22 BISIG MANGGAGAWA SA TRYCO and/or FRANCISCO
SIQUIG, as Union President, JOSELITO
LARIÑO, VIVENCIO B. BARTE, SATURNINO EGERA and
SIMPLICIO AYA-AY vs. NATIONAL
LABOR RELATIONS COMMISSION, TRYCO PHARMA
CORPORATION, and/or WILFREDO C.
RIVERA
FACTS:
Tryco Pharma Corporation (Tryco) is a manufacturer of
veterinary medicines and its principal office is located in Caloocan
City. Joselito Lariño, Vivencio Barte, Saturnino Egera and
Simplicio Aya-ay are its regular employees, occupying the
positions of helper, shipment helper and factory workers,
respectively, assigned to the Production Department. They are
members of Bisig Manggagawa sa Tryco (BMT), the exclusive
bargaining representative of the rank-and file employees. Tryco
received a Letter from the Bureau of Animal Industry of the
Department of Agriculture reminding it that its production should
be conducted in San Rafael, Bulacan, not in Caloocan City,
hence, Tryco issued a Memorandum directing petitioner Aya-ay to
report to the company's plant site in Bulacan. When petitioner Aya
-ay refused to obey, Tryco reiterated the order. Subsequently,
through a Memorandum, Tryco also directed petitioners Egera,
Lariño and Barte to report to the company's plant site in Bulacan.
Petitioners then filed their separate complaints for illegal
dismissal, underpayment of wages, nonpayment of overtime
pay and service incentive leave. The alleged that the
management transferred petitioners Lariño, Barte, Egera and Aya-
ay from Caloocan to San Rafael, Bulacan to paralyze the union. In
their defense, respondents averred that the petitioners were not
dismissed but they refused to comply with the management's
directive for them to report to the company's plant in San Rafael,
Bulacan.
ISSUE:
WON management’s prerogative of transferring and
reassigning employees from one area of operation to another in
order to meet the requirements of the business constitutes
constructive dismissal.
HELD:
NO. Management’s prerogative of transferring and
reassigning employees from one area of operation to another in
order to meet the requirements of the business is, generally NOT
constitutive of constructive dismissal. This prerogative
extends to the management's right to regulate, according to
its own discretion and judgment, all aspects of employment,
including the freedom to transfer and reassign employees
according to the requirements of its business.
Management's prerogative of transferring and reassigning
employees from one area of operation to another in order to meet
the requirements of the business is, therefore, generally not
constitutive of constructive dismissal. Thus, the consequent
transfer of Tryco's personnel, assigned to the Production
Department was well within the scope of its management
prerogative.
23 MANILA JOCKEY CLUB EMPLOYEES LABOR UNION
PTGWO vs MANILA JOCKEY CLUB, INC.
FACTS:
Manila Jockey Club Employees Labor Union-PTGWO
and respondent Manila Jockey Club, Inc., a corporation with a
legislative franchise to conduct, operate and maintain horse races,
entered into a Collective Bargaining Agreement (CBA). The CBA
governed the economic rights and obligations of respondents
regular monthly paid rank-and-file employees. In the CBA, the
parties agreed to a 7-hour work schedule from 9:00 a.m. to
12:00noon and from 1:00 p.m. to 5:00 p.m. on a work week of
Monday to Saturday. Respondent issued an inter-office
memorandum declaring that, effective April 20, 1999, the
hours of work of regular monthly paid employees shall be
from 1:00 p.m. to 8:00 p.m. when horse races are held, that
is, every Tuesday and Thursday. The memorandum,
however, maintained the 9:00 a.m. to 5:00 p.m. schedule
for non-race days. Petitioner and respondent entered into an
Amended and
Supplemental CBA retaining Section 1 of Article IV and Section 2
of Article XI, supra, and clarified that any conflict arising therefrom
shall be referred to a voluntary arbitrator for resolution.
Subsequently, before a panel of voluntary arbitrators of the
National Conciliation and Mediation Board (NCMB), petitioner
questioned the above office memorandum as violative
of the prohibition against non-diminution of wages and benefits
guaranteed under Section 1, Article IV, of the CBA which specified
the work schedule of respondent's employees to be from
9:00 a.m. to 5:00 p.m. Petitioner claimed that as a result of the
memorandum, the employees are precluded from rendering their
usual overtime work from 5:00 p.m. to 9:00 p.m.
ISSUE:
WON Manila Jockey relinquish part of its management
prerogative when it stipulated a work schedule in the CBA.
HELD:
NO. MJCI did not relinquish part of its management
prerogative when it stipulated a work schedule in the CBA. Every
business enterprise endeavors to increase profits. As it is, the
Court will not interfere with the business judgment of an employer
in the exercise of its prerogative to devise means to improve its
operation, provided that it does not violate the law, CBAs, and the
general principles of justice and fair play. We have thus held that
management is free to regulate, according to its own discretion
and judgment, all aspects of employment, including hiring, work
assignments, working methods, time, place and manner of work,
processes to be followed, supervision of workers, working
regulations, transfer of employees, work supervision, layoff of
workers and discipline, dismissal, and recall of workers.
24 CAPITOL MEDICAL CENTER, INC. and DR. THELMA
NAVARETTE-CLEMENTE vs CESAR MERIS
FACTS:
Capitol Medical Center, Inc. (Capitol) hired Dr. Cesar
Meris (Dr. Meris), one of its stockholders, as in charge of its
Industrial Service Unit (ISU) at a monthly salary of P10,270.00.
Until the closure of the ISU, Dr. Meris performed dual functions of
providing medical services to Capitols more than 500 employees
and health workers as well as to employees and workers of
companies having retainer contracts with it. Dr. Meris received
from Capitols president and chairman of the board, Dr. Thelma
Navarette Clemente (Dr. Clemente), a notice advising him of
the managements decision to close or abolish the ISU and the
consequent termination of his services as Chief thereof. Dr. Meris,
doubting the reason behind the managements decision to
close the ISU and believing that the ISU was not in fact abolished
as it continued to operate and offer services to the client
companies with Dr. Clemente as its head and the notice of closure
was a mere ploy for his ouster in view of his refusal to retire
despite Dr. Clementes previous prodding for him to do so, sought
his reinstatement but it was unheeded. Dr. Meris thus filed a
complaint against Capitol and Dr. Clemente for illegal dismissal
and reinstatement with claims for backwages, moral and
exemplary damages, plus attorneys fees.
ISSUE:
WON the abolition of the industrial service unit (ISU)
constitutes a valid exercise of management prerogative
HELD:
No. Capitol failed to sufficiently prove its good faith in
closing the ISU. Employers are also accorded rights and privileges
to assure their self-determination and independence and
reasonable return of capital. This mass of privileges comprises the
so-called management prerogatives. Although they may be broad
and unlimited in scope, the State has the right to determine
whether an employers privilege is exercised in a manner that
complies with the legal requirements and does not offend the
protected rights of labor. One of the rights accorded an
employer is the right to close an establishment or undertaking. The
right to close the operation of an establishment or undertaking is
explicitly recognized under the Labor Code as one of the
authorized causes in terminating employment of workers, the only
limitation being that the closure must not be for the purpose of
circumventing the provisions on termination of employment
embodied in the Labor Code.
25 SAN MIGUEL CORPORATION, et.al, vs. NUMERIANO
LAYOC, JR., et.al.
FACTS:
Respondents were among the Supervisory Security
Guards of the Beer Division of the San Miguel Corporation with
offices at No. 40 San Miguel venue, Mandaluyong City. They
started working as guards assigned to the Beer Division on
different dates until such time that they were promoted as
supervising security guards. From the commencement of their
employment, the private respondents were required to punch their
time cards for purposes of determining the time they would come
in and out of the companys work place. Corollary, the private
respondents were availing the benefits for overtime, holiday and
night premium duty through time card punching.
However, in the early 1990s, the San Miguel Corporation
embarked on a Decentralization Program aimed at enabling the
separate divisions of the San Miguel Corporation to pursue a more
efficient and effective management of their respective operations.
As a result of the Decentralization Program, the Beer Division of
the San Miguel Corporation implemented a no time card policy
whereby the Supervisory I and II composing of the
supervising security guards of the Beer Division were no
longer required to punch their time cards.
Consequently, without prior consultation with the private
respondents, the time cards were ordered confiscated and
the latter were no longer allowed to render overtime work.
However, in lieu of the overtime pay and the premium pay, the
personnel of the Beer Division affected by the No Time Card
Policy were given a 10% across-the-board increase on their basic
pay while the supervisors who were assigned in the night shift
(6:00 p.m. to 6:00 a.m.) were given night shift allowance ranging
from P2,000.00 to P2,500.00 a month.
Respondents filed a complaint for unfair labor
practice, violation of Article 100 of the Labor Code of the
Philippines, and violation of the equal protection clause and due
process of law in relation to paragraphs 6 and 8 of Article 32 of the
New Civil Code of the Philippines SMC maintained that
respondents were supervisory security guards who were exempt
from the provisions of the Labor Code on hours of work, weekly
rest periods, and rest days. The no time card policy did not just
prevent respondents from punching their time cards, but it also
granted respondents an across-the board increase of 10% of basic
salary and either a P2,000 or P2,500 night shift allowance on top
of their yearly merit increase. They further asserted that the no
time card policy was a valid exercise of management prerogative
and that all supervisors in the Beer Division were covered
by the no time card policy, which classification was distinct and
separate from the other divisions within SMC.
ISSUE:
Whether the implementation of the no time card policy
was a valid exercise of management prerogative.
HELD:
Yes. Given the discretion granted to the various divisions
of SMC in the management and operation of their respective
businesses and in the formulation and implementation of policies
affecting their operations and their personnel, the no time card
policy affecting all of the supervisory employees of the Beer
Division is a valid exercise of management prerogative.
The no time card policy undoubtedly caused pecuniary loss to
respondents. However, petitioners granted to respondents and
other supervisory employees a 10% across-the-board
increase in pay and night shift allowance, in addition to their yearly
merit increase in basic salary, to cushion the impact of the loss. So
long as a companys management prerogatives are
exercised in good faith for the advancement of the
employers interest and not for the purpose of defeating or
circumventing the rights of the employees under special
laws or under valid agreements, this Court will uphold them.
26 PHILIPPINE AIRLINES, INC. (PAL) vs. NLRC
FACTS:
Philippine Airlines, Inc. (PAL) completely revised its 1966
Code of Discipline. The Code was circulated among the
employees and was immediately implemented, and some
employees were forthwith subjected to the disciplinary measures
embodied therein. Thus, the Philippine Airlines Employees
Association (PALEA) filed a complaint before the National Labor
Relations Commission (NLRC) for unfair labor practice with the
following remarks: "ULP with arbitrary implementation of PAL's
Code of Discipline without notice and prior discussion with Union
by Management". In its position paper, PALEA contended that
PAL, by its unilateral implementation of the Code, was guilty of
unfair labor practice.
PALEA alleged that copies of the Code had been
circulated in limited numbers; that being penal in nature the Code
must conform with the requirements of sufficient publication, and
that the Code was arbitrary, oppressive, and prejudicial to the
rights of the employees. PAL filed a motion to dismiss the
complaint, asserting its prerogative as an employer to prescribe
rules and regulations regarding employees' conduct in carrying out
their duties and functions, and alleging that by implementing the
Code, it had not violated the collective bargaining agreement
(CBA) or any provision of the Labor Code
ISSUE:
Whether the management may be compelled to share
with the union or its employees its prerogative of formulating a
code of discipline.
HELD:
YES. PAL asserts that when it revised its Code on March
15, 1985, there was no law which mandated the sharing of
responsibility therefor between employer and employee.
Indeed, it was only on March 2, 1989, with the approval of
Republic Act No. 6715, amending Article 211 of the Labor
Code, that the law explicitly considered it a State policy "(t)o
ensure the participation of workers in decision and policy-making
processes affecting the rights, duties and welfare."
However, even in the absence of said clear provision of
law, the exercise of management prerogatives was never
considered boundless. Thus, in Cruz vs. Medina (177 SCRA
565 [1989]) it was held that management's prerogatives must
be without abuse of discretion.
In San Miguel Brewery Sales Force Union (PTGWO) vs. Ople (170
SCRA 25 [1989]), we upheld the company's right to implement a
new system of distributing its products, but gave the following
caveat: So long as a company's management prerogatives are
exercised in good faith for the advancement of the employer's
interest and not for the purpose of defeating or circumventing the
rights of the employees under special laws or under valid
agreements, this Court will uphold the.
All this points to the conclusion that the exercise of
managerial prerogatives is NOT unlimited. It is
circumscribed by limitations found in law, a collective
bargaining agreement,
or the general principles of fair play and justice (University of
Sto. Tomas vs. NLRC, 190 SCRA 758 [1990]). Moreover, as
enunciated in Abbott Laboratories (Phil.), vs. NLRC (154 713
[1987]), it must be duly established that the prerogative being
invoked is clearly a managerial one.
27 WILTSHIRE FILE CO., INC., vs. NLRC and VICENTE T.
ONG
FACTS:
Vicente T. Ong was the Sales Manager of Wiltshire File
Co., Inc. ("Wiltshire"). As such, he received a monthly salary
excluding commissions from sales. He also enjoyed vacation
leave with pay, as well as hospitalization privileges per year. Upon
private respondent's return from a business and pleasure trip
abroad, he was informed by the President of Wiltshire that his
services were being terminated. Ong maintains that he tried to get
an explanation from management of his dismissal but to no avail.
When private respondent again tried to speak with the President of
Wiltshire, the company's security guard handed him a letter which
formally informed him that his services were being terminated
upon the ground of redundancy.
Ong filed a complaint before the Labor Arbiter for illegal dismissal
alleging that his position could not possibly be redundant
because nobody (save himself) in the company was then
performing the same duties. He further contended that
retrenching him could not prevent further losses because it was in
fact through his remarkable performance as Sales Manager that
the Company had an unprecedented increase in domestic market
share the preceding year. For that accomplishment, he continued,
he was promoted to Marketing Manager and was authorized by
the President to hire four (4) Sales Executives five (5) months prior
to his termination.
Wiltshire alleged that the termination of Ong's services
was a cost-cutting measure: that the company had experienced an
unusually low volume of orders: and that it was in fact forced to
rotate its employees in order to save the company. Despite the
rotation of employees, it continued to experience financial losses
and Ong's position, Sales Manager of the company, became
redundant. During the proceedings before the Labor Arbiter,
Wiltshire notified the DOLE that it would close its doors
permanently due to substantial business losses.
HIRING ISSUE:
It is of no legal moment that the financial troubles of the
company were not of Ong's making. Ong cannot insist on the
retention of his position upon the ground that he had not
contributed to the financial problems of Wiltshire. The
characterization of private respondent's services as no
longer necessary or sustainable, and therefore properly
terminable, was an exercise of business judgment on the
part of petitioner company. The wisdom or soundness of such
characterization or decision was not subject to discretionary
review on the part of the
Labor Arbiter nor of the NLRC so long, of course, as violation of
law or merely arbitrary and malicious action is not shown.
The determination of the continuing necessity of a
particular officer or position in a business corporation is
management's prerogative, and the courts will not interfere with
the exercise of such so long as no abuse of discretion or merely
arbitrary or malicious action on the part of management is shown.
REDUNDANCY ISSUE:
Redundancy in an employer's personnel force does not
necessarily or even ordinarily refers to duplication of work. That no
other person was holding the same position that private
respondent held prior to the termination of his services, does not
show that his position had not become redundant. Indeed, in any
well-organized business enterprise, it would be surprising to find
duplication of work and two (2) or more people doing the work of
one person.
Redundancy exists where the services of an employee are in
excess of what is reasonably demanded by the actual
requirements of the enterprise. Succinctly put, a position is
redundant where it is superfluous, and superfluity of a position or
positions may be the outcome of a number of factors, such as
overhiring of workers, decreased volume of business, or dropping
of a particular product line or service activity previously
manufactured or undertaken by the enterprise. The employer has
no legal obligation to keep in its payroll more employees than are
necessarily for the operation of its business.
28 FARLE P. ALMODIEL vs. NLRC & RAYTHEON PHILS.,
INC.
FACTS:
Farle P. Almodiel is a certified public accountant who was
as Cost Accounting Manager of Raytheon Philippines, Inc. through
a reputable placement firm, John Clements Consultants, Inc. He
started as a probationary or temporary employee. After a few
months, he was given a regularization increase. Not long
thereafter, his salary was also increased. Almodiel recommended
and submitted a Cost Accounting/Finance Reorganization,
affecting the whole finance group but the same was disapproved
by the Controller. However, he was assured by the
Controller that should his position or department which was
apparently a one-man department with no staff becomes
untenable or unable to deliver the needed service due to
manpower constraint, he would be given a three (3) year advance
notice. In the meantime, the standard cost accounting system was
installed and used at the Raytheon plants and subsidiaries
worldwide. Almodiel was summoned by his immediate boss and in
the presence of IRD Manager, Mr. Rolando Estrada, was told of
the abolition of his position on the ground of redundancy.
He pleaded with management to defer its action or
transfer him to another department, but he was told that the
decision of management was final and that the same has
been conveyed to the Department of Labor and Employment.
Thus, he was constrained to file the complaint for illegal dismissal.
Petitioner claims that the functions of his position were
absorbed by the Payroll/Mis/Finance Department under the
management of Danny Ang Tan Chai, a resident alien without any
working permit from the Department of Labor and Employment as
required by law. And granting that his department has to be
declared redundant, he claims that he should have been the
Manager of the Payroll/Mis/Finance Department which handled
general accounting, payroll and encoding. As a B. S. Accounting
graduate, a CPA with M.B.A. units, 21 years of work experience,
and a natural born Filipino, he claims that he is better qualified
than Ang Tan Chai, a B.S. Industrial Engineer, hired merely as a
Systems Analyst Programmer or its equivalent in early 1987,
promoted as MIS Manager only during the middle part of 1988 and
a resident alien. Petitioner also assails Raytheon's choice of
Ang Tan Chai to head the Payroll/Mis/Finance Department,
claiming that he is better qualified for the position.
HELD:
It has been consistently held that an objection founded on
the ground that one has better credentials over the appointee is
frowned upon so long as the latter possesses the minimum
qualifications for the position. In the case at bar, since petitioner
does not allege that Ang Tan Chai does not qualify for the position,
the Court cannot substitute its discretion and judgment for that
which is clearly and exclusively management prerogative. To do so
would take away from the employer what rightly belongs to him as
aptly explained in National Federation of Labor Unions v. NLRC:
It is a well-settled rule that labor laws do not authorize
interference with the employer's judgment in the conduct of his
business. The determination of the qualification and fitness of
workers for hiring and firing, promotion or reassignment are
exclusive prerogatives of management. The Labor Code and its
implementing Rules do not vest in the Labor Arbiters nor
in the different Divisions of the NLRC (nor in the courts)
managerial authority. The employer is free to determine, using his
own discretion and business judgment, all elements of
employment, "from hiring to firing" except in cases of unlawful
discrimination or those which may be provided by law. There is
none in the instant case.
29 PRIMO E. CAONG, JR., ALEXANDER J. TRESQUIO,
and LORIANOD. DALUYON, Petitioners,- versus - AVELINO
REGUALOS, Respondent
Facts:
Petitioners Primo E. Caong, Jr. (Caong), Alexander J.
Tresquio(Tresquio), and Loriano D. Daluyon (Daluyon) were
employed by respondent Avelino Regualos under a
boundary agreement, as drivers of his brand new jeepneys.
On November 4, 2001 a meeting was conducted by respondent.
During the said meeting, respondent informed his employees,
including petitioners, to strictly comply with the policy
regarding remittances and warned them that they would not be
allowed to take out the jeepneys if they did not remit the full
amount of the boundary. Despite the said reminder given by the
respondent, Daluyon, Tresquio and Caong failed to remit the entire
amount of boundary on November 7, 8, 9, 2001, respectively, and
when they returned for work after their rest day, respondent barred
them from driving because of the deficiency in the boundary
payment. They pleaded with the respondent to allow them to drive
but to no avail. Thus, they filed an illegal dismissal case against
the respondent. During the mandatory conference, respondent
manifested that petitioners were not dismissed and that they could
drive his jeepneys once they paid their arrears. Petitioners,
however, refused to do so. On March 31, 2003, the Labor Arbiter
decided the case in favor of respondent.
Petitioners appealed the decision to the National Labor Relations
Commission (NLRC). In its resolution] dated March 31, 2004, the
NLRC agreed with the Labor Arbiter and dismissed the appeal. It
also denied petitioners’ motion for reconsideration.
Forthwith, petitioners filed a petition for certiorari with the
CA. In its Decision dated December 14, 2006, the CA found no
grave abuse of discretion on the part of the NLRC. According to
the CA, the employer-employee relationship of the parties
has not been severed, but merely suspended when
respondent refused to allow petitioners to drive
the jeepneys while there were unpaid boundary obligations.
The CA pointed out that the fact that it was within the power of
petitioners to return to work is proof that there was no
termination of employment. The condition that petitioners
should first pay their arrears only for the period of November 5-
9,2001 before they can be readmitted to work is neither
impossible nor unreasonable if their total unpaid boundary
obligations and the need to sustain the financial viability of the
employer’s enterprise—which would ultimately redound to the
benefit of the employees—are taken into consideration. The CA
went on to rule that petitioners were not denied their right to due
process. It pointed out that the case does not involve a termination
of employment; hence, the strict application of the twin-notice rule
is not warranted. According to the CA, what is important is that
petitioners were given the opportunity to be heard. The meeting
conducted by respondent on November 4, 2001 served as
sufficient notice to petitioners. During the said meeting,
respondent informed his employees, including petitioners, to
strictly comply with the policy regarding remittances and warned
them that they would not be allowed to take out the jeepneys if
they did not remit the full mount of the boundary.
Issue:
Whether or not the petitioners were illegally dismissed by
the respondent and that such dismissal was made in violation of
the due process requirements of the law.
Held:
The petition is without merit. The Labor Arbiter, the
NLRC, and the CA uniformly declared that petitioners were NOT
dismissed from employment but merely suspended pending
payment of their arrears. We have no reason to deviate from such
findings.
Indeed, petitioners’ suspension cannot be categorized as
dismissal, considering that there was no intent on the part of
respondent to sever the employer-employee relationship between
him and petitioners. In fact, it was made clear that petitioners
could put an end to the suspension if they only pay their recent
arrears. As it was, the suspension dragged on for years because
of petitioners’ stubborn refusal to pay. It is acknowledged that an
employer has free rein and enjoys wide latitude of
discretion to regulate all aspects of employment, including
the prerogative to instill discipline on his employees and to
impose penalties, including dismissal, if warranted, upon
erring employees.
This is a management prerogative. Indeed, the
manner in which management conducts its own affairs to achieve
its purpose is within the management’s discretion.
The only limitation on the exercise of management
prerogative is that the policies, rules, and regulations on work-
related activities of the employees must always be fair and
reasonable, and the corresponding penalties, when prescribed,
commensurate to the offense involved and to the degree of
the infraction.
Petitioners’ concern relates to the implementation of the
policy, which is another matter. A company policy must be
implemented in such manner as will accord social justice and
compassion to the employee. In case of noncompliance with the
company policy, the employer must consider the surrounding
circumstances and the reasons why the employee failed to
comply. When the circumstances merit the relaxation of the
application of the policy, then its noncompliance must be excused.
In the case at bench, private respondent, upon finding that
petitioners had consistently failed to remit the full amount of the
boundary, conducted a meeting on November 4, 2001 informing
them to strictly comply with the policy regarding their remittances
and warned them to discontinue driving if they still failed to remit
the full amount of the boundary.
Petition is DENIED. TheCourt of Appeals Decision dated
Dec 14, 2006 and Resolution dated July 16, 2007 are AFFIRMED
30 PHIL TELEGRAPH AND TELEPHONE CORPORATION
vs. ALICIA LAPLANA, ET.AL
FACTS:
Alicia Laplana was the cashier of the Baguio City Branch
Office of the Philippine Telegraph and Telephone Corporation.
PT & T's treasurer, Mrs. Alicia A. Arogo, directed Laplana to
transfer to the company's 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. Mrs. Arogo
reiterated her directive for Laplana's transfer to the Laoag Branch,
this time in the form of a written Memorandum, informing Laplana
that she will be reassigned to Laoag branch assuming the same
position of branch cashier and ordering her "to turn over her
accountabilities and files to Rose Ca ysido 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 the time
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. Laplana later received a
telegram from Mrs. Arogo requiring her to report to Manila for a
new job assignment, that failure to report shall constitute
abandonment of her job, which might constrain them to impose
disciplinary actions against her. Laplana in turn sent a telex
message to Mrs. Arogo refusing the job offer in Manila and
requested that she be retrenched instead. Termination of
Laplana's employment on account of retrenchment
thereupon followed. Laplana then filed 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 company's "act of
transferring is not only without any valid ground but also arbitrary
and without any purpose but to harass and force . . . (her) to
eventually resign." In answer, the defendants alleged that
Laplana "was being transferred to Laoag City because of
increase in sales due to the additional installations of vodex
line and the company "was exercising management
prerogatives in transferring complainant . .& there is no
showing that this exercise was arbitrarily &whimsically
done”
ISSUE:
WON Laplana was illegally dismissed.
HELD:
NO. 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 therefor –– retrenchment. 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 . . . (itself) of an
undesirable worker," or "to penalize an employee for . . . union
activities. . . ." The employer was moreover not unmindful of
Laplana's 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 pre-
determined 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 employer's 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
employee's wishes that should be made to prevail.
31 BLUE DAIRY CORPORATION vs . NLRC and ELVIRA R.
RECALDE
FACTS:
BLUE DAIRY CORPORATION, engaged in the
processing of dairy and chocolate products, juices and vegetables,
hired Elvira R. Recalde as a food technologist in its laboratory.
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 vehicle's windshield and side mirror. Later, 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. She later stopped reporting for work. The
following day she sent a letter to Blue Dairy Corporation that she
will no longer report for work because of their drastic and
oppressive action. Recalde then filed a complaint against Blue
Dairy Corporation for constructive dismissal and non-payment of
premium pay. 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 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 company's General Rules and
Regulation, to that effect such 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 rule that
petitioners were guilty of constructive dismissal as he found
the justification for Recaldes transfer unreasonable. Petitioners
insist that the transfer of Recalde from the laboratory to the
vegetable processing section was effected in the exercise of
management prerogative.

ISSUE: WON Recaldes transfer was unreasonable.
HELD:
YES. 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. 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.
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. 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. 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 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.
32 PHARMACIA and UPJOHN, INC. vs. RICARDO P.
ALBAYDA, JR
FACTS:
Ricardo P. Albayda, Jr. was an employee of Upjohn, Inc.
in 1978 and continued working there until 1996 when a merger
between Pharmacia and Upjohn was created. After the merger,
Abayda was designated by Pharmacia and Upjohn (Pharmacia) as
District Sales Manager assigned to District XI in the Western
Visayas area, where respondent settled in Bacolod City. A
district meeting was held in Makati City wherein one of the topics
discussed was the district territorial configuration for the new
marketing and sales direction. Later, Abayda received a
Memorandum announcing the sales force structure and that he
was reassigned as District Sales Manager to District XII in the
Northern Mindanao area. Abayda questioned his transfer from
District XI to District XII, that he has always been assigned to the
Western Visayas area and that he felt that he could not improve
the sales of products if he was assigned to an unfamiliar territory.
He then concluded that his transfer might be a way for his
managers to dismiss him from employment. He added that he
could not possibly accept his new assignment in Cagayan
de Oro City because he will be dislocated from his family; his wife
runs an established business in Bacolod City; his eleven- year-old
daughter is studying in Bacolod City; and his two-year-old son is
under his and his wifes direct care.
Petitioner then deny the request of Abayda to be
reassigned to the Western Visayas area. It explained that the
factors used in determining assignments of managers are to
maximize business opportunities and growth and development of
personnel. Abayda likened his transfer to Mindanao as a form of
punishment. He argued that Chu failed to face and address the
issues he raised regarding the loss of his family income, the
additional cost of housing and other additional expenses he will
incur in Mindanao. Abayda was then given an option to be
assigned in Metro Manila and is entitled to Relocation Benefits and
Allowance pursuant to the companys Benefits Manual and was
then directed to report for work in Manila . However, Abayda did
not repliy to their last memorandum and was warned that
the same would be a final notice for him to report for work in
Manila within 5 working days from receipt of the memo; otherwise,
his services will be terminated on the basis of being absent without
official leave (AWOL). A memorandum was then sent notifying
Abayda of the company’s decision to terminate his services after
he repeatedly refused to report for work despite due notice,
Abayda filed a Complaint for constructive di smissal but was later
dismissed.
ISSUE:
WON Abayda’s reassignment was a valid exercise of
petitioners management prerogative.
HELD:
YES. Jurisprudence recognizes the exercise of
management prerogative to transfer or assign employees from
one office or area of operation to another, provided there is no
demotion in rank or diminution of salary, benefits, and other
privileges, and the action is not motivated by discrimination, made
in bad faith, or effected as a form of punishment or demotion
without sufficient cause. To determine the validity of the transfer of
employees, the employer must 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 employee's transfer shall be
tantamount to constructive dismissal. Petitioners posture that the
transfer of respondent was a valid exercise of a legitimate
management prerogative to maximize business opportunities,
growth and development of personnel and that the expertise of
respondent was needed to build the companys business in
Cagayan de Oro City which dismally performed in 1999, that the
reassignment of respondent was not a demotion as he will also be
assigned as a District Sales Manager in Mindanao or in Metro
Manila and that the notice of his transfer did not indicate that
his emoluments will be reduced. He was even entitled to
Relocation Benefits and Allowance in accordance with
petitioners Benefits Manual. The allegation of complainant
that his income will be affected because his wife who is doing
business in Bacolod City and earns P50,000.00, should not be
taken in consideration of his transfer. What is contemplated
here is the diminution of the salary of the complainant but not his
wife. Besides, even if complainant may accept his new assignment
in Cagayan de Oro or in Metro Manila, his wife may still continue
to do her business in Bacolod City. Anyway, Bacolod Ci ty and
Manila is just one (1) hour travel by plane. Lastly, in respondents
contract of employment, he agreed to be assigned to any work or
workplace as may be determined by the company whenever the
operations require such assignment.
33 ZEL T. ZAFRA, vs. CA, PLDT
FACTS:
Zel T. Zafra was hired by PLDT as Operations Analyst II
while Edwin B. Ecarma was hired as Junior Operations Analyst I.
Both were regular rank-and-file employees assigned at the
Regional Operations and Maintenance Control Center (ROMCC)
of PLDTs Cebu Provincial Division. Petitioners were chosen for the
OMC Specialist and System Software Acceptance
Training Program in Germany. They left for Germany and while
they were in Germany, a certain Mr. R. Relucio, Switch Net
Division Manager, requested advice, through an inter-office
memorandum, from the Cebu and Davao Provincial Managers if
any of the training participants were interested to transfer to the
Sampaloc ROMCC to address the operational requirements
therein. Upon petitioners return from Germany, they were informed
about the memorandum.
They balked at the idea, but PLDT, through an inter-office
memorandum proceeded to transfer petitioners to the Sampaloc
ROMCC. Petitioners left Cebu for Manila to air their grievance to
PLDT and to seek assistance from their union head office in
Mandaluyong. PLDT ordered petitioners to report for work but they
asked for a deferment to February 1, 1996. Petitioners
reported for work at the Sampaloc office on January 29, 1996.
Meanwhile PLDT moved the effectivity date of their transfer to
March 1, 1996. On March 13, 1996, petitioners again appealed to
PLDT to no avail. And, because all their appeals fell on deaf ears,
petitioners, while in Manila, tendered their resignation letters.
Petitioners then filed a com plaint for alleged constructive
dismissal and non-payment of benefits under the Collective
Bargaining Agreement
PLDT averred that petitioners agreed to accept any assignment
within PLDT in their application for employment and also in the
undertaking they executed prior to their training in Germany.
ISSUE:
WON Petitioners transfer was a valid exercise of
management prerogative.
HELD:
NO. The fact that petitioners, in their application for
employment agreed to be transferred or assigned to any branch
should not be taken in isolation, but rather in conjunction
with the established company practice in PLDT. The standard
operating procedure in PLDT is to inform personnel regarding the
nature and location of their future assignments after training
abroad. This prevailing company practice is evidenced by the
inter-office memorandum. Under these circumstances, the need
for the dissemination of notice of transfer to employees before
sending them abroad for training should be deemed necessary
and later to have ripened into a company practice or policy that
could no longer be peremptorily withdrawn, discontinued, or
eliminated by the employer. Fairness at the workplace and settled
expectations among employees require that we honor this practice
and commend this policy. Needless to say, had they known about
their pre-planned reassignments, petitioners could have declined
the foreign training intended for personnel assigned to the Manila
office. The lure of a foreign trip is fleeting while a reassignment
from Cebu to Manila entails major and permanent readjustments
for petitioners and their families. The transfer of an employee
ordinarily lies within the ambit of management prerogatives.
However, a transfer amounts to constructive dismissal when the
transfer is unreasonable, inconvenient, or prejudicial to the
employee, and involves a demotion in rank or diminution of
salaries, benefits, and other privileges. In the present case,
petitioners were unceremoniously transferred, necessitating their
families relocation from Cebu to Manila. This act of management
appears to be arbitrary without the usual notice that should have
been done even prior to their training abroad. From the employees
viewpoint, such action affecting their families are burdensome,
economically and emotionally. It is no exaggeration to say that
their forced transfer is not only unreasonable, inconvenient, and
prejudicial, but to our mind, also in defiance of basic due process
and fair play in employment relations.
34 PHILIPPINE TELEGRAPH & TELEPHONE
CORPORATION vs. CA, NLRC, et.al
FACTS:
The petitioner is a domestic corporation engaged in the
business of providing telegraph and communication services thru
its branches all over the country. After conducting a series of
studies regarding the profitability of its retail operations, it came up
with a Relocation and Restructuring Program designed to (a)
sustain its (PT&Ts) retail operations; (b) decongest surplus
workforce in some branches, to promote efficiency and
productivity; (c) lower expenses incidental to hiring and training
new personnel; and (d) avoid retrenchment of employees
occupying redundant positions.
Cristina Rodiel, Jesus Paracale, Romeo Tee, Benjamin
Lakandula, Avelino Acha, Ignacio Dela Cerna and Guillermo
Demigillo received separate letters from the petitioner, giving them
the option to choose the branch to which they could be
transferred. Thereafter they were directed to relocate to their new
PT&T Branches. They were directed to report to their respective
relocation assignments. Meanwhile, the petitioner offered
benefits/allowances to those employees who would agree to be
transferred under its new program. Moreover, the employees
who would agree to the transfers would be considered
promoted. However, private respondents rejected the
petitioners offer. Petitioner sent letters to the private respondents
requiring them to explain in writing why no disciplinary action
should be taken against them for their refusal to be
transferred/relocated. Private respondents explained that: the
transfers imposed by the management would cause enormous
difficulties on the individual complainants. For one, their new
assignment involve distant places which would require their
separation from their respective families. Dissatisfied with this
explanation, the petitioner considered the private respondents
refusal as insubordination and willful disobedience to a lawful
order; hence, the private respondents were dismissed from work.
Respondents then filed their respective complaints against the
petitioner declaring that their refusal to transfer could not possibly
give rise to a valid dismissal on the ground of willful
disobedience, as their transfer was prejudicial and inconvenient;
thus unreasonable. Petitioner alleged that the transfers were
made in the lawful exercise of its management prerogative
and were done in good faith. The transfers were aimed at
decongesting surplus employees and detailing them to a more
demanding branch.
ISSUE:
WON private respondents transfers were made in the
lawful exercise of its management prerogative.  NO
WON it was transfer or promotion.
HELD:
NO. The increase in the respondents responsibility can
be ascertained from the scalar ascent of their job grades. With or
without a corresponding increase in salary, the respective
transfer of the private respondents were in fact promotions,
following the ruling enunciated in Homeowners Savings and Loan
Association, Inc. v. NLRC: [P]romotion, as we defined in Millares
v, Subido, is the advancement from one position to another with an
increase in duties and responsibilities as authorized by law, and
usually accompanied by an increase in salary.
Apparently, the indispensable element for there to be a promotion
is that there must be an advancement from one position to another
or an upward vertical movement of the employees rank or position.
Any increase in salary should only be considered incidental but
never determinative of whether or not a promotion is bestowed
upon an employee. This can be likened to the upgrading of
salaries of government employees without conferring upon the, the
concomitant elevation to the higher positions. ] An employee
cannot be promoted, even if merely as a result of a transfer,
without his consent. A transfer that results in promotion or
demotion, advancement or reduction or a transfer that aims to lure
the employee away from his permanent position cannot be done
without the employees consent. There is no law that compels an
employee to accept a promotion for the reason that a promotion is
in the nature of a gift or reward, which a person has a right to
refuse. Hence, the exercise by the private respondents of
their right cannot be considered in law as insubordination,
or willful disobedience of a lawful order of the employer. As
such, there was no valid cause for the private respondents
dismissal.
35 PHILIPPINE INDUSTRIAL SECURITY AGENCY
CORPORATION vs. VIRGILIO DAPITON & NLRC
FACTS:
Petitioner hired Dapiton as a security guard. His initial
assignment was at PCIBank in Caloocan City. During his tour of
duty at PCIBank, Dapiton had a heated argument with his
fellow security guard. The incident almost led to a shootout.
Respondent (Dapiton) was suspended from work for seven (7)
days. Petitioner alleged that respondent did not serve his
suspension and instead went on a leave of absence.
Nonetheless, he was assigned at the BPI Family Bank in
Navotas when he reported back for duty. Allegedly, respondent
refused to accept his assignment. Respondent was assigned at
Sevilla Candle Factory in Malabon. Three (3) weeks
later, he abandoned his post and went on absence without leave
(AWOL). Respondent was given another assignment at Security
Bank and Trust Company. He was required to report for an
interview and to undergo a neurological examination. Respondent
refused and allegedly again went on AWOL. Petitioner sent a
telegram to respondent to report to its office for a
conference. Respondent did not show up. Instead, on April 22,
1994, respondent filed the present illegal dismissal case.
Respondent denied petitioners allegations. He claimed that after
he served his suspension, he was assigned at BPI Family Bank in
Navotas. He accepted the new post. However, after a short period,
he was relieved and was transferred to the Mercury Drugstore in
Grand Central, Kalookan City. Again, after a brief tour of duty, he
was relieved. He was posted at Sevilla Candle Factory. While on
duty, he witnessed some shabu dealers doing their illegal trade.
Fearful for his life, he left his post and requested petitioner to
transfer him to another post. He admitted that his assignment at
Security Bank did not materialize for he failed to take the
neurological test. He explained he could not pay the examination
fee in the amount of P250.00. He asked petitioner to pay the said
amount but it refused. Respondent alleged that thereafter, he was
reduced to a mere reliever of absent security guards and was
frequently transferred from one post to another. His last
assignment was at the Philippine Savings Bank (PSB) in Makati. It
lasted for only one (1) day. Since April 13, 1994, he was not
given any assignment. He reported to petitioners office regularly
for his posting but to no avail.
Consequently, on April 22, 1994, he sued petitioner for illegal
dismissal and asked for separation pay.
ISSUE:
WON petitioner was constructively dismissed.
HELD:
YES. Constructive dismissal is 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. On the other hand, abandonment of work
means a clear, deliberate and unjustified refusal of an employee to
resume his employment and a clear intention to sever the
employer-employee relationship. Abandonment is incompatible
with constructive dismissal.
In the case at bar, we hold that there was no deliberate intent
on the part of the respondent to abandon his employment
with petitioner. The clear evidence that respondent did not wish
to be separated from work is that, after his last assignment he
reported to petitioners office regularly for a new posting but to no
avail. He then lost no time in filing the illegal dismissal
case. An employee who forthwith takes steps to protest his layoff
cannot by any logic be said to have abandoned his work.
Moreover, respondent's failure to assume his posts in Sevilla
Candle Factory and the Security Bank and Trust Company is not
without reason. He explained that he requested for a transfer of
assignment from Sevilla Candle Factory because he feared for his
life after he witnessed shabu dealers doing their business in his
workstation. As regards the Security Bank assignment, he failed to
take the neurological test for lack of money to pay for the
examination fee. Petitioner cannot overinflate the significance of
the fact that respondent often absented himself from work without
an approved leave. It is a settled rule that mere absence or failure
to report for work is not tantamount to abandonment of work. Even
the failure to report for work after a notice to return to work has
been served does not necessarily constitute abandonment nor
does it bar reinstatement. The burden of proving that respondent
has abandoned his job rests with petitioner. However, petitioner
failed miserably to discharge the burden. The records show no
memoranda concerning respondents alleged unauthorized
absences and refusal to work. Even the telegram petitioner sent to
respondent after he allegedly went on AWOL merely required
respondent to report to its office for a conference but did not
mention anything about his absences. We find it incredible that
petitioner did not even write respondent on his alleged refusal to
accept the posts assigned to him and the abandonment of his
posts considering that such acts constitute willful disobedience
and gross neglect of duty which are valid grounds for dismissal.
36 CONSOLIDATED FOOD CORPORATION/PRESIDENT
JOHN GOKONGWEI, et.al. vs. NLRC AND
WILFREDO M. BARON
FACTS:
Consolidated Food Corporation (CFC) is a domestic
corporation engaged in the sale of food products. Wilfredo M.
Baron was a Bonded Merchandiser at CFC, was thereafter
assigned as Acting Section Manager for Northern Luzon (NL) — 2
Area covering Baguio City, La Trinidad and Benguet. He was
tasked, among others, to deliver for sale CFC Presto Ice Cream
Products to stores and outlets in Baguio City, make inventories
thereof, replace or retrieve bad orders or damaged ice cream
stocks, and to handle funds in relation to his functions. A killer
earthquake hit Baguio City causing severe damage in the area.
Power lines were cut off and the roads to and from the city
became impassable. Hence, the Presto ice cream products in the
possession of customers and sales outlets in Baguio were
damaged and became bad orders. Unit Mgr. Abalos issued an
Action Plan which provided among others the cut-off audit of
Wilfredo M. Baron to determine accountabilities that should be
liquidated on account of non –sales operations. The Field Audit
Group of CFC conducted an audit on the accountabilities of Baron
that reflected a shortage of P1,985.12 in the cash purchase fund
and expense allowance fund.
Unit Mgr. Abalos requested a field audit of the area to further
evaluate private respondent's exposure, particularly on sales
account, freezer and bad orders stocks. Baron was then directed
to temporarily stop routing in his assigned areas until such time
that the complete audit of the customers' bad orders stocks within
the area had been finished and was ordered to turnover his
accountabilities .
Calura, who is to take over the route operation of Baguio City as
Baron’s presence would be required in the audit being conducted
on bad orders stocks caused by the earthquake. A memorandum
was sent to Baron informing him of the discrepancies appearing in
the audit of accountabilities and giving him opportunity to explain
his side in writing. Meanwhile, his normal sales route was
temporarily suspended until further notice but he was
instructed to report daily to the head office in Pasig City. Baron
submitted his answer. Private respondent was required to submit
his written explanation on the points indicated within a
period of seven (7) days from receipt of the memorandum and was
also requested to explain why no additional action should be taken
against him for his continued absence. Petitioners sent notice to
private respondent requiring him to explain within ten (10) days
why he shouldnot be dismissed from the service for having been
absent without leave (AWOL). Baron sent a letter to petitioners
stating that he was advised by his doctor not to report for work
because he was sick and would have to take his medication.
Baron then filed a complaint with the Labor Arbiter for constructive
dismissal, non-payment of salaries, commissions, service
incentive leave pay and allowances.
HELD:
A valid exercise of management prerogative is one which
covers hiring, work assignment, 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. Except as provided for or limited
by special laws, employers are free to regulate, according to their
own discretion and judgment, all aspects of employment. Re-
assignments made by management pending investigation of
irregularities allegedly committed by an employee fall within the
ambit of management prerogative. The purpose of reassignments
is no different from that of preventive suspension which
management could validly impose as a disciplinary measure for
the protection of the company's property pending investigation of
any alleged malfeasance or misfeasance committed by the
employee.
The audit result also showed that Baron failed to
account for his expense allowance fund. Although Baron had given
his written explanation, petitioners found it unsatisfactory and his
defense inexcusable. While there may be no direct
evidence to prove that Baron actually and deliberately committed
fraud or misappropriation of company funds, there was substantial
proof of the existence of irregularities committed by him
in the use of the funds. We have ruled that substantial proof, and
not clear and convincing evidence or proof beyond reasonable
doubt, is sufficient as basis for the imposition of any
disciplinary action upon the employee. The standard of substantial
evidence is satisfied where the employer has reasonable ground
to believe that the employee is responsible for the misconduct and
his participation therein renders him unworthy of the trust and
confidence demanded by his position.
We find that petitioners' acts of conducting audits and
investigation on the alleged irregularities committed by private
respondent and in reassigning him to another place of work
pending the results of the investigation were based on valid and
legitimate grounds. As such, these acts of management cannot
amount to constructive dismissal. It is worthy to note that
petitioners gave Baron every opportunity to raise his
defense and fully explain the discrepancies in the funds in
his possession. In fact private respondent informed petitioners
that he would be returning for work on 5 March 1991 after his sick
leave. But instead of doing so, he filed a complaint for constructive
dismissal before the Labor Arbiter.
37 Josephine Ruiz vs Wendel Osaka Realty
Facts:
Petitioner was hired as secretary to respondent (Delfin),
the president of DMWAI there after appointed as executive
assistant to the president of respondent WORC. Sometime in
2002, the BIR informed Delfin of the tax deficiency allegations
against his companies. On November 2002, he discovered that
“various very important files”11 of DMWAI were missing. He
required the employees to answer a questionnaire but the
petitioner failed to comply. Thus Delfin sent a letter17 to petitioner
informing her that she would be placed under a 30-day preventive
suspension and another 15 days with pay. After 45 day period,
she reported back to work and was transferred to the Cavite
city branch. Thereafter, petitioner amended her Complaint for
illegal suspension to include constructive illegal dismissal.
CA ruled, that the transfer of petitioner was justified,
considering the gravity of the offense she was being charged
with.41
Issue:
w/n the transfer is valid.
Held:
Yes. An employer has the inherent right to transfer or
assign an employee in pursuance of its legitimate business
interest, subject only to the condition that the move be not
motivated by bad faith. Having lost his trust and confidence in
petitioner, respondent Delfin had the right to transfer her to ensure
that she would no longer have access to the companies’
confidential files. Although it is true that petitioner has yet to be
proven guilty, respondents had the authority to reassign her,
pending investigation.
38 WENIFREDO FARROL vs. CA and RCPI
FACTS:
Wenifredo Farrol was employed as station cashier at
RCPIs Cotabato City station. RCPIs district manager in Cotabato
City informed their main office that "Peragram funds"[ from
said branch were used for the payment of retirement
benefits of five employees. Farrol verified as correct RCPIs
Field Auditors report that there was a shortage of P50,985.37 in
their branchs
Peragram, Petty and General Cash Funds. Consequently,
petitioner was required by the Field Auditor to explain the cash
shortage within 24 hours from notice. The next day, petitioner paid
to RCPI P25,000.00 of the cash shortage. RCPI required petitioner
to explain why he should not be dismissed from employment. Two
days thereafter, petitioner wrote a letter to the Field Auditor stating
that the missing funds were used for the payment of the retirement
benefits earlier referred to by the branch manager and that he had
already paid P25,000.00 to RCPI.
After making two more payments of the cash shortage to RCPI,
petitioner was informed by the district manager that he is being
placed under preventive suspension. Thereafter, he again paid
two more sums on different dates to RCPI leaving a balance of
P6,995.37 of the shortage. RCPI claims that it sent a letter to
petitioner informing him of the termination of his services on the
ground that the position of Station Cashier is one which requires
utmost trust and confidence.
Unaware of the termination letter, Farrol requested that he
be reinstated considering that the period of his preventive
suspension had expired. He likewise manifested to RCPI his
willingness to settle his case provided he is given his retirement
benefits. However, RCPI informed petitioner that his employment
had already been terminated earlier
HELD:
In cases involving the illegal termination of employment, it
is fundamental that the employer must observe the mandate of the
Labor Code, i.e., the employer has the burden of proving that the
dismissal is for a cause provided by the law[ and that it afforded
the employee an opportunity to be heard and to defend himself
The employer must comply with the twin requirements of
two notices and hearing. The first notice is that which apprises
the employee of the particular acts or omissions for which his
dismissal is sought, and after affording the employee an
opportunity to be heard, a subsequent notice informing the latter of
the employers decision to dismiss him from work. As regards the
first notice, RCPI simply required petitioner to "explain in writing
why he failed to account" for the shortage and demanded that
he restitute the same. On the assumption that the foregoing
statement satisfies the first notice, the second notice sent by
RCPI to petitioner does not "clearly" cite the reasons for
the dismissal, c ontrary to the requirements set by the
above-quoted Section 6 of Book V, Rule XIV of the
Omnibus Rules. RCPIs dismissal notice reveals that it merely
stated a conclusion to the effect that the withholding was
deliberately done to hide alleged malversation or misappropriation
without, however, stating the facts and circumstances in support
thereof. It further mentioned that the position of cashier requires
utmost trust and confidence but failed to allege the breach of trust
on the part of petitioner and how the alleged breach was
committed. On the
assumption that there was indeed a breach, there is no evidence
that petitioner was a managerial employee of respondent RCPI. It
should be noted that the term "trust and confidence" is
restricted to managerial employees. It may not even be
presumed that when there is a shortage, there is also a
corresponding breach of trust. Cash shortages in a cashiers
work may happen, and when there is no proof that the same was
deliberately done for a fraudulent or wrongful purpose, it cannot
constitute breach of trust so as to render the dismissal from work
valid. Assuming further that there was breach of trust and
confidence, it appears that this is the first infraction committed by
petitioner. Although the employer has the prerogative to discipline
or dismiss its employee, such prerogative cannot be exercised
wantonly, but must be controlled by substantive due process and
tempered by the fundamental policy of protection to labor
enshrined in the Constitution. Infractions committed by an
employee should merit only the corresponding sanction
demanded by the circumstances. The penalty must be
commensurate with the act, conduct or omission imputed to the
employee and
imposed in connection with the employers disciplinary authority.
RCPI alleged that under its rules, petitioners infraction is
punishable by dismissal. Petitioner has no previous record in his
twenty-four long years of service - this would have been his first
offense. The Court thus holds that the dismissal imposed on
petitioner is unduly harsh and grossly disproportionate to the
infraction which led to the termination of his services. A lighter
penalty would have been more just, if not humane. In any case,
petitioner paid back the cash shortage in his accounts.
Considering, however, that the latter is about to retire or may have
retired from work, it would no longer be practical to order his
reinstatement.
39 MANILA WATER COMPANY, Petitioner,vs. CARLITO
DEL ROSARIO, Respondent.
PRINCIPLE:
The grant of separation pay to a dismissed employee is
determined by the cause of the dismissal. The years of service
may determine how much separation pay may be awarded. It is,
however, not the reason why such pay should be granted at all.
FACTS:
 Del Rosario was employed as Instrument Technician by
Metropolitan Waterworks and Sewerage System (MWSS). MWSS
was reorganized pursuant to Republic Act No. 8041 or the
National Water Crisis Act of 1995, and its implementing guidelines
− Executive Order No. 286.
 Because of the reorganization, Manila Water absorbed
some employees of MWSS including Del Rosario.
 Manila Water discovered that 24 water meters were
missing in its stockroom. Upon initial investigation, it appeared that
Del Rosario and his co-employee, Danilo Manguera, were
involved in the pilferage and the sale of water meters to the
company’s contractor.
 When Del Rosario was directed to explain, he
confessed his involvement in the act charged and pleaded for
forgiveness, promising not to commit similar acts in the future.
 During the formal investigation Del Rosario was found
responsible for the loss of the water meters and therefore liable for
violating Section 11.1 of the Company’s Code of Conduct. Hence,
the dismissal of Del Rosario from employment.
 This prompted Del Rosario to file an action for
illegal dismissal claiming that his severance from
employment is without just cause. Del Rosario averred in his
position paper that his admission to the misconduct charged was
not voluntary but was coerced by the company. Such admission
therefore, made without the assistance of a counsel, could not be
made basis in terminating his employment.
 Manila Water answered and pointed out that he was
involved in the taking of the water meters from the company’s
stock room and of selling these to a private contractor for personal
gain. Invoking Section 11.1 of the Company’s Code of Conduct,
Manila Water averred that such act of stealing the company’s
property is punishable by dismissal. They further averred that
Del Rosario himself confessed his involvement to the loss of the
water meters not only in his letter-explanation, but also during the
formal investigation, and in both instances, pleaded for his
employer’s forgiveness.
**Labor Arbiter - dismissing for lack of merit the complaint
filed by Del Rosario who was, however, awarded separation pay.
According to the Labor Arbiter, Del Rosario’s length of service for
21 years, without previous derogatory record, warrants the award
of separation pay.
----------- **Separation pay equivalent to one-half (1/2)
month’s salary for every year of service based on his basic salary
Php 11,244.00 at the time of his dismissal. This shall be computed
from [1 August 1997] up to June 2000, the total amount of which is
Php 118,062.00.
**Manila Waters filed a MR to NLRC however, it is denied. **CA –
affirmed the granting of Separation Pay by the Labor Arbiter
ISSUE:
WON Respondent Del Rosario is entitled for Separation Pay
RULING:
No. “As a general rule, an employee who has been
dismissed for any of the just causes enumerated under Article 282
of the Labor Code is not entitled to a separation pay.” However, in
exceptional cases, separation pay has been granted to a legally
dismissed employee as an act of “social justice” or on “equitable
grounds.” In either case, “it is required that the dismissal (1) was
not for serious misconduct; and (2) did not reflect on the moral
character of the employee.”
Citing the leading case of PLDT v. NLRC (247 Phil. 641,
1988), the Supreme Court laid down the rule “that separation pay
shall be allowed as a measure of social justice only in the
instances where the employee is validly dismissed for causes
other than serious misconduct reflecting his moral character…”
In subsequent cases, the high tribunal “expanded the
exclusions and elucidated that separation pay shall be allowed as
a measure of social justice only in instances where the employee
is validly dismissed for causes other than serious misconduct,
willful disobedience, gross and habitual neglect of duty, fraud or
willful breach of trust, commission of a crime against the employer
or his family, or those reflecting on his moral character…”
Although long years of service might generally be
considered for the award of separation benefits or some form of
financial assistance to mitigate the effects of termination, this case
is not the appropriate instance for generosity under the Labor
Code nor under our prior decisions. The fact that private
respondent served petitioner for more than twenty years with no
negative record prior to his dismissal, in our view of this case,
does not call for such award of benefits, since his violation
reflects a regrettable lack of loyalty and worse, betrayal of
the company. If an employee's length of service is to be regarded
as a justification for moderating the penalty of dismissal, such
gesture will actually become a prize for disloyalty, distorting the
meaning of social justice and undermining the efforts of labor to
cleanse its ranks of undesirables.
The grant of separation pay to a dismissed
employee is determined by the cause of the dismissal. The
years of service may determine how much separation pay may be
awarded. It is, however, not the reason why such pay should be
granted at all.
In sum, we hold that the award of separation pay or any
other kind of financial assistance to Del Rosario, under the
nomenclature of compassionate justice, is not warranted in the
instant case. A contrary rule would have the effect of rewarding
rather than punishing an erring employee, disturbing the noble
concept of social justice.
40 Salvador O. Mojar vs Agro Commercial Security Service
Agency
Facts:
Petitioners were employed as security guards by
respondent and assigned to the various branches of the Bank of
Commerce in Pangasinan, La Union and Ilocos Sur. Petitioners
were relieved from their respective posts and directed to report to
their new assignments in Metro Manila. They, however, failed to
report for duty in their new assignments. On 15 February 2005,
petitioners filed a Complaint for illegal dismissal against
respondent and the Bank of Commerce, Dagupan Branch.
Petitioners claimed, among others, that their reassignment was a
scheme to sever the employer-employee relationship and was
done in retaliation for pressing their claim for salary differential,
which they had earlier filed against respondent and the Bank of
Commerce before the NLRC. They also contended that the
transfer to Manila was inconvenient and prejudicial, since they
would incur additional expenses for board and lodging. The Labor
Arbiter rendered a Decision finding that petitioners were illegally
dismissed and ordered respondents to reinstate all the
complainants to their former assignment in Pangasinan with full
backwages and if reinstatement is no longer possible, to pay
separation pay of one month for every year of service each of the
seven complainant security guards. On appeal, the NLRC affirmed
the LA’s ruling, with the modification that the Complaint against the
Bank of Commerce was dismissed.
The CA found the Orders transferring petitioners to
Manila to be a valid exercise of management prerogative. The CA
further ruled that the records were bereft of any showing that the
subject transfer involved a diminution of rank or salaries. Further,
there was no showing of bad faith or ill motive on the part of the
employer. Thus, petitioners’ refusal to comply with the transfer
orders constituted willful disobedience of a lawful order of an
employer and abandonment, which were just causes for
termination under the Labor Code. However, respondent failed to
observe the due process requirements in terminating them.
Issue:
Whether or not an employee may be considered to have
been constructively dismissed if his floating status lasts for more
than six months.
Ruling:
In this case NO. The Petition is DENIED and the court
AFFIRMED the Court of Appeals decision. Petitioners argue that
they were illegally dismissed, based on the 1989 case Agro
Commercial Security Services Agency, Inc. v. NLRC., which holds
that when the floating status of employees lasts for more than six
(6) months, they may be considered to have been illegally
dismissed from the service. Unfortunately, the above-mentioned
case is not applicable here. In Agro, the service contracts of the
security agency therein with various corporations and government
agencies – to which the security guards were previously assigned
– were terminated, generally due to the sequestration of the said
offices. Accordingly, many of the security guards were placed on
floating status. “Floating status” means an indefinite period of time
when one does not receive any salary or financial benefit provided
by law.
In this case, petitioners were actually reassigned to
new posts, albeit in a different location from where they
resided. Thus, there can be no floating status or indefinite
period to speak of. Instead, petitioners were the ones who
refused to report for work in their new assignment. In cases
involving security guards, a relief and transfer order in itself does
not sever the employment relationship between the security
guards and their agency. Employees have the right to security of
tenure, but this does not give them such a vested right to their
positions as would deprive the company of its prerogative to
change their assignment or transfer them where their services, as
security guards, will be most beneficial to the client. An employer
has the right to transfer or assign its employees from one office or
area of operation to another in pursuit of its legitimate business
interest, provided there is no demotion in rank or diminution of
salary, benefits, and other privileges; and the transfer is not
motivated by discrimination or bad faith, or effected as a form of
punishment or demotion without sufficient cause. While petitioners
may claim that their transfer to Manila will cause added expenses
and inconvenience, the court agree with the CA that, absent any
showing of bad faith or ill motive on the part of the employer, the
transfer remains valid.
41 PHILBAG INDUSTRIAL MANUFACTURING
CORPORATION, Petitioner, v. PHILBAG WORKERS
UNION-LAKAS AT GABAY NG MANGGAGAWANG
NAGKAKAISA, Respondent.
FACTS:
Edwin Mauricio and Zharralyn Camacho were employees
of the petitioner, Philbag Industrial Manufacturing Corporation
(company), until their dismissal in the second half of 2004.
Mauricio and Camacho protested their dismissal, prompting the
union and the company to convene the CBAs grievance
machinery in an effort to resolve the matter at plant level. Unable
to reach a settlement, they agreed to have the dispute resolved
through voluntary arbitration.
To avoid liability, the company maintained that both
Mauricio and Camacho violated company rules on employee
discipline, thereby incurring demerit points that justified their
separation from the service. It pointed out that Mauricio was
observed idling & wasting company time for two hours on May 24,
2004 as reported by Reinoso who witnessed the incident. With
respect to Camacho, the company stressed that she failed (1) to
follow the procedure in taking a leave of absence (filing the
required form) or getting permission from or notifying mgmt that
she could not report for work from March 15 to 21, 2004 and (2) to
have her medical certificate countersigned by the company doctor.
(Voluntary Arbitrator ) VA Ancheta declared
Mauricio and Camachos dismissal valid. With the ruling, VA
Ancheta upheld the companys prerogative to impose disciplinary
action on its employees who violate company rules and
regulations. The union sought relief from the CA through a petition
for review under Rule 43 of the Rules of Court.
CA granted the petition and reversed VA Anchetas ruling.
It found "no plausible reason for [the company] to [impose] demerit
points on Mauricio and Camacho as a result of the subject
incidents.
The CA thus ruled that Mauricio and Camacho were
illegally dismissed. The company moved for reconsideration,
which was denied by the CA.
ISSUE: Whether or not Mauricio and Camacho were illegally
dismissed?  YES
HELD:
Court of Appeals decision is sustained.
LABOR LAW  Under the law, the burden of proving
that the termination of employment was for a valid or authorized
cause rests on the employer. Failure to discharge this burden
would result in an unjust or illegal dismissal, as aptly pointed out
by the CA. We find such a failure on the part of the employer in
this case.
It is obvious that the company overstepped the bounds of
its management prerogative in the dismissal of Mauricio and
Camacho. It lost sight of the principle that mgmt. prerogative must
be exercised in good faith and with due regard to the rights of the
workers in the spirit of fairness and with justice in mind.
In sum, we find Mauricio and Camachos dismissal
without a valid cause and, therefore, illegal. DENIED.
42 JEAN C. AURELIO vs. NATIONAL LABOR RELATIONS
COMMISSION
FACTS:
Jean Aurelio started as clinical instructor of the College of
Nursing of Northwestern College (NWC). Later, she was appointed
as Dean of the College of Nursing. Again, petitioner was promoted
to College Administrator or Vice-President for Administration,
retaining concurrently her position of Dean of the College of
Nursing, with an increased salary. She was later promoted to
Executive Vice-President. This new management unleashed a
series of reorganization affecting the petitioner . Without prior
notice, petitioner's office was stripped of its facilities, her salary
was reduced from P7,500.00 to P5,000.00 then to P2,500.00 a
month, and while petitioner was absent because of influenza,
respondents assigned her office room to the Chairman on
Management and Planning; the Nursing conference room was
assigned as the lounge room of the members of the Board of
Directors. Because of the indignities and humiliation suffered by
the petitioner, she wrote a letter informing the President of
Northwestern College that she was going on an indefinite leave.
Petitioner sent a copy of the letter to the Secretary of DECS for
assistance. The matter of petitioner's resumption of her
position as Dean of the College of Nursing was addressed
by the DECS to the attention of respondents but it did not
answer. They refused to accept petitioner. Hence, petitioner filed
her complaint for illegal dismissal against private respondents.
NWC, on its part, was compelled to abolish the administrative
positions held by petitioner, which she did not contest, because
they realized after a study of the realignment of the positions that
the functions and duties of Administrator/Vice President for
Administration were being performed by the President.
Consequently, the former positions had become redundant.
ISSUE:
WON the Management is at liberty to abolish positions no
longer necessary.
HELD:
YES. The Board of Directors, composed of the individual
private respondents herein, has the power granted by the Corp
Code to implement a reorganization of respondent college's
offices, including the abolition of various positions, since it is
implied or incidental to its power to conduct the regular business
affairs of the corporation. The prerogative of management to
conduct its own business affairs to achieve its purposes cannot be
denied.  Management is at liberty, absent any malice on its part,
to abolish positions which it deems no longer necessary. Thus,
when petitioner was stripped by the Board of her positions as
Executive Vice President and Vice President for Administration,
with a corresponding reduction in salary, the Board did not act in a
capricious, whimsical, and arbitrary manner, thus negating malice
and bad faith.
43 GOLDEN THREAD KNITTING INDUSTRIES, INC.,
GEORGE NG and WILFREDO BICO vs. NATIONAL LABOR
RELATIONS COMMISSION, GEORGE MACASPAC, MARY
ANN MACASPAC, ROMULO ALBASIN, MELCHOR
CACHUCHA, GILBERT RIVERA and FLORA BALBINO,
respondents.
FACTS:
The complainants alleged that in the first week of May
1992 they organized a labor union. On 22 May 1992 Cristina
Balingit, wife of the union Chairman, was dismissed from
employment as sewer. In the last week of May union Chairman
Deogracias Balingit himself was, suspended from work as knitting
operator. On 1 June 1992 petitioners shortened the number
of working days of the union officers and members from six (6) to
three (3) days a week. Petitioners contended that they resorted to
rotation of work, which affected practically all employees, because
of the low demand for their towels and shirts. Petitioners also
avowed that they validly dismissed five (5) of the complainants.
According to petitioners, some slashed several bundles of
towels on 3 July 1992, while the positions of some became
redundant. One of them threatened the Personnel Manager
and violated company rules by removing her time card from the
rack, while another one was not dismissed but abandoned his
employment on 7 July 1992.
LABOR ARBITER ruled that they were validly dismissed,
while the reduction of working days and suspension or dismissal of
union officers or members were not shown to have been done in
retaliation to the complainants’ act of organizing a union.
NLRC reversed the ruling for a number of the
complainants, holding that they were illegally dismissed.
ISSUE:
 WON they were validly dismissed
HELD:
(SA MGA NAG SLASH NG TOWELS) We find that
petitioners were unable to substantiate the charge of serious
misconduct against the ones who slashed the towels. They were
likewise denied procedural due process. As correctly observed
by respondent NLRC, petitioners failed to afford Macaspac and
Albasin the benefit of hearing and investigation before
termination. It is also our observation that neither did petitioners
comply with the requirement on notices. An established rule of
long standing is that to effect a completely valid and unassailable
dismissal, an employer must show not only sufficient ground
therefor but must also prove that procedural due process has been
observed by giving the employee two (2) notices: one, of the
intention to dismiss, indicating therein his acts or omissions
complained against, & two, notice of the decision to dismiss
(SA MGA NATANGGAL FOR REDUNDANCY) The
characterization of an employee’s services as no longer necessary
or sustainable, and therefore properly terminable, is an exercise
of business judgment on the part of the employer. (Management
Prerogative) …..HOWEVER, SC questioned petitioners’ exercise
of management prerogative because it was not shown that
Rivera and Macaspac’s positions were indeed unnecessary, much
less was petitioners’ claim supported by any evidence. It is not
enough for a company to merely declare that it has
become overmanned. It must produce adequate proof that
such is the actual situation in order to justify the dismissal
of the affected employees for redundancy.
Furthermore, we have laid down the principle that in
selecting the employees to be
dismissed, a fair and reasonable criteria must be used, such as
but not limited to:
(a) less preferred status (e.g., temporary employee),
(b) efficiency, and
(c) seniority.
However, no criteria whatsoever was used by the
employer in this case.
Another procedural lapse committed by petitioners is the
lack of written notice to the DOLE required under Art. 283
of the Labor Code. The purpose of such notice is to ascertain
the
verity of the cause of termination of employment.
(DUN SA NANG THREATEN NG MANAGER) The
utterances by an employee of obscene, insulting or offensive
words against a superior justify his dismissal for gross misconduct.
The scornful attitude is also destructive of his co-employees’
morale. However, the dismissal will not be upheld where it
appears, as in this case, that the employee’s act of disrespect
was provoked by the employer. Balbino hurled invectives at
petitioner Bico because she was provoked by the baseless
suspension imposed on her. Under the circumstances, we believe
that dismissal was a harsh penalty; one (1) week suspension
would have sufficed.
(DUN SA NAG ABANDON NG WORK) It is essential that:
(1) the employee must have failed to report for work or
must have been absent without valid or justifiable reason; and,
(2) there must have been a clear intention to sever the
employer-employee relationship manifested by some overt acts.
The circumstance that Cachucha lost no time in filing a
complaint for illegal dismissal against petitioners on 16 July 1992
is incompatible with the charge of abandonment and confirms in
fact that he was refused entry into the company premises on 6
July 1992.
44 Pantranco North Express, Inc., vs. NLRC & Urbano
Suñiga
FACTS:
Private respondent was hired by petitioner in 1964 as a
bus conductor. He eventually joined the Pantranco Employees
Association-PTGWO. He continued in petitioner's employ until
August 12, 1989, when he was retired at the age of fifty-two (52)
after having rendered twenty five years' service. The basis of his
retirement was the compulsory retirement provision of the
collective bargaining agreement between the petitioner and the
aforenamed union. On February 1990, private respondent filed a
complaint for illegal dismissal against petitioner with NLRC. The
complaint was consolidated with two other cases of illegal
dismissal having similar facts and issues, filed by other
employees, non -union members.
Labor Arbiter rendered his decision finding that the three
complainants were illegally and unjustly dismissed and order the
respondent to reinstate them to their former or substantially
equivalent positions without loss of seniority rights with full back
wages and other benefits. Petitioner appealed to public
respondent, which issued the questioned Resolution
affirming the labor arbiter's decision in toto.
ISSUE:
Whether or not the CBA stipulation on compulsory retirement after
twenty-five years of service is legal and enforceable.  YES
RULING:
The Court rules that the CBA stipulation is legal and enforceable.
The bone of contention in this case is the provision on
compulsory retirement after 25 years of service.
Article XI, Section 1 (e) (5) of the May 2, 1989 Collective
Bargaining Agreement 8 between petitioner company and the
union states:
Section 1. The COMPANY shall formulate a retirement
plan with the following main features:
(e) The COMPANY agrees to grant the retirement
benefits herein provided to regular employees who may be
separated from the COMPANY for any of the following reasons:
(5) Upon reaching the age of sixty (60) years or upon
completing twenty-five (25) years of service to the COMPANY,
whichever comes first, and the employee shall be compulsory
retired and paid the retirement benefits herein provided."
The said Code provides: Art. 287. Retirement. — Any
employee may be retired upon reaching the retirement age
established in the Collective Bargaining Agreement or other
applicable employment contract. In case of retirement, the
employee shall be entitled to receive such retirement benefits as
he may have earned under existing laws and any collective
bargaining or other agreement."
The Court agrees with petitioner and the Solicitor
General. Art. 287 of the Labor Code as worded permits employers
and employees to fix the applicable retirement age at below 60
years. Moreover, providing for early retirement does not constitute
diminution of benefits. In almost all countries today, early
retirement, i.e., before age 60, is considered a reward for services
rendered since it enables an employee to reap the fruits of his
labor — particularly retirement benefits, whether lump-sum or
otherwise — at an earlier age, when said employee, in presumably
better physical & mental condition, can enjoy them better & longer.
As a matter of fact, one of the advantages of early retirement is
that the corresponding retirement benefits, usually consisting of a
substantial cash windfall, can early on be put to productive and
profitable uses by way of income-generating investments, thereby
affording a more significant measure of financial security and
independence for the retiree who, up till then, had to contend with
life's vicissitudes within the parameters of his fortnightly or weekly
wages. Thus we are now seeing many CBAs with such early
retirement provisions. And the same cannot be considered a
diminution of employment benefits.
Being a product of negotiation, the CBA between
the petitioner and the union intended the provision on
compulsory retirement to be beneficial to the employees-
union members, including herein private respondent. When
private respondent ratified the CBA with the union, he not only
agreed to the CBA but also agreed to conform to and abide by its
provisions. Thus, it cannot be said that he was illegally
dismissed when the CBA provision on compulsory retirement was
applied to his case.
Incidentally, we call attention to Republic Act No. 7641,
known as "The Retirement Pay Law", which went into effect on
January 7, 1993. Although passed many years after the
compulsory retirement of herein private respondent, nevertheless,
the said statute sheds light on the present discussion when it
amended Art. 287 of the Labor Code, to make it read as follows:
Retirement. — Any employee may be retired upon reaching the
retirement age establish in the collective bargaining agreement or
other applicable employment contract.
In the absence of a retirement plan or agreement
providing for retirement benefits of employees in the
establishment, an employee upon reaching the age of sixty (60)
years or more, but not beyond sixty-five (65) years which is hereby
declared the compulsory retirement age, who has served at least
five (5) years in the said establishment may retire . . ."
The aforequoted provision makes clear the intention and
spirit of the law to give employers and employees a free hand to
determine and agree upon the terms and conditions of retirement.
Providing in a CBA for compulsory retirement of employees after
twenty-five (25) years of service is legal and enforceable so long
as the parties agree to be governed by such CBA. The law
presumes that employees know what they want and what is good
for them absent any showing that fraud or intimidation was
employed to secure their consent thereto.
45 Pantoja v. SCA Hygiene
FACTS:
Respondent employed petitioner as a utility man on
March 15, 1987. Petitioner was eventually assigned at
respondent's Paper Mill No. 4, the section which manufactures the
company's industrial paper products, as a back tender in charge of
the proper operation of the sections machineries. In a Notice of
Transfer dated March 27, 1999, respondent informed petitioner of
its reorganization plan and offered him a position at Paper Mill No.
5 under the same terms and conditions of employment in
anticipation of the eventual closure and permanent shutdown of
Paper Mill No. 4 effective May 5, 1999.The closure and
concomitant reorganization is in line with respondents decision to
streamline and phase out the company's industrial paper
manufacturing operations due to financial difficulties brought about
by the low volume of sales and orders for industrial paper
products. However, petitioner rejected respondents offer for
his transfer. Thus, a notice of termination of employment
effective May 5, 1999 was sent to petitioner as his position was
declared redundant by the closure of Paper Mill No. 4.He then
received his separation pay and thereafter executed a
release and quitclaim in favor of respondent.
On April 5, 1999, respondent informed DOLE of its
reorganization and partial closure by submitting with the said office
an Establishment Termination Report together with the list of 31
terminated employees. Petitioner filed a complaint for illegal
dismissal against respondent assailing his termination as
without any valid cause.He averred that the alleged redundancy
never occurred as there was no permanent shutdown of Paper Mill
No. 4 due to its continuous operation since his termination. A co-
employee, Nestor Agtang, confirmed this fact and further attested
that several contractual workers were employed to operate Paper
Mill No. 4. Petitioner also presented in evidence documents
pertaining to the actual and continuous operation of Paper
Mill No. 4 such as the Paper Mill Personnel Schedule for July 2-8,
2000 and 23-29, 2000 and Paper Machine No. 4 Production
Report and Operating Data dated April 28, 2000 and May 18,
2000. In its defense, respondent refuted petitioners claim of illegal
dismissal.It argued that petitioner has voluntarily separated himself
from service by opting to avail of the separation benefits of the
company instead of accepting reassignment/transfer to another
position of equal rank and pay. According to respondent,
petitioners discussion on the alleged resumption of operation of
Paper Mill No. 4 is rendered moot by the fact of petitioner's
voluntary separation.
The Labor Arbiter rendered a Decision dismissing
petitioners complaint for lack of merit.Upon appeal by petitioner,
the NLRC reversed the Labor Arbiters Decision by finding
petitioners separation from employment illegal. Aggrieved,
respondent filed a petition for certiorari with the CA. The CA
reversed the NLRC's Decision and reinstated the Labor Arbiters
Decision dismissing the complaint.
ISSUE:
Whether or not respondent is guilty of illegal dismissal.  NO
HELD:
LABOR LAW
Respondent presented evidence of the low volume of
sales and orders for the production of industrial paper in 1999
which inevitably resulted to the company's decision to
streamline its operations. This fact was corroborated by
respondents VP-Tissue Manufacturing Director and was not
disputed by petitioner. Exercising its management prerogative and
sound business judgment, respondent decided to cut down on
operational costs by shutting down one of its paper mill. The
determination of the need to phase out a particular department
and consequent reduction of personnel and reorganization as a
labor and cost saving device is a recognized management
prerogative which the courts will not generally interfere with. In this
case, the abolishment of Paper Mill No. 4 was undoubtedly a
business judgment arrived at in the face of the low demand for the
production of industrial paper at the time.Despite an apparent
reason to implement a retrenchment program as a cost-cutting
measure, respondent, however, did not outrightly dismiss the
workers affected by the closure of Paper Mill No. 4 but
gave them an option to be transferred to posts of equal
rank and pay.As can be seen, retrenchment was utilized by
respondent only as an available option in case the affected
employee would not want to be transferred. Respondent did not
proceed directly to retrench. This is an indication of good faith
on respondents part as it exhausted other possible measures
other than retrenchment. Besides, the employers prerogative to
bring down labor
costs by retrenching must be exercised essentially as a measure
of last resort, after less drastic means have been tried and found
wanting.Giving the workers an option to be transferred without any
diminution in rank and pay specifically belie petitioners allegation
that the alleged streamlining scheme was implemented as a ploy
to ease out employees, thus, the absence of bad faith. Apparently,
respondent implemented its streamlining or reorganization plan
with good faith, not in an arbitrary manner and without prejudicing
the tenurial rights of its employees. DENIED
46 JONATHAN V. MORALES, Petitioner, v. HARBOUR
CENTRE PORT TERMINAL, INC. Respondent.
FACTS:
Regularized on 17 November 2000, Morales was
promoted to Division Manager of the Accounting Dept, for which
he was compensated a monthly salary of P33,700.00, plus
allowances starting 1 July 2002. Subsequent to HCPTIs transfer to
its new offices at Vitas, Tondo, Manila on 2 January 2003, Morales
received an inter-office memorandum dated 27 March 2003,
reassigning him to Operations Cost Accounting, tasked with the
duty of "monitoring and evaluating all consumables requests,
gears and equipment" related to the corporations operations and
of interacting with its sub-contractor, Bulk Fleet Marine
Corporation.
Morales wrote Singson, protesting that his reassignment
was a clear demotion since the position to which he was
transferred was not even included in HCPTIs plantilla. Singson,
the Administration Manager, answered by stating that the transfer
was a management prerogative.
For the whole of the ensuing month Morales was absent
from work and/or tardy. Singson issued to Morales a 29 April 2003
inter-office memorandum denominated as a First Warning. In view
of the absences Morales continued to incur, HCPTI issued a
Second Warning.
In the meantime, Morales filed a complaint dated 25 April
2003 against HCPTI, Filart & Singson, for constructive dismissal,
moral and exemplary damages as well as attorneys fees.
LA dismissed the complaint for lack of merit. It ruled that
Morales reassignment was a valid exercise of HCPTIs mgmt.
prerogative w/c cannot be construed as constructive dismissal
absent showing that the same was done in bad faith and resulted
in the diminution of his salary and benefits. The NLRC however,
reversed the decision. Its subsequent denial of HCPTIs motion for
reconsideration prompted the latter to file a petition for certiorari
before the CA. The CA reversed the findings of the NLRC. Hence,
this petition.
ISSUE:
Whether or not petitioner was constructively dismissed
HELD:
Yes. CA Decision reversed and set aside
Constructive dismissal exists where there is cessation
of work because "continued employment is rendered impossible,
unreasonable or unlikely, as an offer involving a demotion in rank
or a diminution in pay and other benefits.
In cases of a transfer of an employee, the rule is settled
that the employer is charged with the burden of proving that
its conduct and action are for valid and legitimate grounds
such as genuine business necessity and that the transfer is not
unreasonable, inconvenient or prejudicial to the employee. If the
employer cannot overcome this burden of proof, the employees
transfer shall be tantamount to unlawful constructive dismissal.
Record shows that HCPTI miserably failed to discharge
the foregoing onus. While there was a lack of showing that the
transfer or reassignment entailed a diminution of salary and
benefits, one fact that must not be lost sight of was that Morales
was already occupying the position of Division Manager at HCPTIs
Accounting Department as a consequence of his promotion to said
position on 22 October 2002.
Concurrently appointed as member of HCPTIs
Management Committee (MANCOM) on 2 December 2002,
Morales was subsequently reassigned by HCPTI "from managerial
accounting to Operations Cost Accounting" on 27 March 2003,
without any mention of the position to which he was actually being
transferred. That the reassignment was a demotion is, however,
evident from Morales new duties which, far from being managerial
in nature, were very simply and vaguely described as inclusive of
"monitoring and evaluating all consumables requests, gears and
equipments related to HCPTIs operations" as well as "close
interaction with its sub-contractor Bulk Fleet Marine Corporation."
Admittedly, the right of employees to security of tenure
does not give them vested rights to their positions to the extent of
depriving management of its prerogative to change their
assignments or to transfer them. By management prerogative is
meant the right of an employer to regulate all aspects of
employment, such as the freedom to prescribe work assignments,
working methods, processes to be followed, regulation regarding
transfer of employees, supervision of their work, lay-off and
discipline, and dismissal and recall of workers.
Although jurisprudence recognizes said management
prerogative, it has been ruled that the exercise thereof, while
ordinarily not interfered with, is not absolute and is subject to
limitations imposed by law, collective bargaining agreement, and
general principles of fair play and justice. Thus, an employer may
transfer or assign employees from one office or area of operation
to another, provided there is no demotion in rank or diminution of
salary, benefits, and other privileges, and the action is not
motivated by discrimination, made in bad faith, or effected as a
form of punishment or demotion without sufficient cause. Indeed,
having the right should not be confused with the manner in which
that right is exercised. --GRANTED
47 STAR PAPER CORP vs. RONALDO D. SIMBOL, ET.AL.
FACTS:
Josephine Ongsitco is the Manager of the Personnel and
Administration Dept while Sebastian Chua is its Managing Director
of Star Paper Corporation. Meanwhile, 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 where he met Alma Dayrit, also an
employee of the company, whom he also married. 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. Simbol then resigned pursuant to the company policy.
Comia was hired by the company where she met Howard Comia,
a co-employee, and whom she later married. Ongsitco likewise
reminded them that pursuant to company policy, one must resign
should they decide to get married. Comia then resigned later on.
Estrella was hired by the company, and there 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. However, 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.
Estrella met an accident and when she returned to work she found
out 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. But 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.
ISSUE:
WON Respondents company policy is illegal and
contravenes Article 136 of the Labor Code/ ---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.  YES
HELD:
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. With more women
entering the workforce, employers are also enacting employment
policies specifically prohibiting spouses from working for the same
company. 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). The
courts that have broadly construed the term marital status rule
that it encompassed the identity, occupation and employment of
one's 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 individual's 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. 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 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. 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.
48 DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and
PEDRO A. TECSON vs. GLAXO WELLCOME PHIL, INC.
FACTS:
Pedro A. Tecson (Tecson) was hired by respondent Glaxo
Wellcome Philippines, Inc. (Glaxo) as medical repr. Tecson signed
a contract of employment which stipulates, among others, that he
agrees to study and abide by existing company rules; to disclose
to management any existing or future relationship by
consanguinity or affinity with co-employees or employees of
competing drug companies and should management find that such
relationship poses a possible conflict of interest, to resign from the
company. Tecson was initially assigned to market Glaxos products
in the Camarines Sur-Camarines Norte sales area.
Subsequently, Tecson entered into a romantic relationship with
Bettsy, an employee of Astra Pharmaceuticals (Astra), a
competitor of Glaxo. Bettsy was Astras Branch Coordinator in
Albay. She supervised the district managers and medical
representatives of her company and prepared marketing strategies
for Astra in that area. Even before they got married, Tecson
received several reminders from his District Manager regarding
the conflict of interest which his relationship with Bettsy might
engender. Still, Tecson married Bettsy. Tecsons superiors
informed him that his marriage to Bettsy gave rise to a conflict of
interest. Tecson requested for time to comply with the company
policy against entering into a relationship with an employee
of a competitor company. Later Tecson applied for a transfer
in Glaxos milk division, thinking that since Astra did not
have a milk division, the potential conflict of interest would
be eliminated. However, his application was denied. Thus, Glaxo
transferred Tecson to the Butuan City Surigao City-Agusan del Sur
sales area. Tecson asked Glaxo to reconsider its decision, but
his request was denied. Tecson defied the transfer order and
continued acting as medical representative in the Camarines Sur-
Camarines Norte sales area.
ISSUE:
WON Glaxos policy prohibiting its employees from having
personal relationships with employees of competitor companies is
a valid exercise of its management prerogatives.
HELD:
YES. Glaxo has a right to guard its trade secrets,
manufacturing formulas, mktg strategies & other confidential
programs and information from competitors, especially so
that it and Astra are rival companies in the highly competitive
pharmaceutical industry. The prohibition against personal or
marital relationships with employees of competitor companies
upon Glaxos employees is reasonable under the circumstances
because relationships of that nature might compromise the
interests of the company. In laying down the assailed company
policy, Glaxo only aims to protect its interests against the
possibility that a competitor company will gain access to its secrets
and procedures. That Glaxo possesses the right to protect its
economic interests cannot be denied. No less than the
Constitution recognizes the right of enterprises to adopt and
enforce such a policy to protect its right to reasonable returns on
investments and to expansion and growth. Indeed, while our laws
endeavor to give life to the constitutional policy on social justice
and the protection of labor, it does not mean that every labor
dispute will be decided in favor of the workers. The law also
recognizes that management has rights which are also entitled to
respect and enforcement in the interest of fair play.
49 ARMANDO G. YRASUEGUI, petitioners vs. PHILIPPINE
AIRLINES, INC., respondents.
FACTS:
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.
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.
In 1984, the weight problem started, which prompted PAL
to send him to an extended vacation until November 1985. He was
allowed to return to work once he lost all the excess weight. But
the problem recurred. He again went on leave without pay from
October 17, 1988 to February 1989.
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, which he failed to comply with.
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,
which he did not report to.
On November 13, 1992, PAL finally served petitioner a
Notice of Administrative Charge for violation of company standards
on weight requirements. Petitioner insists that he is being
discriminated as those similarly situated were not treated the
same. 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.”
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. NLRC affirmed.
CA: 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.
ISSUE:
WON he was validly dismissed.
HELD:
YES. 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. The
dismissal of the employee would thus fall under Article 282(e) of
the Labor Code. --- In the case at bar, the evidence on record
militates against petitioner’s 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 self-discipline.
Indeed, during the clarificatory hearing on December 8, 1992,
petitioner himself claimed that “*the issue is could I bring my
weight down to ideal weight which is 172, then the answer is
yes. I can do it now.”
Petitioner has only himself to blame. He could have
easily availed the assistance of the company physician, per the
advice of PAL. 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, “*voluntariness 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).”
NOTES:
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 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.”
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.
The primary objective of PAL in the imposition of the weight
standards for cabin crew is flight safety.
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.
50 AVON vs. LUNA
FACTS: The present petition stemmed from a complaint dated 1
December 1988, filed by herein respondent Luna alleging, inter
alia¸ that she began working for Beautifont, Inc. in 1972, first as a
franchise dealer and then a year later, as a Supervisor. Sometime
in 1978, Avon Cosmetics, Inc. (Avon), herein petitioner, acquired
and took over the management and operations of Beautifont, Inc.
Nonetheless, respondent Luna continued working for said
successor company. Aside from her work as a supervisor,
respondent Luna also acted as a make-up artist of petitioner
Avon’s Theatrical Promotion’s Group, for which she received a per
diem for each theatrical performance.
The contract was that:
The Company agrees:
1) To allow the Supervisor to purchase at wholesale the products
of the Company.
The Supervisor agrees:
1) To purchase products from the Company exclusively for resale
and to be responsible for obtaining all permits and licenses
required to sell the products on retail.

The Company and the Supervisor mutually agree:
1) That this agreement in no way makes the Supervisor an
employee or agent of the Company, therefore, the Supervisor has
no authority to bind the Company in any contracts with other
parties.
2) That the Supervisor is an independent retailer/dealer insofar as
the Company is concerned, and shall have the sole discretion to
determine where and how products purchased from the Company
will be sold. However, the Supervisor shall not sell such products
to stores, supermarkets or to any entity or person who sells things
at a fixed place of business.
3) That this agreement supersedes any agreement/s between the
Company and the Supervisor.
4) That the Supervisor shall sell or offer to sell, display or promote
only and exclusively products sold by the Company.
5) Either party may terminate this agreement at will, with or without
cause, at any time upon notice to the other.
Later, respondent Luna entered into the sales force of Sandre
Philippines which caused her termination for the alleged violation
of the terms of the contract. The trial court ruled in favor of Luna
that the contract was contrary to public policy thus the dismissal
was not proper. The Court of Appeals affirmed the decision, hence
this petition.
ISSUE: Whether or not the Supervisor’s Agreement is valid and
not against public policy.
RULING:
YES. Plainly put, public policy is that principle of the law which
holds that no subject or citizen can lawfully do that which has a
tendency to be injurious to the public or against the public good.
As applied to contracts, in the absence of express legislation or
constitutional prohibition, a court, in order to declare a contract
void as against public policy, must find that the contract as to the
consideration or thing to be done, has a tendency to injure the
public, is against the public good, or contravenes some
established interests of society, or is inconsistent with sound policy
and good morals, or tends clearly to undermine the security of
individual rights, whether of personal liability or of private property.
From another perspective, the main objection to exclusive dealing
is its tendency to foreclose existing competitors or new entrants
from competition in the covered portion of the relevant market
during the term of the agreement. Only those arrangements whose
probable effect is to foreclose competition in a substantial share of
the line of commerce affected can be considered as void for being
against public policy. The foreclosure effect, if any, depends on the
market share involved.
The relevant market for this purpose includes the full range of
selling opportunities reasonably open to rivals, namely, all the
product and geographic sales they may readily compete for, using
easily convertible plants and marketing organizations.
Applying the preceding principles to the case at bar, there is
nothing invalid or contrary to public policy either in the objectives
sought to be attained by paragraph 5, the exclusivity clause, in
prohibiting respondent Luna, and all other Avon supervisors, from
selling products other than those manufactured by petitioner Avon
51 ST. LUKE’S MEDICAL CENTER EMPLOYEE’S
ASSOCIATION-AFW (SLMCEA-AFW) AND
MARIBEL S. SANTOS vs. NLRC
FACTS:
Maribel S. Santos was hired as X-Ray Technician in the
Radiology department of private respondent St. Lukes Medical
Center, Inc. (SLMC). Congress passed and enacted Republic Act
No. 7431 known as the Radiologic Technology Act of 1992. Said
law requires that no person shall practice or offer to practice as a
radiology and/or x-ray technologist in the Philippines without
having obtained the proper certificate of registration from the
Board of Radiologic Technology. SLMC issued a final notice to all
practitioners of Radiologic Technology to comply with the
requirement of Republic Act No. 7431 otherwise, the unlicensed
employee will be transferred to an area which does not require a
license to practice if a slot is available. Later, a final notice was
issued to Maribel S. Santos requiring the latter to comply by taking
and passing the forthcoming examination otherwise, SLMC may
be compelled to retire her from employment should there be no
other position available where she may be absorbed. She was
likewise advised that only a license can assure her of her
continued employment at the Institute of Radiology of the SLMC.
otherwise, private respondent SLMC shall be constrained to take
action which may include her separation from employment. Later,
a notice was issued to Maribel S. Santos informing the latter that
the management of private respondent SLMC has approved her
retirement in lieu of separation pay, but Santos refused to accept
SLMCs offer for early retirement. SLMC again issued a Notice of
Separation from the Company to petitioner Maribel S. Santos after
the latter failed to present/ submit her appeal for rechecking to the
Professional Regulation Commission (PRC) of the recent board
examination which she took and failed. Maribel S. Santos filed a
complaint against private respondent SLMC for illegal dismissal.
ISSUE:
Whether petitioner Santos was illegally dismissed by
private respondent SLMC on the basis of her inability to secure a
certificate of registration from the Board of Radiologic
Technology.  NO
HELD:
While the right of workers to security of tenure is
guaranteed by the Constitution, its exercise may be reasonably
regulated pursuant to the police power of the State to safeguard
health, morals, peace, education, order, safety, and the general
welfare of the people. Consequently, persons who desire to
engage in the learned professions requiring scientific or
technical knowledge may be required to take an examination as a
prerequisite to engaging in their chosen careers. The most
concrete example of this would be in the field of medicine, the
practice of which in all its branches has been closely regulated by
the State. It has long been recognized that the regulation of this
field is a reasonable method of protecting the health and safety of
the public to protect the public from the potentially deadly effects
of incompetence and ignorance among those who would practice
medicine. The same rationale applies in the regulation of the
practice of radiologic and x-ray technology. No malice or ill-will can
be imputed upon private respondent as the separation of petitioner
Santos was undertaken by it conformably to an existing statute. It
is undeniable that her continued employment without the required
Board certification exposed the hospital to possible sanctions and
even to a revocation of its license to operate. Certainly, private
respondent could not be expected to retain petitioner Santos
despite the inimical threat posed by the latter to its business. This
notwithstanding, the records bear out the fact that petitioner
Santos was given ample opportunity to qualify for the position and
was sufficiently warned that her failure to do so would result in her
separation from work in the event there were no other vacant
positions to which she could be transferred. Despite these
warnings, petitioner Santos was still unable to comply and pass
the required exam. To reiterate, the requirement for Board
certification was set by statute. Justice, fairness and due process
demand that an employer should not be penalized for situations
where it had no participation or control. It would be unreasonable
to compel private respondent to wait until its license is cancelled
and it is materially injured before removing the cause of the
impending evil. Neither can the courts step in to force private
respondent to reassign or transfer petitioner Santos under these
circumstances.
Petitioner Santos is not in the position to demand that
she be given a different work assignment when what necessitated
her transfer in the first place was her own fault or failing. The
prerogative to determine the place or station where an employee
is best qualified to serve the interests of the company on the basis
of the his or her qualifications, training and performance belongs
solely to the employer.[14] The Labor Code and its implementing
Rules do not vest in the Labor Arbiters nor in the different
Divisions of the NLRC (nor in the courts) managerial authority.
52 DANILO LEONARDO, petitioner, vs. NLRC, ET.AL.
FACTS:
AURELIO FUERTE was originally employed by
REYNALDOS MARKETING CORP as a muffler specialist. He
alleges that he was instructed to report at private respondents
main office where he was informed by the companys personnel
manager that he would be transferred to its Sucat plant due to his
failure to meet his sales quota, and for that reason, his supervisors
allowance would be withdrawn. For a short time, FUERTE
reported for work at the Sucat plant; however, he protested his
transfer, subsequently filing a complaint for illegal termination.
Private respondent contends that it never terminated petitioners
services. In FUERTEs case, they claimed that the latter was
demoted pursuant to a company policy intended to foster
competition among its employees. Under this scheme, private
respondents employees are required to comply with a monthly
sales quota. Should a supervisor such as FUERTE fail to meet his
quota for a certain number of consecutive months, he will be
demoted, whereupon his supervisors allowance will be withdrawn
and be given to the individual who takes his place. When the
employee concerned succeeds in meeting the quota again, he is
reappointed supervisor and his allowance is restored.
ISSUE:
WON the right to demote an employee falls within the
category of management prerogatives.
HELD:
YES. This arrangement appears to us to be an allowable
exercise of company rights. An employer is entitled to impose
productivity standards for its workers, and in fact, non compliance
may be visited with a penalty even more severe than demotion.
Thus, [t]he practice of a company in laying off workers because
they failed to make the work quota has been recognized in this
jurisdiction. In the case at bar, the petitioners failure to
meet”reasonable” sales quota assigned to each of them constitute
a just cause of their dismissal, regardless of the permanent or
probationary status of their employment. Failure to observe
prescribed standards of work, or to fulfill reasonable work
assignments due to inefficiency may constitute just cause
for
dismissal. Such inefficiency is understood to mean failure to
attain work goals or work quotas, either by failing to complete the
same within the allotted reasonable period, or by producing
unsatisfactory results. This management prerogative of requiring
standards may be availed of so long as they are exercised in good
faith for the advancemen t of the employers interest.
53 RODOLFO LUNA, Petitioner, v. ALLADO
CONSTRUCTION CO., INC., and/or RAMON ALLADO,
Respondents.
FACTS:
Sometime in the afternoon of November 24, 2001,
petitioner alleges that he was given a travel order dated to
proceed to respondents main office in Davao City for
reassignment. Upon arrival at the office, he was asked to sign
several sets of "Contract of Project Employment". He refused.
Thus, he was not given a reassignment or any other work. These
incidents prompted him to file the complaint.
Respondents, on the other hand, alleged that petitioner
applied for a leave of absence which was granted. Upon expiration
of his leave, he was advised to report to the companys project in
Sarangani Province. However, he refused and claimed instead
that he had been dismissed illegally.
Finding that petitioner is deemed resigned, the Labor
Arbiter (LA) dismissed petitioners complaint for illegal dismissal,
but ordered respondent to pay the former the amount of
P18,000.00 by way of financial assistance.
Respondents appealed with the National Labor Relations
Commission (NLRC) which reversed the decision of the LA,
declared respondents guilty of illegal dismissal, and ordered them
to pay petitioner one-month salary for every year of service as
separation pay. Respondents moved for reconsideration but their
motion was denied.
Respondents elevated their cause to the CA via a petition
for certiorari under Rule 65. The CA granted respondents petition
for certiorari & deleted the award of financial assistance. Further,
the CA held that it was grave abuse of discretion for the NLRC to
rule on the issue of illegal dismissal when such issue was not
raised on appeal. Petitioner filed an MR but this was denied by the
CA.
ISSUE:
(1) Whether the NLRC could still review issues not
brought during the appeal,
(2) Whether the CA exercised grave abuse of discretion
in disregarding the findings of fact by the NLRC, the principle of
social justice, and jurisprudence with respect to the award of
financial assistance, and
(3) Whether the CA exhibited bias and partiality when it
rendered the decision and resolution considering the hasty and
improvident issuance of a writ of preliminary injunction to frustrate
petitioner in implementing the final and executor judgment of the
NLRC favouring petitioner.
HELD:
The petition is PARTLY GRANTED.The award of
financial assistance is REINSTATED.
I. The 2002 Rules of Procedure of the NLRC, which was
in effect at the time respondents appealed the Labor Arbiters
decision, provided that the NLRC shall limit itself only to the
specific issues that were elevated for review. Here, the NLRC
passed upon the issue of illegal dismissal although this was not
brought up in the appeal. Therefore, by considering the arguments
and issues in the reply/opposition to appeal which were not
properly raised by timely appeal nor comprehended within the
scope of the issue raised in petitioners appeal, public respondent
committed grave abuse of discretion amounting to excess of
jurisdiction.
II. As shown by the records, inconsistent with his claim
that he was actually dismissed petitioner applied for and was
granted a week long leave. Petitioner did not deny this. He merely
claimed that he went on leave since he was not given any work
assignment by the Company.However, the leave application form
which bore his signature clearly stated that his reason for going on
leave was "to settle [his] personal problem." Indeed, the NLRC
gravely abused its discretion in reversing the Labor Arbiters
decision on mere conjectures and insubstantial grounds.
III. We are not unmindful of the rule that financial
assistance is allowed only in instances where the employee is
validly dismissed for causes other than serious misconduct or
those reflecting on his moral character. But we must stress that
this Court did allow the grant of financial assistance as a measure
of social justice and exceptional circumstances, and as an
equitable concession.There appears to be no reason why
petitioner, who has served respondent corporation for more than
eight years without committing any infraction, cannot be extended
the reasonable financial assistance of P18,000.00 as awarded by
the Labor Arbiter on equity considerations.
IV. Granting of a TRO by a justice of the CA even without
the concurrence of the other associate justices in the division, is
allowed in cases of extreme urgency. Here, the records of this
case would attest to the urgency of the situation. When the TRO
was issued, the NLRC Regional Arbitration Branch No. XI was
already in the process of enforcing the assailed Resolution of the
NLRC dated May 9, 2003 as evidenced by its issuance of a Notice
of Hearingfor a pre-execution conference which was impelled by a
motion made by petitioner. The pre-execution conference was
conducted as scheduled, thus, respondents filed with the Court of
Appeals an Urgent Motion for the Issuance of a Temporary
Restraining Order and/or Writ of Preliminary Injunction.
54 ERNESTO G. YMBONG VS. ABS-CBN BROADCASTING
CORPORATION, VENERANDA SY AND DANTE LUZON,
VILLARAMA, JR., J.:
Before us is a Rule 45 Petition seeking to set aside the
August 22, 2007 Decision 1[1] and September 18, 2008
Resolution2[2] of the Court of Appeals (CA) in CA-G.R. SP No.
86206 declaring petitioner to have resigned from work and not
illegally dismissed.
The antecedent facts follow:
Petitioner Ernesto G. Ymbong started working for ABS-
CBN Broadcasting Corporation (ABS-CBN) in 1993 at its regional
station in Cebu as a television talent, co-anchoring Hoy Gising and
TV Patrol Cebu. His stint in ABS-CBN later extended to radio
when ABS-CBN Cebu launched its AM station DYAB in 1995
where he worked as drama and voice talent, spinner, scriptwriter
and public affairs program anchor. Like Ymbong, Leandro
Patalinghug also worked for ABS-CBN Cebu. Starting 1995, he
worked as talent, director and scriptwriter for various radio
programs aired over DYAB. On January 1, 1996, the ABS-CBN
Head Office in Manila issued Policy No. HR-ER-016 or the “Policy
on Employees Seeking Public Office.”
The pertinent portions read:
1. Any employee who intends to run for any public office
position, must file his/her letter of resignation, at least thirty (30)
days prior to the official filing of the certificate of candidacy either
for national or local election.
xxxx 3. Further, any employee who intends to join a
political group/party or even with no political affiliation but who
intends to openly and aggressively campaign for a candidate or
group of candidates (e.g. publicly speaking/endorsing candidate,
recruiting campaign workers, etc.) must file a request for leave of
absence subject to management’s approval.
For this particular reason, the employee should file the
leave request at least thirty (30) days prior to the start of the
planned leave period. x x x x3[3] [Emphasis and underscoring
supplied.]
Because of the impending May 1998 elections and based
on his immediate recollection of the policy at that time, Dante
Luzon, Assistant Station Manager of DYAB issued the following
memorandum:
TO : ALL CONCERNED FROM : DANTE LUZON DATE :
MARCH 25, 1998 SUBJECT : AS STATED Please be informed
that per company policy, any employee/talent who wants to run for
any position in the coming election will have to file a leave of
absence the moment he/she files his/her certificate of candidacy.
The services rendered by the concerned employee/talent to this
company will then be temporarily suspended for the entire
campaign/election period. For strict compliance.4[4] [Emphasis
and underscoring supplied.]
Luzon, however, admitted that upon double-checking of
the exact text of the policy and subsequent confirmation with the
ABS-CBN Head Office, he saw that the policy actually required
suspension for those who intend to campaign for a political party
or candidate and resignation for those who will actually run in the
elections.5[5]
After the issuance of the March 25, 1998 Memorandum,
Ymbong got in touch with Luzon. Luzon claims that Ymbong
approached him and told him that he would leave radio for a
couple of months because he will campaign for the administration
ticket. It was only after the elections that they found out that
Ymbong actually ran for public office himself at the eleventh hour.
Ymbong, on the other hand, claims that in accordance
with the March 25, 1998 Memorandum, he informed Luzon
through a letter that he would take a few months leave of absence
from March 8, 1998 to May 18, 1998 since he was running for
councilor of Lapu-Lapu City. As regards Patalinghug, Patalinghug
approached Luzon and advised him that he will run as councilor
for Naga, Cebu.
According to Luzon, he clarified to Patalinghug that he
will be considered resigned and not just on leave once he files a
certificate of candidacy. Thus, Patalinghug wrote Luzon the
following letter on April 13, 1998: Dear Mr. Luzon, I’m submitting to
you my letter of resignation as your Drama Production Chief and
Talent due to your company’s policy that every person connected
to ABS-CBN that should seek an elected position in the
government will be forced to resigned (sic) from his position. So
herewith I’m submitting my resignation with a hard heart. But I’m
still hoping to be connected again with your prestigious company
after the election[s] should you feel that I’m still an asset to your
drama production department.
I’m looking forward to that day and I’m very happy and
proud that I have served for two and a half years the most stable
and the most prestigious Radio and TV Network in the Philippines.
As a friend[,] wish me luck and Pray for me. Thank you. 1 2 3 4 5
Very Truly Yours, (Sgd.) Leandro “Boy” Patalinghug6[6]
Unfortunately, both Ymbong and Patalinghug lost in the
May 1998 elections. Later, Ymbong and Patalinghug both tried to
come back to ABS-CBN Cebu.
According to Luzon, he informed them that they cannot
work there anymore because of company policy. This was
stressed even in subsequent meetings and they were told that the
company was not allowing any exceptions. ABS-CBN, however,
agreed out of pure liberality to give them a chance to wind up their
participation in the radio drama, Nagbabagang Langit, since it was
rating well and to avoid an abrupt ending. The agreed winding-up,
however, dragged on for so long prompting Luzon to issue to
Ymbong the following memorandum dated September 14, 1998:
 TO : NESTOR YMBONG FROM : DANTE LUZON
SUBJECT : AS STATED DATE : 14 SEPT. 1998 Please be
reminded that your services as drama talent had already been
automatically terminated when you ran for a local government
position last election. The Management however gave you more
than enough time to end your drama participation and other
involvement with the drama department. It has been decided
therefore that all your drama participation shall be terminated
effective immediately. However, your involvement as drama
spinner/narrator of the drama “NAGBA[BA]GANG LANGIT”
continues until its writer/director Mr. Leandro Patalinghug wraps it
up one week upon receipt of a separate memo issued to him.7[7]
Ymbong in contrast contended that after the expiration of
his leave of absence, he reported back to work as a regular talent
and in fact continued to receive his salary. On September 14,
1998, he received a memorandum stating that his services are
being terminated immediately, much to his surprise. Thus, he filed
an illegal dismissal complaint 8[8] against ABS-CBN, Luzon and
DYAB Station Manager Veneranda Sy. He argued that the ground
cited by ABS-CBN for his dismissal was not among those
enumerated in the Labor Code, as amended. And even granting
without admitting the existence of the company policy supposed to
have been violated, Ymbong averred that it was necessary that
the company policy meet certain requirements before willful
disobedience of the policy may constitute a just cause for
termination.
Ymbong further argued that the company policy violates
his constitutional right to suffrage.9[9] Patalinghug likewise filed an
illegal dismissal complaint10[10] against ABS-CBN. ABS-CBN
prayed for the dismissal of the complaints arguing that there is no
employer-employee relationship between the company and
Ymbong and Patalinghug. ABS-CBN contended that they are not
employees but talents as evidenced by their talent contracts.
However, notwithstanding their status, ABS-CBN has a standing
policy on persons connected with the company whenever they will
run for public office.11[11]
Issues:
Whether Ymbong, by seeking an elective post, is deemed
to have resigned and NOT dismissed by ABS-CBN.
Held:
Ymbong is deemed resigned when he ran for councilor.
As Policy No. HR-ER-016 is the subsisting company policy and
not Luzon’s March 25, 1998 Memorandum, Ymbong is deemed
resigned when he ran for councilor.
We find no merit in Ymbong’s argument that “[his]
automatic termination x x x was a blatant [disregard] of [his] right
to due process” as he was “never asked to explain why he did not
tender his resignation before he ran for public office as mandated
by [the subject company policy].”12[37] Ymbong’s overt act of
running for councilor of Lapu-Lapu City is tantamount to
resignation on his part. He was separated from ABS-CBN not
because he was dismissed but because he resigned. Since there
was no termination to speak of, the requirement of due process in
dismissal cases cannot be applied to Ymbong. Thus, ABS-CBN is
not duty-bound to ask him to explain why he did not tender his
resignation before he ran for public office as mandated by the
subject company policy. In addition, we do not subscribe to
Ymbong’s claim that he was not in a position to know which of the
two issuances was correct. Ymbong most likely than not, is fully
aware that the subsisting policy is Policy No. HR-ER-016 and not
the March 25, 1998 Memorandum and it was for this reason that,
as stated by Luzon in his Sworn Statement, he only told the latter
that he will only campaign for the administration ticket and not
actually run for an elective post. Ymbong claims he had fully
apprised Luzon by letter of his plan to run and even filed a leave of
absence but records are bereft of any proof of said claim.
Ymbong claims that the letter stating his intention to go
on leave to run in the election is attached to his Position Paper as
Annex “A,” a perusal of said pleading attached to his petition
before this Court, however, show that Annex “A” was not his letter
to Luzon but the September 14, 1998 Memorandum informing
Ymbong that his services had been automatically terminated when
he ran for a local government position.
Moreover, as pointed out by ABS-CBN, had Ymbong
been truthful to his superiors, they would have been able to clarify
to him the prevailing company policy and inform him of the
consequences of his decision in case he decides to run, as Luzon
did in Patalinghug’s case. WHEREFORE, the petition for review
on certiorari is DENIED for lack of merit. With costs against
petitioner. SO ORDERED
55 PRODUCERS BANK OF THE PHILIPPINES vs. LRC and
PRODUCERS BANK EMPLOYEES ASSOCIATION
FACTS:
Private respondent argues that the mid-year and
Christmas bonuses, by reason of their having been given for
thirteen consecutive years, have ripened into a vested right and,
as such, can no longer be unilaterally withdrawn by petitioner
without violating Article 100 of Presidential Decree No. 442 which
prohibits the diminution or elimination of benefits already being
enjoyed by the employees.
Although private respondent concedes that the grant of a
bonus is discretionary on the part of the employer, it argues that,
by reason of its long and regular concession, it may become part
of the employees regular compensation.
On the other hand, Petitioner asserts that it cannot be
compelled to pay the alleged bonus differentials due to its
depressed financial condition, as evidenced by the fact that in
1984 it was placed under conservatorship by the Monetary Board.
Moreover, the collective bargaining agreement of the parties does
not provide for the payment of any mid -year or Christmas bonus.
On the contrary, in the CBA it states that any other benefits or
privileges w/c are not expressly provided, even if now
accorded or hereafter accorded to the employees, shall be
deemed purely acts of grace dependent upon the sole
judgment & discretion of the BANK to grant, modify or
wdraw.
HELD:
A bonus is an amount granted and paid to an employee
for his industry and loyalty which contributed to the success of the
employers business and made possible the realization of profits. It
is an act of generosity granted by an enlightened employer to spur
the employee to greater efforts for the success of the business
and realization of bigger profits. The granting of a bonus is a
management prerogative, something given in addition to what is
ordinarily received by or strictly due the recipient. Thus, a bonus
is not a demandable and enforceable obligation, except when
it is made part of the wage, salary or compensation of the
employee.
However, an employer cannot be forced to distribute
bonuses which it can no longer afford to pay. To hold otherwise
would be to penalize the employer for his past generosity.
56 LEPANTO CERAMICS, INC. vs. LEPANTO CERAMICS
EMPLOYEES ASSOCIATION
FACTS:
Lepanto Ceramics Employees Association is a legitimate
labor organization duly registered with the Department of Labor
and Employment. It is the sole and exclusive bargaining agent of
Lepanto Ceramics, Incorporated. In December 1998, Petitioner
gave a P3,000.00 bonus to its employees. Subsequently, in
September 1999, petitioner and respondent Association entered
into a CBA which provides for, among others, the grant of a
Christmas gift package/bonus to the members of the
respondent Association. The Christmas bonus was one of the
enumerated existing benefit, practice of traditional rights which
shall remain in full force and effect. In the succeeding years, the
bonus was not in cash. Instead, petitioner gave each of the
members of respondent Association Tile Redemption Certificates
equivalent to P3,000.00. On 2002, Petitioner gave a yearend cash
benefit of Six Hundred Pesos (P600.00) and offered a cash
advance to interested employees equivalent to one (1) month
salary payable in one year. The respondent Association objected
to the P600.00 cash benefit and argued that this was in violation of
the CBA it executed with the petitioner.
HELD:
By definition, a bonus is a gratuity or act of liberality of
the giver. It is something given in addition to what is ordinarily
received by or strictly due the recipient. A bonus is granted and
paid to an employee for his industry and loyalty which contributed
to the success of the employers business and made possible the
realization of profits. A bonus is also granted by an enlightened
employer to spur the employee to greater efforts for the success of
the business and realization of bigger profits. Generally, a bonus is
not a demandable and enforceable obligation. For a bonus to be
enforceable, it must have been promised by the employer
and
expressly agreed upon by the parties. Given that the bonus
in this case is integrated in the CBA, the same partakes the
nature of a demandable obligation. Verily, by virtue of its
incorporation in the CBA, the Christmas bonus due to
respondent Association has become more than just an act
of generosity on the part of the petitioner but a contractual
obligation it has undertaken.
57 INTERPHIL LABORATORIES EMPLOYEES UNION-
FFW, ENRICO GONZALES and MA. THERESA
MONTEJO vs. INTERPHIL LABORATORIES, INC.,
FACTS:
Interphil Laboratories Employees Union-FFW is the sole
and exclusive bargaining agent of the rank-and-file employees of
Interphil Laboratories, Inc., a company engaged in the business of
manufacturing and packaging pharmaceutical products. They had
a Collective Bargaining Agreement (CBA). On 16 April 1993, all
the rank-and-file employees of the company refused to follow their
regular two-shift work schedule of from 6:00 a.m. to 6:00 p.m., and
from 6:00 PM to 6:00 AM. At 2:00 p.m. and 2:00 AM, respectively,
the employees stopped working and left their workplace without
sealing the containers and securing the raw materials they were
working on. When Salazar inquired about the reason for their
refusal to follow their normal work schedule, the employees told
him to "ask the union officers."
To minimize the damage the overtime boycott was
causing the company, Salazar immediately asked for a meeting
with the union officers. In the meeting, Enrico Gonzales, a union
director, told Salazar that the employees would only return to their
normal work schedule if the company would agree to their
demands as to the effectivity and duration of the new CBA.
Salazar again told the union officers that the matter could be better
discussed during the formal renegotiations of the CBA.
HELD:
It is evident from the foregoing provision that the working
hours may be changed, at the discretion of the company, should
such change be necessary for its operations, and that the
employees shall observe such rules as have been laid down by
the company. In the case before us, Labor Arbiter Caday found
that respondent company had to adopt a continuous 24-hour
work daily schedule by reason of the nature of its business and the
demands of its clients. It was established that the employees
adhered to the said work schedule since 1988. The employees are
deemed to have waived the eight-hour schedule since they
followed, without any question or complaint, the two shift schedule
while their CBA was still in force and even prior thereto. The two-
shift schedule effectively changed the working hours stipulated in
the CBA. As the employees assented by practice to this
arrangement, they cannot now be heard to claim that the overtime
boycott is justified because they were not obliged to work beyond
eight hours.
58 MALAYAN EMPLOYEES ASSOC-FFW and RODOLFO
MANGALINO vs. MALAYAN INSURANCE CO, INC.
FACTS:
The union is the exclusive bargaining agent of the rank-
and-file employees of the company. A provision in the unions
collective bargaining agreement (CBA) with the company
allows union officials to avail of union leaves with pay for a total of
ninety-man days per year for the purpose of attending grievance
meetings, Labor-Management Committee meetings, annual
National Labor Management Conferences, labor education
programs and seminars, and other union activities. The company
issued a rule in November 2002 requiring not only the prior
notice that the CBA expressly requires, but prior approval by the
department head before the union and its members can avail of
union leaves. The rule was placed into effect in November
2002 without any objection from the union until a union officer,
Mangalino, filed union leave applications in January and February,
2004. His department head disapproved the applications
because the department was undermanned at that time. Despite
the disapproval, Mangalino proceeded to take the union leave. He
said he believed in good faith that he had complied with the
existing company practice and with the procedure set forth in the
CBA. The company responded by suspending him for one week
and, thereafter, for a month, for his second offense in February
2004.
ISSUE:
WON regulation of the use of union leaves is within
the companys management prerogative
HELD:
YES. While it is true that the union and its members have
been granted union leave privileges under the CBA, the grant
cannot be considered separately from the other provisions
of the CBA, particularly the provision on management prerogatives
where the CBA reserved for the company the full and complete
authority in managing and running its business. We see
nothing in the wordings of the union leave provision that removes
from the company the right to prescribe reasonable rules and
regulations to govern the manner of availing of union leaves,
particularly the prerogative to require prior approval. Precisely,
prior notice is expressly required under the CBA so that the
company can appropriately respond to the request for leave. In
this sense, the rule requiring prior approval only made express
what is implied in the terms of the CBA. The prior approval policy
fully supported the validity of the suspensions the company
imposed on Mangalino. We point out additionally that as an
employee, Mangalino had the clear obligation to comply with the
management disapproval of his requested leave while at the same
time registering his objection to the company regulation and
action. That he still went on leave, in open disregard of his
superiors orders, rendered Mangalino open to the charge of
insubordination, separately from his absence without official leave.
This charge, of course, can no longer prosper even if laid today,
given the lapse of time that has since transpired.