Yushi Kondo v. Toyota Boshoku et al., G.R.

201396, September 11, 2019

Facts: Yushi Kondo (petitioner), a Japanese citizen, was hired by respondent Toyota Boshoku
Philippines Corporation (Toyota) as Assistant General Manager for Marketing, Procurement and
Accounting. He was provided a service car and a local driver by Toyota's President at the time,
Fuhimiko Ito.

After working for 5 months, his performance rating was only slightly above average. Petitioner was
thereafter allegedly assigned the oldest company car. He was also prevented from further using his
Caltex card for gasoline expenses, and instructed to pay for gas expenses with his own money,
subject to reimbursement. He was also prevented from attending the meeting for the evaluation of
employees.

When respondent Mamoru Matsunaga (Matsunaga) took over as President of Toyota, petitioner was
transferred to the Production Control, Technical Development and Special Project department as
Assistant Manager. Petitioner allegedly objected to the transfer and admitted having no knowledge,
skills, and experience in production control and technical development. Nonetheless, petitioner
assumed his new post.

Then, petitioner was notified that his service car and driver will be withdrawn. Since petitioner could
not report for work, he considered himself constructively dismissed. On the same day, he filed a
complaint with the NLRC for constructive dismissal, illegal diminution of benefits, among others.

Respondents denied petitioner's allegations.

Labor Arbiter Michaela A. Lontoc (LA) issued a Decision holding that petitioner was constructively
dismissed. Respondents appealed to the NLRC which reversed and set aside the LA Decision.
Petitioner filed a motion for reconsideration, but NLRC denied it. Hence, he filed a petition for
certiorari with the Court of Appeals (CA). The CA denied the petition. Thus, he filed the present
petition.

Issue: Whether the CA erred in not finding grave abuse of discretion on the part of the NLRC when it
reversed the LA 's Decision and dismissed petitioner's labor complaint.

Ruling: Constructive dismissal exists where there is cessation of work because continued
employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in
rank and a diminution in pay. What is essential is that there is a lack of "voluntariness in the
employee's separation from employment." Petitioner claimed that he was forced to resign. Hence, it
is incumbent upon him to prove that his resignation was involuntary, with clear, positive and
convincing evidence. This he failed to do.

We agree with the NLRC that, the primary and immediate cause for petitioner's claim of constructive
dismissal is the withdrawal of his assigned car and driver," which petitioner claimed as "essential
requisites of his continued employment. To place matters in perspective, what petitioner essentially
alleges is diminution of benefits.

There is diminution of benefits when the following are present: (1) the grant or benefit is founded on
a policy or has ripened into a practice over a long period of time; (2) the practice is consistent and
deliberate; (3) the practice is not due to error in the construction or application of a doubtful or
difficult question of law; and (4) the diminution or discontinuance is done unilaterally by the
employer.
Here, the grant of service car and local driver to petitioner was based neither on express policy or a
written contract. It may also not be considered company practice. In this case, petitioner failed to
prove that the car and driver benefits were also being enjoyed by other employees who held
positions equivalent to his position, or that the benefits were given by the company itself with
voluntary and deliberate intent.

There is likewise no showing that petitioner's entitlement to the Caltex card is based on an express
policy, a written contract, or company practice. He also failed to prove that the card was being
enjoyed by other employees similarly situated as him, as would indicate Toyota's intention to give
the benefit consistently and deliberately.

As regards the transfer of Department, petitioner did not raise any objections to his transfer prior to
the filing of the complaint, nor did he amply demonstrate why he was unsuited for the new job.
There was no proof of any verbal or written opposition to the transfer.

It was not established that the petitioner was constructively dismissed, much less that respondents
acted in bad faith or in an oppressive or malevolent manner.
 Mejila v. Wringley Philippines, Inc. et al, G.R. No. 199469, September 11, 2019

FACTS: Wringley Philippines Inc. (WPI) sent a memorandum to Mejila informing her that her position
has been abolished as a result of the company's manpower rationalization program and that her
employment will be terminated on November 26, 2007. The memorandum stated that Mejila is no
longer required to work beginning the day of receipt thereof, although her salary will be paid.

WPI granted her separation pay at the rate of 1.5 months every year of service, cash conversion of
unused leaves, one-year extension of medical insurance, and pro rata 13 th month pay, New Year pay,
and mid-year pay. On the same date, WPI notified the Department of Labor and Employment (DOLE)
Rizal Field Office of its decision to terminate Mejila due to redundancy.

WPl engaged the services of Activeone Health, Inc. to take over the services previously handled by
the occupational health practitioners.

Mejila filed a complaint for illegal dismissal against WPI and its officers.

The Labor Arbiter ruled that Mejila was illegally dismissed and held that WPI failed to comply with
the procedural due process. The National Labor Relations Commission (NLRC) reversed the Labor
Arbiter. Mejila elevated the case to the CA on certiorari. The CA affirmed the NLRC's finding that
Mejila was not illegally dismissed.

ISSUE: 1) Whether or not Mejila was illegally dismissed. 2) Whether or not WPI complied with the
reporting requirement to DOLE.

RULING:

1. The Labor Code recognizes redundancy as an authorized cause for the termination of
employment. Redundancy exists where the services of an employee arc in excess or what is
reasonably. In the present case, we agree with the CA and the NLRC that WPI substantially
proved that its Headcount Optimization Program was a fair exercise of business judgment.
The decision to outsource clinic operations can hardly be considered as whimsical or
arbitrary. As both the CA and the NLRC found, WPI had deliberated on the feasibility of the
Headcount Optimization Program.

Mejila failed to prove her accusation that WPI acted with ill motive in implementing the
redundancy program. The pieces of evidence presented by Mejila to support her allegation
were mainly hearsay and speculation at best. Mejila's failure to discharge her burden of
proving that WPI's management acted in a malicious or arbitrary manner constrains us to
apply the policy of non-interference with the employer's exercise of business judgment.

2. In implementing a redundancy program, Article 298 requires employers to serve a written

notice to both the affected employees and the DOLE at least one month prior to the
intended date of termination.

The practice of the employer directing an employee not to attend work during the period of
notice of resignation or termination of the employment is colloquially known as "garden
leave" or "gardening leave." During the period of garden leave, employees continue to be
paid their salary and any other contractual benefits as if they were rendering their services
to the employer. In the Philippines, there is no prohibition under our labor laws against a
garden leave clause in an employment contract.
WPl argues that many functions of the regional offices have been devolved to the provincial,
field and/or satellite offices. Thus, it posits that it "substantially complied” with the reporting
requirement. This is unwarranted in the absence of any clear devolution of the authority to
receive the notice of termination. It does not change the rule that the notice must be filed
with the regional office.

If the dismissal is based on an authorized cause under Article 298 but the employer failed to
comply with the notice requirement, the sanction is stiffer compared to termination based
on Article 297 because the dismissal was initiated by the employer's exercise of its
management prerogative. We accordingly hold that WPI is liable to pay nominal damages in
the sum of P50,000.00.