1.
CALS POULTRY SUPPLY CORPORATION and
DANILO YAP vs. ALFREDO ROCO and CANDELARIA
ROCO
FACTS: CALS Poultry Supply Corporation is engaged in
the business of selling dressed chicken and other related
products and managed by Danilo Yap
CALS hired Alfredo Roco as its driver and Edna Roco,
Alfredos sister, as a helper in the dressing room of CALS.
On May 16, 1995, it hired Candelaria Roco, another
sister, as helper, also at its chicken dressing plant on an
probationary basis.
On March 5, 1996, Alfredo Roco and Candelaria Roco
filed a complaint for illegal dismissal against CALS and
Danilo Yap alleging that Alfredo and Candelaria were
illegally dismissed on January 20, 1996 and November 5,
1996, respectively.
According to Candelaria Roco, she was terminated
without cause from her job as helper after serving more
than six (6) months as probationary employee.
The Labor Arbiter on April 16, 1998, issued a decision
dismissing the complaints for illegal dismissal for lack of
merit.
In the case of Candelaria Roco, the Labor Arbiter upheld
CALS decision not to continue with her probationary
employment having been found her unsuited for the
work for which her services were engaged.
She was hired on May 16, 1995 and her services were
terminated on November 15, 1995.
ISSUE: WON Candelaria has attained the status of a
regular employee.
HELD: NO. We agree with CALS contention as upheld by
both the Labor Arbiter and the NLRC that Candelarias
services was terminated within and not beyond the 6-
month probationary period.
In Cebu Royal v. Deputy Minister of Labor, our
computation of the 6-month probationary period is
reckoned from the date of appointment up to the same
calendar date of the 6th month following.
2. ALCIRA vs. NLRC
FACTS: The petitioner, Radin Alcira, was hired by the
respondent Middle by Philippines Corporation as
engineering support services supervisor under
probationary status for 6 months. Afterwards, the
service of the petitioner was terminated by the
respondent on the ground that the latter was not
satisfied on the performance of the former.
As a result, the petitioner filed a complaint foe illegal
dismissal in the National Labor Relations Commission
(NLRC) against the respondent.
Petitioner contended that his termination in the service
tantamount to illegal dismissal since he attained the
status of a regular employee as of the time of dismissal.
He presented the appointment paper showing that he
was hired on May 20, 1996, consequently, his dismissal
on November 20, 1996 was illegal because at that time,
he wa s already a regular employee since the 6-month
probationary period ended on November 16, 1996.
The respondent, on the other hand, asserted that during
the petitioner’s probationary period, he showed poor
performance on his assigned tasks, was late couple of
times and violated the company’s rule.
Thus, the petitioner was terminated and his application
to become a regular employment was disapproved.
The respondent also insisted that the removal of the
petitioner from office was within the probationary
period.
The Labor Arbiter dismissed the complaint on the ground
that the dismissal of the petitioner was done before his
regularization because the 6- month probationary period,
counting from May 20, 1996 shall end on November 20,
1996.
The NLRC affirmed the decision of the Labor Arbiter. The
Court of Appeals affirmed the decision of NLRC.
Hence, the present recourse.
ISSUE: Whether the petitioner was already a regular
employee in respondent’s company at the
time of his dismissal from the service.
HELD: The Supreme Court ruled in the negative. The
status of the petitioner at the time of his termination was
still probationary.
His dismissal on November 20, 1996 was within the 6-
month probationary period.
Article 13 of the Civil Code provides that when the law
speaks of years, months, and days and nights, it shall be
understood that years are of 365 days, months of 30
days, days of 24 hours and nights are from sunset to
sunrise.
Since, one month is composed of 30 days, then, 6 months
shall be understood to be composed of 180 days.
And the computation of the 6- month period is reckoned
from the date of appointment up to the same calendar
date of the 6th month following.
Since, the number of days of a particular month is
irrelevant, petitioner was still a probation ary employee
at the time of his dismissal. Wherefore, the petition is
dismissed.
Page 1 of 38
3. MITSUBISHI MOTORS PHILIPPINES CORPORATION
vs CHRYSLER PHILIPPINES LABOR UNION and
NELSON PARAS
FACTS: Nelson Paras was hired on a probationary basis
as a manufacturing trainee at the Plant Engineering
Maintenance Department of Mitsubishi Motors
Philippines Corporation (MMPC).
He and the new and re-hired employees were given an
orientation respecting the company’s history, corporate
philosophy, organizational structure, and company rules
and regulations, including the company standards for
regularization, code of conduct and company-provided
benefits.
Paras started reporting for work on May 27, 1996. As
part of the MMPC’s policy, Paras was evaluated by his
immediate supervisors Lito R. Lacambacal and Wilfredo J.
Lopez7 after six (6) months, and received an average
rating.
Later, Lacambacal informed Paras that based on his
performance rating, he would be regularized.
However, the Department and Division Managers
reviewed the performance evaluation made on Paras.
They unanimously agreed, along with Paras’ immediate
supervisors, that the performance of Paras was
unsatisfactory.
As a consequence, Paras was not considered for
regularization.
On November 26, 1996, he received a Notice of
Termination dated November 25, 1996, informing him
that his services were terminated effective the said date
since he failed to meet the required company standards
for regularization.
ISSUE: WON Paras, who continued to be employed even
after the 180th day, had become a regular employee
HELD: YES. Paras was employed as a management
trainee on a probationary basis. During the orientation
conducted on May 15, 1996, he was apprised of the
standards upon which his regularization would be based.
He reported for work on May 27, 1996. As per the
company’s policy, the probationary period was from
three (3) months to a maximum of six (6) months.
Applying Article 13 of the Civil Code, 31 the probationary
period of six (6) months consists of one hundred eighty
(180) days. This is in conformity with paragraph one,
Article 13 of the Civil Code, which provides that the
months which are not designated by their names shall be
understood as consisting of thirty (30) days each.
The number of months in the probationary period, six
(6), should then be multiplied by the number of days
within a month, thirty (30); hence, the period of one
hundred eighty (180) days. As clearly provided for in the
last paragraph of Article 13, in computing a period, the
first day shall be excluded and the last day included.
Thus, the one hundred eighty (180) days commenced on
May 27, 1996, and ended on November 23, 1996.
The termination letter dated November 25, 1996 was
served on respondent Paras only at 3:00 a.m. of
November 26, 1996. He was, by then, already a regular
employee of the petitioner under Article 281 of the Labor
Code
4. ROBINSONS GALLERIA/ROBINSONS SUPERMARKET
CORPORATION and/or JESS MANUEL, petitioners, vs.
IRENE R. RANCHEZ, respondents.
FACTS: Respondent Ranchez was a probationary
employee for 5 months. She was hired as a cashier by
Robinsons sometime within that period. Two weeks
after she was hired, she reported the loss of cash which
she had placed in the company locker.
She offered to pay for the lost amount but the Operations
Manager of Robinsons had her strip-searched then
reported her to the police even though they found
nothing on her person. An information for Qualified Theft
was filed with the Quezon City Regional Trial Court. She
was detained for 2 weeks for failure to immediately post
bail.
Weeks later, respondent Ranchez filed a complaint for
illegal dismissal and damages. A year later, Robinsons
sent to respondent by mail a notice of termination
and/or notice of expiration of probationary employment.
ISSUE: Whether respondent was illegally terminated
from employment by petitioners.
HELD: The petition is unmeritorious.
There is probationary employment when the employee
upon his engagement is made to undergo a trial period
during which the employer determines his fitness to
qualify for regular employment based on reasonable
standards made known to him at the time of engagement.
A probationary employee, like a regular employee, enjoys
security of tenure.
However, in cases of probationary employment, aside
from just or authorized causes of termination, an
additional ground is provided under Article 281 of the
Labor Code,i.e., the probationary employee may also be
terminated for failure to qualify as a regular employee in
accordance with reasonable standards made known by
the employer to the employee at the time of the
engagement.
Thus, the services of an employee who has been engaged
on probationary basis may be terminated for any of the
following: a just or; an authorized cause; and; when he
fails to qualify as a regular employee in accordance with
reasonable standards prescribed by the employer.
Article 277(b) of the Labor Code mandates that the
employer shall furnish the worker, whose employment is
sought to be terminated, a written notice containing a
statement of the causes of termination, and shall afford
the latter ample opportunity to be heard and to defend
himself with the assistance of a representative if he so
desires, in accordance with company rules and
regulations pursuant to the guidelines set by the
Department of Labor and Employment.
Page 2 of 38
5. ST. PAUL COLLEGE QUEZON CITY, SR. LILIA
THERESE TOLENTINO, SPC, SR. BERNADETTE
RACADIO, SPC, and SR. SARAH MANAPOL, Petitioners,
v. REMIGIO MICHAEL A. ANCHETA II and CYNTHIA A.
ANCHETA, Respondent.
FACTS: Remigio Michael was hired by the St. Paul College
(SPCQC) as a teacher in the Gen. Education Dept. with a
probationary rank in SY 1996-1997 which was renewed
the following year.
His wife, Cynthia was was also hired as a part time
teacher of the Mass Comm Dept in the 2nd Sem SY 1996-
1997 and her appointment was renewed for SY 1997-
1998.
February 1998, the spouses both wrote a letter
addressed to Sr. Lilia asking for their contract to be
renewed which was indeed granted by the College
Council as evidenced by a letter sent by petitioner.
April 22,1998, a letter, whose signatures includes that of
the respondents, was sent to Sr. Bernadette.
The said letter contain teachers sentiments regarding
school policies. However, April 21, 1998, a letter written
by the latter was shown, reiterating the conversation of
Sr. Bernadette and Remigio regarding the noncompliance
of respondent to instructional school policies.
Accordingly, Sr. Bernadette wrote a letter endorsing the
termination of the spouses.
Respondents submitted their comments however they
were still terminated and their letter for reconsideration
denied thus the filling of a complaint for illegal dismissal
which was dismissed by both NLRC and LA but was
granted by the CA. Petitioners MR was denied hence the
present petition.
ISSUE: Whether or not the spouses were illegally
dismissed.
HELD: Respondent Remigio Michael's spouse shared the
same defenses and admissions as to the charges against
her.
The plain admissions of the charges against them were
the considerations taken into account by the petitioner
school in their decision not to renew the respondent
spouses' employment contracts. This is a right of the
school that is mandated by law and jurisprudence. It is
the prerogative of the school to set high standards of
efficiency for its teachers since quality education is a
mandate of the Constitution. Schools cannot be required
to adopt standards which barely satisfy criteria set for
government recognition. The same academic freedom
grants the school the autonomy to decide for itself the
terms and conditions for hiring its teacher, subject of
course to the overarching limitations under the Labor
Code.
A probationary employee or probationer is one who is on
trial for an employer, during which the latter determines
whether or not he is qualified for permanent
employment.
The probationary employment is intended to afford the
employer an opportunity to observe the fitness of a
probationary employee while at work, and to ascertain
whether he will become an efficient and productive
employee. The word probationary, as used to describe
the period of employment, implies the purpose of the
term or period, not its length. It is important that the
contract of probationary employment specify the period
or term of its effectivity. The failure to stipulate its
precise duration could lead to the inference that the
contract is binding for the full three-year probationary
period.
Therefore, the letters sent by petitioner, which were void
of any specifics cannot be considered as contracts.
The closest they can resemble to are that of informal
correspondence among the said individuals.
As such, petitioner school has the right not to renew the
contracts of the respondents, the old ones having been
expired at the end of their terms.
6. TAMSONS ENTERPRISES, INC., NELSON LEE,
LILIBETH ONG and JOHNSON NG v. COURT OF
APPEALS and ROSEMARIE L. SY
FACTS: It appears that on September 1, 2006, Sy was hired by
Tamsons as Assistant to the President. On February 24, 2007,
four days before she completed her sixth month of working in
Tamsons, Ng, Sy was informed that her services would be
terminated due to inefficiency.
Sy claimed that the remarks of her superiors about her alleged
inefficiency were ill-motivated and made without any basis. She
had been rendering services for almost six (6) months before
she was arbitrarily and summarily dismissed. The petitioners
did not show her any evaluation or appraisal report regarding
her alleged inefficient performance. Petitioners asserted that
before Sy was hired, she was apprised that she was being hired
as a probationary employee for six months, subject to extension
as a regular employee conditioned on her meeting the
standards of permanent employment set by the company. Her
work performance was thereafter monitored and evaluated. On
February 1, 2007, she was formally informed that her
employment would end because she failed to meet the
company's standards. Sy filed a case for illegal dismissal. The
ELA rendered a decision in favor of Sy, stating that a
termination, notwithstanding the probationary status, must be
for a just cause. Dissatisfied, the petitioners appealed to the
NLRC.
The NLRC reversed the ELAs finding. The NLRC reasoned out
that failure to qualify for regular employment is in itself a just
cause for termination of probationary employment.
ISSUE: Was the termination of Sy, a probationary employee,
valid?
HELD: Even if probationary employees do not enjoy
permanent status, they are accorded the constitutional
protection of security of tenure. They may only be terminated
for a just cause or when they otherwise fail to qualify as regular
employees in accordance with reasonable standards made
known to them by the employer at the time of their
engagement. One of the conditions before an employer can
terminate a probationary employee is dissatisfaction on the
part of the employer which must be real and in good faith, not
feigned so as to circumvent the contract or the law. Here,
absent any proof showing that the work performance of
petitioner was unsatisfactory, We cannot conclude that
petitioner failed to meet the standards. This absence of proof
leads Us to infer that their dissatisfaction with her work
performance was contrived so as not to regularize her
employment. The power of the employer to terminate an
employee on probation is not without limitations. Here, the
petitioners failed to convey to Sy the standards upon which she
should measure up to be considered for regularization and how
the standards had been applied in her case. Petitioners
dissatisfaction was at best self-serving and dubious as they
could not present concrete and competent evidence
establishing her alleged incompetence. Failure on the part of
the petitioners to discharge the burden of proof is indicative
that the dismissal was not justified. The law is clear that in all
cases of probationary employment, the employer shall make
known to the employee the standards under which he will
qualify as a regular employee at the time of his engagement.
Where no standards are made known to the employee at that
time, he shall be deemed a regular employee.
The standards under which she would qualify as a regular
employee not having been communicated to her at the start of
her probationary period, Sy qualified as a regular employee
Assuming that Sy failed to meet the standards that was made
known to her, the termination was still flawed flawed for failure
to give the required notice to Sy.
In this case, the petitioners failed to comply with the
requirement of a written notice. Notably, Sy was merely
verbally informed that her employment would be terminated as
admitted by the petitioners. Considering that the petitioners
failed to observe due process in dismissing her, the dismissal
Page 3 of 38
had no legal sanction. It bears stressing that a workers
employment is property in the constitutional sense.

Page 4 of 38
7. MANILA ELECTRIC CO. VS. GALA, G.R. NO. 191288 & conditions) laid down in his probationary employment
191304, MARCH 7, 2012 agreement. Under paragraph 8 of the agreement, he was
subject to strict compliance with, and non-violation of the
FACTS: Respondent Jan Carlo Gala was hired by Company Code on Employee Discipline, Safety Code,
petitioner Meralco as a probationary lineman on March 2, rules and regulations and existing policies.
2006. On July 27, 2006, barely four months on the job, Paragraph 10 required him to observe at all times the
Gala was dismissed for alleged complicity in pilferages of highest degree of transparency, selflessness and integrity
Meralco’s electrical supplies, particularly, for the incident in the performance of his duties and responsibilities, free
which took place on May 25, 2006. On that day, Gala and from any form of conflict or contradicting with his own
other Meralco workers were instructed to replace a personal interest.
worn-out electrical pole at the Pacheco Subdivision in On the whole, the totality of the circumstances obtaining
Valenzuela City. While the Meralco crew was at work, one in the case convinces us that Gala could not but have
Noberto Llanes, a non-Meralco employee, arrived. knowledge of the pilferage of company electrical supplies
He appeared to be known to the Meralco foremen as they on May 25, 2006; he was complicit in its commission, if
were seen conversing with him. not by direct participation, certainly, by his inaction
Llanes boarded the trucks, without being stopped, and while it was being perpetrated and by not reporting the
took out what were later found as electrical supplies. incident to company authorities.
Aside from Gala, the foremen and the other linemen who Thus, we find substantial evidence to support the
were at the worksite when the pilferage happened were conclusion that Gala does not deserve to remain in
later charged with misconduct and dishonesty for their Meralco’s employ as a regular employee.
involvement in the incident. Unknown to them, a He violated his probationary employment agreement,
Meralco surveillance task force was monitoring their especially the requirement for him “to observe at all
activities and recording everything with a video camera. times the highest degree of transparency, selflessness
Gala denied involvement in the pilferage, contending that and integrity in the performance of their duties and
even if his superiors might have committed a responsibilities.” He failed to qualify as a regular
wrongdoing, he had no participation in what they did. He employee.
claimed that: he was at some distance away from the
trucks when the pilferage happened; he did not have an
inkling that an illegal activity was taking place since his
supervisors were conversing with Llanes, giving him the
impression that they knew him; he did not call the
attention of his superiors because he was not in a
position to do so as he was a mere lineman; and he was
just following instructions in connection with his work
and had no control in the disposition of company
supplies and materials.
He maintained that his mere presence at the scene of the
incident was not sufficient to hold him liable as a
conspirator.
Despite Gala’s explanation, Meralco terminated his
employment. Gala responded by filing an illegal dismissal
complaint against Meralco.
The Labor Arbiter dismissed the complaint for lack of
merit.
She held that Gala’s participation in the pilferage of
Meralco’s property rendered him unqualified to become
a regular employee.
On appeal, the NLRC reversed the labor arbiter’s ruling.
It found that Gala had been illegally dismissed, since
there was “no concrete showing of complicity with the
alleged misconduct/dishonesty.
The CA denied Meralco’s petition for lack of merit and
partially granted Gala’s petition
It concurred with the NLRC that Gala had been illegally
dismissed.
It opined that nothing in the records show Gala’s
knowledge of or complicity in the pilferage.

ISSUE: Whether or not Gala was illegally dismissed.

HELD: We find merit in the petition. Contrary to the

conclusions of the CA and the NLRC, there is substantial
evidence supporting Meralco’s position that Gala had
become unfit to continue his employment with the
company.
Gala was found, after an administrative investigation, to
have failed to meet the standards expected of him to
become a regular employee and this failure was mainly
due to his “undeniable knowledge, if not participation, in
the pilferage activities done by their group, all to the
prejudice of the Company’s interests.”
As probationary employee, his overall job performance
and his behavior were being monitored and measured in
accordance with the standards (i.e., the terms and
Page 5 of 38
8/9. ARMANDO ALILING, petitioner, vs. JOSE B.
FELICIANO, MANUEL F. SAN MATEO III, JOSEPH R.
LARIOSA, and WIDE WIDE WORLD EXPRESS
CORPORATION
G.R. No. 185829. April 25, 2012.
FACTS: On June 2, 2004, respondent Wide Wide World
Express (WWWEC) employed petitioner Armando Aliling
as account executive. The employment was for a six
month probationary period.
On October 6, 2004, respondent terminated petitioner’s
services owing to his non-satisfactory performance
during his probationary period. Petitioner filed a
complaint for illegal dismissal alleging, among others,
that at the time of his engagement, respondent did not
make known to him the standards under which he will
qualify as a regular employee.
ISSUE: WON Aliling’s contention is meritorious
HELD: Yes. To note, that June, 2, 2004, letter-offer itself
states that the regularization standards or the
performance norms to be used are still to be agreed upon
by Aliling and his supervisor. WWWEC failed to prove
that an agreement as regards thereto has been reached.
Clearly then, there were actually no performance
standards to speak of. And lest it be overlooked, Aliling
was assigned to GX Trucking sales, an activity entirely
different from the Seafreight Sales he was originally hired
and trained for. Thus, at the time of his engagement, the
standards relative to his assignment with GX Sales could
not have plausibly been communicated to him as he was
under Seafreight Sales.
Respondents further allege that San Mateo’s email dated
July 16, 2004 shows that the standards for his
regularization were made known to Aliling at the time of
his engagement. In that email, San Mateo reminded
Aliling of the sales quota he ought to meet as a condition
for his continued employment. Contrary to respondents’
contention, San Mateo’s email cannot support their
allegation on Aliling being informed of the standards for
his continued employment, such as the sales quota, at the
time of his engagement. As it were, the email message
was sent to Aliling more than a month after he signed his
employment contract with WWWEC.
Sec. 6 of the implementing Rules of Book VI, Rule VIII-A
of the Code specifically requires the employer to inform
the probationary employee of such reasonable standards
at the time of his engagement, not at any time later; else,
the latter shall be considered a regular employee.
10. MYLENE CARVAJAL VS. LUZON DEVELOPMENT
BANK AND/OR OSCAR RAMIREZ
FACTS: Carvajal was employed as a trainee-teller by
Luzon Development Bank (Bank) under a six-month
probationary employment contract. Ramirez is the
President and CEO of the Bank. A month into her
employment, she was send a Memorandum directing her
to explain in writing why she should not be subjected to
disciplinary action for her eight tardiness on November
2003. A second Memorandum was sent to her on
January for her again chronic tardiness on December
2003.
She submitted her written explanations for both events
and manifested her acceptance of the consequences of
her actions. She was terminated for three days effective
21 January 2004. However, on 22 January, her
termination was lifted but at the same time, her services
were terminated. In the respondents’ position paper to
the LA, they explained that the reasons for her absence
are chronic tardiness, absenteeism and failure to perform
satisfactorily as a probationary employee. LA
Decision: The petitioner was illegally dismissed because
she was not afforded the notice in writing informing her
of what the Bank would like to bring out to her for the
latter to answer in writing. NLRC Decision: NLRC
affirmed the decision of the LA. CA Decision: The CA
found that the petitioner was not entitled to backwages
because she was rightfully dismissed for failure to meet
the employment standards.
ISSUE: Whether the petitioner can be considered a
regular employee at the time of her dismissal.
HELD: No. Carvajal’s appointment letter reads that
“Possible extension of this contract will depend on the
job requirements of the Bank and your overall
performance.
Performance review will be conducted before possible
renewal can take effect.”
Therefore, petitioner knew, at the time of her
engagement, that she must comply with the standards set
forth by respondent and perform satisfactorily in order
to attain regular status. Even the NLRC upheld the
petitoner’s probationary status, stating that
reinstatement is not synonymous to regularization.
Although probationary employees also enjoy security of
tenure, he may still be terminated because of just and
authorized causes of termination and the additional
ground under Article 281 of the Labor Code, i.e. the
probationary employee may also be terminated for
failure to qualify as a regular employee in accordance to
the reasonable standards set by the employer.
Punctuality is a reasonable standard imposed on every
employee, whether in government or private sector.
This, together with absenteeism, underperformance and
mistake in clearing a check are infractions that cannot be
tantamount to satisfactory standards.
In addition to the abovementioned, it has been previously
held in PDI vs. Magtibay, Jr., that the second requirement
under Article 281 does not require notice and hearing.
Due process of law for this second ground consists of
making the reasonable standards expected of the
employee during his probationary period known to him
at the time of his engagement.
By the very nature of probationary employment, the
employee knows from the very start that he will be under
close observation and continuous scrutiny by his
supervisors.
If termination is for cause, it may be done at anytime
during the probation.
Page 6 of 38
11. ATLANTA INDUSTRIES, INC. and/or ROBERT
CHAN, VS APRILITO R. SEBOLINO, KHIM V. COSTALES,
ALVIN V. ALMOITE, and JOSEPH S. SAGUN,
G.R. No. 187320, January 26, 2011
FACTS: The complainants filed a case against Atlanta
Industries Inc. for non-regularization, underpayment,
nonpayment of wages and other money claims, as well as
claims for moral and exemplary damages and attorney’s
fees against the petitioners Atlanta Industries, Inc.
They alleged that they had attained regular status as they
were allowed to work with Atlanta for more than six (6)
months from the start of a purported apprenticeship
agreement between them and the company.
They claimed that they were illegally dismissed when
the apprenticeship agreement expired. Atlanta Inc.
argued that the workers were not entitled to
regularization and to their money claims because they
were engaged as apprentices under a government-
approved apprenticeship program.
The company offered to hire them as regular employees
in the event vacancies for regular positions occur in the
section of the plant where they had trained.
Then the labor arbiter dismiss the complain but the CA
reversed it.
ISSUE: Whether complainants are employees of Atlanta
and entitled to be payed.
RULING: Yes, Even if we recognize the company’s need to
train its employees through apprenticeship, we can only
consider the first apprenticeship agreement for the
purpose.
With the expiration of the first agreement and the
retention of the employees, Atlanta had, to all intents and
purposes, recognized the completion of their training and
their acquisition of a regular employee status.
To foist upon them the second apprenticeship agreement
for a second skill which was not even mentioned in the
agreement itself, is a violation of the Labor Code’s
implementing rules and is an act manifestly unfair to the
employees, to say the least.
On the supposed apprenticeship agreements they
entered into, Costales, Almoite, Sebolino and Sagun
refuse to accept the agreements’ validity, contending that
the company’s apprenticeship program is merely a ploy
“to continually deprive [them] of their rightful wages and
benefits which are due them as regular employees.” The
petition is denied.
12. GREGORIO V. TONGKO v. THE MANUFACTURERS
LIFE INSURANCE CO. (PHILS.), INC. and RENATO A.
VERGEL DE DIOS
FACTS: Gregorio V. Tongko started his professional
relationship with Manulife by virtue of a Career Agent's
Agreement he executed with Manulife.
In the Agreement, it is provided that the Agent is an
independent contractor and nothing contained herein
shall be construed or interpreted as creating an
employer-employee relationship between the Company
and the Agent. De Dios wrote Tongko another letter
terminating Tongko's services Tongko filed a Complaint
against Manulife for illegal dismissal. Tongko, in a bid to
establish an employer-employee relationship, alleged
that De Dios gave him specific directives on how to
manage his area of responsibility. He further claimed that
Manulife exercised control over him
Labor Arbiter Marita V. Padolina dismissed the complaint
for lack of an employer-employee relationship. Padolina
found that applying the four-fold test in determining the
existence of an employer-employee relationship, none
was found in the instant case.
Tongko appealed the arbiter's Decision to the NLRC
which reversed the same... the CA issued the assailed
Decision... finding the absence of an employer-employee
relationship between the parties
ISSUE: Did the Supreme Court err in issuing the June 29,
2010 resolution, reversing its earlier decision that an
employer-employee relationship existed?
HELD: The Supreme Court finds no reason to reverse the
June 29, 2010 decision. Control over the performance of
the task of one providing service both with respect to the
means and manner, and the results of the service is the
primary element in determining whether an employment
relationship exists. The Supreme Court ruled petitioners
Motion against his favor since he failed to show that the
control Manulife exercised over him was the control
required to exist in an employer-employee relationship;
Manulifes control fell short of this norm and carried only
the characteristic of the relationship between an
insurance company and its agents, as defined by the
Insurance Code and by the law of agency under the Civil
Code.
In the Supreme Courts June 29, 2010 Resolution, they
noted that there are built-in elements of control specific
to an insurance agency, which do not amount to the
elements of control that characterize an employment
relationship governed by the Labor Code.The Insurance
Code provides definite parameters in the way an agent
negotiates for the sale of the companys insurance
products, his collection activities and his delivery of the
insurance contract or policy. They do not reach the level
of control into the means and manner of doing an
assigned task that invariably characterizes an
employment relationship as defined by labor law.
To reiterate, guidelines indicative of labor law "control"
do not merely relate to the mutually desirable result
intended by the contractual relationship; they must have
the nature of dictating the means and methods to be
employed in attaining the result. Tested by this norm,
Manulifes instructions regarding the objectives and sales
targets, in connection with the training and engagement
of other agents, are among the directives that the
principal may impose on the agent to achieve the
assigned tasks.They are targeted results that Manulife
wishes to attain through its agents. Manulifes codes of
conduct, likewise, do not necessarily intrude into the
insurance agents means and manner of conducting their
sales. Codes of conduct are norms or standards of
behavior rather than employer directives into how
specific tasks are to be done.
In sum, the Supreme Court found absolutely no evidence
of labor law control. DENIED.
Page 7 of 38
13 PHILIPPINE CHARITY SWEEPSTAKES OFFICE
BOARD OF DIRECTORS and REYNALDO P. MARTIN v.
MARIE JEAN C. LAPID
FACTS: An administrative complaint was filed against
the Respondent for allegedly confronting, badmouthing
and shouting invectives at Mr. Guemo, in the presence of
other employees and seeking assistance from the PSCO.
The PCSO Board of Directors found her guilty of
discourtesy in the course of official duties and grave
misconduct and imposed on her the penalty of dismissal
from service.
On appeal with the CSC, the Commission dismissed the
respondent’s appeal for being moot and academic.
Moreover, they ruled that the respondent is a casual
employee which means that she is not entitled to security
of tenure.
However, the CA reversed the decision of the
Commission by reinstating the respondent in the service
until the expiration of her casual employment.
ISSUE: Did the CA gravely err in granting the
respondent’s petition, in effect, reversing the CSC’s
resolutions.
HELD: A new ruling recognizes that casual employees are
covered by the security of tenure and cannot be
terminated within the period of his employment except
for cause.
Despite this new ruling, it is not the intention of the Court
to make the status of a casual employee at par with that
of a regular employee, who enjoys permanence of
employment.
The rule is still that casual employment will cease
automatically at the end of the period unless renewed as
stated in the Plantilla of Casual Employment.
Casual employees may also be terminated anytime
though subject to certain conditions or qualifications.
Thus, they may be laid-off anytime before the expiration
of the employment period provided any of the following
occurs: when their services are no longer needed; funds
are no longer available; the project has already been
completed/finished; or their performance are below par.
Equally important, they are entitled to due process
especially if they are to be removed for more serious
causes or for causes other than the reasons mentioned in
CSC Form No. 001.
The reason for this is that their termination from the
service could carry a penalty affecting their rights and
future employment in the government.
In the case at bench, the CSC itself found that Lapid was
denied due process as she was never formally charged
with the administrative offenses of Discourtesy in the
Course of Official Duties and Grave Misconduct, for which
she was dismissed from the service.
To somehow remedy the situation, the petitioners
mentioned in their Memorandum before the CA that
there was no reason anymore to pursue the
administrative charge against Lapid and to investigate
further as this was superseded by Memorandum dated
September 14, 2005 recommending the termination of
respondent Lapid’s casual employment.
They pointed out that this was precisely the reason why
no Formal Charge was issued. Clearly, the action of
petitioners clearly violated Lapid’s basic rights as a
casual employee.
Therefore, the petition is denied and the respondent is
allowed to continue rendering services as teller of PCSO
and is also entitled to payment of backwages.
14. EXODUS INTERNATIONAL CONSTRUCTION
CORPORATION and ANTONIO P. JAVALERA,
Petitioners, v.GUILLERMO BISCOCHO, FERNANDO
PEREDA, FERDINAND MARIANO, GREGORIO BELLITA
and MIGUEL BOBILLO, Respondent.
FACTS: Petitioner Exodus International Construction
Corporation (Exodus) is a duly licensed labor contractor
for the painting of residential houses, condominium units
and commercial buildings.
In the furtherance of its business, Exodus hired
respondents as painters on different dates. Guillermo,
Fernando, Ferdinand, and Miguel filed a complaint for
illegal dismissal and non-payment of holiday pay, service
incentive leave pay, 13th month pay and night-shift
differential pay.
The Labor Arbiter rendered a Decision exonerating
petitioners from the charge of illegal dismissal as
respondents chose not to report for work.
However, she allowed the claims for holiday pay, service
incentive leave pay and 13th month pay.
The Decision was affirmed by the NLRC and the CA.
They opined that in a situation where the employer has
complete control over the records and could thus easily
rebut any monetary claims against it but opted not to lift
any finger, the burden is on the employer and not on the
complainants.
ISSUE: Whether or not the CA erred and committed
grave abuse of discretion in ordering the reinstatement
of respondents to their former positions and affirming
the award granted by the lower tribunals.
HELD: The petition is partly meritorious.
In illegal dismissal cases, it is incumbent upon the
employees to first establish the fact of their dismissal
before the burden is shifted to the employer to prove that
the dismissal was legal.
Here, there was no evidence that respondents were
dismissed nor were they prevented from returning to
their work. It was only respondents’ unsubstantiated
conclusion that they were dismissed.
Clearly therefore, there was no dismissal, much less
illegal, and there was also no abandonment of job to
speak of.
The Labor Arbiter is therefore correct in ordering that
respondents be reinstated but without any backwages.
However, petitioners are of the position that the
reinstatement of respondents to their former positions,
which were no longer existing, is impossible, highly
unfair and unjust.
Petitioners are misguided.
They forgot that there are two types of employees in the
construction industry.
The first is referred to as project employees or those
employed in connection with a particular construction
project or phase thereof and such employment is
coterminous with each project or phase of the project to
which they are assigned.
The second is known as non-project employees or those
employed without reference to any particular
construction project or phase of a project.
The second category is where respondents are classified.
Petition is PARTLY GRANTED.
Page 8 of 38
15. D.M. CONSUNJI, INC. and/or DAVID M. CONSUNJI,
Petitioners, v. ESTELITO L. JAMIN, Respondent.
FACTS: Petitioner D.M. Consunji, Inc. (DMCI), a construction
company, hired respondent Estelito L. Jamin as a laborer.
Sometime in 1975, Jamin became a helper carpenter. Since his
initial hiring, Jamins employment contract had been renewed a
number of times. On March 20, 1999, his work at DMCI was
terminated due to the completion of the SM Manila project.
This termination marked the end of his employment with DMCI
as he was not rehired again. Jamin filed a complaintfor illegal
dismissal, with several money claims (including attorney’s
fees), against DMCI and its President/General Manager, David
M. Consunji. Jamin alleged that DMCI terminated his
employment without a just and authorized cause at a time when
he was already 55 years old and had no independent source of
livelihood. He claimed that he rendered service to DMCI
continuously for almost 31 years. DMCI denied liability. It
argued that it hired Jamin on a project-to-project basis, from the
start of his engagement in 1968 until the completion of its SM
Manila project on March 20, 1999 where Jamin last worked.
With the completion of the project, it terminated Jamins
employment. The LA dismissed the complaint for lack of merit.
On appeal, the NLRC affirmed the decision of the LA. On further
appeal, the CA reversed the NLRC decision and ruled that Jamin
was a regular employee. Hence, DMCI seeks a reversal of the CA
rulings on the ground that the appellate court committed a
grave error in annulling the decisions of the labor arbiter and
the NLRC.
ISSUE: Whether or not Jamin is a regular employee
HELD: Yes. CA Decision Affirmed. Once a project or work pool
employee has been: continuously, as opposed to intermittently,
rehired by the same employer for the same tasks or nature of
tasks; and these tasks are vital, necessary and indispensable to
the usual business or trade of the employer, then the employee
must be deemed a regular employee. While the contracts
indeed show that Jamin had been engaged as a project
employee, there was an almost unbroken string of Jamins
rehiring from December 17, 1968 up to the termination of his
employment on March 20, 1999. While the history of Jamins
employment (schedule of projects) relied upon by DMCI shows
a gap of almost four years in his employment for the period
between July 28, 1980 (the supposed completion date of the
Midtown Plaza project) and June 13, 1984 (the start of the IRRI
Dorm IV project), the gap was caused by the companys
omission of the three projects above mentioned. To reiterate,
Jamins employment history with DMCI stands out for his
continuous, repeated and successive rehiring in the companys
construction projects. In all the 38 projects where DMCI
engaged Jamins services, the tasks he performed as a carpenter
were indisputably necessary and desirable in DMCIs
construction business. He might not have been a member of a
work pool as DMCI insisted that it does not maintain a work
pool, but his continuous rehiring and the nature of his work
unmistakably made him a regular employee. Nevertheless, it is
vital in determining if the employee was hired for a specific
undertaking or tasked to perform functions vital, necessary and
indispensable to the usual business or trade of the employer.
Here, private respondent had been a project employee several
times over. His employment ceased to be coterminous with
specific projects when he was repeatedly re-hired due to the
demands of petitioners business. Without doubt, Jamins case
fits squarely into the employment situation just quoted.
16. UNIVERSAL ROBINA SUGAR MILLING
CORPORATION and RENE CABATI v. FERDINAND
ACIBO
FACTS: The complainants were employees of URSUMCO, and
were hired on various dates between 1988 and 1996, and on
different capacities. The complainants signed contracts of
employment for a period of 1 month or for a given season, and
were repeatedly hired to perform the same duties and, for
every engagement, were required to sign new employment
contracts for the same duration of one month or given season.
The complainants filed before the Labor Arbiter complaints for
regularization, entitlement to the benefits under the existing
Collective Bargaining Agreement (CBA), and attorney’s fees.
CA pointed out that the primary standard for determining
regular employment is the reasonable connection between a
particular activity performed by the employee vis-vis the usual
trade or business of the employer.
As the complainants have been performing their respective
tasks for at least one year, these same tasks, regardless of
whether the performance was continuous or intermittent,
constitutes sufficient evidence of the necessity, if not
indispensability, of the activity to URSUMCOs business.
ISSUE: Whether or not the respondents are regular employees
of URSUMCO?
HELD: The respondents are regular seasonal employees of
URSUMCO Article 280 of the Labor Code provides for three
kinds of employment arrangements, namely: regular,
project/seasonal and casual. Regular employment refers to that
arrangement whereby the employee has been engaged to
perform activities which are usually necessary or desirable in
the usual business or trade of the employer. By way of an
exception, paragraph 2, Article 280 of the Labor Code also
considers regular a casual employment arrangement when the
casual employees engagement has lasted for at least one year,
regardless of the engagements continuity. The controlling test
in this arrangement is the length of time during which the
employee is engaged. Project employment, on the other hand,
contemplates on arrangement whereby the employment has
been fixed for a specific project or undertaking whose
completion or termination has been determined at the time of
the engagement of the employee. The services of the project
employees are legally and automatically terminated upon the
end or completion of the project as the employees services are
coterminous with the project. Seasonal employment operates
much in the same way as project employment, albeit it involves
work or service that is seasonal in nature or lasting for the
duration of the season. To exclude the asserted seasonal
employee from those classified as regular employees, the
employer must show that: the employee must be performing
work or services that are seasonal in nature; and he had been
employed for the duration of the season.
Hence, when the seasonal workers are continuously and
repeatedly hired to perform the same tasks or activities for
several seasons or even after the cessation of the season, this
length of time may likewise serve as badge of regular
employment. Casual employment refers to any other
employment arrangement that does not fall under any of the
first two categories. In the case at bar, the respondents were
made to perform various tasks that did not at all pertain to any
specific phase of URSUMCO's strict milling operations that
would ultimately cease upon completion of a particular phase in
the milling of sugar; rather, they were tasked to perform duties
regularly and habitually needed in URSUMCO's operations
during the milling season. The respondents duties as loader
operators, hookers, crane operators and drivers were necessary
to haul and transport the sugarcane from the plantation to the
mill; laboratory attendants, workers and laborers to mill the
sugar; and welders, carpenters and utility workers to ensure
the smooth and continuous operation of the mill for the
duration of the milling season, as distinguished from the
production of the sugarcane which involves the planting and
raising of the sugarcane until it ripens for milling. They
perform activities that are necessary and desirable in sugarcane
production.
Also, the respondents were regularly and repeatedly hired to
perform the same tasks year after year. This regular and
repeated hiring of the same workers (two different sets) for
two separate seasons has put in place, principally through
jurisprudence, the system of regular seasonal employment in
the sugar industry and other industries with a similar nature of
operations. Therefore, the nature of the employment does not
depend solely on the will or word of the employer or on the
procedure for hiring and the manner of designating the
employee. Rather, the nature of the employment depends on
the nature of the activities to be performed by the employee,
considering the nature of the employers business, the duration
and scope to be done, and, in some cases, even the length of
time of the performance and its continued existence.
Page 9 of 38
17. JOSE Y. SONZA vs. ABS-CBN BROADCASTING
CORPORATION
FACTS: ABS-CBN signed an Agreement (Agreement) with
the Mel and Jay Management and Development
Corporation (MJMDC). ABS-CBN was represented by its
corporate officers while MJMDC was represented by
SONZA, as President and General Manager, and Carmela
Tiangco (TIANGCO), as EVP and Treasurer.
Referred to in the Agreement as AGENT, MJMDC agreed
to provide SONZAs services exclusively to ABS-CBN as
talent for radio and television.
ABS-CBN agreed to pay for SONZAs services a monthly
talent fee of P310,000 for the first year and P317,000 for
the second and third year of the Agreement.
ABS-CBN would pay the talent fees on the 10th and 25th
days of the month. On 1 April 1996, SONZA wrote a letter
to ABS-CBNs President regarding the resignation of Mr.
Jose Sonza, consequently serving notice of rescission of
said Agreement.
SONZA filed a complaint against ABS-CBN before the
Department of Labor and Employment, National Capital
Region in Quezon City.
SONZA complained that ABS-CBN did not pay his salaries,
separation pay, service incentive leave pay, 13th month
pay, signing bonus, travel allowance and amounts due
under the Employees Stock Option Plan (ESOP).
ABS-CBN filed a Motion to Dismiss on the ground that no
employer-employee relationship existed between the
parties.
The Labor Arbiter rendered his Decision dismissing the
complaint for lack of jurisdiction, and that Sonza cannot
be considered as an employee by reason of the peculiar
circumstances surrounding the engagement of his
services.
That he was engaged by respondent by reason of his
peculiar skills and talent as a TV host and a radio
broadcaster.
Unlike an ordinary employee, he was free to perform the
services he undertook to render in accordance with his
own style.
Whatever benefits complainant enjoyed arose from
specific agreement by the parties and not by reason of
employer-employee relationship.
The fact that complainant was made subject to
respondents Rules and Regulations, likewise, does not
detract from the absence of employer-employee
relationship.
ISSUE: WON employer-employee relationship existed
between Sonza and ABS-CBN.
HELD: NO. Independent contractors often present
themselves to possess unique skills, expertise or talent to
distinguish them from ordinary employees.
The specific selection and hiring of SONZA, because of his
unique skills, talent and celebrity status not possessed by
ordinary employees, is a circumstance indicative, but not
conclusive, of an independent
contractual relationship.
If SONZA did not possess such unique skills, talent and
celebrity status, ABS-CBN would not have entered into
the Agreement with SONZA but would have hired him
through its personnel department just like any other
employee.
In any event, the method of selecting and engaging
SONZA does not conclusively determine his status. We
must consider all the circumstances of the relationship,
with the control test being the most important element.
18. FARLEY FULACHE, ET. AL. vs. ABS-CBN
BROADCASTING CORPORATION
FACTS: Farley Fulache, et al filed two separate
complaints for regularization, unfair labor practice and
several money claims (regularization case) against ABS-
CBN Broadcasting Corporation-Cebu.
They alleged that ABS-CBN and the ABS-CBN Rank-and-
File Employees Union (Union) executed a collective
bargaining agreement (CBA) where they learned that
they had been excluded from its coverage as ABS-CBN
considered them temporary and not regular employees,
in violation of the Labor Code.
They claimed they had already rendered more than a
year of service in the company and, therefore, should
have been recognized as regular employees entitled to
security of tenure and to the privileges and benefits
enjoyed by regular employees. ABS-CBN explained the
nature of the petitioners employment within the
framework of its operations. It further claimed that to
cope with fluctuating business conditions, it contracts on
a caseto-case basis the services of persons who possess
the necessary talent, skills, training, expertise or
qualifications to meet the requirements of its programs
and productions. These contracted persons are called
talents and are considered independent contractors who
offer their services to broadcasting companies. ABS-CBN
alleged that the petitioners services were contracted on
various dates by its Cebu station as independent
contractors/off camera talents, and they were not
entitled to regularization in these capacities.
ISSUE: WON they are ABS-CBNs regular employees
entitled to the benefits and privileges of regular
employees.
HELD: They are ABS-CBNs regular employees entitled to
the benefits and privileges of regular employees. These
benefits and privileges arise from entitlements under the
law (specifically, the Labor Code and its related laws),
and from their employment contract as regular ABS-CBN
employees, part of which is the CBA if they fall within the
coverage of this agreement. Thus, what only needs to be
resolved as an issue for purposes of implementation of the
decision is whether the petitioners fall within CBA
coverage. The parties 1999-2002 CBA provided in its
Article I (Scope of the Agreement) that:
Section 1. APPROPRIATE BARGAINING UNIT.
The parties agree that the appropriate bargaining unit
shall be regular rank-and-file employees of ABS-CBN
BROADCASTING CORPORATION but shall not include:
Personnel classified as Supervisor and
Confidential employees; Personnel who are on casual or
probationary status as defined in Section 2 hereof;
Personnel who are on contract status or who are paid for
specified units of work such as writer-producers, talent-
artists, and singers. The inclusion or exclusion of new job
classifications into the bargaining unit shall be subject of
discussion between the COMPANY and
the UNION. Under these terms, the petitioners are
members of the appropriate bargaining unit because they
are regular rank-and-file employees and do not belong to
any of the excluded categories.
Specifically, nothing in the records shows that they
are supervisory or confidential employees; neither are
they casual nor probationary employees.
Most importantly, the labor arbiters decision of January
17, 2002 affirmed all the way up to the
CA level ruled against ABS-CBNs submission that they are
independent contractors.
Page 10 of 38
Thus, as regular rank-and-file employees, they fall within
CBA coverage under the CBAs express terms
and are entitled to its benefits.

Page 11 of 38
19. UERMMMC-RDU VS. LAGUESMA
FACTS: The resident physicians formed a union called
the UERMMC-Resident Doctors Union and filed the
petition for certification so that it will be recognized as
the exclusive bargaining agent of all the resident
physicians in the hospital for purposes of collective
bargaining.
The petition for certification was dismissed by the
Undersecretary, acting under the authority of the
Secretary of Labor, on the ground that there exist no
employer-employee relationship between the resident
doctors and the hospital.
ISSUE: WON resident doctors are employees of the
hospital.
HELD: The resident doctors are not employees of the
hospital. It is clear that physicians undergo residency
training in order to hone their skills and develop or
improve their knowledge in a specialized medical field or
discipline. Hence, residency is basically and simply a
continuation of their medical course. However, they are
not required or mandated under any law to further
undergo a residence training program. Having passed
the medical board examinations, they are already
licensed physicians and could very well engage in the
general practice of medicine. It is for the practice of
highly specialized medical disciplines which necessitates
further on-the-job training thereon.
Viewed from this perspective, residency training clearly
amounts to a pursuit of further education on a specific
discipline.
Thus, the relationship between the teaching/training
hospital and the resident doctor is not one of employer-
employee.
The training/teaching hospital may simply be likened to
a medical school/university, but in this instance, the
emphasis is on the practical application and training of
its students, the resident doctors.
20. CALAMBA MEDICAL CENTER, INC. VS NATIONAL
LABOR RELATIONS COMMISSION
FACTS: Ronaldo Lanzanas and Merceditha Lanzanas are
doctors employed by Calamba Medical Center, Inc.
They are given a retainer’s fee by the hospital as well as
shares from fees obtained from patients.
One time, Ronaldo was overheard by Dr. Trinidad talking
to another doctor about how low the admission rate to
the hospital is.
That conversation was reported to Dr. Desipeda who was
then the Medical Director of the hospital.
Eventually Ronaldo was suspended. Ronaldo filed a case
for Illegal Suspension in March 1998.
In the same month, the rank and file employees
organized a strike against the hospital for unfair labor
practices.
Desipeda eventually fired Ronaldo for his alleged
participation in the strike, which is not allowed under the
Labor Code for he is a managerial employee.
Desipeda also fired Merceditha on the ground that she is
the wife of Ronaldo who naturally sympathize s
with him.
The Labor Arbiter ruled that there was no Illegal
Suspension for there was no employer employee
relationship because the hospital has no control over
Ronaldo as he is a doctor who even gets shares from the
hospitals earnings.
The National Labor Relations Commission as well as the
Court of Appeals reversed the LA.
ISSUE: Whether or not there is an employer-employee
relationship?
HELD: Yes. Under the control test, an employment
relationship exists between a physician and a hospital if
the hospital controls both the means and the details of
the process by which the physician is to accomplish his
task.
There is control in this case because of the fact that
Desipeda schedules the hours of work for Ronaldo and
his wife. The doctors are also registered by the hospital
under the SSS which is premised on an employer-
employee relationship.
There is Illegal Dismissal committed against Rolando for
there was no notice and hearing held.
It was never shown that Rolando joined the strike.
But even if he did, he has the right to do so for he is not a
part of the managerial or supervisory employees.
As a doctor, their decisions are still subject to revocation
or revision by Desipeda.
There is Illegal Dismissal committed against Merceditha
for the ground therefor was not
mentioned in Article 282 of the Labor Code.
When is Control (One of the Four Tests of Employer-
Employee Relationship) Absent?
Where a person who works for another does so more or
less at his own pleasure and is not subject to definite
hours or conditions of work, and is compensated
according to the result of his efforts and not the amount
thereof, the element of control is absent.
Page 12 of 38
21. RAMOS VS COURT OF APPEALS
FACTS: Plaintiff Erlinda Ramos was, until the afternoon
of June 17, 1985 a 47-year old robust woman. Except for
occasional complaints of discomfort due to pains
allegedly caused by presence of a stone in her gall
bladder, she was as normal as any other woman. Married
to Rogelio Ramos, an executive of Philippine Long
Distance Telephone Company (PLDT), she has
three children whose names are Rommel, Roy Roderick,
and Ron Raymond.
Because of the discomforts somehow interfered with her
normal ways, she sough t professional advice.
She was told to undergo an operation for the removal of a
stone in her gall bladder. She underwent series of
examination which revealed that she was fit for the said
surgery. Through the intercession of a mutual friend, she
and her husband met Dr. Osaka for the first time and she
was advised by Dr. Osaka to go under the operation
called cholecystectomy and the same was agreed to be
scheduled on June 17,1985 at 9:00am at the Delos Santos
Medical Center Rogelio asked Dr. Osaka to look for a good
anesthesiologist to which the latter agreed to.
A day before the scheduled operation, she was admitted
at the hospital and on the day of the operation, Erlinda’s
sister was with her insider the operating room.
Dr. Osaka arrived at the hospital late, Dr. Guttierez, the
anesthesiologist, started to intubate Erlina when
Herminda heard her say that intubating Erlinda is quite
difficult and there were complications.
This prompt Dr. Osaka to order a call to another
anesthesiologist, Dr. Caldron who successfully
intubated Erlina.
The patient’s nails became bluish and the patient was
placed in a trendelenburg position.
After the operation, Erlina was diagnosed to be suffering
from diffuse cerebral parenchymal damage and that the
petitioner alleged that this was due to lack of oxygen
supply to Erlinda’s brain which resulted from the
intubation.
Scientific studies point out that intubation problems are
responsible for 1/3 of deaths and serious injuries
associated with anesthesia.
Nevertheless, 98% or the vast majority of difficult
intubation may be anticipated by performing a thorough
evaluation of the patient’s airway prior to the operation.
As stated beforehand, respondent, Dra. Guttierez failed to
observe the proper pre-operative protocol which could
have prevented this unfortunate
incident.
Had appropriate diligence and reasonable care been used
in the pre –operative evaluation, respondent physician
could have been more prepared to meet the contingency
brought about by the perceived atomic variations in the
patient’s neck and oral area; defects
which could have been easily overcome by a prior
knowledge of those va riations together with
a change in technique.
In other words, an experienced anesthesiologist,
adequately alerted by a thorough pre-operative
evaluation, would have had little difficulty going around
the short neck and potruding teeth.
Having failed to observe common medical standards in
pre-operative management and intubation, respondent
Dra. Guttierez negligence resulted in cerebral anoxia and
eventual coma of Erlinda.

ISSUE: Whether or not the doctors and the hospital are

liable for damages against petitioner
for the result to Erlinda of the said operation.

HELD: Yes. The private respondents were unable to

disprove the presumption of negligence on their part in
the care of Erlinda and their negligence was the
proximate case of her piteous condition.
Nevertheless, despite the fact that the scope of res ipsa
liquitor has been measurably enlarged, it does not
automatically follow that it apply to all cases of medical
negligence as to mechanically shift the burden of proof to
the defendant to show that he is not guilty of the ascribed
negligence.
Res ipsa liquitor is not a rigid or ordinary doctrine to be
perfunctorily used but a rule to be cautiously applied,
dependin g upon the circumstances of each case.
It is generally restricted to situations in malpractice
cases where a layman is able to say, as a matter
of common knowledge and observation, that the
consequences of professional care were not as such as
would ordinarily have followed if due care had been
exercised.
A distinction must be made between the failure to secure
results, and the occurrence of something more unusual
and not ordinarily found if the service or treatment
rendered followed the usual procedure of
those skilled in that particular practice.
It must be conceded that the doctrine of res ipsa
liquitor can have no application in a suit against a
physician or surgeon which involves the merits of a
diagnosis or of a scientific treatment.

Page 13 of 38
22. PROFESSIONAL SERVICES, INC. VS. CA
FACTS: April 4, 1984: Natividad Agana was rushed to the
Medical City General Hospital because of difficulty of
bowel movement and bloody anal discharge. Dr. Miguel
Ampil diagnosed her to be suffering from cancer of the
sigmoid. April 11, 1984: Dr. Ampil performed an anterior
resection surgery on Natividad and found that the
malignancy in her sigmoid area had spread on her left
ovary, necessitating the removal of certain portions of it
Dr. Ampil obtained the consent of Natividad’s husband,
Enrique Agana to perform hysterectomy. After a couple
of days, Natividad consulted both Dr. Ampil and Dr.
Fuentes about the excruciating pain in her anal region.
Dr. Ampil recommended that she consult an oncologist.
May 9, 1984: The Aganas went to the United States to
seek further treatment and was told she was FREE from
cancer.
August 31, 1984: Natividad's daughter found a piece of
gauze protruding from her vagina.
Dr. Ampil proceeded to her house and extracted by hand
a piece of gauze measuring 1.5 inches in width and
assuring that the pain will vanish. When the pain
intensified, Nativided went to Polymedic General
Hospital where Dr.
Ramon Gutierrez found a foul-smelling gauze measuring
1.5 inches in width which badly
infected her vaginal vault which formed a recto-vaginal
fistula forcign her stool to excrete
through the vagina. October 1984: Natividad underwent
another surgery to remedy the damage. February 16,
1986: Natividad died so she was substituted by her
children
RTC: PSI solidarily liable with Dr. Ampil and Dr. Fuentes
for damages for negligence and malpractice
CA: absolved Dr. Fuentes upon the same advice from the
PRC Board of Medicine for failure to show that he placed
the guages or concealed the fact from Natividad.
which the latter are employed or on the occasion of their
functions.
Employers shall be liable for the damages caused by their
employees and household helpers acting within the
scope of their assigned tasks even though the former are
not engaged in any business or industry.
The responsibility treated of in this article shall cease
when the persons herein mentioned prove that they
observed all the diligence of a good father of a family to
prevent damage.
failed to adduce evidence showing that it exercised the
diligence of a good father of a family in the accreditation
and supervision private hospitals, hire, fire and exercise
real control over their attending and visiting ‘consultant’
staff control test is determining for the purpose of
allocating responsibility in medical negligence cases, an
employer-employee relationship in effect exists between
hospitals and their attending and visiting physicians
ART. 1869. Agency may be express, or implied from the
acts of the principal, from his silence or lack of action, or
his failure to repudiate the agency, knowing that another
person is acting on his behalf without authority.
By accrediting Dr. Ampil and Dr. Fuentes and publicly
advertising their qualifications, the hospital created the
impression that they were its agents, authorized to
perform medical or surgical services for its patients
doctrine of corporate negligence or corporate
responsibility knowledge of any of the staff of Medical
City Hospital constitutes knowledge of PSI It is worthy to
note that Dr. Ampil and Dr. Fuentes operated on
Natividad with the assistance of the Medical City
Hospital’s staff, composed of resident doctors, nurses,
and interns

ISSUE: W/N Dr. Fuentes may be held liable under the

principle of res ipso loquitor

HELD: NO. CA affirmed Dr. Ampil as the negligent party

surgeons used gauzes as sponges to control the bleeding
of the patient during the surgical operation immediately
after the operation, the nurses who assisted in the
surgery noted in their report 2 sponges lacking 2 gauzes
were extracted from the same spot of the body of Mrs.
Agana element 3 "control and management of the thing
which caused the injury" to be wanting Dr. Fuentes
performed the surgery and thereafter reported and
showed his work to Dr. Ampil who allowed Dr. Fuentes to
leave the operating room. Under the "Captain of the Ship"
rule, the operating surgeon is the person in complete
charge of the surgery room and all personnel connected
with the operation res ipsa loquitur not a rule of
substantive law, hence, does not per se create or
constitute an
independent or separate ground of liability, being a mere
evidentiary rule mere invocation and application of the
doctrine does not dispense with the requirement of proof
of negligence
Art. 2176. Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay
for the damage done. Such fault or negligence, if there is
no pre-existing contractual relation between the parties,
is called a quasi-delict and is governed by the provisions
of this Chapter.
ART. 2180. The obligation imposed by Article 2176 is
demandable not only for one’s own acts or omissions, but
also for those of persons for whom one is responsible.
The owners and managers of an establishment or
enterprise are likewise responsible for damages caused
by their employees in the service of the branches in
Page 14 of 38
23. BISIG MANGGAGAWA SA TRYCO and/or
FRANCISCO SIQUIG JOSELITO LARIÑO, VIVENCIO B.
BARTE, SATURNINO EGERA and SIMPLICIO AYA-AY
vs. NATIONAL LABOR RELATIONS COMMISSION,
TRYCO PHARMA CORPORATION
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 an d
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-
andfile 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 dericting 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 udgment,
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.
24. MANILA JOCKEY CLUB EMPLOYEES LABOR
UNIONPTGWO 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 monthlypaid 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 N ational 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 MJCI 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.
Page 15 of 38
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 company’s 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 prescibe 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 "(to 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
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.
Page 16 of 38
Page 17 of 38
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.
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.
Page 18 of 38
29. PRIMO E. CAONG, JR., ALEXANDER J. TRESQUIO,
AND LORIANOD. DALUYON, PETITIONERS,- VERSUS -
AVELINO REGUALOS, RESPONDENT
FACTS: Petitioners were employed by
respondent Avelino Regualos under a
boundary agreement, as drivers of his brand
new jeepneys. On November 4, 2001 a meeting was cond
ucted 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
returnedfor 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 doso. 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 amount of the boundary.
ISSUE: Whether or not the petitioners were illegally
dismissed by the respondent andthat such dismissal was
made in violation of the due process requirements ofthe
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 instil
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.
WHEREFORE, premises considered, the petition
is DENIED. TheCourt of Appeals Decision dated
December 14, 2006 and Resolution datedJuly 16, 2007
are AFFIRMED
Page 19 of 38
30. PHILIPPINE 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 n o 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 ncrease in sales due to the
additional installations of vodex line and the company "was
exercising management prerogatives in transferring
complainant . . . and there is no showing that this exercise was
arbitrarily and 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. In adopting
that proposition by way of resolving the controversy, the
respondent NLRC gravely abused its discretion.
31. BLUE DAIRY CORPORATION vs. NLRC and ELVIRA
R. RECALDE
FACTS: BLUE DAIRY CORPORATION hired Elvira R. Recalde as a
food technologist in its laboratory. Recalde accompanied
Production Manager Editha N. Nicolas in conductin g 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 ruled 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 i n
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.
Page 20 of 38
32. PHARMACIA and UPJOHN, INC. vs. RICARDO P. Petitioners posture that the transfer of respondent was a
ALBAYDA, JR valid exercise of a legitimate management prerogative to
maximize business opportunities, growth and
FACTS: Ricardo P. Albayda, Jr. was an employee of development of personnel and that the expertise of
Upjohn, Inc. in 1978 and continued working there until respondent was needed to build the companys business
1996 when a merger between Pharmacia and Upjohn in Cagayan de Oro City which dismally performed in
was created. After the merger, Abayda was designated 1999, that the reassignment of respondent was not a
by Pharmacia and Upjohn (Pharmacia) as District Sales demotion as he will also be assigned as a District Sales
Manager assigned to District XI in the Western Visayas Manager in Mindanao or in Metro Manila and that the
area, where respondent settled in Bacolod City. notice of his transfer did
A district meeting was held in Makati City wherein one of not indicate that his emoluments will be reduced.
the topics discussed was the district territorial He was even entitled to Relocation Benefits and
configuration for the new marketing and sales direction. Allowance in accordance with petitioners Benefits
Later, Abayda received a Memorandum announcing the Manual.
sales force structure and that he was reassigned as The allegation of complainant that his income will be
District Sales Manager to District XII in the Northern affected because his wife who is doing business in
Mindanao area. Abayda questioned his transfer from Bacolod City and earns P50,000.00, should not be taken
District XI to District XII, that he has always been in consideration of his transfer.
assigned to the Western Visayas area and that he felt that What is contemplated here is the diminution of the salary
he could not improve the sales of products if he was of the complainant but not his wife.
assigned to an unfamiliar territory. He then concluded Besides, even if complainant may accept his new
that his transfer might be a way for his managers to assignment in Cagayan de Oro or in Metro Manila, his
dismiss him from employment. He added that he could wife may still continue to do her business in Bacolod City.
not possibly accept his new assignment in Cagayan de Anyway, Bacolod City and Manila is just
Oro City because he will be dislocated from his family; his one (1) hour travel by plane.
wife runs an established business in Bacolod City; his Lastly, in respondents contract of employment, he agreed
eleven- year-old daughter is studying in Bacolod City; and to be assigned to any work or workplace as may be
his two-year-old son is under his and his wifes direct determined by the company whenever the
care. Petitioner then deny the request of Abayda to be operations require such assignment.
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 replied 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 basi s 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.

Page 21 of 38
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, SwitchNet 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 sustain its (PT&Ts) retail operations; decongest surplus
workforce in some branches, to promote efficiency and
productivity; lower expenses incidental to hiring and training
new personnel; and 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 wilful 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 wilful
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. 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 du ties 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 wilful
disobedience of a lawful order of the employer.
As such, there was no valid cause for the private respondents
dismissal.
Page 22 of 38
35. PHILIPPINE INDUSTRIAL SECURITY AGENCY workstation. As regards the Security Bank assignment, he
CORPORATION vs. VIRGILIO DAPITON & NLRC failed to take the neurological test for lack of money to
pay for the examination fee. Petitioner cannot
FACTS: Petitioner hired Dapiton as a security guard. His overinflate the significance of the fact that respondent
initial assignment was at PCIBank in Caloocan City. often absented himself from work without an approved
During his tour of duty at PCIBank, Dapiton had a heated leave. It is a settled rule that mere absence or failure to
argument with his fellow security guard. The incident report for work is not tantamount to abandonment of
almost led to a shootout. Respondent was suspended work. Even the failure to report for work after a notice to
from work for seven (7) days. Petitioner alleged that return to work has been served does not necessarily
respondent did not serve his suspension and instead constitute abandonment nor does it bar reinstatement.
went on a leave of absence. Nonetheless, he was assigned The burden of proving that respondent has abandoned
at the BPI Family Bank in Navotas when he reported back his job rests with petitioner. However, petitioner failed
for duty. Allegedly, respondent refused to accept his miserably to discharge the burden. The records show no
assignment. Respondent was assigned at Sevilla Candle memoranda concerning respondents alleged
Factory in Malabon. Three (3) weeks later, he abandoned unauthorized absences and refusal to work. Even the
his post and went on absence without leave (AWOL). telegram petitioner sent to respondent after he allegedly
Respondent was given another assignment at Security went on AWOL merely required respondent to report to
Bank and Trust Company. He was required to report for its office for a conference but
an interview and to undergo a neurological examination. did not mention anything about his absences. We find it
Respondent refused and allegedly again went on AWOL. incredible that petitioner did not even
Respondent filed the present illegal dismissal case. write respondent on his alleged refusal to accept the
Respondent denied petitioners allegations. He claimed posts assigned to him and the abandonment of his posts
that after he served his suspension, he was assigned at considering that such acts constitute willful disobedience
BPI Family Bank in Navotas. He accepted the new post. and gross neglect of duty which are valid grounds for
However, after a short period, he was relieved and was dismissal.
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 d eliberate 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
Page 23 of 38
36. CONSOLIDATED FOODCORPORATION/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 should
not 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.
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 i nformed 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.

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.

Page 24 of 38
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, contrary 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
invalid.
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.
Page 25 of 38
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 fie 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
fied 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 fied a MR to NLRC however, it is denied.
CA – affied 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 was not
for serious misconduct; and 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 reflcting 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
habituals neglect of duty, fraud or willful breach of trust,
commission of a crime against the employer or his family,
or those reflcting on his moral character…”
Although long years of service might generally be
considered for the award of separation benefis or some
form of fiancial assistance to mitigate the effcts 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 benefis, since his violation reflcts a
regrettable lack of loyalty and worse, betrayal of the
company.
If an employee's length of service is to be regarded as a
justifiation for moderating the penalty of dismissal, such
gesture will actually become a prize for disloyalty,
distorting the meaning of social justice and undermining
the effrts 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 fiancial assistance to Del Rosario, under the
nomenclature of compassionate justice, is not warranted
in the instant case.
A contrary rule would have the effct of rewarding rather
than punishing an erring employee, disturbing the noble
concept of social justice.
Page 26 of 38
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: 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 and 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 to follow the procedure
in taking a leave of absence (filing the required form) or
getting permission from or notifying management that
she could not report for work from March 15 to 21, 2004
and to have her medical certificate countersigned by the
company doctor.
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?
HELD: Court of Appeals decision is sustained.
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 management 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.
Page 27 of 38
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 Corporation 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 NANG SLASH UG TOWEL:
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, and two, notice of the
decision to dismiss. 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: the
employee must have failed to report for work or must
have been absent without valid or justifiable reason; and,
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.
Page 28 of 38
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
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 and mental condition, can
enjoy them better and 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.
Page 29 of 38
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 the Dep artment
of Labor and Employment (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.
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.

ISSUE: Whether or not respondent is guilty of illegal

dismissal.

HELD: 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.
Page 30 of 38
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
Department, 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 and Singson, for constructive
dismissal, moral and exemplary damages as well as
attorney’s fees.
LA dismissed the complaint for lack of merit. It ruled that
Morales reassignment was a valid exercise of HCPTIs
management prerogative which 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.
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

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
Page 31 of 38
47. STAR PAPER CORPORATION vs. RONALDO D.
SIMBOL, ET.AL.
FACTS: Josephine Ongsitco is the Manager of the
Personnel and Administration Department 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
contraven es 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.
HELD: YES. 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: that the employment qualification is reasonably
related to the essential operation of the job involved; and,
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.
Page 32 of 38
48. DUNCAN ASSOCIATION OF DETAILMAN-PTGWO
and PEDRO A. TECSON vs. GLAXO WELLCOME
PHILIPPINES, INC.
FACTS: Pedro A. Tecson (Tecson) was hired by
respondent Glaxo Wellcome Philippines, Inc. (Glaxo) as
medical representative. 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 Bra nch 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 continu ed 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, marketing strategies and 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 “*t+he issue is could I bring my weight down to
ideal weight which is 172, then the answer is yes. I can do it
now.”
Petitioner has only himself to blame. He could ha ve 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).”
Page 33 of 38
50. AVON vs. LUNA
FACTS: Leticia Luna worked as a supervisor.
Subsequently, when Avon Cosmetics took over the
management and operations of Beautifront, Avon and
Luna entered into an agreement through which she
became a part of the independent sales force of Avon. The
pertinent provision is: “That the Supervisor shall sell or
offer to sell, display or promote, only and exclusively the
products sold by the company.”
Luna was invited by a former Avon employee to become
Group Franchise Director of another company, Sander
Philippines, which sells vitamins and other food
supplements. Luna consulted with a law firm to render a
legal opinion as to the legal consequence of the
Supervisor’s Agreement with Avon. In response to that,
the firm explained the Supervisor’s agreement was
contrary to law and public policy. Subsequently, Avon
caught wind of Luna’s position as Group Franchise
Director of another company, and ordered for the
cancellation of the Supervisor’s Agreement.
ISSUE: WON the agreement is null and void for being
contrary to public policy
HELD: No. There is nothing invalid or contrary to public
policy in the agreement. Such prohibition is neither
directed to eliminate the competition like Sandre Phils
nor foreclose new entrants to the market. Sandre Phils, is
still very much free to distribute its products in the
market but it must do so at its own expense. The
exclusivity clause does not in any way limit its selling
opportunities, just the undue use of the resources of
petitioner Avon. It would be unfai to Avon if the talents
and skills Luna acquired while working under it would be
shared to its competitor Sandre Phils. This would be
tantamount to unjust enrichment.
In business parlance, this is commonly termed as the
“exclusivity clause.” This is defined as agreements which
prohibit the obligor from engaging in business in
competition with the obligee. This exclusivity clause is
more often the subject of critical scrutiny when it is
perceived to collide with the Constitutional proscription
against ‘reasonable restraint of trade or occupation’
(Article 19).
First off, restraint of trade or occupation embraces acts,
contracts, agreements or combinations which restrict
competition or obstruct due course of trade. Whether
under the particular circumstances of the case and the
nature of the particular contract involved, such contract
is, or is not, against public interest.
Contracts requiring exclusivity are not per se void. Each
contract must be viewed vis-à-vis all the circumstances
surrounding such agreement in deciding whether a
restrictive practice should be prohibited as imposing an
unreasonable restraint or competition. When is a
restraint in trade unreasonable? Authorities are one in
declaring that a restraint in trade is unreasonable when it
is contrary to public policy or public welfare. And what is
public policy? That principle of the law which holds that
no subject or citizen can lawfully do that which has a
tendency to be injurious or against the public good.
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, one 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 personal liability or of private
property.
51. ST. LUKE’S MEDICAL CENTER EMPLOYEE’S
ASSOCIATION-AFW (SLMCEA-AFW) AND
MARIBEL S. SANTOS vs. NATIONAL LABOR
RELATIONS COMMISSION
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 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.
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.
HELD: NO. 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.[ 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.
Page 34 of 38
52. DANILO LEONARDO, petitioner, vs. NATIONAL
LABOR RELATIONS COMMISSION, ET.AL.
FACTS: AURELIO FUERTE was originally employed by
REYNALDOS MARKETING CORPORATION 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 the 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 ofP18,000.00 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 viaa petition
for certiorari under Rule 65. The CA granted respondents
petition for certiorari and 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.
ISSUE:
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
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.
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.
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.
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.
Page 35 of 38
54. ERNESTO G. YMBONG VS. ABS-CBN
BROADCASTING CORPORATION,
FACTS: On Jan. 1, 1996, ABS-CBN Head Office issued
Policy no. HR-ER-016 requiring that an employee who
intends to run for any public office must file a letter of
resignation. On March 25, 1998, Dante Luzon who was
then the Cebu assistant station manager, issued a
memorandum informing the petitioner, Ymbong that per
company policy, any employee/talent who wants to run
for any position in the then coming election will have to
file a leave of absence. Petitioner Ymbong claims that
pursuant to the March 25 memorandum, he informed
Luzon that he would take a leave of absence since he was
running for coucilor of Lapu-Lapu city. When he lost his
bid, he tried to come back to ABS-CBN but was turned
down because of company policy. Thus, he filed a
complaint for illegal dismissal contending that the
ground relied upon by respondents is not among the just
and authorized cause provided in the Labor Code.
ISSUE: WON the dismissal was valid
HELD: The SC has consistently held that 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, the court will uphold them. In the instant
case, ABSCBN validly justified the implementation of the
policy. It is well within its rights to ensure that it
maintains its objectivity and credibility and frees itself
from any appearance of impartiality so that the
confidence of the viewing and listening public in it will
not be in any way eroded.
Even as the law is solicitious of the welfare of the
employees, it must also protect the right of an employer
to exercise what are clearly management prerogatives.
The free will of management to conduct its own business
affairs to achieve its purpose cannot be denied.
It is worth noting that such exercise of management
prerogative has earned a stamp of approval from no less
than our Congress itself when on Feb 12 2001, it enacted
RA 9006, otherwise known as the fair elections act.
55. PRODUCERS BANK OF THE PHILIPPINES vs.
NATIONAL LABOR RELATIONS COMMISSION
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 which 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 and discretion of the
BANK to grant, modify or withdraw.
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.
Page 36 of 38
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
p.m. to 6:00 a.m. At 2:00 p.m. and 2:00 a.m., 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 schedu
le 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.
Page 37 of 38
58. MALAYAN EMPLOYEES ASSOCIATION-FFW and
RODOLFO MANGALINO vs. MALAYAN
INSURANCE COMPANY, 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.
59. NEGROS SLASHERS, INC., ET AL. V. ALVIN L. TENG
FACTS: Respondent Alvin Teng is a professional
basketball player who started his career as such in the
Philippine Basketball Association and then later on
played in the Metropolitan Basketball Association (MBA).
Some time in one of his games, particularly Game
Number 4 of the MBA Championship Round for the year
2000 season, Teng had a below-par playing
performance.
Because of this, the coaching staff decided to pull him out
of the game. Teng then sat on the bench, untied his
shoelaces and donned his practice jersey. On the
following game, Game Number 5 of the Championship
Round, Teng called-in sick and did not play.
On March 16, 2001, because of what happened, the
management of Negros Slashers came up with a decision,
and through its General Manager, petitioner Rodolfo
Alvarez, wrote Teng informing him of his termination
from the team.
ISSUE: Whether or not Teng’s dismissal from the Negros
Slashers Team was unjustified and too harsh considering
his misconduct.
RULING: YES.
As ruled in Sagales v. Rustan’s Commercial Corporation,
while the employer has the inherent right to discipline,
including that of dismissing its employees, this
prerogative is subject to the regulation by the State in the
exercise of its police power.
In this regard, it is a hornbook doctrine that infractions
committed by an employee should merit only the
corresponding penalty demanded by the circumstance.
The penalty must be commensurate with the act, conduct
or omission imputed to the employee and must be
imposed in connection with the disciplinary authority of
the employer.
In the case at bar, the penalty handed out by the
petitioners was the ultimate penalty of dismissal. There
was no warning or admonition for respondent’s violation
of team rules, only outright termination of his services
for an act which could have been punished appropriately
with a severe reprimand or suspension.
Page 38 of 38