You are on page 1of 9

Cases for Labor Law Case Digest

Interpretation and Construction of Labor Standards


1. Acua v. CA 489 SCRA 658

Facts: On January 14, 2000, petitioners Acua and Mendez invoking Republic Act No. 8042,[13] filed a complaint for illegal dismissal
and non-payment/underpayment of salaries or wages, overtime pay, refund of transportation fare, payment of salaries/wages for 3
months, moral and exemplary damages, and refund of placement fee before the National Labor Relations Commission (NLRC).
Petitioner Ramones filed her complaint on January 20, 2000.

Issue: Whether petitioners were illegally dismissed under Rep. Act No. 8042, thus entitling them to benefits including overtime pay

Ruling:
In this case, the appellate court found that petitioners did not deny that the accommodations were not as homely as expected.
We likewise note that petitioners did not refute private respondents assertion that they had deployed approximately sixty other
workers to their principal, and to the best of their knowledge, no other worker assigned to the same principal has resigned, much less,
filed a case for illegal dismissal. To our mind these cited circumstances do not reflect malice by private respondents nor do they show
the principals intention to subject petitioners to unhealthy accommodations. Under these facts, we cannot rule that there was
constructive dismissal.

It is a time-honored rule that in controversies between a worker and his employer, doubts reasonably arising from the evidence, or in
the interpretation of agreements and writing should be resolved in the workers favor.[28] The policy is to extend the applicability of
the decree to a greater number of employees who can avail of the benefits under the law, which is in consonance with the avowed
policy of the State to give maximum aid and protection to labor.[29] Accordingly, we rule that private respondents are solidarily liable
with the foreign principal for the overtime pay claims of petitioners.
2. G & M Phils., Inc. v. Cuambot, G.R. No. 162308, Nov. 22, 2006

Facts:
Respondent Cuambot filed a case for illegal dismissal unpaid wages, withheld salaries, and refund of plane ticket against
petitioner G & M Phils. Respondent alleged that his employer violated Article 83 and 108 of the Labor Code. Petitioner on the other
hand alleged that respondent was religiously paid his salaries and as evidence they presented copies of 7 payslips purportedly signed
by the respondent himself. The respondent countered that his signatures were forged. The Labor Arbiter rendered a decision favoring
the respondent. Upon appeal, the NLRC reversed the decision and remanded the case back to the Labor Arbiter with the instruction
that the signatures be examined by a calligraphy expert. After raffling the case, the new Labor Arbiter rendered a decision favoring the
petitioner, without consulting an expert. Upon appeal, the CA reversed the ruling. Hence this petition.

Issues:
1. Whether or not the signatures were forged.
2. How should doubts involving the interpretation of Labor be resolved?

Ruling:
1. Yes. The signatures were clearly forged even upon visual examination. Moreover, petitioner did not submit original copies of the
payslips but only photocopies. Further, the opinions of handwriting experts are not binding upon the Courts as the judge must conduct
an independent examination of the questioned signature in order to arrive at a reasonable conclusion as to its authenticity.

2. The rules is that all doubts in the implementation and interpretation of the Labor Code shall be resolved in favor of labor in order to
give effect of the State Policy provided in Article 3 of the Labor Code. Moreover, one who pleads payment has the burden of proving it.
Only when the debtor introduces evidence that the obligation has been extinguished does the burden shift to the creditor, who is then
under a duty of producing evidence to show why payment does not extinguish the obligation.

3. Continental Steel v. Hon. Accredited VA Montao, G.R. No. 182836, Oct. 13, 2009

FACTS:
Before the SC is a petition for certiorari assailing the CAs Decision which affirmed the respondent labor arbiters Resolution to
grant bereavement leave and other death benefits to Rolando Hortillano based on the death of his unborn child. Hortillano is an
employee of petitioner Continental Steel and is a member of a union. Hortillano filed a claim for Paternity Leave, Bereavement Leave
and Death and Accident Insurance for dependent in pursuance to the CBA between management and the union. The claim was based
on the death of Hortillanos unborn child as his wife had a premature delivery which led to the death of the fetus during labor.

Petitioner granted the paternity leave but denied the bereavement leave and death and accident insurance. Hortillano sought the
reversal of managements grant through his Unions grievance machinery provided the CBA. However, no settlement was reached,
hence the issue was elevated to the DOLE. The Union maintains that under the CBA, granting bereavement leave and other death
benefits, there was no specification that dependent should have first been born alive or must have acquired juridical personality so that
his/her subsequent death could be covered by the CBA death benefits. The Union invoked Article 1702 of the Civil Code, which
provides that all doubts in labor legislations and labor contracts shall be construed in favor of the safety of and decent living for the
laborer.

On the other hand, Petitioner claimed that the express provision of the CBA did not contemplate the death of an unborn child, a
fetus, without legal personality. Petitioner, reasoned that a fetus that was dead from the moment of delivery was not a person at all.
Hence, a fetus that was delivered dead could not be considered a dependent, since it never needed any support, nor did it ever acquire
the right to be supported. Petitioner maintained that the wording of the CBA was clear and unambiguous. Since neither of the parties
qualified the terms used in the CBA, the legally accepted definitions thereof were deemed automatically accepted by both parties.

ISSUE: How should the term death of a legitimate dependent be interpreted so as to warrant the allowance or disallowance of
bereavement leave and other death benefits?

RULING:
Death is defined as the cessation of life. Life is not synonymous with civil personality. One need not acquire civil personality
first before he/she could die. Even a child inside the womb already has life. No less than the Constitution recognizes the life of the
unborn from conception, that the State must protect equally with the life of the mother. If the unborn already has life, then the cessation
thereof even prior to the child being delivered, qualifies as death.

The unborn child is considered a dependent under the CBA. As petitioner itself defines, a dependent is "one who relies on
another for support; one not able to exist or sustain oneself without the power or aid of someone else." Under said general definition,
even an unborn child is a dependent of its parents. Hortillanos child could not have reached 38-39 weeks of its gestational life without
depending upon its mother for sustenance. Further, the CBA did not provide a qualification for the child dependent, such that the child
must have been born or must have acquired civil personality. Without such qualification, then child shall be understood in its more
general sense, which includes the unborn fetus in the mothers womb.

The term legitimate merely addresses the dependent childs status in relation to his/her parents. A legitimate child is a
product of, and, therefore, implies a valid and lawful marriage.

Given the existence of all the requisites for bereavement leave and other death benefits under the CBA, Hortillanos claims for
the same should be granted by petitioner. Being for the benefit of the employee, CBA provisions on bereavement leave and other
death benefits should be interpreted liberally to give life to the intentions thereof. Time and again, the Labor Code is specific in
enunciating that in case of doubt in the interpretation of any law or provision affecting labor, such should be interpreted in favor of labor.
In the same way, the CBA and CBA provisions should be interpreted in favor of labor.

4. Manola Peaflor v. Outdoor Clothing, G.R. No. 177114, Jan. 21, 2010

Facts:
Penaflor filed a complaint for illegal dismissal against Outdoor Clothing with the labor arbiter, claiming that he had been
constructively dismissed. On the other hand, Outdoor Clothing denied Penaflors allegation of constructive dismissal. It insists
that Penaflor voluntarily resigned from his work. Both parties submitted evidences to support their claims, however, since the
resignation letter was undated, it was unclear or cannot be ascertained whether there was illegal dismissal or not.

Issue: Was there illegal dismissal?

Ruling:
Yes. Firstly, in employee termination disputes, the employer bears the burden of proving that the employees dismissal was for
a just and valid cause. Secondly, expressed in Article 4 of the Labor Code is that all doubts in the interpretation and
implementation of the Labor Code should be interpreted in favor of the workingman. This principle has been extended to cover
doubts in the evidence presented by the employer and the employee.

5. Dansart Security v. Jean Bagoy, G.R. No. 168495, July 2, 2010

Facts:
Respondent Jean Bagoy was employed by petitioner Dansart Security Force and Allied Services Company to guard the
establishments of its various clients. However, from April 1999 until November 2001, respondent had allegedly been caught
sleeping on the job and incurred absences without leave, for which he was given notices of disciplinary action. In 2002, respondent
filed with the Regional Arbitration Branch a Complaint against petitioners for underpayment of salaries and non-payment of
overtime pay, holiday pay, premium pay, 13th month pay and service incentive leave pay. Bagoy alleged that she had been
required to report for work daily from 7:00 a.m to 7:00 p.m. with a salary rate of P166.00 per day, which was increased to P180.00
in January 2001; that she was required to work even on Sundays and holidays but was not paid holiday pay, 13th month pay and
service incentive leave pay; and that since December 2001, she had been on floating status, tantamount to constructive dismissal.
Petitioners countered that it was respondent who abandoned her work beginning November 2001. The Labor Arbiter issued a
decision favorable to respondent with regard to her money claims. The said decision was then appealed to the NLRC which in turn
reversed the Labor Arbiter's ruling. Respondent then filed a petition for certiorari with the CA which then partly gave due course.
Hence, this petition.

Issue: Whether or not the DOLE Certifications should be considered as sufficient proof that petitioner paid respondent proper
wages and all other monetary benefits to which she was entitled

Ruling:
No. The Court has repeatedly ruled that any doubt arising from the evaluation of evidence as between the employer and the
employee must be resolved in favor of the latter. Moreover, the burden of proving payment of monetary claims rests on the
employer. As reiterated in G & M Philippines, Inc. v. Cuambot, to wit: x x x one who pleads payment has the burden of proving it.
The reason for the rule is that the pertinent personnel files, payrolls, records, remittances and other similar documents which will
show that overtime, differentials, service incentive leave, and other claims of workers have been paid are not in the possession
of the worker but in the custody and absolute control of the employer. Thus, the burden of showing with legal certainty that the
obligation has been discharged with payment falls on the debtor, in accordance with the rule that one who pleads payment has the
burden of proving it. In this case, petitioners failed to discharge such burden of proof. The Certifications from the DOLE stated
that there are no pending labor cases against petitioners filed before said office, but said certifications "do not cover cases filed
before the National Labor Relations Commission and the National Conciliation and Mediation Board." For the years 2001 and
2002, the DOLE Reports stated only that based on records submitted by petitioners, it had no violations. Verily, such documents
from the DOLE do not conclusively prove that respondent, in particular, has been paid all her salaries and other benefits in full.

6. Uy v. Centro Ceramica, G.R. No. 174631, Oct. 19, 2011

Facts:
Petitioner Jhorizaldy Uy was hired by respondent Centro Ceramica Corporation as full-time sales executive. On March 18,
2002, petitioner filed a complaint for illegal dismissal against the respondent company, alleging that he is entitled to his unpaid
commission, tax refund, back wages and reinstatement. He also alleged that his predicament started with his strained working
relationship with Garcia when she was hired by the company. Petitioner was dismissed on Feb. 19, 2002 during his closed door
meeting with Sy and Garcia and he did not report for work from Feb 22. But on March 6, he was sent a notice of his failure to meet
quota for sales executive and a notice of a charge against him for his absence without leave on March 13. The Labor Arbiter
dismissed petitioners complaint. NLRC reversed LAs ruling and found petitioner to have been illegally dismissed. CA reversed
NLRCs ruling and dismissed petitioners complaint.

Issue: Whether petitioner was dismissed by the respondents or voluntarily severed his employment by abandoning his job.

Ruling:
Petitioner was illegally dismissed. Petitioner was not given any opportunity to defend himself from whatever charges hurled by
management against him such as poor sales performance as relayed to him by his supervisor, when Sy unceremoniously
terminated him which must have shocked him considering that his supervisor earlier advised that he would just be transferred to
another department. Under this scenario, petitioners decision not to report for work anymore was perfectly understandable, as
the sensible reaction of an employee fired by no less than the company president. It was indeed a case of dismissal without just
cause and due process, which is proscribed under our labor laws.

Fairness requires that dismissal, being the ultimate penalty that can be meted out to an employee, must have a clear basis. Any
ambiguity in the ground for the termination of an employee should be interpreted against the employer, who ordained such ground
in the first place.

When there is no showing of a clear, valid and legal cause for the termination of employment, the law considers it a case of illegal
dismissal. Furthermore, Article 4 of the Labor Code expresses the basic principle that all doubts in the interpretation and
implementation of the Labor Code should be interpreted in favor of the workingman. This principle has been extended by
jurisprudence to cover doubts in the evidence presented by the employer and the employee. If the evidence presented by the
employer and the employee are in equipoise, the scales of justice must be tilted in favor of the latter.

7. Cebu Metal v. Saliling, 501 SCRA 61

FACTS:
Respondent (Cebu Metal Corporation) is a corporation engaged in buying and selling of scrap iron. In the Bacolod Branch,
they have employees who are undertaking pakiao work in the unloading of scrap iron for stockpiling.

Among those workers who presented for work in the unloading of scrap iron in the area are the unemployed persons or trisicad
drivers standing by in the vicinity, most of whom are the herein complainants.

The company alleged that its Bacolod Branch is mainly a stockyard where scrap metal delivered by its suppliers are stockpiled.

The trucks used in the delivery of scrap metal are owned and/or rented by the different suppliers of scrap metal. Sometimes, the
suppliers do not have any truck boys, and in these instances, the respondent hires the services of people for the purpose of
unloading the scrap metal from these trucks. Usually, there is a leader for a particular group who is also tasked to distribute the
individual take of each member.

The complainants raised their protest saying that they never received any other benefits from the company; 13th month pay,
holiday pay, etc. So, when the complainants demanded from the company for the increase of their salary, the manager got irritated
and told them to stop working. Hence, this petition.

ISSUE: Whether or not the complainants were illegally dismissed

RULING:
No, they were not illegally dismissed since they were not regular employees of the company. The petty cash vouchers
confirmed the fact that unloaders were paid on pakiao or task basis. With the irregular nature of the work involved, the stoppage
and resumption of which depended solely on the availability or supply of scrap metal, it necessarily follows that after the job of
unloading was completed and were paid the contract price, their working relationship with the company legally ended.

There is no basis then for complainants to claim that they are underpaid since there is no minimum wage in this type of work.
Complainants earnings depend upon their own diligence and speed in unloading and stockpiling scrap iron. More importantly, it
depends upon the availability of scrap iron to be unloaded and stockpiled. Their services are needed only when scrap metals are
delivered which occurs only one or twice a week or sometimes no delivery at all in a given week.

8. Sarocam v. Interorient Maritime, 493 SCRA 502

Facts:
Petitioner Benjamin Sarocam was hired by Interorient Maritime and Demaco United Ltd., for a 12-month contract as bosun
on board M/V Despina. While the vessel was navigating, petitioner suffered lumbar sprain when he accidentally fell from a
ladder. He was examined and found to have neuromyositis with the waist and diabetes. The examining physician prescribed
medicine and recommended the signing off and hospitalization of petitioner. His employers also repatriated him. Petitioner was
referred to the company designated physician, Dr. Teodoro F. Pidlaoan. With the required medication, he was declared fit for
duty. Three months after from being pronounced fit to work, petitioner executed a release and quitclaim in favor of his
employers where he acknowledged the receipt of US 405.00 as his sick wages and freed his employers from further liability.
Petitioner then filed with the NLRC for disability benefit illness allowance / reimbursement of medical expenses, damages and
attorneys fees. The complaint was dismissed and petitioner was not entitled to disability benefits because he was declared fit
for duty.

Issue: Whether or not the execution by petitioner of a release and quitclaim estop him from claiming disability benefits?

Ruling:
Since he was declared fit for work, petitioner has no more right to claim disability benefits under the contractual provisions of
the POEA Standard Employment Contract. In order to claim disability benefits, it is the company-designated physician who must
proclaim that the seaman suffered a permanent disability, whether total or partial, due to either injury or illness, during the term of
the latters employment. Petitioner instead of questioning the assessment of the company-designated doctor, executed a release
and quitclaim in favor of the respondents. such execution is an implied admission of the assessment of the company-designated
physician and acknowledged that he could no longer claim for disability benefits. Recognized legitimate waivers that represent a
voluntary and reasonable settlement of a workers claim should be respected as a law between the parties.

Management Prerogatives
1. Placido Urbanes v. CA, G.R. No. 138279, Nov. 25, 2004

Facts:
Respondent (Rilles) is a security guard in petitioner's agency. On June 24, 1994, the agency's contract with the SSS in
Buendia, Makati, where he was assigned, expired. He then reported to petitioner's office for a new assignment, to no avail. On
March 28, 1995, Rilles filed a complaint before the NLRC against petitioner and his agency for illegal dismissal, illegal deduction,
underpayment of wages, non-payment of premium pay for holiday, rest day, holiday pay, service incentive leave pay, 13th month
pay, back wages and attorney's. In the position paper he submitted it was alleged that after his assignment with SSS Buendia
there was a vacant position in the National Home Mortgage Finance Corporation but there was no post available for him. However,
the agency offered him a post in Bataan which he rejected as he was residing in Manila.

Issue: Whether or not the assignment offered to him in Bataan was unreasonable and prejudicial to his interest which is
tantamount to a constructive dismissal.

Ruling:
As a general rule, the right to transfer or reassign employees is recognized as an employer's right and the prerogative of
management. However, as in all other rights, there are limits. The management prerogative to transfer personnel must be
exercised without grave abuse of discretion and putting to mind the basic elements of justice and fair play. There must be no
showing that it is unnecessary, inconvenient and prejudicial to the displaced employee. However, the petitioner failed to do. He
argues in his present petition that respondent Rilles was continuously offered an assignment in Bataan, and it is only Rilles who
refuses, thus there cannot be any constructive dismissal. In the position paper submitted before the NLRC, however, petitioner
claimed that there were many posts available in Manila where Rilles could be posted if only Rilles would agree. Thus, instead of
adequately showing the necessity of such transfer to Bataan, petitioner cast doubt as to the urgency of such decision. The Labor
Arbiter also noted that while petitioner claimed that there are many posts in Manila which it could give to respondent if only
respondent would agree, no offer was ever made by petitioner in the conferences conducted before his office. Also, if such offer of
an assignment in Manila was actually made, there would have been no need for Rilles to institute the complaint before the NLRC.
While transfer of assignment which may occasion hardship or inconvenience is allowed, this Court however shall not countenance
a transfer that is unnecessary, inconvenient and prejudicial to employees. Thus, we hold that respondent Rilles was constructively
removed and illegally dismissed by petitioner. He is entitled to reinstatement and back wages as a necessary consequence of
petitioner's acts.

2. Gualberto Aguanza v. Asian Terminal, Inc. G.R. No. 163505, Aug. 14, 2009

FACTS:
Petitioner filed a complaint for illegal dismissal against respondents because of refusal to give him a work assignment and
diminution of pay.

He was a crane operator from April 1989 to October 1997 aboard the respondent companys barge, the Bismark IV. In
September 1997, the Bismark IV was permanently assigned at the Mariveles Grains Terminal in Bataan.

Respondent James Keith issued a memo to the ships crew stating that because of the assignment, out of port benefits, 16hrs
overtime, and P200 daily allowance would no longer be provided. Petitioner and four others objected to the reduction of benefits.
In response, Keith ordered them to go to the Manila office, only to be sent back to Bataan with no work assignment.

Without prejudice to taking appropriate action to protect his rights, petitioner intimated that he would be willing to continue working
under the companys disagreeable terms and conditions.

Respondent company claims that Aguanza insisted on working in Manila, but would work in Mariveles only if the benefits were
offered. In his appointment paper, however, he had agreed to work in such place of work as ATI may assign or transfer me.


ISSUES:
1) Was there a valid exercise of management prerogative in the Auguanzas transfer to Mariveles?
2) Was there constructive dismissal?

RULING:
1) Yes. Transfer of employees is traditionally among the acts identified as a management prerogative, which is limited only by
law, CBAs, and general principles of justice. This is the right of management to conduct business affairs to achieve its
purpose.

2) No. There was no reason to believe that Aguanza would not be able to continue his employment. Aguanza reported for
work in Manila, where he wanted to work, and not in Bataan, where he was supposed to work. Furthermore, there was no
demotion or reduction of pay, because the benefits aforementioned are contingent upon out-of-port reassignment, and hence,
merely supplemental. As such, the rule against diminution of pay was not violated.

3. PAL v. NLRC, G.R. No. 115785, Aug. 4, 2000

Facts:
Petitioner PAL convened an ad-hoc Committee on Administrative Investigation and conducted an investigation after employee
Raul Diamante was charged by passenger Edgardo Pineda for extortion/bribery of One Thousand Pesos (P1, 000.00) in exchange
of accommodating the latter for a flight booking. After the said investigation which was participated by Diamante and his counsel,
the former was dismissed for bribery/extortion and violation of PAL's Code of Discipline. This decision however was set aside by
the NLRC which ordered the employees reinstatement with three years backwages. Thus, this petition for certiorari with prayer for
preliminary injunction and temporary restraining order seeking to nullify the decision.

Issue: What is management prerogative?

Ruling:
The Court recognizes the right of an employer to regulate all aspects of employment. This right, aptly called management
prerogative, gives employers the freedom to regulate, according to their discretion and best judgment, all aspects of employment,
including work assignment, working methods, processes to be followed, working regulations, transfer of employees, work
supervision, lay-off of workers and the discipline, dismissal and recall of workers. In general, management has the prerogative to
discipline its employees and to impose appropriate penalties on erring workers pursuant to company rules and regulations.

Respondent was found to have violated the Company Code of Discipline. Since private respondent Diamantes dismissal was for
just and valid cause, he is not entitled to reinstatement or backwages.

4. Phil Am Life v. Gramaje, G.R. No. 156963, Nov. 11, 2004
Facts:
Petitioner was the employer of private respondent. Respondent was employed as Assistant Vice President and Head of the
Pensions Department in 1997 and was given an additional position for which separate compensation was to be given. However,
shortly after respondent was given the additional position, her assistants were transferred to another department, hence,
respondent was forced to work alone in order to reach the department's quotas. In 1998, while on sick leave, respondent was
replaced, as head of the Pensions Department, with another person by petitioner without due notice. This prompted respondent to
question the said act. Instead of explaining reasons for the said changes, petitioner offered a closure deal with respondent wherein
the latter would have to leave the firm in exchange for 250, 000 Php. When respondent refused, she was transferred by petitioner
to the Legal Department. Thereafter, respondent filed a case for constructive dismissal.

Issue: WoN there was illegal or constructive dismissal.

Ruling:
Yes, there was constructive dismissal because even though petitioner had the right to exercise management prerogatives,
such right is subject to limitations. The exercise of the said right must not be tainted with abuse of discretion, bad faith,
discrimination, must not be unreasonable, and must be made in the pursuit of legitimate business interests. Such exercise must
not be inconvenient and prejudicial to the employee. The actions of petitioner as articulated by the facts above were clothed with
bad faith and discrimination towards private respondent.

5. St. Michaels Institute v. Santos. G.R. No. 145280, Dec. 4, 2001

FACTS:
Petitioner is a learning institute in Bacoor, Cavite with Fr. Victorino as Director and Blanco as the Principal while respondents
Santos, Magcamit and Rosarda were regular classroom teachers. On Aug. 10, 1993, there held a public rally organized and
participated by, among others, the respondents aimed at calling the attention of the school administration to certain grievances
relative to substandard school facilities and the economic demands of teachers and other employees. In response to the
memoranda issued by Blanco, Magcamit and Rosarda denied all the accusations attributed to them while Santos justified her
actions as having been done in behalf of her co-teachers with the parents' blessings.

After finding that respondents had led and actively participated in the rally through an investigation, petitioners dismissed their
employment that caused the former to file a complaint against petitioners for illegal dismissal. The Labor Arbiter dismissed the
cause for lack of merit declaring that there was just cause for the dismissal of the respondents' complaints. The NLRC reversed
the ruling of the Labor Arbiter and held that the respondents had been illegally dismissed. This was sustained by the CA.

ISSUE: WON the conduct of the respondents warranted their dismissal from their employment.

HELD:
No. The SC agrees with the appellate court's conclusion that, under the attendant factual antecedents, the dismissal meted
out on the respondents for dereliction of duty for one school day and denouncing school authority, appears to be too harsh a
penalty. It must be noted that the respondents are being held liable for a first time offense and, in the case of respondent Santos,
despite long years of unblemished service. Even when an employee is found to have transgressed the employer's rules, in the
actual imposition of penalties upon the erring employee, due consideration must still be given to his length of service and the
number of violations committed during his employment. Where a penalty less punitive would suffice, whatever missteps may have
been committed by the employee ought not to be visited with a consequence so severe such as dismissal from employment.
Moreover, the facts, as further established on appeal in the NLRC, paint out a picture that the respondents were singled out by the
petitioners apparently for being officers of the teachers' union which they formed, despite the fact that several other teachers also
joined the August10, 1993 rally. Absence of one day of work to join a public rally cannot be of such great dimension as to equate it
with an offense punishable with the penalty of dismissal. The reinstatement of the respondents is, thus, just and proper.

6. Duncan Association v. Glaxo welcome, G.R. No. 162994, Sept. 17, 2004

Facts:
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. If
management perceives a conflict of interest or a potential conflict between such relationship and the employees employment with
the company, the management and the employee will explore the possibility of a "transfer to another department in a non-
counterchecking position" or preparation for employment outside the company after six months.

Issue: Whether or not the prohibition imposed by Glaxo is a valid exercise of its management prerogative?

Ruling:
The challenged company policy does not violate the equal protection clause of the Constitution as petitioners erroneously suggest.
It is a settled principle that the commands of the equal protection clause are addressed only to the state or those acting under color of
its authority.24 Corollarily, it has been held in a long array of U.S. Supreme Court decisions that the equal protection clause erects no
shield against merely private conduct, however, discriminatory or wrongful. The only exception occurs when the state29 in any of its
manifestations or actions has been found to have become entwined or involved in the wrongful private conduct.27 Obviously, however,
the exception is not present in this case. Significantly, the company actually enforced the policy after repeated requests to the
employee to comply with the policy. Indeed, the application of the policy was made in an impartial and even-handed manner, with due
regard for the lot of the employee.

7. SCA Hygiene Employees Association vs. SCA Hygience Products Corp, G.R. 182877, Aug. 9, 2010

Facts:
Respondent Corporation has an existing Collective Bargaining Agreement with Petitioner. Sometime in 2003, Respondent
conducted a company-wide job evaluation as provided for in their CBA agreement and as a result, 22 daily paid rank and file
employees were given a rank of Job level 2. The employees association then requested that the 22 employees be given a raise and
other benefits as the new job level constitutes a promotion. Respondent Corporation denied this saying that the evaluation did not
constitute a promotion and that the 22 employees were still occupying the same position, albeit different job level, hence there was no
promotion. The parties agreed to submit to labor arbitration. The Arbitrator ruled in favor of the unions but upon appeal, the CA
reversed the decision stating that the job evaluation was not designed to provide any conversion or adjustment to the salaries of the
employees and that there was no promotion as the workers remained as rank and file. Hence, this petition.

Issue: Were the workers entitled to a 10% increase in salary?

Ruling:
It is a well-settled rule that labor laws do not authorize interference with the employers judgment in the conduct of its business.
The Labor Code and its implementing rules do not vest managerial authority in the labor arbiters or in the different divisions of the
National Labor Relations Commission or in the courts. The hiring, firing, transfer, demotion, and promotion of employees have been
traditionally identified as a management prerogative subject to limitations found in the law, a collective bargaining agreement, or in
general principles of fair play and justice. This is a function associated with the employers inherent right to control and manage
effectively its enterprise. Even as the law is solicitous of the welfare of employees, it must also protect the right of an employer to
exercise what are clearly management prerogatives. The free will of management to conduct its own business affairs to achieve its
purpose cannot be denied. Accordingly, this Court has recognized and affirmed the prerogative of management to implement a job
evaluation program or a re-organization for as long as it is not contrary to law, morals or public policy. In the case at bar, petitioner has
failed to convince this Court that respondent acted in bad faith in implementing the job evaluation program. There is no showing that it
was intended to circumvent the law and deprived the 22 daily paid workers the benefits they are supposed to receive.

8. Julie Bakeshop v. Henry Arnaiz, G.R. No. 173882, Feb. 15, 2012

FACTS:
Petitioners assail the CAs decision reversing the NLRCs Resolutions and ordering that petitioners to reinstate respondents and to
pay them their backwages and their other monetary benefits for having been constructively dismissed. Reyes hired respondents as
chief bakers in his three franchise branches of Julies Bakeshop. Respondents filed separate complaints against petitioners for
underpayment of wages, payment of premium pay for holiday and rest day, service incentive leave pay, 13th month pay, COLA, and
attorneys fees. Subsequently, in a memorandum, Reyes reassigned respondents as utility/security personnel tasked to clean the
outside vicinity of his bakeshops and to maintain peace and order in the area. Upon service of the memo, respondents, however,
refused to sign the same and likewise refused to perform their new assignments by not reporting for work. Thereafter, Reyes, in a
letter-memo, directed respondents to report back for work and to explain why they failed to assume their duties as utility/security
personnel. A second letter-memorandum of the same tenor was also sent to respondents. However, Respondents did not heed both
memoranda.

ISSUE: Was the transfer/reassignment of respondents to another position without diminution in pay and other privileges a valid
exercise of management prerogative; hence, not tantamount to constructive dismissal?

RULING:
No, there was no a valid exercise of management prerogative and hence, the transfer/reassignment of respondents to another
position without diminution in pay and other privileges is still considered as constructive dismissal. The Court 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, lay off of workers and discipline, dismissal and recall of workers. The exercise of management
prerogative, however, is not absolute as it must be exercised in good faith and with due regard to the rights of labor.

In constructive dismissal cases, the employer has the burden of proving that the transfer of an employee is for just or valid ground,
such as genuine business necessity. The employer must demonstrate that the transfer is not unreasonable, inconvenient, or prejudicial
to the employee and that the transfer does not involve a demotion in rank or a diminution in salary and other benefits. "If the employer
fails to overcome this burden of proof, the employees transfer is tantamount to unlawful constructive dismissal."

In the present case, petitioners failed to satisfy the burden of proving that the transfer was based on just or valid ground.
Petitioners bare assertions of imminent threat from the respondents were mere accusations which were not substantiated by any
proof. The court cannot make conclusions based on mere assumptions and suppositions. The Court found no compelling reason to
justify the transfer of respondents from chief bakers to utility/security personnel. What the Court saw was that respondents transfer
was an act of retaliation on the part of petitioners due to the formers filing of complaints against them, and thus, was clearly made in
bad faith. The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion. It must always bear in
mind the basic elements of justice and fair play. Having the right must not be confused with the manner that right is exercised.