Labor Management Prerogative Digests

1.)

CAONG V. REGUALOS

Petitioners: Primo Caong, Alexander Tresquio, Loriano Daluyon

FACTS: The petitioners petitioners are employed employed by the respondent respondent under a boundary boundary agre agreem ement ent as driv drivers ers.. Petitio etitione ners rs fled fled separa separate te ompl omplain aints ts !or illeg illegal al dismissal against respondent.

PRIMO CAONG

ALEXANDER TRESQUIO

"ired in #ept. $%%& )ea )eame me per permane manent nt in *+++ #uspended on t. %/$0 !or !ailur !ailure e to remit remit the !ull amount o! boundary

"ired in August $%%' )ea )eame me per permane manent nt in $%% )arred to return to 1or2 on 3ov. & a!ter his !ailure to remit !ull amount o! boundary on 3ov. ' 450+60++7

LORIANO DALUYON "ired in (arh $%%& )ea )eame me per permane manent nt in -uly $%%% )arred to return to 1or2 on 3ov. & a!ter his !ailure to remit !ull amount amount o! bounda boundary ry o! the previous day45+60++7

Petitioner! "##e$"tion: •

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8espo espond nden entt did did not not omp omply ly 1ith 1ith du due e pro proes ess s requi equirremen ements ts be!o be!orre terminating their employment as they 1ere not !urnished notie apprising them o! their in!rations and another in!orming them o! their dismissal. 9uestioned the respondents poliy o! automatially automatially dismissing the drivers 1ho !ail to remit the !ull amount o! the boundary as it allegedly 4a7 violates their right to due proess 4b7 does not onstitute a ;ust ause !or dismissal 47 disregards the reality that there are days 1hen they ould not raise the !ull amount o! the boundary beause o! the sarity o! passengers.

Re%on&ent! "##e$"tion: •

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8esponde espondent nt mani!est mani!ested ed in the mandator mandatory y on!er on!erene ene that petition petitioners ers 1ere not dismissed and that they ould drive his ;eepneys 3C< T"<= PA>D T"<>8 A88
daily rental 1ould not be allo1ed to rent a ;eepney./ "e !urther explained that the ;eepneys are aquired on installment basis and that he 1as paying the monthly amortiBations through the lease inome.

LA: DECIDED IN FAVOR OF T'E RESPONDENT t is proper to impose reasonable santion to the drivers 1ho annot pay their boundary payments.

NLRC: AGREED (IT' T'E LAOR ARITER CA: FOUND NO AUSE OF DISCRETION ON T'E PART OF NLRC •

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The employer/employee employer/employee relationsh relationship ip o! the parties has not been severed, butt mer bu merely ely susp suspen ende ded d 1hen 1hen the the respo espond nden entt re!us e!used ed to allo allo1 1 the the petitioners to drive his ;eepneys. The !at that it 1as 1ithin the po1er or the petitioners petitioners to return return to 1or2 is proo! that there 1as no termination o! employment. The petitioners petitioners 1ere not denied o! their due proess. proess. They 1ere given the opportunity to be heard in the meeting onduted by respondent

SC: Petition i *it+o,t -erit.

The relationship relationship bet1een ;eepney o1ners6operators o1ners6operators and ;eepney drivers under the boundary system is that o! employer/employee and not o! lessor/lessee. Petit etitio ione ners rs 1er 1ere not not dism dismis isse sed d !rom !rom empl employ oyme ment nt bu butt mer merely ely suspended pending payment o! their arrears. 8espondents poliy o! suspending drivers 1ho !ail to remit the !ull amo amount o! the the boundary ary 1as !air !air and reaso asonable under the irumstanes.

It i "/no*#e&$e& t+"t "n e-%#o0er +" ree rein "n& en2o0 *i&e #"tit, it,&e o &i iretion ion to re$,#"t #"te "## "%et o e-%#o0-ent3 in#,&in$ t+e %rero$"ti4e to inti## &ii%#ine on +i e-%#o0ee "n& to i-%oe %en"#tie3 in#,&in$ &i-i"#3 i *"rr"nte&3 ,%on errin$ e-%#o0ee. •

The manner in 1hih management onduts its o1n aairs to ahieve its purpose is 1ithin the managements disretion. The only limitation on the exerise o! management prerogative is that the poliies, rules and regu regula latio tions ns on 1or2/ 1or2/re rela lated ted ativi ativitie ties s o! the the emplo employee yees s mu must st al1ays be !air and reasonable, and the orresponding penalties, 1hen presribed, ommensurate to the oense involved and to the degree o! the in!ration.

5.) DELES 6R. 4 NLRC

G.R. No. 1517893 M"r+ 3 5;;; Petitioner: Angelito P. Deles, -r 8espondents: 3L8C, irst Phil. >ndustrial Corp. And6r laviano C. #antos Ponente: 9uisumbing, J.

FACTS: •

Petition: #peial ivil ation !or ertiorari

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Re%on&ent Co-%"n0
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Petitioner
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perates a pipeline system 1hih transports petroleum produts !rom the refneries by Caltex and #hell in )atangas to terminal reeiving !ailities in (etro (anila.

(arh $%, $%%@ 4pm7 o

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Deles -r. 1as the shi!t supervisor on duty 1hile
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Deles -r. instruted his hie! operator 4=umul7 to eet a bath hange !rom the 2erosene tan2 to the aviation !uel tan2 1hen the ;oint terminal !aility turbine meter registers *,%55 barrels o! 2erosene delivered. "o1ever, =umul !ailed to exeute orretly petitionerFs order and instead o! eeting the bath hange at the presribed reading o! *,%55 barrels, ausing the bath hange 1hen the reading already reahed @,@5$ barrels. About @% barrels o! the sueeding bath o! aviation turbine !uel 1ent to the 2erosene bath thereby do1ngrading the !ormer.

Therea!ter, 8espondent Company required petitioner to explain 1hy he should not be harged administratively !or neglet o! duty in vie1 o! his !ailure: a7 to 1itness the atual bath hange utting o! #&@/G<6#&5/AH b7 to see to it that a bath hange he2list 1as prepared and !ollo1ed, and 7 to see to it that a bath hange report 1as prepared.

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Deles -r. 1as plaed under preventive suspension pending the outome o! the investigation =umul and
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8espondent Company onduted a ;oint !ormal investigation o! the ases o! the three a!orementioned personnel.

(arh @$, $%%@ o

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8espondent Company !ound Deles -r., =umul and
!or this violation he 1as meted the penalty o! three 4@7 months suspension =umul 1as meted the penalty o! dismissal and
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Deles -r. then fled a omplaint be!ore the 3L8C questioning the legality o! his suspension sine he believed that the suspension 1as too harsh. Ihile Deles -r. 1as under suspension, 8espondent Company reeived reports that petitioner allo1ed the entry o! t1o Jbar girlsJ at the terminal at an unholy hour 45:++ A.(.7 on ebruary *@, $%%@. o

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Deles -r laimed that the t1o !emale visitors are his relatives.

8espondent Company required petitioner to explain in 1riting 1hy he should not be held liable !or: $7 neglet o! duty as he allo1ed unauthoriBed persons in a restrited area, and *7 dishonesty as he misrepresented to management that the t1o 1omen are his relatives. o

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Deles -r. !ailed to submit his 1ritten explanation.

8espondent Company onduted a !ormal inquiry on the matter 1hih 1as attended by petitioner. o

indings: -

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Deles -r. tampered 1ith the automati shutdo1n !eature o! Kravitometer 3o. 0 at the terminal on (arh $%, $%%@. "e opened the terminalFs motor operated valve 4(H $+7 bet1een ':++ A.(. and ':@0 A.(. on said date 1hih aused the gravitation o! the ontents o! #hell 2erosene tan2 to aviation !uel tan2.

- The abovementioned gravitometer is equipped 1ith a sa!ety !eature 1hih triggers the automati losure o! the ;oint terminal !aility pressure ontrol valve 1hih in turn ause a shutdo1n o! the pipeline operations. >t prevents

the entry o! liquefed petroleum gas 4LPK7 or a produt mixture ontaining LPK, through the motor operated valve and on1ards to the other produt tan2s suh as gasoline, 2erosene, ;et !uel and diesel !uel. "ene, by disabling the automati shutdo1n !eature o! said gravitometer, LPK ould pass through the line to the gasoline tan2 undeteted, and sine the gasoline tan2 is not designed to aommodate LPK, the possibility o! an explosion is enhaned. •

Deles -r. 1as again required to explain 1hy he should not be administratively santioned !or: $7 tampering 1ith an operating equipment 4(H>7, and *7 tampering 1ith the installation o! a sa!ety devie o! gravitometer.

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"e 1as then plaed under preventive suspension eetive -une *5, $%%@, pending the outome o! the probe on the latest harges against him. -uly *5, $%%@ o

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Deles -r. 1as reinstated in the payroll

A!ter the !ormal investigation, 8espondent Company terminated the employment o! petitioner. Deles -r. then amended his omplaint by inluding the harge o! illegal dismissal 1ith a laim !or unpaid 1ages.

L"=or Ar=iter! R,#in$ "re3 6r.3 M"0 7;3 18 &eiion) •

Dismissed omplaint !or la2 o! merit.

NLRC! R,#in$ •

Mpheld the LAFs fnding that petitionerFs suspension !or three months is a reasonable disiplinary measure.

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3L8C also ruled that respondent ompany has suEient basis to lose its trust and onfdene on petitioner. >t modifed the deision o! LA by inluding therein an indemnity in an amount equivalent to petitionerFs one month salary !or alleged !ailure o! herein respondent ompany to stritly omply 1ith due proess requirements prior to termination, thus:

ISSUE: Ihether or not publi respondent ommitted grave abuse o! disretion in aErming the deision o! the labor arbiter fnding that petitionerFs suspension is legal and that his dismissal is !or valid and ;ust ause on aount o! loss o! onfdene.

'ELD: No. Le$"#it0 o De#e 6r.! S,%enion Deles -r. 1as !ound remiss in his duties in onnetion 1ith the 1rong bath hange operation on (arh $%, $%%@ ho1ever, he ontends that his suspension !or three months is too harsh, 1himsial and biased. "o1ever, Deles -r. lost sight o! the !at that the right o! an employer to regulate all aspets o! employment is 1ell settled. This right, aptly alled management prerogative 1hih gives employers the !reedom to regulate, aording to their disretion and best ;udgment, all aspets o! employment, inluding 1or2 assignment, 1or2ing methods, proesses to be !ollo1ed, 1or2ing regulations, trans!er o! employees, 1or2 supervision, lay/o o! 1or2ers and the disipline, dismissal and reall o! 1or2ers. >n general, management has the prerogative to disipline its employees and to impose appropriate penalties on erring 1or2ers pursuant to ompany rules and regulations. The Court !ound Deles -r.s protestation un!ounded. or, based on the reord, 8espondent Company imposed said penalty pursuant to the Company Code o! Disipline 1hih the labor agenies fnd to be !air and in aordane 1ith la1. >n !at, the penalty !or violating the provision on 3eglet o! Duty ranges !rom 1arning to dismissal depending on the gravity o! the oense. 8espondent Company explained that mishandling the delivery

o! highly Nammable petroleum produts ould result in enormous damage to properties and loss o! lives at the terminal and surrounding areas. "ene, it has to exerise extraordinary diligene in onduting its operations in vie1 o! the deliate nature o! its business. Considering the attendant irumstanes, the Court is onstrained to agree that the penalty o! suspension frst imposed on petitioner is reasonable and appropriate as 1ell as legally unassailable.

Le$"#it0 o De#e 6r.! Di-i"# ro- Ser4ie "e insists that respondent ompany has no ground to lose trust and onfdene on him to ;usti!y his dismissal. "e vehemently denies tampering 1ith the gravitometer, muh less admitting doing it. "e also avers that it is inoneivable !or him to do so sine he 1as 1ith his o/1or2ers, 3oel Halle and n the revie1 o! 3L8C deisions through a speial ivil ation !or certiorari , the Court is onfned only to issues o! 1ant o! ;urisdition and grave abuse o! disretion on the part o! the labor tribunal. The Court is preluded !rom inquiring unto the orretness o! the evaluation o! that evidene that underpins the labor tribunalFs onlusion on matters o! !at. 3or ould the Court re/examine the evidene, re/evaluate the redibility o! the 1itnesses, nor substitute our fndings o! !at !or those o! an administrative body 1hih has the authority and expertise in its speialiBed feld. Arguably, there may even be an error in ;udgment. This ho1ever is not 1ithin the ambit o! the extraordinary remedy o! certiorari . 3evertheless, in this ase, the Court noted that the labor arbiter used every reasonable means to asertain the !ats by giving the parties ample opportunity to present evidene. A!ter both parties 1ere heard, they fled their respetive aEdavits, position papers and memoranda. >n our vie1, the labor arbiter properly !ound that despite onsidering these doumentary evidene, averments o! laviano #antos in his aEdavit inditing petitioner !or tampering 1ith the gravitometer and admitting the 1rongdoing stand on solid ground. urther, petitioner did not quite sueed to onvine the respondent 3L8C to rule other1ise.

Lo o Tr,t "n& Con?&ene " " V"#i& Gro,n& or Di-iin$ "n E-%#o0ee

As provided !or in the Labor Code: JA8T. *&*. Termination by employer. O An employer may terminate an employment !or any o! the !ollo1ing auses: 47 raud or 1ill!ul breah by the employee o! the trust reposed in him by his employer or duly authoriBed representativeJ >t must also be stressed that loss o! onfdene as a ;ust ause !or termination o! employment is premised on the !at that an employee onerned holds a position o! trust and onfdene. This situation holds 1here an employee or oEial o! the ompany is entrusted 1ith responsibility involving deliate matters, suh as the ustody, handling, or are and protetion o! the employerFs property. >n the ase o! ompany personnel oupying suh positions o! responsibility, the Court has repeatedly held that loss o! trust and onfdene ;ustifes termination. As regards a managerial employee, moreover, mere existene o! a basis !or believing that suh employee has breahed the trust o! his employer 1ould suEe !or his dismissal. Proo! beyond reasonable doubt is not required, it being suEient that there is some basis !or suh loss o! onfdene, suh as 1hen the employer has reasonable ground to believe that the employee onerned is responsible !or the purported misondut, and the nature o! his partiipation therein renders him un1orthy o! the trust and onfdene demanded by his position. >n the ase at bar, Deles -r. is tas2ed to per!orm 2ey !untions he is bound by an exating 1or2 ethi. "e should have realiBed that his position requires the !ull trust and onfdene o! his employer in every exerise o! managerial disretion inso!ar as the ondut o! his employerFs business is onerned. "o1ever, as !ound a quo, he ommitted ats 1hih betrayed the trust and onfdene reposed on him by tampering 1ith very sensitive equipment at the ;oint terminal !aility. >n doing so, he exposed the terminal omplex and the residents in ad;aent ommunities to the danger o! a ma;or disaster that may be aused by tan2 explosions and onNagration. Herily, he ommitted ats inimial to the interest o! his employer 1hih is mandated by la1 to observe extraordinary diligene in its operations to ensure the sa!ety o! the publi. >ndeed, the Court is onstrained to onlude that petitionerFs admitted in!ration as 1ell his past violation o! sa!ety regulations is more than suEient ground !or respondent ompany to terminate the employment o! petitioner.

>n sum, publi respondent 3L8C ould not be !aulted !or any grave abuse o! disretion in ruling that petitionerFs suspension is legal and his dismissal 1ell ;ustifed on the ground o! loss o! trust and onfdene.

Proe&,r"# A%et o De#e 6r.@ Di-i"# >t appeared lear to the Court that Deles -r. 1as given ample opportunity to present his side and to de!end himsel! against the harges against him. 8espondent Company sent petitioner a letter dated -une *, $%%@, requiring him to ans1er the harges hurled against him. "e partiipated in the !ormal investigation onduted by respondent ompany on -uly *@ and August @, $%%@. A!ter the investigation 1as onluded, Deles -r. 1as notifed o! his dismissal. Mnder these attendant irumstanes, the Court !ound no basis !or publi respondentFs ruling that 8espondent Company breahed legal proedure prior to termination.

RULING: Petition i DENIED !or la2 o! merit. The ""i#e& &eiion o NLRC, 1hih upheld the Labor ArbiterFs deision dismissing petitionerFs omplaint 3 i AFFIRMED *it+ t+e MODIFICATION that the "*"r& o in&e-nit0 in

t+e "-o,nt e,i4"#ent to %etitioner@ one <1) -ont+ "#"r0 i DELETED.

BBB7.) CAVITE APPAREL <&i /o -"=,/"n ?#e ni C"r#o)

8.) RICCIO RICY A. POLLO3 PETITIONER3 VS. C'AIRPERSON ARINA CONSTANTINODAVID3 DIRECTOR IV RACQUEL DE GUMAN UENSALIDA3 DIRECTOR IV LYDIA A. CASTILLO3 DIRECTOR III ENGELERT ANT'ONY D. UNITE AND T'E CIVIL SERVICE COMMISSION3 RESPONDENTS. G.R. No. 1919913 Oto=er 193 5;11

(Searches and Seizures)

VILLARAMA3 6R.3 6.: FACTS:

n -anuary @, *++, an unsigned letter/omplaint addressed to respondent Civil #ervie Commission 4C#C7 Chairperson Garina Constantino/David 1hih 1as mar2ed JConfdentialJ 1as reeived by the >ntegrated 8eords (anagement Ee 4>8(7 at the C#C Central Ee. The a!oresaid letter 1as given diretly to Chairperson David. The letter/omplaint reads: > 1ould li2e to as2 !rom you personally i! it is ;ust alright !or an employee o! your ageny to be a la1yer o! an aused govFt employee having a pending ase in the QC#CR. > honestly thin2 this is a violation o! la1 and un!air to others and your oEe. > have 2no1n that a person have been la1yered by one o! your attornQeRy in the Q8Region 5 oEe. "e is the hie! o! the R (amamayan (una "indi (amaya 3a DivisionR. "e have been helping many 1ho have pending ases in the QC#CR. Chairperson David immediately !ormed a team o! !our personnel 1ith ba2ground in in!ormation tehnology 4>T7, and issued a memo direting them to ondut an investigation and speifally Jto ba2 up all the fles in the omputers !ound in the (amamayan (una 4PALD7 and Legal divisions.J The same day, the investigating team fnished their tas2. >t 1as !ound that most o! the fles in the $ dis2ettes ontaining fles opied !rom the omputer assigned to and being used by the petitioner, numbering about 5+ to 5* douments, 1ere dra!t pleadings or letters in onnetion 1ith administrative ases in the C#C and other tribunals. n the basis o! this fnding, Chairperson David issued the #ho1/Cause rder requiring the petitioner, 1ho had gone on extended leave, to submit his explanation or ounter/aEdavit 1ithin fve days !rom notie. Petitioner fled his Comment, denying that he is the person re!erred to in the anonymous letter/omplaint 1hih had no attahments to it, beause he is not a la1yer and neither is he Jla1yeringJ !or people 1ith ases in the C#C. "e asserted that he had protested the unla1!ul ta2ing o! his omputer done 1hile he 1as on leave, iting the letter dated -anuary &, *++ in 1hih he in!ormed

Diretor Castillo that the fles in his omputer 1ere his personal fles and those o! his sister, relatives, !riends and some assoiates and that he is not authoriBing their sealing, opying, dupliating and printing as these 1ould violate his onstitutional right to privay and protetion against sel!/inrimination and 1arrantless searh and seiBure. "e pointed out that though government property, the temporary use and o1nership o! the omputer issued under a (emorandum o! 8eeipt 4(87 is eded to the employee 1ho may exerise all attributes o! o1nership, inluding its use !or personal purposes.

ISSUE:

Ihether or not petitioners Constitutional unreasonable searhes and seiBures 1as violated.

right

against

'ELD:

3o. The onstitutional guarantee is not a prohibition o! all searhes and seiBures but only o! JunreasonableJ searhes and seiBures. The Court, in deiding the ase, addressed the !ollo1ing questions: 4$7 Did petitioner have a reasonable expetation o! privay in his oEe and omputer flesS and 4*7 Ias the searh authoriBed by the C#C Chair, the opying o! the ontents o! the hard drive on petitionerFs omputer reasonable in its ineption and sopeS >n the frst question, Petitioner !ailed to prove that he had an atual 4sub;etive7 expetation o! privay either in his oEe or government/issued omputer 1hih ontained his personal fles. Petitioner did not allege that he had a separate enlosed oEe 1hih he did not share 1ith anyone, or that his oEe 1as al1ays lo2ed and not open to other employees or visitors. 3either did he allege that he used pass1ords or adopted any means to prevent other employees !rom aessing his omputer fles. n the ontrary, he submits that being in the publi assistane oEe o! the C#C/8>H, he normally 1ould have visitors in his oEe li2e !riends, assoiates and even un2no1n people, 1hom he even allo1ed to use his omputer 1hih to him seemed a trivial request. "e desribed his oEe as J!ull o! people, his !riends, un2no1n peopleJ and that in the past ** years he had been disharging his !untions at the PALD, he is Jpersonally assisting inoming lients, reeiving douments, dra!ting ases on appeals, in harge o! aomplishment report, Mamamayan Muna Program, Publi #etor Mnionism, Corretion o! name, areditation o! servie, and hardly had anytime !or himsel! alone, that in !at he stays in the oEe as a paying ustomer.J Mnder this senario, it an hardly be dedued

that petitioner had suh expetation o! privay that soiety 1ould reogniBe as reasonable. As to the seond point o! inquiry on the reasonableness o! the searh onduted on petitionerFs omputer, 1e ans1er in the aErmative. The searh o! petitionerFs omputer fles 1as onduted in onnetion 1ith investigation o! 1or2/related misondut prompted by an anonymous letter/omplaint addressed to Chairperson David regarding anomalies in the C#C/8>H 1here the head o! the Mamamayan Muna Hindi Mamaya Na division is supposedly Jla1yeringJ !or individuals 1ith pending ases in the C#C. At the ineption o! the searh, a omplaint 1as reeived reounting that a ertain division hie! in the C#C8 3o. >H 1as Jla1yeringJ !or parties having pending ases 1ith the said regional oEe or in the Commission. T+e n"t,re o t+e i-%,t"tion *" erio,3 " it *" $rie4o,#0 &it,r=in$. >!, indeed, a C#C employee 1as !ound to be !urtively engaged in the pratie o! Jla1yeringJ !or parties 1ith pending ases be!ore the Commission 1ould be a highly repugnant senario, then suh a ase 1ould have shattering reperussions. >t 1ould undeniably ast louds o! doubt upon the institutional integrity o! the Commission as a quasi/;udiial ageny, and in the proess, render it less eetive in !ulflling its mandate as an impartial and ob;etive dispenser o! administrative ;ustie. >t is settled that a ourt or an administrative tribunal must not only be atually impartial but must be seen to be so, other1ise the general publi 1ould not have any trust and onfdene in it. BERSAMIN, J., Concurring and Dissenting:

> hold, instead, that the petitioner is entitled to a reasonable expetation o! privay in respet o! the ommuniations reated, stored, sent, or reeived after oce hours through the oEe omputer, as to 1hih he must be proteted. or that reason, respondent DavidFs order to ba2 up fles should only over the fles orresponding to ommuniations reated, stored, sent, or reeived during oce hours. There 1ill be no diEulty in identi!ying and segregating the fles reated, stored, sent, or reeived during and after oEe hours 1ith the onstant advanement and improvement o! tehnology and the presumed expertise o! the CommissionFs in!ormation systems analysts.

CARPIO3 J.3 Con,rrin$:

The C#CFs omputer use regulation, 1hih opens to aess !or internal srutiny anything C#C employees Jreate, store, send, or reeive in the omputer system,J has a statutory basis under the Kovernment Auditing Code o! the Philippines. #etion 54*7 o! the Code mandates that J $Ho4ern-ent x x x property +"## =e x x x used solely for pulic purposes.JQ$R >n short, any %ri4"te ,e o! a government property, li2e a government/o1ned omputer, is prohibited by la1. Consequently, a government employee annot expet any privay 1hen he uses a government/o1ned omputer beause he 2no1s he annot use the omputer !or any pri!ate purpose. The C#C regulation delaring a no/privay expetation on the use o! government/o1ned omputers logially !ollo1s !rom the statutory rule that government/o1ned property shall be used J solely J !or a publi purpose.

".# EMIRA$E !. MENESE

F"t: (enese fled a omplaint !or onstrutive dismissal against
produe or present any evidene. #he laimed that her alleged trans!er 1as motivated by ill/1ill and bad !aith as it 1as done to !ailitate the entry o! a !avored appliant. LA: "eld that she 1as onstrutively dismissed as she 1ould be suering a demotion in ran2 and a diminution o! pay in the oered position. 3L8C: "eld that she 1as not onstrutively dismissed but 1as merely trans!erred and it 1as a valid exerise o! the petitioners management prerogative. "o1ever, she annot be liable !or abandonment beause it 1as an honest belie! that she 1as being onstrutively dismissed. CA: 8einstated the deision o! LA beause (eneses trans!er did not exist or that no substantial evidene 1as presented in that regard. Although it is a management prerogative to trans!er employee to another oEe, it must be exerised in suh a 1ay that there is no demotion in ran2 or diminution in pay, benefts and other privileges.

I,e: I63 the ageny is ;ustifed in using its management prerogative #C: (enese 1as onstrutively dismissed and the use o! management prerogative is not ;ustifed. (anagerial prerogative to trans!er personnel must be exerised 1ithout abuse o! disretion, bearing in mind the basi elements o! ;ustie and !air play. "aving the right should not be on!used 1ith the manner in 1hih that right is exerised. Thus, it should not be used as a subter!uge by the employer to get rid o! an undesirable 1or2er.U (easured against this basi preept, the petitioners undoubtedly abused their disretion or authority in trans!erring (enese to the agenys head oEe. #he had beome undesirableU beause she stood in the 1ay o! Claros entry into the PK" detahment. (enese had to go, thus the need !or a pretext to get rid o! her. The request o! a lient !or the trans!er beame the overriding ommand that prevailed over the la2 o! basis !or the trans!er. >t should not be used as a subter!uge by the employer to get rid o! an undesirable 1or2er.U Court annot blame (enese !or re!using =ans oer to be trans!erred. 3ot only 1as the trans!er arbitrary and done in bad !aith, it 1ould also result, as (enese !eared, in a demotion in ran2 and a diminution in pay. Although =an in!ormed (enese that based on the request o! the lient, she 1ill be trans!erred to another assignment 1hih ho1ever 1ill not involve any demotion in ran2 nor diminution in her salaries and other benefts,U the oer 1as suh as to invite relutane and suspiion as it 1as

ouhed in a very general manner. Ie fnd redible (eneses submission on this point, i.e., that under the oered trans!er: 4$7 she 1ould hold the position o! lady guard and 4*7 she 1ould be paid in aordane 1ith the statutory minimum 1age, or !rom P$$,*+.++ to P,0++.++.

.)

G.R. No. 19J78

6,#0 73 5;17

6ENNY F. PECSON3 Petitioner, vs.

ROINSONS SUPERMARET CORPORATION3 6ODY GADIA3 ROENA SARTE3 "n& RUY ALEX3 8espondents. FACTS: •

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The petitioner frst ;oined the 8obinsons #upermar2et Corporation 48#C7 as a #ales Cler2. Then, she 1as holding the position o! Category )uyer 1hen respondent 8oena #arte, 8#Cs Assistant Hie/President !or (erhandising, reassigned her to the position o! Provinial Coordinator. Claiming that her ne1 assignment 1as a demotion beause it 1as non/supervisory and lerial in nature, the petitioner re!used to turn over her responsibilities to the ne1 Category )uyer, or to aept her ne1 responsibilities as Provinial Coordinator. >n a memorandum to the petitioner, the 8#C, through #arte, demanded an explanation !rom her 1ithin 5& hours !or her re!usal to aept her ne1 assignment despite 1ritten and verbal demands. #arte ited a ompany rule, enses #ub;et to Disiplinary Ation 3o. 5.+, 1hih provided that JQdRisobediene, re!usal or !ailure to do assigned tas2 or to obey superiors6oEials orders6instrutions, or to !ollo1 established proedures or praties 1ithout valid reasonJ 1ould be meted the penalty o! suspension. The petitioner ignored the 5&/hour deadline to explain imposed by #arte. #arte issued her another memorandum, reiterating her demand to explain in 1riting 1ithin 5& hours 1hy she persistently re!used to assume her ne1 position, and 1arning her that this ould be her fnal hane to present her side or be deemed to have 1aived her right to be heard. >n her one/paragraph reply submitted, the petitioner stated that she ould not aept the position o! Provinial Coordinator sine she sa1 it as a demotion. As it turned out, ho1ever, the •

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petitioner had already fled a omplaint !or onstrutive dismissal against 8#C, #arte, Kadia and Alex 4respondents7. #arte issued an instrution to the petitioner to report to 8#Cs (etroeast Depot to help prepare all shipping mani!ests !or Cagayan de ro and )aolod, but as 1itnessed by 8#C employees 8aquel Torrehua and Alex, she did not obey as instruted. Again, #arte issued a similar instrution, iting the need !or ertain tas2s !rom the petitioner in preparation !or the oming Christmas holidays, but the petitioner again re!used to heed. As ulled !rom the assailed appellate ourt deision, the petitioner argued be!ore the LA that the true organiBational hart o! the 8#C sho1ed that the position o! Category )uyer 1as one level above that o! the Provinial Coordinator, and that moreover, the ;ob desription o! a Provinial Coordinator 1as largely lerial and did not require her to analyBe sto2 levels and order points, or soure ne1 loal and international suppliers, or monitor sto2 level per store and reommend items !or replenishment, or negotiate better items and disounts !rom suppliers, duties 1hih only a Category )uyer ould per!orm. #he also laimed that she 1as instruted to fle a ourtesy resignation in exhange !or a separation pay o! one/hal! salary per year o! servie.

8espondents: •

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(aintained that her trans!er 1as not a demotion sine the Provinial Coordinator oupied a JLevel 0J position li2e the Category )uyer, 1ith the same 1or2 onditions, salary and benefts. )ut 1hile both positions had no signifant disparity in the required s2ill, experiene and aptitude, the position o! Category )uyer demanded the traits o! puntuality, diligene and attentiveness beause it is a !rontline position in the day/to/day business operations o! 8#C 1hih the petitioner, un!ortunately, did not possess. 8aised the petitioners reord o! habitual tardiness as !ar ba2 as $%%%, as 1ell as poor per!ormane rating in *++0. >n addition to her per!ormane rating o! J*.&J out o! J5.+J in *++0 equivalent to Jbelo1 expetation,J the petitioner 1as !ound to be tardy in -une and -uly *++0, $@ times, and !or the entire *++0, 0 times that she 1as suspended t1ie in *++' !or *+ instanes o! tardiness and absenes !rom -uly to #eptember *++' alone. $@ Ie also note that the petitioner 1as suspended !or seven 47 days in #eptember and tober *++0 !or deliberately violating a ompany poliy a!ter she 1as seen having lunh 1ith a ompany supplier. $5 Denied that the reassignment o! the petitioner as Provinial Coordinator 1as motivated by a desire to besmirh the name o! the latter. S'E ASSERTED T'AT IT (AS MADE IN T'E EXERCISE OF

MANAGEMENT PREROGATIVE AND SOUND DISCRETION3 IN VIE( OF T'E NSITIVE POSITION OCCUPIED Y T'E CATEGORY UYER IN RSC!S DAILY OPERATIONS3 VISKVIS T'E PETITIONER!S ELO( EXPECTATION PERFORMANCE RATING AND 'AITUAL TARDINESS. LA : Dismissed the ase •

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8uled that ;ob reassignment or lassifation is a strit prerogative o! the employer, and that the petitioner annot re!use her trans!er !rom Category )uyer to Provinial Coordinator sine both positions ommanded the same salary struture, high degree o! responsibility and impeable honesty and integrity. Mpholding the employers right not to retain an employee in a partiular position to prevent losses or to promote proftability, the LA !ound no sho1ing o! any illegal motive on the part o! the respondents in reassigning the petitioner. The trans!er 1as ditated by the need !or puntuality, diligene and attentiveness in the position o! Category )uyer, 1hih the petitioner learly la2ed. 8uled that her persistent re!usal to aept her ne1 position amounted to insubordination, entitling the 8#C to dismiss her !rom employment.

A month a!ter the above ruling, or on -une **, *++, the petitioner tendered her 1ritten J!oredJ resignation, 1herein she omplained that she 1as being sub;eted to ridiule by lients and o/employees ali2e on aount o! her Noating status sine the time she re!used to aept her trans!er. #he li2e1ise laimed that she 1as being ompelled to aept the position o! Provinial Coordinator 1ithout due proess.

NLRC: sustained the fndings o! the LA. •

Agreed that the lateral trans!er o! the petitioner !rom Category )uyer to Provinial Coordinator 1as not a demotion amounting to onstrutive dismissal, sine both positions belonged to -ob Level 0 and bet1een them there is no signifant disparity in terms o! the requirements o! s2ill, experiene and aptitude. Contrary to the petitioners assertion, the 3L8C !ound that the position o! Provinial Coordinator is not a ran2/and/fle position but in !at requires the exerise o! disretion and independent ;udgment, as 1ell as appropriate reommendations to management to ensure the !aith!ul implementation o! its poliies and programs that it even exerises inNuene over the Category )uyer in that it inludes per!orming a reommendatory !untion to guide the Category )uyer in ma2ing deisions on the right assortment, prie and quantity o! the items, artiles or merhandise to be sold by the store.

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8eiterated the settled rule that MANAGEMENT MAY TRANSFER AN

EMPLOYEE FROM ONE OFFICE TO ANOT'ER (IT'IN T'E USINESS ESTALIS'MENT3 PROVIDED T'ERE IS NO DEMOTION IN RAN OR DIMINUTION OF SALARY3 ENEFITS3 AND OT'ER PRIVILEGES3 AND T'E ACTION IS NOT MOTIVATED Y DISCRIMINATION OR AD FAIT' OR EFFECTED AS A FORM OF PUNIS'MENT (IT'OUT SUFFICIENT CAUSE. >t ruled that the respondents 1ere able to sho1 that the petitioners trans!er 1as not unreasonable, inonvenient or pre;udiial, but 1as prompted by her !ailure to meet the demands o! puntuality, diligene, and personal attention o! the position o! Category )uyer that management 1anted to give the petitioner a hane to improve her 1or2 ethi, but her obstinate re!usal to assume her ne1 position has pre;udied respondent 8#C, even 1hile she ontinued to reeive her salaries and benefts as Provinial Coordinator. n appeal in CA, the petitioner insisted that her trans!er !rom Category )uyer to Provinial Coordinator 1as a !orm o! demotion 1ithout due proess, and that the respondents un;ustifably depited her as remiss in her duties, Na1ed in her harater, and unduly obstinate in her re!usal to aept her ne1 post.

CA: ound no basis to deviate !rom the o!t/repeated tenet that the fndings o! !at and onlusions o! the 3L8C 1hen supported by substantial evidene are generally aorded not only great 1eight and respet but even fnality, and are thus deemed binding.

ISSUE: Ihether or not the lateral trans!er !rom Category )uyer to Provinial Coordinator o! the petitioner 1as a demotion amounting to onstrutive dismissal beause her reassignment 1as not a valid exerise o! management prerogative, but 1as done in bad !aith and 1ithout due proess.

'ELD: #C aErmed the deision o! the lo1er ourt. This Court has onsistently re!used to inter!ere 1ith the exerise by management o! its prerogative to regulate the employees 1or2 assignments, the 1or2ing methods and the plae and manner o! 1or2. As 1e all 2no1, there are various la1s imposing all 2inds o! burdens and obligations upon the employer in relation to his employees, and yet as a rule this Court has al1ays upheld the employers prerogative to regulate all

aspets o! employment relating to the employees 1or2 assignment, the 1or2ing methods and the plae and manner o! 1or2. >ndeed, labor la1s disourage inter!erene 1ith an employers ;udgment in the ondut o! his business. >n 8ural )an2 o! Cantilan, >n. v. -ulve, the Court had oasion to summariBe the general ;urisprudential guidelines aeting the right o! the employer to regulate employment, inluding the trans!er o! its employees: Mnder the dotrine o! MANAGEMENT PREROGATIVE , every employer has the inherent right to regulate, aording to his o1n disretion and ;udgment, all aspets o! employment, inluding hiring, 1or2 assignments, 1or2ing methods, the time, plae and manner o! 1or2, 1or2 supervision, trans!er o! employees, lay/o o! 1or2ers, and disipline, dismissal, and reall o! employees. The only limitations to the exerise o! this prerogative are those imposed by labor la1s and the priniples o! equity and substantial ;ustie. Ihile the la1 imposes many obligations upon the employer, nonetheless, it also protets the employers right to expet !rom its employees not only good per!ormane, adequate 1or2, and diligene, but also good ondut and loyalty. >n !at, the Labor Code does not exuse employees !rom omplying 1ith valid ompany poliies and reasonable regulations !or their governane and guidane. Conerning the TRANSFER OF EMPLOYEES, these are the !ollo1ing ;urisprudential guidelines: 4a7 A trans!er is a movement !rom one position to another o! equivalent ran2, level or salary 1ithout brea2 in the servie or a lateral movement !rom one position to another o! equivalent ran2 or salary 4b7 The employer has the inherent right to trans!er or reassign an employee !or legitimate business purposes 47 A trans!er beomes unla1!ul 1here it is motivated by disrimination or bad !aith or is eeted as a !orm o! punishment or is a demotion 1ithout suEient ause 4d7 The employer must be able to sho1 that the trans!er is not unreasonable, inonvenient, or pre;udiial to the employee. >t is the employers prerogative, based on its assessment and pereption o! its employees qualifations, aptitudes, and ompetene, to move them around in the various areas o! its business operations in order to asertain 1here they 1ill !untion 1ith maximum beneft to the ompany. An employees right to seurity o! tenure does not give him suh a vested right

in his position as 1ould deprive the ompany o! its prerogative to hange his assignment or trans!er him 1here he 1ill be most use!ul. Ihen his trans!er is not unreasonable, nor inonvenient, nor pre;udiial to him, and it does not involve a demotion in ran2 or a diminution o! his salaries, benefts, and other privileges, the employee may not omplain that it amounts to a onstrutive dismissal. As a privilege inherent in the employers right to ontrol and manage its enterprise eetively, its !reedom to ondut its business operations to ahieve its purpose annot be denied. Ie agree 1ith the appellate ourt that the respondents are ;ustifed in moving the petitioner to another equivalent position, 1hih presumably 1ould be less aeted by her habitual tardiness or inonsistent attendane than i! she ontinued as a Category )uyer, a J!rontline positionJ in the day/to/day business operations o! a supermar2et suh as 8obinsons. >! the trans!er o! an employee is not unreasonable, or inonvenient, or pre;udiial to him, and it does not involve a demotion in ran2 or a diminution o! his salaries, benefts and other privileges, the employee may not omplain that it amounts to a onstrutive dismissal. As 1e have already noted, the respondents had the burden o! proo! that the trans!er o! the petitioner 1as not tantamount to onstrutive dismissal, 1hih as defned in )lue Dairy Corporation v. 3L8C, is a quitting beause ontinued employment is rendered impossible, unreasonable or unli2ely, or an oer involving a demotion in ran2 and diminution o! pay: The managerial prerogative to trans!er personnel must be exerised 1ithout grave abuse o! disretion, bearing in mind the basi elements o! ;ustie and !air play. "aving the right should not be on!used 1ith the manner in 1hih that right is exerised. Thus, it annot be used as a subter!uge by the employer to rid himsel! o! an undesirable 1or2er. >n partiular, the employer must be able to sho1 that the trans!er is not unreasonable, inonvenient or pre;udiial to the employee nor does it involve a demotion in ran2 or a diminution o! his salaries, privileges and other benefts. #hould the employer !ail to overome this burden o! proo!, the employees trans!er shall be tantamount to onstrutive dismissal, 1hih has been defned as a quitting beause ontinued employment is rendered impossible, unreasonable or unli2ely as an oer involving a demotion in ran2 and diminution in pay. Li2e1ise, onstrutive dismissal exists 1hen an at o! lear disrimination, insensibility or disdain by an employer has beome so unbearable to the employee leaving him 1ith no option but to !orego 1ith his ontinued employment. Thus, as !urther held in Philippine -apan Ative Carbon Corporation, *& 1hen the trans!er o! an employee is not unreasonable, or inonvenient, or

pre;udiial to him, and it does not involve a demotion in ran2 or a diminution o! his salaries, benefts and other privileges, the employee may not omplain that it amounts to a onstrutive dismissal. *% )ut li2e all other rights, there are limits to the exerise o! managerial prerogative to trans!er personnel, and on the employer is laid the burden to sho1 that the same is 1ithout grave abuse o! disretion, bearing in mind the basi elements o! ;ustie and !air play. @+ >ndeed, management prerogative may not be used as a subter!uge by the employer to rid himsel! o! an undesirable 1or2er.

RE:

URDEN

OF

PROOF

FOR

CONSTRUCTIVE

>nterestingly, although the petitioner laims that she 1as onstrutively dismissed, yet until the un!avorable deision o! the LA on (ay @+, *++, !or seven 47 months she ontinued to ollet her salary 1hile also adamantly re!using to heed the order o! #arte to report to the (etroeast Depot. >t 1as only on -une **, *++, a!ter the LAs deision, that she fled her J!oredJ resignation. "er deliberate and un;ustifed re!usal to assume her ne1 assignment is a !orm o! neglet o! duty, and aording to the LA, an at o! insubordination. Ie sa1 ho1 the ompany sought every hane to hear her out on her grievanes and ho1 she ignored the memoranda o! #arte as2ing her to explain her re!usal to aept her trans!er. All that the petitioner ould say 1as that it 1as a demotion and that her Noating status embarrassed her be!ore the suppliers and her o/employees. The respondents have disharged the burden o! proo! that the trans!er o! the petitioner 1as not tantamount to onstrutive dismissal. >n -aria (ahine #hop and Auto #upply, >n. v. 3L8C, @* a mahinist 1ho had been employed 1ith the petitioner ompany !or $' years 1as redued to the servie ;ob o! transporting flling materials a!ter he !ailed to report !or 1or2 !or one 4$7 day on aount o! an urgent !amily matter. This is one instane 1here the employees demotion 1as rightly held to be an unla1!ul onstrutive dismissal beause the employer !ailed to sho1 substantial proo! that the employees demotion 1as !or a valid and ;ust ause: >n ase o! a onstrutive dismissal, the employer has the burden o! proving that the trans!er and demotion o! an employee are !or valid and legitimate grounds suh as genuine business neessity. Partiularly, !or a trans!er not to be onsidered a onstrutive dismissal, the employer must be able to sho1 that suh trans!er is not unreasonable, inonvenient, or pre;udiial to the employee nor does it involve a demotion in ran2 or a diminution o! his

salaries, privileges and other benefts. ailure o! the employer to overome this burden o! proo!, the employees demotion shall no doubt be tantamount to unla1!ul onstrutive dismissal.

n the ase at bar, 1e agree 1ith the appellate ourt that there is substantial sho1ing that the trans!er o! the petitioner !rom Category )uyer to Provinial Coordinator 1as not unreasonable, inonvenient, or pre;udiial to her. •

•

•

•

The petitioner !ailed to dispute that the ;ob lassifations o! Category )uyer and Provinial Coordinator are similar, or that they ommand a similar salary struture and responsibilities. Ie agree 1ith the 3L8C that the Provinial Coordinators position does not involve mere lerial !untions but requires the exerise o! disretion !rom time to time, as 1ell as independent ;udgment, sine the Provinial Coordinator gives appropriate reommendations to management and ensures the !aith!ul implementation o! poliies and programs o! the ompany. >t even has inNuene over a Category )uyer beause o! its reommendatory !untion that enables the Category )uyer to ma2e right deisions on assortment, prie and quantity o! the items to be sold by the store. Ie also annot sustain the petitioners laim that she 1as not aorded &,e %roe and that the respondents ated to1ard her 1ith disrimination, insensibility, or disdain as to !ore her to !orego her ontinued employment. >n addition to verbal reminders !rom #arte, the petitioner 1as as2ed in 1riting t1ie to explain 1ithin 5& hours her re!usal to aept her trans!er. >n the frst, she ompletely remained silent, and in the seond, she too2 !our 457 days to fle a mere one/ paragraph reply, 1herein she simply said that she sa1 the Provinial Coordinator position as a demotion, hene she ould not aept it. Iorse, she may even be said to have ommitted insubordination 1hen she re!used to turn over her responsibilities to the ne1 Category )uyer, Padilla, and to assume her ne1 responsibilities as Provinial Coordinator and report to the (etroeast Depot as direted. This 1as preisely the reason 1hy the petitioner 1as 2ept on Noating status. To her disredit, her defane onstituted a neglet o! duty, or an at o! insubordination, per the LA. 3either an 1e onsider tenable the petitioners ontention that the respondents deliberately held her up to mo2ery and ridiule 1hen they ut o her email aess, sent memoranda to her lients that she 1as no longer a Category )uyer, and to the various 8obinsons branhes that she 1as no1 a Provinial Coordinator on Noating status

and that Padilla 1as ta2ing over her position as the ne1 Category )uyer. >t suEes to state that these measures are the logial steps to ta2e !or the petitioners un;ustifed resistane to her trans!er, and 1ere not intended to sub;et her to publi embarrassment. inally, as reiterated in Aebedo ptial, @0 this Court is not a trier o! !ats, and only errors o! la1 are generally revie1ed in petitions !or revie1 on ertiorari ritiiBing deisions o! the CA. 9uestions o! !at are not entertained, and in labor ases, this dotrine applies 1ith greater !ore. atual questions are !or labor tribunals to resolve. @' Thus: -udiial 8evie1 or labor ases does not go beyond the evaluation o! the suEieny o! the evidene upon 1hih its labor oEialsF fndings rest. As suh, the fndings o! !ats and onlusion o! the 3L8C are generally aorded not only great 1eight and respet but even lothed 1ith fnality and deemed binding on this Court as long as they are supported by substantial evidene. This Court fnds no basis !or deviating !rom said dotrine 1ithout any lear sho1ing that the fndings o! the Labor Arbiter, as aErmed by the 3L8C, are bere!t o! substantiation. Partiularly 1hen passed upon and upheld by the Court o! Appeals, they are binding and onlusive upon the #upreme Court and 1ill not normally be disturbed. As earlier stated, 1e fnd no basis !or deviating !rom the o!t espoused legal tenet that fndings o! !ats and onlusion o! the labor arbiter are generally aorded not only great 1eight and respet but even lothed 1ith fnality and deemed binding on this Court as long as they are supported by substantial evidene, 1ithout any lear sho1ing that suh fndings o! !at, as aErmed by the 3L8C, are bere!t o! substantiation. (ore so, 1hen passed upon and upheld by the Com$ o! Appeals, they are binding and onlusive upon us and 1ill not normally be disturbed I"<8<8<, the premises onsidered, the Deision o! the Court o! Appeals dated is A>8(
.) G.R. No. 1915J. M"r+ 193 5;17.B T'E ORC'ARD GOLF AND COUNTRY CLU3 %etitioner3 4. AMELIA R. FRANCISCO3 re%on&ent. TOPIC: M"n"$e-ent Prero$"ti4e: I##e$"# Tr"ner FACTS: Petitioner, The rhard Kol! and Country Club 4the Club7, operates and maintains t1o gol! ourses in DasmariVas, Cavite !or Club members and their guests. n (arh $, $%%, respondent Amelia 8. raniso 4raniso7

1as employed as Club Aountant. As Keneral Aounting Division head, respondent reports diretly to the Clubs inanial Comptroller, -ose nstead o! omplying 1ith the memorandum, raniso 1ent to the Clubs Keneral (anager, Tomas ). Clemente >>> 4Clemente7, and personally explained to the latter that due to the alleged heavy volume o! 1or2 that needed her attention, she 1as unable to dra!t the letter. Clemente assured her that he 1ould disuss the matter 1ith amy personally. n this assurane, raniso did not submit the required 1ritten explanation. or this reason, amy issued a -une *%, *+++ memorandum'suspending raniso 1ithout pay !or a period o! $0 days. n -uly $, *+++, amy issued another memorandum& in!orming raniso that her suspension shall be eetive !rom -uly @ to $%, *+++. n -uly @, *+++ raniso 1rote to the Clubs Keneral and Administrative (anager, (a. >rma CoraBon A. 3uevo 43uevo7, questioning amys at o! harging, investigating, and suspending her 1ithout oursing the same through the Clubs Personnel Department. n -uly 0, *+++, raniso 1rote a letter$$ to Clemente requesting an investigation into amys possible involvement in the ommission in $%% o! alleged !raudulent and negligent ats relative to the questionable approval and release o! Club he2s in payment o! )ureau o! >nternal 8evenue 4)>87 taxes, in 1hih her ounter/signature though required 1as not obtained. n -uly *+, *+++, or a day a!ter ranisos period o! suspension expired, amy issued separate memoranda to raniso and Clemente in!orming them o! ranisos trans!er, 1ithout diminution in salary and benefts, to the Clubs Cost Aounting #etion 1hile the investigation on amys alleged illegal ativities is pending. n August $$, *+++, raniso fled a Complaint !or illegal dismissal against the Club, impleading amy, Clemente and 3uevo as additional respondents. raniso amended her illegal dismissal Complaint to one !or illegal suspension. (ean1hile, she ontinued to report !or 1or2. n #eptember , *+++, or a day a!ter serving her suspension, raniso again reeived a #eptember ', *+++ memorandum !rom 3uevo, duly noted and approved by Clemente, this time plaing her on !ored leave 1ith pay !or @+ days, or !rom

#eptember , *+++ up to tober $$, *+++, !or the alleged reason that the ase fled against her has strained her relationship 1ith her superiors. #he 1as again suspended. A!ter the expiration o! her !ored leave, or on tober $*, *+++, raniso reported ba2 to 1or2. This time she 1as handed an tober $$, *+++ memorandum*0 !rom Clemente in!orming her that, due to strained relations bet1een her and amy and the pending evaluation o! her betrayal o! ompany trust harge, she has been permanently trans!erred, 1ithout diminution o! benefts, to the Clubs Cost Aounting #etion eetive tober $*, *+++.

R,#in$ o t+e LA: A!ter onsidering the parties respetive Position Papers and evidene, Labor Arbiter t resulted in ranisos demotion, sine the position o! Cost Controller 1as merely o! a supervisory harater, 1hile the position o! Club Aountant 1as o! managerial ran2. The 3L8C added that strained relationship is not a valid ground !or termination o! employment under the Labor Code. CA: The CA sustained the 3L8C ruling. >t held that 1hile petitioner had the right or prerogative to trans!er the respondent !rom one oEe to another 1ithin the Club, t+ere +o,#& =e no &e-otion in r"n/3 "#"r03 =ene?t "n& ot+er %ri4i#e$e. "ene, this petition.

ISSUE: Ihether or not petitioner ated in bad !aith in abusing their right or prerogative in trans!erring raniso 4respondent7 !rom one oEe to another there!ore resulting in demotion in ran2, salary, benefts, and other privileges amounting to onstrutive dismissal.

RULING: =es. The #upreme Court aErmed CAs deision and ordered petitioners to reinstate respondent to her !ormer position as Club Aountant.

1. CONSTRUCTIVE DISMISSALILLEGAL TRANSFER/ T+ere *" ontr,ti4e &i-i"# *+en Fr"nio *" tr"nerre& to t+e Cot Ao,ntin$ Setion.

Ie agree 1ith the 3L8C and the CA that ranisos trans!er to the position o! Cost Controller 1as 1ithout valid basis and that it amounted to a demotion in ran2. "ene, there 1as onstrutive dismissal. The Court shares the CAs observation that 1hen raniso 1as plaed on !ored leave and trans!erred to the Cost Aounting #etion, not one 1as raniso given the opportunity to ontest these ompany ations ta2en against her. 3ot even the laim that her relations 1ith her superiors have been strained ould ;usti!y ranisos trans!er to Cost Aounting #etion. >ndeed, it appears that her harge 1as never resolved. And i! amy, 3uevo and Clemente truly believed that their relations 1ith raniso have been strained, then it puBBles the Court 1hy, despite her trans!er, she ontinues to remain under amys diret supervision. ranisos -uly *+, *+++ temporary trans!er and her tober $*, *+++ permanent trans!er to Cost Aounting #etion must be invalidated. or one, there 1as no valid reason to temporarily trans!er raniso to Cost Aounting #etion on -uly *+, *+++. #he had already served her penalty !or her !ailure to dra!t the #KH letter, through the $0/day suspension period 1hih she ;ust ompleted on -uly *+, *+++. #eondly, the trans!er 1as not even rooted in any ne1 in!ration she is aused o! ommitting. There 1as thus an absolute la2 o! basis !or her -uly *+, *+++ temporary trans!er. As !or her tober $*, *+++ permanent trans!er, the same is null and void !or la2 o! ;ust ause. Also, the trans!er is a penalty imposed on a harge that has not yet been resolved. Defnitely, to punish one !or an oense that has not been proved is truly un!air this is deprivation 1ithout due proess. inally, the Court sees no neessity !or ranisos trans!er on the ontrary, suh trans!er is out1eighed by the need to seure her oEe and douments !rom amys possible intervention on aount o! the omplaint she fled against him. Ie also agree 1ith the fndings o! the 3L8C, as aErmed by the CA, that ranisos trans!er onstituted a demotion, viB: bviously, the alleged August $0, $%%& Companys rganiBational Chart sho1ing the Club Aountant and the Cost Controller oupying the same ;ob grade level, 1hih 1as attahed to 8espondents ebruary *$, *++$ 8eply x x x 1as never implemented, other1ise, the Department "ead and the Ating K( W C 1ould not have speifally indiated J(anagerial/@J !or Complainants position o! Club Aountant in the 3otie o! Personnel Ation issued to Complainant on -uly $+, *+++ or t1o 4*7 years a!ter the date o! the alleged rganiBational Chart. C#e"r#03 Co-%#"in"nt *" " -"n"$er *+en

+e o,%ie& t+e %oition o C#,= Ao,nt"nt. 'o*e4er3 *+en -"n"$e-ent tr"nerre& +er to t+e %oition o Cot Contro##erAo,nt"nt3 +e *" &e-ote& to " -ere ,%er4ior.

(oreover, in Complainants Deember @, $%% -ob Desription as Club Aountant prepared by -ose an Paul Kardner and Atty. #tellamar C. lores o! "8, it is speifally indiated therein that as Club Aountant, Complainant diretly supervises the Cost Controller x x x. 3otably, Complainant 1as never issued any amendment to her Deember @, $%% -ob Desription, 1hih 1ould have removed !rom her supervision the Cost Controller. >n !at, 8espondents do not re!ute Complainants allegation that as Club Aountant, she 1as responsible !or the rating o! the Cost Controllers per!ormane !or the years $%%& to *+++. >t is obvious, there!ore, that Complainants position o! Club Aountant is higher in level6ran2 than that o! Cost Controller6Aountant. Patently, Complainants trans!er !rom the position o! Club Aountant to the position o! Cost Aountant resulted to her demotion in level6ran2. Complainants trans!er resulting to her demotion is, there!ore, tantamount to onstrutive dismissal. x x x 50 The !at that raniso ontinued to report !or 1or2 does not neessarily suggest that onstrutive dismissal has not ourred, nor does it operate as a 1aiver. Construtive dismissal ours not 1hen the employee eases to report !or 1or2, but 1hen the un1arranted ats o! the employer are ommitted to the end that the employees ontinued employment shall beome so intolerable.

5. MANAGEMENT PREROGATIVE JAn employer is !ree to manage and regulate, aording to his o1n disretion and ;udgment, all phases o! employment, 1hih inludes hiring, 1or2 assignments, 1or2ing methods, time, plae and manner o! 1or2, supervision o! 1or2ers, 1or2ing regulations, trans!er o! employees, lay/o o! 1or2ers, and the disipline, dismissal and reall o! 1or2. Ihile the la1 reogniBes and sa!eguards this right o! an employer to exerise 1hat are learly management prerogatives, suh right should not be abused and used as a tool o! oppression against labor. The ompanys prerogatives must be exerised in good !aith and 1ith due regard to the rights o! labor. A priori, they are not absolute prerogatives but are sub;et to legal limits, olletive bargaining agreements and the general priniples o! !air play and ;ustie. The po1er to dismiss an employee is a reogniBed prerogative that is inherent in the employers right to !reely manage and regulate his business. x x x. #uh right, ho1ever, is sub;et to regulation by the #tate, basially in the exerise o! its paramount polie po1er. Thus, the dismissal o! employees must be made 1ithin the parameters o! the la1 and pursuant to the basi tenets o! equity, ;ustie and !air play. >t must not be done arbitrarily and 1ithout ;ust ause.J

D#>3

DEL CASTILLO3 J.:

Construtive dismissal ours not 1hen the employee eases to report !or 1or2, but 1hen the un1arranted ats o! the employer are ommitted to the end that the employeeFs ontinued employment shall beome so intolerable. >n these diEult times, an employee may he le!t 1ith no hoie but to ontinue 1ith his employment pespite abuses ommitted against him by the employer, and even during the pendeny o! a labor dispute bet1een them. This should not be ta2en against the employee. >nstead, 1e must share the burden o! his plight, ever a1are o! the preept that neessitous men are not !ree men. Assailed in this Petition !or 8evie1 $ is the -anuary *0, *++ Deision * o! the Court o! Appeals 4CA7 1hih dismissed the Petition in CA/K.8. #P 3o. &+%'& and aErmed the 3ovember $%, *++* 8esolution@ o! the 3ational Labor 8elations Commission 43L8C7. Li2e1ise assailed is the (ay *@, *++ CA 8esolution5 denying petitionerFs (otion !or 8eonsideration. atual Anteedents Petitioner, The rhard Kol! and Country Club 4the Club7, operates and maintains t1o gol! ourses in DasmariVas, Cavite !or Club members and their guests. The Club li2e1ise has a s1imming pool, bo1ling alley, inema, ftness enter, ourts !or tennis, badminton and bas2etball, restaurants, and !untion rooms. n (arh $, $%%, respondent Amelia 8. raniso 4raniso7 1as employed as Club Aountant, to head the Clubs Keneral Aounting Division and the !our divisions under it, namely: $7 8evenue and Audit Division, *7 )illing6 Aounts 8eeivable Division, @7 Aounts Payable Division, and 57 ixed Assets Division. nstead o! omplying 1ith the memorandum, raniso 1ent to the Clubs Keneral (anager, Tomas ). Clemente >>> 4Clemente7, and personally explained to the latter that due to the alleged heavy volume o! 1or2 that needed her attention, she 1as unable to dra!t the letter. Clemente assured her that he 1ould disuss the matter 1ith amy personally. n this assurane, raniso did not submit the required 1ritten explanation. or this

reason, amy issued a -une *%, *+++ memorandum 'suspending raniso 1ithout pay !or a period o! $0 days. The memorandum reads, as !ollo1s: Considering the !at that you did QsiR explain in 1riting 1ithin *5 hours !rom the date and time o! my memorandum to you dated -une *, *+++ the reason 1hy you should not be harged 1ith J>nsubordinationJ as speifed in 8ule 0 #etion *a o! our handboo2, it has been !ound that: indings: =ou 1ill!ully re!used to arry out a legitimate and reasonable instrution o! your Department "ead. At6ense: >nsubordination Mnder the irumstanes and pursuant to the rules and regulations o! the Club, you are hereby suspended !or $0 1or2ing days 1ithout pay. <etive dates o! 1hih shall be determined by the undersigned depending on the exigeny o! your 1or2. 4#igned7 3ilo P. amy n -uly $, *+++, amy issued another memorandum & in!orming raniso that her suspension shall be eetive !rom -uly @ to $%, *+++. n -uly @, *+++ raniso 1rote to the Clubs Keneral and Administrative (anager, (a. >rma CoraBon A. 3uevo 43uevo7, questioning amys at o! harging, investigating, and suspending her 1ithout oursing the same through the Clubs Personnel Department. Pertinent portions o! her memorandum to 3uevo read: This has re!erene to the memoranda o! the inanial Controller, (r. 1ould li2e to 2no1 under 1hat authority x x x a department head ould issue a memorandum and ma2e deisions 1ithout the intervention o! the Personnel Department. > believe that i! ever a department head or superior has omplaints against his subordinate then he has to ourse them through the Personnel Department 1hih 1ill be the one to initiate and ondut an inquiry and investigation. A mere !urnishing o! the memorandum to the Personnel Department does not substitute QsiR the atual authority and !untions o! the Personnel Department beause there 1ill be no due proess x x x. 3ilo amy deided on his o1n omplaint 1ithout merit 4si7 x x x. Also > believe x x x 3ilo amy abuse QsiR his authority as superior 1ith !ull disregard o! the Personnel Department beause he ated as the omplainant, the investigator and the ;udge, all by himsel!. or this > 1ould li2e to fle this omplaint against him !or abuse o! authority x x x.

x x x During our departmental meetings listed in his letter, > al1ays made him a1are o! the lined/up priorities that need to be given attention frst and pending 1or2s 1hih during the year/end audit by the auditors 1ere put on hold and 1ere not x x x fnished by the assigned sta. >n !at, he ommented that > should do something about the pending 1or2. Also, i! he really !eels QsiR the importane o! that letter and QsiR ogniBant o! my present 1or2 load, then 1hy did he 1ent QsiR on leave !rom -une *@ until -une *'. 4his leave 1as ut beause o! the board meeting. "is leave QsiR supposed to be until -une @+7 x x x. Also, > 1ould li2e to !ormally in!orm you that 1henever 1e have some disagreement or he has dissatis!ation QsiR he is reating QsiR a !eeling o! ;ob inseurity it is very easy !or (r. 3ilo amy to diretly tell me and the sta to resign. The last time 1e had a tal2 prior to this issue, +e -"&e it #e"r

t+"t +e "n tr"ner -e to #o*er %oition #i/e t+e %oition o t+e "+ier3 ot ontro##er "n& t+e #i/e. "e is onfdent he an do it beause he had done it to the !ormer Club Aountant. Ihat do you thin2 is the 2ind o! authority you expet !rom him i! you al1ays hear these 1ordings QsiR. %

That very same day, 3uevo replied, $+ exonerating amy and ;usti!ying the latters ations as !alling 1ithin his po1er and authority as department head. 3uevo said that raniso 1as aorded due proess 1hen she 1as given the opportunity to explain her side that she deliberately ignored her superiors diretive 1hen she did not submit a 1ritten explanation, 1hih at onstitutes insubordination that amy ated prudently though he did not ourse his ations through the Personnel Department, !or ultimately, he 1ould deide the ase and that she 1as onsulted by amy and that she gave her assent to amys proposed ations, 1hih he later arried out. 3uevo li2e1ise brushed aside ranisos ausation o! abuse o! authority against amy, and instead blamed raniso !or her prediament. n -uly 0, *+++, raniso 1rote a letter$$ to Clemente requesting an investigation into amys possible involvement in the ommission in $%% o! alleged !raudulent and negligent ats relative to the questionable approval and release o! Club he2s in payment o! )ureau o! >nternal 8evenue 4)>87 taxes, in 1hih her ounter/signature though required 1as not obtained. amy belied ranisos laims in a reply memorandum, saying the harges 1ere baseless and intended to malign him. n -uly *+, *+++, or a day a!ter ranisos period o! suspension expired, amy issued separate memoranda$* to raniso and Clemente in!orming them o! ranisos trans!er, 1ithout diminution in salary and benefts, to the Clubs Cost Aounting #etion 1hile the investigation on amys alleged illegal ativities is pending. 8elevant portions o! these memoranda state: (<(8A3DM( T CL<(<3T<

>n vie1 o! the reent developments, i.e. the suspension o! (s. Amelia raniso and her letter o! -uly 0, *+++ x x x, > 1ould li2e to !ormally in!orm you that eetive today, -uly *+, *+++, (s. raniso shall be temporarily given a ne1 assignment in my department pending the result o! the investigation she lodged against the undersigned. x x x. #he shall remain diretly reporting to the inanial Comptroller 4amy7.$@ (<(8A3DM( T 8A3C>#C This is to in!orm you that eetive today, -uly *+, *+++, (anagement has approved your temporary trans!er o! assignment pending the ompletion o! the investigation you lodged against the undersigned. =ou shall be handling the Cost Aounting #etion together 1ith six 4'7 Aounting #tas and shall remain reporting diretly to the undersigned. $5 =et again, in another memorandum $0 dated August $, *+++ addressed to 3uevo, amy sought an investigation into ranisos alleged insubordination, this time !or her alleged unauthoriBed hange o! day/o !rom -uly @+ to August 5, *+++, and !or being absent on said date 4August 5, *+++7 despite disapproval o! her leave6oset appliation there!or. >n an August *, *+++ memorandum, $' raniso 1as required to explain these harges. >n another memorandum $ dated August 0, *+++, raniso 1as as2ed to submit her explanation on the !oregoing harges o! insubordination, negligene, ineEieny and violation o! 1or2 standards relative to the unauthoriBed hange o! day/o and disapproved oset6 leave. To these, raniso replied on August &, *+++ laiming that her presene on -uly @+, *+++ 1hih 1as a #unday and supposedly her day/o, 1as nonetheless neessary beause it 1as the Clubs sheduled month/end inventory, and she 1as assigned as one o! the oEers/in/harge thereo!. #he added that her ations 1ere in aord 1ith past experiene, 1here she 1ould ta2e a leave during the frst 1ee2 o! eah month to ma2e payments to Pag/>big, and amy very 1ell 2ne1 about this. #he aused amy o! 1aging a personal vendetta against her !or her see2ing an inquiry into laimed anomalies embodied in her -uly 0, *+++ letter. #he also too2 exeption to her trans!er to Cost Aounting #etion, laiming that the same 1as humiliating and demeaning and that it onstituted onstrutive dismissal, and threatened to ta2e legal ation or see2 assistane !rom Club members to insure that amys impropriety is investigated. $& n August $$, *+++, raniso fled a Complaint !or illegal dismissal against the Club, impleading amy, Clemente and 3uevo as additional respondents. The ase 1as do2eted as 3L8C Case 3o. 8A)/>H/&$*&+/++/C. #he prayed, among others, !or damages and attorneys !ees.

n August $', *+++, raniso reeived another memorandum requiring her to explain 1hy she should not be harged 1ith betrayal o! ompany trust, allegedly !or the at o! one n an tober $@, *+++ memorandum * to Clemente, raniso protested her permanent trans!er, laiming that it 1as made in bad !aith. #he also be1ailed Clementes ination on her -uly 0, *+++ letter harging amy 1ith irregularities relative to )>8 tax payments. Li2e1ise, on aount o! her trans!er, raniso one more amended her Complaint to inlude

illegal6onstrutive dismissal. And in her prayer, she sought to be reinstated to her !ormer position as Club Aountant. n tober $, *+++, Clemente issued a memorandum*& addressed to raniso denying that her trans!er 1as done in bad !aith, and aErming instead that it 1as made in the proper exerise o! management prerogative. >n addition, Clemente larifed the matter o! amys alleged 1rongdoing, thus: #eondly, > 1ould also li2e to orret your assumptions that the ase o! (r. amy has not yet been ated upon. or your in!ormation, the Committee omposed o! Club members and mysel! tas2ed by the )oard o! Diretors to investigate the ase and ma2e the neessary reommendations has already onluded its investigation and has made its reommendations to the )oard. The )oard, li2e1ise, has ated on the Committees reommendation x x x the results o! 1hih have been given to (r. amy. Ihatever that deision 1as, it is a matter bet1een the )oard and (r. amy. *% 8uling o! the Labor Arbiter A!ter onsidering the parties respetive Position Papers and evidene, Labor Arbiter t is at these times, 1hen the !at QsiR and pro!essionalism o! an employee, partiularly a managerial employee, is put to test. x x x @$ The Labor Arbiter !urther upheld ranisos t1o suspensions as valid exerises o! the Clubs management prerogative, ;usti!ying the measures ta2en as reasonable and neessary penalties !or ranisos !ailure to dra!t the #KH letter and her ta2ing a leave 1ith !ull a1areness yet in disregard o! her superior amys disapproval o! her leave appliation. "e added that in the ondut o! proeedings leading to the deision to suspend raniso, the proper proedure 1as ta2en, and raniso 1as aorded ample opportunity to de!end hersel!.

The Labor Arbiter li2e1ise !ound ranisos laim o! onstrutive dismissal to be baseless. n the ontrary, he !ound ranisos trans!er as neessary and in !urtherane o! the Clubs interests. "e also noted that the trans!er 1as lateral, or to a position o! the same ran2 and pay sale based on the Clubs rganiBational Chart. @* )oth Club Aountant and Cost Controller positions belonged to the same pay sale J%J and are rated as J#upervisor HJ. inally, the Labor Arbiter held that the !at that raniso ontinued to report !or 1or2 belies her laim o! onstrutive dismissal. 8uling o! the 3ational Labor 8elations Commission n #eptember $, *++$, raniso appealed the Labor Arbiters Deision to the 3L8C, 1hih too2 a ontrary vie1. Thus, in its 3ovember $%, *++* 8esolution, @@ the 3L8C held that 1hile ranisos suspensions 1ere valid, her subsequent permanent trans!er on the ground o! strained relations to the Clubs Cost Aounting #etion as Cost Controller on tober $*, *+++ 1as 1ithout ;ust ause. >t resulted in ranisos demotion, sine the position o! Cost Controller 1as merely o! a supervisory harater, 1hile the position o! Club Aountant 1as o! managerial ran2. )esides, by admission o! herein petitioner, raniso held the ran2 o! J(anager @J 1ith her position as Club Aountant, 1hile the Cost Controller is only a #upervisor position and is preisely under the diret supervision and ontrol o! the Club Aountant. @5 This un1arranted demotion, aording to the 3L8C, is equivalent to onstrutive dismissal. The 3L8C added that strained relationship is not a valid ground !or termination o! employment under the Labor Code. >t ordered ranisos reinstatement to her !ormer position as Club Aountant and a1arded her attorneys !ees in the amount o! P0+,+++.++. "o1ever, the 3L8C absolved amy, 3uevo and Clemente o! 1rongdoing. >t also held that raniso 1as not entitled to moral and exemplary damages beause she !ailed to sho1 proo! that her onstrutive dismissal 1as attended by bad !aith. Thus, the 3L8C held: I"<8<8<, premises onsidered, Complainants appeal is partly K8A3T>t is hereby delared that Complainants trans!er resulted in a demotion in level6ran2, 1hih is onsidered as illegal onstrutive dismissal. 8espondent the rhard Kol! W Country Club, >n. is hereby ordered to immediately reinstate Complainant to her !ormer position as Club Aountant 1ithout loss o! seniority rights and other privileges and to pay her attorneys !ees in the amount o! P0+,+++.++ # 8D<8
Petitioner moved !or reonsideration, to no avail. raniso moved !or partial reonsideration o! the 3L8Cs 8esolution 1ith respet to its ruling delaring her suspensions as valid and the denial o! her laim !or damages. "er motion 1as denied as 1ell. 8uling o! the Court o! Appeals Petitioner 1ent up to the CA via Petition !or Certiorari, @' 1hile respondent raniso no longer too2 issue 1ith the denial o! her motion. >n its -anuary *0, *++ Deision, the CA sustained the 3L8C ruling. >t held that 1hile petitioner had the right or prerogative to trans!er the respondent !rom one oEe to another 1ithin the Club, there should be no demotion in ran2, salary, benefts and other privileges. The CA added that the right may not be used arbitrarily to rid the employer o! an undesirable 1or2er. Proper notifation and an opportunity to be heard or ontest the trans!er must be given to the employee 1hose trans!er is sought, onditions 1hih 1ere not observed in ranisos ase. #he 1as notifed only o! the Clubs deision to permanently trans!er her, 1ithout giving her the opportunity to ontest the same. The CA harateriBed ranisos permanent trans!er as a demotion in the guise o! a lateral trans!er. The CA sustained as 1ell the a1ard o! attorneys !ees, saying that raniso 1as !ored to litigate and hire the servies o! ounsel to protet her rights. Thus, the Petition !or Certiorari 1as dismissed. Petitioner fled a (otion !or 8eonsideration, @ 1hih 1as subsequently denied. >ssues "ene, this Petition raising the !ollo1ing issues: > I"M#L= <88D3  #M)#TA3C< >3 A (A33<8 3T >3 ACC8D I>T" LAI A3D I>T" APPL>CA)L< D#>3#  T"># "38A)L< CM8T I"<3 >T "T>3  CLM) ACCM3TA3T T C#T ACCM3TA3T IA# TA3TA(M3T T A D<(T>3. >> I"M#L= <88D3  #M)#TA3C< >3 A (A33<8 3T >3 ACC8D I>T" LAI A3D I>T" APPL>CA)L< D#>3#  T"># "38A)L< CM8T

I"<3 >T AIA8D3 T"< A(M3T  >T= T"M#A3D P<## 4P0+,+++.++7.@& Petitioners Arguments >n see2ing the annulment and setting aside o! the CA Deision, petitioner insists that respondent ranisos trans!er did not amount to a demotion, and that she suered no diminution in ran2, salary, benefts, and position beause the position o! Club Aountant and Cost Controller6Aountant are o! equal ran2. )oth positions belong to pay grade J%J and rated as J#upervisor HJ a trans!er !rom one o! the positions to the other is merely a lateral trans!er and 1ithin the prerogative o! Club management. Petitioner direts the Courts attention to its rganiBational Chart @% 1hih should bolster its laim in this regard. Petitioner adds that ranisos trans!er to the Cost Aounting #etion 1as done in good !aith, noting that the deteriorating relationship bet1een amy and raniso plaed the Clubs business at ris2. >t had no hoie but to address this problem in order not to !urther ;eopardiBe the Clubs day/to/day operations. Petitioner laims !urther that ranisos trans!er did not pre;udie her. #he ontinues to report to amy and reeive the same benefts and privileges as the Club Aountant. >t is o! no onsequene that as Cost Controller, she has a lesser number o! employees6sta 4six7 under her or that she is relegated to a very small oEe spae, as opposed to the position o! Club Aountant, 1hih has @* employees under it and holds oEe at the bigger oEes reserved !or use by the Clubs exeutives. n the issue o! onstrutive dismissal, petitioner laims that it did not ommit any at 1hih !ored raniso to quit she ontinues to be employed by the Club, and in !at ontinues to report !or 1or2. inally, petitioner argues that raniso is not entitled to attorneys !ees, in the absene o! an a1ard o! exemplary damages and in the 1a2e o! the 3L8Cs fnding that she is not entitled to suh damages. >t believes that i! no exemplary damages are ad;udged, then no attorneys !ees may be a1arded as 1ell. >t adds that raniso ould only blame hersel! !or the !ate she suered, 2no1ing very 1ell that she is not entitled to her laims she should bear her o1n litigation expenses. 8espondents Arguments raniso insists that the issues raised in the Petition have been suEiently addressed by the 3L8C and the CA, and their fndings should bind the Court. raniso stresses that petitioners o1n ations betrayed the !at that the position o! Cost Controller6Aountant is a mere #upervisor position and the same is diretly under the supervision o! the Club Aountant. A

reassignment !rom Club Aountant to Cost Controller is learly an un1arranted demotion in ran2. #he adds that per the Clubs latest ations, she has suered not only a demotion in ran2, but also a diminution in salary and benefts. Petitioner illegally 1ithheld her arued salary dierential, merit inreases and produtivity bonuses sine *++$. ur 8uling The Petition la2s merit. At the outset, it must be emphasiBed that ranisos t1o suspensions, i.e., !or her !ailure to dra!t the #KH letter and !or being absent 1ithout prior leave, is no longer at issue be!ore this Court. 8eords sho1 that a!ter the 3L8C delared the same as valid in its 3ovember $%, *++* 8esolution, raniso moved !or reonsideration but to no avail. A!ter the denial o! her motion, raniso no longer brought the issue or appealed the same to the CA. "ene, the only issues !or our resolution are the propriety o! ranisos trans!er to the position o! Cost Controller and the a1ard o! attorneys !ees.

T+ere *" ontr,ti4e &i-i"# *+en Fr"nio *" tr"nerre& to t+e Cot Ao,ntin$ Setion. Ie agree 1ith the 3L8C and the CA that ranisos trans!er to the position o! Cost Controller 1as 1ithout valid basis and that it amounted to a demotion in ran2. "ene, there 1as onstrutive dismissal. 8eords sho1 that 1hen raniso returned to 1or2 on -uly *+, *+++ !resh !rom her frst suspension, she 1as uneremoniously trans!erred by amy, via his -uly *+, *+++ memorandum, to the Clubs Cost Aounting #etion. amy stated the reason !or her trans!er: This is to in!orm you that eetive today, -uly *+, *+++, (anagement has approved your temporary trans!er o! assignment pending the ompletion o! the investigation you lodged against the undersigned. x x x x5+ "is memorandum o! even date to his superior Clemente reveals the same ause: >n vie1 o! the reent developments, i.e. the suspension o! (s. Amelia raniso and her letter o! -uly 0, *+++ x x x, > 1ould li2e to !ormally in!orm you that eetive today, -uly *+, *+++, (s. raniso shall be temporarily given a ne1 assignment in my department pending the result o! the investigation she lodged against the undersigned. x x x x5$

>n other 1ords, the ause o! ranisos temporary trans!er on -uly *+, *+++ 1as her pending omplaint against amy. And then again, on #eptember ', *+++, 3uevo issued another memorandum duly noted and approved by Clemente, and personally delivered at ranisos residene on #eptember , *+++ in!orming her this time that she has been plaed on !ored leave 1ith pay !or @+ days, or !rom #eptember , *+++ up to tober $$, *+++, !or the reason that the ase fled against her has strained her relationship 1ith her superiors. And ;ust 1hen her !ored leave expired on tober $$, or on tober $*, *+++, raniso 1as one more handed an tober $$, *+++ memorandum !rom Clemente in!orming her that, due to strained relations bet1een her and amy and pending evaluation o! her betrayal o! ompany trust harge, she has been permanently trans!erred, 1ithout diminution o! benefts, to the Clubs Cost Aounting #etion eetive tober $*, *+++. The Court shares the CAs observation that 1hen raniso 1as plaed on !ored leave and trans!erred to the Cost Aounting #etion, not one 1as raniso given the opportunity to ontest these ompany ations ta2en against her. >t has also not esaped our attention that ;ust 1hen one penalty has been served by raniso, another 1ould instantaneously ta2e its plae. And all these happened even 1hile the supposed ase against her, the alleged harge o! Jbetrayal o! ompany trustJ, 1as still pending and remained unresolved. >n !at, one o! the memoranda 1as served even at ranisos residene. 3ot even the laim that her relations 1ith her superiors have been strained ould ;usti!y ranisos trans!er to Cost Aounting #etion. >ndeed, it appears that her harge 1as never resolved. And i! amy, 3uevo and Clemente truly believed that their relations 1ith raniso have been strained, then it puBBles the Court 1hy, despite her trans!er, she ontinues to remain under amys diret supervision. #uh is the tenor o! the memoranda relative to her temporary and subsequently, permanent, trans!er to the Cost Aounting #etion: -ML= *+, *+++ (<(8A3DM(  A(= T CL<(<3T< >n vie1 o! the reent developments, i.e. the suspension o! (s. Amelia raniso and her letter o! -uly 0, *+++ x x x, > 1ould li2e to !ormally in!orm you that eetive today, -uly *+, *+++, (s. raniso shall be temporarily given a ne1 assignment in my department pending the result o! the investigation she lodged against the undersigned. x x x. #he shall remain diretly reporting to the inanial Comptroller 4amy7.5*

-ML= *+, *+++ (<(8A3DM(  A(= T 8A3C>#C This is to in!orm you that eetive today, -uly *+, *+++, (anagement has approved your temporary trans!er o! assignment pending the ompletion o! the investigation you lodged against the undersigned. =ou shall be handling the Cost Aounting #etion together 1ith six 4'7 Aounting #tas and shall remain reporting diretly to the undersigned. 5@ CT)<8 $$, *+++ (<(8A3DM(  CL<(<3T< T 8A3C>#C )eause o! the strained relationship bet1een you and your department head, (r. nterestingly, ranisos trans!er 1as oasioned not by a past in!ration or a present one 1hih has ;ust been ommitted, but by her at o! fling a omplaint !or impropriety against amy. or this reason, ranisos -uly *+, *+++ temporary trans!er and her tober $*, *+++ permanent trans!er to Cost Aounting #etion must be invalidated. or one, there 1as no valid reason to temporarily trans!er raniso to Cost Aounting #etion on -uly *+, *+++. #he had already served her penalty !or her !ailure to dra!t the #KH letter, through the $0/day suspension period 1hih she ;ust ompleted on -uly *+, *+++. #eondly, the trans!er 1as not even rooted in any ne1 in!ration she is aused o! ommitting. There 1as thus an absolute la2 o! basis !or her -uly *+, *+++ temporary trans!er. As !or her tober $*, *+++ permanent trans!er, the same is null and void !or la2 o! ;ust ause. Also, the trans!er is a penalty imposed on a harge that has not yet been resolved. Defnitely, to punish one !or an oense that has not been proved is truly un!air this is deprivation 1ithout due proess. inally, the Court sees no neessity !or ranisos trans!er on the ontrary, suh trans!er is out1eighed by the need to seure her oEe and douments !rom amys possible intervention on aount o! the omplaint she fled against him. Ie also agree 1ith the fndings o! the 3L8C, as aErmed by the CA, that ranisos trans!er onstituted a demotion, viB: x x x Ie ho1ever, hold that Complainants trans!er resulted to a demotion in her level6ran2. The level o! Club Aountant is not J#upervisor HJ but J(anagerial/@J as indiated in the 3otie o! Personnel Ation issued to Complainant on -uly *+, *+++, signed by her immediate superior -ose
approved by Tomas ). Clemente >>>, Ating K( W C on -uly $$, *+++ x x x. bviously, the alleged August $0, $%%& Companys rganiBational Chart sho1ing the Club Aountant and the Cost Controller oupying the same ;ob grade level, 1hih 1as attahed to 8espondents ebruary *$, *++$ 8eply x x x 1as never implemented, other1ise, the Department "ead and the Ating K( W C C 1oul 1ould d not not have have spe speif ifa all lly y indi india ate ted d J(an J(anag ager eria ial/ l/@J @J !or !or Complainants position o! Club Aountant in the 3otie o! Personnel Ation issued to Complainant on -uly $+, *+++ or t1o 4*7 years a!ter the date o! the alleged rganiBational rganiBational Chart. Clearly, Complainant 1as a manager manager 1hen she oup oupied ied the posit positio ion n o! Club Club Ao Aount untan ant. t. "o1e "o1ever ver,, 1hen 1hen manag managem emen entt trans! trans!er erre red d her her to the posit position ion o! Cost Cost Contr Control oller ler6A 6Ao oun untan tant, t, she 1as 1as demoted to a mere supervisor. (ore (oreov over, er, in Comp Complai laina nant nts s Deem Deembe berr @, $% $%% % -ob Desri Desripti ption on as Club Club Aou Aount ntant ant prepa prepare red d by -ose -ose an Paul aul Kardner and Atty. #tellamar C. lores o! "8, it is speifally indiated therein that as Club Aountant, Complainant diretly supervises the Cost Controller x x x. 3ota 3otabl bly, y, Comp Compla lain inan antt 1as 1as neve neverr issu issued ed any any amen amendm dmen entt to her her Deember @, $%% -ob Desription, 1hih 1ould have removed !rom her supe superv rvis isio ion n the the Cost Cost Cont Contrroller ller.. >n !at !at,, 8espo espond nden ents ts do not not re!ut e!ute e Complainants allegation that as Club Aountant, she 1as responsible !or the rating o! the Cost Controllers Controllers per!ormane per!ormane !or the years $%%& to *+++. >t beo beome mes s lea learrer no1 no1 that that the the alle allege ged d Augu August st $0 $0,, $% $%%& %& Comp Compan any ys s rganiBational Chart sho1ing the Club Aountant and the Cost Controller oupying the same ;ob grade level, 1hih 1as attahed to 8espondents ebruary **, *++$ 8eply x x x 1as, indeed, never implemented, other1ise, mana manage geme ment nt 1oul 1ould d have have issu issued ed Comp Compla lain inan annt nt an amen amendm dmen entt to her her Deember @, $%% -ob Desription eetively removing !rom her supervision the position o! Cost Controller6Aountant and management 1ould not have let Complainant rate the per!ormane o! the Cost Controller6Aountant !or the years $%%& to *+++. >t is obvious, there!ore, that Complainants position o! Club Aountant is higher in level6ran2 than that o! Cost Controller6Aountant. Patently, Complainants trans!er !rom the position o! Club Aountant to the position o! Cost Aountant resulted to her demotion in level6ran2. Complainants trans!er resulting to her demotion is, there!ore, tantamount to onstrutive dismissal. x x x 50 The !at that raniso ontinued ontinued to report report !or 1or2 does not neessarily suggest that onstrutive dismissal has not ourred, nor does it operate as a 1aiver 1aiver.. Constru Construtive tive dismissal dismissal ours ours not 1hen the employee employee eases to repor eportt !or !or 1or2 1or2,, bu butt 1hen 1hen the the un un1a 1arr rran ante ted d ats ats o! the the empl employ oyer er are are omm ommitt itted ed to the end end that that the employ employee ees s ontin ontinued ued emplo employme yment nt shall shall beome so intolerable. >n these diEult times, an employee may be le!t 1ith no hoie but to ontinue 1ith his employment despite abuses ommitted against him by the employer, and even during the pendeny o! a labor dispu dispute te bet1ee bet1een n them. them. This This should should not not be ta2 ta2en agai against nst the emplo employee yee..

>nstead, 1e must share the burden o! his plight, ever a1are o! the preept that neessitous men are not !ree men.

An e-%#o0er i ree to -"n"$e "n& re$,#"te3 "or&in$ to +i o*n &iretion "n& 2,&$-ent3 "## %+"e o e-%#o0-ent3 *+i+ in#,&e +irin$3 *or/ "i$n-ent3 *or/in$ -et+o&3 ti-e3 %#"e "n& -"nner o *or/3 ,%er4iion o *or/er3 *or/in$ re$,#"tion3 tr"ner o e-%#o0 e-%#o0ee ee33 #"0o #"0o  o *or/e *or/er3 r3 "n& t+e &ii% &ii%#in #ine3 e3 &i-i &i-i"# "# "n& re"## o *or/. (+i#e t+e #"* reo$ni>e "n& "e$,"r& t+i ri$+t o "n e-%#o0er to eerie *+"t "re #e"r#0 -"n"$e-ent %rero$"ti4e3 ,+ ri$+t +o,#& not =e "=,e& "n& ,e& " " too# o o%%reion "$"in "$"intt #"=or #"=or.. T+e o-%"n o-%"n0! 0! %rero$ %rero$"t "ti4e i4e -,t -,t =e eeri eerie& e& in $oo& "it+ "n& *it+ &,e re$"r& to t+e ri$+t o #"=or. A %riori3 t+e0 "re "re not not "=o "=o#, #,te te %rer %rero$ o$"t "ti4 i4e e =, =,tt "re "re ,=2 ,=2e ett to #e$" #e$"## #i-i #i-it t33 o##eti4e ="r$"inin$ "$ree-ent "n& t+e $ener"# %rini%#e o "ir %#"0 "n& 2,tie. T+e %o*er to &i-i "n e-%#o0ee i " reo$ni>e& %rer %rero$ o$"t "ti4 i4e e t+"t t+"t i in+e in+ere rent nt in t+e t+e e-%# e-%#o0 o0er! er!  ri$+ ri$+tt to ree ree#0 #0 -"n"$e "n& re$,#"te +i =,ine.   . S,+ ri$+t3 +o*e4er3 i ,=2et to re$,#"tion =0 t+e St"te3 ="i"##0 in t+e eerie o it %"r"-o,nt %o#ie %o*er. T+,3 t+e &i-i"# o e-%#o0ee -,t =e -"&e *it+in t+e %"r"-eter o t+e #"* "n& %,r,"nt to t+e ="i tenet o e,it03 2,tie "n& "ir %#"0. %#"0. It -,t not =e &one "r=itr"ri#0 8 "n& *it+o,t 2,t ",e. The a1ard a1ard o! attorneys attorneys !ees is proper proper.. Iith respet respet to the a1ard o! attorneys !ees, 1e fnd the same to be due and o1ing to respondent given the irumstanes prevailing in this ase as 1ell as the !at that this ase has spanned the 1hole ;udiial proess !rom the Labor Arbiter to the 3L8C, the CA and all the 1ay up to this Court. Mnder Artile **+& o! the Civil Code, attorneys !ees and expenses o! litigation other than ;udiial osts may be reovered i! the laimant is ompelled to litigate 1ith third persons or to inur expenses to protet his interest by reason o! an un;ustifed at or omission o! the party !rom 1hom it is sought, 5 and 1here the ourts deem it ;ust and equitable that attorneys !ees and expenses o! litigation should be reovered. As !or petitioners argument that in the absene o! an a1ard o! exemplary dama damage ges, s, atto attorrney neys s !ees !ees may not not be gran grante ted, d, the the Cour Courtt fn fnds ds this this unav un avail ailin ing. g. An a1ar a1ard d o! attor attorne neys ys !ees !ees is not not predi prediat ated ed on a grant grant o! exemplary damages. Kiven the irumstanes o! this ase, it is regret!ul that the the Labo Laborr Arbi Arbite terr and and the the 3L8 3L8C !ail !ailed ed to a1ar a1ard d mora morall and and exem exempl plar ary y damages prayed !or by the respondent. )ut beause respondent did not appeal the denial, the Court may no longer modi!y the ruling in this regard. 8espon esponde dent nt is entitl entitled ed to reeive eeive her aru arued ed salary salary dier dierent entia ial, l, merit merit inreases and produtivity bonuses sine *++$.

8espo espond nden entt raise aises s the the side side issu issue e pert pertai aini ning ng to peti petiti tion oner ers s alle allege ged d 1ith 1ithho hold ldin ing g o! her ar arue ued d sala salary ry die dierrenti ential al,, merit erit inr inrea ease ses s and and 5& produtivity bonuses sine *++$. #he laims that during the pendeny o! this this ase ase,, peti petiti tion oner er ee eete ted d sala salary ry ad;u ad;ust stme ment nts, s, meri meritt inr inrea ease ses s and and produtivity produtivity bonuses to other employees. employees. As proo!, proo!, she s he submitted the 3otie 5% o! Personnel Ation/#alary Ad;ustment o! Arsenio 8odrigo 3eyra, the !ormer Cost Aountant 1hih position she no1 oupies, and pertinent portions o! the Colletiv Colletive e )argain )argaining ing Agreeme Agreement. nt. 0+#h #he e no1 no1 see2 see2s s paym paymen entt o! thes these e amounts. 3otab 3otably, ly, petit petition ioner er does does not not re!ut re!ute e its gran grantt o! salary salary inr inreas eases, es, merit merit inreases and produtivity bonuses to other employees. >n its attempt to rebu ranisos laim, petitioner merely argues that the same should no longer be entertained beause it 1as never raised be!ore the proeedings belo1.0$ >nterestingly, it never ategorially denied that suh salary inreases, merit inreases and produtivity bonuses have indeed been given to the other employees. At this ;unture, it must be stressed that Jtehnial rules o! proedure are not binding in labor ases. The appliation o! tehnial rules o! proedure may be relaxed to serve the demands o! substantial ;ustie.J 0* J>t is more in 2eeping 1ith the ob;etive o! rendering rendering substantial ;ustie i! 1e brush aside tehnial rules rather than stritly apply its literal reading. There QbeingR no ob;etive reason to !urther delay this ase by insisting on a tehniality 1hen the ontroversy ould no1 be resolved.J 0@ (oreover, Jthere is no need to remand this ase to the Labor Arbiter !or !urther proeedings, as the !ats are lear and omplete on the basis o! 1hih a deision an be made.J 05 )ased on the !oregoing, 1e fnd no reason to deprive herein respondent o! the arued salary dierential, merit inreases and produtivity bonuses due her sine *++$. I"<8<8<, the Petition is D<3>8( A>8(
@. Iithin the same period, to pay the respondent attorneyFs !ees in the amount o! P0+,+++.++. # 8D<8
9.)

NORIS VS GNILO

ACT#: (elvin 8. Knilo 4respondent7 1as initially hired by 3or2is Trading Co., >n. 4petitioner 3or2is7 as 3or2is >nstallment Colletor 43>C7 in April $%&&. (anuel Kaspar <. Albos, -r. 4petitioner Albos7 is the #enior Hie/President o! petitioner 3or2is. 8espondent held various positions in the ompany until he 1as appointed as Credit and Colletion (anager o! (agna inanial #ervies Kroup, >n./Legaspi )ranh, petitioner 3or2iss sister ompany, in harge o! the areas o! Albay and Catanduanes 1ith travel and transportation allo1anes and a servie ar. A speial audit team 1as onduted in respondentFs oEe in Legaspi, Albay !rom (arh $@ to April 0, *+++ 1hen it 1as !ound out that respondent !or1arded the monthly olletion reports o! the 3>Cs under his supervision 1ithout he2ing the veraity o! the same. >t appeared that the monthly olletion highlights !or the months o! April to #eptember $%%% submitted by respondent to the top management 1ere all overstated partiularly the aount handled by 3>C Dennis Cadag, 1ho made it appear that the olletion eEieny 1as higher than it atually 1as and that the top management 1as misled into believing that respondents area o! responsibility obtained a !avorable olletion eEieny. 8espondent 1as then harged by petitionersF >nquiry Assistane Panel 4Panel7 1ith negligene o! basi duties and responsibilities resulting in loss o! trust and onfdene and laxity in direting and supervising his o1n subordinates. During the investigation, re%on&ent "&-itte& that he 1as negligent !or !ailing to regularly he2 the report o! eah 3>C under his supervision that he only he2ed at random the 3>CFs monthly olletion highlight reports and that as a leader, he is responsible !or the ations o! his subordinates. "e ho1ever &enie& being lax in supervising his subordinates, as he imposed disipline on them i! the need arose.

Petitioner 3or2is through its "uman 8esoure (anager issued a memorandum@ plaing respondent under 1J &"0 ,%enion *it+o,t %"0, tr"4e# "n& tr"n%ort"tion "##o*"ne3 eeti4e ,%on reei%t

t+ereo. Another memorandum5 dated -une @+, *+++ 1as issued to respondent requiring him to report on -uly 0, *+++ to the head oEe o! petitioner 3or2is in (andaluyong City !or a re/training or a possible ne1 assignment 1ithout pre;udie to his request !or a reonsideration or an appeal o! his suspension. "e 1as then assigned to the (ar2eting Division diretly reporting to petitioner Albos. 8espondent requested petitioner Albos that he be assigned as #ales
LAOR ARITER: Dismissed the ase !or la2 o! merit. The LA !ound that the position o! Credit and Colletion (anager held by respondent involved a high degree o! responsibility requiring trust and onfdene that his !ailure to observe the required proedure in the preparation o! reports, 1hih resulted in the overstated olletion reports ontinuously !or more than six months, 1as suEient to breah the trust and onfdene o! petitioners and 1as a valid ground !or termination that instead o! terminating him, petitioners merely imposed a $0/day suspension 1hih 1as not illegal and that petitioners exerised their inherent prerogative as an employer 1hen they appointed respondent as a (ar2eting Assistant.

NLRC: 8eversed the deision o! the LA. The 3L8C !ound that the $0/day suspension annot be onsidered harsh and unonsionable as petitioners validly exerised their management prerogative to impose disipline on an erring employee !or negligene by submitting unreliable and inaurate reports !or six onseutive months to the top management 1ho used the reports in their planning and deision/ ma2ing ativities, and thus aused damage or in;ury one 1ay or another to petitioners. >t ho1ever held that the trans!er o! respondent !rom the position o! Credit and Colletion (anager to (ar2eting Assistant resulted in his

demotion in ran2 !rom (anager to a mere ran2 and fle employee, 1hih 1as tantamount to onstrutive dismissal and there!ore illegal. 3L8C ruled that respondent 1as onstrutively dismissed.

COURT OF APPEALS: CA rendered its assailed Deision denying the petition and aErming the 3L8C 8esolutions.

Petitioner onten&: that !atual fndings o! quasi/;udiial agenies, 1hile generally aorded fnality, may be revie1ed by this Court 1hen the fndings o! the 3L8C and the LA are ontraditory that in the exerise o! its equity ;urisdition, this Court may loo2 into the reords o! the ase to re/examine the questioned fndings.

Petitioner #"i-: that they 1ere merely exerising their inherent prerogative as an employer 1hen they appointed respondent as (ar2eting Assistant to the #enior Hie/President !or (ar2eting that respondentFs per!ormane evaluations during the previous years sho1ed that he 1as 1ea2 in the fnanial aspet o! operation, but 1as good in mar2eting thus, he 1ould !untion 1ith utmost eEieny and maximum beneft to the ompany in the (ar2eting Department and that he had aepted his appointment unonditionally. Petitioners submit that the positions o! Credit and Colletion (anager and (ar2eting Assistant are o/equal and o! the same level o! authority that the sope o! 1or2 o! a (ar2eting Assistant is 1ider, sine he has aess to onfdential in!ormation and has the hane to ommuniate diretly 1ith higher oEers o! the ompany that his area o! responsibility as Credit and Colletion (anager 1as limited to branhes loated in Legaspi City and Hira, Catanduanes 1hereas as (ar2eting Assistant, he is responsible !or analyBing and oordinating all mar2eting in!ormation relevant to the ompanyFs motoryles !rom all over LuBon, and his reports are neessary !or the planning and deision/ma2ing ativities o! petitionersF top management and that there is no demotion, sine respondentFs position is more enompassing and vital to the ompany and he is reeiving the same salary.

ISSUE: Ihether or not petitioners ation o! trans!erring respondent is a valid exerise o! management prerogatives.

'ELD:

YES . Iell/settled is the rule that it is the prerogative o! the employer to trans!er and reassign employees or 4"#i& re"on "n& "or&in$ to t+e re,ire-ent o it =,ine.$@ An o1ner o! a business enterprise is given onsiderable lee1ay in managing his business. ur la1 reogniBes ertain rights, olletively alled management prerogative as inherent in the management o! business enterprises. (e +"4e onitent#0 reo$ni>e&

"n& ,%+e#& t+e %rero$"ti4e o -"n"$e-ent to tr"ner "n e-%#o0ee ro- one oe to "not+er *it+in t+e =,ine et"=#i+-ent3 %ro4i&e& t+"t t+ere i no &e-otion in r"n/ or &i-in,tion o +i "#"r03 =ene?t "n& ot+er %ri4i#e$e18 "n& t+e "tion i not -oti4"te& =0 &iri-in"tion3 -"&e in ="& "it+3 or eete& " " or- o %,ni+-ent or &e-otion *it+o,t ,ient ",e.1J T+i %ri4i#e$e i in+erent in t+e ri$+t o e-%#o0er to ontro# "n& -"n"$e t+eir enter%rie eeti4e#0. The right o! employees to seurity o! tenure does not give them vested rights to their positions to the extent o! depriving management o! its prerogative to hange their assignments or to trans!er them. (anagerial prerogatives, ho1ever, are ,=2et to #i-it"tion %ro4i&e& =0 #"*3

o##eti4e ="r$"inin$ "$ree-ent3 "n& $ener"# %rini%#e o "ir %#"0 "n& 2,tie.1 The employer bears the burden o! sho1ing that the trans!er is not unreasonable, inonvenient or pre;udiial to the employee and does not involve a demotion in ran2 or a diminution o! his salaries, privileges and other benefts.$&#hould the employer !ail to overome this burden o! proo!, the employees trans!er shall be tantamount to onstrutive dismissal.$% >n this ase, 1hile the trans!er o! respondent !rom Credit and Colletion (anager to (ar2eting Assistant did not result in the redution o! his salary, there 1as a redution in his duties and responsibilities 1hih amounted to a demotion tantamount to a onstrutive dismissal as orretly held by the 3L8C and the CA. Ihile petitioners have the prerogative to trans!er respondent to another position, suh trans!er should be done 1ithout diminution o! ran2 and benefts 1hih has been sho1n to be present in respondentFs ase. "e ould have been trans!erred to a ;ob o! managerial position and not to that o! a (ar2eting Assistant. (oreover, petitioners !ailed to substantiate their laim that respondent 1as 1ea2 in the fnanial aspet o! operation, but he 1as

good in mar2eting, as the per!ormane evaluation report relied upon by petitioners 1ould not suEe.

. COCACOLA OTTLERS P'ILS INC. V. ANGEL U. DEL VILLAR FACTS: •

•

The Company, one o! the leading and largest manu!aturers o! beverages in the ountry, initially hired respondent Del Hillar on (ay $, $%%+ as Physial Distribution leet (anager, aside !rom the use o! a ompany ar, gasoline allo1ane, and annual !oreign travel, among other benefts. >n $%%*, as part o! the reorganiBation o! the Company, the respondent beame the Transportation #ervies (anager, under the )usiness Logisti Diretorate, headed by Diretor . #an -uan 4#an -uan7. The respondent is responsible !or the preparation o! the budget !or the vehiles o! the Company nation1ide.

•

•

•

n -anuary 5, $%%', the respondent submitted a 8eport dated to the Company President, detailing an alleged !raudulent sheme underta2en by ertain Company oEials in onspiray 1ith loal tru2 manu!aturers, overpriing the tru2s purhased by the Company by as muh as P+,+++.++ eah. The respondent also impliated #an -uan and Pineda, among other Company oEials, as part o! the onspiray. Pineda then served as the n $%%', the Company embar2ed on a reorganiBation o! the )usiness Logisti Diretorate. As a result, the respondent beame the #ta Assistant o! Pineda, 1ho 1as then appointed as the Corporate Purhasing and (aterials Control (anager. n -uly &, $%%', the respondent reeived a (emorandum Q0R !rom #an -uan in!orming the !ormer that 4$7 he 1as designated as #ta Assistant to the Corporate Purhasing and (aterials Control (anager 4*7 1ith the respondents ne1 assignment, he eased to be entitled to the benefts under existing ompany rules and poliies and 4@7 he 1as to

turn over the vehile assigned to him as Transportation #ervies (anager to Pineda by -uly $+, $%%'. •

•

•

•

Although the respondent ontinued to reeive the same salary as Transportation #ervies (anager, but his ar and other privileges 1ere 1ithdra1n and he spent his time at his ne1 post sitting at a des2 1ith no meaning!ul 1or2 1hatsoever. Q'R Del Hillar believed that he 1as demoted by the Company to !ore him to resign Mnable to endure any !urther the harassment, Del Hillar fled 1ith the Arbitration )ranh o! the 3L8C on 3ovember $$, $%%' a omplaint against the Company !or illegal demotion and !or!eiture o! ompany privileges. The Company fled a motion to dismiss !or no ause o! ation and reasoned that in appointing Del Hillar as the #ta Assistant o! the Corporate Purhasing and (aterials Control (anager, !rom his !ormer position as Transportation #ervies (anager, the Company 1as merely exerising its inherent management prerogative to trans!er an employee !rom one position to another. The Company also ontended that the respondent had no vested right to the privileges he previously en;oyed as Transportation #ervies (anager. LA: >n !avor o! the respondent /

The Labor Arbiter held that the allegations in respondents omplaint suEiently presented a ause o! ation against the Company

/

The Company, in fling a (otion to Dismiss, hypothetially admitted the truth o! the !ats alleged in the omplaint, and the !ailure o! the Company to deny or rebut Del Hillars allegations o! bad !aith on the part o! the Company, gave rise to the presumption against the latter

/

The issue as to 1hether or not the petitioner ated illegally in demoting the respondent is, there!ore, ans1ered in the aErmative.

/

The reorganiBation o! the ompany appears to have been done a!ter the respondent had fled his omplaint to the

ompany President detailing the sam involving the purhase o! the tru2 Neet o! $%%'. /

The respondent 1as not outrightly dismissed instead, he 1as removed !rom his !ormer position as Transportation #ervies (anager, and demoted to #ta Assistant to the Corporate Purhasing and (aterials Control (anager. urthermore, as #ta Assistant although he reeives his usual salary but his ar privileges, gasoline allo1anes, and !oreign travel 1ere 1ithdra1n and he no1 sits at a des2 1ith no meaning!ul 1or2 1hatsoever

/

The respondent appears to have been singled out or disriminated upon due to his having reported the $%%' tru2 sam, and his present isolation an be seen as a punishment !or ating in a righteous and !orthright manner. ther1ise, as a #ta Assistant should have been given some meaning!ul or responsible 1or2 appurtenant to the ;ob designation.

/

The onept o! management %rero$"ti4e i #i-ite& or other1ise qualifed. Proedurally and substantively, the petitioner through its named oEers appears to have ated illegally and in bad !aith in its purported reorganiBation, in demoting and removing the ompany privileges o! the respondent

/

>n the matter o! the unla1!ul 1ithdra1al o! respondents ar, gasoline allo1ane and !oreign travel by petitioner, it is obligated to reti!y the 1ithdra1al o! privileges by returning to !ormer the said Toyota ar, and i! that is not possible, its value as o! the time said ar 1as 1ithdra1n inluding the value o! the gasoline allo1ane and !oreign travel due him.

/

The LA order to: 4$7 reinstatement o! the respondent to his !ormer ;ob 4*7 to return the ar to the respondent or to ompensate him !or the loss o! his privileges suh as the value o! the Toyota ar as o! the time o! ta2ing inluding the value o! the gasoline allo1ane and the !oreign travel due to him 4@7 indemni!y the respondent !or moral damages o! P$,+++,+++.++ Pesos and exemplary damages o! P$,+++,+++.++ Pesos, aside !rom attorneys !ees o! $+Y

/

Ihile the ase 1as still pending appeal be!ore the 3L8C, Del Hillar reeived a letter dated April *&, $%%& stating that the respondent 1ill be separated !rom the ompany eetive on (ay @$, $%%& due to the ne1 reorganiBation program 1hih 1ill result his position to be redundant !rom the ompany.

3L8C: >n !avor o! the petitioner and #
The petitioner ated in good !aith. There is no dislosure o! sam and the alleged demotion o! the respondent.

/ The logial onsequene o! suh dislosure o! the alleged sam is !or the president o! the ompany to dismiss the erring employees and oEers !or their highly irregular ats and not to penaliBe the petitioner !or ma2ing suh dislosure. / There is no demotion o! the petitioner. There is no diminution o! his salary, and 1hile his transportation expenses 1as removed, it is beause the a ompany annot, ho1ever, be reasonably expeted to provide the same benefts to an employee 1hose position !or example, requires that he stays in the oEe during 1or2ing hours, li2e the petitioner 1ho 1as hired as #ta Assistant in this ase. Ihile it appears that his transportation benefts 1ere 1ithheld, it does not !ollo1 that his position as #ta Assistant is in!erior to that o! a Transportation #ervies (anager /

)enefts, privileges and perquisites that attah to a ertain position do not provide suEient bases !or determining the superiority or in!eriority o! the position so held.

CA: >n !avor o! the respondent and reinstated the LA /

Conededly, employers and their managers have all the lee1ay to ma2e the neessary ad;ustments in their organiBations. )ut the prerogative is not absolute. >t must be aompanied by good !aith.

/

The reorganiBation theory poised by petitioner 1as a mere a!terthought. >! indeed the respondent 1as removed due to a valid reorganiBation, oEials o! the Company ould have easily told him in the several memos they issued to the respondent.
-uan, in a memo dated April *%, $%%', merely in!ormed him the name o! his replaement as Transportation #ervies (anager /

! all the memos the respondent reeived !rom the petitioner, it did not attributed the reorganiBation as the reason o! his reassignment as #ta Assistant.

ISSUE: •

Ihether or not the petitioner, in trans!erring the respondent !rom the position o! Transportation #ervies (anager to #ta Assistant to the Corporate Purhasing and (aterials Control (anager, validly exerised its management prerogative

RULING: 3. The managerial prerogative to trans!er personnel must be exerised 1ithout grave abuse o! disretion, bearing in mind the basi elements o! ;ustie and !air play. Thus, it annot be used as a subter!uge by the employer to rid himsel! o! an undesirable 1or2er. >n partiular, the employer must be able to sho1 that the trans!er is not unreasonable, inonvenient or pre;udiial to the employee. #hould the employer !ail to overome this burden o! proo!, the employees trans!er shall be tantamount to onstrutive dismissal, 1hih has been defned as a quitting beause ontinued employment is rendered impossible, unreasonable or unli2ely Li2e1ise, onstrutive dismissal exists 1hen an at o! lear disrimination, insensibility or disdain by an employer has beome so unbearable to the employee leaving him 1ith no option but to !orego 1ith his ontinued employment. •

>n the ase at bar, there is no dispute that the respondent 1as trans!erred by the Company !rom the position o! Transportation #ervies (anager to the position o! #ta Assistant. The burden thus !alls upon the Company to prove that respondents trans!er 1as not tantamount to onstrutive dismissal. A!ter a are!ul srutiny o! the reords, 1e agree 1ith the Labor Arbiter and the Court o! Appeals that the Company !ailed to disharge this burden o! proo!. The Company and its oEials attempt to ;usti!y the trans!er o! Del Hillar by alleging his unsatis!atory per!ormane as Transportation #ervies (anager, but le!t unsatis!atory. The Company and its oEials

attempt to ;usti!y the trans!er o! Del Hillar by alleging unsatis!atory per!ormane as Transportation #ervies (anager

his

!emotion involves a situation 1here an employee is relegated to a subordinate or less important position onstituting a redution to a lo1er grade or ran2, 1ith a orresponding derease in duties and responsibilities, and usually aompanied by a derease in salary. 8espondents position as Transportation #ervies (anager involved a high degree o! responsibility, he being in harge o! preparing the budget !or all o! the vehiles o! the Company nation1ide. As #ta Assistant o! the Corporate Purhasing and (aterials Control (anager, Del Hillar ontended that he 1as not assigned any meaning!ul 1or2 at all. The t1o posts are not o! the same 1eight in terms o! duties and responsibilities. •

Although it 1as not bad enough that respondent 1as demoted to a

•

#ta Assistant beause his salary 1as not deduted, but he 1as even plaed by the Company under the ontrol and supervision o! Pineda, the person 1hom the respondent verily aused in de!rauding the ompany. >t is not too diEult to imagine that the 1or2ing relations bet1een Del Hillar, the auser, and Pineda, the aused, had been strained and hostile. The situation 1ould be more oppressive !or Del Hillar beause o! his subordinate position "is##"is Pineda.
•

8edundany is one o! the authoriBed auses !or the dismissal o! an employee. >t is governed by Artile *&@ o! the Labor Code. 8edundany, !or purposes o! the Labor Code, exists 1here the servies o! an employee are in exess o! 1hat is reasonably demanded by the atual requirements o! the enterprise. #uintly put, a position is redundant 1here it is superNuous, and superNuity o! a position or positions may be the outome o! a number o! !ators, suh as overhiring o! 1or2ers, dereased volume o! business, or dropping o! a partiular produt line

or servie ativity previously manu!atured or underta2en by the enterprise. •

The determination that the employeeFs servies are no longer neessary or sustainable and, there!ore, properly terminable !or being redundant is an exerise o! business ;udgment o! the employer. The 1isdom or soundness o! this ;udgment is not sub;et to disretionary revie1 o! the Labor Arbiter and the 3L8C, pro!ided there is no violation o! la1 and no sho1ing that it 1as prompted by an arbitrary or maliious at. >n other 1ords, it is not enough !or a ompany to merely delare that it has beome overmanned. >t must produe adequate proo! o! suh redundany to ;usti!y the dismissal o! the aeted employees.

•

•

•

•

>n this ase, other than its o1n bare and sel!/serving allegation that respondents position as #ta Assistant o! Corporate Purhasing and (aterials Control (anager had already beome redundant, no other evidene 1as presented by the Company 3either did the Company present proo! that it had omplied 1ith the proedural requirement in Artile *&@ o! prior notie to the Department o! Labor and
LAOR LA( CONCEPTS: (anagement Prerogative: -urisprudene reogniBes the exerise o! management prerogative. or this reason, ourts o!ten deline to inter!ere in legitimate business deisions o! employers. >n !at, labor la1s disourage inter!erene in employers ;udgment onerning the ondut o! their business. (anagement has the prerogative to trans!er or assign employees !rom one oEe or area o! operation to another ro"ided there is no demotion in ran2 or diminution o! salary, benefts, and other privileges and the ation is not motivated by disrimination, made in bad !aith, or eeted as a !orm o! punishment or demotion 1ithout suEient ause. The right o! employees to seurity o! tenure does not give them vested rights to their positions to the extent o! depriving management o! its prerogative to hange their assignments or to trans!er them. (anagerial prerogatives, ho1ever, are sub;et to limitations provided by la1, olletive bargaining agreements, and general priniples o! !air play and ;ustie

SUMMARY: An$e# U. De# Vi##"r3 the petitioner, 1ho 1as hired by the respondent as

"

Transportation #ervies (anager and 1as demoted to a #ta Assistant under Corporate Purhasing and (aterials Control (anager a!ter he reported the !raud that transpired in the ompany. The petitioner ontended that it 1as due to the reorganiBation and management prerogative. The Court held that the managements prerogative to assign the respondent as a #ta Assistant is not ;ust beause the latters assignment 1as motivated by disrimination, made in bad !aith, or eeted as a !orm o! punishment or demotion 1ithout suEient ause.

1;.)

ISIG MANGGAGA(A VS. NLRC

FACTS: •

Tryo Pharma Corporation 4Tryo7, the private respondent, is a manu!aturer o! veterinary mediines in Calooan City and the petitioners are are its regular employees, oupying the positions o!

helper, shipment helper and !atory 1or2ers, respetively, assigned to the Prodution Department. Petitioners are members o! (anggaga1a sa Tryo 4)(T7, the exlusive bargaining representative o! the ran2/ and/fle employees. •

Tryo and the petitioners signed separate (A, providing !or a ompressed 1or21ee2 shedule to be implemented in the ompany. The (A 1as entered into pursuant to Department o! Labor and
Fri&"03 +"## =e oni&ere& " t+e re$,#"r *or/in$ +o,r3 "n& no o4erti-e %"0 +"## =e &,e "n& %"0"=#e to t+e e-%#o0ee !or 1or2 rendered during those hours. •

The (A speifally stated that the employee *"i4e t+e ri$+t to

#"i- o4erti-e %"0 or *or/ ren&ere& "ter J:;; %.-. ,nti# :15 %.-. ro- Mon&"0 to Fri&"0 onsidering that the ompressed 1or21ee2 shedule is adopted in lieu o! the regular 1or21ee2 shedule 1hih also onsists o! 5' hours. •

>n -anuary $%%, )(T and Tryo negotiated !or the rene1al o! their olletive bargaining agreement 4C)A7 but !ailed to arrive at a ne1 agreement. (eantime, Tryo reeived the Letter dated (arh *', $%% !rom the )ureau o! Animal >ndustry o! the Department o! Agriulture reminding it that its prodution should be onduted in #an 8a!ael, )ulaan, as Liensed to operate 1as designated there and not in Calooan City

•

•

)(T opposed the trans!er o! its members to #an 8a!ael, )ulaan, ontending that it onstitutes un!air labor pratie. >n protest, )(T delared a stri2e on (ay *', $%%. Thus, petitioners fled their separate omplaints Q&R !or illegal dismissal, underpayment o! 1ages, nonpayment o! overtime pay and servie inentive leave, and re!usal to bargain against Tryo Petitioners alleged that the ompany ated in bad !aith during the C)A negotiations beause it sent representatives 1ithout authority to bind the ompany, and this 1as the reason 1hy the negotiations !ailed.

They added that the management trans!erred some !rom Calooan to #an 8a!ael, )ulaan to paralyBe the union. •

•

1or2ers

The respondent averred that the petitioners 1ere not dismissed but they re!used to omply 1ith the managements diretive !or them to report to the ompanys plant in #an 8a!ael, )ulaan. 8espondents !urther averred that, long be!ore the start o! the negotiations, the ompany had already been planning to deongest the Calooan oEe to omply 1ith the government poliy to shi!t the onentration o! manu!aturing ativities !rom the metropolis to the ountryside.

LA: >n !avor o! respondent •

•

•

The Labor Arbiter held that the trans!er o! the petitioners 1ould not paralyBe or render the union ineetive !or the !ollo1ing reasons: 4$7 omplainants are not members o! the negotiating panel and 4*7 the trans!er 1as made pursuant to the diretive o! the Department o! Agriulture The Labor Arbiter also denied the money laims, ratioinating that the nonpayment o! 1ages 1as ;ustifed beause the petitioners did not render 1or2 !rom (ay *' to @$, $%% overtime pay is not due beause o! the ompressed 1or21ee2 agreement bet1een the union and management and servie inentive leave pay annot be laimed by the omplainants beause they are already en;oying vaation leave 1ith pay !or at least fve days. As !or the laim o! nonompliane 1ith Iage rder 3o. 5, the Labor Arbiter held that the issue should be le!t to the grievane mahinery or voluntary arbitrator.

3L8C: aErmed the LA CA: aErmed LA and 3L8C: /

The trans!er order 1as a management prerogative not amounting to a onstrutive dismissal or an un!air labor pratie.

/

The en!oreability o! the (A, partiularly the 1aiver o! overtime pay in light o! this Courts rulings upholding a 1aiver o! benefts in exhange o! other valuable privileges.

ISSUE: •

Ihether or not the trans!er order to the petitoners to )ulaan 1as a proper management prerogative

RULING: •

•

•

=es. >n this ase, the Labor Arbiter, the 3L8C, and the CA uni!ormly agreed that the petitioners 1ere not onstrutively dismissed and that the trans!er orders did not amount to an un!air labor pratie. urthermore, Tryos deision to trans!er its prodution ativities to #an 8a!ael, )ulaan, regardless o! 1hether it 1as made pursuant to the letter o! the )ureau o! Animal >ndustry, 1as 1ithin the sope o! its inherent right to ontrol and manage its enterprise eetively. (anagements prerogative o! trans!erring and reassigning employees !rom one area o! operation to another in order to meet the requirements o! the business is, there!ore, generally not onstitutive o! onstrutive dismissal.Q*+R Thus, the onsequent trans!er o! Tryos personnel, assigned to the Prodution Department 1as 1ell 1ithin the sope o! its management prerogative.

•

•

Ihen the trans!er is not unreasonable, or inonvenient, or pre;udiial to the employee, and it does not involve a demotion in ran2 or diminution o! salaries, benefts, and other privileges, the employee may not omplain that it amounts to a onstrutive dismissal. Q*$R The employer must sho1 that the trans!er is not unreasonable, inonvenient, or pre;udiial to the employee nor does it involve a demotion in ran2 or a diminution o! his salaries, privileges and other benefts >n the instant ase, the trans!er orders do not entail a demotion in ran2 or diminution o! salaries, benefts and other privileges o! the petitioners. Petitioners, there!ore, anhor their ob;etion solely on the ground that it 1ould ause them great inonveniene sine they are all

residents o! (etro (anila and they 1ould inur additional expenses to travel daily !rom (anila to )ulaan. •

The Court has previously delared that mere inidental inonveniene is not suEient to 1arrant a laim o! onstrutive dismissal. Q*@R b;etion to a trans!er that is grounded solely upon the personal inonveniene or hardship that 1ill be aused to the employee by reason o! the trans!er is not a valid reason to disobey an order o! trans!er. Ie annot see ho1 the mere trans!er o! its members an paralyBe the union. The union 1as not deprived o! the membership o! the petitioners 1hose 1or2 assignments 1ere only trans!erred to another loation.

•

(ore importantly, there 1as no sho1ing or any indiation that the trans!er orders 1ere motivated by an intention to inter!ere 1ith the petitioners right to organiBe. ith the e*cetion of +rtic%e ,-(f) of the /a0or 'ode of the hi%iines2 the prohibited ats are related to the 1or2ers ri$+t to e#or$"ni>"tion and to the observane o! a C)A. Iithout that element, the ats, no matter ho1 un!air, are not un!air labor praties.

•

3otably, the (A omplied 1ith the !ollo1ing onditions set by the DL<, under D.. 3o. *$, to protet the interest o! the employees in the implementation o! a ompressed 1or21ee2 sheme

•

Considering that the (A learly states that the employee 1aives the payment o! overtime pay in exhange o! a fve/day 1or21ee2, there is no room !or interpretation and its terms should be implemented as they are 1ritten.

LAOR LA( CONCEPTS: This prerogative extends to the managements right to regulate, aording to its o1n disretion and ;udgment, all aspets o! employment, inluding the !reedom to trans!er and reassign employees aording to the requirements o! its business.

Q$%R

(anagements prerogative o! trans!erring and reassigning employees !rom one area o! operation to another in order to meet the requirements o! the business is, there!ore, generally not onstitutive o! onstrutive dismissal

SUMMARY: The petitioner is a labor union regular employees o! the respondent 1ho ontests that the !ailure to ondut another C)A 1ith the respondent 1as due to the deongestion o! the employees !rom Calooan to 8iBal. The petitioner fled !or illegal dismissal. The Court held that the trans!er order 1as a management prerogative in order to meet the requirements o! business.

11.)

PROTACIO V. LAYA MANANG'AYA

FACTS: GP(K Laya (ananghaya W Co. is a general pro!essional partnership duly organiBed under the la1s o! the Philippines. Petitioner Zayber Protaio 1as hired as T" M"n"$er on April $, $%%'. "e 1as promoted as Senior T" M"n"$er and then as a T" Prini%"# on tober $, $%%. n August @+, $%%%, petitioner tendered his rei$n"tion. n Deember $,$%%% petitioner sent a letter to respondent frm demanding the immediate payment o! his 4$7 $@ th month pay 4*7 ash ommutation o! his leave redits and 4@7 his $%%% Certifate o! >nome Tax Iithheld on Compensation. "e even sent demand letters. n Deember $0,$%%%, petitioner fled be!ore the 3L8C a omplaint !or the non/issuane o! petitioners I/* tax !orm !or $%%% and the non/ payment o! the !ollo1ing benefts: $7 ash equivalent o! petitioners leave redits in the amount o! P00,5'.'+ 4*7 proportionate $@th month pay !or the year $%%% 4@7 reimbursement laims in the amount o! P$%,+$*.++ and 457 lump sum pay !or the fsal year $%%% in the amount o! P'5,0'.+. Petitioner also sought moral and exemplary damages and attorneys !ees.

PROTACIO Ihen he 1as promoted as Tax Prinipal in tober $%%, his ompensation pa2age had

PMG LAYA MANANG'AYA •

Denied it had intentionally delayed the proessing o! petitioners laims but alleged

onsisted o! a monthly gross ompensation o! P'+,+++, a $@th month pay and lump sum payment !or the year $%% in the amount o! P*5+,+++ that 1as paid to him on ebruary &,$%%&.

)eginning tober $, his ompensation pa2age 1as revised as !ollo1s: 4a7 monthly gross ompensation o! P%0,+++.++, inlusive o! nontaxable allo1ane 4b7 $@th month pay and 47 a lump sum amount in addition to the aggregate monthly gross ompensation. n $* April $%%%, petitioner reeived the lump sum amount o! P0@,+++.++ !or the fsal year ending $%%&

•

that the abrupt departure o! petitioner and three other members o! the frms Tax Division had reated problems in the determination o! petitioners various aountabilities, 1hih ould be fnished only by going over voluminous douments. n three oasions sent he2 payments to petitioner in the !ollo1ing amounts: 4$7 P$,*0+.++, representing petitioners $@th month pay 4*7 P05,&*5.$&, as payments !or the ash equivalent o! petitioners leave redits and reimbursement laims and 4@7 P$+,'*.0, !or the re!und o! petitioners taxes 1ithheld on his vaation leave redits. Petitioners opies o! his 1ithholding tax ertifates 1ere sent to him along 1ith the he2 payments. Petitioner a2no1ledged the reeipt o! the $@th month pay but disputed the omputation o! the ash value o! his vaation leave redits and reimbursement laims

LA AIA8D
)A#># the granted on the ground that the respondent frms re!usal to grant the same 1as not so muh beause the laim 1as baseless but beause petitioner had !aoiled to fle the reimbursement !orms the de!et 1as ured 1hen petitioner fled

P*&,5+ representing underpayment o! the equivalent o! the unused redits o! omplainant

the ash leave

P0@,+++ representing omplainants $%%% year/end lump sum payment

several demand letters and the ase petitioner 1as not !ully paid o! the ash equivalent based on the omputation on a basi pay o! P'$,+++. "e 1as P%0,+++ inlusive o! the other benefts that 1ere deemed inluded and integrated in the basi salary and that respondent frm had omputed the $@ th month pay on the same base. ompany poliy o! granting yearly lump sum payments to petitioner during all the years o! servie and that the respondent frm had !ailed to give petitioner the same beneft !or the year $%%% 1ithout any explanation

$+Yo! the total ;udgement a1ards 1ay o! attorneys !ees

NLRC: Ar-e& LA *it+ o-e -o&i?"tion P*,@+$ as 8<>()M8#<(<3T CLA>(# !or la2 o! basis.

CA: Re&,e& t+e tot"# -one0 "*"r& P*,@+$ as 8<>()M8#<(<3T CLA>(# P%,&+*.&@ as M3D<8PA=(<3T  T"< CA#" <9M>HAL<3T  P8>HAT< 8<#P3D<3T# M3M#T# P$+,+++ as ATT83<=# <<#

ISSUE: (+et+er t+e &e#etion o t+e 0e"r en& #,-% ,- i re"on"=#e SUPREME COURT: Ue& t+e ="e ?$,re PJ3;;;  The reord reveals that the use o! the P$,*0+ is 1ithout basis and that the proper base fgure to be used is the monthly ompensation o! Protaio 4P%0,+++7 1hih onsists the basi salary o! P'$,+++, advane inentive pay o! P$0,+++, transportation allo1ane o! P$0,+++ and representation allo1ane o! P5,+++.

De#ete& t+e "*"r& o t+e 0e"r en& #,-% ,-  The Court !ully agrees that the lump sum a1ard o! P0@,+++ 1as baseless. Although the petitioner reeived year/end lump sum !or the frst t1o years, the distribution thereo! is disretionary.

Ihile the amount 1as dra1n !rom the annual net inome o! the frm, the distribution thereo! to non/partners or employees o! the frm 1as not, stritly spea2ing, a proft/sharing arrangement bet1een petitioner and respondent frm ontrary to the Court o! Appeals fnding. 3he ayment thereof to non#artners of the 4rm %ie herein etitioner was discretionary on the art of the chairman and managing artner coming from their authority to 4* the comensation of any em%oyee 0ased on a share in the artnershi5s net income. The distribution being merely disretionary, the year/end lump sum payment may properly be onsidered as a 0e"ren& =on, or inenti4e. Contrary to petitioners laim, the granting o! the year/end lump sum amount 1as preisely dependent on the frms net inome hene, the same 1as payable only a!ter the frms annual net inome and ash position 1ere determined.

)y defnition, a J onus6 is a gratuity or act of %i0era%ity of the gi"er . >t is something given in addition to 1hat is ordinarily reeived by or stritly due the reipient. A bonus is granted and paid to an employee !or his industry and loyalty 1hih ontributed to the suess o! the employers business and made possible the realiBation o! profts. Kenerally, a bonus is not a demandable and en!oreable obligation. >t is so only 1hen it is made part o! the 1age or salary or ompensation. Ihen onsidered as part o! the ompensation and there!ore demandable and en!oreable, the amount is usually fxed. >! the amount 1ould be a ontingent one dependent upon the realiBation o! the profts, the bonus is also not demandable and en!oreable. >n the instant ase, petitioners laim that the year/end lump sum represented the balane o! his total ompensation pa2age is inorret. The !at remains that the amounts paid to petitioner on the t1o oasions varied and 1ere al1ays dependent upon the frms fnanial position.

(oreover, in hi%iine !u%icators2 &nc. ". N/7' ,the Court held that i! the bonus is paid only i! profts are realiBed or a ertain amount o! produtivity ahieved, it annot be onsidered part o! 1ages. >! the desired goal o! prodution is not obtained, o! the amount o! atual 1or2 aomplished, the bonus does not arue. nly 1hen the employer promises and agrees to give 1ithout any onditions imposed !or its payment, suh as suess o! business or greater prodution or output, does the bonus beome part o! the 1age. The granting o! a bonus is basially a management prerogative 1hih annot be !ored upon the employer 1ho may not be obliged to assume the onerous burden o! granting bonuses or other benefts aside !rom the employees basi salaries or 1ages. 8espondents had onsistently maintained !rom the start that petitioner 1as not entitled to the bonus as a matter o! right. The payment o! the year/end lump sum bonus based upon the frms produtivity or the individual per!ormane o! its employees 1as 1ell 1ithin respondent frms prerogative. Thus, respondent frm 1as also ;ustifed in delining to give the bonus to petitioner on aount o! the latters unsatis!atory per!ormane.

SUMMARY OF T'E VALUES: Prot" PMG io $@th pay

month [

Cash 00,5' equivalent .' o! leave redits 4*@.07

8eimbursem ent laims =ear/end

$%,+$ *.+ '5,

P$,*0+ 4based on P%0G rate7 05,&*5.$ & 4o! 16 P5',++%. ' ash equiv. o! leave redits7 $+,'*.0  4re!und7 X

LA

NLR C

CA

SC

[

[

[

[

%,&+*.&@ \ 4$,*0+6 @+ day/ divisorx* @.0/ 5',++%.' 7 AErmed 3L8C X

@%,&00.& \ 4%0G6*' days x *@.0 \ &0,&'0.5&/ 5',++%.'7

*&,5+.+ AEr & med \4%0G6@ LA +days x *@.0/ 5',++%.' 7 $*,'&$ 0@,+++

*,@+ $ AEr

AErmed CA AErmed CA

lump sum

0'.

/

/

$+Y total a1ard

med LA o! /

$+G

AErmed CA

15.) PAL 4 NLRC G.R. No. 9J9J A,$,t 173 17 Petitioner: Philippine Airlines, >n. 4PAL7 8espondents: 3ational Labor 8elations Commission, Labor Arbiter >sabel P. rtiguerra And Philippine Airlines
FACTS: •

Petition: Petition !or revie1 on ertiorari

•

(arh $0, $%&0 o

Philippine Airlines, >n. 4PAL7 ompletely revised its $%'' Code o! Disipline. The Code 1as irulated among the employees and 1as immediately implemented, and some employees 1ere !orth1ith sub;eted to the disiplinary measures embodied therein.

Re%on&ent! Contention •

August *+, $%%0: Philippine Airlines
•

•

•

PALt prayed that implementation o! the Code be held in abeyane that PAL should disuss the substane o! the Code 1ith PAL
Petitioner! Contention •

•

PAL fled a motion to dismiss the omplaint, asserting its prerogative as an employer to presribe rules and regulations regarding employeesF ondut in arrying out their duties and !untions, and alleging that by implementing the Code, it had not violated the olletive bargaining agreement 4C)A7 or any provision o! the Labor Code. Assailing the omplaint as unsupported by evidene, PAL maintained that Artile *0@ o! the Labor Code ited by PAL
Re%on&ent! Poition P"%er H and > o! Chapter >> o! the Code as de!etive !or, respetively, running ounter to the onstrution o! penal la1s and ma2ing punishable any oense 1ithin PALFs ontemplation. These provisions are the !ollo1ing: #e. *. Non#e*c%usi"ity . O This Code does not ontain the entirety o! the rules and regulations o! the ompany. E4er0

e-%#o0ee i =o,n& to o-%#0 *it+ "## "%%#i"=#e r,#e3

re$,#"tion3 %o#iie3 %roe&,re "n& t"n&"r&3 in#,&in$ t"n&"r& o ,"#it03 %ro&,ti4it0 "n& =e+"4ior3 " i,e& "n& %ro-,#$"te& =0 t+e o-%"n0 t+ro,$+ it &,#0 ",t+ori>e& oi"#. Any violations thereo! shall be punishable 1ith a penalty to be determined by the gravity and6or !requeny o! the oense. #e. . 'umu%ati"e 7ecord . O An employeeFs reord o! oenses shall be umulative. The penalty !or an oense shall be determined on the basis o! his past reord o! oenses o! any nature or the absene thereo!. The more habitual an oender has been, the greater shall be the penalty !or the latest oense. Thus, an employee may be dismissed i! the number o! his past oenses 1arrants suh penalty in the ;udgment o! management even i! eah oense onsidered separately may not 1arrant dismissal. "abitual oenders or reidivists have no plae in PAL. n the other hand, due regard shall be given to the length o! time bet1een ommission o! individual oenses to determine 1hether the employeeFs ondut may indiate oasional lapses 41hih may nevertheless require sterner disiplinary ation7 or a pattern o! inorrigibility.

L"=or Ar=iter! R,#in$
The LA !ound #etion * o! the Code a!orequoted as Jan all embraing and all/enompassing provision that ma2es punishable any oense one an thin2 o! in the ompanyJ 1hile #etion , li2e1ise quoted above, is Job;etionable !or it violates the rule against double ;eopardy thereby ushering in t1o or more punishment !or the same misdemeanor.J •

•

The LA also !ound that PAL J!ailed to prove that the ne1 Code 1as amply irulatedU / PALFs assertion that it had !urnished all its employees opies o! the Code is unsupported by doumentary evidene, she stated that suh !ailure on the part o! PAL resulted in the imposition o! penalties on employees 1ho thought all the 1hile that the $%'' Code 1as still being !ollo1ed. The LA onluded that Jt+e %+r"e i$nor"ne o t+e #"* e,e

no one ro- o-%#i"ne . . . ?n& "%%#i"tion on#0 "ter it +" =een on#,i4e#0 +o*n t+"t t+e #"* *" ir,#"te& to "## t+e %"rtie onerne& "n& eort to &ie-in"te inor-"tion re$"r&in$ t+e ne* #"* +"4e =een eerte&.U NLRC! RULING "n& Co--iioner M"$#"0"3 A,$,t 13 199 Deiion) The 3L8C !ound no evidene o! un!air labor pratie ommitted by PAL and aErmed the dismissal o! PALndeed, !ailure o! management to disuss the provisions o! a ontemplated ode o! disipline 1hih shall govern the ondut o! its employees 1ould result in the erosion and deterioration o! an other1ise harmonious and smooth relationship bet1een them as did happen in the instant ase. T+ere i no &i%,te t+"t

"&o%tion o r,#e o on&,t or &ii%#ine i " %rero$"ti4e o -"n"$e-ent "n& i i-%er"ti4e "n& eenti"# i "n in&,tr03 +" to ,r4i4e in " o-%etiti4e *or#&. )ut labor limate has progressed, too. >n the Philippine sene, at no time in our ontemporary history is the need !or a ooperative, supportive and smooth relationship bet1een labor and management more 2eenly !elt i! 1e are to survive eonomially.

M"n"$e-ent "n no #on$er e#,&e #"=or in t+e

&e#i=er"tion "n& "&o%tion o r,#e "n& re$,#"tion t+"t *i## "et t+e-. The omplainant union in this ase has the right to !eel isolated in the adoption o! the 3e1 Code o! Disipline. T+e Co&e o

Dii%#ine in4o#4e e,rit0 o ten,re "n& #o o e-%#o0-ent  " %ro%ert0 ri$+t >t is time that management realiBes that to attain eetiveness in its ondut rules, there should be andidness and openness by (anagement and partiipation by the union, representing its members. >n !at, our Constitution has reogniBed the priniple o! Jshared responsibilityJ bet1een employers and 1or2ers and has li2e1ise reogniBed the right o! 1or2ers to partiipate in Jpoliy and deision/ma2ing proess aeting their rights . . .J The latter provision 1as interpreted by the Constitutional Commissioners to mean partiipation in JmanagementJF

In " ene3 %"rtii%"tion =0 t+e ,nion in t+e "&o%tion o t+e o&e o on&,t o,#& +"4e "e#er"te& "n& en+"ne& t+eir ee#in$ o =e#on$in$ "n& *o,#& +"4e re,#te& in oo%er"tion r"t+er t+"n reit"ne to t+e Co&e. In "t3 #"=or-"n"$e-ent oo%er"tion i no* t+e t+in$.

ISSUE: Ihether or not management may be ompelled to share 1ith the union or its employees its prerogative o! !ormulating a ode o! disipline.

'ELD: YES. PAL asserts that 1hen it revised its Code on (arh $0, $%&0, there 1as no la1 1hih mandated the sharing o! responsibility there!or bet1een employer and employee.

>ndeed, it 1as only on (arh *, $%&%, 1ith the approval o! 8epubli At 3o. '$0, amending Artile *$$ o! the Labor Code, that the la1 expliitly onsidered it a #tate poliy Jto ensure the partiipation o! 1or2ers in deision and poliy/ma2ing proesses aeting the rights, duties and 1el!are.J "o1ever, even in the absene o! said lear provision o! la1, the exerise o! management prerogatives 1as never onsidered boundless. Thus, in 'ruz "s. Medina2 it 1as held that managementFs prerogatives must be 1ithout abuse o! disretion. >n San Migue% 8rewery Sa%es 9orce :nion "s. ;%e , the Court upheld the ompanyFs right to implement a ne1 system o! distributing its produts, but gave the !ollo1ing aveat: #o long as a ompanyFs management prerogatives are exerised in good !aith !or the advanement o! the employerFs interest and not !or the purpose o! de!eating or irumventing the rights o! the employees under speial la1s or under valid agreements, this Court 1ill uphold them. All this points to the onlusion that the exerise o! managerial prerogatives is not unlimited. >t is irumsribed by limitations !ound in la1, a olletive bargaining agreement, or the general priniples o! !air play and ;ustie. (oreover, as enuniated in +00ott /a0oratories "s. N/7'2 it must be duly established that the prerogative being invo2ed is learly a managerial one. A lose srutiny o! the ob;etionable provisions o! the Code reveals that they are not purely business/oriented nor do they onern the management aspet o! the business o! the ompany as in the San Migue% ase. The provisions o! the Code learly have reperussions on the employeeFs right to seurity o! tenure. The implementation o! the provisions may result in the deprivation o! an employeeFs means o! livelihood 1hih, as orretly pointed out by the 3L8C, is a property right. >n vie1 o! these aspets o! the ase 1hih border on in!ringement o! onstitutional rights, the Court must uphold the onstitutional requirements !or the protetion o! labor and the promotion o! soial ;ustie, !or these !ators, aording to -ustie >sagani CruB, tilt Jthe sales o! ;ustie 1hen there is doubt, in !avor o! the 1or2er.U Herily, a line must be dra1n bet1een management prerogatives regarding business operations er se and those 1hih aet the rights o! the

employees. >n treating the latter, management should see to it that its employees are at least properly in!ormed o! its deisions or modes ation. PAL asserts that all its employees have been !urnished opies o! the Code. Publi respondents !ound to the ontrary, 1hih fnding, to say the least is entitled to great respet. PAL posits the vie1 that by signing the $%&%/$%%$ olletive bargaining agreement, on -une *, $%%+, PAL
ri$+t to -"/e "n& enore o-%"n0 r,#e "n& re$,#"tion to "rr0 o,t t+e ,ntion o -"n"$e-ent %it&out +"4in$ to &i, t+e "-e *it+ PALEA "n& -,+ #e3 o=t"in t+e #"tter@ confor'ity t&eretoJ PetitionerFs vie1 is based on the !ollo1ing provision o! the agreement:

The Assoiation reogniBes the right o! the Company to determine matters o! management it poliy and Company operations and to diret its manpo1er. (anagement o! the Company inludes the right to organiBe, plan, diret and ontrol operations, to hire, assign employees to 1or2, trans!er employees !rom one department, to another, to promote, demote, disipline, suspend or disharge employees !or ;ust ause to lay/o employees !or valid and legal auses, to introdue ne1 or improved methods or !ailities or to hange existing methods or !ailities and the right to ma2e and en!ore Company rules and regulations to arry out the !untions o! management.

T+e eerie =0 -"n"$e-ent o it %rero$"ti4e +"## =e &one in " 2,t re"on"=#e3 +,-"ne "n&or #"*,# -"nner. The provision in the olletive bargaining agreement may not be interpreted as ession o! employeesF rights to partiipate in the deliberation o! matters 1hih may aet their rights and the !ormulation o! poliies relative thereto. And one suh mater is the !ormulation o! a ode o! disipline. >ndeed, industrial peae annot be ahieved i! the employees are denied their ;ust partiipation in the disussion o! matters aeting their rights. Thus, even be!ore Artile *$$ o! the labor Code 4P.D. 55*7 1as amended by 8epubli At 3o. '$0, it 1as already delared a poliy o! the #tate, J4d7 To promote the enlightenment o! 1or2ers onerning their rights

and obligations . . . as employees.J This 1as, o! ourse, amplifed by 8epubli At 3o '$0 1hen it dereed the Jpartiipation o! 1or2ers in deision and poliy ma2ing proesses aeting their rights, duties and 1el!are.J PALFs position that it annot be saddled 1ith the JobligationJ o! sharing management prerogatives as during the !ormulation o! the Code, 8epubli At 3o. '$0 had not yet been enated, annot thus be sustained. Ihile suh JobligationJ 1as not yet !ounded in la1 1hen the Code 1as !ormulated, the attainment o! a harmonious labor/management relationship and the then already existing state poliy o! enlightening 1or2ers onerning their rights as employees demand no less than the observane o! transpareny in managerial moves aeting employeesF rights. PetitionerFs assertion that it needed the implementation o! a ne1 Code o! Disipline onsidering the nature o! its business annot be overemphasiBed. >n !at, its being a loal monopoly in the business demands the most stringent o! measures to attain sa!e travel !or its patrons. 3onetheless, 1hatever disiplinary measures are adopted annot be properly implemented in the absene o! !ull ooperation o! the employees. #uh ooperation annot be attained i! the employees are restive on aount, o! being le!t out in the determination o! ardinal and !undamental matters aeting their employment.

RULING: The %etition i DISMISSED and the ,etione& &eiion
17.) SIME DARY PILIPINAS3 INC. , !s. NATIONAL LAOR RELATIONS COMMISSION <5ND DIVISION) "n& SIME DARY SALARIED EMPLOYEES ASSOCIATION
#ime Darby Pilipinas, >n., petitioner, is engaged in the manu!ature o! automotive tires, tubes and other rubber produts.

#ime Darby #alaried
(acts •

•

Prior to the present ontroversy, all ompany !atory 1or2ers in (ari2ina inluding members o! private respondent union 1or2ed !rom :50 a.m. to @:50 p.m. 1ith a @+ minute paid on all lunh brea2. n $5 August $%%* petitioner issued a memorandum to all !atory/ based employees advising all its monthly salaried employees in its (ari2ina Tire Plant, exept those in the Iarehouse and 9uality Assurane Department 1or2ing on shi!ts, a hange in 1or2 shedule eetive $5 #eptember $%%* thus T: ALL ACT8=/)A#
•

#ine private respondent !elt aeted adversely by the hange in the 1or2 shedule and disontinuane o! the @+/minute paid on all lunh brea2, it fled on behal! o! its members a omplaint 1ith the Labor Arbiter !or un!air labor pratie, disrimination and evasion o! liability

L"=or Ar=iter! Deiion

•

•

•

the Labor Arbiter &i-ie& the omplaint the hange in the 1or2 shedule and the elimination o! the @+/ minute paid lunh brea2 o! the !atory 1or2ers onstituted a 4"#i& eerie o -"n"$e-ent %rero$"ti4e and that the ne1 1or2 shedule, brea2 time and one/hour lunh brea2 did not have the eet o! diminishing the benefts granted to !atory 1or2ers as the 1or2ing time did not exeed eight 4&7 hours. The !atory 1or2ers 1ould =e 2,t#0 enri+e& i! they ontinued to be paid during their lunh brea2 even i! they 1ere no longer on all or required to 1or2 during the brea2.

NLRC! R,#in$ •

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•

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3ational Labor 8elations Commission 43L8C7 1hih sustained the Labor Arbiter and dismissed the appeal Mpon motion !or reonsideration by private respondent, the 3L8C, this time 1ith t1o 4*7 ne1 ommissioners replaing those 1ho earlier retired, REVERSED its earlier deision o! *+ April $%%5 as 1ell as the deision o! the Labor Arbiter. The 3L8C onsidered the deision o! the #upreme Court in t+e Si'e Dary "e o 1; " t+e #"* o t+e "e1herein petitioner 1as ordered to pay the money value o! these overed employees deprived o! lunh and6or 1or2ing time brea2s. The 3L8C delared that the ne1 1or2 shedule &e%ri4e& the employees o! the benefts o! time/honored ompany pratie o!

providing its employees a @+/minute paid lunh brea2 resulting in an un;ust diminution o! ompany privileges prohibited by Art. $++ o! the Labor Code, as amended.

T+e Oe o t+e So#iitor Gener"# •

The $5 August $%%* memorandum 1hih ontained the ne1 1or2 shedule 1as not &iri-in"tor0 o! the union members nor &i& it ontit,te ,n"ir #"=or %r"tie on the part o! petitioner.

T+e S,%re-e Co,rt! Deiion •

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•

•

•

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The Court agrees 1ith petitioner. The right to fx the 1or2 shedules o! the employees ret %rini%"##0 on t+eir e-%#o0er. The reason !or the ad;ustment is !or the eEient ondut o! its business operations and its improved prodution. >t rationaliBes that 1hile the old 1or2 shedule inluded a @+/minute paid lunh brea2, the employees ould be alled upon to do ;obs during that period as they 1ere on all.
o-%#ie *it+ t+e &"i#0 *or/ %erio& o ei$+t <9) +o,r *it+o,t

4io#"tin$ t+e L"=or Co&e3 t+e ne* +e&,#e "%%#ie to "## e-%#o0ee in t+e "tor0 i-i#"r#0 it,"te& *+et+er t+e0 "re ,nion -e-=er or not. •

The earlier Sime !ar0y case is not appliable. The present ase does not pertain to any ontroversy involving disrimination o! employees but only the issue o! *+et+er t+e +"n$e o *or/ +e&,#e3 *+i+

-"n"$e-ent &ee- nee"r0 ontit,te ,n"ir #"=or %r"tie. •

•

to

inre"e

%ro&,tion3

The hange eeted by management 1ith regard to 1or2ing time is made to apply to all !atory employees engaged in the same line o! 1or2 1hether or not they are members o! private respondent union. "ene, it annot be said that the ne1 sheme adopted by management pre;udies the right o! private respondent to sel!/ organiBation.

E4er0 =,ine enter%rie en&e"4or to inre"e it %ro?t. In t+e %roe3 it -"0 &e4ie -e"n to "tt"in t+"t $o"# .
•

-"n"$e-ent is !ree to regulate, aording to its o1n disretion and ;udgment, all aspets o! employment, inluding hiring, 1or2 assignments, 1or2ing methods, time, plae and manner o! 1or2, proesses to be !ollo1ed, supervision o! 1or2ers, 1or2ing regulations, trans!er o! employees, 1or2 supervision, lay o o! 1or2ers and disipline, dismissal and reall o! 1or2ers.

•

M"n"$e-ent retains the prerogative, 1henever exigenies o! the servie so require, to hange the 1or2ing hours o! its employees. #o long as suh prerogative is eerie& in $oo& "it+ !or the advanement o! the employers interest and not !or the purpose o! de!eating or irumventing the rights o! the employees under speial la1s or under valid agreements.

•

Ihile the Constitution is ommitted to the poliy o! soial ;ustie and the protetion o! the 1or2ing lass, it should not be supposed that every dispute 1ill be automatially deided in !avor o!

labor. (anagement also has right 1hih, as suh, are entitled to respet and en!orement in the interest o! simple !air play.

18.) DUSIT 'OTEL 4. NU('RAIN G.R. No. 1;71. A,$,t 3 5;;J MANAGEMENT PREROGATIVE

FACTS: The P+i#i%%ine 'ote#ier3 In. n -anuary $%%0, the "otel deided to tri- &o*n the number o! its employees !rom the original ount o! &*+ to 0+.5 The "otel, through an >nter/Ee (emorandum signed by the general manager o! Dusit, =oshi2aBu (asuda, oered a S%ei"# E"r#0 Retire-ent Pro$r"- t 1as stated therein that the program 1as intended to Jprovide employees fnanial benefts prior to prolonged renovation period and, at the same time, to enable management to streamline the organiBation by eliminating redundant positions and having a more eEient and produtive manpo1er omplement.J 0 The respondent 3ational Mnion o! Ior2ers in "otel, 8estaurant and Allied >ndustries, "otel 3i22o (anila Karden Chapter 43MI"8A>37, sought Ja ommitment !rom the management that the employees terminated due to redundany 1ill not be replaed by ne1 employees nor 1ill their positions be given to subontrators, agenies or asual employees.J Consequently, a total o! *5@ employees, inluding Agonillo, $'$ o! 1hom 1ere Mnion oEers and members, 1ere separated !rom the "otels employment. As a result, the membership o! the Mnion 1as substantially redued. n April $, $%%', the "otel 1rote the DL<, in!orming that the "otel terminated the employment o! *5@ employees due to re&,n&"n0. n the

same day, Agonillo 1as summoned by "otel Comptroller, 1ho gave her a letter o! even date in!orming the latter o! her J e%"r"tion ro- er4ie

&,e to re&,n&"n0 eeti4e #oe o oe +o,r o A%ri# 7;3 1. Agonillo 1as advised to ;ust avail o! the "otelFs #<8P, as embodied in the inter/oEe memorandum o! (asuda. "o1ever Agonillo said that she 1ould not avail o! the #<8P benefts. )y then, she had deided to fle a omplaint !or illegal dismissal against the "otel. (ean1hile, the "otel temporarily #oe& o%er"tion beause o! the renovation thereo!. Ihen ne1s spread among the hotel employees that Agonillo 1ould ontest her termination be!ore the 3L8C, she 1as summoned by Personnel (anager Letiia Delarmente to a on!erene. The t1o met on (ay *$, $%%' in the presene o! (i##0 Di>on, 1ho later beame the Diretor !or Personnel and Training o! the "otel. At the said meeting, Delarmente and DiBon repeatedly as2ed Agonillo to give ba2 the original opy o! the April $, $%%' termination letter. Agonillo told them that the letter 1as already in the possession o! her ounsel. Agonillo 1as relieved 1hen she 1as given another letter o! even date stating that, by reason o! her non/availment o! the #<8P, she 1as still onsidered an employee but on temporary lay/o due to the ongoing renovation o! the "otel % and that she 1ill ;ust be advised aordingly o! her 1or2 shedule 1hen the "otel reopens.$+ )ut her relie! 1as shortlived. Delarmente and DiBon oered to reinstate Agonillo but not to her !ormer position as #enior ront Ee Cashier. Agonillo ob;eted but in!ormed them that she ould aept the position o! 8eservation Cler2. $$ "o1ever, no response 1as reeived. (ean1hile, the "otel hired six 4'7 ront Ee Cashiers on tober $, $%%'. n tober *$, $%%', Agonillo reeived a telegram !rom the "uman 8esoures Department o! the "otel direting her to report to DiBon as soon as possible.$@ #he 1as told by DiBon that the "otel 1as 1illing to reinstate her but as an utlet Cashier. DiBon explained that the "otel had already hired ne1 employees !or the positions o! 8eservation Cler2s. Agonillo, ho1ever, pointed out that she 1as already an utlet Cashier #upervisor be!ore her promotion as #enior ront Ee Cashier and that i! she aepted the position, it 1ould be an ,n2,ti?e& &e-otion on her part. DiBon, ho1ever, explained that the management 1anted Jne1 graduatesJ as J!ront liners,J i.e., ne1 graduates 1ho 1ould oupy the !ront des2s and other $*

setions exposed to guests. n the other hand, Agonillo reiterated that she ould aept the lo1er position o! 8eservation Cler2, but DiBon re;eted the suggestion. DiBon ountered that Agonillo ould be reinstated as a 8oom #ervie Cashier J ara naatago.J A!ter Agonillos meeting 1ith DiBon on tober **, $%%', the latter 2ept on promising to fnd a suitable position !or her. >n those meetings, DiBon al1ays oered reinstatement to positions that do not require guest exposure li2e Linen Dispather at the hotel basement or #eretary o! 8ooms2eeping. Ihen Agonillo re!used, DiBon ;ust instruted her to return. Agonillo had no speif position or assigned tas2 to per!orm. The L"=or Ar=iter rendered ;udgment &i-iin$ t+e o-%#"int !or un!air labor pratie and onstrutive dismissal. n (arh $+, *+++, the Mnion and the "otel exeuted a Me-or"n&,- o A$ree-ent 4(A7 in 1hih the "otel agreed to pay P$0,+++.++ to eah member o! the Mnion by 1ay o! amiable settlement o! 3C()/3C8/3#/$$/5*0/%' in addition to the redundany pay earlier paid to them and that they shall fle 1ith the DL< a motion praying !or the !ollo1ing: a. Dismissal o! the ase 1ith pre;udie in regard to: 4i7 illegal redundany as to those 1ho have reeived the settlement pay above and signed the #peial Po1er o! Attorney and 8elease, Iaiver and 9uitlaim 4ii7 all MLP harges and b. Dismissal o! the ase 1ithout pre;udie as to those 1ho have not yet reeived the settlement pay. *5 "o1ever, the (A 1as not submitted to the 3L8C !or its approval. 3either did Agonillo reeive any monetary benefts based on the (A.

t+e NLRC r,#e& t+"t A$oni##o *" i##e$"##0 appeal, &i-ie&. The CA ren&ere& 2,&$-ent &i-iin$ t+e %etition. "ene, this appeal. n

ISSUES:

$. Ihether or not Agonillo 1as illegally dismissed. *. Ihether or not the redundany program implemented by the hotel is valid. @. Ihether or not the respondents trans!er !rom the position o! #enior ront Ee Cashier to the position o! outlet ashier 1as a valid exerise o! -"n"$e-ent %rero$"ti4e. 5. Ihether or not the respondents are bound by the ompromise agreement bet1een the union and the hotel.

'ELD: T+e %etition i ,n-eritorio,. $. =es, Agonillo 1as illegally dismissed. >t is plain as day that the petitioners terminated the employment o! respondent Agonillo eetive April @+, $%%', as evidened by their letter. The letter o! the petitioners terminating the employment o! Agonillo on the ground o! redundany 1as re;eted by the rder o! the #L< in 3C()/3C8/ 3#/$$/5*0/%' 1here he ruled that the petitioners redundany program 1as but a ploy, a ontrivane unningly sripted by them to subvert the Mnion and unla1!ully dismiss many o! its employees. The #L< delared that, by their ats, the petitioners 1ere guilty o! un!air labor pratie.

5. No3 the redundany program implemented by the hotel is not valid. Re&,n&"n0 exists 1hen the servie apability o! the 1or2!ore is in exess o! 1hat is reasonably needed to meet the demands o! the business enterprise. A re"on"=#0 re&,n&"nt %oition is one rendered superNuous by any number o! !ators, suh as overhiring o! 1or2ers, dereased volume o! business, dropping o! a partiular produt line previously manu!atured by the ompany or phasing out o! servie ativity priorly underta2en by the business. Among the re,iite o " 4"#i& re&,n&"n0 %ro$r"- are: <1) the good !aith o! the employer in abolishing the redundant position and 4*7 !air and reasonable riteria in asertaining 1hat positions are to be delared redundant and aordingly abolished. @@ As !ound by the #L<, the 3L8C and

the CA, t+e %oition o re%on&ent A$oni##o *" not "=o#i+e& or &e#"re& re&,n&"nt. >n !at, the petitioners hired an entirely ne1 set o! employees to per!orm the tas2s o! respondent Agonillo.

*. 3o, the trans!er o! respondent to the position o! utlet Cashier 1as not a valid exerise o! management prerogative.

(e "$ree *it+ t+e ontention o t+e %etitioner t+"t it i t+e %rero$"ti4e o -"n"$e-ent to trans!er an employee !rom one oEe to another 1ithin the business establishment based on its assessment and pereption o! the employees qualifation, aptitude and ompetene, and in order to asertain 1here he an !untion 1ith the maximum beneft to the ompany. 'o*e4er3 t+i Co,rt e-%+"i>e& t+"t: )ut, li2e other rights, there are limits thereto. The managerial prerogative to trans!er personnel must be exerised 1ithout grave abuse o! disretion, bearing in mind the basi elements o! ;ustie and !air play. "aving the right should not be on!used 1ith the manner in 1hih that right is exerised. Thus, it annot be used as a subter!uge by the employer to rid himsel! o! an undesirable 1or2er. >n partiular, the employer must be able to sho1 that the trans!er is not unreasonable, inonvenient or pre;udiial to the employee nor does it involve a demotion in ran2 or a diminution o! his salaries, privileges and other benefts. #hould the employer !ail to overome this burden o! proo!, the employees trans!er shall be tantamount to onstrutive dismissal, 1hih has been defned as a quitting beause ontinued employment is rendered impossible, unreasonable or unli2ely as an oer involving a demotion in ran2 and diminution in pay. @0 There is ontr,ti4e &i-i"# 1hen there is a demotion in ran2 and6or diminution in pay or 1hen a lear disrimination, insensibility or disdain by an employer beomes unbearable to the employee. @' >n the present ase, the petitioners realled the termination o! respondent Agonillo 1hen they learned that she 1as going to fle a omplaint against them 1ith the 3L8C !or illegal dismissal. "o1ever, instead o! reinstating her to her !ormer position, she 1as oered the position o! Linen Dispather in the hotel basement or #eretary o! the 8ooms2eeping #etion, positions muh lo1er than that o! a #upervisor o! utlet Cashiers 1hih the respondent held be!ore she 1as promoted as #enior ront Ee

Cashier. Iith the said positions, the respondent 1ould not ertainly be reeiving the same salary and other benefts as #enior ront Ee Cashier.

(e "$ree *it+ t+e r,#in$ o t+e NLRC t+"t t+e oer =0 t+e %etitioner to tr"ner re%on&ent A$oni##o to ot+er %oition *ere -"&e in ="& "it+3 " %#o0 to t"4e o " ,it or i##e$"# &i-i"#. >n !at, respondent Agonillo had not been trans!erred to another position at all. n this ase, ho1ever, the supposed trans!er 1as made only a!ter omplainant had been earlier terminated. Complainants statement in her aEdavit that she 1as summoned by the hotel a!ter ne1s o! her plan to ontest her dismissal irulated remains unre!uted. urthermore, the hotel has not explained 1hy there 1as no oEial memorandum issued to omplainant !ormally in!orming her o! her Jtrans!erJ. All these lead to only one onlusion ? that t+e "##e$e&

tr"ner *" not -"&e in $oo& "it+ " " 4"#i& eerie o -"n"$e-ent %rero$"ti4e but 1as intended as a settlement oer to omplainant to prevent her !rom fling a ase. @&

@. 3o, As private respondents did not authoriBe the union to represent them in the ompromise settlement, t+e0 "re not =o,n& =0 t+e ter- t+ereo . There is no denying the right o! the Mnion and the petitioners under Artile ** o! the Labor Code to enter into and exeute a ompromise agreement 1ith the assistane o! the DL< and that suh agreement is binding not only on the Mnion generally but on its individual members. 5+ The Union ee,te& t+e MOA in =e+"# o t+e -e-=er o t+e ="r$"inin$ ,nit. There is no sho1ing that Agonillo is a member o! that unit. The (A applies only to the members o! the bargaining unit 1ho agreed to the termination o! their employment based on redundany and reeived redundany pay. Agonillo did not reeive any redundany pay or any monetary benefts under the (A or exeuted any deed or 1aiver or release in !avor o! the petitioners.

T+e MOA ee,te& =0 t+e %etitioner "n& t+e Union ett#e& on#0 t+e "e o t+e %"rtie =eore t+e SOLE or ,n"ir #"=or %r"tie "n& or i##e$"# re&,n&"n0. >t did not settle the ase bet1een the petitioners and Agonillo be!ore the 3L8C. Ie have onsistently ruled that Ja ompromise is governed by the basi priniple that the obligations arising there!rom have the !ore o! la1 bet1een the parties.J Consequently, private respondents may pursue their individual laims against petitioners be!ore the Labor Arbiter.

T+e 2,&$-ent o t+e L"=or Ar=iter ="e& on t+e o-%ro-ie "$ree-ent in ,etion &oe not +"4e t+e eet o res )udicata ,%on %ri4"te re%on&ent *+o &i& not "$ree t+ereto. JA ompromise, one approved by fnal orders o! the ourt has the !ore o! res
IN LIG'T OF ALL T'E FOREGOING , the petition is D<3>
*".# Mendo+a !. Rural Ban of -ucan

ats: )oard o! Diretors o! 8espondent )an2 issued a )oard 8esolution to implement a reshu]e in 5 employees 1ithout hanges in salary, allo1anes, and other benefts reeived. Therea!ter, (endoBa expressed his opinion on the reshu]e and laimed that the position is deemed to be a demotion 1ithout any legal basis. The )oard replied and laimed that it is a tool in providing the ban2 a sound internal ontrol system or he2 and balane. The management merely shi!ted duties o! employees and their position may be retained i! requested !ormally. A!ter1ards, petitioner applied !or a leave o! absene !rom 1or2 initially !or $+ days. "e applied again !or an additional o! *+ days. During suh leave, he flled a omplaint !or illegal dismissal against the ban2.

LA: 8espondent is guilty o! illegal dismissal. 3L8C: 8eversed the ruling o! LA. The )oard ated in good !aith and the resolution 1as not aimed solely at the petitioner but !or all the other employee o! the ban2. "o1 and by 1hat manner a business onern onduts its aairs is not !or this Commission to inter!ere 1ith, espeially so i! there is no sho1ing, as in the ase at bar, that the reshu]e 1as motivated by bad !aith or ill/1ill. CA: AErmed the ruling o! 3L8C. The alleged harassment is only a fgment o! his imagination as there is no evidene and suh laims o! the petitioner is merely sel!/serving statements. "e 1as not demoted as there 1as no diminution o! benefts and ran2. "e ould even retain his position title. The reshu]ing o! its employees 1as done in good !aith and annot be made the basis o! a fnding o! onstrutive dismissal. (endoBa separated himsel! !rom the ban2 1hen he flled a omplaint 1hile on leave. >ssue: I63 the ageny is ;ustifed in using its management prerogative in reshu]ing its employees. #C: =es. -urisprudene reogniBes the exerise o! management prerogatives. >n the pursuit o! its legitimate business interest, management has the prerogative to trans!er or assign employees !rom one oEe or area o! operation to anotherOprovided there is no demotion in ran2 or diminution o! salary, benefts, and other privileges and the ation is not motivated by disrimination, made in bad !aith, or eeted as a !orm o! punishment or demotion 1ithout suEient ause. This privilege is inherent in the right o! employers to ontrol and manage their enterprise eetively. The right o! employees to seurity o! tenure does not give them vested rights to their positions to the extent o! depriving management o! its prerogative to hange their assignments or to trans!er them. (anagerial prerogatives, ho1ever, are sub;et to limitations provided by la1, olletive bargaining agreements, and general priniples o! !air play and ;ustie. The employer must be able to sho1 that the trans!er is not unreasonable, inonvenient or pre;udiial to the employee nor does it involve a demotion in ran2 or a diminution o! his salaries, privileges and other benefts. >n the ase at bar, theres no onstrutive dismissal beause the respondent ban2 proved through substantial evidene that it 1as in pursuit o! their poliy to !amiliarise the employees 1ith various phases o! ban2

operations. Additionally, Petitioner 1as not singled/out: other employees 1ere also reassigned 1ithout their express onsent. 3either 1as there any demotion and diminution based on the )oard 8esolution.

1.) GENERAL MILLING CORPORATION3 Petitioner, vs.

VIOLETA L. VIA6AR3 8espondent. ACT#: •

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K(C is a domesti orporation 1ith prinipal oEe in (a2ati City and a manu!aturing plant in Lapu/Lapu City. K(C terminated the servies o! thirteen employees !or redundany, inluding herein respondent, Hioleta Hia;ar. K(C alleged that it has been gradually do1nsiBing its Hismin 4Hisayas/(indanao7 Hia;ar fled a Complaint !or >llegal Dismissal 1ith damages against K(C, its "uman 8esoure Department 4"8D7 (anager, -ohnny T. Almoera, and Purhasing (anager, -oel Paulino be!ore the 8egional Arbitration )ranh 48A)7 3o. H>>, 3L8C, Cebu City. Hia;ar alleged that she 1as employed by K(C on August ', $%% as >nvoiing Cler2. Through the years, the respondent held various positions in the ompany until she beame Purhasing #ta. Hia;ar reeived a Letter/(emorandum dated tober *, *++@ !rom K(C, through Almoera, in!orming her that her servies 1ere no longer needed, eetive 3ovember @+, *++@ beause her position as Purhasing #ta at the Purhasing Kroup, Cebu perations 1as deemed redundant. Ihen Hia;ar reported !or 1or2 on tober @$, *++@, almost a month be!ore the eetivity o! her severane !rom the ompany, the guard on duty barred her !rom entering K(Cs premises. #he 1as also denied aess to her oEe omputer and 1as restrited !rom punhing her daily time reord in the bundy lo2. n 3ovember , *++@, Hia;ar 1as invited to the "8D Cebu Ee 1here she 1as as2ed to sign ertain douments, 1hih turned out to be an JA%%#i"tion or Retire-ent "n& ene?t .J The respondent re!used to sign and sought larifation beause she did not apply !or retirement and instead asserted that her servies 1ere terminated !or alleged redundany. Almoera told her that her signature on the Appliation !or 8etirement and )enefts 1as needed to proess her separation pay. K(C reasoned out that it 1as !ored to terminate the servies o! the respondent beause o! the eonomi setba2s the ompany 1as suering 1hih aeted the ompanys proftability, and the ontinuing rise o! its operating and interest expenditures. 8edundany 1as part o!

the petitioners onrete and atual ost redution measures. K(C also presented the required J
L"=or Ar=iter >#(>##
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The LA !ound that the respondent 1as properly notifed on tober @+, *++@ through a Letter/(emorandum dated tober *, *++@, signed by K(Cs "8D (anager Almoera, that her position as Purhasing #ta had been delared redundant. >t also !ound that the petitioner submitted to the DL< on tober *&, *++@ the J>, Cebu City so as to ompel the petitioner to prove that Hia;ars position 1as indeed redundant. >t ruled that the petitioner omplied 1ith the requirements under Artile *&@ o! the Labor Code, onsidering that the nation 1as then experiening an eonomi do1nturn and that K(C must adopt measures !or its survival.

AFFIRMED. 8espondent Keneral (illing Corporation is hereby 3L8C: ordered to pay omplainants separation pay in the amount o! P5'$,5'5.@. •

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The 3L8C, ho1ever, stated that it did not agree 1ith the LA that Hia;ar should be !aulted !or !ailing to question the petitioners delaration o! redundany be!ore the DL< 8egional Ee, 8egion H>>, Cebu City. >t 1as not imperative !or Hia;ar to hallenge the validity o! her termination due to redundany. 3ot1ithstanding, the 3L8C aErmed the fndings o! the LA that Hia;ars dismissal 1as legal onsidering that K(C omplied 1ith the requirements provided !or under Artile *&@ o! the Labor Code and existing ;urisprudene, partiularly iting Asian Alohol Corporation v. 3L8C.

T'E NLRC STATED T'AT T'E C'ARACTERIATION OF POSITIONS AS REDUNDANT IS AN EXERCISE OF T'E

EMPLOYER!S USINESS 6UDGMENT AND PREROGATIVE . >t also ruled that the petitioner did not exerise this prerogative in bad !aith and that the payment o! separation pay in the amount o! P5'$,5'5.@ 1as in ompliane 1ith Artile *&@ o! the Labor Code.*+ CA: 83K the dismissal >LL
ISSUE: I"TT#C83 >3 >T# D#>3  #3  -A3MA8= @+, *++& A# T"< #A(< A8< C3T8A8= T T"< D<3C< 3 8
'ELD: The petition is denied. The petitioner argues that the !atual fndings o! the 3L8C, aErming that o! the LA must be aorded respet and fnality as it is supported by evidene on reord. )oth the LA and the 3L8C !ound the petitioners evidene suEient to terminate the employment o! respondent on the ground o! redundany. The evidene also sho1s that K(C has omplied 1ith the proedural and substantive requirements !or a valid termination. There 1as, there!ore, no reason !or the CA to disturb the !atual fndings o! the 3L8C. As a general rule: •

The !atual fndings o! quasi/;udiial agenies suh as the 3L8C are generally aorded not only respet, but at times, even fnality beause o! the speial 2no1ledge and expertise gained by these agenies !rom handling matters !alling under their speialiBed ;urisdition. >t is also settled that this Court is not a trier o! !ats and does not normally embar2 in the evaluation o! evidene addued during trial. This rule, ho1ever, allo1s !or exeptions.

•

•

Ihen the fndings o! !at o! the trial ourt, or o! the quasi/;udiial agenies onerned, are onitin$ or ontr"&itory 1ith those o! the CA. Ihen there is a 4"ri"ne in the !atual fndings, it is inumbent upon the Court to re/examine the !ats one again. Ihen the said fndings are not ,%%orte& =0 ,=t"nti"# e4i&ene or i! on the basis o! the available !ats, the in!erene or onlusion arrived at is mani!estly erroneous. *atual fndings o! administrative agenies are not in!allible and 1ill be set aside 1hen they !ail the test o! arbitrariness. *& >n the instant ase, the Court agrees 1ith the CA that the onlusions arrived at by the LA and the 3L8C are mani!estly erroneous.

K(C laims that Hia;ar 1as validly dismissed on the ground o! redundany 1hih is one o! the authoriBed auses !or termination o! employment. The petitioner asserts that it has observed the proedure provided by la1 and that the same 1as done in good !aith. To ;usti!y the respondents dismissal, the petitioner presented: 4i7 the notifation Letter/(emorandum dated tober *, *++@ addressed to the respondent 1hih 1as reeived on tober @+, *++@ *% 4ii7 the Jt reads: Artile *&@. Closure o! establishment and redution o! personnel. ? The employer may also terminate the employment o! any employee due to the installment o! labor/saving devies, re&,n&"n03 retrenhment to prevent losses or the losing or essation o! operation o! the establishment or underta2ing unless the losing is !or the purpose o! irumventing the provisions o! this Title, by serving a 1ritten notie on the 1or2er and the (inistry o! Labor and n ase o! termination due to the installation o! labor/ saving devies or redundany, the 1or2er aeted thereby shall be entitled to a separation pay equivalent to at least his one 4$7 month pay or to at least one 4$7 month pay !or every year o! servie, 1hihever is higher. >n ase o! retrenhment to prevent losses and in ases o! losures or essation o! operations o! establishment or underta2ing not due to serious business losses or reverses, the separation pay shall be equivalent to one 4$7 month pay or at least one/hal! 4$6*7 month pay !or every year o! servie, 1hihever

is higher. A !ration o! at least six 4'7 months shall be onsidered one 4$7 1hole year. 4n #mart Communiations, >n., v. Astorga, @5 the Court held that: The nature o! redundany as an authoriBed ause !or dismissal is explained in the leading ase o! Iiltshire ile Co., >n. v. 3ational Labor 8elations Commission, viB: 8e&,n&"n0 in an employers personnel !ore neessarily or even ordinarily re!ers to dupliation o! 1or2. That no other person 1as holding the same position that private respondent held prior to termination o! his servies does not sho1 that his position had not beome redundant. >ndeed, in any 1ell organiBed business enterprise, it 1ould be surprising to fnd dupliation o! 1or2 and t1o 4*7 or more people doing the 1or2 o! one person. Ie believe that redundany, !or purposes o! the Labor Code, exists 1here the servies o! an employee are in exess o! 1hat is reasonably demanded by the atual requirements o! the enterprise. #uintly put, a position is redundant 1here it is superNuous, and superNuity o! a position or positions may be the outome o! a number o! !ators, suh as overhiring o! 1or2ers, dereased volume o! business, or dropping o! a partiular produt line or servie ativity previously manu!atured or underta2en by the enterprise.J The harateriBation o! an employees servies as superNuous or no longer neessary and, there!ore, properly terminable, is an exerise o! business ;udgment on the part o! the employer. The 1isdom and soundness o! suh harateriBation or deision is not sub;et to disretionary revie1 provided, o! ourse, that a violation o! la1 or arbitrary or maliious ation is not sho1n.@0 4
Ihile it is true that the JharateriBation o! an employees servies as superNuous or no longer neessary and, there!ore, properly terminable, IS

AN EXERCISE OF USINESS 6UDGMENT ON T'E PART OF T'E EMPLOYER37 T'E EXERCISE OF SUC' 6UDGMENT3 'O(EVER3 MUST NOT E IN VIOLATION OF T'E LA(3 AND MUST NOT E ARITRARY OR MALICIOUS. The Court has al1ays stressed that a ompany annot simply delare redundany 1ithout basis. To exhibit its good !aith and that there 1as a !air and reasonable riteria in asertaining redundant positions, a ompany laiming to be over manned must produe adequate proo! o! the same. Ie reiterate 1hat 1as held in Caltex 4Phils.7, >n. v. 3L8C: @ >n Asu!rin, -r. v. #an (iguel Corporation, 1e ruled that it is not enough !or a ompany to merely delare that it has beome overmanned 4si7. >t must produe adequate proo! o! suh redundany to ;usti!y the dismissal o! the aeted employees. >n Panlilio v. 3ational Labor 8elations Commission, 1e held that evidene must be presented to substantiate redundany suh as but not limited to the ne1 staEng pattern, !easibility studies6proposal, on the viability o! the ne1ly reated positions, ;ob desription and the approval by the management o! the restruturing. 4
APPLICATION: >n the instant ase, the Court agrees 1ith the CA 1hen it held that the petitioner "i#e& to %reent ,=t"nti"# %roo to support K(Cs general allegations o! redundany. As sho1n !rom the reords, the petitioner simply presented as its evidene o! good !aith and ompliane 1ith the la1 the notifation letter to respondent Hia;ar the J
•

T+ere i no +o*in$ t+"t GMC -"&e "n e4"#,"tion o t+e eitin$ %oition "n& t+eir eet to t+e o-%"n0. Neit+er &i& GMC eert eort to %reent t"n$i=#e %roo t+"t it *" e%erienin$ =,ine #o* &o*n or o4er +irin$.

•

The J
n the other hand, the respondent presented proo! that the petitioner had been hiring ne1 employees 1hile it 1as fring the old ones, 50 negating the laim o! redundany. >t must, ho1ever, be pointed out that in termination ases, li2e the one be!ore us, the burden o! proving that the dismissal o! the employees 1as !or a valid and authoriBed ause rests on the employer. >t 1as inumbent upon the petitioner to sho1 by substantial evidene that the termination o! the employment o! the respondent 1as validly made and !ailure to disharge that duty 1ould mean that the dismissal is not ;ustifed and there!ore illegal. 5' urthermore, the Court annot overloo2 the !at that Hia;ar 1as prohibited !rom entering the ompany premises even be!ore the eetivity date o! termination and 1as ompelled to sign an JAppliation !or 8etirement and )enefts.J These ats exhibit the petitioners bad !aith sine it annot be denied that the respondent 1as still entitled to report !or 1or2 until 3ovember @+, *++@. The demand !or her to sign the JAppliation !or 8etirement and )eneftsJ also ontravenes the !at that she 1as terminated due to redundany. >ndeed, there is a dierene bet1een voluntary retirement o! an employee and !ored termination due to authoriBed auses. >n 9uevedo v. )enguet norporated, 5 this Court explained the dierene bet1een retirement and termination due to redundany, to 1it 88<(<3T

T<8(>3AT>3

Ihile termination o! employment and retirement !rom servie are ommon modes o! ending employment, they are mutually exlusive, 1ith varying ;uridial bases and resulting benefts. 8etirement !rom servie is ontratual 4i.e. based on the bilateral agreement o! the employer and employee7

1hile termination o! employment is statutory 4i.e. governed by the Labor Code and other related la1s as to its grounds, benefts and proedure7.

)enefts !or retirement, Artile *& o! The benefts resulting !rom the Labor Code gives lee1ay to the termination vary, depending on the parties to stipulate above a Noor o! ause benefts.

Vo#,nt"r0 retire-ent uts employment ties leaving no residual employer liability in4o#,nt"r0 retire-ent amounts to a disharge, rendering the employer liable !or termination 1ithout ause. The employees intent is the !oal point o! analysis. >n determining suh intent, the !airness o! the proess governing the retirement deision, the payment o! stipulated benefts, and the absene o! badges o! intimidation or oerion are relevant parameters.

APPLICATION: Clearly, the instant ase is not about retirement sine the term has its peuliar meaning and is governed by Artile *& o! the Labor Code. 8ather, this is a "e o ter-in"tion due to redundany under Artile *&@ o! the Labor Code. Thus, the demand o! K(C !or the respondent to sign an JAppliation !or 8etirement and )eneftsJ is really suspet. inally the Court agrees 1ith the CA that the a1ard o! moral and exemplary damages is proper.1âwhi1 The Court has a1arded moral damages in termination ases 1hen bad !aith, malie or !raud attend the employees dismissal or 1here the at oppresses labor, or 1here it 1as done in a manner ontrary to morals, good ustoms or publi poliy. I"<8<8<, the petition is D<3>
1.) G.R. No. 1;;J8. 6"n,"r0 513 5;17.B

GOYA3 INC.3 %etitioner3 4. GOYA3 INC. EMPLOYEES UNIONFF(3 re%on&ent. To%i: Li-it"tion on M"n"$e-ent Prero$"ti4e FACTS: #ometime in -anuary *++5, petitioner Koya, >n. 4Company7, a domesti orporation engaged in the manu!ature, importation, and 1holesale o! top quality !ood produts, hired ontratual employees !rom P<# 8esoures Development Corporation 4P<#7 to per!orm temporary and oasional servies in its !atory in Parang, (ari2ina City. This prompted respondent Koya, >n. t noted that the ontratual 1or2ers engaged have been assigned to 1or2 in positions previously handled by regular 1or2ers and Mnion members, in eet violating #etion 5, Artile > o! the C)A, 1hih provides !or three ategories o! employees in the Company. The Mnion ontends that sine $%+, the ategories o! employees had been a part o! the C)A. >n ountering the Mnions allegations, the Company argued that: 4a7 the la1 expressly allo1s ontrating and subontrating arrangements through Department o! Labor and o! the C)A merely provides !or the defnition o! the ategories o! employees and does not put a limitation on the Companys right to engage the servies o! ;ob ontrators or its management prerogative to address temporary6oasional needs in its operation.

R,#in$ o t+e Vo#,nt"r0 Ar=itr"tor: n tober *', *++5, HA Laguesma dismissed the Mnions harge o! MLP !or being purely speulative and !or la2ing in !atual basis, but the Company 1as direted to observe and omply 1ith its ommitment under the C)A. Ihile the !oregoing agreement bet1een the parties did eliminate managements prerogative o! outsouring parts o! its operations, it serves as a limitation on suh prerogative partiularly i! it involves !untions or duties

speifed under the a!orequoted agreement. >t is lear that the parties agreed that in the event that the Company needs to engage the servies o! additional 1or2ers 1ho 1ill per!orm Joasional or seasonal 1or2 diretly onneted 1ith the regular operations o! the C(PA3=,J or Jspeif pro;ets o! limited duration not onneted diretly 1ith the regular operations o! the C(PA3=J, the Company an hire asual employees 1hih is a2in to ontratual employees. I *e note t+e Co-%"n0! o*n &e#"r"tion t+"t

PESO *" en$"$e& to %eror- te-%or"r0 or o"ion"# er4ie t is evident, there!ore, that the engagement o! P<# is not in 2eeping 1ith the intent and spirit o! the C)A provision in question. >t must, ho1ever, be stressed that the right o! management to outsoure parts o! its operations is not totally eliminated but is merely limited by the C)A.

CA: The CA sustained the ruling o! the Holuntary Arbitrator. A are!ul reading o! the above/enumerated ategories o! employees reveals that the P<# ontratual employees do not !all 1ithin the enumerated ategories o! employees stated in the C)A o! the parties. ollo1ing the said ategories, the Company should have observed and omplied 1ith the provision o! their C)A. #ine the Company had admitted that it engaged the servies o! P<# to per!orm temporary or oasional servies 1hih is a2in to those per!ormed by asual employees, the Company should have tapped the servies o! asual employees instead o! engaging P<#. "ene, this petition.

I,e: Ihether or not the petitioner ated in exess o! their po1ers in engaging the servies o! P<#, ontrary to the limitation given by the C)A.

R,#in$: =es. The #upreme Court denied petitioners motion !or revie1 and upheld that the ompany should observe and omply 1ith the Colletive )argaining Agreement in hiring asual employees.

1. UNFAIR LAOR PRACTICE Ihile the engagement o! P<# is in violation o! #etion 5, Artile > o! the C)A, it does not onstitute un!air labor pratie as it 4si7 not harateriBed under the la1 as a gross violation o! the C)A. Hiolations o! a C)A, exept those 1hih are gross in harater, shall no longer be treated as un!air labor pratie. Kross violations o! a C)A means Nagrant and6or maliious re!usal to omply 1ith the eonomi provisions o! suh agreement.

5. LIMITATIONS ON MANAGEMENT PREROGATIVE Ie onfrm that the HA ruled on a matter that is overed by the sole issue submitted !or voluntary arbitration. 8esultantly, the CA did not ommit serious error 1hen it sustained the ruling that the hiring o! ontratual employees !rom P<# 1as not in 2eeping 1ith the intent and spirit o! the C)A. >ndeed, the opinion o! the HA is germane to, or, in the 1ords o! the CA, Jinterrelated and intert1ined 1ith,J the sole issue submitted !or resolution by the parties. To emphasiBe, delaring that a partiular at !alls 1ithin the onept o! management prerogative is signifantly dierent !rom a2no1ledging that suh at is a valid exerise thereo!. (+"t t+e VA "n& t+e CA orret#0

r,#e& *" t+"t t+e Co-%"n0! "t o ontr"tin$ o,to,to,rin$ i *it+in t+e %,r4ie* o -"n"$e-ent %rero$"ti4e. ot+ &i& not "03 +o*e4er3 t+"t ,+ "t i " 4"#i& eerie t+ereo. O=4io,#03 t+i i &,e to t+e reo$nition t+"t t+e CA %ro4iion "$ree& ,%on =0 t+e Co-%"n0 "n& t+e Union &e#i-it t+e ree eerie o -"n"$e-ent %rero$"ti4e %ert"inin$ to t+e +irin$ o ontr"t,"# e-%#o0ee.

>ndeed, the HA opined that Jthe right o! the management to outsoure parts o! its operations is not totally eliminated but is merely limited by the C)A,J 1hile the CA held that Jthis management prerogative o! ontrating out servies, ho1ever, is not 1ithout limitation. x x x These ategories o! employees partiularly 1ith respet to asual employees serve as limitation to the Companys prerogative to outsoure parts o! its operations espeially 1hen hiring ontratual employees.J As repeatedly held, the exerise o! management prerogative is not unlimited it is sub;et to the limitations !ound in la1, olletive bargaining agreement or the general priniples o! !air play and ;ustie*0 #>3

PERALTA3 J.: This petition !or revie1 on ertiorari under 8ule 50 o! the 8ules o! Civil Proedure see2s to reverse and set aside the -une $', *++0 Deision $ and tober $*, *++0 8esolution * o! the Court o! Appeals in CA/K.8. #P 3o. &@@0, 1hih sustained the tober *', *++5 Deision @ o! Holuntary Arbitrator )ienvenido <. Laguesma, the dispositive portion o! 1hih reads: I"<8<8<, ;udgment is hereby rendered delaring that the Company is 3T guilty o! un!air labor pratie in engaging the servies o! P<#. The ompany is, ho1ever, direted to observe and omply 1ith its ommitment as it pertains to the hiring o! asual employees 1hen neessitated by business irumstanes. 5 The !ats are simple and appear to be undisputed.

#ometim #ometime e in -anuary -anuary *++ *++5, 5, petition petitioner er Koya, Koya, >n. 4Company 4Company7, 7, a domesti domesti  orporation engaged in the manu!ature, importation, and 1holesale o! top quality quality !ood produ produts, ts, hired hired ontra ontratual tual employ employees ees !rom !rom P<# 8esoures esoures Devel Develop opme ment nt Corp Corpora oratio tion n 4P<# 4P<#77 to per!o per!orm rm tempor temporar ary y and and oas oasion ional al servies in its !atory in Parang, (ari2ina City. This prompted respondent Koya Koya,, >n. >n. t noted that the ontratual 1or2ers engaged have have been been assign assigned ed to 1or2 1or2 in posit position ions s previ previou ously sly hand handled led by regu regular lar 1or2ers and Mnion members, in eet violating #etion 5, Artile > o! the C)A, 1hih provides !or three ategories o! employees in the Company, to 1it: #etion 5. Categories o! ! the the probationary employee is hired or omes !rom outside the Company 4non/ Koya, >n. employee7, he shall be required to undergo a probationary period o! six 4'7 months, 1hih period, in the sole ;udgment o! management, may be shortened i! the employee has already aquired the 2no1ledge or s2ills required o! the ;ob. >! the employee is hired !rom the asual pool and has 1or2ed in the same position at any time during the past t1o 4*7 years, the probationary period shall be three 4@7 months. 4b7 8egular
Company, or one hired !or speif pro;ets o! limited duration not onneted diretly 1ith the regular operations o! the Company. >t 1as averred that the ategories o! employees had been a part o! the C)A sine the $%+s and that due to this provision, a pool o! asual employees had been maintained by the Company !rom 1hih it hired 1or2ers 1ho then beame regular 1or2ers 1hen urgently neessary to employ them !or more than than a year year.. Li2 Li2e1is e1ise, e, the the Comp Compan any y some someti time mes s hir hired prob probat atio iona nary ry empl employ oyee ees s 1ho 1ho also also late laterr bea beame me regul egular ar 1or2 1or2er ers s a!te a!terr pass passin ing g the the probat probationa ionary ry period. period. Iith Iith the hiring hiring o! ontra ontratual tual employees, employees, the Mnion Mnion ontended that it 1ould no longer have probationary and asual employees !rom 1hih it ould obtain additional Mnion members thus, rendering inutile #etion $, Artile >>> 4Mnion #eurity7 o! the C)A, 1hih states: #et #etio ion n $. Cond Condit itio ion n o! n ountering the Mnions allegations, the Company argued that: 4a7 the la1 expr express essly ly allo1 allo1s s ontr ontrat atin ing g and subo subontr ntrat atin ing g arran arrange gemen ments ts throu through gh Depar Departm tment ent o! Labo Laborr and and o! the C)A merely provides !or the defnition o! the the ate atego gori ries es o! empl emplo oyees yees and and does does not not pu putt a limi limita tati tio on on the the Comp Compa anys rig right to eng engage the serv serviies es o! ;ob ontra trato torrs or its mana managem gemen entt prer prerog ogati ative ve to addre address ss tempo temporar rary6o y6oa asio siona nall needs needs in its operation. n tober *', *++5, HA Laguesma dismissed the Mnions harge o! MLP !or being purely speulative and !or la2ing in !atual basis, but the Company 1as direted to observe and omply 1ith its ommitment under the C)A. The HA opined: opined : Ie examined the C)A provision #etion 5, Artile > o! the C)A allegedly violated by the Company and indeed the agreement presribes three 4@7

ategories o! employees in the Company and provides !or the defnition, !untions and duties o! eah. (aterial to the ase at hand is the defnition as regards the !untions o! a asual employee desribed as !ollo1s: Casual t is lear lear that that the partie parties s agreed that in the event that the Company needs to engage the servies o! additional 1or2ers 1ho 1ill per!orm Joasional or seasonal 1or2 diretly onneted 1ith the regular operations o! the C(PA3=,J or Jspeif pro;ets o! limited duration not onneted diretly 1ith the regular operations o! the C(P C(PA3 A3=J =J,, the the Comp Compan any y an an hir hire asu asual al empl employ oyee ees s 1hi 1hih h is a2in a2in to ontratual ontratual employees. >! 1e note the Companys Companys o1n delaration delaration that P<# 1as 1as enga engage ged d to per! per!or orm m Jtem Jtempo pora rary ry or oa oasi sion onal al serv servi ies esJJ 4#ee 4#ee the the Companys Position Paper, at p. $7, then it should have diretly hired the servies o! asual employees rather than do it through P<#. >t is evident, there!ore, that the engagement o! P<# is not in 2eeping 1ith the intent and spirit o! the C)A provision in question. >t must, ho1ever, be stressed that the right o! management management to outsoure parts o! its operations is not totally eliminated but is merely limited by the C)A. Kiven the !oregoing, the Companys engagement o! P<# !or the given purpose is indubitably a violation o! the C)A. Ihile the Mnion moved !or partial reonsideration o! the HA Deision, & the Company immediately fled a petition !or revie1 % be!ore the Court o! Appeals 4CA7 under 8ule 5@ o! the 8evised 8ules o! Civil Proedure to set aside the diretive to observe and omply 1ith the C)A ommitment pertaining to the hiring o! asual employees 1hen neessitated by business irumstanes. Pro!essing that suh order 1as not overed by the sole issue submitted !or voluntary arbitration, the Company assigned the !ollo1ing errors: T"< "38A)L< "38A)L< HLM3T HLM3TA8 A8= = A8)>T8AT8 A8)>T8AT8 # PI<8 I">C" IA# (>T<# >3 8ML>3K T"AT T"< <3KAK<(<3T <3KAK<(<3T  P<# ># 3T 3T >3 G<
3K I>T" T"< >3T<3T >3T<3T A3D #P>8>T $+  T"< C)A. T"< "38A)L< "38A)L< HLM3T HLM3TA8 A8= = A8)>T8A A8)>T8AT8 C((>TT3 D3K T"AT T"AT T"< <3KAK<(<3T <3KAK<(<3T  P<# ># 3T >3 G<
3K I>T" T"< >3T<3T A3D #P>8>T  T"< C)A.$$

n -une $', *++0, the CA dismissed the petition. >n dispensing 1ith the merits o! the ontroversy, it held: This Court does not fnd it arbitrary on the part o! the "on. Holuntary Arbitrator in ruling that Jthe engagement o! P<# is not in 2eeping 1ith the intent and spirit o! the C)A.J The said ruling is interrelated and intert1ined 1ith the sole issue to be resolved that is, JIhether or not the Company is guilty o! un!air labor pratie in engaging the servies o! P<#, a third party servie provider, under existing C)A, la1s, and ;urisprudene.J )oth issues onern the engagement o! P<# by the Company 1hih is pereived as a violation o! the C)A and 1hih onstitutes as un!air labor pratie on the part o! the Company. This is easily disernible in the deision o! the "on. Holuntary Arbitrator 1hen it held: x x x x Ihile the engagement o! P<# is in violation o! #etion 5, Artile > o! the C)A, it does not onstitute un!air labor pratie as it 4si7 not harateriBed under the la1 as a gross violation o! the C)A. Hiolations o! a C)A, exept those 1hih are gross in harater, shall no longer be treated as un!air labor pratie. Kross violations o! a C)A means Nagrant and6or maliious re!usal to omply 1ith the eonomi provisions o! suh agreement. xxx Anent the seond assigned error, the Company ontends that the "on. Holuntary Arbitrator erred in delaring that the engagement o! P<# is not in 2eeping 1ith the intent and spirit o! the C)A. The Company ;ustifed its engagement o! ontratual employees through P<# as a management prerogative, 1hih is not prohibited by la1. Also, it !urther alleged that no provision under the C)A limits or prohibits its right to ontrat out ertain servies in the exerise o! management prerogatives. Kermane to the resolution o! the above issue is the provision in their C)A 1ith respet to the ategories o! the employees: xxxx A are!ul reading o! the above/enumerated ategories o! employees reveals that the P<# ontratual employees do not !all 1ithin the enumerated ategories o! employees stated in the C)A o! the parties. ollo1ing the said ategories, the Company should have observed and omplied 1ith the provision o! their C)A. #ine the Company had admitted that it engaged the servies o! P<# to per!orm temporary or oasional servies 1hih is a2in to those per!ormed by asual employees, the Company should have tapped the servies o! asual employees instead o! engaging P<#. >n ;usti!ying its at, the Company posits that its engagement o! P<# 1as a management prerogative. >t bears stressing that a management prerogative re!ers to the right o! the employer to regulate all aspets o! employment,

suh as the !reedom to presribe 1or2 assignments, 1or2ing methods, proesses to be !ollo1ed, regulation regarding trans!er o! employees, supervision o! their 1or2, lay/o and disipline, and dismissal and reall o! 1or2, presupposing the existene o! employer/employee relationship. n the basis o! the !oregoing defnition, the Companys engagement o! P<# 1as indeed a management prerogative. This is in onsonane 1ith the pronounement o! the #upreme Court in the ase o! (anila n ontrating out servies, the management must be motivated by good !aith and the ontrating out should not be resorted to irumvent the la1 or must not have been the result o! maliious arbitrary ations. >n the ase at benh, the C)A o! the parties has already provided !or the ategories o! the employees in the Companys establishment. These ategories o! employees partiularly 1ith respet to asual employees serve as limitation to the Companys prerogative to outsoure parts o! its operations espeially 1hen hiring ontratual employees. As stated earlier, the 1or2 to be per!ormed by P<# 1as similar to that o! the asual employees. Iith the provision on asual employees, the hiring o! P<# ontratual employees, there!ore, is not in 2eeping 1ith the spirit and intent o! their C)A. 4Citations omitted7 $* The Company moved to reonsider denied $5 hene, this petition.

the

CA

Deision, $@ but

it

1as

>nidentally, on -uly $', *++%, the Company fled a (ani!estation $0 in!orming this Court that its sto2holders and diretors unanimously voted to shorten the Companys orporate existene only until -une @+, *++', and that the three/year period allo1ed by la1 !or liquidation o! the Companys aairs already expired on -une @+, *++%. 8e!erring to Kelano v. Court o! Appeals, $' Publi >nterest Center, >n. v.
C)A. >ndeed, the opinion o! the HA is germane to, or, in the 1ords o! the CA, Jinterrelated and intert1ined 1ith,J the sole issue submitted !or resolution by the parties. This being said, the Companys invoation o! #etions 5 and 0, 8ule >H*+ and #etion 0, 8ule H> *$o! the 8evised Proedural Kuidelines in the Condut o! Holuntary Arbitration Proeedings dated tober $0, *++5 issued by the 3C() is plainly out o! order. Li2e1ise, the Company annot fnd solae in its ited ase o! Ludo W Luym Corporation v. #aornido. ** >n Ludo, the ompany 1as engaged in the manu!ature o! oonut oil, orn starh, gluose and related produts. >n the ourse o! its business operations, it engaged the arrastre servies o! CLA# !or the loading and unloading o! its fnished produts at the 1har!. The arrastre 1or2ers deployed by CLA# to per!orm the servies needed 1ere subsequently hired, on dierent dates, as Ludos regular ran2/and/fle employees. Therea!ter, said employees ;oined Lt then disposed as !ollo1s: 4a7 the omplainants 1ere onsidered regular employees six months !rom the frst day o! servie at CLA# 4b7 the omplainants, being entitled to the C)A benefts during the regular employment, 1ere a1arded si2 leave, vaation leave, and annual 1age and salary inreases during suh period 47 respondents shall pay attorneys !ees o! $+Y o! the total a1ard and 4d7 an interest o! $*Y per annum or $Y per month shall be imposed on the a1ard !rom the date o! promulgation until !ully paid. The HA added that all separation and6or retirement benefts shall be onstrued !rom the date o! regulariBation sub;et only to the appropriate government la1s and other soial legislation. Ludo fled a motion !or reonsideration, but the HA denied it. n appeal, the CA aErmed in toto the assailed deision hene, a petition 1as brought be!ore this Court raising the issue, among others, o! 1hether a voluntary arbitrator an a1ard benefts not laimed in the submission agreement. >n denying the petition, Ie ruled: Kenerally, the arbitrator is expeted to deide only those questions expressly delineated by the submission agreement. 3evertheless, the arbitrator an assume that he has the neessary po1er to ma2e a fnal settlement sine arbitration is the fnal resort !or the ad;udiation o! disputes. The suint reasoning enuniated by the CA in support o! its holding, that the Holuntary

Arbitrator in a labor ontroversy has ;urisdition to render the questioned arbitral a1ards, deserves our onurrene, thus: >n general, the arbitrator is expeted to deide those questions expressly stated and limited in the submission agreement. "o1ever, sine arbitration is the fnal resort !or the ad;udiation o! disputes, the arbitrator an assume that he has the po1er to ma2e a fnal settlement. Thus, assuming that the submission empo1ers the arbitrator to deide 1hether an employee 1as disharged !or ;ust ause, the arbitrator in this instane an reasonably assume that his po1ers extended beyond giving a yes/or/no ans1er and inluded the po1er to reinstate him 1ith or 1ithout ba2 pay. >n one ase, the #upreme Court stressed that Jxxx the Holuntary Arbitrator had plenary ;urisdition and authority to interpret the agreement to arbitrate and to determine the sope o! his o1n authority sub;et only, in a proper ase, to the ertiorari ;urisdition o! this Court. The Arbitrator, as already indiated, vie1ed his authority as embraing not merely the determination o! the abstrat question o! 1hether or not a per!ormane bonus 1as to be granted but also, in the aErmative ase, the amount thereo!. )y the same to2en, the issue o! regulariBation should be vie1ed as t1o/ tiered issue. Ihile the submission agreement mentioned only the determination o! the date or regulariBation, la1 and ;urisprudene give the voluntary arbitrator enough lee1ay o! authority as 1ell as adequate prerogative to aomplish the reason !or 1hih the la1 on voluntary arbitration 1as reated ? speedy labor ;ustie. >t bears stressing that the underlying reason 1hy this ase arose is to settle, one and !or all, the ultimate question o! 1hether respondent employees are entitled to higher benefts. To require them to fle another ation !or payment o! suh benefts 1ould ertainly undermine labor proeedings and ontravene the onstitutional mandate providing !ull protetion to labor. *@ >ndubitably, Ludo !ortifes, not diminishes, the soundness o! the questioned HA Deision. #aid ase reaErms the plenary ;urisdition and authority o! the voluntary arbitrator to interpret the C)A and to determine the sope o! his6her o1n authority. #ub;et to ;udiial revie1, the lee1ay o! authority as 1ell as adequate prerogative is aimed at aomplishing the rationale o! the la1 on voluntary arbitration ? speedy labor ;ustie. >n this ase, a omplete and fnal ad;udiation o! the dispute bet1een the parties neessarily alled !or the resolution o! the related and inidental issue o! 1hether the Company still violated the C)A but 1ithout being guilty o! MLP as, needless to state, MLP is ommitted only i! there is gross violation o! the agreement. Lastly, the Company 2ept on harping that both the HA and the CA oneded that its engagement o! ontratual 1or2ers !rom P<# 1as a valid exerise o! management prerogative. >t is on!used. To emphasiBe, delaring that a partiular at !alls 1ithin the onept o! management prerogative is

signifantly dierent !rom a2no1ledging that suh at is a valid exerise thereo!. Ihat the HA and the CA orretly ruled 1as that the Companys at o! ontrating out6outsouring is 1ithin the purvie1 o! management prerogative. )oth did not say, ho1ever, that suh at is a valid exerise thereo!. bviously, this is due to the reognition that the C)A provisions agreed upon by the Company and the Mnion delimit the !ree exerise o! management prerogative pertaining to the hiring o! ontratual employees. >ndeed, the HA opined that Jthe right o! the management to outsoure parts o! its operations is not totally eliminated but is merely limited by the C)A,J 1hile the CA held that Jthis management prerogative o! ontrating out servies, ho1ever, is not 1ithout limitation. x x x These ategories o! employees partiularly 1ith respet to asual employees serve as limitation to the Companys prerogative to outsoure parts o! its operations espeially 1hen hiring ontratual employees.J A olletive bargaining agreement is the la1 bet1een the parties: >t is !amiliar and !undamental dotrine in labor la1 that the C)A is the la1 bet1een the parties and they are obliged to omply 1ith its provisions. Ie said so in "onda Phils., >n. v. #amahan ng (alayang (anggaga1a sa "onda: A olletive bargaining agreement or C)A re!ers to the negotiated ontrat bet1een a legitimate labor organiBation and the employer onerning 1ages, hours o! 1or2 and all other terms and onditions o! employment in a bargaining unit. 1âwhi1 As in all ontrats, the parties in a C)A may establish suh stipulations, lauses, terms and onditions as they may deem onvenient provided these are not ontrary to la1, morals, good ustoms, publi order or publi poliy. Thus, 1here the C)A is lear and unambiguous, it beomes the la1 bet1een the parties and ompliane there1ith is mandated by the express poliy o! the la1. (oreover, i! the terms o! a ontrat, as in a C)A, are lear and leave no doubt upon the intention o! the ontrating parties, the literal meaning o! their stipulations shall ontrol. x x x. *5 >n this ase, #etion 5, Artile > 4on ategories o! employees7 o! the C)A bet1een the Company and the Mnion must be read in on;untion 1ith its #etion $, Artile >>> 4on union seurity7. )oth are interonneted and must be given !ull !ore and eet. Also, these provisions are lear and unambiguous. The terms are expliit and the language o! the C)A is not suseptible to any other interpretation. "ene, the literal meaning should prevail. As repeatedly held, the exerise o! management prerogative is not unlimited it is sub;et to the limitations !ound in la1, olletive bargaining agreement or the general priniples o! !air play and ;ustie *0
the Company. To reiterate, the C)A is the norm o! ondut bet1een the parties and ompliane there1ith is mandated by the express poliy o! the la1.@+ I"<8<8<, the petition is D<3>8(
19.) MEGA MAGAINE VS DEFENSOR FACTS: Petitioner (ega (agaBine Publiations, >n. 4((P>7 frst employed the respondent as an Assoiate Publisher in $%%', and later promoted her as a Kroup Publisher 1ith a monthly salary o! P'+,+++.++. ebruary *0, $%%%, the respondent proposed to ((P>s Qa to my omputation, ahievable i! they only meet their month min. quotaR 1e an delare $5th month pay !or entire ompany.J0 The respondent sent another memorandum on April 0, $%%% setting out the $%%% advertisement sales, target and ommissions, and proposing that the shedule o! her outright ommissions should start at .+0Y o! [email protected] million total revenue, or P$0,+++.++' and !urther proposing that the speial inentives be given 1hen total revenues reahed P@0/P@& million. n tober $%%%, the respondent tendered her letter o! resignation eetive at the end o! Deember $%%%. =ap aepted the resignation.&

n (ay *+++, a!ter the respondent had le!t the ompany, she fled a omplaint !or payment o! bonus and inentive ompensation 1ith damages,$@ speifally demanding the payment o!P*$,*'5.'& as sales ommissions, P'+,+++.++ as $5th month pay, and P&,0++.++ as her share in the inentive sheme !or the advertising and sales sta.$5

R,#in$ o t+e L"=or Ar=iter: the Labor Arbiter 4LA7 dismissed the respondents omplaint. >t ruled that the respondent had not presented any evidene sho1ing that ((P> had agreed or ommitted to the terms proposed in her memorandum o! April 0, $%%% that even assuming that the petitioners had agreed to her terms, the table she had submitted ;usti!ying a gross revenue o! P@',*$','*5.+ 1as not an oEial aount by ((P>$'and that the petitioners had presented a $%%% statement o! inome and defit prepared by the auditing frm o! Punongbayan W Araullo sho1ing ((P>s gross revenue !or $%%% being only P@$,%5,'.++.

Deiion o t+e NLRC: the 3L8C onurred 1ith the LAs ruling that there had been no agreement bet1een the petitioners and the respondent on the terms and onditions o! the inentives reahed.

6,&$-ent o t+e CA: CA dismissed the respondents petition !or ertiorari and upheld the resolutions o! the 3L8C.

ISSUE: Ihether or not the respondent 1as entitled to the ommissions and the inentive bonus being laimed.

'ELD: T+e $r"nt o " =on, or %ei"# inenti4e3 =ein$ " -"n"$e-ent %rero$"ti4e3 i not " &e-"n&"=#e "n& enore"=#e o=#i$"tion3 ee%t *+en t+e =on, or %ei"# inenti4e i -"&e %"rt o t+e *"$e3 "#"r0 or o-%en"tion o t+e e-%#o0ee35 or i %ro-ie& =0 t+e e-%#o0er "n& e%re#0 "$ree& ,%on =0 t+e %"rtie.@+ )y its very defnition, bonus is a gratuity or at o! liberality o! the giver,@$ and annot be onsidered part o! an employees 1ages i! it is paid only 1hen profts are realiBed or a ertain amount o! produtivity is ahieved. >! the desired goal o! prodution or atual 1or2 is not aomplished, the bonus does not arue.

Due to the nature o! the bonus or speial inentive being a gratuity or at o! liberality on the part o! the giver, the respondent ould not validly insist on the shedule proposed in her memorandum o! April 0, $%%%

oni&erin$ t+"t t+e $r"nt o t+e =on, or %ei"# inenti4e re-"ine& " -"n"$e-ent %rero$"ti4e. The Court agrees 1ith the CAs ruling that the petitioners had already exerised the management prerogative to grant the bonus or speial inentive. At no instane did =ap Natly re!use or re;et the respondents request !or ommissions and the bonus or inentive. This is plain !rom the !at that =ap even JbargainedJ 1ith the respondent on the shedule o! the rates and the revenues on 1hih the bonus or inentive 1ould be pegged. Ihat remained ontested 1as only the shedule o! the rates and the revenues. The Court agrees 1ith the CAs ruling that the petitioners had already exerised the management prerogative to grant the bonus or speial inentive. At no instane did =ap Natly re!use or re;et the respondents request !or ommissions and the bonus or inentive. This is plain !rom the !at that =ap even JbargainedJ 1ith the respondent on the shedule o! the rates and the revenues on 1hih the bonus or inentive 1ould be pegged. Ihat remained ontested 1as only the shedule o! the rates and the revenues.

1.) MIRANT
6OSELITO A. CARO3 respondent

FACTS: •

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Petitioner Corporation is a holding ompany that o1ns shares in pro;et ompanies suh as (irant #ual Corporation and (irant Pagbilao Corporation 4(irant Pagbilao7 1hih operate and maintain po1er stations loated in #ual, Pangasinan and Pagbilao, 9ueBon, respetively. 8espondent 1as hired by (irant Pagbilao on -anuary @, $%%5 as its Logistis Eer.

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At the time o! the severane o! his employment, respondent 1as the Prourement #upervisor o! (irant Pagbilao assigned at Petitioner Corporations orporate oEe. As Prourement #upervisor, his main tas2 1as to serve as the lin2 bet1een the (aterials (anagement Department o! Petitioner Corporation and its sta, and the suppliers and servie ontrators in order to ensure that prourement is arried out in on!ormity 1ith set poliies, proedures and praties. >n addition, respondent 1as put in harge o! ensuring the timely, eonomial, sa!e and expeditious delivery o! materials at the right quality and quantity to Petitioner Corporations plant. 8espondent 1as also responsible !or guiding and overseeing the 1el!are and training needs o! the sta o! the (aterials (anagement Department. Due to the nature o! respondents !untions, Petitioner Corporation onsiders his position as onfdential. n 3ovember @, *++5, Petitioner Corporation onduted a random drug test 1here respondent 1as randomly hosen among its employees 1ho 1ould be tested !or illegal drug use. 8espondent avers that at around $$:@+ a.m. o! the same day, he reeived a phone all !rom his 1i!es olleague 1ho in!ormed him that a bombing inident ourred near his 1i!es 1or2 station in Tel Aviv, >srael 1here his 1i!e 1as then 1or2ing as a aregiver. 8espondent laims that a!ter the said phone all, he proeeded to the >sraeli
that he 1ould submit to a drug test the !ollo1ing day at his o1n expense. 8espondent never heard !rom Ceilia again. •

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n 3ovember &, *++5, respondent reeived a #ho1 Cause 3otie $0 !rom Petitioner Corporation through Dulot, his immediate supervisor, requiring him to explain in 1riting 1hy he should not be harged 1ith Jun;ustifed re!usal to submit to random drug testing.J 8espondent submitted his 1ritten explanation $' on 3ovember $$, *++5. Petitioner orporation !urther required respondent on Deember $5, *++5 to submit additional piees o! supporting douments to prove that respondent 1as at the >sraeli sraeli nvestigating Panel issued an >nvestigating 8eport $& fnding respondent guilty o! Jun;ustifed re!usal to submit to random drug testingJ and reommended a penalty o! !our 1or2ing 1ee2s suspension 1ithout pay, instead o! termination. n -anuary $%, *++0, Petitioner Corporations HP !or perations reommended that respondent be terminated !rom employment instead o! merely being suspended. Lamela argued that even i! respondent did not outrightly re!use to ta2e the random drug test, he avoided the same. >t averred that JavoidaneJ 1as synonymous 1ith Jre!usal.J 8espondent fled a omplaint !or illegal dismissal and money laims !or $@th and $5th month pay, bonuses and other benefts, as 1ell as the payment o! moral and exemplary damages and attorneys !ees. "e also stated that 1e has denied o! due proess >t is the ontention o! respondent that he 1as illegally dismissed by petitioner orporation due to the latters non/ompliane 1ith the t1in requirements o! notie and hearing. "e asserts that 1hile there 1as a notie harging him o! Jun;ustifed re!usal to submit to random drug testing,J there 1as no notie o! hearing and Petitioner Corporations investigation 1as not the equivalent o! the JhearingJ required under the la1 1hih should have aorded respondent the opportunity to be heard.

LA: >n !avor o! the respondent

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8espondent have been illegally dismissed

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The quitlaim purportedly exeuted by respondent 1as not a bona fde quitlaim 1hih eetively disharged petitioners o! all the laims o! respondent in the ase at bar.

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Ihile petitioner orporation observed the proper proedure in the termination o! an employee !or a purported authoriBed ause, suh ;ust ause did not exist in the ase at bar.

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The deision did not agree 1ith the onlusions reahed by Petitioner Corporations o1n >nvestigating Panel that 1hile respondent did not re!use to submit to the questioned drug test and merely JavoidedJ it on the designated day, JavoidaneJ and Jre!usalJ are one and the same.

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LA held that terms JavoidaneJ and Jre!usalJ are separate and distint and that Jthe t1o 1ords are not even synonymous 1ith eah other. LA onsidered as more tenable the stane o! respondent that his omission merely resulted to a J!ailureJ to submit to the said drug test ? and not an Jun;ustifed re!usal.J

3L8C: >n !avor o! petitioner and reversed the LA /

3L8C onsidered respondents omission as Jun;ustifed re!usalJ in violation o! petitioner orporations drug poliy.

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3L8C stated that the oer o! respondent to submit to another drug test the !ollo1ing day, even at his expense, annot operate to !ree him !rom liability. The 3L8C opined that ta2ing the drug test on the day !ollo1ing the sheduled random drug test 1ould aet both the integrity and the auray o! the speimen 1hih 1as supposed to be ta2en !rom a randomly seleted employee 1ho 1as notifed o! his6her seletion on the same day that the drug test 1as to be administered.

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The 3L8C !urther asserted that a drug test, onduted many hours or a day a!ter the employee 1as notifed, 1ould ompromise its results beause the employee may have possibly ta2en remedial measures to metaboliBe or eradiate 1hatever drugs s6he may have ingested prior to the drug test.

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These irumstanes have learly established the !alsity o! respondents laims and !ound no ;ustifable reason !or respondent to re!use to submit to the petitioner orporations random drug test.

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Ihile the 3L8C a2no1ledged that it 1as Petitioner Corporations o1n >nvestigating Panel that onsidered respondents !ailure to ta2e the required drug test as mere JavoidaneJ and not Jun;ustifed re!usal,J it onluded that suh fnding 1as merely reommendatory to guide top management on 1hat ation to ta2e.

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The 3L8C !ound that respondent 1as not only validly dismissed !or ause and ordered petitioner orporation to pay respondent fnanial assistane equivalent to one/hal! 4$6*7 month pay !or every year o! servie in the amount o! ne "undred 3inety/3ine Thousand #eventy/ ive Pesos 4P$%%,+0.++7.

CA: reversed 3L8C and reinstated LA /

it 1as immaterial 1hether respondent !ailed, re!used, or avoided being tested

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The singular !at material to this ase 1as that respondent did not get himsel! tested in lear disobediene o! ompany instrutions and poliy.

/ To the appellate ourt, the singular !at material to this ase 1as that respondent did not get himsel! tested in lear disobediene o! ompany instrutions and poliy. Despite suh disobediene, ho1ever, the appellate ourt onsidered the penalty o! dismissal to be too harsh to be imposed on respondent /

Ihile it is a management prerogative to terminate its erring employee !or 1ill!ul disobediene, the #upreme Court has reogniBed that suh penalty is too harsh depending on the irumstanes o! eah ase. JThere must be reasonable proportionality bet1een, on the one hand, the 1ill!ul disobediene by the employee and, on the other hand, the penalty imposed there!orU

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>n this ase, petitioner orporations o1n investigating panel has revealed that the penalty o! dismissal is too harsh to impose on QrespondentR, onsidering that this 1as the frst time in his $+/year employment that the latter violated its ompany poliies

ISSUE: •

Ihether or not the management prerogative to dismiss the respondent !or his !ailure to partiipate the drug test on the designated day is proper

RULING: •

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3. >t is beyond debate that Petitioner Corporations en!orement o! its Anti/Drugs Poliy is an exerise o! its management prerogative. >t is also a oneded !at that respondent J!ailedJ to ta2e the random drug test as sheduled, and under the said ompany poliy, suh !ailure metes the penalty o! termination !or the frst oense. >t is the rux o! petitioners argument that respondents omission amounted to Jun;ust re!usalJ beause he ould not suEiently support 1ith onvining proo! and evidene his de!enses !or !ailing to ta2e the random drug test. or petitioners, the inonsistenies in respondents explanations li2e1ise operated to ast doubt on his real reasons and motives !or not submitting to the random drug test on shedule. Ihile the adoption and en!orement by Petitioner Corporation o! its Anti/Drugs Poliy is reogniBed as a valid exerise o! its management prerogative as an employer, suh exerise is not absolute and unbridled. (anagerial prerogatives are sub;et to limitations provided by la1, olletive bargaining agreements, and the general priniples o! !air play and ;ustie. 5' >n the exerise o! its management prerogative, an employer must there!ore ensure that the poliies, rules and regulations on 1or2/related ativities o! the employees must al1ays be !air and reasonable and the orresponding penalties, 1hen presribed, ommensurate to the oense involved and to the degree o! the in!ration. The Anti/Drugs Poliy o! (irant !ell short o! these requirements. Petitioner Corporations sub;et Anti/Drugs Poliy !ell short o! being !air and reasonable. The poliy 1as not lear on 1hat onstitutes Jun;ustifed re!usalJ 1hen the sub;et drug poliy presribed that an employees Jun;ustifed re!usalJ to submit to a random drug test shall be punishable by the penalty o! termination !or the frst oense. To be sure, the term Jun;ustifed re!usalJ ould not possibly over all !orms o! Jre!usalJ as the employees resistane, to be punishable by termination, must be Jun;ustifed.J

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it is on this area 1here petitioner orporation had !allen short o! ma2ing it lear to its employees ? as 1ell as to management ? as to 1hat types o! ats 1ould !all under the purvie1 o! Jun;ustifed re!usal. The !at that petitioner orporations o1n >nvestigating Panel and its Hie President !or perations, #liman, diered in their reommendations regarding respondents ase are frst/hand proo! that there, indeed, is ambiguity in the interpretation and appliation o! the sub;et drug poliy. The !at that petitioner orporations o1n personnel had to disset the intended meaning o! Jun;ustifed re!usalJ is !urther proo! that it is not lear on 1hat ontext the term Jun;ustifed re!usalJ applies to The penalty o! termination imposed by Petitioner Corporation upon respondent !ell short o! being reasonable. Company poliies and regulations are generally valid and binding bet1een the employer and the employee unless sho1n to be grossly oppressive or ontrary to la10+ ? as in the ase at bar. To be sure, the unreasonableness o! the penalty o! termination as imposed in this ase is !urther highlighted by a !at admitted by Petitioner Corporation itsel!: that !or the ten/year period that respondent had been employed by petitioner orporation, he did not have any reord o! a violation o! its ompany poliies.

LAOR LA( CONCEPTS: (anagerial prerogatives are sub;et to limitations provided by la1, olletive bargaining agreements, and the general priniples o! !air play and ;ustie. 5' >n the exerise o! its management prerogative, an employer must there!ore ensure that the poliies, rules and regulations on 1or2/related ativities o! the employees must al1ays be !air and reasonable and the orresponding penalties, 1hen presribed, ommensurate to the oense involved and to the degree o! the in!ration

SUMMARY: •

The respondent, an employee o! the petitioner !ailed to attend the drug test on the designated day, 1hih resulted to his dismissal. The Court held that the management prerogative to dismiss the respondent 1as not proper, as the interpretation avoidaneU and un;ust re!usalU stated on the Anti/Drug ompany poliy 1as not lear as to 1hether

Labor Management Prerogative Digests

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