinstatement of Pilones would prejudice public health cannot but sound hollow and
hypocritical. By its own implied admission, the petitioner had exposed its customers to the
employee's disease because of its failure to examine him before entrusting him with the
functions of a "syrup man." Its belated concern for the consuming public is hardly
persuasive, if not clearly insincere and self-righteous.
There is proof in fact that the private respondent was first hired not on February 16, 1978,
but earlier in 1977. This is the 1977 withholding tax statement5 issued for him by the
petitioner itself which it does not and cannot deny. The petitioner stresses that this is the
only evidence of the private respondent's earlier service and notes that he has not
presented any co-worker to substantiate his claim. This is perfectly understandable. Given
the natural reluctance of many workers to antagonize their employers, we need not wonder
why none of them testified against the petitioner.
We are satisfied that whether his employment began on February 16, 1978, or even earlier
as he claims, the private respondent was already a regular employee when he was
dismissed on August 21, 1978. As such, he could validly claim the security of tenure
guaranteed to him by the Constitution and the Labor Code.
The applicable rule on the ground for dismissal invoked against him is Section 8, Rule I,
Book VI, of the Rules and Regulations Implementing the Labor Code reading as follows:
"Sec. 8. Disease as a ground for dismissal.Where the employee suffers from a
disease and
his continued employment is prohibited by law or prejudicial to his health
or to the health of his
co-employees, the employer shall not terminate his employment
unless there is a certification by
a competent public health authority that the disease is
of such nature or at such a stage that it
cannot be cured within a period of six (6)
months even with proper medical treatment. If the
disease or ailment can be cured
within the period, the employer shall not terminate the
employee but shall ask the
employee to take a leave. The employer shall reinstate such employee to his former
position immediately upon the restoration of his normal health."
The record does not contain the certification required by the above rule. The medical
certificate offered by the petitioner came from its own physician, who was not a "competent
public health authority," and merely stated the employee's disease, without more. We may
surmise that if the required certification was not presented, it was because the disease was
not of such a nature or seriousness that it could not be cured within a period of six months

even with proper medical treatment. If so, dismissal was unquestionably a severe and
unlawful sanction.
It is also worth noting that the petitioner's application for clearance to terminate the
employment of the private respondent was filed with the Ministry of Labor only on August
28, 1978, or seven days after his dismissal.6 As the NLRC has repeatedly and correctly
said, the prior clearance rule (which was in force at that time) was not a "trivial technicality."
It required "not just the mere filing of a petition or the mere attempt to procure a clearance"
but that "the said clearance be obtained prior to the operative act of termination. "
We agree that there was here an attempt to circumvent the law by separating the
employee after five months' service to prevent him from becoming a regular employee, and
then rehiring him on probation, again without security of tenure. We cannot permit this
subterfuge if we are to be true to the spirit and mandate of social justice. On the other
hand, we have also the health of the public and of the dismissed employee himself to
consider. Hence, although we must rule in favor of his reinstatement, this must be
conditioned on his fitness to resume his work, as certified by competent authority.
We take this opportunity to reaffirm our concern for the lowly worker who, often at the
mercy of his employers, must look up to the law for his protection. Fittingly, that law regards
him with tenderness and even favor and always with faith and hope in his capacity to help
in shaping the nation's future. It is error to take him for granted. He deserves our abiding
respect. How society treats him will determine whether the knife in his hands shall be a
caring tool for beauty and progress or an angry weapon of defiance and revenge. The
choice is obvious, of course. If we cherish him as we should, we must resolve to lighten
"the weight of centuries" of exploitation and disdain that bends his back but does not bow
his head.
WHEREFORE, the petition is DISMISSED and the temporary restraining order of
November 18, 1981, is LIFTED. The Order of the public respondent dated July 141981, is
AFFIRMED, but with the modification that the back wages shall be limited to three years
only and the private respondent shall be reinstated only upon certification by a competent
public health authority that he is fit to return to work. Costs against the petitioner.
SO ORDERED.
Teehankee (Chairman, C.J.), Narvasa, Paras and Gancayco, JJ., concur.
Petition dismissed. Order affirmed.
Notes.Employee who was illegally dismissed is entitled to receive his back wages from
date of his illegal dismissal. The period of pendency of decision of a case should not be
deducted in the computation of back wages. (New Manila Candy Workers Union vs. Court
of Industrial Relations, 86 SCRA 37.)
Reinstatement is a restoration to a state from which one has been removed or separated. It
is the return to the position from which he was removed and assuming again the functions
of the office already held. (Union of Supervisors vs. Secretary of Labor, 128 SCRA 442.)
MANUEL SOSITO, petitioner, vs. AGUINALDO DEVELOPMENT CORPORATION,
respondent.
Gr No. L-48926, Dec. 14, 1987
Constitutional Law; Labor Laws; While the constitution commit' ted to the policy of social
justice and the protection of the working class, it should not be supposed that every labor
dispute will be automatically decided in favor of labor.While the Constitution is committed
to the policy of social justice and the protection of the working class, it should not be
supposed that every labor dispute will be automatically decided in favor of labor.
Management also has its own rights which, as such, are entitled to respect and
enforcement in the interest of simple fair play. Out of its concern for those with less
privileges in life, this Court has inclined more often than not toward the worker and upheld
his cause in his conflicts with the employer. Such favoritism, however, has not blinded us to

the rule that justice is in every case for the deserving, to be dispensed in the light of the
established f acts and the applicable law and doctrine.
Same; Same; Compassionate measure offered by the company deserves commendation
and support.We note that under the law then in force the private respondent could have
validly reduced its work force because of its financial reverses without the obligation to
grant separation pay. This was permitted under the original Article 272(a), of the Labor
Code, which was in force at the time. To its credit, however, the company voluntarily offered
gratuities to those who would agree to be phased out pursuant to the terms and conditions
of its retrenchment program, in recognition of their loyalty and to tide them over their own
financial difficulties. The Court feels that such compassionate measure deserves
commendation and support but at the same time rules that it should be available only to
those who are qualified therefor. We hold that the petitioner is not one of them.
PETITION to review the decision of the National Labor Relations Commission.
The facts are stated in the opinion of the Court.
CRUZ, J.:
We gave due course to this petition and required the parties to file simultaneous
memoranda on the sole question of whether or not the petitioner is entitled to separation
pay under the retrenchment program of the private respondent.
The facts are as follows:
Petitioner Manuel Sosito was employed in 1964 by the private respondent, a logging
company, and was in charge of logging importation, with a monthly salary of P675.00,
when he went on indefinite leave with the consent of the company on January 16, 1976.2
On July 20, 1976, the private respondent, through its president, announced a retrenchment
program and offered separation pay to employees in the active service as of June 30,
1976, who would tender their resignations not later than July 31, 1976. The petitioner
decided to accept this offer and so submitted his resignation on July 29, 1976, "to avail
himself of the gratuity benefits" promised. However, his resignation was not acted upon and
he was never given the separation pay he expected. The petitioner complained to the
Department of Labor, where he was sustained by the labor arbiter. The company was
ordered to pay Sosito the sum of P4,387.50, representing his salary for six and a half
months. On appeal to the National Labor Relations Commission, this decision was
reversed and it was held that the petitioner was not covered by the retrenchment program.
The petitioner then came to us.
For a better understanding of this case, the memorandum of the private respondent on its
retrenchment program is reproduced in full as follows:
"July 20, 1976
"Memorandum To: ALL EMPLOYEES
"Re: RETRENCHMENT PROGRAM
"As you are all aware, the operations of wood-based industries in the Philippines for the
last two (2) years were adversely affected by the worldwide decline in the demand for and
prices of logs and wood products. Our company was no exception to this general decline in
the market, and has suffered tremendous losses. In 1975 alone, such losses amounted to
nearly P20,000,000.00.
"The company has made a general review of its operations and has come to the unhappy
decision of the need to make adjustments in its manpower strength if it is to survive. This is
indeed an unfortunate and painful decision to make, but it leaves the company no
alternative but to reduce its tremendous and excessive overhead expense in order to
prevent an ultimate closure.
"Although the law allows the Company, in a situation such as this, to drastically reduce it
manpower strength without any obligation to pay separation benefits, we recognize the
need to provide our employees some financial assistance while they are looking for other
jobs.

"The Company therefore is adopting a retrenchment program whereby employees who are
in the active service as of June 30, 1976 will be paid separation benefits in an amount
equivalent to the employee's one-half (1/2) month's basic salary multiplied by his/her years
of service with the Company. Employees interested in availing of the separation benefits
offered by the Company must manifest such intention by submitting written letters of
resignation to the Management not later than July 31, 1976. Those whose resignations are
accepted shall be informed accordingly and shall be paid their separation benefits.
"After July 31, 1976, this offer of payment of separation benefits will no longer be available.
Thereafter, the Company shall apply for a clearance to terminate the services of such
number of employees as may be necessary in order to reduce the manpower strength to
such desired level as to prevent further losses.

"(SGD.) JOSE G. RICAFORT

President
"N.B.
"For additional information
and/or resignation forms,
please see Mr. Vic Maceda
or Atty. Ben Aritao."
It is clear from the memorandum that the offer of separation pay was extended only to
those who were in the active service of the company as of June 30, 1976. It is equally clear
that the petitioner was not eligible for the promised gratuity as he was not actually working
with the company as of the said date. Being on indefinite leave, he was not in the active
service of the private respondent although, if one were to be technical, he was still in its
employ. Even so, during the period of indefinite leave, he was not entitled to receive any
salary or to enjoy any other benefits available to those in the active service.
It seems to us that the petitioner wants to enjoy the best of two worlds at the expense of
the private respondent. He has insulated himself from the insecurities of the floundering
firm but at the same time would demand the benefits it offers. Being on indefinite leave
from the company, he could seek and try other employment and remain there if he should
find it acceptable; but if not, he could go back to his former work and argue that he still had
the right to return as he was only on leave.
There is no claim that the petitioner was temporarily laid off or forced to go on leave; on the
contrary, the record shows that he voluntarily sought the indefinite leave which the private
respondent granted. It is strange that the company should agree to such an open-ended
arrangement, which is obviously one-sided. The company would not be free to replace the
petitioner but the petitioner would have a right to resume his work as and when he saw fit.
We note that under the law then in force the private respondent could have validly reduced
its work force because of its financial reverses without the obligation to grant separation
pay. This was permitted under the original Article 272(a), of the Labor Code, which was in
force at the time, To its credit, however, the company voluntarily offered gratuities to those
who would agree to be phased out pursuant to the terms and conditions of its retrenchment
program, in recognition of their loyalty and to tide them over their own financial difficulties.
The Court feels that such compassionate measure deserves commendation and support
but at the same time rules that it should be available only to those who are qualified
therefor. We hold that the petitioner is not one of them.
While the Constitution is committed to the policy of social justice and the protection of the
working class, it should not be supposed that every labor dispute will be automatically
decided in favor of labor. Management also has its own rights which, as such, are entitled
to respect and enforcement in the interest of simple fair play. Out of its concern for those
with less privileges in life, this Court has inclined more often than not toward the worker

and upheld his cause in his conflicts with the employer. Such favoritism, however, has not
blinded us to the rule that justice is in every case for the deserving, to be dispensed in the
light of the established facts and the applicable law and doctrine.
WHEREFORE, the petition is DISMISSED and the challenged decision AFFIRMED, with
costs against the petitioner.
SO ORDERED.
Teehankee (C.J.), Narvasa, Paras and Gancayco, JJ., concur.
Petition dismissed, Decision affirmed.
"Art. 272. Termination by employer.An employer may terminate an employment without
a definite period for any of the following just causes:
"(a) the closing or cessation of operation of the establishment or enterprise, or where the
employer has to reduce his work force by more than one-half due to serious business
reverses, unless the closing is for the purpose of circumventing the provisions of this
Chapter; x x x."
Notes.A person is not an independent contractor where he only manages a particular
business belonging to another (CMS Estate vs. SSS, 132 SCRA 108.)
In the absence of existence of employer-employee relationship between the parties, the
former CFI had authority to assume jurisdiction over the case. (National Mines & Allied
Workers' Union vs. Valero, 132 SCRA 578.)
PHILIPPINE JAPAN ACTIVE CARBON CORPORATION AND TOKUICHI SATOFUKA,
petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and OLGA S.
QUIANOLA, respondents.
G.R. No. 83239 March 8, 1989
Labor Law; Dismissal; Constructive dismissal defined. A constructive discharge is defined
as: A quitting because continued employment is rendered impossible, unreasonable or
unlikely; as, an offer involving a demotion in rank and a diminution in pay.
Same; Same; Same; Private respondents assignment as Production Secretary of the
Production Department was not unreasonable and did not constitute a constructive
dismissal. In this case, the private respondents assignment as Production Secretary of the
Production Department was not unreasonable as it did not involve a demotion in rank (her
rank was still that of a department secretary) nor a change in her place of work (the office
is in the same building), nor a diminution in pay, benefits, and privileges. It did not
constitute a constructive dismissal.
Same; Same; Employees right to security of tenure does not give him a vested right in his
position as would deprive the company of its prerogative to change his assignment or
transfer him where he will be most useful.It is the employers prerogative, based on its
assessment and perception of its employees qualifications, aptitudes, and competence, to
move them around in the various areas of its business operations in order to ascertain
where they will function with maximum benefit to the company. An employees right to
security of tenure does not give him such a vested right in his position as would deprive the
company of its prerogative to change his assignment or transfer him where he will be most
useful. When his transfer is not unreasonable, nor inconvenient, nor prejudicial to him, and
it does not involve a demotion in rank or a diminution of his salaries, benefits, and other
privileges, the employee may not complain that it amounts to a constructive dismissal.
Same; Same; Abandonment; Petitioners contention that private respondents absence
from work on June 2 to June 3, 1986 constituted an abandonment of her job rejected.On
the other hand, we reject the petitioners contention that the private respondents absence
from work on June 2 to June 3, 1986 constituted an abandonment of her job in the
company resulting in the forfeiture of the benefits due her. While she was guilty of
insubordination of having refused to move out of her position as Executive Secretary to the
Executive Vice-President and General Manager of the company, dismissal from the service

would be a draconian punishment for it, as her complaint for illegal dismissal was filed in
good faith.
PETITION for review from the decision of the National Labor Relations Commission.
The facts are stated in the opinion of the Court.
Dominguez & Paderna Law Offices Co. for petitioners.
The Solicitor General for public respondent.
B.E. Militar and Associate Law Offices for private respondent.
GRIO-AQUINO, J.:
This is a petition for review of the decision dated November 27, 1987 in NLRC Case No.
1966-LR-XI-86, entitled Olga S. Quianola, Complainant-Appellee vs. Philippine Japan
Active Carbon Corporation and/or Tokuichi Satofuka, Respondents-Appellants, affirming
the decision dated June 5, 1987 of the Labor Arbiter finding that the private respondent
Olga S. Quianola was illegally dismissed and ordering the appellants to reinstate her with
back wages and damages.
The private respondent, who had been employed in petitioner corporation since January
19, 1982, as Assistant Secretary/ Export Coordinator, was promoted on May 20, 1983 to
the position of Executive Secretary to the Executive Vice President and General Manager.
On May 31, 1986, for no apparent reason at all and without prior notice to her, she was
transferred to the Production Department as Production Secretary, swapping positions with
Ester Tamayo. Although the transfer did not amount to a demotion because her salary and
workload remained the same, she believed otherwise so she rejected the assignment and
filed a complaint for illegal dismissal. The Labor Arbiter found, on the basis of the evidence
of both parties, that the transfer would amount to constructive dismissal, hence, her refusal
to obey the transfer order was justified (pp. 76-77, Rollo). The Labor Arbiter further
observed that:
There was something perverse in the way she was dismissed from her work. She
was
dismissed for causes that are unjustified, if not entirely non-existent, and foisted
on her by
respondents illegal act the motivation of which reeks with bad faith.
Accordingly, they should be
assessed and required to pay complainant the sum of
P25,000 as damages and P5,000 as
attorneys fee.
he dispositive portion of his decision reads as follows:
WHEREFORE, judgment is hereby rendered declaring complainant Olga
Quianolas
dismissal illegal and for respondents to reinstate her to her former
position with back wages equivalent to one year in the amount of P33,684 (P2,807 x 12
months) only, without loss of
seniority rights and other benefits also equivalent to
one year or until the finality of this Decision, whichever is higher.
Likewise, respondents are hereby assessed and ordered to pay complainant the
sum of P25,000.00 as damages plus P5,000 as attorneys fee.
Total Awards: P63,684 only, exclusive of other benefits herein granted but not yet
computed.
Upon appeal to the NLRC, the Commission approved the Labor Arbiters decision but
reduced to P10,000 the award of moral damages and the attorneys fees to 10% of the
judgment.
The employer filed a petition for review of that decision in this Court alleging that:
1. The decisions of the Labor Arbiter and of the NLRC are tainted with grave
abuse of discretion
in finding that the private respondent was constructively and
illegally dismissed as a result of her
transfer or assignment to the Office of the
Production Manager even if she would have received the same salary, rank, rights and
privileges;
2. In ordering her reinstatement with full back wages and without loss of seniority
rights and
other
benefits;
3. In awarding to the private respondent moral damages of P10,000 and
attorneys fees
equivalent to 10% of the judgment; and

4. In not declaring that private respondent forfeited all her benefits for having
abandoned her job
on June 2 to 3, 1986 and for insubordination.
In her comment to the petition, the private respondent argued that she was dismissed
without due process because she was not given the opportunity to be heard concerning the
causes of her transfer.
Upon a careful consideration of the petition and the documents annexed thereto as well as
private respondents comment, We find the petition to be meritorious.
A constructive discharge is defined as: A quitting because continued employment is
rendered impossible, unreasonable or unlikely; as, an offer involving a demotion in rank
and a diminution in pay.
In this case, the private respondents assignment as Production Secretary of the
Production Department was not unreasonable as it did not involve a demotion in rank (her
rank was still that of a department secretary) nor a change in her place of work (the office
is in the same building), nor a diminution in pay, benefits, and privileges. It did not
constitute a constructive dismissal.
It is the employers prerogative, based on its assessment and perception of its employees
qualifications, aptitudes, and competence, to move them around in the various areas of its
business operations in order to ascertain where they will function with maximum benefit to
the company. An employees right to security of tenure does not give him such a vested
right in his position as would deprive the company of its prerogative to change his
assignment or transfer him where he will be most useful. When his transfer is not
unreasonable, nor inconvenient, nor prejudicial to him, and it does not involve a demotion
in rank or a diminution of his salaries, benefits, and other privileges, the employee may not
complain that it amounts to a constructive dismissal.
On the other hand, we reject the petitioners contention that the private respondents
absence from work on June 2 to June 3, 1986 constituted an abandonment of her job in the
company resulting in the forfeiture of the benefits due her. While she was guilty of
insubordination for having refused to move out of her position as Executive Secretary to
the Executive Vice-President and General Manager of the company, dismissal from the
service would be a draconian punishment for it, as her complaint for illegal dismissal was
filed in good faith.
WHEREFORE, the decision of the NLRC insofar as it orders the petitioner to reinstate the
private respondent is affirmed, but she shall be reinstated to her position as Production
Secretary of the Production Department of petitioners corporation without loss of seniority
rights and other privileges. The awards of back wages, moral damages and attorneys fees
to the private respondent are hereby set aside. No pronouncement as to costs.
SO ORDERED.
Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.
Decision affirmed.
Notes.The right to dismiss or otherwise impose disciplinary sanctions upon an employee
for just cause and valid cause, pertains in the first place to the employer, as well as the
authority to determine the existence of said cause in accordance with the norms of due
process. (Richardson vs. Demetrion, 142 SCRA 505.)
Prerogative of management to dismiss or lay-off a managerial employee must be made
without abuse of discretion. (D.M. Consunji, Inc. vs. NLRC, 143 SCRA 204.)
ABBOTT LABORATORIES (PHILIPPINES), INC., and JAIME C. VICTA, petitioners, vs.
NATIONAL LABOR RELATIONS COMMISISON and ALBERT BOBADILLA,
respondents.
GR No. L-76959. October 12, 1987.
Labor; Dismissal due to insubordination; Hiring, firing, transfer, demotion and promotion of
employees, a management prerogative but subject to certain limitations.The hiring, firing,

transfer, demotion, and promotion of employees has been traditionally identified as a

management prerogative subject to limitations found in law, a collective bargaining
agreement, or general principles of fair play and justice. This is a function associated with
the employer's inherent right to control and manage effectively its enterprise. Even as the
law is solicitous of the welfare of employees, it must also protect the right of an employer to
exercise what are clearly management prerogatives. The free will of management to
conduct its own business affairs to achieve its purpose cannot be denied. (See Dangan v.
National Labor Relations Commission, 127 SCRA 706).
Same; Same; Transfer, General rule that the right to transfer or reassign an employee is an
employer's exclusive right and a management prerogative.As a general rule, the right to
transfer or reassign an employee is recognized as an employer's exclusive right and the
prerogative of management.
Same; Same; Same; An employee had no valid reason to disobey the order of transfer as
he had tacitly given his consent thereto; Case at bar. Therefore, Bobadilla had no valid
reason to disobey the order of transfer. He had tacitly given his consent thereto when he
acceded to the petitioners' policy of hiring sales staff who are willing to be assigned
anywhere in the Philippines which is demanded by the petitioners' business.
Same; Same; Same; Same; By the very nature of his employment a drug salesman or
medical representative is expected to travel and should anticipate reassignment;
Reassignments are part of the employment contract of the employee.By the very nature
of his employment, a drug salesman or medical representative is expected to travel. He
should anticipate reassignment according to the demands of their business. It would be a
poor drug corporation which cannot even assign its representatives or detail men to new
markets calling for opening or expansion or to areas where the need for pushing its
products is great. Mere so if such reassignments are part of the employment contract.
PETITION for certiorari to review the decision of the National Labor Relations Commission.
The facts are stated in the opinion of the Court.
GUTIERREZ, JR., J.:
This is a petition for review on certiorari of the decision of respondent National Labor
Relations Commission (NLRC) which set aside the Labor Arbiter's decision dismissing the
complaint and instead entered a new decision ordering the complainant's reinstatement
with full backwages from the date of his termination until his actual reinstatement.
The antecedent facts as found by the Labor Arbiter and reiterated in the NLRC decision are
undisputed:
"Complainant Bobadilla started his employment with respondent company
sometime in May 1982. After undergoing training, in September, 1982, complainant was
designated professional medical representative (PMR) and was assigned to cover the
sales territory comprising of Sta.
Cruz, Binondo and a part of Quiapo and Divisoria, of
the Metro Manila district. In connection with the respondent company's marketing and
sales operations, it has been its policy and established
practice
of
undertaking
employment movements and/or reassignments from one
territorial area to another as
the exigencies of its operations require and to hire only applicant
salesmen,
including professional medical representatives (PMRs) who are willing to take
provincial
assignments, at least insofar as male applicants were concerned. Likewise,
respondent company had made reassignments or transfers of sales personnel,
which included PMRs, from one territorial area of responsibility to another on a more or
less regular basis.
"In complainant's application for employment with respondent company, he
agreed to the
following: 1) that if employed, he will accept assignment in the provinces
and/or cities anywhere
in the Philippines; 2) he is willing and can move into and live in
the territory assigned to him; and (3) that should any answer or statement in his
application for employment be found false or incorrect, he will be subject to immediate
dismissal, if then employed.

"On 22 July 1983, respondent Victa called complainant to his office and informed
the latter that
he was being transferred effective 1 August 1983 to the newly opened
Cagayan territory comprising the provinces of Cagayan, Nueva Vizcaya and Isabela. The
transfer order was made formal in a memorandum dated 29 July 1983. Among the
reasons given for complainant's
selection as PMR for the Cagayan territory were: 'The
territory required a veteran and seasoned
PMR who can operate immediately with
minimum training and supervision. Likewise, a PMR who can immediately exploit the vast
business potential of the area.
"In a letter dated 1 August 1983, which was received by Abbott on 4 August 1983,
complainant,
thru his lawyer, objected to the transfer on the grounds that it was not
only a demotion but also personal and punitive in nature without basis legally and
factually.
"On 8 August 1983, Victa issued another inter-office correspondence to
complainant, giving the
latter up to 15 August 1983 within which to comply with the
transfer order, otherwise his name would be dropped from the payroll for having
abandoned his job. When complainant failed to
report to his new assignment, Abbott
assigned thereat Fausto Antonio T. Tibi, another PED PMR
who was priorly covering
the provinces of Nueva Ecija and Tarlac.
"Meanwhile, complainant filed applications for vacation leave from 2 to 9 August
1983, and then from 10 to 13 August 1983. And on 18 August 1983, he filed the present
complaint.
" After due consideration of the evidence adduced by the parties, the Arbiter below
ruled for the
respondent on the ground that the complainant is guilty of gross
insubordination."
On appeal, the respondent National Labor Relations Commission reversed the Arbiter's
decision and held that herein petitioners had no valid and justifiable reason to dismiss the
complainant. The National Labor Relations Commission ordered the latter's reinstatement
with back wages.
A motion for reconsideration subsequently filed by the petitioners was denied.
On September 8,1986, the petitioners filed their second motion for reconsideration which
was not favorably acted upon by respondent National Labor Relations Commission as the
record of the case had already been transmitted to the labor arbiter for the execution of its
decision.
On December 16, 1986, the petitioners and the private respondent agreed before the labor
arbiter that the former would bring the case before this Court.
Hence, this present petition.
Petitioners assigned as errors the following:
"x x x [R]espondent NLRC acted in excess of jurisdiction and/or grave abuse of
discretion in that
a] Respondent NLRC disregarded settled law and altered the parties'
contract when it
stated that private respondent's prior consent was necessary for
the validity of his transfer,
rendering
his
consequent
dismissal
f
or
insubordination illegal.
b] Granting arguendo that prior consent of an employee is required for
the validity of his
transfer to another territory, private respondent had explicitly
given such prior consent as a
condition for his hiring and continued
employment by petitioner Abbott.
c] Respondent NLRC abused its discretion when it declared private
respondent's dismissal illegal despite his clear and willful insubordination."
When asked to comment on the petition as counsel for NLRC, the Solicitor General,
assisted by Assistant Solicitor General Zoilo A. Andin and Trial Attorney Alexander Q.
Gesmundo, agreed with the petitioners' stand that the dismissal of the private respondent
from his employment was for valid reasons.

The main issue in this case is whether or not Albert Bobadilla could be validly dismissed
from his employment on the ground of insubordination for refusing to accept his new
assignment.
We are constrained to answer in the affirmative.
The hiring, firing, transfer, demotion, and promotion of employees has been traditionally
identified as a management prerogative subject to limitations found in law, a collective
bargaining agreement, or general principles of fair play and justice. This is a function
associated with the employer's inherent right to control and manage effectively its
enterprise. Even as the law is solicitous of the welfare of employees, it must also protect
the right of an employer to exercise what are clearly management prerogatives. The free
will of management to conduct its own business affairs to achieve its purpose cannot be
denied. (See Dangan v, National Labor Relations Commission, 127 SCRA 706).
As a general rule, the right to transfer or reassign an employee is recognized as an
employer's exclusive right and the prerogative of management.
We agree with the Labor Arbiter's conclusions that:
"Settled is the rule in this regard that an employer, except when limited by special
laws, has the
right to regulate, according to his own discretion and judgment, all
aspects of employment, which includes, among others, hiring, work assignments,
place and manner of work,
working regulations and transfer of employees in
accordance with his operational demands
and
requirements. This right flows from
ownership and from the established rule that labor law
does
not authorize the
substitution of judgment of the employer in the conduct of his business, unless it
is
shown to be contrary to law, morals or public policy (NLU v. InsularYebana Tobacco
Corp., 2 SCRA 924, 931; and Republic Savings Bank v, Court of Industrial
Relations, 21 SCRA 226, 235).
"x x x Abbott, in accordance with the demands and requirements of its marketing
and sales
operations, adopted a policy to hire only sales applicants who are willing
to accept assignments
in the provinces anywhere in the Philippines, and to move into
and live in the territory assigned
to them.
The existence and implementation of this policy are clearly discernible from the
questions
appearing in the application form under the heading: TO BE FILLED BY
SALES APPLICANTS
ONLY/ and the fact that Abbott, depending upon the needs of its
marketing and sales
operations, periodically made transfers or reassignments of its
sales people.
"Complainant was precisely hired because he manifested at the outset as a job
applicant his
willingness to follow the conditions of his employment. In line with the
policy, as practiced,
Abbott, thru Jaime Victa, issued an inter-office correspondence
transferring complainant to a
newly opened sales territorythe Cagayan Region,
comprising the provinces of Cagayan,
Nueva Vizcaya and Isabela, According to
respondents, complainant was selected as PMR for the region primarily because he was
a veteran and seasoned PMR who can operate
immediately with minimum training
and supervision,
That complainant is a veteran and seasoned PMR is admitted. In fact, it is even
conceded by
respondents that complainant was the leader of his peers in PED, as
indicated in the letter dated
20 December 1982 of Jaime Victa to complainant. That
the Cagayan Region is relatively
inaccessible cannot be debated. That the territory
needed a responsible PMR who could work under the least supervision is a judgment of
respondents. And that this judgment was arrived at
upon consultations among the PED
Marketing Manager Jaime Victa, the Director for
Administration Francisco Lim, and
the General Manager A. C. Bout, has been proven by respondents.
"It appearing, therefore, that the order to transfer complainant is based upon a
judgment of his employer Abbott, which judgment to transfer is in line with a company
practice which is not
contrary to law, morals or public policy. hence, beyond the

competence of this office to question,

the refusal of complainant to obey the lawful
order of Abbott is gross insubordinationa valid
cause for dismissal.
"Complainant asserted that the true reason for his transfer was the personal ill
motives on the part of respondent Victa who resented the derogatory remarks attributed
to him, as purportedly
shown in Victa's memoranda dated 20 December 1982 and 26
April 1983. However, a cursory
reading of said memoranda in question will show that
the same were legitimately issued by Victa in the exercise of his functions as PED
Manager. And the fact that complainant never lifted a finger to formally question said
memoranda is a mute admission on his part that the allegations
therein are true.
"Complainant also alleged that his transfer was a demotion. However, no
explanation was given
much less any evidence presented in support of the allegation.
On the other hand, it is clear that there was no change in complainant's position and
salary, privileges and benefits he was
receiving while in Manila. With respect to the
sales commission, Abbott claimed that had complainant accepted the assignment, he
could have earned more because the sales prospects
in the Cagayan Territory,
which comprises Nueva Vizcaya, Isabela and Cagayan Province were much higher than
the territory assigned to him in Manila. Besides, the assignment offered an
important
avenue for future promotion, respondent concluded." (pp. 6-9, Labor Arbiter's
decision).
Therefore, Bobadilla had no valid reason to disobey the order of transfer. He had tacitly
given his consent thereto when he acceded to the petitioners' policy of hiring sales staff
who are willing to be assigned anywhere in the Philippines which is demanded by the
petitioners' business.
By the very nature of his employment, a drug salesman or medical representative is
expected to travel. He should anticipate reassignment according to the demands of their
business. It would be a poor drug corporation which cannot even assign its representatives
or detail men to new markets calling for opening or expansion or to areas where the need
for pushing its products is great. More so if such reassignments are part of the employment
contract.
WHEREFORE, the petition is hereby GRANTED. The questioned decision of the National
Labor Relations Commission is SET ASIDE. The decision of the Labor Arbiter dated April
16, 1985 is REINSTATED.
SO ORDERED.
Fernan (Chairman), Bidin and Corts, JJ., concur.
Feliciano, J., no part. Former firm is counsel for one party.
Petition granted.
Notes.Employer company in dismissing the employee has the prerogative to prescribe
reasonable rules and regulations necessary for the conduct of its business and to provide
disciplinary rules to implement said rules and to assure that the same would be followed.
(Soco vs. Mercantile Corporation of Davao, 148 SCRA 526.)
Dismissed employee granted separation pay for equitable considerations for his 18 years
of service. (Soco vs, Mercantile Corporation of Davao, 148 SCRA 526.) [Abbott
Laboratories (Phils.) Inc. vs. NLRC, 154 SCRA 713(1987)]
RURAL BANK OF CANTILAN, INC., and WILLIAM HOTCHKISS III, petitioners, vs.
ARJAY RONNEL H. JULVE, respondent.
G.R. No. 169750. February 27, 2007.*
Labor Law; Management Prerogatives; Under the doctrine of management prerogative,
every employer has the inherent right to regulate, according to his own discretion and
judgment, all aspects of employment, including hiring, work assignments, working
methods, the time, place and manner of work, work supervision, transfer of employees, lay-

off of workers, and discipline, dismissal, and recall of employees; Employees are not
excused from complying with valid company policies and reasonable regulations for their
governance and guidance.Under the doctrine of management prerogative, every
employer has the inherent right to regulate, according to his own discretion and judgment,
all aspects of employment, including hiring, work assignments, working methods, the time,
place and manner of work, work supervision, transfer of employees, lay-off of workers, and
discipline, dismissal, and recall of employees. The only limitations to the exercise of this
prerogative are those imposed by labor laws and the principles of equity and substantial
justice. While the law imposes many obligations upon the employer, nonetheless, it also
protects the employers right to expect from its employees not only good performance,
adequate work, and diligence, but also good conduct and loyalty. In fact, the Labor Code
does not excuse employees from complying with valid company policies and reasonable
regulations for their governance and guidance.
Same; Same; Transfers and Reassignments; Guidelines.Concerning the transfer of
employees, these are the following jurisprudential guidelines: (a) a transfer is a movement
from one position to another of equivalent rank, level or salary without break in the service
or a lateral movement from one position to another of equivalent rank or salary; (b) the
employer has the inherent right to transfer or reassign an employee for legitimate business
purposes; (c) a transfer becomes unlawful where it is motivated by discrimination or bad
faith or is effected as a form of punishment or is a demotion without sufficient cause; (d) the
employer must be able to show that the transfer is not unreasonable, inconvenient, or
prejudicial to the employee.
Same; Same; Same; Words and Phrases; Constructive Dismissal, Defined.
Constructive dismissal is defined as quitting when continued employment is rendered
impossible, unreasonable, or unlikely as the offer of employment involves a demotion in
rank and diminution of pay.
Same; Same; Same; Bookkeepers; Under any standard, the work of the bookkeeper and
bank assistant branch head, charged with preparing financial reports and monthly bank
reconciliations, as well as head of the Accounting Department of a branch, constitutes
supervisory and administrative tasks which entail great responsibility.Respondent
contends that the abolition of his position as planning and marketing officer and his
appointment as bookkeeper I and assistant branch head of the Madrid Branch is a
demotion. However, a look at the functions of his new position shows the contrary. The
bookkeeper and assistant branch head is not only charged with preparing financial reports
and monthly bank reconciliations, he is also the head of the Accounting Department of a
branch. Under any standard, these are supervisory and administrative tasks which entail
great responsibility. Moreover, respondents transfer did not decrease his pay.
PETITION for review on certiorari of the decision and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Julius A. Magno for petitioners.
Henry C. Filoteo and James Reserva for respondent.
SANDOVAL-GUTIERREZ, J.:
For our resolution is the instant Petition for Review on Certiorari assailing the Decision of
the Court of Appeals (Twenty Second Division, Cagayan de Oro City) dated September 23,
2004 in CA-G.R. SP No. 77206 and its Resolution of September 6, 2005.
The facts of this case as found by the Court of Appeals are:
On August 1, 1997, the Rural Bank of Cantilan, Inc., petitioner, hired respondent as a
management trainee. Later, he was appointed as planning and marketing officer.
On June 18, 2001, William Hotchkiss III (also a petitioner), president of petitioner bank,
issued a memorandum addressed to all its branch managers informing them of the
abolition of the positions of planning and marketing officer and remedial officer; that this
was undertaken in accordance with the banks Personnel Streamlining Program; and that
the operations officer shall absorb the functions of the abolished offices.

On July 18, 2001, Hotchkiss sent respondent a memorandum stating that he has been
appointed bookkeeper I at the banks branch in Madrid, Surigao del Sur effective
immediately with the same salary corresponding to his old position. Initially, respondent
agreed to accept the appointment, but eventually, he changed his mind and made the
following notation on Hotchkiss memorandum, thus:
I am withdrawing my signature on this appointment because I feel that this is a
demotion (on t
he position itself and allowances) and not a lateral transfer as what the
President told me
yesterday. I believe I do not deserve a demotion.
Thank you.
On August 9, 2001, Hotchkiss appointed respondent as bookkeeper I and assistant branch
head of the Madrid branch. However, he did not report for work.
On September 11, 2001, Hotchkiss directed respondent to explain why he should not be
sanctioned for his failure to assume his new post at the Madrid branch.
The following day, respondent submitted his written explanation, which partly reads:
I regret to say that I am not accepting the position of Asst. Branch Head of RBCIMadrid Branch for the very reason that the papers were not left with me by the Admin.
Officer after she let me
read them. Considering that Asst. Branch Head is a newlycreated position, I requested her for a
copy of the said papers first so I can
thoroughly study them before making my decision. But she
immediately took them
back from me after I told her about this.
On September 14, 2001, respondent filed with the Regional Arbitration Branch No. XIII,
National Labor Relations Commission (NLRC), Butuan City, a complaint for constructive
dismissal against petitioners, docketed as NLRC Case No. RAB-1309002762001.
On January 14, 2002, the Labor Arbiter rendered a Decision, the dispositive portion of
which is partly reproduced below:
WHEREFORE, premises considered, judgment is hereby entered:
1. Declaring complainant as constructively illegally dismissed;
2. Ordering respondents to reinstate complainant to his former or equivalent
position without loss of seniority rights with full back wages from the time his salary was
withheld from him up to
the time he is actually reinstated;
3. To pay complainant his partial back wages in the amount of P57,165.33
computed up to the
date of this decision as follows:
A.
BACK WAGES FROM 16 Oct 2001 to 15 Jan 2002 (4 months) (Partial)
P12,192.50+1,000 x 4
= P52,768.00
Plus P52,768/13 (13th mo. Pay)
= P4,397.33
TOTAL BACKWAGES P57,165.33
and
4. Ordering respondents to pay complainant moral and exemplary damages in the
total amount
of P100,000.00 plus P15,718.53, as attorneys fees which is equivalent
to 10% of the total
monetary award.
Complainants other claims are dismissed for lack of merit.
SO ORDERED.
On appeal by petitioners, the NLRC, in its Resolution dated November 19, 2002, set aside
the Labor Arbiters judgment, thus:
WHEREFORE, foregoing premises considered, the appealed decision is Vacated
and Set Aside. In lieu thereof, a new judgment is rendered dismissing the above-entitled
case for lack of merit.
SO ORDERED.
The NLRC held that respondents reassignment is not a demotion. There was neither
diminution in functions and pay. Thus, he was not constructively dismissed from

employment. Moreover, respondent himself admitted that he decided not to report for work
at his new station. Yet, he continued receiving his salaries and allowances.
Respondent filed a motion for reconsideration but it was denied by the NLRC.
Respondent then filed with the Court of Appeals a petition for certiorari, docketed as CAG.R. SP No. 77206.
On September 23, 2004, the Court of Appeals rendered its Decision granting the petition,
thus:
WHEREFORE, the instant Petition is hereby GRANTED. The NLRC Resolutions
dated 19
November 2002 and 26 February 2003 are hereby ANNULLED and SET
ASIDE. The Labor
Arbiters Decision dated 14 January 2002 is hereby
REINSTATED.
SO ORDERED.
Petitioners filed a motion for reconsideration. However, it was denied by the appellate court
in its Resolution dated September 6, 2005.
The only issue before us is whether the Court of Appeals erred in holding that respondent
was constructively dismissed from employment.
In resolving this issue, we rely on the following guide posts:
Under the doctrine of management prerogative, every employer has the inherent right to
regulate, according to his own discretion and judgment, all aspects of employment,
including hiring, work assignments, working methods, the time, place and manner of work,
work supervision, transfer of employees, lay-off of workers, and discipline, dismissal, and
recall of employees. The only limitations to the exercise of this prerogative are those
imposed by labor laws and the principles of equity and substantial justice.
While the law imposes many obligations upon the employer, nonetheless, it also protects
the employers right to expect from its employees not only good performance, adequate
work, and diligence, but also good conduct and loyalty. In fact, the Labor Code does not
excuse employees from complying with valid company policies and reasonable regulations
for their governance and guidance.
Concerning the transfer of employees, these are the following jurisprudential guidelines: (a)
a transfer is a movement from one position to another of equivalent rank, level or salary
without break in the service or a lateral movement from one position to another of
equivalent rank or salary; (b) the employer has the inherent right to transfer or reassign an
employee for legitimate business purposes;5 (c) a transfer becomes unlawful where it is
motivated by discrimination or bad faith or is effected as a form of punishment or is a
demotion without sufficient cause; (d) the employer must be able to show that the transfer
is not unreasonable, inconvenient, or prejudicial to the employee.
Constructive dismissal is defined as quitting when continued employment is rendered
impossible, unreasonable, or unlikely as the offer of employment involves a demotion in
rank and diminution of pay.
In light of the above guidelines, we agree with the NLRC in ruling that respondent was not
constructively dismissed from employment.
Respondent contends that the abolition of his position as planning and marketing officer
and his appointment as book-keeper I and assistant branch head of the Madrid Branch is a
demotion. However, a look at the functions of his new position shows the contrary. The
bookkeeper and assistant branch head is not only charged with preparing financial reports
and monthly bank reconciliations, he is also the head of the Accounting Department of a
branch. Under any standard, these are supervisory and administrative tasks which entail
great responsibility. Moreover, respondents transfer did not decrease his pay.
Nor was respondents transfer motivated by ill-will or prejudice on the part of petitioners.
His position was not the only one abolished pursuant to the banks Personnel Streamlining
Program. We recall that the position of remedial officer was likewise abolished. Petitioners
reason was to acquire savings from the salaries it would pay to full-time personnel in these
positions.

Finally, we note that despite respondents refusal to accept the new appointment,
petitioners did not dismiss him. Rather, it was he who opted to terminate his employment
when he purposely failed to report for work.
In fine, we hold that the Court of Appeals erred when it concluded that respondent was
constructively dismissed from employment.
WHEREFORE, we GRANT the petition and REVERSE the Decision of the Court of
Appeals in CA-G.R. SP No. 77206. The Resolutions of the NLRC dated November 19,
2002 and February 26, 2003, dismissing respondents complaint are AFFIRMED.
SO ORDERED.
Puno (C.J., Chairperson), Corona and Garcia, JJ., concur.
Azcuna, J., On Official Leave.
Petition granted, judgment reversed.
Notes.Employers rules cannot preclude the State from inquiring whether the strict and
rigid application or interpretation thereof would be harsh to the employee. (Farrol vs. Court
of Appeals, 325 SCRA 331 [2000])
The right of an employer to regulate all aspects of employment, aptly called management
prerogative, gives employers the freedom to regulate, according to their discretion and best
judgment, all aspects of employment, including work assignment, working methods,
processes to be followed, working regulations, transfer of employees, work supervision,
lay-off of workers and the discipline, dismissal and recall of workers. (Deles, Jr. vs. National
Labor Relations Commission, 327 SCRA 540 [2000]) [Rural Bank of Cantilan, Inc. vs.
Julve, 517 SCRA 17(2007)]
BLUE DAIRY CORPORATION and/or EDISON T. AVIGUETERO and PEDRO G.
MIGUEL, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and ELVIRA
R. RECALDE, respondents.
G.R. No. 129843. September 14, 1999.*
Labor Law; Management Prerogatives; Transfers; It is the prerogative of management to
transfer an employee from one office to another within the business establishment based
on its assessment and perception of the employees qualifications, aptitudes and
competence, and in order to ascertain where he can function with maximum benefit to the
company.No grave abuse of discretion was committed by the NLRC. Indeed, it is the
prerogative of management to transfer an employee from one office to another within the
business establishment based on its assessment and perception of the employees
qualifications, aptitudes and competence, and in order to ascertain where he can function
with maximum benefit to the company. This is a privilege inherent in the employers right to
control and manage his enterprise effectively. The freedom of management to conduct its
business operations to achieve its purpose cannot be denied.
Same; Same; Same; The managerial prerogative to transfer personnel must be exercised
without grave abuse of discretion, bearing in mind the basic elements of justice and fair
playit cannot be used as a subterfuge by the employer to rid himself of an undesirable
worker.But, like other rights, there are limits thereto. The managerial prerogative to
transfer personnel must be exercised without grave abuse of discretion, bearing in mind
the basic elements of justice and fair play. Having the right should not be confused with the
manner in which that right is exercised. Thus, it cannot be used as a subterfuge by the
employer to rid himself of an undesirable worker.
Same; Same; Same; Constructive Dismissal; Words and Phrases; The employer must be
able to show that the transfer is not unreasonable, inconvenient or prejudicial to the
employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges
and other benefits.The employer must be able to show that the transfer is not
unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion
in rank or a diminution of his salaries, privileges and other benefits. Should the employer

fail to overcome this burden of proof, the employees transfer shall be tantamount to
constructive dismissal, which has been defined as a quitting because continued
employment is rendered impossible, unreasonable or unlikely; as an offer involving a
demotion in rank and diminution in pay. Likewise, constructive dismissal exists when an act
of clear discrimination, insensibility or disdain by an employer has become so unbearable
to the employee leaving him with no option but to forego with his continued employment.
Same; Same; Same; Same; Demotion; Due Process; While due process required by law is
applied in dismissals, the same is also applicable to demotions as demotions likewise
affect the employment of a worker whose right to continued employment, under the same
terms and conditions, is also protected by law.Petitioners failed to justify Recaldes
transfer from the position of food technologist in the laboratory to a worker in the vegetable
processing section. We recall that what triggered Recaldes transfer was the 21 October
incident where she was found to have allegedly utilized company vehicle in looking for a
new residence during office hours without permission from management. In petitioners
view, she was dishonest such that they lost their trust and confidence in her. Yet, it does
not appear that Recalde was provided an opportunity to refute the reason for the transfer.
Petitioners merely relied on the narrations of the company driver. Nor was Recalde notified
in advance of her impending transfer which was, as we shall elucidate later, a demotion in
rank. In Gaco v. NLRC we notedWhile due process required by law is applied in
dismissals, the same is also applicable to demotions as demotions likewise affect the
employment of a worker whose right to continued employment, under the same terms and
conditions, is also protected by law. Moreover, considering that demotion is, like dismissal,
also a punitive action, the employee being demoted should, as in cases of dismissals, be
given a chance to contest the same.
Same; Illegal Dismissals; Reassignments; Loss of Trust and Confidence; Breach of trust
and confidence as a ground for dismissal from employment must be related to the
performance of the duties of the employee such as would show him to be thereby unfit to
continue working for the employer; Breach of trust and confidence as a ground for
reassignment must be related to the performance of the duties of the employee such as
would show him to be thereby unfit to discharge the same task.Petitioners overstretched
the effect of Recaldes claimed wrongdoing. We have ruled that breach of trust and
confidence as a ground for dismissal from employment must be related to the performance
of the duties of the employee such as would show him to be thereby unfit to continue
working for the employer. By analogy, breach of trust and confidence as a ground for
reassignment must be related to the performance of the duties of the employee such as
would show him to be thereby unfit to discharge the same task. Clearly, the act of
dishonesty imputed to Recalde has no bearing at all to her work in the laboratory.
Same; Same; Same; Demotions; The transfer of an employee from being a food
technologist in the laboratory, occupying a highly technical position requiring use of her
mental faculty, to being a worker in the vegetable processing section performing mere
mechanical work, is virtually a transfer from a position of dignity to a servile or menial job, a
demotion in rank, beyond doubt.We find insignificant the submission of petitioners that
the coring of lettuce together with the other production jobs connected therewith is one of
the most important aspects of the corporations existence and that those assigned to the
vegetable processing section are mostly professionals like teachers, computer secretaries
and forestry graduates. Rather, the focus should be on the comparison between the
nature of Recaldes work in the laboratory and in the vegetable processing section. As food
technologist in the laboratory, she occupied a highly technical position requiring use of her
mental faculty. As a worker in the vegetable processing section, she performed mere
mechanical work. It was virtually a transfer from a position of dignity to a servile or menial
job. We agree with the observation of the Office of the Solicitor General that the radical
change in Recaldes nature of work unquestionably resulted in, as rightly perceived by her,

a demeaning and humiliating work condition. The transfer was a demotion in rank, beyond
doubt.
Same; Same; Same; Same; A transfer from a workplace where only highly trusted
authorized personnel are allowed access to a workplace that is not as critical is another
reason enough for an employee to howl a protest.The laboratory is the place where the
quality of the totality of petitioners products such as dairy, juices, chocolates and
vegetables is tested. On the other hand, the vegetable processing section, as the name
implies, involves processing of vegetables alone. Definitely, a transfer from a workplace
where only highly trusted authorized personnel are allowed access to a workplace that is
not as critical is another reason enough for Recalde to howl a protest.
Same; Same; Back wages; To be included in the computation of back wages are the
illegally dismissed employees allowances and other benefits or their monetary equivalent.
We reiterate that the NLRC did not commit grave abuse of discretion in affirming the
ruling of the Labor Arbiter that petitioners are guilty of constructive dismissal. Recalde is
entitled to reinstatement as food technologist without loss of seniority rights and privileges
and with full back wages, as directed by the Labor Arbiter. We clarify however that
conformably with Art. 279 of the Labor Code, as amended by Sec. 34 of RA 6715, to be
included in the computation of back wages are the illegally dismissed employees
allowances and other benefits or their monetary equivalent.
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
The facts are stated in the opinion of the Court.
Esmeraldo U. Guloy for petitioners.
The Solicitor General for public respondent.
BELLOSILLO, J.:
BLUE DAIRY CORPORATION, engaged in the processing of dairy and chocolate products,
juices and vegetables, hired on 14 May 1994 private respondent Elvira R. Recalde as a
food technologist in its laboratory with the following specific functions: microanalysis of
toppings and syrup, onions and garlic, and liquid mixes (soft serve and milk shake);
physical and chemical analysis of liquid mixes, including raw materials for toppings and
syrup and its inspection; routine computation for liquid mixes and supervision while
weighing the materials; performing chlorine test for lettuce, red onion, white onion and
green pepper; preparation of forms for toppings and syrup; sensory evaluation of toppings
and syrup; product development (assistant); and, preparation of food coloring for orange
syrup production.
On 22 May 1994, a Sunday, Recalde reported for work but claimed that she was not given
her premium pay.
On 21 October 1994 Recalde accompanied Production Manager Editha N. Nicolas in
conducting a sensory evaluation of vanilla syrup in one of the outlets of a client. While on
their way back to the office a post fell on the company vehicle they were riding due to a
raging typhoon damaging the vehicles windshield and side mirror.
On 3 December 1994 Recalde was transferred from the laboratory to the vegetable
processing section where she cored lettuce, minced and repacked garlic and performed
similar work, and was restricted from entering the laboratory. She was unhappy. She
considered her new job humiliating and menial. On 14 December 1994 she stopped
reporting for work. The following day she sent a letter to petitioner Edison T. Aviguetero, the
President and Chairman of the Board of Director of Blue Dairy Corporation, reading
I would like to inform you that I will no longer report for work because of your
drastic and oppressive action. And besides, I have already filed a case against BLUE
DAIRY CORPORATION and/or EDISON T. AVIGUETERO,
PEDRO
G. MIGUEL x x x x

On 16 December 1994 Recalde filed a complaint against petitioner Blue Dairy Corporation,
Edison T. Aviguetero and Pedro G. Miguel3 for constructive dismissal and non-payment of
premium pay. She also claimed overtime pay as well as moral and exemplary damages
plus attorneys fees.
Petitioners contended that Recalde was given a less sensitive assignment outside of the
laboratory on account of her dishonesty which resulted in loss of trust and confidence.
They seriously took into account the result of the investigation concerning the 21 October
incident that Recalde was actually scouting for a new residence using company vehicle
without prior permission from the General Manager and during office hours, in violation of
par. IV, subpars. B and G, of the companys General Rules and Regulations. Petitioners
accorded credence to the narrations of Rolando V. Flores, driver of the damaged vehicle, to
that effect which act of dishonesty could even have merited dismissal from employment
had they adhered simply to jurisprudential rule but took into account instead the spirit of the
approaching Christmas season.
The Labor Arbiter was convinced that petitioners were guilty of constructive dismissal as he
found the justification for Recaldes transfer unreasonable: first, the unofficial trip on the
way back to the office on 21 October was undertaken through the bidding of the Production
Manager; second, loss of trust and confidence must necessarily occur in the performance
of duties; and third, the new position of Recalde was too humiliating and demeaning. The
Labor Arbiter also found that petitioners failed to grant premium pay to Recalde for her
work performed on 22 May 1994, a Sunday.
On 31 October 1996 petitioners were thus ordered to reinstate Recalde to her former
position as food technologist assisting in the quality assurance processes of the company
and performing laboratory work without loss of seniority rights and privileges, with full back
wages as well as to grant her premium pay, initially computed thus
Back Wages:
12/14/94 - 12/30/96 = 24.53 mos.
P183.33 x 30 days x 24.53 mos. - - - - - - - - P134,912.54
Premium Pay for Rest Day:
(May 22, 1994): P183.33 x 30% = P55.00
55.00
TOTAL AWARD: - - - - - - - - - - - - - - - - - - - P134,967.54
The other claims were dismissed for lack of merit.
On 30 April 1997 public respondent National Labor Relations Commission (NLRC) affirmed
the ruling.5 On 19 June 1997 reconsideration was denied.
Petitioners insist that the transfer of Recalde from the laboratory to the vegetable
processing section was effected in the exercise of management prerogative. It did not
amount to a constructive dismissal as Recalde erroneously maintained.
Moreover, petitioners submit that the coring of lettuce together with the other production
jobs connected therewith is one of the most important aspects of the corporations
existence; in fact, those assigned to the vegetable processing section are mostly
professionals like teachers, computer secretar-ies and forestry graduates.
No grave abuse of discretion was committed by the NLRC. Indeed, it is the prerogative of
management to transfer an employee from one office to another within the business
establishment based on its assessment and perception of the employees qualifications,
aptitudes and competence, and in order to ascertain where he can function with maximum
benefit to the company. This is a privilege inherent in the employers right to control and
manage his enterprise effectively. The freedom of management to conduct its business
operations to achieve its purpose cannot be denied.

But, like other rights, there are limits thereto. The managerial prerogative to transfer
personnel must be exercised without grave abuse of discretion, bearing in mind the basic
elements of justice and fair play. Having the right should not be confused with the manner
in which that right is exercised. Thus, it cannot be used as a subterfuge by the employer to
rid himself of an undesirable worker.9 In particular, the employer must be able to show that
the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it
involve a demotion in rank or a diminution of his salaries, privileges and other benefits.10
Should the employer fail to overcome this burden of proof, the employees transfer shall be
tantamount to constructive dismissal, which has been defined as a quitting because
continued employment is rendered impossible, unreasonable or unlikely; as an offer
involving a demotion in rank and diminution in pay. Likewise, constructive dismissal exists
when an act of clear discrimination, insensibility or disdain by an employer has become so
unbearable to the employee leaving him with no option but to forego with his continued
employment.
In the present case, petitioners failed to justify Recaldes transfer from the position of food
technologist in the laboratory to a worker in the vegetable processing section. We recall
that what triggered Recaldes transfer was the 21 October incident where she was found to
have allegedly utilized company vehicle in looking for a new residence during office hours
without permission from management. In petitioners view, she was dishonest such that
they lost their trust and confidence in her. Yet, it does not appear that Recalde was
provided an opportunity to refute the reason for the transfer. Petitioners merely relied on
the narrations of the company driver. Nor was Recalde notified in advance of her
impending transfer which was, as we shall elucidate later, a demotion in rank. In Gaco v.
NLRC13 we noted
While due process required by law is applied in dismissals, the same is also
applicable to demotions as
demotions likewise affect the employment of
a worker whose right to continued employment, under the same
terms
and conditions, is also protected by law. Moreover, considering that demotion is,
like dismissal, also a
punitive action, the employee being demoted should,
as in cases of dismissals, be given a chance to contest the
same.
Further, petitioners overstretched the effect of Recaldes claimed wrongdoing. We have
ruled that breach of trust and confidence as a ground for dismissal from employment must
be related to the performance of the duties of the employee such as would show him to be
thereby unfit to continue working for the employer. By analogy, breach of trust and
confidence as a ground for reassignment must be related to the performance of the duties
of the employee such as would show him to be thereby unfit to discharge the same task.
Clearly, the act of dishonesty imputed to Recalde has no bearing at all to her work in the
laboratory.
Further still, granting that Recalde was proved guilty of dishonesty, the companys General
Rules and Regulations provide the corresponding sanctions therefor. Recalde appears to
have no prior record of infractions. For leaving post temporarily without permission during
working hours committed for the first time, warning is imposable, whereas for
unauthorized use of any company vehicle committed for the first time, the commensurate
penalty is 15 days suspension. Although petitioners invoked the pertinent provisions of
the rules and regulations which Recalde allegedly violated, for reasons known only to
them, they disregarded those sanctions. Instead, they gave her a less sensitive assignment
outside of the laboratory as they claimed that had they adhered to the rules she would
have been dismissed outright for her dishonesty in the unauthorized use of company
property. Then too is their claim that they were moved by compassion on account of the
then approaching Christmas season. Commendable as this compassionate gesture may
seem, nevertheless, petitioners failed to realize that it was not relief from dismissal which
they provided to Recalde when they assigned her to the vegetable processing section but
discomfiture.

We find insignificant the submission of petitioners that the coring of lettuce together with
the other production jobs connected therewith is one of the most important aspects of the
corporations existence and that those assigned to the vegetable processing section are
mostly professionals like teachers, computer secretaries and forestry graduates. Rather,
the focus should be on the comparison between the nature of Recaldes work in the
laboratory and in the vegetable processing section. As food technologist in the laboratory,
she occupied a highly technical position requiring use of her mental faculty. As a worker in
the vegetable processing section, she performed mere mechanical work. It was virtually a
transfer from a position of dignity to a servile or menial job. We agree with the observation
of the Office of the Solicitor General that the radical change in Recaldes nature of work
unquestionably resulted in, as rightly perceived by her, a demeaning and humiliating work
condition. The transfer was a demotion in rank, beyond doubt.
Another aspect of comparison is the workplaces themselves. Petitioners admitted in their
answer to Recaldes complaint that
Respondents Laboratory is the most expensive area, on a persquare-meter
basis, in the companys premises. It is
here where the quality of the companys
products is tested and assured. Since these products are food items
ingested by the
consuming public, this Laboratory becomes several folds critical. Hence, only highly trusted
authorized personnel are allowed access to this place.
In other words, the laboratory is the place where the quality of the totality of petitioners
products such as dairy, juices, chocolates and vegetables is tested. On the other hand, the
vegetable processing section, as the name implies, involves processing of vegetables
alone. Definitely, a transfer from a workplace where only highly trusted authorized
personnel are allowed access to a workplace that is not as critical is another reason
enough for Recalde to howl a protest.
We reiterate that the NLRC did not commit grave abuse of discretion in affirming the ruling
of the Labor Arbiter that petitioners are guilty of constructive dismissal. Recalde is entitled
to reinstatement as food technologist without loss of seniority rights and privileges and with
full back wages, as directed by the Labor Arbiter. We clarify however that conformably with
Art. 279 of the Labor Code, as amended by Sec. 34 of RA 6715, to be included in the
computation of back wages are the illegally dismissed employees allowances and other
benefits or their monetary equivalent.
WHEREFORE, the petition is DISMISSED. The Decision of public respondent National
Labor Relations Commission finding that private respondent Elvira R. Recalde was
constructively dismissed from employment and entitled to premium pay is AFFIRMED.
Petitioners Blue Dairy Corporation, Edison T. Aviguetero and Pedro G. Miguel are ordered
to reinstate private respondent Recalde as food technologist in the laboratory without loss
of seniority rights and privileges and with full back wages inclusive of allowances and other
benefits or their monetary equivalent to be computed from her dismissal on 14 December
1994 up to actual reinstatement, and to grant her premium pay of P55.00 for work
performed on 22 May 1994, a Sunday. Costs against petitioners.
SO ORDERED.
Mendoza, Quisumbing and Buena, JJ., concur.
Petition dismissed; Questioned decision affirmed.
Notes.Being sidelined temporarily is a standard stipulation in employment contracts, as
the availability of assignment for security guards is primarily dependent on the contracts
entered into by the agency with third parties; In security agency parlance, being placed off
detail or on floating status means waiting to be posted. (Sentinel Security Agency, Inc.
vs. National Labor Relations Commission, 295 SCRA 123 [1998])
On the basis of the qualifications, training and performance of the employee, the
prerogative to determine the place or station where he or she is best qualified to serve the
interests of the company belongs to the employer. (Tan vs. National Labor Relations
Commission, 299 SCRA 169 [1998])

[Blue Dairy Corporation vs. NLRC, 314 SCRA 401(1999)]

PHILIPPINE TELEGRAPH AND TELEPHONE CORPORATION, petitioner, vs. ALICIA
LAPLANA, Hon. RICARDO ENCARNACION, and NATIONAL LABOR RELATIONS
COMMISSION, respondents.
G.R. No. 76645. July 23, 1991.*
Labor Law; Illegal Dismissal; Employer has the inherent right to transfer or assign an
employee in the pursuit of its legitimate business interest subject only to the condition that
it be not motivated by discrimination or bad faith.There can be no quarrel with the
Arbiters formulation of the general principle governing an employers prerogative to
transfer his employees from place to place or from one position to another. The Arbiter
acknowledges the inherent right of an employer to transfer or assign an employee in the
pursuit of its legitimate business interests subject only to the condition that it be not
motivated by discrimination or (made) in bad faith, or xx effected as a form of punishment
or demotion without sufficient cause. This is a principle uniformly adhered to by this Court.
Same; Same; Security of Tenure; An employees right to security of tenure does not give
him such a vested right in his position as would deprive the company of its prerogative to
change his assignment or transfer him.It is the employers prerogative, based on its
assessment and perception of its employees qualifications, aptitudes, and competence, to
move them around in the various areas of its business operations in order to ascertain
where they will function with maximum benefit to the company. An employees right to
security of tenure does not give him such a vested right in his position as would deprive the
company of its prerogative to change his assignment or transfer him where he will be most
useful. When his transfer is not unreasonable, nor inconvenient, nor prejudicial to him, and
it does not involve a demotion in rank or diminution of his salaries, benefits, and other
privileges, the employee may not complain that it amounts to a constructive dismissal.
Same; Same; Same; The employee (Laplana) had to all intents and purposes resigned
from her position.In this case, the employee (Laplana) had to all intents and purposes
resigned from her position. She had unequivocally asked that she be considered
dismissed, herself suggesting the reason thereforretrenchment. When so dismissed, she
accepted separation pay. On the other hand, the employer has not been shown to be
acting otherwise than in good faith, and in the legitimate pursuit of what it considered its
best interests, in deciding to transfer her to another office. There is no showing whatever
that the employer was transferring Laplana to another work place, not because she would
be more useful there, but merely as a subterfuge to rid x x (itself) of an undesirable
worker, or to penalize an employee for x x union activities x x.
Same; Same; Same; Court cannot accept the proposition that when an employee opposes
his employers decision to transfer him to another work place, there being no bad faith or
underhanded motives on the part of either party, it is the employees wishes that should be
made to prevail.The situation here presented is of an employer transferring an employee
to another office in the exercise of what it took to be sound business judgment and in
accordance with predetermined and established office policy and practice, and of the latter
having what was believed to be legitimate reasons for declining that transfer, rooted in
considerations of personal convenience and difficulties for the family. Under these
circumstances, the solution proposed by the employee herself, of her voluntary termination
of her employment and the delivery to her of corresponding separation pay, would appear
to be the most equitable. Certainly, the Court cannot accept the proposition that when an
employee opposes his employers decision to transfer him to another work place, there
being no bad faith or underhanded motives on the part of either party, it is the employees
wishes that should be made to prevail.
PETITION for certiorari to review the resolution of the National Labor Relations
Commission.
The facts are stated in the opinion of the Court.

D.P. Mercado & Associates for petitioner.

NARVASA, J.:
Alicia Laplana was the cashier of the Baguio City Branch Office of the Philippine Telegraph
and Telephone Corporation (hereafter, simply PT & T). Sometime in March 1984, PT & Ts
treasurer, Mrs. Alicia A. Arogo, directed Laplana to transfer to the companys branch office
at Laoag City. Laplana refused the reassignment and proposed instead that qualified clerks
in the Baguio Branch be trained for the purpose. She set out her reasons therefor in her
letter to Mrs. Arogo dated March 27, 1984, viz.:
1. I have established Baguio City as my permanent residence. Working in Laoag
will involve additional expenses like for my board and lodgingly, fare, and other
miscellaneous expenses. My salary alone will not be enoughthere will be no
savings and my family will spend more on account of my transfer.
2. I will be away from my family. A far assignment would be a big sacrifice on my
part keeping me away from my husband and family which might affect my
efficiency.
3. Since I have been with PT & T for more than six years already, I have learned
to work with my co-employees here more effectively. Working in another place
with entirely different environment will require long adjustment period, thereby
affecting performance of my job.
On April 12, 1984, Mrs. Arogo reiterated her directive for Laplanas transfer to the Laoag
Branch, this time in the form of a written Memorandum, informing Laplana that effective
April 16, 1984, you will be reassigned to Laoag branch assuming the same position of
branch cashier, and ordering her to turn over your accountabilities such as PCF,
undeposited collections, used and unused official receipts, other accountable forms and
files to Rose Caysido who will be in charge of cashiering in Baguio.
Apparently Laplana was not allowed to resume her work as Cashier of the Baguio Branch
when April 16, 1984 came. She thereupon wrote again to Mrs. Arogo advising that the
directed transfer was unacceptable, reiterating the reasons already given by her in her first
letter dated March 27, 1984. On April 30, 1984, Laplana received a telegram from Mrs.
Arogo reading as follows:
PLEASE REPORT TO MANILA ON MAY 2, 1984 FOR NEW JOB ASSIGNMENT
IF YOU DONT REPORT ON MAY 2, 1984, WE WILL CONSIDER THIS
AS ABANDONMENT OF YOUR JOB AND THIS MIGHT CONSTRAIN US TO IMPOSE
DISCIPLINARY ACTION AGAINST YOU
YOU CAN GET YOUR CASH ADVANCE FOR TRANSPORTATION
FROM MRS. BAUTISTA TODAY.
On May 8, 1984, Laplana in turn sent a telex message to Mrs. Arogo which reads as
follows:
I LOVE WORKING FOR OUR COMPANY HOWEVER I AM SORRY I CANNOT
ACCEPT YOUR JOB OFFER IN MANILA. THANK YOU AND RETRENCH ME INSTEAD.
MY BEST REGARDS.
Thereafter, Laplana sent a letter to Mrs. Arogo on May 15, 1984, expatiating on her telex
message and reiterating her request to be retrenched, as follows:
Dear Mrs. Arogo:
Thank you for the job in Manila. However, I cannot accept the said offer
because I have established Baguio City as my permanent residence. Considering the high
cost of living in Manila it will surely involve additional expenses on my part. My salary
alone will not be enough to sustain my expenses. Furthermore, a far assignment will be a
big sacrifice on my part keeping me away from my husband which might affect my health
due to an entirely new environment and climate, thereby affecting my efficiency.
In view of the above reasons, I hereby request management to retrench
me.
xxxxx.

Termination of Laplanas employment on account of retrenchment thereupon followed. On

May 19, 1984, PT & T issued an Employeess Service Report which contained the
following remarks regarding Laplana: Services terminated due to retrenchment with
corresponding termination pay effective May 16, 1984. And on June 30, 1984, Mrs. Arogo
sent a Memorandum to the companys Baguio Branch Manager embodying the
computation of the separation and 13th month pay due to Laplana, together with a check
for the amount thereof, P2,512.50 and a quitclaim deed, and instructing said manager to
have the quitclaim signed by Alicia Laplana before releasing the check and return all
copies of said form x x immediately. On July 4, 1984, Laplana signed the quitclaim and
received the check representing her 13th month and separation pay.
On October 9, 1984, Laplana filed with the Labor Arbiters Office at Baguio City, thru the
CLAO, a complaint against PT &T, its Baguio Northwestern Luzon Branch, Baguio City,
and Paraluman Bautista, Area Manager. In her complaint, she set forth substantially the
facts just narrated, and alleged, as right of action, that when she insisted on her right of
refusing to be transferred, the Defendants made good its warning by terminating her
services on May 16, 1984 on alleged ground of retrenchment, although the truth is, she
was forced to be terminated and that there was no ground at all for the retrenchment; that
the companys act of transferring is not only without any valid ground but also arbitrary and
without any purpose but to harass and force x x (her) to eventually resign.
In answer, the defendants alleged that
1) Laplana was being transferred to Laoag City because of increase in sales due
to the additional installations of vodex line;
2) in connection with her transfer, Laplana had been informed that she would be
given ten (10) days
relocation allowance and transportation expense from
Baguio to Laoag City;
3) the company was exercising management prerogatives in transferring
complainant x x and there is no
showing that this exercise was arbitrarily and
whimsically done;
4) Laplanas services were terminated on her explicit declaration that she was
willing to be retrenched
rather than be assigned to Laoag City or Manila;
5) in any event, the company had been actually suffering losses; in fact, in June,
1984, several employees were retrenched because of losses incurred due to
rising costs in wages, rentals, production supplies and
other operational
costs.
Upon the issues thus raised, judgment was rendered on March 28, 1985 by the Labor
Arbiter in Laplanas favor. The Arbiters verdict was made to rest essentially on the
following pronouncements (made avowedly in reliance on the doctrine laid down by this
Court in Helmut Dosch v. NLRC and Northwest Airlines, Inc., G.R. No. 51182, July 5,
19832), to wit:
Transferring an employee from one place to another is not by itself
unlawful. It is within the inherent right of an employer to transfer or assign an
employee in the pursuit of its legitimate business interests. However, this right is
not absolute.
Transfer becomes unlawful where it is motivated by discrimination or in
bad faith, or is effected as a form of punishment or demonition without sufficient
cause.
The transfer of the complainant from Baguio City to Laoag City or to Manila is
patently a demotion and a form of punishment without just cause and would cause untold
suffering on the part of the complainant. x
x.
With these premises in mind, the Arbiter ruled that the complainant was illegally dismissed
xx (and her) acceptance of separation pay xx cannot cure the illegality of her dismissal
because it was forced upon hershe was compelled to accept the lesser evil, and that
there was no evidence to show that the complainant was retrenched to prevent losses,

but that on the contrary, it is continuously expanding and improving its facilities, and hiring
new employees. Accordingly, he ordered
1) PT & T to reinstate immediately the complainant, Alicia R. Laplana, to her
former position or equivalent
position without loss of seniority rights and
benefits earned with full back wages and benefits less
P2,512.50,
the
amount she received as separation, from the time her compensation was
suspended until reinstated;
2) the dismissal of the claim for moral and exemplary damages for lack of merit;
and
3) the dismissal of the case against Mrs. Paraluman Bautista also for lack of merit.
The National Labor Relations Commission affirmed the Arbiters judgment and dismissed
the respondents appeal, by Resolution dated August 5, 1986.3
There can be no quarrel with the Arbiters formulation of the general principle governing an
employers prerogative to transfer his employees from place to place or from one position
to another. The Arbiter acknowledges the inherent right of an employer to transfer or
assign an employee in the pursuit of its legitimate business interests subject only to the
condition that it be not motivated by discrimination or (made) in bad faith, or x x effected
as a form of punishment or demotion without sufficient cause. This is a principle uniformly
adhered to by this Court.
The case law on the matter is succinctly set out by a noted commentator on Labor
Relations Law as follows:
x x Except as limited by special laws, the employer is free to regulate, according
to his own discretion and judgment, all aspects of employment, including hiring,
work assignments, working methods, time, place
and manner of work, tools
to be used, processes to be followed, supervision of workers, working
regulations, transfer of employees, work supervision, lay-off of workers,
and the discipline, dismissal and recall of workers. This flows from the established
rule that labor law does not authorize the substitution of
the judgment of
the employer in the conduct of his business and does not deprive the employer of
the right to select or dismiss his employees for any cause, except in cases of
unlawful discrimination (NLU v. Insular-Yebana Tobacco Corp., 2 SCRA 924, 931;
Republic Savings Bank v. CIR, 21 SCRA 226, 235).
x x The employer has the prerogative of making transfers and reassignment of
employees to meet the requirements of the business. Thus, where the rotation of
employees from the day shift to the night shift was a standard operating
procedure of management, an employee who had been on the day shift for some
time may be transferred to the night shift (Castillo v. CIR, 39 SCRA 81). Similarly,
transfers effected pursuant to a company policy to transfer employees from one
theater to other theaters operated by the employer, in order to prevent connivance
among them, was sustained (Cinema, Stage and Radio
Entertainment
Free Workers v. CIR, 18 SCRA 1071). Similar transfers and re-assignments of
employees have been upheld such as the reassignment of one from a position of
supervisor to that of engineer at the power house (Interwood Employees Assn. v.
Interwood, 99 Phil. 82), or the transfer of the union president from his position of
messenger clerk in a hotel to purely office work and two other unionists from the
position of hotel guard to line and elevator men, without diminution of pay or other
employees rights (Bay view Hotel Employees Union v. Bay View Hotel, L-10393,
March 30, 1960), or the temporary assignment
of a sales clerk to another
section of the store (Marcaida v. PECO, 63 O.G. 8559).
Subsequent decisions of this Court have made no deviation from the doctrine. In Philippine
Japan Active Carbon Corp. v. NLRC, promulgated on March 8, 1989,6 this Court made the
following pronouncement, to wit:
It is the employers prerogative, based on its assessment and perception of its
employees qualifications, aptitudes, and competence, to move them around in the

various areas of its business operations in order to ascertain where they will
function with maximum benefit to the company. An employees right to security of
tenure does not give him such a vested right in his position as would deprive the
company of its prerogative to change his assignment or transfer him where he will
be most useful. When his transfer is not unreasonable, nor inconvenient, nor
prejudicial to him, and it does not involve a demotion in rank or diminution of his
salaries, benefits, and other privileges, the employee may not complain that it
amounts to
a constructive dismissal.
In Yuco Chemical Industries, Inc. v. MOLE, et al. (judgment promulgated on May 28,
1990),7 the same general principles on transfer were restated. The Court said:
x x. In a number of cases, the Court has recognized and upheld the prerogative
of management to transfer an employee from one office to another within the
business establishment provided that there is no
demotion
in
rank
or
diminution of his salary, benefits and other privileges. This is a privilege inherent in
the employers right to control and manage its enterprise effectively. Even as the
law is solicitous of the employees welfare, it cannot ignore the right of the
employer to exercise what are clearly and obviously management prerogatives.
The freedom of management to conduct its business operations to achieve its
purpose cannot be denied.
But like all other rights, there are limits. The managerial prerogative to
transfer personnel must be exercised without grave abuse of discretion and
putting to mind the basic elements of justice and fair play. Having the right should
not be confused with the manner in which that right must be exercised. Thus it
cannot be used as a subterfuge by the employer to rid himself of an undesirable
worker. Nor when the real reason is to penalize an employee for his union
activities and thereby defeat his right to self-organization.
But the transfer
can be upheld when there is no showing that it is unnecessary, inconvenient and
prejudicial to the displaced employee.
The acceptability of the proposition that transfers made by an employer for an illicit or
underhanded purposee.g., to evade the duty to bargain collectively, or to defeat the
employees right of collective bargaining, or discriminate against one or some of them on
account of their union activitiesis self-evident and cannot be gainsaid. The difficulty lies in
the situation where no such illicit, improper or underhanded purpose can be ascribed to the
employer, the objection to the transfer being ground solely upon the personal
inconvenience or hardship that will be caused to the employee by reason of the transfer.
What then?
In Dosch v. NLRC, supra, this Court found itself unable to agree with the NLRC that the
petitioner employee was guilty of disobedience and insubordination in refusing to accept
his transfer from the Philippines to an overseas post. Said the Court:
x x. The only piece of evidence on which (respondent employer) Northwest bases
the charge of contumacious refusal is petitioners letter dated August 28, 1975 to
R.C. Jenkins wherein petitioner acknowledged receipt of the formers
memorandum dated August 18, 1975, appreciated his promotion to Director of
International Sales but at the same time regretted that at this time for personal
reasons and reasons of my family, I am unable to accept the transfer from the
Philippines and thereafter expressed his preference to remain in my position of
Manager-Philippines until such time that my services in that capacity are no
longer required by Northwest Airlines. From this evidence, We cannot discern
even the slightest
hint of defiance, much less imply insubordination on
the part of petitioner.
Withal, it is evident that the courteous tone of the employees letter did not alter the
actuality of his refusal to accept the transfer decreed by his employer in the exercise of its
sound business judgment and discretion; and that the transfer of an employee to an

overseas post cannot be likened to a transfer from a city to another within the country, as in
the case at bar.
In this case, the employee (Laplana) had to all intents and purposes resigned from her
position. She had unequivocally asked that she be considered dismissed, herself
suggesting the reason thereforretrenchment. When so dismissed, she accepted
separation pay. On the other hand, the employer has not been shown to be acting
otherwise than in good faith, and in the legitimate pursuit of what it considered its best
interests, in deciding to transfer her to another office. There is no showing whatever that
the employer was transferring Laplana to another work place, not because she would be
more useful there, but merely as a subterfuge to rid xx (itself) of an undesirable worker, or
to penalize an employee for xx union activities xx. The employer was moreover not
unmindful of Laplanas initial plea for reconsideration of the directive for her transfer to
Laoag; in fact, in response to that plea not to be moved to the Laoag Office, the employer
opted instead to transfer her to Manila, the main office, offering at the same time the
normal benefits attendant upon transfers from an office to another.
The situation here presented is of an employer transferring an employee to another office
in the exercise of what it took to be sound business judgment and in accordance with predetermined and established office policy and practice, and of the latter having what was
believed to be legitimate reasons for declining that transfer, rooted in considerations of
personal convenience and difficulties for the family. Under these circumstances, the
solution proposed by the employee herself, of her voluntary termination of her employment
and the delivery to her of corresponding separation pay, would appear to be the most
equitable. Certainly, the Court cannot accept the proposition that when an employee
opposes his employers decision to transfer him to another work place, there being no bad
faith or underhanded motives on the part of either party, it is the employees wishes that
should be made to prevail. In adopting that proposition by way of resolving the controversy,
the respondent NLRC gravely abused its discretion.
WHEREFORE, the writ of certiorari prayed for is GRANTED and the Resolution of August
5, 1986 of respondent NLRC is thereby nullified and set aside, and the termination of
services of private respondent is declared legal and proper. No costs.
SO ORDERED.
Cruz, Gancayco, Grio-Aquino and Medialdea, JJ., concur.
Writ granted. Resolution nullified and set aside.
Note.Employees right to security of tenure does not give him a vested right in his
position as would deprive the company of its prerogative to change his assignment or
transfer him where he will be most useful. (Phil-Japan Active Carbon Corp. vs. National
Labor Relations Commission, 171 SCRA 164.)
ARMANDO G. YRASUEGUI, petitioner, vs. PHILIPPINE AIRLINES, INC., respondent.
G.R. No. 168081.October 17, 2008.*
Labor Law; Termination of Employment; Common Carriers; Air Transportation; Weight
Standards; Obesity; An employee may be dismissed the moment he is unable to comply
with his ideal weight as prescribed by the weight standardsthe dismissal would fall under
Article 282(e) of the Labor Code.A reading of the weight standards of PAL would lead to
no other conclusion than that they constitute a continuing qualification of an employee in
order to keep the job. Tersely put, an employee may be dismissed the moment he is unable
to comply with his ideal weight as prescribed by the weight standards. The dismissal of the
employee would thus fall under Article 282(e) of the Labor Code. As explained by the CA:
xxx
[T]he standards violated in this case were not mere orders of the employer; they were the
prescribed weights that a cabin crew must maintain in order to qualify for and keep his or
her position in the company. In other words, they were standards that establish continuing
qualifications for an employees position. In this sense, the failure to maintain these

standards does not fall under Article 282(a) whose express terms require the element of
willfulness in order to be a ground for dismissal. The failure to meet the employers
qualifying standards is in fact a ground that does not squarely fall under grounds (a) to (d)
and is therefore one that falls under Article 282(e)the other causes analogous to the
foregoing. By its nature, these qualifying standards are norms that apply prior to and
after an employee is hired. They apply prior to employment because these are the
standards a job applicant must initially meet in order to be hired. They apply after hiring
because an employee must continue to meet these standards while on the job in order to
keep his job. Under this perspective, a violation is not one of the faults for which an
employee can be dismissed pursuant to pars. (a) to (d) of Article 282; the employee can be
dismissed simply because he no longer qualifies for his job irrespective of whether or not
the failure to qualify was willful or intentional. x x x
Same; Same; Same; Same; Same; Same; The obesity of a cabin crew, when placed in the
context of his work as flight attendant, becomes an analogous cause under Article 282(e)
of the Labor Code that justifies his dismissal from the servicehis obesity may not be
unintended, but is nonetheless voluntary.In fine, We hold that the obesity of petitioner,
when placed in the context of his work as flight attendant, becomes an analogous cause
under Article 282(e) of the Labor Code that justifies his dismissal from the service. His
obesity may not be unintended, but is nonetheless voluntary. As the CA correctly puts it,
[v]oluntariness basically means that the just cause is solely attributable to the employee
without any external force influencing or controlling his actions. This element runs through
all just causes under Article 282, whether they be in the nature of a wrongful action or
omission. Gross and habitual neglect, a recognized just cause, is considered voluntary
although it lacks the element of intent found in Article 282(a), (c), and (d).
Same; Same; Same; Same; Same; Same; Bona Fide Occupational Qualification (BFOQ)
Defense; Words and Phrases; Employment in particular jobs may not be limited to persons
of a particular sex, religion, or national origin unless the employer can show that sex,
religion, or national origin is an actual qualification for performing the jobqualification
referred to as bona fide occupational qualification (BFOQ).Employment in particular jobs
may not be limited to persons of a particular sex, religion, or national origin unless the
employer can show that sex, religion, or national origin is an actual qualification for
performing the job. The qualification is called a bona fide occupational qualification
(BFOQ). In the United States, there are a few federal and many state job discrimination
laws that contain an exception allowing an employer to engage in an otherwise unlawful
form of prohibited discrimination when the action is based on a BFOQ necessary to the
normal operation of a business or enterprise.
Same; Same; Same; Same; Same; Same; Same; Same; Meiorin Test; The Constitution,
the Labor Code, and RA No. 7277 or the Magna Carta for Disabled Persons contain
provisions similar to Bona Fide Occupational Qualification (BFOQ); The test of
reasonableness of the company policy is used because it is parallel to Bona Fide
Occupational Qualification (BFOQ)Bona Fide Occupational Qualification (BFOQ) is valid
provided it reflects an inherent quality reasonably necessary for satisfactory job
performance; Under the Meiorin Test, (1) the employer must show that it adopted the
standard for a purpose rationally connected to the performance of the job, (2) the employer
must establish that the standard is reasonably necessary to the accomplishment of that
work-related purpose, and, (3) the employer must establish that the standard is reasonably
necessary in order to accomplish the legitimate work-related purpose.Petitioner contends
that BFOQ is a statutory defense. It does not exist if there is no statute providing for it.
Further, there is no existing BFOQ statute that could justify his dismissal. Both arguments
must fail. First, the Constitution, the Labor Code, and RA No. 7277 or the Magna Carta for
Disabled Persons contain provisions similar to BFOQ. Second, in British Columbia Public
Service Employee Commission (BSPSERC) v. The British Columbia Government and
Service Employees Union (BCGSEU), 3 SCRA 3 (1999), the Supreme Court of Canada

adopted the so-called Meiorin Test in determining whether an employment policy is

justified. Under this test, (1) the employer must show that it adopted the standard for a
purpose rationally connected to the performance of the job; (2) the employer must establish
that the standard is reasonably necessary to the accomplishment of that work-related
purpose; and (3) the employer must establish that the standard is reasonably necessary in
order to accomplish the legitimate work-related purpose. Similarly, in Star Paper
Corporation v. Simbol, 487 SCRA 228 (2006), this Court held that in order to justify a
BFOQ, the employer must prove that (1) the employment qualification is reasonably related
to the essential operation of the job involved; and (2) that there is factual basis for believing
that all or substantially all persons meeting the qualification would be unable to properly
perform the duties of the job. In short, the test of reasonableness of the company policy is
used because it is parallel to BFOQ. BFOQ is valid provided it reflects an inherent quality
reasonably necessary for satisfactory job performance.
Same; Same; Same; Civil Law; A common carrier, from the nature of its business and for
reasons of public policy, is bound to observe extraordinary diligence for the safety of the
passengers it transports.There is no merit to the argument that BFOQ cannot be applied
if it has no supporting statute. Too, the Labor Arbiter, NLRC, and CA are one in holding that
the weight standards of PAL are reasonable. A common carrier, from the nature of its
business and for reasons of public policy, is bound to observe extraordinary diligence for
the safety of the passengers it transports. It is bound to carry its passengers safely as far
as human care and foresight can provide, using the utmost diligence of very cautious
persons, with due regard for all the circumstances. The law leaves no room for mistake or
oversight on the part of a common carrier. Thus, it is only logical to hold that the weight
standards of PAL show its effort to comply with the exacting obligations imposed upon it by
law by virtue of being a common carrier.
Same; Same; Same; Same; The weight standards of an airline should be viewed as
imposing strict norms of discipline upon its employeesthe primary objective of said airline
in the imposition of the weight standards for cabin crew is flight safety, for it cannot be
gainsaid that cabin attendants must maintain agility at all times in order to inspire
passenger confidence on their ability to care for the passengers when something goes
wrong.The business of PAL is air transportation. As such, it has committed itself to safely
transport its passengers. In order to achieve this, it must necessarily rely on its employees,
most particularly the cabin flight deck crew who are on board the aircraft. The weight
standards of PAL should be viewed as imposing strict norms of discipline upon its
employees. In other words, the primary objective of PAL in the imposition of the weight
standards for cabin crew is flight safety. It cannot be gainsaid that cabin attendants must
maintain agility at all times in order to inspire passenger confidence on their ability to care
for the passengers when something goes wrong. It is not farfetched to say that airline
companies, just like all common carriers, thrive due to public confidence on their
safety records. People, especially the riding public, expect no less than that airline
companies transport their passengers to their respective destinations safely and soundly. A
lesser performance is unacceptable.
Same; Same; Same; Same; The task of a cabin crew or flight attendant is not limited to
serving meals or attending to the whims and caprices of the passengerspassenger
safety goes to the core of the job of a cabin attendant; On board an aircraft, the body
weight and size of a cabin attendant are important factors to consider in case of emergency
aircrafts have constricted cabin space, and narrow aisles and exit doors.The task of a
cabin crew or flight attendant is not limited to serving meals or attending to the whims and
caprices of the passengers. The most important activity of the cabin crew is to care for the
safety of passengers and the evacuation of the aircraft when an emergency occurs.
Passenger safety goes to the core of the job of a cabin attendant. Truly, airlines need cabin
attendants who have the necessary strength to open emergency doors, the agility to attend
to passengers in cramped working conditions, and the stamina to withstand grueling flight
schedules. On board an aircraft, the body weight and size of a cabin attendant are

important factors to consider in case of emergency. Aircrafts have constricted cabin space,
and narrow aisles and exit doors. Thus, the arguments of respondent that [w]hether the
airlines flight attendants are overweight or not has no direct relation to its mission of
transporting passengers to their destination; and that the weight standards has nothing to
do with airworthiness of respondents airlines, must fail.
Same; Same; Same; Same; Judicial Notice; That an obese cabin attendant occupies more
space than a slim one is an unquestionable fact which courts can judicially recognize
without introduction of evidenceit would also be absurd to require airline companies to
reconfigure the aircraft in order to widen the aisles and exit doors just to accommodate
overweight cabin attendants; The biggest problem with an overweight cabin attendant is
the possibility of impeding passengers from evacuating the aircraft, should the occasion
call for itbeing overweight necessarily impedes mobility.There is no need to individually
evaluate their ability to perform their task. That an obese cabin attendant occupies more
space than a slim one is an unquestionable fact which courts can judicially recognize
without introduction of evidence. It would also be absurd to require airline companies to
reconfigure the aircraft in order to widen the aisles and exit doors just to accommodate
overweight cabin attendants like petitioner. The biggest problem with an overweight cabin
attendant is the possibility of impeding passengers from evacuating the aircraft, should the
occasion call for it. The job of a cabin attendant during emergencies is to speedily get the
passengers out of the aircraft safely. Being overweight necessarily impedes mobility.
Indeed, in an emergency situation, seconds are what cabin attendants are dealing with, not
minutes. Three lost seconds can translate into three lost lives. Evacuation might slow down
just because a wide-bodied cabin attendant is blocking the narrow aisles. These
possibilities are not remote.
Estoppel; Good faith demands that what is agreed upon shall be done.Petitioner is also
in estoppel. He does not dispute that the weight standards of PAL were made known to him
prior to his employment. He is presumed to know the weight limit that he must maintain at
all times. In fact, never did he question the authority of PAL when he was repeatedly asked
to trim down his weight. Bona fides exigit ut quod convenit fiat. Good faith demands that
what is agreed upon shall be done. Kung ang tao ay tapat kanyang tutuparin ang
napagkasunduan.
Administrative Law; Appeals; Factual findings of administrative agencies do not have
infallibility and must be set aside when they fail the test of arbitrariness.We are not
unmindful that findings of facts of administrative agencies, like the Labor Arbiter and the
NLRC, are accorded respect, even finality. The reason is simple: administrative agencies
are experts in matters within their specific and specialized jurisdiction. But the principle is
not a hard and fast rule. It only applies if the findings of facts are duly supported by
substantial evidence. If it can be shown that administrative bodies grossly misappreciated
evidence of such nature so as to compel a conclusion to the contrary, their findings of facts
must necessarily be reversed. Factual findings of administrative agencies do not have
infallibility and must be set aside when they fail the test of arbitrariness.
Bill of Rights; Equal Protection Clause; In the absence of governmental interference, the
liberties guaranteed by the Constitution cannot be invokedthe Bill of Rights is not meant
to be invoked against acts of private individuals.To make his claim more believable,
petitioner invokes the equal protection clause guaranty of the Constitution. However, in the
absence of governmental interference, the liberties guaranteed by the Constitution cannot
be invoked. Put differently, the Bill of Rights is not meant to be invoked against acts of
private individuals. Indeed, the United States Supreme Court, in interpreting the Fourteenth
Amendment, which is the source of our equal protection guarantee, is consistent in saying
that the equal protection erects no shield against private conduct, however discriminatory
or wrongful. Private actions, no matter how egregious, cannot violate the equal protection
guarantee.
Labor Law; Payroll Reinstatement; The option to exercise actual reinstatement or payroll
reinstatement belongs to the employer.The law is very clear. Although an award or order

of reinstatement is self-executory and does not require a writ of execution, the option to
exercise actual reinstatement or payroll reinstatement belongs to the employer. It does not
belong to the employee, to the labor tribunals, or even to the courts.
Same; Separation Pay; Exceptionally, separation pay is granted to a legally dismissed
employee as an act social justice, or based on equityin both instances, it is required
that the dismissal (1) was not for serious misconduct, and (2) does not reflect on the moral
character of the employee.A legally dismissed employee is not entitled to separation pay.
This may be deduced from the language of Article 279 of the Labor Code that [a]n
employee who is unjustly dismissed from work shall be entitled to reinstatement without
loss of seniority rights and other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary equivalent computed from the time
his compensation was withheld from him up to the time of his actual reinstatement. Luckily
for petitioner, this is not an ironclad rule. Exceptionally, separation pay is granted to a
legally dismissed employee as an act social justice, or based on equity. In both
instances, it is required that the dismissal (1) was not for serious misconduct; and (2) does
not reflect on the moral character of the employee. Here, We grant petitioner separation
pay equivalent to one-half (1/2) months pay for every year of service. It should include
regular allowances which he might have been receiving. We are not blind to the fact that he
was not dismissed for any serious misconduct or to any act which would reflect on his
moral character. We also recognize that his employment with PAL lasted for more or less a
decade.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Ramel C. Muria for petitioner.
Bienvenido T. Jamoralin, Jr. for respondent.
REYES, R.T.,J.:
THIS case portrays the peculiar story of an international flight steward who was dismissed
because of his failure to adhere to the weight standards of the airline company.
He is now before this Court via a petition for review on certiorari claiming that he was
illegally dismissed. To buttress his stance, he argues that (1) his dismissal does not fall
under 282(e) of the Labor Code; (2) continuing adherence to the weight standards of the
company is not a bona fide occupational qualification; and (3) he was discriminated against
because other overweight employees were promoted instead of being disciplined.
After a meticulous consideration of all arguments pro and con, We uphold the legality of
dismissal. Separation pay, however, should be awarded in favor of the employee as an act
of social justice or based on equity. This is so because his dismissal is not for serious
misconduct. Neither is it reflective of his moral character.
The Facts
Petitioner Armando G. Yrasuegui was a former international flight steward of Philippine
Airlines, Inc. (PAL). He stands five feet and eight inches (58) with a large body frame. The
proper weight for a man of his height and body structure is from 147 to 166 pounds, the
ideal weight being 166 pounds, as mandated by the Cabin and Crew Administration
Manual of PAL.
The weight problem of petitioner dates back to 1984. Back then, PAL advised him to go on
an extended vacation leave from December 29, 1984 to March 4, 1985 to address his
weight concerns. Apparently, petitioner failed to meet the companys weight standards,
prompting another leave without pay from March 5, 1985 to November 1985.
After meeting the required weight, petitioner was allowed to return to work. But petitioners
weight problem recurred. He again went on leave without pay from October 17, 1988 to
February 1989.
On April 26, 1989, petitioner weighed 209 pounds, 43 pounds over his ideal weight. In line
with company policy, he was removed from flight duty effective May 6, 1989 to July 3,

1989. He was formally requested to trim down to his ideal weight and report for weight
checks on several dates. He was also told that he may avail of the services of the company
physician should he wish to do so. He was advised that his case will be evaluated on July
3, 1989.
On February 25, 1989, petitioner underwent weight check. It was discovered that he
gained, instead of losing, weight. He was overweight at 215 pounds, which is 49 pounds
beyond the limit. Consequently, his off-duty status was retained.
On October 17, 1989, PAL Line Administrator Gloria Dizon personally visited petitioner at
his residence to check on the progress of his effort to lose weight. Petitioner weighed 217
pounds, gaining 2 pounds from his previous weight. After the visit, petitioner made a
commitment3 to reduce weight in a letter addressed to Cabin Crew Group Manager
Augusto Barrios. The letter, in full, reads:
Dear Sir:
I would like to guaranty my commitment towards a weight loss from 217
pounds to 200 pounds from today until 31 Dec. 1989.
From thereon, I promise to continue reducing at a reasonable
percentage until such time that my ideal weight is achieved.
Likewise, I promise to personally report to your office at the designated
time schedule you will set for my weight check.

Respectfully Yours,
F/S
Armando Yrasuegui
Despite the lapse of a ninety-day period given him to reach his ideal weight, petitioner
remained overweight. On January 3, 1990, he was informed of the PAL decision for him to
remain grounded until such time that he satisfactorily complies with the weight standards.
Again, he was directed to report every two weeks for weight checks.
Petitioner failed to report for weight checks. Despite that, he was given one more month to
comply with the weight requirement.
As usual, he was asked to report for weight check on different dates. He was reminded that
his grounding would continue pending satisfactory compliance with the weight standards.5
Again, petitioner failed to report for weight checks, although he was seen submitting his
passport for processing at the PAL Staff Service Division.
On April 17, 1990, petitioner was formally warned that a repeated refusal to report for
weight check would be dealt with accordingly. He was given another set of weight check
dates.6 Again, petitioner ignored the directive and did not report for weight checks. On
June 26, 1990, petitioner was required to explain his refusal to undergo weight checks.
When petitioner tipped the scale on July 30, 1990, he weighed at 212 pounds. Clearly, he
was still way over his ideal weight of 166 pounds.
From then on, nothing was heard from petitioner until he followed up his case requesting
for leniency on the latter part of 1992. He weighed at 219 pounds on August 20, 1992 and
205 pounds on November 5, 1992.
On November 13, 1992, PAL finally served petitioner a Notice of Administrative Charge for
violation of company standards on weight requirements. He was given ten (10) days from
receipt of the charge within which to file his answer and submit controverting evidence.
On December 7, 1992, petitioner submitted his Answer. Notably, he did not deny being
overweight. What he claimed, instead, is that his violation, if any, had already been
condoned by PAL since no action has been taken by the company regarding his case
since 1988. He also claimed that PAL discriminated against him because the company
has not been fair in treating the cabin crew members who are similarly situated.
On December 8, 1992, a clarificatory hearing was held where petitioner manifested that he
was undergoing a weight reduction program to lose at least two (2) pounds per week so as
to attain his ideal weight.

On June 15, 1993, petitioner was formally informed by PAL that due to his inability to attain
his ideal weight, and considering the utmost leniency extended to him which spanned a
period covering a total of almost five (5) years, his services were considered terminated
effective immediately.
His motion for reconsideration having been denied, petitioner filed a complaint for illegal
dismissal against PAL.
Labor Arbiter, NLRC and CA Dispositions
On November 18, 1998, Labor Arbiter Valentin C. Reyes ruled that petitioner was illegally
dismissed. The dispositive part of the Arbiter ruling runs as follows:
WHEREFORE, in view of the foregoing, judgment is hereby rendered, declaring
the complainants dismissal illegal, and ordering the respondent to reinstate him to
his former position or substantially equivalent one, and to pay him:
a.Back wages of Php10,500.00 per month from his dismissal on June
15, 1993 until reinstated, which for purposes of appeal is hereby set from June 15,
1993 up to August 15, 1998 at P651,000.00;
b.Attorneys fees of five percent (5%) of the total award.
SO ORDERED.
The Labor Arbiter held that the weight standards of PAL are reasonable in view of the
nature of the job of petitioner. However, the weight standards need not be complied with
under pain of dismissal since his weight did not hamper the performance of his duties.
Assuming that it did, petitioner could be transferred to other positions where his weight
would not be a negative factor. Notably, other overweight employees, i.e., Mr. Palacios, Mr.
Cui, and Mr. Barrios, were promoted instead of being disciplined.
Both parties appealed to the National Labor Relations Commission (NLRC).
On October 8, 1999, the Labor Arbiter issued a writ of execution directing the reinstatement
of petitioner without loss of seniority rights and other benefits.
On February 1, 2000, the Labor Arbiter denied the Motion to Quash Writ of Execution of
PAL.
On March 6, 2000, PAL appealed the denial of its motion to quash to the NLRC.
On June 23, 2000, the NLRC rendered judgment in the following tenor:
WHEREFORE, premises considered[,] the Decision of the Arbiter dated 18
November 1998 as modified by our findings herein, is hereby AFFIRMED and that
part of the dispositive portion of said decision concerning complainants
entitlement to back wages shall be deemed to refer to complainants entitlement
to his full back wages, inclusive of allowances and to his other benefits or their
monetary equivalent instead of simply back wages, from date of dismissal until his
actual reinstatement or finality hereof. Respondent is enjoined to manifests (sic)
its choice of the form of the reinstatement of complainant, whether physical or
through payroll within ten (10) days from notice failing which, the same
shall be deemed as complainants reinstatement through payroll and execution
in case of non-payment shall accordingly be issued by the Arbiter. Both appeals of
respondent thus, are DISMISSED for utter lack of merit.
According to the NLRC, obesity, or the tendency to gain weight uncontrollably regardless
of the amount of food intake, is a disease in itself. As a consequence, there can be no
intentional defiance or serious misconduct by petitioner to the lawful order of PAL for him to
lose weight.
Like the Labor Arbiter, the NLRC found the weight standards of PAL to be reasonable.
However, it found as unnecessary the Labor Arbiter holding that petitioner was not remiss
in the performance of his duties as flight steward despite being overweight. According to
the NLRC, the Labor Arbiter should have limited himself to the issue of whether the failure
of petitioner to attain his ideal weight constituted willful defiance of the weight standards of
PAL.

PAL moved for reconsideration to no avail. Thus, PAL elevated the matter to the Court of
Appeals (CA) via a petition for certiorari under Rule 65 of the 1997 Rules of Civil
Procedure.
By Decision dated August 31, 2004, the CA reversed31 the NLRC:
WHEREFORE, premises considered, we hereby GRANT the petition. The
assailed NLRC decision is declared NULL and VOID and is hereby SET ASIDE. The
private respondents complaint is hereby
DISMISSED. No costs.
SO ORDERED.
The CA opined that there was grave abuse of discretion on the part of the NLRC because it
looked at wrong and irrelevant considerations in evaluating the evidence of the parties.
Contrary to the NLRC ruling, the weight standards of PAL are meant to be a continuing
qualification for an employees position. The failure to adhere to the weight standards is an
analogous cause for the dismissal of an employee under Article 282(e) of the Labor Code
in relation to Article 282(a). It is not willful disobedience as the NLRC seemed to suggest.
Said the CA, the element of willfulness that the NLRC decision cites is an irrelevant
consideration in arriving at a conclusion on whether the dismissal is legally proper. In other
words, the relevant question to ask is not one of willfulness but one of reasonableness of
the standard and whether or not the employee qualifies or continues to qualify under this
standard.
Just like the Labor Arbiter and the NLRC, the CA held that the weight standards of PAL are
reasonable. Thus, petitioner was legally dismissed because he repeatedly failed to meet
the prescribed weight standards. It is obvious that the issue of discrimination was only
invoked by petitioner for purposes of escaping the result of his dismissal for being
overweight.
On May 10, 2005, the CA denied petitioners motion for reconsideration. Elaborating on its
earlier ruling, the CA held that the weight standards of PAL are a bona fide occupational
qualification which, in case of violation, justifies an employees separation from the
service.
Issues
In this Rule 45 petition for review, the following issues are posed for resolution:
I.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT
PETITIONERS OBESITY CAN BE A GROUND FOR DISMISSAL UNDER PARAGRAPH
(e) OF ARTICLE 282 OF THE LABOR CODE OF THE PHILIPPINES;
II.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT
PETITIONERS DISMISSAL FOR OBESITY CAN BE PREDICATED ON THE BONA FIDE
OCCUPATIONAL QUALIFICATION (BFOQ) DEFENSE;
III.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT
PETITIONER WAS NOT UNDULY DISCRIMINATED AGAINST WHEN HE WAS
DISMISSED WHILE OTHER OVERWEIGHT CABIN ATTENDANTS WERE EITHER
GIVEN FLYING DUTIES OR PROMOTED;
IV.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED WHEN IT BRUSHED
ASIDE PETITIONERS CLAIMS FOR REINSTATEMENT [AND] WAGES ALLEGEDLY FOR
BEING MOOT AND ACADEMIC.
Our Ruling
I.The obesity of petitioner is a ground for dismissal under Article 282(e) of the
Labor Code.
A reading of the weight standards of PAL would lead to no other conclusion than that they
constitute a continuing qualification of an employee in order to keep the job. Tersely put, an
employee may be dismissed the moment he is unable to comply with his ideal weight as

prescribed by the weight standards. The dismissal of the employee would thus fall under
Article 282(e) of the Labor Code. As explained by the CA:
x x x [T]he standards violated in this case were not mere orders of the
employer; they were the prescribed weights that a cabin crew must maintain in order to
qualify for and keep his or her position in the company. In other words, they were standards
that establish continuing qualifications for an employees position. In this sense, the failure
to maintain these standards does not fall under Article 282(a) whose express terms require
the element of willfulness in order to be a ground for dismissal. The failure to meet the
employers qualifying standards is in fact a ground that does not squarely fall under
grounds (a) to (d) and is therefore one that falls under Article 282(e)the other causes
analogous to the foregoing.
By its nature, these qualifying standards are norms that apply prior to and after
an employee is hired. They apply prior to employment because these are the standards a
job applicant must initially meet in order to be hired. They apply after hiring because an
employee must continue to meet these standards while on the job in order to keep his job.
Under this perspective, a violation is not one of the faults for which an employee can be
dismissed pursuant to pars. (a) to (d) of Article 282; the employee can be dismissed simply
because he no longer qualifies for his job irrespective of whether or not the failure to
qualify was willful or intentional. x x x
Petitioner, though, advances a very interesting argument. He claims that obesity is a
physical abnormality and/or illness. Relying on Nadura v. Benguet Consolidated, Inc., he
says his dismissal is illegal:
Conscious of the fact that Naduras case cannot be made to fall squarely within
the specific causes
enumerated in subparagraphs 1(a) to (e), Benguet invokes the
provisions of subparagraph 1(f) and says that Naduras illnessoccasional attacks of
asthmais a cause analogous to them.
Even a cursory reading of the legal provision under consideration is sufficient to
convince anyone that, as the trial court said, illness cannot be included as an analogous
cause by any stretch of imagination.
It is clear that, except the just cause mentioned in sub-paragraph 1(a), all the
others expressly enumerated in the law are due to the voluntary and/or willful act of the
employee. How Naduras illness
could be considered as analogous to any of them is
beyond our understanding, there being no claim or pretense that the same was contracted
through his own voluntary act.
The reliance on Nadura is off-tangent. The factual milieu in Nadura is substantially different
from the case at bar. First, Nadura was not decided under the Labor Code. The law applied
in that case was Republic Act (RA) No. 1787. Second, the issue of flight safety is absent in
Nadura, thus, the rationale there cannot apply here. Third, in Nadura, the employee who
was a miner, was laid off from work because of illness, i.e., asthma. Here, petitioner was
dismissed for his failure to meet the weight standards of PAL. He was not dismissed due to
illness. Fourth, the issue in Nadura is whether or not the dismissed employee is entitled to
separation pay and damages. Here, the issue centers on the propriety of the dismissal of
petitioner for his failure to meet the weight standards of PAL. Fifth, in Nadura, the
employee was not accorded due process. Here, petitioner was accorded utmost leniency.
He was given more than four (4) years to comply with the weight standards of PAL.
In the case at bar, the evidence on record militates against petitioners claims that obesity
is a disease. That he was able to reduce his weight from 1984 to 1992 clearly shows that it
is possible for him to lose weight given the proper attitude, determination, and selfdiscipline. Indeed, during the clarificatory hearing on December 8, 1992, petitioner himself
claimed that [t]he issue is could I bring my weight down to ideal weight which is 172, then
the answer is yes. I can do it now.
True, petitioner claims that reducing weight is costing him a lot of expenses. However,
petitioner has only himself to blame. He could have easily availed the assistance of the
company physician, per the advice of PAL. He chose to ignore the suggestion. In fact, he

repeatedly failed to report when required to undergo weight checks, without offering a valid
explanation. Thus, his fluctuating weight indicates absence of willpower rather than an
illness.
Petitioner cites Bonnie Cook v. State of Rhode Island, Department of Mental Health,
Retardation and Hospitals, decided by the United States Court of Appeals (First Circuit). In
that case, Cook worked from 1978 to 1980 and from 1981 to 1986 as an institutional
attendant for the mentally retarded at the Ladd Center that was being operated by
respondent. She twice resigned voluntarily with an unblemished record. Even respondent
admitted that her performance met the Centers legitimate expectations. In 1988, Cook reapplied for a similar position. At that time, she stood 52 tall and weighed over 320
pounds. Respondent claimed that the morbid obesity of plaintiff compromised her ability to
evacuate patients in case of emergency and it also put her at greater risk of serious
diseases.
Cook contended that the action of respondent amounted to discrimination on the basis of a
handicap. This was in direct violation of Section 504(a) of the Rehabilitation Act of 1973,
which incorporates the remedies contained in Title VI of the Civil Rights Act of 1964.
Respondent claimed, however, that morbid obesity could never constitute a handicap
within the purview of the Rehabilitation Act. Among others, obesity is a mutable condition,
thus plaintiff could simply lose weight and rid herself of concomitant disability.
The appellate Court disagreed and held that morbid obesity is a disability under the
Rehabilitation Act and that respondent discriminated against Cook based on perceived
disability. The evidence included expert testimony that morbid obesity is a physiological
disorder. It involves a dysfunction of both the metabolic system and the neurological
appetitesuppressing signal system, which is capable of causing adverse effects within
the musculoskeletal, respiratory, and cardiovascular systems. Notably, the Court stated that
mutability is relevant only in determining the substantiality of the limitation flowing from a
given impairment, thus mutability only precludes those conditions that an individual can
easily and quickly reverse by behavioral alteration.
Unlike Cook, however, petitioner is not morbidly obese. In the words of the District Court for
the District of Rhode Island, Cook was sometime before 1978 at least one hundred
pounds more than what is considered appropriate of her height. According to the Circuit
Judge, Cook weighed over 320 pounds in 1988. Clearly, that is not the case here. At his
heaviest, petitioner was only less than 50 pounds over his ideal weight.
In fine, We hold that the obesity of petitioner, when placed in the context of his work as
flight attendant, becomes an analogous cause under Article 282(e) of the Labor Code that
justifies his dismissal from the service. His obesity may not be unintended, but is
nonetheless voluntary. As the CA correctly puts it, [v]oluntariness basically means that the
just cause is solely attributable to the employee without any external force influencing or
controlling his actions. This element runs through all just causes under Article 282, whether
they be in the nature of a wrongful action or omission. Gross and habitual neglect, a
recognized just cause, is considered voluntary although it lacks the element of intent found
in Article 282(a), (c), and (d).
II.The dismissal of petitioner can be predicated on the bona fide occupational
qualification defense.
Employment in particular jobs may not be limited to persons of a particular sex, religion, or
national origin unless the employer can show that sex, religion, or national origin is an
actual qualification for performing the job. The qualification is called a bona fide
occupational qualification (BFOQ). In the United States, there are a few federal and many
state job discrimination laws that contain an exception allowing an employer to engage in
an otherwise unlawful form of prohibited discrimination when the action is based on a
BFOQ necessary to the normal operation of a business or enterprise.
Petitioner contends that BFOQ is a statutory defense. It does not exist if there is no statute
providing for it. Further, there is no existing BFOQ statute that could justify his dismissal.
Both arguments must fail.

First, the Constitution, the Labor Code, and RA No. 7277or the Magna Carta for Disabled
Persons62 contain provisions similar to BFOQ.
Second, in British Columbia Public Service Employee CommissionA (BSPSERC) v. The
British Columbia Government and Service Employees Union (BCGSEU), the Supreme
Court of Canada adopted the so-called Meiorin Test in determining whether an
employment policy is justified. Under this test, (1) the employer must show that it adopted
the standard for a purpose rationally connected to the performance of the job; (2) the
employer must establish that the standard is reasonably necessary to the accomplishment
of that work-related purpose; and (3) the employer must establish that the standard is
reasonably necessary in order to accomplish the legitimate work-related purpose. Similarly,
in Star Paper Corporation v. Simbol, this Court held that in order to justify a BFOQ, the
employer must prove that (1) the employment qualification is reasonably related to the
essential operation of the job involved; and (2) that there is factual basis for believing that
all or substantially all persons meeting the qualification would be unable to properly
perform the duties of the job.
In short, the test of reasonableness of the company policy is used because it is parallel to
BFOQ. BFOQ is valid provided it reflects an inherent quality reasonably necessary for
satisfactory job performance.
In Duncan Association of Detailman-PTGWTO v. Glaxo Wellcome Philippines, Inc., the
Court did not hesitate to pass upon the validity of a company policy which prohibits its
employees from marrying employees of a rival company. It was held that the company
policy is reasonable considering that its purpose is the protection of the interests of the
company against possible competitor infiltration on its trade secrets and procedures.
Verily, there is no merit to the argument that BFOQ cannot be applied if it has no
supporting statute. Too, the Labor Arbiter, NLRC, and CA are one in holding that the weight
standards of PAL are reasonable. A common carrier, from the nature of its business and for
reasons of public policy, is bound to observe extraordinary diligence for the safety of the
passengers it transports. It is bound to carry its passengers safely as far as human care
and foresight can provide, using the utmost diligence of very cautious persons, with due
regard for all the circumstances.
The law leaves no room for mistake or oversight on the part of a common carrier. Thus, it is
only logical to hold that the weight standards of PAL show its effort to comply with the
exacting obligations imposed upon it by law by virtue of being a common carrier.
The business of PAL is air transportation. As such, it has committed itself to safely transport
its passengers. In order to achieve this, it must necessarily rely on its employees, most
particularly the cabin flight deck crew who are on board the aircraft. The weight standards
of PAL should be viewed as imposing strict norms of discipline upon its employees.
In other words, the primary objective of PAL in the imposition of the weight standards for
cabin crew is flight safety. It cannot be gainsaid that cabin attendants must maintain agility
at all times in order to inspire passenger confidence on their ability to care for the
passengers when something goes wrong. It is not farfetched to say that airline companies,
just like all common carriers, thrive due to public confidence on their safety records.
People, especially the riding public, expect no less than that airline companies transport
their passengers to their respective destinations safely and soundly. A lesser performance
is unacceptable.
The task of a cabin crew or flight attendant is not limited to serving meals or attending to
the whims and caprices of the passengers. The most important activity of the cabin crew is
to care for the safety of passengers and the evacuation of the aircraft when an emergency
occurs. Passenger safety goes to the core of the job of a cabin attendant. Truly, airlines
need cabin attendants who have the necessary strength to open emergency doors, the
agility to attend to passengers in cramped working conditions, and the stamina to withstand
grueling flight schedules.
On board an aircraft, the body weight and size of a cabin attendant are important factors to
consider in case of emergency. Aircrafts have constricted cabin space, and narrow aisles

and exit doors. Thus, the arguments of respondent that [w]hether the airlines flight
attendants are overweight or not has no direct relation to its mission of transporting
passengers to their destination; and that the weight standards has nothing to do with
airworthiness of respondents airlines, must fail.
The rationale in Western Air Lines v. Criswell relied upon by petitioner cannot apply to his
case. What was involved there were two (2) airline pilots who were denied reassignment as
flight engineers upon reaching the age of 60, and a flight engineer who was forced to retire
at age 60. They sued the airline company, alleging that the age-60 retirement for flight
engineers violated the Age Discrimination in Employment Act of 1967. Age-based BFOQ
and being overweight are not the same. The case of overweight cabin attendants is
another matter. Given the cramped cabin space and narrow aisles and emergency exit
doors of the airplane, any overweight cabin attendant would certainly have difficulty
navigating the cramped cabin area.
In short, there is no need to individually evaluate their ability to perform their task. That an
obese cabin attendant occupies more space than a slim one is an unquestionable fact
which courts can judicially recognize without introduction of evidence. It would also be
absurd to require airline companies to reconfigure the aircraft in order to widen the aisles
and exit doors just to accommodate overweight cabin attendants like petitioner.
The biggest problem with an overweight cabin attendant is the possibility of impeding
passengers from evacuating the aircraft, should the occasion call for it. The job of a cabin
attendant during emergencies is to speedily get the passengers out of the aircraft safely.
Being overweight necessarily impedes mobility. Indeed, in an emergency situation,
seconds are what cabin attendants are dealing with, not minutes. Three lost seconds can
translate into three lost lives. Evacuation might slow down just because a wide-bodied
cabin attendant is blocking the narrow aisles. These possibilities are not remote.
Petitioner is also in estoppel. He does not dispute that the weight standards of PAL were
made known to him prior to his employment. He is presumed to know the weight limit that
he must maintain at all times. In fact, never did he question the authority of PAL when he
was repeatedly asked to trim down his weight. Bona fides exigit ut quod convenit fiat. Good
faith demands that what is agreed upon shall be done. Kung ang tao ay tapat kanyang
tutuparin ang napagkasunduan.
Too, the weight standards of PAL provide for separate weight limitations based on height
and body frame for both male and female cabin attendants. A progressive discipline is
imposed to allow non-compliant cabin attendants sufficient opportunity to meet the weight
standards. Thus, the clear-cut rules obviate any possibility for the commission of abuse or
arbitrary action on the part of PAL.
III.Petitioner failed to substantiate his claim that he was discriminated against by
PAL.
Petitioner next claims that PAL is using passenger safety as a convenient excuse to
discriminate against him. We are constrained, however, to hold otherwise. We agree with
the CA that [t]he element of discrimination came into play in this case as a secondary
position for the private respondent in order to escape the consequence of dismissal that
being overweight entailed. It is a confession-and-avoidance position that impliedly admitted
the cause of dismissal, including the reasonableness of the applicable standard and the
private respondents failure to comply. It is a basic rule in evidence that each party must
prove his affirmative allegation.
Since the burden of evidence lies with the party who asserts an affirmative allegation,
petitioner has to prove his allegation with particularity. There is nothing on the records
which could support the finding of discriminatory treatment. Petitioner cannot establish
discrimination by simply naming the supposed cabin attendants who are allegedly similarly
situated with him. Substantial proof must be shown as to how and why they are similarly
situated and the differential treatment petitioner got from PAL despite the similarity of his
situation with other employees.

Indeed, except for pointing out the names of the supposed overweight cabin attendants,
petitioner miserably failed to indicate their respective ideal weights; weights over their ideal
weights; the periods they were allowed to fly despite their being overweight; the particular
flights assigned to them; the discriminating treatment they got from PAL; and other relevant
data that could have adequately established a case of discriminatory treatment by PAL. In
the words of the CA, PAL really had no substantial case of discrimination to meet.
We are not unmindful that findings of facts of administrative agencies, like the Labor Arbiter
and the NLRC, are accorded respect, even finality. The reason is simple: administrative
agencies are experts in matters within their specific and specialized jurisdiction.But the
principle is not a hard and fast rule. It only applies if the findings of facts are duly supported
by substantial evidence. If it can be shown that administrative bodies grossly
misappreciated evidence of such nature so as to compel a conclusion to the contrary, their
findings of facts must necessarily be reversed. Factual findings of administrative agencies
do not have infallibility and must be set aside when they fail the test of arbitrariness.
Here, the Labor Arbiter and the NLRC inexplicably misappreciated evidence. We thus
annul their findings.
To make his claim more believable, petitioner invokes the equal protection clause guaranty
of the Constitution. However, in the absence of governmental interference, the liberties
guaranteed by the Constitution cannot be invoked. Put differently, the Bill of Rights is not
meant to be invoked against acts of private individuals. Indeed, the United States Supreme
Court, in interpreting the Fourteenth Amendment,which is the source of our equal
protection guarantee, is consistent in saying that the equal protection erects no shield
against private conduct, however discriminatory or wrongful.Private actions, no matter how
egregious, cannot violate the equal protection guarantee.
IV.The claims of petitioner for reinstatement and wages are moot.
As his last contention, petitioner avers that his claims for reinstatement and wages have
not been mooted. He is entitled to reinstatement and his full backwages, from the time he
was illegally dismissed up to the time that the NLRC was reversed by the CA.
At this point, Article 223 of the Labor Code finds relevance:
In any event, the decision of the Labor Arbiter reinstating a dismissed or
separated employee, insofar
as the reinstatement aspect is concerned, shall
immediately be executory, even pending appeal. The employee shall either be admitted
back to work under the same terms and conditions prevailing prior to
his dismissal or
separation or, at the option of the employer, merely reinstated in the payroll. The posting
of a bond by the employer shall not stay the execution for reinstatement provided
herein.
The law is very clear. Although an award or order of reinstatement is self-executory and
does not require a writ of execution, the option to exercise actual reinstatement or payroll
reinstatement belongs to the employer. It does not belong to the employee, to the labor
tribunals, or even to the courts.
Contrary to the allegation of petitioner that PAL did everything under the sun to frustrate
his immediate return to his previous position, there is evidence that PAL opted to
physically reinstate him to a substantially equivalent position in accordance with the order
of the Labor Arbiter. In fact, petitioner duly received the return to work notice on February
23, 2001, as shown by his signature.
Petitioner cannot take refuge in the pronouncements of the Court in a case that [t]he
unjustified refusal of the employer to reinstate the dismissed employee entitles him to
payment of his salaries effective from the time the employer failed to reinstate him despite
the issuance of a writ of execution and even if the order of reinstatement of the Labor
Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and
pay the wages of the employee during the period of appeal until reversal by the higher
court. He failed to prove that he complied with the return to work order of PAL. Neither
does it appear on record that he actually rendered services for PAL from the moment he
was dismissed, in order to insist on the payment of his full back wages.

In insisting that he be reinstated to his actual position despite being overweight, petitioner
in effect wants to render the issues in the present case moot. He asks PAL to comply with
the impossible. Time and again, the Court ruled that the law does not exact compliance
with the impossible.
V.Petitioner is entitled to separation pay.
Be that as it may, all is not lost for petitioner.
Normally, a legally dismissed employee is not entitled to separation pay. This may be
deduced from the language of Article 279 of the Labor Code that [a]n employee who is
unjustly dismissed from work shall be entitled to reinstatement without loss of seniority
rights and other privileges and to his full back wages, inclusive of allowances, and to his
other benefits or their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement. Luckily for petitioner, this is
not an ironclad rule.
Exceptionally, separation pay is granted to a legally dismissed employee as an act social
justice, or based on equity. In both instances, it is required that the dismissal (1) was not
for serious misconduct; and (2) does not reflect on the moral character of the employee.
Here, We grant petitioner separation pay equivalent to one-half (1/2) months pay for every
year of service. It should include regular allowances which he might have been receiving.
We are not blind to the fact that he was not dismissed for any serious misconduct or to any
act which would reflect on his moral character. We also recognize that his employment with
PAL lasted for more or less a decade.
WHEREFORE, the appealed Decision of the Court of Appeals is AFFIRMED but
MODIFIED in that petitioner Armando G. Yrasuegui is entitled to separation pay in an
amount equivalent to one-half (1/2) months pay for every year of service, which should
include his regular allowances. [Yrasuegui vs. Philippine Airlines, Inc., 569 SCRA 467
(2008)]
STAR PAPER CORPORATION, JOSEPHINE ONGSITCO & SEBASTIAN CHUA,
petitioners, vs. RONALDO D. SIMBOL, WILFREDA N. COMIA & LORNA E. ESTRELLA,
respondents.
G.R. No. 164774. April 12, 2006.*
Labor Law; Management Prerogatives; Employer Policies; Nepotism; It is true that the
policy of the petitioners prohibiting close relatives from working in the same company takes
the nature of an anti-nepotism employment policy.It is true that the policy of petitioners
prohibiting close relatives from working in the same company takes the nature of an antinepotism employment policy. Companies adopt these policies to prevent the hiring of
unqualified persons based on their status as a relative, rather than upon their ability. These
policies focus upon the potential employment problems arising from the perception of
favoritism exhibited towards relatives. With more women entering the workforce, employers
are also enacting employment policies specifically prohibiting spouses from working for the
same company. We note that two types of employment policies involve spouses: policies
banning only spouses from working in the same company (no-spouse employment
policies), and those banning all immediate family members, including spouses, from
working in the same company (anti-nepotism employment policies).
Same; Same; Same; Same; Two Theories of Employment DiscriminationDisparate
Treatment and Disparate Impact; Words and Phrases; Under the disparate treatment
analysis, the employer must prove that an employment policy is discriminatory on its face;
To establish disparate impact, the complainants must prove that a facially neutral policy
has a disproportionate effect on a particular class.Unlike in our jurisdiction where there is
no express prohibition on marital discrimination, there are twenty state statutes in the
United States prohibiting marital discrimination. Some state courts have been confronted
with the issue of whether no-spouse policies violate their laws prohibiting both marital
status and sex discrimination. In challenging the anti-nepotism employment policies in the

United States, complainants utilize two theories of employment discrimination: the

disparate treatment and the disparate impact. Under the disparate treatment analysis, the
plaintiff must prove that an employment policy is discriminatory on its face. No-spouse
employment policies requiring an employee of a particular sex to either quit, transfer, or be
fired are facially discriminatory. For example, an employment policy prohibiting the
employer from hiring wives of male employees, but not husbands of female employees, is
discriminatory on its face. On the other hand, to establish disparate impact, the
complainants must prove that a facially neutral policy has a disproportionate effect on a
particular class. For example, although most employment policies do not expressly indicate
which spouse will be required to transfer or leave the company, the policy often
disproportionately affects one sex.
Same; Same; Same; Marital Status Discrimination; The courts narrowly interpreting marital
status to refer only to a persons status as married, single, divorced, or widowed reason
that if the legislature intended a broader definition it would have either chosen different
language or specified its intent.The courts narrowly interpreting marital status to refer
only to a persons status as married, single, divorced, or widowed reason that if the
legislature intended a broader definition it would have either chosen different language or
specified its intent. They hold that the relevant inquiry is if one is married rather than to
whom one is married. They construe marital status discrimination to include only whether a
person is single, married, divorced, or widowed and not the identity, occupation, and place
of employment of ones spouse. These courts have upheld the questioned policies and
ruled that they did not violate the marital status discrimination provision of their respective
state statutes.
Same; Same; Same; Same; Words and Phrases; The courts that have broadly construed
the term marital status rule that it encompassed the identity, occupation and employment
of ones spouse, and strike down the no-spouse employment policies based on the broad
legislative intent of the state statute, and further hold that the absence of a bona fide
occupational qualification invalidates a rule denying employment to one spouse due to the
current employment of the other spouse in the same office; This is known as the bona fide
occupational qualification exception.The courts that have broadly construed the term
marital status rule that it encompassed the identity, occupation and employment of ones
spouse. They strike down the no-spouse employment policies based on the broad
legislative intent of the state statute. They reason that the no-spouse employment policy
violate the marital status provision because it arbitrarily discriminates against all spouses of
present employees without regard to the actual effect on the individuals qualifications or
work performance. These courts also find the no-spouse employment policy invalid for
failure of the employer to present any evidence of business necessity other than the
general perception that spouses in the same workplace might adversely affect the
business.They hold that the absence of such a bona fide occupational qualification
invalidates a rule denying employment to one spouse due to the current employment of the
other spouse in the same office. Thus, they rule that unless the employer can prove that
the reasonable demands of the business require a distinction based on marital status and
there is no better available or acceptable policy which would better accomplish the
business purpose, an employer may not discriminate against an employee based on the
identity of the employees spouse. This is known as the bona fide occupational qualification
exception.
Same; Same; Same; Same; Occupational Qualifications; To justify a bona fide occupational
qualification, the employer must prove two factors: (1) that the employment qualification is
reasonably related to the essential operation of the job involved; and, (2) that there is a
factual basis for believing that all or substantially all persons meeting the qualification
would be unable to properly perform the duties of the job.We note that since the finding
of a bona fide occupational qualification justifies an employers no-spouse rule, the
exception is interpreted strictly and narrowly by these state courts. There must be a
compelling business necessity for which no alternative exists other than the discriminatory

practice. To justify a bona fide occupational qualification, the employer must prove two
factors: (1) that the employment qualification is reasonably related to the essential
operation of the job involved; and, (2) that there is a factual basis for believing that all or
substantially all persons meeting the qualification would be unable to properly perform the
duties of the job. The concept of a bona fide occupational qualification is not foreign in our
jurisdiction. We employ the standard of reasonableness of the company policy which is
parallel to the bona fide occupational qualification requirement. In the recent case of
Duncan Association of Detailman-PTGWO and Pedro Tecson v. Glaxo Wellcome
Philippines, Inc., we passed on the validity of the policy of a pharmaceutical company
prohibiting its employees from marrying employees of any competitor company.
Same; Same; Same; Same; Same; The cases of Duncan Association of DetailmentPTGWO v. Glaxo Wellcome Philippines, Inc., G.R. No. 162994, 17 September 2004, 438
SCRA 343, and Philippine Telegraphy and Telephone Company v. National Labor Relations
Commission, G.R. No. 118978, 23 May 1997, 272 SCRA 596, instruct that the requirement
of reasonableness must be clearly established to uphold a questioned employment policy.
The cases of Duncan and PT&T instruct us that the requirement of reasonableness must
be clearly established to uphold the questioned employment policy. The employer has the
burden to prove the existence of a reasonable business necessity. The burden was
successfully discharged in Duncan but not in PT&T.
Same; Same; Same; Same; Same; That the company did not just want to have two (2) or
more of its employees related between the third degree by affinity and/or consanguinity is
lamethe policy is premised on the mere fear that employees married to each other will be
less efficient; If the court were to uphold the questioned rule without valid justification, the
employer can create policies based on an unproven presumption of a perceived danger at
the expense of an employees right to security of tenure.Petitioners sole contention that
the company did not just want to have two (2) or more of its employees related between
the third degree by affinity and/or consanguinity is lame. That the second paragraph was
meant to give teeth to the first paragraph of the questioned rule is evidently not the valid
reasonable business necessity required by the law. It is significant to note that in the case
at bar, respondents were hired after they were found fit for the job, but were asked to
resign when they married a co-employee. Petitioners failed to show how the marriage of
Simbol, then a Sheeting Machine Operator, to Alma Dayrit, then an employee of the
Repacking Section, could be detrimental to its business operations. Neither did petitioners
explain how this detriment will happen in the case of Wilfreda Comia, then a Production
Helper in the Selecting Department, who married Howard Comia, then a helper in the
cutter-machine. The policy is premised on the mere fear that employees married to each
other will be less efficient. If we uphold the questioned rule without valid justification, the
employer can create policies based on an unproven presumption of a perceived danger at
the expense of an employees right to security of tenure.
Same; Same; Same; Same; Same; The failure to prove a legitimate business concern in
imposing an employer policy cannot prejudice the employees right to be free from arbitrary
discrimination based upon stereotypes of married persons working together in one
company.Petitioners contend that their policy will apply only when one employee marries
a co-employee, but they are free to marry persons other than co-employees. The
questioned policy may not facially violate Article 136 of the Labor Code but it creates a
disproportionate effect and under the disparate impact theory, the only way it could pass
judicial scrutiny is a showing that it is reasonable despite the discriminatory, albeit
disproportionate, effect. The failure of petitioners to prove a legitimate business concern in
imposing the questioned policy cannot prejudice the employees right to be free from
arbitrary discrimination based upon stereotypes of married persons working together in one
company.
Same; Same; Same; Same; The protection given to labor in this jurisdiction is vast and
extensive that the Supreme Court cannot prudently draw inferences from the legislatures
silence that married persons are not protected under the Constitution and declare valid a

policy based on a prejudice or stereotype.The absence of a statute expressly prohibiting

marital discrimination in our jurisdiction cannot benefit the petitioners. The protection given
to labor in our jurisdiction is vast and extensive that we cannot prudently draw inferences
from the legislatures silence that married persons are not protected under our Constitution
and declare valid a policy based on a prejudice or stereotype. Thus, for failure of
petitioners to present undisputed proof of a reasonable business necessity, we rule that the
questioned policy is an invalid exercise of management prerogative. Corollarily, the issue
as to whether respondents Simbol and Comia resigned voluntarily has become moot and
academic.
Same; Illegal Dismissals; Voluntary Resignation; In voluntary resignation, an employee is
compelled by personal reason(s) to disassociate himself from employmentit is done with
the intention of relinquishing an office, accompanied by the act of abandonment.The
contention of petitioners that Estrella was pressured to resign because she got
impregnated by a married man and she could not stand being looked upon or talked about
as immoral is incredulous. If she really wanted to avoid embarrassment and humiliation,
she would not have gone back to work at all. Nor would she have filed a suit for illegal
dismissal and pleaded for reinstatement. We have held that in voluntary resignation, the
employee is compelled by personal reason(s) to dissociate himself from employment. It is
done with the intention of relinquishing an office, accompanied by the act of abandonment.
Thus, it is illogical for Estrella to resign and then file a complaint for illegal dismissal. Given
the lack of sufficient evidence on the part of petitioners that the resignation was voluntary,
Estrellas dismissal is declared illegal.
PETITION for review on certiorari of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
F.F. Bonifacio, Jr. for petitioners.
Ernesto R. Arellano for respondents.
PUNO, J.:
We are called to decide an issue of first impression: whether the policy of the employer
banning spouses from working in the same company violates the rights of the employee
under the Constitution and the Labor Code or is a valid exercise of management
prerogative.
At bar is a Petition for Review on Certiorari of the Decision of the Court of Appeals dated
August 3, 2004 in CA-G.R. SP No. 73477 reversing the decision of the National Labor
Relations Commission (NLRC) which affirmed the ruling of the Labor Arbiter.
Petitioner Star Paper Corporation (the company) is a corporation engaged in trading
principally of paper products. Josephine Ongsitco is its Manager of the Personnel and
Administration Department while Sebastian Chua is its Managing Director.
The evidence for the petitioners show that respondents Ronaldo D. Simbol (Simbol),
Wilfreda N. Comia (Comia) and Lorna E. Estrella (Estrella) were all regular employees of
the company.
Simbol was employed by the company on October 27, 1993. He met Alma Dayrit, also an
employee of the company, whom he married on June 27, 1998. Prior to the marriage,
Ongsitco advised the couple that should they decide to get married, one of them should
resign pursuant to a company policy promulgated in 1995, viz.:
1. New applicants will not be allowed to be hired if in case he/she has [a] relative,
up to [the] 3rd degree of relationship, already employed by the company.
2. In case of two of our employees (both singles [sic], one male and another
female) developed a friendly
relationship during the course of their
employment and then decided to get married, one of them should
resign to
preserve the policy stated above.
Simbol resigned on June 20, 1998 pursuant to the company policy.

Comia was hired by the company on February 5, 1997. She met Howard Comia, a coemployee, whom she married on June 1, 2000. Ongsitco likewise reminded them that
pursuant to company policy, one must resign should they decide to get married. Comia
resigned on June 30, 2000.
Estrella was hired on July 29, 1994. She met Luisito Zuiga (Zuiga), also a co-worker.
Petitioners stated that Zuiga, a married man, got Estrella pregnant. The company
allegedly could have terminated her services due to immorality but she opted to resign on
December 21, 1999.
The respondents each signed a Release and Confirmation Agreement. They stated therein
that they have no money and property accountabilities in the company and that they
release the latter of any claim or demand of whatever nature.
Respondents offer a different version of their dismissal. Simbol and Comia allege that they
did not resign voluntarily; they were compelled to resign in view of an illegal company
policy. As to respondent Estrella, she alleges that she had a relationship with co-worker
Zuiga who misrepresented himself as a married but separated man. After he got her
pregnant, she discovered that he was not separated. Thus, she severed her relationship
with him to avoid dismissal due to the company policy. On November 30, 1999, she met an
accident and was advised by the doctor at the Orthopedic Hospital to recuperate for
twenty-one (21) days. She returned to work on December 21, 1999 but she found out that
her name was on-hold at the gate. She was denied entry. She was directed to proceed to
the personnel office where one of the staff handed her a memorandum. The memorandum
stated that she was being dismissed for immoral conduct. She refused to sign the
memorandum because she was on leave for twenty-one (21) days and has not been given
a chance to explain. The management asked her to write an explanation. However, after
submission of the explanation, she was nonetheless dismissed by the company. Due to her
urgent need for money, she later submitted a letter of resignation in exchange for her
thirteenth month pay.
Respondents later filed a complaint for unfair labor practice, constructive dismissal,
separation pay and attorneysfees. They averred that the aforementioned company policy
is illegal and contravenes Article 136 of the Labor Code. They also contended that they
were dismissed due to their union membership.
On May 31, 2001, Labor Arbiter Melquiades Sol del Rosario dismissed the complaint for
lack of merit, viz.:
[T]his company policy was decreed pursuant to what the respondent corporation
perceived as management prerogative. This management prerogative is quite
broad and encompassing for it covers hiring, work assignment, working method,
time, place and manner of work, tools to be used, processes to be followed,
supervision of workers, working regulations, transfer of employees, work
supervision, lay-off of workers and the discipline, dismissal and recall of workers.
Except as provided for or limited by special law, an employer is
free
to
regulate, according to his own discretion and judgment all the aspects of
employment.9 (Citations omitted.)
On appeal to the NLRC, the Commission affirmed the decision of the Labor Arbiter on
January 11, 2002.
Respondents filed a Motion for Reconsideration but was denied by the NLRC in a
Resolution dated August 8, 2002.
They appealed to respondent court via Petition for Certiorari. In its assailed Decision dated
August 3, 2004, the Court of Appeals reversed the NLRC decision, viz.:
WHEREFORE, premises considered, the May 31, 2002 (sic) Decision of the
National Labor Relations Commission is hereby REVERSED and SET ASIDE and
a new one is entered as follows:
(1) Declaring illegal, the petitioners dismissal from employment and ordering
private respondents to reinstate petitioners to their former positions without loss of

seniority rights with full back wages from the time of their dismissal until actual
reinstatement; and
(2) Ordering private respondents to pay petitioners attorneys fees amounting to
10% of the award and thecost of this suit.
On appeal to this Court, petitioners contend that the Court of Appeals erred in holding that:
1. X X X THE SUBJECT 1995 POLICY/REGULATION IS VIOLATIVE OF THE
CONSTITUTIONAL RIGHTS
TOWARDS MARRIAGE AND THE FAMILY OF
EMPLOYEES AND OF ARTICLE 136 OF THE LABOR CODE; AND
2. X X X RESPONDENTS RESIGNATIONS WERE FAR FROM VOLUNTARY.
We affirm.
The 1987 Constitution states our policy towards the protection of labor under the following
provisions, viz.:
Article II, Section 18. The State affirms labor as a primary social economic force. It
shall protect the rights of workers and promote their welfare.
xxx
Article XIII, Sec. 3. The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full employment and equality
of employment opportunities for all. It shall guarantee the rights of all workers to
self-organization, collective bargaining and negotiations, and peaceful concerted
activities, including the right to strike in accordance with law. They shall be entitled
to security of tenure,
humane conditions of work, and a living wage. They
shall also participate in policy and decision-making
processes affecting their
rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between
workers and employers, recognizing the right of labor to its just share in the fruits
of production and the right of enterprises to reasonable returns on investments,
and to expansion and growth.
The Civil Code likewise protects labor with the following provisions:
Art. 1700. The relation between capital and labor are not merely contractual. They
are so impressed with
public interest that labor contracts must yield to the common
good. Therefore, such contracts are subject to
the special laws on labor unions,
collective bargaining, strikes and lockouts, closed shop, wages, working
conditions, hours of labor and similar subjects.
Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be
construed in favor of the safety and decent living for the laborer.
The Labor Code is the most comprehensive piece of legislation protecting labor. The case
at bar involves Article 136 of the Labor Code which provides:
Art. 136. It shall be unlawful for an employer to require as a condition of
employment or continuation of
employment that a woman employee shall not get
married, or to stipulate expressly or tacitly that upon getting
married a woman employee
shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee merely by reason of her marriage.
Respondents submit that their dismissal violates the above provision. Petitioners allege
that its policy may appear to be contrary to Article 136 of the Labor Code but it assumes a
new meaning if read together with the first paragraph of the rule. The rule does not require
the woman employee to resign.
The employee spouses have the right to choose who between them should resign. Further,
they are free to marry persons other than co-employees. Hence, it is not the marital status
of the employee, per se, that is being discriminated. It is only intended to carry out its noemployment-for-relatives-within-the-third-degree-policy which is within the ambit of the
prerogatives of management.
It is true that the policy of petitioners prohibiting close relatives from working in the same
company takes the nature of an anti-nepotism employment policy. Companies adopt these
policies to prevent the hiring of unqualified persons based on their status as a relative,

rather than upon their ability. These policies focus upon the potential employment problems
arising from the perception of favoritism exhibited towards relatives.
With more women entering the workforce, employers are also enacting employment
policies specifically prohibiting spouses from working for the same company. We note that
two types of employment policies involve spouses: policies banning only spouses from
working in the same company (no-spouse employment policies), and those banning all
immediate family members, including spouses, from working in the same company (antinepotism employment policies).
Unlike in our jurisdiction where there is no express prohibition on marital discrimination,
there are twenty state statutes in the United States prohibiting marital discrimination. Some
state courts have been confronted with the issue of whether no-spouse policies violate their
laws prohibiting both marital status and sex discrimination.
In challenging the anti-nepotism employment policies in the United States, complainants
utilize two theories of employment discrimination: the disparate treatment and the disparate
impact. Under the disparate treatment analysis, the plaintiff must prove that an employment
policy is discriminatory on its face. No-spouse employment policies requiring an employee
of a particular sex to either quit, transfer, or be fired are facially discriminatory. For
example, an employment policy prohibiting the employer from hiring wives of male
employees, but not husbands of female employees, is discriminatory on its face.
On the other hand, to establish disparate impact, the complainants must prove that a
facially neutral policy has a disproportionate effect on a particular class. For example,
although most employment policies do not expressly indicate which spouse will be required
to transfer or leave the company, the policy often disproportionately affects one sex.
The state courts rulings on the issue depend on their interpretation of the scope of marital
status discrimination within the meaning of their respective civil rights acts. Though they
agree that the term marital status encompasses discrimination based on a persons
status as either married, single, divorced, or widowed, they are divided on whether the term
has a broader meaning. Thus, their decisions vary.
The courts narrowly interpreting marital status to refer only to a persons status as married,
single, divorced, or widowed reason that if the legislature intended a broader definition it
would have either chosen different language or specified its intent. They hold that the
relevant inquiry is if one is married rather than to whom one is married. They construe
marital status discrimination to include only whether a person is single, married, divorced,
or widowed and not the identity, occupation, and place of employment of ones spouse.
These courts have upheld the questioned policies and ruled that they did not violate the
marital status discrimination provision of their respective state statutes.
The courts that have broadly construed the term marital status rule that it encompassed
the identity, occupation and employment of ones spouse. They strike down the no-spouse
employment policies based on the broad legislative intent of the state statute. They reason
that the no-spouse employment policy violate the marital status provision because it
arbitrarily discriminates against all spouses of present employees without regard to the
actual effect on the individuals qualifications or work performance. These courts also find
the no-spouse employment policy invalid for failure of the employer to present any
evidence of business necessity other than the general perception that spouses in the same
workplace might adversely affect the business. They hold that the absence of such a bona
fide occupational qualification invalidates a rule denying employment to one spouse due to
the current employment of the other spouse in the same office. Thus, they rule that unless
the employer can prove that the reasonable demands of the business require a distinction
based on marital status and there is no better available or acceptable policy which would
better accomplish the business purpose, an employer may not discriminate against an
employee based on the identity of the employees spouse. This is known as the bona fide
occupational qualification exception.

We note that since the finding of a bona fide occupational qualification justifies an
employers no-spouse rule, the exception is interpreted strictly and narrowly by these state
courts. There must be a compelling business necessity for which no alternative exists other
than the discriminatory practice. To justify a bona fide occupational qualification, the
employer must prove two factors: (1) that the employment qualification is reasonably
related to the essential operation of the job involved; and, (2) that there is a factual basis
for believing that all or substantially all persons meeting the qualification would be unable
to properly perform the duties of the job.
The concept of a bona fide occupational qualification is not foreign in our jurisdiction. We
employ the standard of reasonableness of the company policy which is parallel to the bona
fide occupational qualification requirement. In the recent case of Duncan Association of
Detailman-PTGWO and Pedro Tecson v. Glaxo Wellcome Philippines, Inc.,we passed on
the validity of the policy of a pharmaceutical company prohibiting its employees from
marrying employees of any competitor company. We held that Glaxo has a right to guard
its trade secrets, manufacturing formulas, marketing strategies and other confidential
programs and information from competitors. We considered the prohibition against
personal or marital relationships with employees of competitor companies upon Glaxos
employees reasonable under the circumstances because relationships of that nature might
compromise the interests of Glaxo. In laying down the assailed company policy, we
recognized that Glaxo only aims to protect its interests against the possibility that a
competitor company will gain access to its secrets and procedures.
The requirement that a company policy must be reasonable under the circumstances to
qualify as a valid exercise of management prerogative was also at issue in the 1997 case
of Philippine Telegraph and Telephone Company v. NLRC. In said case, the employee was
dismissed in violation of petitioners policy of disqualifying from work any woman worker
who contracts marriage. We held that the company policy violates the right against
discrimination afforded all women workers under Article 136 of the Labor Code, but
established a permissible exception, viz.:
[A] requirement that a woman employee must remain unmarried could be justified
as a bona fide occupational qualification, or BFOQ, where the particular
requirements of the job would justify the same, but not on the ground of a general
principle, such as the desirability of spreading work in the workplace. A
requirement of that nature would be valid provided it reflects an inherent quality
reasonably necessary for satisfactory job performance. (Emphases supplied.)
The cases of Duncan and PT&T instruct us that the requirement of reasonableness must
be clearly established to uphold the questioned employment policy. The employer has the
burden to prove the existence of a reasonable business necessity. The burden was
successfully discharged in Duncan but not in PT&T.
We do not find a reasonable business necessity in the case at bar.
Petitioners sole contention that the company did not just want to have two (2) or more of
its employees related between the third degree by affinity and/or consanguinity is lame.
That the second paragraph was meant to give teeth to the first paragraph of the questioned
rule is evidently not the valid reasonable business necessity required by the law.
It is significant to note that in the case at bar, respondents were hired after they were found
fit for the job, but were asked to resign when they married a co-employee. Petitioners failed
to show how the marriage of Simbol, then a Sheeting Machine Operator, to Alma Dayrit,
then an employee of the Repacking Section, could be detrimental to its business
operations. Neither did petitioners explain how this detriment will happen in the case of
Wilfreda Comia, then a Production Helper in the Selecting Department, who married
Howard Comia, then a helper in the cutter-machine. The policy is premised on the mere
fear that employees married to each other will be less efficient. If we uphold the questioned
rule without valid justification, the employer can create policies based on an unproven
presumption of a perceived danger at the expense of an employees right to security of
tenure.

Petitioners contend that their policy will apply only when one employee marries a coemployee, but they are free to marry persons other than co-employees. The questioned
policy may not facially violate Article 136 of the Labor Code but it creates a
disproportionate effect and under the disparate impact theory, the only way it could pass
judicial scrutiny is a showing that it is reasonable despite the discriminatory, albeit
disproportionate, effect. The failure of petitioners to prove a legitimate business concern in
imposing the questioned policy cannot prejudice the employees right to be free from
arbitrary discrimination based upon stereotypes of married persons working together in one
company.
Lastly, the absence of a statute expressly prohibiting marital discrimination in our
jurisdiction cannot benefit the petitioners. The protection given to labor in our jurisdiction is
vast and extensive that we cannot prudently draw inferences from the legislatures silence
that married persons are not protected under our Constitution and declare valid a policy
based on a prejudice or stereotype. Thus, for failure of petitioners to present undisputed
proof of a reasonable business necessity, we rule that the questioned policy is an invalid
exercise of management prerogative. Corollary, the issue as to whether respondents
Simbol and Comia resigned voluntarily has become moot and academic.
As to respondent Estrella, the Labor Arbiter and the NLRC based their ruling on the
singular fact that her resignation letter was written in her own handwriting. Both ruled that
her resignation was voluntary and thus valid. The respondent court failed to categorically
rule whether Estrella voluntarily resigned but ordered that she be reinstated along with
Simbol and Comia.
Estrella claims that she was pressured to submit a resignation letter because she was in
dire need of money. We examined the records of the case and find Estrellas contention to
be more in accord with the evidence. While findings of fact by administrative tribunals like
the NLRC are generally given not only respect but, at times, finality, this rule admits of
exceptions, as in the case at bar.

Estrella avers that she went back to work on December 21, 1999 but was dismissed due to
her alleged immoral conduct. At first, she did not want to sign the termination papers but
she was forced to tender her resignation letter in exchange for her thirteenth month pay.
The contention of petitioners that Estrella was pressured to resign because she got
impregnated by a married man and she could not stand being looked upon or talked about
as immoral is incredulous. If she really wanted to avoid embarrassment and humiliation,
she would not have gone back to work at all. Nor would she have filed a suit for illegal
dismissal and pleaded for reinstatement. We have held that in voluntary resignation, the
employee is compelled by personal reason(s) to dissociate himself from employment. It is
done with the intention of relinquishing an office, accompanied by the act of abandonment.
Thus, it is illogical for Estrella to resign and then file a complaint for illegal dismissal. Given
the lack of sufficient evidence on the part of petitioners that the resignation was voluntary,
Estrellas dismissal is declared illegal.
IN VIEW WHEREOF, the Decision of the Court of Appeals in CA-G.R. SP No. 73477 dated
August 3, 2004 is AFFIRMED.
SO ORDERED.
Sandoval-Gutierrez, Corona, Azcuna and Garcia, JJ., concur.
Judgment affirmed.
Notes.The right to fix the work schedules of the employees rests principally on their
employer. (Sime Darby Pilipinas, Inc. vs. National Labor Relations Commission, 289 SCRA
86 [1998])
Rules and regulations operative in a workplace issued by employers are deemed part of
the contract of employment binding upon the employees who enter the service, on the
assumption that they are knowledgeable of such rules. (Salavarria vs. Letran College, 296
SCRA 184 [1998])
[Star Paper Corporation vs. Simbol, 487 SCRA 228(2006)]