DAN RUNILLE M.

ABESAMIS
CALS POULTRY SUPPLY CORPORATION vs. CANDELARIA ROCO
GR NO. 150660
(Probationary Employment)
FACTS:
CALS Poultry Supply Corporation is engaged in the business of selling dressed chicken and
other related products.
On May 16, 1995, it hired Candelaria Roco, as helper at its chicken dressing plant on a
probationary basis.
On Nov. 15, 1995, Candelaria Roco was terminated due to poor work performance, because
she did not measure up to the work standards on the dressing of chicken.
This prompted Candelaria Roco to file a case for illegal dismissal.
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.
The National Labor Relations Commission (NLRC), affirmed the judgment of the Labor
Arbiter.
On appeal by Candelaria to the Court of Appeals, the appellate court set aside the NLRCs
decision and ordered reinstatement of Candelaria Roco because her employment was
terminated on November 15, 1995 (she was hired on May 16, 1995), it was four (4) days
after she ceased to be a probationary employee and became a regular employee within the
ambit of Article 281 of the Labor Code.
CALS argues that the Court of Appeals computation of the 6-month probationary period is
erroneous as the termination of Candelarias services on November 15, 1995 was exactly on
the last day of the 6-month period.
Hence, this appeal to the S.C.
ISSUE:
How is the 6-month probationary period computed?
HELD:
The S.C. agrees 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, the S.C.s 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.

Jane S. Baker
ALCIRA VS. NLRC
GR NO. 149859
(Probationary Employment)
FACTS:
Respondent Middleby Philippines Corporation (Middleby) hired petitioner as
engineering support services supervisor on a probationary basis for six months. Apparently
unhappy with petitioners performance, respondent Middleby terminated petitioners
services.
The parties, presenting their respective copies of Alciras appointment paper, claimed
conflicting starting dates of employment: May 20, 1996 according to petitioner and May 27,
1996 according to respondent. Both documents indicated petitioners employment status as
probationary (6 mos.) and a remark that after five months (petitioners) performance
shall be evaluated and any adjustment in salary shall depend on (his) work performance.
In their defense, respondents claim that, during petitioners probationary
employment, he showed poor performance in his assigned tasks, incurred ten absences, was
late several times and violated company rules on the wearing of uniform. Since he failed to
meet company standards, petitioners application to become a regular employee was
disapproved and his employment was terminated.
ISSUES:
THE COURT OF APPEALS GRAVELY ERRED AND BLATANTLY DISREGARDED THE LAW IN
HOLDING THAT PROBATIONARY EMPLOYMENT IS EMPLOYMENT FOR A DEFINITE PERIOD.
THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT AN EMPLOYER CAN BE
PRESUMED TO HAVE COMPLIED WITH ITS DUTY TO INFORM THE PROBATIONARY EMPLOYEE
OF THE STANDARDS TO MAKE HIM A REGULAR EMPLOYEE.
THE COURT OF APPEALS GRAVELY ERRED AND FAILED TO AFFORD PROTECTION TO LABOR IN
NOT APPLYING TO THE INSTANT CASE THE DOCTRINE LAID DOWN BY THIS HONORABLE
COURT IN SERRANO VS. NLRC, ET. AL., G.R. NO. 117040, JANUARY 27, 2000.
HELD:
ART. 281. PROBATIONARY EMPLOYMENT.
Probationary employment shall not exceed six (6) months from the date the
employee started working, unless it is covered by an apprenticeship agreement stipulating a
longer period. The services of an employee who has been engaged on a probationary basis
may be terminated for a just cause or when he fails to qualify as a regular employee in
accordance with reasonable standards made known by the employer to the employee at the
time of his engagement. An employee who is allowed to work after a probationary period
shall be considered a regular employee.
The first issue we must resolve is whether petitioner was allowed to work beyond his
probationary period and was therefore already a regular employee at the time of his alleged
dismissal. We rule in the negative.
Petitioner claims that under the terms of his contract, his probationary employment was only
for five months as indicated by the remark Please be informed that after five months, your
performance shall be evaluated and any adjustment in salary shall depend on your work
performance. The argument lacks merit. The five-month period referred to the evaluation of
his work.
(O)ur 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.(italics supplied)
In short, since the number of days in each particular month was irrelevant, petitioner was
still a probationary employee when respondent Middleby opted not to regularize him on
November 20, 1996.

The second issue is whether respondent Middleby informed petitioner of the standards for
regularization at the start of his employment.
Section 6 (d) of Rule 1 of the Implementing Rules of Book VI of the Labor Code (Department
Order No. 10, Series of 1997) provides that:
xxx xxx xxx
(d) 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.
xxx xxx xxx
We hold that respondent Middleby substantially notified petitioner of the standards to qualify
as a regular employee when it apprised him, at the start of his employment, that it would
evaluate his supervisory skills after five months.
An employer is deemed to substantially comply with the rule on notification of standards if
he apprises the employee that he will be subjected to a performance evaluation on a
particular date after his hiring.
The third issue for resolution is whether petitioner was illegally dismissed when respondent
Middleby opted not to renew his contract on the last day of his probationary employment.
It is settled that even if probationary employees do not enjoy permanent status, they
are accorded the constitutional protection of security of tenure. This means they may only
be terminated for 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.
This constitutional protection ends on the expiration of the probationary period. On that
date, the parties are free to either renew or terminate their contract of employment.

CABARON
MITSUBISHI MOTORS PHILS. CORP. V. CHRYSLER PHILS. LABOR UNION
(Probationary Employment)

Facts:
Private respondent Nelson Paras first worked with Mitsubishi Philippines as a shuttle
bus driver on March 19, 1976. He resigned on June 16, 1982 because he went to Saudi
Arabia and worked there as a diesel mechanic and heavy machine operator from 1982 to
1993. Upon his return, Mitsubishi Philippines re-hired him as a welder-fabricator at a tooling
shop from November 1, 1994 to March 3, 1995.
On May 1996, Paras was re-hired again, this time as a probationary manufacturing
trainee at the Plant Engineering Maintenance Department. He had an orientation on May 15,
1996 and afterwhich, with respect to the companys rules and guidelines, started reporting
for work on May 27, 1996.
Paras was evaluated by his immediate supervisors after six months of working. The
supervisors rating Paras performance were Lito R. Lacambacal and Wilfredo J. Lopez, as part
of the MMPCs company policies. Upon this evaluation, Paras garnered an average rating.
Later, respondent Paras was informed by his supervisor, Lacambacal, that he
received an average performance rating but it is a rate which would still qualify him to be
regularized. But as part of the company protocols, the Division Managers namely A.C.
Velando, H.T. Victoria and Dante Ong reviewed the performance evaluation made on Paras.
Despite the recommendations of the supervisors, they unanimously agreed that the
performance was unsatisfactory. As a consequence, Paras was not considered for
regularization.
Paras received a Notice of Termination on November 26, 1996 which was dated
November 25, 1996. This letters intent is to formally relieve him off of his services and
position effective the date since he failed to meet the companys standards.
Issue:

Whether or not respondent Paras termination was legal or not.

Decision:
Paras termination was not legal. The Court holds that a company employer may
indeed hire an employee on a probationary basis in order to determine his fitness to perform
work. The Court stresses the existence of the statements under Article 281 of the Labor
Code which specifies that the employer must inform the employee of the standards they
were to meet in order to be granted regularization and that such probationary period shall
not exceed six (6) months from the date the employee started working, unless specified in
the apprenticeship agreement.
Respondent Paras was employed on a probationary basis and was apprised of the
standards upon which his regularization would be based during the orientation. His first day
to report for work was 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, the probationary period of six (6) months consists of one hundred eighty (180)
days. The Court conforms with paragraph one, Article 13 of the Civil Code providing that the
months which are not designated by their names shall be understood as consisting of thirty
(30) days each. This case, the Labor Code pertains to 180 days. Also, as clearly provided for
in the last paragraph of Article 13, it is said that 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. The
Court held that by that time, he was actually already a regular employee of the petitioner
under Article 281 of the Labor Code. His position as a regularized employee is thus secured
until further notice.

SHIELA T. DELA VICTORIA

SONZA vs. ABS-CBN
G. R. No. 138051, 413 SCRA 583
(Classification of Employment as to TV and Radio Broadcasting Industries)

FACTS:
ABS-CBN signed an Agreement with the Mel and Jay Management and
Development Corporation). Referred to as AGENT, MJMDC agreed to provide Jay Sonzas
services exclusively to ABS-CBN as talent. After more than two years, Sonza as agent of
MJMDC wrote a letter to ABS-CBN notifying them of the formers intention to rescind the
agreement. Sonza waived and renounced the recovery of the remaining amounts stipulated
in the agreement but reserved the right to seek the recovery of other benefits under the
same. Later, SONZA filed a complaint against ABS-CBN before the DOLE-NCR, alleging 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"). In response ABS-CBN filed a Motion to Dismiss on the ground that no
employer-employee relationship existed between the parties. Meanwhile, pursuant to the
Agreement, ABS-CBN continued to remit SONZAs monthly talent fees through his account at
PCI Bank. ABS-CBN later opened a new account with the same bank where ABS-CBN
deposited SONZAs talent fees and other payments due him under the Agreement.
ISSUE:
Whether or not there existed an employee-employer relationship between Sonza and ABSCBN.
HELD:
Applying the four fold test, there is no employee-employer relationship. The elements
of an employer-employee relationship are: (a) the selection and engagement of the
employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employers
power to control the employee on the means and methods by which the work is
accomplished. The last element, the so-called "control test", is the most important element.
Individuals with special skills, expertise or talent enjoy the freedom to offer their
services as independent contractors. The right to life and livelihood guarantees this freedom
to contract as independent contractors. The right of labor to security of tenure cannot
operate to deprive an individual, possessed with special skills, expertise and talent, of his
right to contract as an independent contractor. An individual like an artist or talent has a
right to render his services without any one controlling the means and methods by which he
performs his art or craft. This Court will not interpret the right of labor to security of tenure
to compel artists and talents to render their services only as employees. If radio and
television program hosts can render their services only as employees, the station owners
and managers can dictate to the radio and television hosts what they say in their shows.
This is not conducive to freedom of the press.

DY
FARLEY FULACHE VS. ABS-CBN
[G.R. No. 183810 January 21, 2010]
(Classification of Employment as to TV and Radio Broadcasting Industries)
FACTS:
The petitioners in this case are questioning the CBA executed between ABS-CBN and the
ABS-CBN Rank-and-File Employees Union (Union) because under such agreement, they are
only considered as temporary and not regular employees. The petitioners claimed that they
should be recognized as regular employees of ABS-CBN because they had already rendered
more than a year of service in the company and, therefore, entitled to the benefits of a
regular employee.
Instead of salaries, ABS-CBN pointed out that talents are paid a pre-arranged consideration
called talent fee taken from the budget of a particular program and subject to a ten
percent (10%) withholding tax. Talents do not undergo probation. Their services are
engaged for a specific program or production, or a segment thereof. Their contracts are
terminated once the program, production or segment is completed.
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.
Labor Arbiter Rendoque rendered his decision holding that the petitioners were regular
employees of ABS-CBN, not independent contractors, and are entitled to the benefits and
privileges of regular employees
ABS-CBN appealed the ruling to the National Labor Relations Commission (NLRC) Fourth
Division, mainly contending that the petitioners were independent contractors, not regular
employees.
While the appeal of the regularization case was pending, ABS-CBN dismissed Fulache,
Jabonero, Castillo, Lagunzad and Atinen (all drivers) for their refusal to sign up contracts of
employment with service contractor Able Services. The four drivers and Atinen responded
by filing a complaint for illegal dismissal.
The Labor Arbiter Rendoque upheld the validity of ABS-CBN's contracting out of certain work
or services in its operations. The labor arbiter found that petitioners Fulache, Jabonero,
Castillo, Lagunzad and Atinen had been dismissed due to redundancy, an authorized cause
under the law.
The NLRC reversed the labor arbiters ruling in the illegal dismissal case; it found that
petitioners Fulache, Jabonero, Castillo, Lagunzad and Atinen had been illegally dismissed and
awarded them backwages and separation pay in lieu of reinstatement. Under both cases,
the petitioners were awarded CBA benefits and privileges from the time they became regular
employees up to the time of their dismissal.

The NLRC resolved the motions for reconsideration on by both parties, thus, on the
regularization issue, the NLRC stood by the ruling that the petitioners were regular
employees entitled to the benefits and privileges of regular employees. On the illegal
dismissal case, the petitioners, while recognized as regular employees, were declared
dismissed due to redundancy. The NLRC denied the petitioners second motion for
reconsideration in its order of May 31, 2006 for being a prohibited pleading.
ISSUE:
WON the petitioners are correct that they should be considered already as regular
employees
WON Fulache and the other petitioners were dismissed illegally

RULING:
1. As regular employees, the petitioners fall within the coverage of the bargaining unit and
are therefore entitled to CBA benefits as a matter of law and contract.

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:

a) Personnel classified as Supervisor and Confidential employees;

b) Personnel who are on casual or probationary status as defined in Section 2 hereof;
c) 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. Thus,
as regular rank-and-file employees, they fall within CBA coverage under the CBAs express
terms and are entitled to its benefits.
2. Their dismissal was not only unjust and in bad faith as the above discussions abundantly
show. The bad faith in ABS-CBNs move toward its illegitimate goal was not even hidden; it
dismissed the petitioners already recognized as regular employees for refusing to sign up
with its service contractor. Thus, from every perspective, the petitioners were illegally
dismissed.
By law, illegally dismissed employees are entitled to reinstatement without loss of seniority
rights and other privileges and to full backwages, inclusive of allowances, and to other
benefits or their monetary equivalent from the time their compensation was withheld from
them

AIKO ELENI PALER

UERMMMC-RDU VS. LAGUESMA
GR NOS. 125425-26
(Classification of Employment as to Hospitals)

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.

RIPARIP
CALAMBA (Classification of Employment as to Hospitals)

ROJALES
Ramos vs. CA
(G.R. 124354, April 11, 2002)
(Classification of Employment as to Hospitals)

FACTS:
After seeking professional medical help with De Los Santos Medical Center, Erlinda
Ramos was advised to undergo an operation for the removal of a stone in her gall bladder.
She was referred to Dr. Hosaka, a surgeon, who recommended the services of Dr. Gutierrez,
an anesthesiologist.
On the day of the operation, Dr. Hosaka came more than 3 hours late than the
scheduled operation. And when Dr. Gutierrez was trying to intubate the patient, there
appeared a bluish discoloration On Erlindas nailbeds on her left hand. Ramoss sister-in-law,
a nurse, heard Dr. Gutierrez say, Ang hirap ma-intubate nito, mali yata ang pagkakapasok.
Dr. Hosaka sought the help of another anesthesiologist, but the patients condition did not
change. On the same day, Erlinda was brought to the ICU where he stayed for a month, and
she remained in comatose since then until she died. RTC found Dr. Hosaka and Dr. Gutierrez
negligent in the performance of their duties to Erlinda.
ISSUE: Is De Los Santos Medical Center solidarily liable for the injury suffered by Erlinda
Ramos?
HELD:
NO. There is no employer-employee relationship between DLSMC and Doctors Hosaka
and Gutierrez which would hold the hospital solidarily liable for the injury suffered by
petitioner Erlinda under Art. 2180 of the Civil Code.
As explained by the hospital, the admission of a physician to membership in DLSMCs
medical staff as active or visiting consultant is first decided upon by the Credentials
Committee thereof, which is composed of the heads of the various specialty departments
with the department head of the particular specialty applied for as chairman. The
Credentials Committee then recommends to DLSMC's Medical Director or Hospital
Administrator the acceptance or rejection of the applicant physician, and said director or
administrator validates the committee's recommendation. [52] Similarly, in cases where a
disciplinary action is lodged against a consultant, the same is initiated by the department to
whom the consultant concerned belongs and filed with the Ethics Committee consisting of

the department specialty heads. The medical director/hospital administrator merely acts as
ex-officio member of said committee.
Neither is there any showing that it is DLSMC which pays any of its consultants for
medical services rendered by the latter to their respective patients. Moreover, the contract
between the consultant in respondent hospital and his patient is separate and distinct from
the contract between respondent hospital and said patient. The first has for its object the
rendition of medical services by the consultant to the patient, while the second concerns the
provision by the hospital of facilities and services by its staff such as nurses and laboratory
personnel necessary for the proper treatment of the patient.
Further, no evidence was adduced to show that the injury suffered by petitioner Erlinda
was due to a failure on the part of respondent DLSMC to provide for hospital facilities and
staff necessary for her treatment.
De Los Santos Medical Center is hereby absolved from liability arising from the injury
suffered by petitioner Erlinda Ramos on June 17, 1985

SALLACAY
PROFESSIONAL SERVICES INC. VS. CA
GR NO. 126297
(Classification of Employment as to Hospitals)

FACTS:
PSI, together with Dr. Miguel Ampil (Dr. Ampil) and Dr. Juan Fuentes (Dr. Fuentes), was
impleaded by Enrique Agana and Natividad Agana (later substituted by her heirs), in a
complaint for damages filed in the Regional Trial Court (RTC) of Quezon City, Branch 96, for
the injuries suffered by Natividad when Dr. Ampil and Dr. Fuentes neglected to remove from
her body two gauzes which were used in the surgery they performed on her on April 11,
1984 at the Medical City General Hospital. PSI was impleaded as owner, operator and
manager of the hospital.
ISSUE:
WON there exists an employer-employee relationship between Dr. Ampil and the hospital so
that the latter can be held vicariously liable for the formers negligence.
HELD:
The Court holds that, in this particular instance, the concurrent finding of the RTC and
the CA that PSI was not the employer of Dr. Ampil is correct. Control as a determinative
factor in testing the employer-employee relationship between doctor and hospital under
which the hospital could be held vicariously liable to a patient in medical negligence cases is
a requisite fact to be established by preponderance of evidence. Here, there was insufficient
evidence that PSI exercised the power of control or wielded such power over the means and
the details of the specific process by which Dr. Ampil applied his skills in the treatment of
Natividad. Consequently, PSI cannot be held vicariously liable for the negligence of Dr. Ampil
under the principle of respondeat superior.

There is, however, ample evidence that the hospital (PSI) held out to the patient
(Natividad) that the doctor (Dr. Ampil) was its agent. Present are the two factors that
determine apparent authority: first, the hospital's implied manifestation to the patient which
led the latter to conclude that the doctor was the hospital's agent; and second, the patients
reliance upon the conduct of the hospital and the doctor, consistent with ordinary care and
prudence. The Court maintained the ruling that PSI is vicariously liable for the negligence of
Dr. Ampil as its ostensible agent.

TANCINCO
Bisig Manggagawa sa TRYCO et. Al. vs. NLRC G.R. No. 151309
(Concept of Management Prerogative)

Facts:
Tryco Pharma Corporation (Tryco) and Bisig Manggagawa sa Tryco (BMT) signed a
Memorandum of Agreement (MOA) that provides for a compressed workweek schedule. The said
MOA also provides that no overtime pays shall be due and payable to the employee for work
rendered from 8:00am to 6:12pm. However, should an employee be permitted or required to work
beyond 6:12pm, such employee shall be entitled to overtime pay.
Sometime in March 1997, Tryco received a letter from the Bureau of Animal Industry
reminding that its production should be conducted in San Rafael, Bulacan and not in Caloocan
City. Due to this, Tryco issued a memorandum directing some of its employee to report to the
companys plant site in Bulacan but BMT opposed the transfer of its members contending that it
constitutes unfair labor practice. In protest, BMT declared a strike on May 26, 1997.
In August 1997, they then filed their complaints for illegal dismissal, underpayment of
wages, nonpayment of overtime pay and service incentive leave and refusal to bargain against
Tryco. The Labor Arbiter dismissed the case for lack of merit. The NLRC & CA affirmed the Labor
Arbiters decision. Hence, this appeal.
Issue:
Whether or not the transfer of the employees is a valid exercise of management
prerogative.
Held:

Trycos decision to transfer its production activities and employees to Bulacan was within
the scope of its inherent right to control and manage its enterprise effectively. While the law is
solicitous of the welfare of employees, it must also protect the right of an employer to exercise
what are clearly management prerogatives. This prerogative extends to the managements right
to regulate, according to its own discretion and judgment all aspects of employment, including the
freedom to transfer and reassign employees according to the requirements of its business.
Managements prerogative of transferring and reassigning employees from one 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 Trycos personnel, assigned to the
Production Department, was well within the scope of its management prerogative.

DAN RUNILLE M. ABESAMIS

MANILA JOCKEY CLUB EMPLOYEES LABOR UNION-PTGWO vs. MANILA JOCKEY CLUB, INC.
GR NO. 167760
(Concept of Management Prerogative)

FACTS:
Petitioner 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) effective January 1, 1996 to
December 31, 2000. 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 12:00 noon and
from 1:00 p.m. to 5:00 p.m. on a work week of Monday to Saturday. The CBA likewise
reserved in respondent certain management prerogatives, including the determination of
the work schedule.
On April 3, 1999, respondent issued an inter-office memorandum declaring that, effective
April 20, 1999, the hours of work of regular monthly-paid employees shall be from 1:00 p.m.
to 8:00 p.m. when horse races are held, that is, every Tuesday and Thursday. The
memorandum, however, maintained the 9:00 a.m. to 5:00 p.m. schedule for non-race days.

Subsequently, before a panel of voluntary arbitrators of the National Conciliation and

Mediation Board (NCMB), petitioner questioned the above office memorandum. 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.
The NCMBs panel of voluntary arbitrators upheld respondent's prerogative to change the
work schedule. Upon appeal, the same was upheld by the CA.
ISSUE:
Was the act of the respondent a valid exercise of Management Prerogative?

HELD:
Yes, Respondent, as employer, cites the change in the program of horse races as reason for
the adjustment of the employees work schedule. It rationalizes that when the CBA was
signed, the horse races started at 10:00 a.m. When the races were moved to 2:00 p.m.,
there was no other choice for management but to change the employees' work schedule as
there was no work to be done in the morning. Evidently, the adjustment in the work
schedule of the employees is justified.
The courts are not unmindful that 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.

Jane S. Baker
CAPITOL MEDICAL CENTER VS. MERIS
470 SCRA 125
(Concept of Management Prerogative)

Facts:
On January 16, 1974, petitioner Capitol Medical Center, Inc. (Capitol) hired Dr. Cesar
Meris (Dr. Meris), one of its stockholders, as in charge of its Industrial Service Unit (ISU) at a
monthly salary of P10,270.00.
Until the closure of the ISU on April 30, 1992,[6] Dr. Meris performed dual functions of
providing medical services to Capitol more than 500 employees and health workers as well
as to employees and workers of companies having retainer contracts with it.
On March 31, 1992, Dr. Meris received from Capitol's president and chairman of the
board, Dr. Thelma Navarette-Clemente (Dr. Clemente), a notice advising him of the
management's decision to close or abolish the ISU and the consequent termination of his
services as Chief thereof, effective April 30, 1992, with the reason that the hospital
management has decided to abolish the CMCs ISU in view of the almost extinct demand for
direct medical services.

Dr. Meris, doubting the reason behind the management's decision to close the ISU
and believing that the ISU was not in fact abolished as it continued to operate and offer
services to the client companies with Dr. Clemente as its head and the notice of closure was
a mere ploy for his ouster in view of his refusal to retire despite Dr. Clemente's previous
prodding for him to do so, sought his reinstatement but it was unheeded.
ISSUE:
THE COURT OF APPEALS ERRED IN NOT UPHOLDING PETITIONERS' MANAGEMENT
PREROGATIVE TO ABOLISH THE INDUSTRIAL SERVICE UNIT (ISU).
HELD:
Work is a necessity that has economic significance deserving legal protection. The
social justice and protection to labor provisions in the Constitution dictate so.
Employers are also accorded rights and privileges to assure their self-determination
and independence and reasonable return of capital. This mass of privileges comprises the
so-called management prerogatives. Although they may be broad and unlimited in scope,
the State has the right to determine whether an employer's privilege is exercised in a
manner that complies with the legal requirements and does not offend the protected rights
of labor. One of the rights accorded an employer is the right to close an establishment or
undertaking.
The right to close the operation of an establishment or undertaking is explicitly
recognized under the Labor Code as one of the authorized causes in terminating
employment of workers, the only limitation being that the closure must not be for the
purpose of circumventing the provisions on termination of employment embodied in the
Labor Code.
ART. 283. Closure of establishment and reduction of personnel. The employer may also
terminate the employment of any employee due to the installation of labor saving devices,
redundancy, retrenchment to prevent losses or the closing or cessation of operation of
the establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice on the workers
and the Ministry of Labor and Employment at least one (1) month before the intended date
thereof. The phrase "closures or cessation of operations of establishment or undertaking"
includes a partial or total closure or cessation.
x x x Ordinarily, the closing of a warehouse facility and the termination of the services of
employees there assigned is a matter that is left to the determination of the employer in the
good faith exercise of its management prerogatives. The applicable law in such a case is
Article 283 of the Labor Code which permits 'closure or cessation of operation of an
establishment or undertaking not due to serious business losses or financial reverses,'
which, in our reading includes both the complete cessation of operations and the
cessation of only part of a company's business.
And the phrase "closures or cessation x x x not due to serious business losses or financial
reverses" recognizes the right of the employer to close or cease his business operations or
undertaking even if he is not suffering from serious business losses or financial reverses, as
long as he pays his employees their termination pay in the amount corresponding to their
length of service.
Clearly then, the right to close an establishment or undertaking may be justified on grounds
other than business losses but it cannot be an unbridled prerogative to suit the whims of the
employer.
The ultimate test of the validity of closure or cessation of establishment or undertaking is
that it must be bona fide in character. And the burden of proving such falls upon the
employer.
In the case at bar, Capitol failed to sufficiently prove its good faith in closing the ISU.

The records of the case, however, fail to impress that there was indeed extinct demand for
the medical services rendered by the ISU.
The closure of ISU then surfaces to be contrary to the provisions of the Labor Code on
termination of employment.

CABARON
SAN MIGUEL CORPORATION et. al. v. LAYOC
GR NO 149640
(Elements for a Valid Exercise of Management Prerogative)
Facts:
Respondents were among the "Supervisory Security Guards" of the Beer Division of
San Miguel Corporation. They started working as guards with the petitioner San Miguel
Corporation 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 company's 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 1990's, 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 on January 1, 1993 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, on January 16, 1993, 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 of the petitioner San Miguel
Corporation 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. Hence, this complaint filed 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.
Issue:
WON the no time card policy is a valid exercise of management prerogative.
Decision:
The Court held that 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, SMC granted to respondents and other supervisory employees a 10%
across-the-board increase in pay and night shift allowance, in addition to their yearly merit
increase in basic salary, to cushion the impact of the loss. So long as a companys
management prerogatives are exercised in good faith for the advancement of the
employers interest and not for the purpose of defeating or circumventing the
rights of the employees under special laws or under valid agreements, this Court
will uphold them.

SHIELA T. DELA VICTORIA

Philippine Airlines, Inc. vs. NLRC,
225 SCRA 301
(Limitations of Management Prerogative)

Facts:

On March 15, 1985, the 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 disciplinary measures
embodied therein.
On August 20, 1985, 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 PALs Code of Discipline
without notice and prior discussion with Union by Management. PALEA alleged that copies
of the Code had been circulated in limited numbers; tat being penal in nature the Code must
conform with the prejudicial with the requirements of sufficient publication, and that the
Code was arbitrary, oppressive, and prejudicial to the rights of the employees. It prayed that
implementation of the Code be held in abeyance; that PAL should discuss the substance o
the Code with PALEA; that employees dismissed under the Code be reinstated and their
cases subjected to further hearing; and that PAL be declared guilty of unfair labor practice
and be ordered to pay damages.
PAL filed a motion to dismiss the complaint asserting its prerogative as an employer
to prescribe rules and regulations regarding employees conduct in carrying out their duties
and functions, and alledging that by implementing the Code, it had not violated the
collective bargaining agreement (CBA) or any provision of the Labor Code.
Issue:
Whether or not the formulation of a Code of Discipline among the employees is a shared
responsibility of the employer and the employees.
Held:
So long as the a companys management prerogative s are exercise 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.
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 principals of fair play and justice.
A line must be drawn between management prerogatives regarding business
operations per se and those which affect the rights of the employees. In treating the latter,
management should see to it that its employees are at least properly informed of its
decisions or modes action. PAL asserts that all its employees have been furnished copies of
the Code. Public respondents found to the contrary, which finding, to say the least is entitled
to great respect.

DY
WILTSHIRE FILE CO., INC. VS. NLRC
193 SCRA 665
(Scope of MP: Hiring)

FACTS:
Private respondent Vicente Ong was the Sales Manager of petitioner from March 16,1981 up
to June 18, 1985.2.On 13 June 1985, upon private respondent's return from a business and
pleasure trip abroad, he was informed by the President of petitioner that his services were
being terminated. Private respondent 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 petitioner, the company's security guard handed him a letter which
formally informed him that his services were being terminated upon the ground of
redundancy.

ISSUE
Whether or not private respondent is validly terminated on the grounds of retrenchment.

HELD:
The Court indeed found that petitioner had serious financial difficulties before, during and
after the termination of the services of private respondent. The company showed a net loss
of P4,431,321.00 in its audited financial statements. Moreover, Wiltshire finally closed its
doords and terminated all operations in the Philippines on January 1987, barely 2 years after
the termination of private respondent. The Court considered that finally shutting down
business operations constitutes strong confirmatory evidence of petitioner's previous
financial distress. It is also to be noted that the letter informing private respondents of the
termination of his services used the word redundant, that letter also referred to the
company having incurred financial losses which in fact has compelled it to resort to
retrenchment to prevent further losses. Thus, what the letter was in effect saying was that
because of financial losses, retrenchment was necessary, which in turn resulted in the
redundancy of private respondent's position. That no other person was holding the same
position that private respondent held prior to the termination of his services, does not show
that his position had not become redundant. Redundancy, for purposes of the Labor Code,
exists where the services of an employee are in excess of what is reasonably demanded by
the actual requirements of the enterprise. A position is redundant where it is superfluous,
and superfluity of a position or positions maybe the outcome of a number of factors such as
over hiring of workers, decreased volume of business, or dropping of a particular product line
or service activity previously manufactured or undertaken by the enterprise.
The financial troubles were not of private respondents making. Private respondent 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 an employees services as superfluous or no longer necessary and,
therefore, properly terminable, is an exercise of business judgment on the part of the
employer. The wisdom and soundness of such characterization or decision is not subject to
discretionary review provided, of course, that a violation

AIKO ELENI PALER

ALMODIEL VS. NLRC
223 SCRA 341
(Scope of MP: Promotion)

FACTS:
Petitioner is a CPA hired as Cost Accounting Manager of Respondent Raytheon
Philippines, Inc. However, when the standard cost accounting system for Raytheon plans
worldwide was adopted and installed in the Philippine operations, the services of the
petitioner was reduced to only the submission of period reports.
On January 27, 1989, petitioner was told of the abolition of his position on the ground
of redundance. He was constrained to file the complaint for illegal dismissal after his request
to have him transferred to another department was denied. He also alleged that the
functions of his position were absorbed by the Payroll/MIS/Finance Department which is
headed by a resident alien without working permit from the DOLE. 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.
ISSUE:
Naglibog kos issue ky redundance man gud ni nga case naka.sentro
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.

QUISTADIO
PT & T V. LAPLANA
G.R. No. 76645
(Scope of MP: Transfer)
Facts:
Alicia Laplana was the cashier of the Baguio City Branch Office of the Philippine
Telegraph and Telephone Corporation (PT & T). Sometime in March 1984, 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. She set out her reasons, mostly adjustments in the
new workplace and family related matters. Mrs. Arogo reiterated her directive for Laplana's
transfer to the Laoag branch. Apparently Laplana was not allowed to resume her work as
cashier of the Baguio branch. As a result, Laplana requested to be retrenched. Termination of
Laplana's employment on account of retrenchment thereupon followed. Laplana then filed a
complaint against PT & T before the Labor Arbiter.
Issue:
Whether or not the termination of employment of Laplana was with valid ground
Held:

The termination of employment of Laplana was without valid ground. The managerial
prerogative to transfer personnel must be exercised without grave abuse of discretion and
putting to mind the basic elements of justice and fair play. Having the right should not be
confused with the manner in which that right must be exercised. Thus it cannot be used as a
subterfuge by the employer to rid himself of an undesirable worker. Nor when the real
reason is to penalize an employee for his union activities and thereby defeat his right to selforganization.
In this case, 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 Laplana 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.

RIPARIP
BLUE DAIRY CORP(Scope of MP: Transfer)

ROJALES
Pharmacia and Upjohn, Inc., et. al., v. Ricardo P. Albayda, Jr.,
(G.R No. 172724, August 23, 2010)
(Scope of MP: Transfer)

FACTS:
Albayda is a District Sales Manager of Petitioner Pharmacia and Upjohn, Inc. assigned
in District XI in the Western Visayas. Pursuant to a district territorial configuration for the
new marketing and sales direction for the year 2000, Albayda was informed in a
memorandum that he will be reassigned as a District Sales Manager to District XII in the
northern Mindanao, which he adamantly refused for reasons of personal inconvenience and
dislocation from his family. Pharmacias National Sales and External Business Manager tried
to convince him because being one of the top performing sales managers of the company,
his skills and expertise are needed by the District office in Northern Mindanao which has
been dismally performing in the past; however, Albayda still refused the transfer.
The Human Resource Manager also met with respondent telling him that he will be
entitled to Relocation Benefits and Allowance and reiterated in a series of memorandum that
his services were badly needed in Cagayan de Oro City due to the latters poor performance
and also for his personal growth. Albayda was even given the option to transfer in Metro
Manila with the same position as the District Manager, which he again refused. He viewed
the transfer as the companys scheme to terminate his employment. He stopped answering
these memorandums, so the company sent him another memo directing him to report for
work within 5 days from receipt; otherwise, he will be terminated on the basis of being
absent without official leave (AWOL). Until finally, the company sent him a memo notifying
him of their decision to terminate his services on the ground of being AWOL and
insubordination after he had repeatedly refused to report for work despite due notice, hence
this complaint for constructive dismissal.
ISSUE:
Is the transfer of Albayda from Western Visayas to Cagayan de Oro City a valid
exercise of companys management prerogative?
HELD:
YES. Jurisprudence recognizes the exercise of management prerogative to transfer or
assign employees from one office or area to another, provided there is no demotion in rank,
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.
The transfer in this case was a valid exercise of a legitimate management prerogative
to maximize business opportunities, growth, and development of personnel, and the
Albaydas expertise was needed to build the companys business in CDO, which dismally
performed in 1999. There was no demotion as he will also be holding the same position, and
the transfer did not indicate that his emoluments will be reduced. He was even informed
that he will be entitled to relocation benefits and allowance. Furthermore, in his employment
contract, he agreed that he was willing to be assigned to any work or workplace during the
period of his employment as may be determined by the company whenever the operations
require such assignment. There was no evidence showing that the restructuring of the
company was done with ill motives or with malice and bad faith purposely to constructively
terminate respondent. The very nature of a salesman is mobile and ambulant.
On the issue of due process, while no actual hearing was held, the same is not fatal,
as only an ample opportunity to be heard is what the law requires in order to satisfy due
process of law. The twin notice were complied with when respondent was sent a memo
which served as a final warning directing him to report for work within 5 days otherwise he
will be terminated on the ground of being AWOL. Upon receipt of this first memo, respondent

could have asked for a conference with the company which he failed to do, hence the
second memo informing him of the companys decision to terminate his services for being
AWOL and for insubordination for deliberately ignoring the defying the lawful orders of his
employer which is a valid ground for termination under Art. 282 (a) of the LC. He was,
however, awarded separation pay as a measure of social justice as this was his 1 st infraction
and considering his 22 years of services with the company.
SALLACAY
ZAFRA et al VS CA
389 SCRA 200
(Scope of MP: Transfer)

FACTS:
Petitioner Zel T. Zafra was hired by PLDT as Operations Analyst II while co-petitioner
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. They were tasked to maintain the operations and
maintenance of the telephone exchanges in the Visayas and Mindanao areas.
In March 1995, petitioners were chosen to attend a training program in Germany.
ALCATEL, the foreign supplier, shouldered the cost of their training and travel expenses.
Petitioners left for Germany on April 10, 1995 and stayed there until July 21, 1995.
While petitioners were in Germany, a certain Mr. R. Relucio, SwitchNet Division
Manager, requested advice, 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, a certain Mr. W.P. Acantillado, Senior Manager
of the PLDT Cebu Plant, informed them about the memorandum. They balked at the idea,
but PLDT, proceeded to transfer petitioners to the Sampaloc ROMCC effective January 3,
1996.
Petitioners left Cebu for Manila on December 27, 1995 to air their grievance to PLDT
and to seek assistance from their union head office in Mandaluyong. PLDT ordered
petitioners to report for work on January 16, 1996, 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 on March 21, 1996.
Consequently, the expenses for their training in Germany were deducted from petitioners
final pay.
On September 11, 1996, petitioners filed a complaint with the National Labor
Relations Commission Regional Arbitration Branch No. 7 for alleged constructive dismissal
and non-payment of benefits under the Collective Bargaining Agreement.
In their complaint, petitioners prayed that their dismissal from employment be
declared illegal. They also asked for reinstatement with full backwages, refund of
unauthorized deductions from their final pay, including damages, costs of litigation, and
attorneys fees.
Respondent PLDT, for its part, 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. It prayed that petitioners complaint be
dismissed.

ISSUE:
WON the petitioners were illegally dismissed.
DECISION:

The petitioners were illegally dismissed. The Court held that although transfer of an
employee ordinarily lies within the ambit of management prerogatives, 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 is 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.

TANCINCO
PT & T vs. CA
G.R. No. 152057
(Scope of MP: Transfer)

Facts:
PT & T is a domestic corporation engaged in the business of providing telegraph and
communication services thru its branches all over the country. It employed various employees
and among them are the private respondents of this case.
Sometime in 1997, after conducting series of studies regarding the profitability of its retail
operations, its existing number of employees, PT & T came up with the Relocation and
Restructuring Program. Thereafter, on August 11, 1997, private respondents herein received
separate letters from PT & T giving them the option to choose the branch which they could be
transferred. Then, they were expected to report on their assignment.
PT & T then offered benefits and allowances to those employees who would agree to
transfer. However, private respondent rejected the offer and they were asked by PT & T to explain
their reason. Private respondents explained that the said transfer would cause enormous
difficulties on their part since their new assignment involves distant places which would require
their separation from their families. Dissatisfied with the explanation, PT & T dismissed them from
work on the ground of willful disobedience.
Issue: 1. Whether or not the transfers of private respondents are considered promotions.
2. Whether or not the dismissal was valid.
Held:
1. The transfers of private respondents are in fact promotions. Promotion, as we defined in
Millares vs. Subido, is the advancement from one position to another with an increase in duties
and responsibilities as authorized by law, and usually accompanied by an increase in salary.
Apparently, the indispensable element for there to be a promotion is that there must be
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. It is clear that there
was an increase in the private respondents responsibility.
2. The dismissal was not valid. The admissions of the petitioner are conclusive on it. 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.[25] Hence, the exercise
by the private respondents of their right cannot be considered in law as insubordination, or willful
disobedience of a lawful order of the employer. As such, there was no valid cause for the private
respondents dismissal.

DAN RUNILLE M. ABESAMIS

PHILIPPINE INDUSTRIAL SECURITY AGENCY CORPORATION vs. VIRGILIO DAPITON

320 SCRA 124
(Scope of MP: Transfer)

FACTS:
On November 2, 1990 petitioner hired respondent as a security guard. His initial assignment
was at PCI Bank in Kalookan City.
During his tour of duty at PCIBank on January 25, 1994, respondent had a heated argument
with his fellow security guard, Roderick Lumen. The incident almost led to a shootout. After
investigation, petitioners chief investigator recommended their dismissal. Lumen was
compelled to resign while respondent was suspended from work for seven (7) days.
Petitioner alleged that:
1. Respondent did not serve his suspension and instead went on a leave of absence.
Nonetheless, he was assigned at the BPI Family Bank in Navotas when he reported
back for duty. Allegedly, respondent refused to accept his assignment.
2. Later, he was assigned at Sevilla Candle Factory in Malabon. Three (3) weeks later,
he abandoned his post and went on absence without leave (AWOL).
3. He was given another assignment at Security Bank and Trust Company. He was
required to report for an interview and to undergo a neurological examination.
Respondent refused and allegedly again went on AWOL.
On April 15, 1994, petitioner sent a telegram to respondent to report to its office for a
conference. Respondent did not show up. Instead, on April 22, 1994, respondent filed the
present illegal dismissal case.
Respondent denied petitioners allegations. He claimed that:
1. After he served his suspension, he was assigned at BPI Family Bank in Navotas. He
accepted the new post. However, after a short period, he was relieved and was
transferred to the Mercury Drugstore in Grand Central, Kalookan City. Again, after a
brief tour of duty, he was relieved.
2. Later, 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.
3. 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.
4. Thereafter, he was reduced to a mere reliever of absent security guards and was
frequently transferred from one post to another.

The Labor Arbiter and the NLRC ruled in favor of the private respondent for lack of
overwhelming evidence to show that it was the private respondent himself who abandoned
his post and refused petitioners offer of new assignment.
ISSUE:
Are the Labor Arbiter and NLRC correct in their decision?
HELD:
YES, there was no deliberate intent on the part of the respondent to abandon his
employment with petitioner. Petitioner cannot overinflate the significance of the fact that
respondent often absented himself from work without an approved leave. It is a settled rule
that mere absence or failure to report for work is not tantamount to abandonment of work.
Even the failure to report for work after a notice to return to work has been served does not
necessarily constitute abandonment nor does it bar reinstatement.
This is not to denigrate the inherent prerogative of an employer to transfer and reassign its
employees to meet the requirements of its business. TRANSFERS can be effected pursuant
to a company policy to transfer employees from one place of work to another place of work
owned by the employer to prevent connivance among them. Likewise, the court have
affirmed the right of an employer to transfer 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.
Particularly so when no illicit, improper or
underhanded purpose can be ascribed to the employer and the objection to the transfer was
grounded solely on the personal inconvenience or hardship that will be caused to the
employee by virtue of the transfer.
In security services, the transfer connotes a changing of guards or exchange of their posts,
or their reassignment to other posts. However, all are considered given their respective
posts.
Be that as it may, the prerogative of the management to transfer its employees must be
exercised without grave abuse of discretion. The exercise of the prerogative should not
defeat an employee's right to security of tenure. The employers privilege to transfer its
employees to different workstations cannot be used as a subterfuge to rid itself of an
undesirable worker.
In the case at bar, the evidence show that respondent enjoyed a single post at the PCIBank
for three (3) years. It changed after his suspension. In a span of less than three (3) months,
respondent was assigned to at least four (4) establishments, namely, BPI Family Bank,
Mercury Drugstore, Sevilla Candle Factory and Philippine Savings Bank. He suddenly found
himself being tossed to different posts and relieving absent security guards. Respondent
was then left uncertain as to when and where his next assignments would be.
Considering the totality of the facts of this case, the labor officials below rightly found that
the frequent transfers of respondent to different posts on short periods of time were indirect
ways of dismissing him.

Jane S. Baker
CONSOLIDATED FOOD CORP. VS. NLRC
315 SCRA 129
(Scope of MP: Transfer)

Facts:
Petitioner Consolidated Food Corporation (CFC) is a domestic corporation engaged in
the sale of food products, e.g., Presto Ice Cream. Private respondent Wilfredo M. Baron was
a Bonded Merchandiser at CFC since November 1985 and received commendations for being
a consistent member of the millionaires group, a title given to provincial salesmen who
filled sales quotas in their assigned areas.
On 16 July 1990 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, due to this event, a cut off audit was conducted
among others to determine accountabilities that should be liquidated on account of nonsales operations due to fortuitous event, and a plan for the reorganization of the Northern
Luzon Sections (NL-1, 3 and 4) to create only one (1) section from the existing outlets
On 1 December 1990 the field Audit Group submitted its report declaring that the
quantity of bad orders stocks per Bad Orders Summary Sheets (BOSS) prepared by Baron
was higher than the total quantity of bad orders stocks per confirmed customers listings. A
memorandum signed by Unit Mgr. Abalos and approved by Gen. Mgr. Fadrilan Jr. 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.
Petitioners declared however that before any decision could be formalized, private
respondent should submit his written explanation on the points indicated within a period of
seven (7) days from receipt of the memorandum. He was also requested to explain why no
additional action should be taken against him for his continued absence from 18 March to 13
April 1991.

ISSUE:

NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction in

holding that private respondent Baron was constructively dismissed simply because he was
subjected to various audits concerning his sales activities.
HELD:
This Court has defined a valid exercise of management prerogative as one which
covers hiring, work assignment, working methods, time, place and manner of work, tools to
be used, processes to be followed, supervision of workers, working regulations, transfer of
employees, work supervision, lay-off of workers and the discipline, dismissal and recall of
workers. Except as provided for or limited by special laws, employers are free to regulate,
according to their own discretion and judgment, all aspects of employment. Re-assignments
made by management pending investigation of irregularities allegedly committed by an
employee fall within the ambit of management prerogative. The purpose of reassignments is
no different from that of preventive suspension which management could validly impose as
a disciplinary measure for the protection of the companys property pending investigation of
any alleged malfeasance or misfeasance committed by the employee.
In the instant case, 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.
By leaving his job without submitting the required final explanation on the alleged
irregularities, private respondent deprived himself of the opportunity to face his accusers
and prove his innocence of the charges hurled against him.

CABARON
FARROL v. CA
325 SCRA 311
(Scope of MP: Dismissal)

Facts:
Wenifrado Farrol was the station cashier of RCPI Cotabato City Station. There was a
50K cash shortage in the branchs Peragram
Petty Cash Funds. Farrol was required to explain the cash shortage. Then he paid to 25K to
RCPI. He was then required to explain why he should not be dismissed. Petitioner wrote to
the Field Auditor stating that the missing funds were used for the payment of the retirement
benefits earlier referred by the Branch Manager and that he already paid 25k. After he made
2 more payments of the cash shortage, he was placed under preventive suspensions.
However, he still made 2 payments of the balance. RCPI then sent Farrol a letter informing
him of the termination of his services for alleging that part of the cash shortage was used for
payment of salaries and retirement benefits, disregard
of policies involving statistical reports,malversation/misappropriation (which is a ground for
dismissal),and loss of trust and confidence.
Unaware of the termination letter, he requested his
reinstatement since his preventive suspension had expired. Farrol even manifested his
willingness to settle the case. RCPI informed him that his employment had already been
terminated. The conflict was sent to the grievance committee. Two years later, it was
submitted for voluntary arbitration. VA ruled in favor of Farrol. RCPI filed a petition for
certiorari before the CA which reversed VA decision. CA also dismissed Motion for
Reconsideration. Farrol now filed a petition for review on certiorari on the ground that his
dismissal was illegal because he was not afforded due process and that he cannot be held
liable for the loss of trust and confidence reposed in him.
Issue: WON he was legally terminated.
Decision:
He was NOT legally terminated. The Omnibus Rules resides on the employer to prove
that there was valid cause for dismissal, and that he was afforded the opportunity to be
heard and defend himself. For the 1st notice, RCPI required petitioner to explain why he

failed to account for the shortage. The 2nd notice was that informing Farrol of his termination.
It does not clearly cite the reasons for dismissal, nor were there facts and circumstances in
support thereof. Even assuming there was a breach of trust and confidence, there was no
evidence that Farrol was a managerial employee. For 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. RCPI alleges that
under its rules, petitioners infraction
is punishable by dismissal. However, employers rules cannot preclude the state from
inquiring whether strict and rigid application or interpretation would be too harsh to the
employee. This is Farrols 1st offense, to which the Court holds that dismissal is too harsh
and grossly disproportionate. Hence, 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.

SHIELA T. DELA VICTORIA

Aurelio vs. NLRC,
211 SCRA 432
(Scope of MP: Reorganization and abolition of positions)

Facts:
Petitioner started as clinical instructor of the College of Nursing of Northwestern
College in June 1977 with a basic salary of P 600.00 a month. In October 1979, petitioner
was appointed Dean of the College of Nursing with a starting salary of P 3,000.00 a month.
In September 1981, 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 of P3, 500.00 per month. She was later promoted to Executive VicePresident with the corresponding salary of P7, 000.00.
On April 10, 1988, petitioners husband, Oscar Aurelio, a stockholder of respondent
NWC, was elected Auditor. On May 1, 1988, the individual respondents, as Board of
Directors, took over the management of respondent NWC. Since their election into office, the
Board members have taken effective control of the college and have regularly exercised
their corporate powers.
The new Board conducted a preliminary audit which revealed that the college was
financially distressed, unable to meet its maturing obligations with its creditor bank. The
new management headed by its President, embarked on realignment of positions and
functions of the different department in order to minimize expenditures. As a result of the
audit, NWC was compelled to abolish the administrative positions held by the petitioner. This
new management unleashed a series of reorganization affecting the petitioner and her
husband.

Issue:
W/N the abolition of positions is within management prerogative.
Held:
The records disclose that in holding on to the two positions, petitioner violated the
Administrative Manual for Private Schools. Thus, the respondent had no other recourse but
to take away one of the positions from her or abolish the same. Undoubtedly, the College
Board of Directors has the authority to reorganize and streamline the operations of the
college with the end in view of minimizing expenditures. The instant case was an offshoot of
a corporate reorganization, a prerogative reposed on the Board of Directors of the College.

DY
GOLDEN THREAD KNITTING INDUSTIRES v. NLRC
304 SCRA 720
(Scope of MP: Reorganization and abolition of positions)
FACTS
- several employees of Golden Thread Knitting Industries (GTK) were dismissed for different
reasons. employees were allegedly slashing the companys products (towels),
for
redundancy, for threatening the personnel manager and violating the company rules, and
for abandonment of work.- The laborers filed complaints for illegal dismissal. They allege
that the company dismissed them in retaliation for establishing and being members of the
Labor Union. GTK, on the other hand, contend that there were valid causes for the
terminations. The dismissals were allegedly a result of the slashing of their products,
rotation of work, which in turn was caused by the low demand for their products, and
abandonment of work. The cases involving the slashing of their products and threats to the
personnel manager, the dismissals were in effect a form of punishment.- The labor arbiter
ruled partially in favor of GTK. He said that there was no showing that the dismissals were in
retaliation for establishing a union. He, however, awarded separation pay to some
employees.- NLRC, however, appreciated the evidence differently. It held that there was
illegal dismissal and ordered reinstatement.

ISSUE
WON there was illegal dismissal

HELD
YES, Dismissal is the ultimate penalty that can be meted to an employee. It must therefore
be based on a clear and not on an ambiguous or ambivalent ground.
the case involving slashing of towels, the employees were not given procedural due process.
There was no notice and hearing, only outright denial of their entry to the work premises by
the security guards. The charges of serious misconduct were not sufficiently proved.the employees dismissed for redundancy, there was also denial of procedural due process.
Hearing and notice were not observed. Thus, although the characterization of an employees
services is a management function, it must first be proved with evidence, which was not
done in this case. The company cannot merely declare that it was overmanned.to the employee dismissed for disrespect, the SC believed the story version of the company
(which essentially said that the personnel manager was threatened upon mere service of a
suspension order to the employee), but ruled that the dismissal could not be upheld. the
dismissal will not be upheld where it appears that the employees act of disrespect was
provoked by the employer. xxx the employee hurled incentives at the personnel manager
because she was provoked by the baseless suspension imposed on her. The penalty of
dismissal must be commensurate with the act, conduct, or omission to the employee.The dismissal was too harsh a penalty; a suspension of 1 week would have sufficed. GTK
exercised their authority to dismiss without due regard to the provisions of the Labor Code.
The right to terminate should be utilized with extreme caution because its immediate effects
is to put an end to an employees present means of livelihood while its distant effects upon a
subsequent finding of illegal dismissal. Is just as pernicious to the employer who will most
likely be required to reinstate the subject employee and grant him full back wages and
other benefits

AIKO ELENI PALER

PANTRANCO NORTH EXPRESS, INC. VS. NLRC
314 SCRA 740
(Scope of MP: Reorganization and abolition of positions)

FACTS:
Pantranco North Express is a government-owned and controlled corporation which
provided transportation services to the public. However, it incurred huge financial losses so
it implemented a job classification program for purposes of manpower reduction. Private
respondent, Ayento, was an employee of the company. With the reorganization, positions
were reclassified and restructured. Ayento's position, as Head of Registration Section, was
abolished. Consequently, he was appointed as Registration Assistant. As a Registration
Assistant, he actually was relieved of his supervisory function, no longer had any field work,
nor entitled to overtime pay. His representation expenses and discretionary funds were also
cancelled. He received instead a fixed amelioration allowance.
Ayento then filed a Complaint against Pantranco for unfair labor practice. It
specifically alleged demotion of position and diminution of salary and benefits. Respondent
company, on the other hand, argued that there was no demotion but a job-reclassification
where petitioner's position was abolished due to the company's financial problems.
ISSUE:
WON there was demotion of position and diminution of salary and benefits.

HELD:
The Supreme Court held in the negative. Where there is nothing that would indicate
that an employee's position was abolished to ease him out of employment, the deletion of
that position should be accepted as a valid exercise of management prerogative. It is a wellsettled rule that labor laws discourage interference with an employer's judgment in the
conduct of his business. Absent any unfair or oppressive act against private respondent, the
Court cannot and should not interfere with management decisions validly undertaken by
petitioner. To do so would be meddling with the control and management of the corporation
without legal justification.

QUISTADIO
PANTOJA vs. SCA Hygiene Products Corp.
G.R. No. 163554
(Scope of MP: Reorganization and abolition of positions)

Facts:
Respondent SCA Hygiene Products Corp., a corporation engaged in the
manufacture, sale and distribution of industrial paper and tissue products,
employed Dannie M. Pantoja as a utility man on March 15, 1987. Pantoja was
eventually assigned at respondents Paper Mill No. 4, the section which
manufactures the companys industrial paper products, as a back tender in charge
of the proper operation of the sections machineries. Sometime in 1999, in a notice
of transfer, respondent informed Pantoja 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.
The closure and concomitant reorganization is in line with respondents decision to
streamline and phase out the companys industrial paper manufacturing operations
due to financial difficulties brought about by the low volume of sales and orders for
industrial paper products. However, Pantoja rejected respondents offer for his
transfer. Thus, a notice of termination of employment was sent to Pantoja as his
position was declared redundant by the closure of Paper Mill No. 4. Pantoja then
received his separation pay and thereafter executed a release and quitclaim in favor
of respondent. He 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.

Issue:
Whether or not there was illegal dismissal
Held: There was no illegal dismissal.
Respondents right of management prerogative was exercised in good faith.
Respondent presented evidence of the low volume of sales and orders for the
production of industrial paper in 1999 which inevitably resulted to the companys
decision to streamline its operations. As held in International Harvester Macleod,
Inc. v. Intermediate Appellate Court, 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.

RIPARIP
STAR PAPER

ROJALES

Duncan Asso. Of Detailman - PTGWO vs Glaxo Wellcome Phils.

(G.R. 162994, Sept. 17, 2004)
(Scope of MP: Employment Policies and stipulations)

FACTS:
Petitioner Pedro Tecson was hired by respondent Glaxo as medical representative
after Tecson had undergone training and orientation. Thereafter, 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. The Employee Code of Conduct of Glaxo similarly provides that an
employee is expected to inform management of any existing or future relationship by
consanguinity or affinity with co-employees or employees of competing drug companies.

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, a competitor of Glaxo. She was Astras Branch Coordinator in
Albay and supervised the district managers and medical representatives of her company
and prepared marketing strategies for Astra in that area. The two married even with the
several reminders given by the District Manager to Tecson. In January 1999, Tecsons
superiors informed him that his marriage to Bettsy gave rise to a conflict of interest.
Tecsons superiors reminded him that he and Bettsy should decide which one of them would
resign from their jobs, although they told him that they wanted to retain him as much as
possible because he was performing his job well. This situation eventually led to his
constructive dismissal.

ISSUE: Is Glaxos policy of prohibiting its employees from marrying an employee of a

competitor company valid?

HELD:
YES. Glaxos policy prohibiting an employee from having a relationship with an
employee of a competitor company is a valid exercise of management prerogative.

Tecsons contract of employment with Glaxo stipulates that Tescon agrees to abide by
the existing company rules of Glaxo, and to study and become acquainted with such
policies. In this regard, the Employee Handbook of Glaxo expressly informs its employees of
its rules regarding conflict of interest. No reversible error can be ascribed to the Court of
Appeals when it ruled that Glaxos policy prohibiting an employee from having a relationship
with an employee of a competitor company is a valid exercise of management prerogative.
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.

SALLACAY
ARMANDO YRASUEGUI
(Scope of MP: Employment Policies and stipulations)
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.
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 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.
Both the LABOR ARBITER and CA held that the weight standards of PAL are
reasonable in view of the nature of the job of petitioner.
ISSUE:
WON he was validly dismissed.
HELD:
He was validly dismissed. 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 fine, the Court held that the obesity of petitioner, when placed in the context of his
work as flight attendant, becomes an analogous cause under Article 282(e) of the Labor
Code that justifies his dismissal from the service. His obesity may not be unintended, but is
nonetheless voluntary. As the CA correctly puts it, [v]oluntariness basically means that the
just cause is solely attributable to the employee without any external force influencing or
controlling his actions. This element runs through all just causes under Article 282, whether
they be in the nature of a wrongful action or omission. Gross and habitual neglect, a
recognized just cause, is considered voluntary although it lacks the element of intent found
in Article 282(a), (c), and (d).
NOTES:

The dismissal of petitioner can be predicated on the bona fide occupational qualification
defense. Employment in particular jobs may not be limited to persons of a particular sex,
religion, or national origin unless the employer can show that sex, religion, or national origin
is an actual qualification for performing the job. The qualification is called a bona fide
occupational qualification (BFOQ). In short, the test of reasonableness of the company policy
is used because it is parallel to BFOQ. BFOQ is valid provided it reflects an inherent quality
reasonably necessary for satisfactory job performance.
The business of PAL is air transportation. As such, it has committed itself to safely transport
its passengers. In order to achieve this, it must necessarily rely on its employees, most
particularly the cabin flight deck crew who are on board the aircraft. The weight standards of
PAL should be viewed as imposing strict norms of discipline upon its employees. The primary
objective of PAL in the imposition of the weight standards for cabin crew is flight safety.
Separation pay, however, should be awarded in favor of the employee as an act of social
justice or based on equity. This is so because his dismissal is not for serious misconduct.
Neither is it reflective of his moral character.
TANCINCO
Avon Cosmetics vs. Leticia Luna
G.R. No. 153647
(Scope of MP: Employment Policies and stipulations)

Facts:
Leticia Luna works as a supervisor for Beautifont, Inc. in 1972 which was later on acquired
by Avon Cosmetics, Inc. (Avon). Despite of the acquisition, Leticia Luna continued working for the
said successor company and aside from being a supervisor, Luna also acted as a make - up artist
of Avon Theatrical Promotions Group where she received a per diem for each theatrical
performance.
On Nov. 5, 1988, Avon and Luna entered into an agreement entitled Supervisors
Agreement and by virtue of which, Luna became part of the independent sales force of Avon. In
the said agreement, it was stated that both parties mutually agrees:
5) That the Supervisor shall sell or offer to sell, display or promote only and exclusively products
sold by the Company.
6) Either party may terminate this agreement at will, with or without cause, at any time upon
notice to the other.
Later, she was then invited by a former Avon employee, who was then currently the sales
manager of Sandre Phi. Inc. (a domestic corporation engaged in direct selling of vitamins and
other food supplements), to sell said products. Luna accepted the offer and then became a Group
Franchise Director of Sandre concurrently being a Group Supervisor of Avon. She then began
selling products to other Avon employees.
On Sept. 23, 1988, she requested a law firm to render a legal opinion as to the legal
consequences of the Supervisors Agreement and in response to her, query, the firm opined that
the agreement was contrary to law. Wanting to share the legal opinion, she wrote a letter to her
colleagues informing them about it.
On Oct. 11, 1988, President & Gen. Manager of Avon notified Luna of the termination or
cancellation of her Supervisors Agreement with Avon.
Issues: 1. Whether or not paragraph 5 of the Supervisors Agreement is void for being violative of
law and public policy
2. Whether or not Avon has no right to terminate the said agreement.
Held: 1. The Supervisors Agreement is not against public policy. There is nothing invalid or
contrary to public policy either in the objectives sought to be attained by paragraph 5, i.e., the
exclusivity clause, in prohibiting respondent Luna, and all other Avon supervisors, from selling
products other than those manufactured by petitioner Avon. We quote with approval the
determination of the U.S. Supreme Court in the case of Board of Trade of Chicago v. U.S. that "the
question to be determined is whether the restraint imposed is such as merely regulates and
perhaps thereby promotes competition, or whether it is such as may suppress or even destroy
competition."

Such prohibition is neither directed to eliminate the competition like Sandr Phils., Inc. nor
foreclose new entrants to the market. In its Memorandum, it admits that the reason for such
exclusion is to safeguard the network that it has cultivated through the years. Admittedly, both
companies employ the direct selling method in order to peddle their products. By direct selling,
petitioner Avon and Sandre, the manufacturer, forego the use of a middleman in selling their
products, thus, controlling the price by which they are to be sold. The limitation does not affect
the public at all. It is only a means by which petitioner Avon is able to protect its investment.
It was not by chance that Sandr Philippines, Inc. made respondent Luna one of its Group
Franchise Directors. It doesnt take a genius to realize that by making her an important part of its
distribution arm, Sandr Philippines, Inc., a newly formed direct-selling business, would be saving
time, effort and money as it will no longer have to recruit, train and motivate supervisors and
dealers. Respondent Luna, who learned the tricks of the trade from petitioner Avon, will do it for
them. This is tantamount to unjust enrichment. Worse, the goodwill established by petitioner Avon
among its loyal customers will be taken advantage of by Sandre Philippines, Inc. It is not so hard
to imagine the scenario wherein the sale of Sandr products by Avon dealers will engender a
belief in the minds of loyal Avon customers that the product that they are buying had been
manufactured by Avon. In other words, they will be misled into thinking that the Sandr products
are in fact Avon products. From the foregoing, it cannot be said that the purpose of the subject
exclusivity clause is to foreclose the competition, that is, the entrance of Sandr products in to
the market. Therefore, it cannot be considered void for being against public policy. How can the
protection of ones property be violative of public policy? Sandr Philippines, Inc. 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.
2. Avon has the right to terminate the contract. In the case of Petrophil Corporation v. Court of
Appeals, this Court already had the opportunity to opine that termination or cancellation clauses
such as that subject of the case at bar are legitimate if exercised in good faith. The termination
clause of the Supervisors Agreement clearly provides for two ways of terminating and/or
canceling the contract. One mode does not exclude the other. The contract provided that it can be
terminated or cancelled for cause, it also stated that it can be terminated without cause, both at
any time and after written notice. Thus, whether or not the termination or cancellation of the
Supervisors Agreement was "for cause," is immaterial. The only requirement is that of notice to
the other party. When petitioner Avon chose to terminate the contract, for cause, respondent Luna
was duly notified thereof.

DAN RUNILLE M. ABESAMIS

ST. LUKES MEDICAL CENTER EMPLOYEES ASSOCIATION-AFW vs. NLRC AND ST. LUKES
MEDICAL CENTER, INC.
(Scope of MP: Employment Policies and stipulations)

FACTS:
Petitioner Maribel S. Santos was hired as X-Ray Technician in the Radiology department of
private respondent St. Lukes Medical Center, Inc. (SLMC) on October 13, 1984.
On April 22, 1992, 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.
On March 4, 1997, the Director of the Institute of Radiology issued a final notice to petitioner
Maribel S. Santos requiring the latter to comply with Republic Act. No. 7431 by taking and
passing the forthcoming examination scheduled in June 1997; otherwise, private respondent
SLMC may be compelled to retire her from employment should there be no other position
available where she may be absorbed.
Later, Santos took the examination but she failed to pass the same. Subsequently, the
Personnel Manager of private respondent SLMC issued a Notice of Separation from the
Company to petitioner Maribel S. Santos effective February 5, 1999 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.
Thus, Maribel S. Santos filed a complaint against private respondent SLMC for illegal
dismissal. the Labor Arbiter came out with a Decision ordering private respondent SLMC to
pay petitioner Maribel S. Santos the amount of One Hundred Fifteen Thousand Five Hundred
Pesos (P115,500.00) representing her separation pay. All other claims of petitioner were
dismissed for lack of merit. Both the NLRC and the CA affirmed the Labor Arbiters decision

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:
YES, 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. (as provided in
Republic Act No. 7431)
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.

Jane S. Baker

LEONARDO VS. NLRC

333 SCRA 589
(Scope of MP:Early retirement program)

FACTS:
DANILO LEONARDO was hired by private respondent on March 4, 1988 as an autoaircon mechanic at a salary rate of P35.00 per day. His pay was increased to P90.00 a day
when he attained regular status six months later.
LEONARDO alleges that on April 22, 1991, private respondent was approached by the
same personnel manager who informed him that his services were no longer needed.
Private respondent likewise insists that it never severed the former's employment. On the
contrary, the company claims that it was LEONARDO who abandoned his post following an

investigation wherein he was asked to explain an incident of alleged "sideline" work which
occurred on April 22, 1991. It would appear that late in the evening of the day in question,
the driver of a red Corolla arrived at the shop looking for LEONARDO. The driver said that, as
prearranged, he was to pick up LEONARDO who would perform a private service on the
vehicle.
When reports of the "sideline" work reached management, it confronted LEONARDO
and asked for an explanation. According to private respondent, LEONARDO gave
contradictory excuses, eventually claiming that the unauthorized service was for an aunt.
When pressed to present his aunt, it was then that LEONARDO stopped reporting for work.

ISSUES:

I. RESPONDENT COMMISSIONERS GRAVELY ABUSED THEIR DISCRETION AMOUNTING TO

LACK OR IN EXCESS OF JURISDICTION WHEN THEY GRANTED RESPONDENTS APPEAL.

II. RESPONDENT COMMISSIONERS GRAVELY ABUSED THEIR DISCRETION AMOUNTING TO

LACK OR EXCESS OF JURISDICTION WHEN THEY FOUND FOR RESPONDENT REYNALDO'S
MARKETING PRONOUNCING THAT THERE WAS NO ILLEGAL DISMISSAL DESPITE CONTRARY
FINDINGS MADE BY THE LABOR ARBITER CONTRARY TO LAW AND EXISTING JURISPRUDENCE.

HELD:
The court do not see any grave abuse of discretion in the Commission's ruling
dismissing LEONARDO's complaint.

The evidence on record indubitably shows that he abandoned his work with the
respondents. As sufficiently established, complainant Leonardo, after being pressed by the
respondent company to present the customer regarding his unauthorized solicitation of
sideline work from the latter and whom he claims to be his aunt, he never reported back to
work anymore. This finding is bolstered by the fact that after he left the respondent
company, he got employed with Dennis Motors Corporation as Air-Con Mechanic from
October 12, 1992 to April 3, 1995 (Certification attached to respondents' Manifestation filed
June 5, 1996)

Moreover, why did it take him ten (10) long months to file his case if indeed he was
aggrieved by respondents. All the above facts clearly point that the filing of his case is a
mere afterthought on the part of complainant Leonardo. In the case of Flexo Mfg. Corp. vs.
NLRC, et. al., 135 SCRA 145, the Supreme Court held, thus:

For abandonment to constitute a valid cause for termination of employment,

there must be a delibarate [sic] unjustified refusal of the employee to resume
his employment. This refusal must be clearly shown, mere absence is not
sufficient, it must be accompanied by overt acts unerringly pointing to the
fatcs [sic] that the employee simply does not want to work anymore.

LEONARDO protests that he was never accorded due process.1awphi1 This begs the
question, for he was never terminated; he only became the subject of an investigation in
which he was apparently loath to participate. As testified by the personnel manager, he was
given a memorandum asking him to explain the incident in question, but he refused to
receive it. In an analogous instance, we held that an employee's refusal to sign the minutes
of an investigation cannot negate the fact that he was accorded due process.
In concluding, we feel that it will not be amiss to point out that a petition for certiorari under
Rule 65 is intended to rectify errors of jurisdiction or grave abuse of discretion. As we held
in Philippine Advertising Counselors, Inc. v.National Labor Relations Commission, 27

The well-settled rule confines the original and exclusive jurisdiction of the Supreme
Court in the review of decisions of the NLRC under Rule 65 of the Revised Rules of
Court only to the issue of jurisdiction or grave abuse of discretion amounting to lack
of jurisdiction. Grave abuse of discretion is committed when the judgment is rendered
in a capricious, whimsical, arbitrary or despotic manner. An abuse of discretion does
not necessarily follow just because there is a reversal by the NLRC of the decision of
the Labor Arbiter. Neither does the mere variance in the evidentiary assessment of
the NLRC and that of the Labor Arbiter would, as a matter of course, so warrant
another full review of the facts. The NLRC's decision, so long as it is not bereft of
support from the records, deserves respect from the Court.

CABARON
PRODUCERS BANK OF THE PHILIPPINES v. NLRC
(Scope of MP: Bonuses)

Facts:
This case involves a special civil action for certiorari with prayer for preliminary
injunction and/or restraining order seeking the nullification of (1) the decision of public
respondent in Producers Bank Employees Association v. Producers Bank of the Philippines,
promulgated on 30 April 1991, reversing the Labor Arbiters dismissal of private
respondents complaint and (2) public respondents resolution dated 18 June 1991 denying
petitioners motion for partial reconsideration.
The present petition originated from a complaint filed by private respondent with the
Arbitration Branch, National Capital Region, National Labor Relations Commission (NLRC),
charging petitioner with diminution of benefits, non-compliance with Wage Order No. 6 and
non-payment of holiday pay. In addition, private respondent prayed for damages.
On March 31, 1989, Labor Arbiter Nieves V. de Castro found private respondents
claims to be unmeritorious and dismissed its complaint. In a complete reversal, however, the
NLRC granted all of private respondents claims, except for damages. In a complete reversal,
however, the NLRC granted all of private respondents claims, except for damages. The
dispositive portion of the NLRCs decision provides
WHEREFORE, premises considered, the appealed Decision is, as it is hereby, SET ASIDE and
another one issued ordering respondent-appellee to pay complainant-appellant:
1. The unpaid bonus (mid-year and Christmas bonus) and 13th month pay;
2. Wage differentials under Wage Order No. 6 for November 1, 1984 and the corresponding
adjustment thereof; and
3. Holiday pay under Article 94 of the Labor Code, but not to exceed three (3) years.
The rest of the claims are dismissed for lack of merit.
Petitioner filed a Motion for Partial Reconsideration, but was denied by the NLRC in a
Resolution issued on June 18, 1991. Hence, recourse to the present Court.
Issue:
Whether or not petitioner can be obliged to pay the alleged unpaid bonuses.
Decision:
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. According to petitioner, it
sustained losses in the millions of pesos from 1984 to 1988, an assertion which was affirmed
by the labor arbiter. Moreover, petitioner points out that the collective bargaining

agreement of the parties does not provide for the payment of any mid-year or Christmas
bonus. On the contrary, section 4 of the collective bargaining agreement states that
Acts of Grace. Any other benefits or privileges which are not expressly provided in this
Agreement, 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.
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.
Thus, in Traders Royal Bank v. NLRC, we held that
It is clear x x x that the petitioner may not be obliged to pay bonuses to its employees. The
matter of giving them bonuses over and above their lawful salaries and allowances is
entirely dependent on the profits, if any, realized by the Bank from its operations during the
past year.
Hence, the contention of the Union that the granting of bonuses to the employees
had ripened into a company practice that may not be adjusted to the prevailing financial
condition of the Bank has no legal and moral bases. Its fiscal condition having declined, the
Bank may not be forced to distribute bonuses which it can no longer afford to pay and, in
effect, be penalized for its past generosity to its employees.
Private respondents contention, that the decrease in the mid-year and year-end
bonuses constituted a diminution of the employees salaries, is not correct, for bonuses are
not part of labor standards in the same class as salaries, cost of living allowances, holiday
pay, and leave benefits, which are provided by the Labor Code.
This doctrine was reiterated in the more recent case of Manila Banking Corporation v.
NLRC wherein the Court made the following pronouncements
By definition, a bonus is a gratuity or act of liberality of the giver which the
recipient has no right to demand as a matter of right. It is something given in
addition to what is ordinarily received by or strictly due the recipient. The granting of
a bonus is basically a management prerogative which cannot be forced upon the
employer who may not be obliged to assume the onerous burden of granting bonuses
or other benefits aside from the employees basic salaries or wages, especially so if it
is incapable of doing so.

SHIELA T. DELA VICTORIA

Lepanto Ceramics, Inc. vs. Lepanto Ceramics Employees Association

G.R. No. 180866, March 2, 2010
(Scope of MP: Bonuses)

Facts:
Petitioner Lepanto Ceramics, Inc., a corporation primarily in the business of
manufacture, makes, buy and sell, on whole sale basis, tiles, marbles, mosaics and other
similar products. Respondent Lepanto Ceramics Employees Association is the sole and
exclusive bargaining agent in the establishment of petitioner.
In 1998, petitioner gave P3, 000.00 as bonus to its employees, members of the
respondent Association. Subsequently, in September 1999, petitioner and respondent
Association entered into a Collective Bargaining Agreement (CBA) which provides for, among
others, the grant of a Christmas gift package/bonus to the members of the respondent
Association.
In the succeeding years, 1999, 2000, 2001, petitioner gave bonuses in a form of a
certificate which is equivalent to P3, 000.00. However, in 2002, petitioner gave only P600.00
as cash benefit. Respondent Association objected to the P600.00 cash benefit and argued
that it was in violation of the CBA. Petitioner averred that the giving of extra compensation
was based on the companys available resources for a given year and the workers are not
entitled to a bonus if the company does not make profits. Unable to amicably settle the
dispute, the case was referred to the Voluntary Arbitrator. The Voluntary Arbitrator rendered
a decision, declaring that petitioner is bound to grant each of its workers a Christmas bonus
of P3,000.00 for the reason that the bonus was given prior to the effectivity of the CBA
between the parties and that the financial losses of the company is not a sufficient reason to
exempt it from granting the same.
Issue:
Is petitioner obliged to give a Christmas bonus to respondent Association?
Ruling:
Yes. 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.
A reading of the provision of the CBA reveals that the same provides for the giving of
a "Christmas gift package/bonus" without qualification. The said provision did not state that

the Christmas package shall be made to depend on the petitioners financial standing. The
records are also bereft of any showing that the petitioner made it clear during CBA
negotiations that the bonus was dependent on any condition. Indeed, if the petitioner and
respondent Association intended that the P3,000.00 bonus would be dependent on the
company earnings, such intention should have been expressed in the CBA.
All given, business losses are a feeble ground for petitioner to repudiate its obligation
under the CBA. The rule is settled that any benefit and supplement being enjoyed by the
employees cannot be reduced, diminished, discontinued or eliminated by the employer. The
principle of non-diminution of benefits is founded on the constitutional mandate to protect
the rights of workers and to promote their welfare and to afford labor full protection.

DY
INTERPHIL LAB UNION

AIKO ELENI PALER

MALAYAN EMPLOYEES ASSOCIATION FFW VS. MALAYAN INSURANCE CO., INC.

GR NO. 181357
(Scope of MP: Prior Approval leave policy)

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 with the company
allows union officials to avail of union leaves with pay 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 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. A union officer, Mangalino, filed union leave applications but was
disapproved by the department head because the department was undermanned at that
time. Despite the disapproval, Mangalino proceeded to take the union leave. The company
responded by suspending him.
ISSUE:
WON the suspension was valid.
HELD:
The suspension was valid. 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.[18] 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.

QUISTADIO
NATIONAL SUGAR REFINERIES

RIPARIP
FALGUERA

ROJALES

Libres v NLRC
(G.R. No.123737, May 28, 1999)
(Just causes for termination: analogous cases: sexual harassment)

FACTS:
Carlos G. Libres, an electrical engineer, was holding a managerial position with
National Steel Corporation (NSC) as Assistant Manager. He was then asked to comment
regarding the charge of sexual harrassment filed against him by the VP's secretary Capiral.
This was included with a waiver of his right to be heard once he didn't comment.
Libres submitted his written explanation denying the accusation against him and
offering to submit himself for clarificatory interrogation. The Management Evaluation
Committee said that "touching a female subordinate's hand and shoulder, caressing her
nape and telling other people that Capiral was the one who hugged and kissed or that she
responded to the sexual advances are unauthorized acts that damaged her honor." They
suspended Libres for 30 days without pay.
Libres filed charges against the corporation in the Labor Arbiter, but the latter held
that the company acted with due process and that his punishment was only mild. Moreover,
he assailed the NLRC decision as without basis since the massaging of her shoulders never
discriminated against her continued employment, impaired her rights and privileges
under the Labor Code, nor created a hostile, intimidating or offensive environment. He
claimed that he wasn't guaranteed due process because he wasn't given the right be heard.
This was due to his demand for personal confrontation not being recognized by the MEC. He
also contends that public respondents reliance on Villarama v. NLRC and Golden Donuts was
misplaced. He draws attention to victim Divina Gonzagas immediate filing of her letter of
resignation in the Villarama case as opposed to the one-year delay of Capiral in filing her
complaint against him. He now surmises that the filing of the case against him was merely
an afterthought and not borne out of a valid complaint, hence, the Villarama case should
have no bearing on the instant case.
ISSUE: Is the case against Libres borne out of a valid complaint?
HELD:
YES. It was both fitting and appropriate since it singularly addressed the issue of a
managerial employee committing sexual harassment on a subordinate. The disparity in the
periods of filing the complaints in the two (2) cases did not in any way reduce this case into
insignificance. On the contrary, it even invited the attention of the Court to focus on sexual
harassment as a just and valid cause for termination. Whereas petitioner Libres was only
meted a 30-day suspension by the NLRC, Villarama, in the other case was penalized with
termination. As a managerial employee, petitioner is bound by more exacting work ethics.
He failed to live up to his higher standard of responsibility when he succumbed to his moral
perversity. And when such moral perversity is perpetrated against his subordinate, he
provides a justifiable ground for his dismissal for lack of trust and confidence.
It is the the duty of every employer to protect his employees from oversexed
superiors. Public respondent therefore is correct in its observation that the Labor Arbiter
was in fact lenient in his application of the law and jurisprudence for which petitioner must
be grateful for.
As pointed out by the Solicitor General, it could be expected since Libres was
Capirals immediate superior. Fear of retaliation and backlash, not to forget the social
humiliation and embarrassment that victims of this human frailty usually suffer, are all
realities that Capiral had to contend with. Moreover, the delay did not detract from the truth
derived from the facts. Petitioner Libres never questioned the veracity of Capirals

allegations. In fact his narration even corroborated the latters assertion in several material
points. He only raised issue on the complaints protracted filing.

SALLACAY
VILLARAMA VS. NLRC

(Just causes for termination: analogous cases: sexual harassment)

TANCINCO
VELOSO VS. CAMINADE

(Just causes for termination: analogous cases: sexual harassment)

ABESAMIS
ATTY. SUSAN M. AQUINO vs. HON. ERNESTO D. ACOSTA, Presiding Judge, Court of Tax
Appeals

(Just causes for termination: analogous cases: sexual harassment)

FACTS:
Complainant alleged several instances when respondent judge sexually harassed her:
1. When she reported for work after her vacation in the United States, bringing gifts for
the three judges of the CTA, including respondent. In the afternoon of the same day,
he entered her room and greeted her by shaking her hand. Suddenly, he pulled her
towards him and kissed her on her cheek.
2. While respondent was on official leave, he called complainant by phone, saying he
will get something in her office. Shortly thereafter, he entered her room, shook her
hand and greeted her, "Merry Christmas." Thereupon, he embraced her and kissed
her.
3. Respondent phoned complainant, asking if she could see him in his chambers in
order to discuss some matters. When complainant arrived there, respondent tried to
kiss her but she was able to evade his sexual attempt. She then resolved not to
enter his chambers alone.
4. After the Senate approved the proposed bill expanding the jurisdiction of the CTA,
while complainant and her companions were congratulating and kissing each other,
respondent suddenly placed his arms around her shoulders and kissed her.
5. Respondent called complainant and asked her to see him in his office to discuss the
Senate bill on the CTA. She requested Ruby to accompany her. The latter agreed
but suggested that they should act as if they met by accident in respondents office.
Ruby then approached the secretarys table which was separated from respondents
office by a transparent glass. For her part, complainant sat in front of respondent's
table and asked him what he wanted to know about the Senate bill. Respondent
seemed to be at a loss for words and kept glancing at Ruby who was searching for
something at the secretary's desk. Forthwith, respondent approached Ruby, asked
her what she was looking for and stepped out of the office. When he returned, Ruby
said she found what she was looking for and left.
Respondent then approached
complainant saying, me gusto akong gawin sa iyo kahapon pa. Thereupon, he tried
to grab her. Complainant instinctively raised her hands to protect herself but
respondent held her arms tightly, pulled her towards him and kissed her. She pushed
him away, then slumped on a chair trembling. Meantime, respondent sat on his chair
and covered his face with his hands. Thereafter, complainant left crying and locked
herself inside a comfort room. After that incident, respondent went to her office and
tossed a note stating, sorry, it wont happen again.
In his comment, respondent judge denied complainants allegation that he sexually harassed
her. He claimed that he has always treated her with respect, being the head of the CTA Legal
Staff. In fact, there is no strain in their professional relationship.
ISSUE:
Did the respondent sexually harassed the complainant?
HELD:

No, A mere casual buss on the cheek is not a sexual conduct or favor and does not fall within
the purview of sexual harassment under R.A. No. 7877. The complainant failed to show by
convincing evidence that the acts of Judge Acosta in greeting her with a kiss on the cheek, in
a 'beso-beso' fashion, were carried out with lustful and lascivious desires or were motivated
by malice or ill-motive. It is clear under the circumstances that most of the kissing incidents
were done on festive and special occasions.
The elements of sexual harassment are as follows:
1) The employer, employee, manager, supervisor, agent of the employer, teacher,
instructor, professor, coach, trainor, or any other person has authority, influence or
moral ascendancy over another;
2) The authority, influence or moral ascendancy exists in a working environment;
3) The employer, employee, manager, supervisor, agent of the employer, teacher,
instructor, professor, coach, or any other person having authority, influence or moral
ascendancy makes a demand, request or requirement of a sexual favor.
Complainant did not even allege that Judge Acosta demanded, requested or required her to
give him a buss on the cheek which, she resented. Neither did Atty. Aquino establish by
convincing evidence that the busses on her cheek, which she considers as sexual favors,
discriminated against her continued employment, or resulted in an intimidating, hostile or
offensive environment. In fact, complainant continued to perform her work in the office with
the usual normalcy. Obviously, the alleged sexual favor, if there ever was, did not interfere
with her working condition. Moreover, Atty. Aquino also continued to avail of benefits and
leaves appurtenant to her office and was able to maintain a consistent outstanding
performance.
On top of this, her working area which, is at the third floor of the CTA, is far removed from
the office of Judge Acosta located at the fourth floor of the same building. Resultantly, no
hostile or intimidating working environment is apparent.
WHEREFORE, respondent Judge Ernesto D. Acosta is EXONERATED of the charges against
him. However, he is ADVISED to be more circumspect in his deportment.