DAN RUNILLE M. ABESAMIS

CALS POULTRY SUPPLY CORPORATION vs. CANDELARIA ROCO

GR NO. 150660

(Probationary Employment)

FACTS:

CALS Poultry Supply Corporation is engaged in the business of selling dressed chicken and other related products.

On May 16, 1995, it hired Candelaria Roco, as helper at its chicken dressing plant on a probationary basis.

On Nov. 15, 1995, Candelaria Roco was terminated due to poor work performance, because she did not measure up to the work standards on the dressing of chicken.

This prompted Candelaria Roco to file a case for illegal dismissal.

The Labor Arbiter upheld CALS decision not to continue with her probationary employment having been found her unsuited for the work for which her services were engaged.

The National Labor Relations Commission (NLRC), affirmed the judgment of the Labor Arbiter.

On appeal by Candelaria to the Court of Appeals, the appellate court set aside the NLRCs decision and ordered reinstatement of Candelaria Roco because her employment was terminated on November 15, 1995 (she was hired on May 16, 1995), it was four (4) days after she ceased to be a probationary employee and became a regular employee within the ambit of Article 281 of the Labor Code.

CALS argues that the Court of Appeals computation of the 6-month probationary period is erroneous as the termination of Candelarias services on November 15, 1995 was exactly on the last day of the 6-month period.

Hence, this appeal to the S.C.

ISSUE:

How is the 6-month probationary period computed?

HELD:

The S.C. agrees with CALS contention as upheld by both the Labor Arbiter and the NLRC that Candelarias services was terminated within and not beyond the 6-month probationary period. In Cebu Royal v. Deputy Minister of Labor, the S.C.s computation of the 6-month probationary period is reckoned from the date of appointment up to the same calendar date of the 6th month following.

Jane S. Baker

ALCIRA VS. NLRC

GR NO. 149859

(Probationary Employment)

FACTS:

Respondent Middleby Philippines Corporation (Middleby) hired petitioner as engineering support services supervisor on a probationary basis for six months. Apparently unhappy with petitioners performance, respondent Middleby terminated petitioners services.

The parties, presenting their respective copies of Alciras appointment paper, claimed conflicting starting dates of employment: May 20, 1996 according to petitioner and May 27, 1996 according to respondent. Both documents indicated petitioners employment status as probationary (6 mos.) and a remark that after five months (petitioners) performance shall be evaluated and any adjustment in salary shall depend on (his) work performance.

In their defense, respondents claim that, during petitioners probationary employment, he showed poor performance in his assigned tasks, incurred ten absences, was late several times and violated company rules on the wearing of uniform. Since he failed to meet company standards, petitioners application to become a regular employee was disapproved and his employment was terminated.

ISSUES:

THE COURT OF APPEALS GRAVELY ERRED AND BLATANTLY DISREGARDED THE LAW IN HOLDING THAT PROBATIONARY EMPLOYMENT IS EMPLOYMENT FOR A DEFINITE PERIOD.

THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT AN EMPLOYER CAN BE PRESUMED TO HAVE COMPLIED WITH ITS DUTY TO INFORM THE PROBATIONARY EMPLOYEE OF THE STANDARDS TO MAKE HIM A REGULAR EMPLOYEE.

THE COURT OF APPEALS GRAVELY ERRED AND FAILED TO AFFORD PROTECTION TO LABOR IN NOT APPLYING TO THE INSTANT CASE THE DOCTRINE LAID DOWN BY THIS HONORABLE COURT IN SERRANO VS. NLRC, ET. AL., G.R. NO. 117040, JANUARY 27, 2000.

HELD:

ART. 281. PROBATIONARY EMPLOYMENT.

Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee.

The first issue we must resolve is whether petitioner was allowed to work beyond his probationary period and was therefore already a regular employee at the time of his alleged dismissal. We rule in the negative.

Petitioner claims that under the terms of his contract, his probationary employment was only for five months as indicated by the remark Please be informed that after five months, your performance shall be evaluated and any adjustment in salary shall depend on your work performance. The argument lacks merit. The five-month period referred to the evaluation of his work.

(O)ur computation of the 6-month probationary period is reckoned from the date of appointment up to the same calendar date of the 6th month following.(italics supplied)

In short, since the number of days in each particular month was irrelevant, petitioner was still a probationary employee when respondent Middleby opted not to regularize him on November 20, 1996.

The second issue is whether respondent Middleby informed petitioner of the standards for regularization at the start of his employment.Section 6 (d) of Rule 1 of the Implementing Rules of Book VI of the Labor Code (Department Order No. 10, Series of 1997) provides that:

xxx xxx xxx

(d) In all cases of probationary employment, the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. Where no standards are made known to the employee at that time, he shall be deemed a regular employee.

xxx xxx xxx

We hold that respondent Middleby substantially notified petitioner of the standards to qualify as a regular employee when it apprised him, at the start of his employment, that it would evaluate his supervisory skills after five months.

An employer is deemed to substantially comply with the rule on notification of standards if he apprises the employee that he will be subjected to a performance evaluation on a particular date after his hiring.

The third issue for resolution is whether petitioner was illegally dismissed when respondent Middleby opted not to renew his contract on the last day of his probationary employment. It is settled that even if probationary employees do not enjoy permanent status, they are accorded the constitutional protection of security of tenure. This means they may only be terminated for just cause or when they otherwise fail to qualify as regular employees in accordance with reasonable standards made known to them by the employer at the time of their engagement.

This constitutional protection ends on the expiration of the probationary period. On that date, the parties are free to either renew or terminate their contract of employment.

CABARON

MITSUBISHI MOTORS PHILS. CORP. V. CHRYSLER PHILS. LABOR UNION

(Probationary Employment)

Facts:

Private respondent Nelson Paras first worked with Mitsubishi Philippines as a shuttle bus driver on March 19, 1976. He resigned on June 16, 1982 because he went to Saudi Arabia and worked there as a diesel mechanic and heavy machine operator from 1982 to 1993. Upon his return, Mitsubishi Philippines re-hired him as a welder-fabricator at a tooling shop from November 1, 1994 to March 3, 1995.

On May 1996, Paras was re-hired again, this time as a probationary manufacturing trainee at the Plant Engineering Maintenance Department. He had an orientation on May 15, 1996 and afterwhich, with respect to the companys rules and guidelines, started reporting for work on May 27, 1996.

Paras was evaluated by his immediate supervisors after six months of working. The supervisors rating Paras performance were Lito R. Lacambacal and Wilfredo J. Lopez, as part of the MMPCs company policies. Upon this evaluation, Paras garnered an average rating.

Later, respondent Paras was informed by his supervisor, Lacambacal, that he received an average performance rating but it is a rate which would still qualify him to be regularized. But as part of the company protocols, the Division Managers namely A.C. Velando, H.T. Victoria and Dante Ong reviewed the performance evaluation made on Paras. Despite the recommendations of the supervisors, they unanimously agreed that the performance was unsatisfactory. As a consequence, Paras was not considered for regularization.

Paras received a Notice of Termination on November 26, 1996 which was dated November 25, 1996. This letters intent is to formally relieve him off of his services and position effective the date since he failed to meet the companys standards.

Issue:Whether or not respondent Paras termination was legal or not.

Decision:

Paras termination was not legal. The Court holds that a company employer may indeed hire an employee on a probationary basis in order to determine his fitness to perform work. The Court stresses the existence of the statements under Article 281 of the Labor Code which specifies that the employer must inform the employee of the standards they were to meet in order to be granted regularization and that such probationary period shall not exceed six (6) months from the date the employee started working, unless specified in the apprenticeship agreement.

Respondent Paras was employed on a probationary basis and was apprised of the standards upon which his regularization would be based during the orientation. His first day to report for work was on May 27, 1996. As per the company's policy, the probationary period was from three (3) months to a maximum of six (6) months. Applying Article 13 of the Civil Code, the probationary period of six (6) months consists of one hundred eighty (180) days. The Court conforms with paragraph one, Article 13 of the Civil Code providing that the months which are not designated by their names shall be understood as consisting of thirty (30) days each. This case, the Labor Code pertains to 180 days. Also, as clearly provided for in the last paragraph of Article 13, it is said that in computing a period, the first day shall be excluded and the last day included. Thus, the one hundred eighty (180) days commenced on May 27, 1996, and ended on November 23, 1996. The termination letter dated November 25, 1996 was served on respondent Paras only at 3:00 a.m. of November 26, 1996. The Court held that by that time, he was actually already a regular employee of the petitioner under Article 281 of the Labor Code. His position as a regularized employee is thus secured until further notice.

SHIELA T. DELA VICTORIA

SONZA vs. ABS-CBN

G. R. No. 138051, 413 SCRA 583

(Classification of Employment as to TV and Radio Broadcasting Industries)

FACTS:

ABS-CBN signed an Agreement with the Mel and Jay Management and DevelopmentCorporation). Referred to as AGENT, MJMDC agreed to provide Jay Sonzas services exclusively to ABS-CBN as talent. After more than two years, Sonza as agent of MJMDC wrote a letter to ABS-CBN notifying them of the formers intention to rescind the agreement. Sonza waived and renounced the recovery of the remaining amounts stipulated in the agreement butreserved the right to seek the recovery of other benefits under the same. Later, SONZA filed a complaint against ABS-CBN before the DOLE-NCR, alleging that ABS-CBN did not pay his salaries, separation pay, service incentive leave pay, 13th month pay, signing bonus, travel allowance and amounts due under the Employees Stock Option Plan ("ESOP"). In response ABS-CBN filed a Motion to Dismiss on the ground that no employer-employee relationship existed between the parties. Meanwhile, pursuant to the Agreement, ABS-CBN continued to remit SONZAs monthly talent fees through his account at PCI Bank. ABS-CBN later opened a new account with the same bank where ABS-CBN deposited SONZAs talent fees and other payments due him under the Agreement.

ISSUE:

Whether or not there existed an employee-employer relationship between Sonza and ABS-CBN.

HELD:

Applying the four fold test, there is no employee-employer relationship. The elements of an employer-employee relationship are: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employers power to control the employee on the means and methods by which the work is accomplished. The last element, the so-called "control test", is the most important element.

Individuals with special skills, expertise or talent enjoy the freedom to offer their services as independent contractors. The right to life and livelihood guarantees this freedom to contract as independent contractors. The right of labor to security of tenure cannot operate to deprive an individual, possessed with special skills, expertise and talent, of his right to contract as an independent contractor. An individual like an artist or talent has a right to render his services without any one controlling the means and methods by which he performs his art or craft. This Court will not interpret the right of labor to security of tenure to compel artists and talents to render their services only as employees. If radio and television program hosts can render their services only as employees, the station owners and managers can dictate to the radio and television hosts what they say in their shows. This is not conducive to freedom of the press.

DY

FARLEY FULACHE VS. ABS-CBN

[G.R. No.183810 January 21, 2010]

(Classification of Employment as to TV and Radio Broadcasting Industries)

FACTS:

The petitioners in this case are questioning the CBA executed between ABS-CBN and the ABS-CBN Rank-and-File Employees Union (Union) because under such agreement, they are only considered as temporary and not regular employees.The petitioners claimed that they should be recognized as regular employees of ABS-CBN because they had already rendered more than a year of service in the company and, therefore, entitled to the benefits of a regular employee.

Instead of salaries, ABS-CBN pointed out that talents are paid a pre-arranged consideration called talent fee taken from the budget of a particular program and subject to a ten percent (10%) withholding tax.Talents do not undergo probation.Their services are engaged for a specific program or production, or a segment thereof.Their contracts are terminated once the program, production or segment is completed.

ABS-CBN alleged that the petitioners services were contracted on various dates by itsCebustation as independent contractors/off camera talents, and they were not entitled to regularization in these capacities.

Labor Arbiter Rendoque rendered his decisionholding that the petitioners were regular employees of ABS-CBN, not independent contractors, and are entitled to the benefits and privileges of regular employees

ABS-CBN appealed the ruling to the National Labor Relations Commission (NLRC) Fourth Division, mainly contending that the petitioners were independent contractors, not regular employees.

While the appeal of the regularization case was pending, ABS-CBN dismissed Fulache, Jabonero, Castillo, Lagunzad and Atinen (all drivers) for their refusal to sign up contracts of employment with service contractor Able Services.The four drivers and Atinen responded by filing acomplaint forillegal dismissal.

TheLabor Arbiter Rendoque upheld the validity of ABS-CBN's contracting out of certain work or services in its operations. The labor arbiter found that petitioners Fulache, Jabonero, Castillo, Lagunzad and Atinen had been dismissed due to redundancy, an authorized cause under the law.

The NLRC reversed the labor arbiters ruling in the illegal dismissal case; it found that petitioners Fulache, Jabonero, Castillo, Lagunzad and Atinen had been illegally dismissed and awarded them backwages and separation pay in lieu of reinstatement. Under both cases, the petitioners were awarded CBA benefits and privileges from the time they became regular employees up to the time of their dismissal.

The NLRC resolved the motions for reconsideration onby both parties, thus, on the regularization issue, the NLRC stood by the ruling that the petitioners were regular employees entitled to the benefits and privileges of regular employees. On the illegal dismissal case, the petitioners, while recognized as regular employees, were declared dismissed due to redundancy.The NLRC denied the petitioners second motion for reconsideration in its order ofMay 31, 2006for being a prohibited pleading.

ISSUE:

WON the petitioners are correct that they should be considered already as regular employees

WON Fulache and the other petitioners were dismissed illegally

RULING:

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

Section 1.APPROPRIATE BARGAINING UNIT. The parties agree that the appropriate bargaining unit shall beregular rank-and-file employeesof ABS-CBN BROADCASTING CORPORATION but shall not include:

a) Personnel classified as Supervisor and Confidential employees;

b)Personnel who are on casual or probationary status as defined in Section 2 hereof;

c)Personnel who are on contract status or who are paid for specified units of work such as writer-producers, talent-artists, and singers.

The inclusion or exclusion of new job classifications into the bargaining unit shall be subject of discussion between the COMPANY and theUNION.

Under these terms, the petitioners are members of the appropriate bargaining unit because they are regular rank-and-file employees and do not belong to any of the excluded categories. Specifically, nothing in the records shows that they are supervisory or confidential employees; neither are they casual nor probationary employees. Most importantly, the labor arbiters decision ofJanuary 17, 2002 affirmed all the way up to the CA level ruled against ABS-CBNs submission that they are independent contractors. Thus, as regular rank-and-file employees, they fall within CBA coverage under the CBAs express terms and are entitled to its benefits.

2. Their dismissal was not only unjust and in bad faith as the above discussions abundantly show.The bad faith in ABS-CBNs move toward its illegitimate goal was not even hidden; it dismissed the petitioners already recognized as regular employees for refusing to sign up with its service contractor.Thus, from every perspective, the petitioners were illegally dismissed.

By law, illegally dismissed employees are entitled to reinstatement without loss of seniority rights and other privileges and to full backwages, inclusive of allowances, and to other benefits or their monetary equivalent from the time their compensation was withheld from them

AIKO ELENI PALER

UERMMMC-RDU VS. LAGUESMA

GR NOS. 125425-26

(Classification of Employment as to Hospitals)

Facts:

The resident physicians formed a union called the UERMMC-Resident Doctors Union and filed the petition for certification so that it will be recognized as the exclusive bargaining agent of all the resident physicians in the hospital for purposes of collective bargaining.

The petition for certification was dismissed by the Undersecretary, acting under the authority of the Secretary of Labor, on the ground that there exist no employer-employee relationship between the resident doctors and the hospital.

Issue:

WON resident doctors are employees of the hospital.

Held:

The resident doctors are not employees of the hospital. It is clear that physicians undergo residency training in order to hone their skills and develop or improve their knowledge in a specialized medical field or discipline. Hence, residency is basically and simply a continuation of their medical course. However, they are not required or mandated under any law to further undergo a residence training program. Having passed the medical board examinations, they are already licensed physicians and could very well engage in the general practice of medicine. It is for the practice of highly specialized medical disciplines which necessitates further on-the-job training thereon.

Viewed from this perspective, residency training clearly amounts to a pursuit of further education on a specific discipline. Thus, the relationship between the teaching/training hospital and the resident doctor is not one of employer-employee. The training/teaching hospital may simply be likened to a medical school/university, but in this instance, the emphasis is on the practical application and training of its students, the resident doctors.

RIPARIP

CALAMBA (Classification of Employment as to Hospitals)

ROJALES

Ramos vs. CA

(G.R. 124354, April 11, 2002)

(Classification of Employment as to Hospitals)

FACTS:

After seeking professional medical help with De Los Santos Medical Center, Erlinda Ramos was advised to undergo an operation for the removal of a stone in her gall bladder. She was referred to Dr. Hosaka, a surgeon, who recommended the services of Dr. Gutierrez, an anesthesiologist.

On the day of the operation, Dr. Hosaka came more than 3 hours late than the scheduled operation. And when Dr. Gutierrez was trying to intubate the patient, there appeared a bluish discoloration On Erlindas nailbeds on her left hand. Ramoss sister-in-law, a nurse, heard Dr. Gutierrez say, Ang hirap ma-intubate nito, mali yata ang pagkakapasok. Dr. Hosaka sought the help of another anesthesiologist, but the patients condition did not change. On the same day, Erlinda was brought to the ICU where he stayed for a month, and she remained in comatose since then until she died. RTC found Dr. Hosaka and Dr. Gutierrez negligent in the performance of their duties to Erlinda.

ISSUE: Is De Los Santos Medical Center solidarily liable for the injury suffered by Erlinda Ramos?

HELD:

NO. There is no employer-employee relationship between DLSMC and Doctors Hosaka and Gutierrez which would hold the hospital solidarily liable for the injury suffered by petitioner Erlinda under Art. 2180 of the Civil Code.

As explained by the hospital, the admission of a physician to membership in DLSMCs medical staff as active or visiting consultant is first decided upon by the Credentials Committee thereof, which is composed of the heads of the various specialty departments with the department head of the particular specialty applied for as chairman. The Credentials Committee then recommends to DLSMC's Medical Director or Hospital Administrator the acceptance or rejection of the applicant physician, and said director or administrator validates the committee's recommendation.[52]Similarly, in cases where a disciplinary action is lodged against a consultant, the same is initiated by the department to whom the consultant concerned belongs and filed with theEthics Committee consisting of the department specialty heads.The medical director/hospital administrator merely acts as ex-officio member of said committee.

Neither is there any showing that it is DLSMC which pays any of its consultants for medical services rendered by the latter to their respective patients.Moreover,the contract between the consultant in respondent hospital and his patient is separate and distinct from the contract between respondent hospital and said patient.The first has for its object the rendition of medical services by the consultant to the patient, while the second concerns the provision by the hospital of facilities and services by its staff such as nurses and laboratory personnel necessary for the proper treatment of the patient.

Further, no evidence was adduced to show that the injury suffered by petitioner Erlinda was due to a failure on the part of respondent DLSMC to provide for hospital facilities and staff necessary for her treatment.

De Los Santos Medical Center is hereby absolved from liability arising from the injury suffered by petitioner Erlinda Ramos on June 17, 1985

SALLACAY

PROFESSIONAL SERVICES INC. VS. CA

GR NO. 126297

(Classification of Employment as to Hospitals)

FACTS:

PSI, together with Dr. Miguel Ampil (Dr. Ampil) and Dr. Juan Fuentes (Dr. Fuentes), was impleaded by Enrique Agana and Natividad Agana (later substituted by her heirs), in a complaint for damages filed in the Regional Trial Court (RTC) of Quezon City, Branch 96, for the injuries suffered by Natividad when Dr. Ampil and Dr. Fuentes neglected to remove from her body two gauzes which were used in the surgery they performed on her on April 11, 1984 at the Medical City General Hospital. PSI was impleaded as owner, operator and manager of the hospital.

ISSUE:

WON there exists an employer-employee relationship between Dr. Ampil and the hospital so that the latter can be held vicariously liable for the formers negligence.

HELD:

The Court holds that, in this particular instance, the concurrent finding of the RTC and the CA that PSI was not the employer of Dr. Ampil is correct. Control as a determinative factor in testing the employer-employee relationship between doctor and hospital under which the hospital could be held vicariously liable to a patient in medical negligence cases is a requisite fact to be established by preponderance of evidence. Here, there was insufficient evidence that PSI exercised the power of control or wielded such power over the means and the details of the specific process by which Dr. Ampil applied his skills in the treatment of Natividad. Consequently, PSI cannot be held vicariously liable for the negligence of Dr. Ampil under the principle of respondeat superior.

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

TANCINCO

Bisig Manggagawa sa TRYCO et. Al. vs. NLRC G.R. No. 151309

(Concept of Management Prerogative)

Facts:

Tryco Pharma Corporation (Tryco) and Bisig Manggagawa sa Tryco (BMT) signed a Memorandum of Agreement (MOA) that provides for a compressed workweek schedule. The said MOA also provides that no overtime pays shall be due and payable to the employee for work rendered from 8:00am to 6:12pm. However, should an employee be permitted or required to work beyond 6:12pm, such employee shall be entitled to overtime pay.

Sometime in March 1997, Tryco received a letter from the Bureau of Animal Industry reminding that its production should be conducted in San Rafael, Bulacan and not in Caloocan City. Due to this, Tryco issued a memorandum directing some of its employee to report to the companys plant site in Bulacan but BMT opposed the transfer of its members contending that it constitutes unfair labor practice. In protest, BMT declared a strike on May 26, 1997.

In August 1997, they then filed their complaints for illegal dismissal, underpayment of wages, nonpayment of overtime pay and service incentive leave and refusal to bargain against Tryco. The Labor Arbiter dismissed the case for lack of merit. The NLRC & CA affirmed the Labor Arbiters decision. Hence, this appeal.

Issue:

Whether or not the transfer of the employees is a valid exercise of management prerogative.

Held:

Trycos decision to transfer its production activities and employees to Bulacan was within the scope of its inherent right to control and manage its enterprise effectively. While the law is solicitous of the welfare of employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. This prerogative extends to the managements right to regulate, according to its own discretion and judgment all aspects of employment, including the freedom to transfer and reassign employees according to the requirements of its business. Managements prerogative of transferring and reassigning employees from one operation to another in order to meet the requirements of the business is, therefore, generally not constitutive of constructive dismissal. Thus, the consequent transfer of Trycos personnel, assigned to the Production Department, was well within the scope of its management prerogative.

DAN RUNILLE M. ABESAMIS

MANILA JOCKEY CLUB EMPLOYEES LABOR UNION-PTGWO vs. MANILA JOCKEY CLUB, INC.

GR NO. 167760

(Concept of Management Prerogative)

FACTS:

Petitioner Manila Jockey Club Employees Labor Union-PTGWO and respondent Manila Jockey Club, Inc., a corporation with a legislative franchise to conduct, operate and maintain horse races, entered into a Collective Bargaining Agreement (CBA) effective January 1, 1996 to December 31, 2000. The CBA governed the economic rights and obligations of respondents regular monthly paid rank-and-file employees.

In the CBA, the parties agreed to a 7-hour work schedule from 9:00 a.m. to 12:00 noon and from 1:00 p.m. to 5:00 p.m. on a work week of Monday to Saturday. The CBA likewise reserved in respondent certain management prerogatives, including the determination of the work schedule.

On April 3, 1999, respondent issued an inter-office memorandum declaring that, effective April 20, 1999, the hours of work of regular monthly-paid employees shall be from 1:00 p.m. to 8:00 p.m. when horse races are held, that is, every Tuesday and Thursday. The memorandum, however, maintained the 9:00 a.m. to 5:00 p.m. schedule for non-race days.

Subsequently, before a panel of voluntary arbitrators of the National Conciliation and Mediation Board (NCMB), petitioner questioned the above office memorandum. Petitioner claimed that as a result of the memorandum, the employees are precluded from rendering their usual overtime work from 5:00 p.m. to 9:00 p.m.

The NCMBs panel of voluntary arbitrators upheld respondent's prerogative to change the work schedule. Upon appeal, the same was upheld by the CA.

ISSUE:

Was the act of the respondent a valid exercise of Management Prerogative?

HELD:

Yes, Respondent, as employer, cites the change in the program of horse races as reason for the adjustment of the employees work schedule. It rationalizes that when the CBA was signed, the horse races started at 10:00 a.m. When the races were moved to 2:00 p.m., there was no other choice for management but to change the employees' work schedule as there was no work to be done in the morning. Evidently, the adjustment in the work schedule of the employees is justified.

The courts are not unmindful that every business enterprise endeavors to increase profits. As it is, the Court will not interfere with the business judgment of an employer in the exercise of its prerogative to devise means to improve its operation, provided that it does not violate the law, CBAs, and the general principles of justice and fair play. We have thus held that management is free to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, layoff of workers and discipline, dismissal, and recall of workers.

Jane S. Baker

CAPITOL MEDICAL CENTER VS. MERIS

470 SCRA 125

(Concept of Management Prerogative)

Facts:

On January 16, 1974, petitioner Capitol Medical Center, Inc. (Capitol) hired Dr. Cesar Meris (Dr. Meris), one of its stockholders, as in charge of its Industrial Service Unit (ISU) at a monthly salary of P10,270.00.

Until the closure of the ISU on April 30, 1992,[6] Dr. Meris performed dual functions of providing medical services to Capitol more than 500 employees and health workers as well as to employees and workers of companies having retainer contracts with it. On March 31, 1992, Dr. Meris received from Capitol's president and chairman of the board, Dr. Thelma Navarette-Clemente (Dr. Clemente), a notice advising him of the management's decision to close or abolish the ISU and the consequent termination of his services as Chief thereof, effective April 30, 1992, with the reason that the hospital management has decided to abolish the CMCs ISU in view of the almost extinct demand for direct medical services.

Dr. Meris, doubting the reason behind the management's decision to close the ISU and believing that the ISU was not in fact abolished as it continued to operate and offer services to the client companies with Dr. Clemente as its head and the notice of closure was a mere ploy for his ouster in view of his refusal to retire despite Dr. Clemente's previous prodding for him to do so, sought his reinstatement but it was unheeded.

ISSUE:

THE COURT OF APPEALS ERRED IN NOT UPHOLDING PETITIONERS' MANAGEMENT PREROGATIVE TO ABOLISH THE INDUSTRIAL SERVICE UNIT (ISU).

HELD: Work is a necessity that has economic significance deserving legal protection. The social justice and protection to labor provisions in the Constitution dictate so.

Employers are also accorded rights and privileges to assure their self-determination and independence and reasonable return of capital. This mass of privileges comprises the so-called management prerogatives. Although they may be broad and unlimited in scope, the State has the right to determine whether an employer's privilege is exercised in a manner that complies with the legal requirements and does not offend the protected rights of labor. One of the rights accorded an employer is the right to close an establishment or undertaking. The right to close the operation of an establishment or undertaking is explicitly recognized under the Labor Code as one of the authorized causes in terminating employment of workers, the only limitation being that the closure must not be for the purpose of circumventing the provisions on termination of employment embodied in the Labor Code.

ART. 283. Closure of establishment and reduction of personnel. The employer may also terminate the employment of any employee due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. The phrase "closures or cessation of operations of establishment or undertaking" includes a partial or total closure or cessation.

x x x Ordinarily, the closing of a warehouse facility and the termination of the services of employees there assigned is a matter that is left to the determination of the employer in the good faith exercise of its management prerogatives. The applicable law in such a case is Article 283 of the Labor Code which permits 'closure or cessation of operation of an establishment or undertaking not due to serious business losses or financial reverses,' which, in our reading includes both the complete cessation of operations and the cessation of only part of a company's business.

And the phrase "closures or cessation x x x not due to serious business losses or financial reverses" recognizes the right of the employer to close or cease his business operations or undertaking even if he is not suffering from serious business losses or financial reverses, as long as he pays his employees their termination pay in the amount corresponding to their length of service.Clearly then, the right to close an establishment or undertaking may be justified on grounds other than business losses but it cannot be an unbridled prerogative to suit the whims of the employer.The ultimate test of the validity of closure or cessation of establishment or undertaking is that it must be bona fide in character. And the burden of proving such falls upon the employer.In the case at bar, Capitol failed to sufficiently prove its good faith in closing the ISU.The records of the case, however, fail to impress that there was indeed extinct demand for the medical services rendered by the ISU.

The closure of ISU then surfaces to be contrary to the provisions of the Labor Code on termination of employment.

CABARON

SAN MIGUEL CORPORATION et. al. v. LAYOC

GR NO 149640

(Elements for a Valid Exercise of Management Prerogative)

Facts:

Respondents were among the "Supervisory Security Guards" of the Beer Division of San Miguel Corporation. They started working as guards with the petitioner San Miguel Corporation assigned to the Beer Division on different dates until such time that they were promoted as supervising security guards. From the commencement of their employment, the private respondents were required to punch their time cards for purposes of determining the time they would come in and out of the company's work place. Corollary, the private respondents were availing the benefits for overtime, holiday and night premium duty through time card punching. However, in the early 1990's, the San Miguel Corporation embarked on a Decentralization Program aimed at enabling the separate divisions of the San Miguel Corporation to pursue a more efficient and effective management of their respective operations.

As a result of the Decentralization Program, the Beer Division of the San Miguel Corporation implemented on January 1, 1993 a "no time card policy" whereby the Supervisory I and II composing of the supervising security guards of the Beer Division were no longer required to punch their time cards. Consequently, on January 16, 1993, without prior consultation with the private respondents, the time cards were ordered confiscated and the latter were no longer allowed to render overtime work. However, in lieu of the overtime pay and the premium pay, the personnel of the Beer Division of the petitioner San Miguel Corporation affected by the "No Time Card Policy" were given a 10% across-the-board increase on their basic pay while the supervisors who were assigned in the night shift (6:00 p.m. to 6:00 a.m.) were given night shift allowance ranging from P2,000.00 to P2,500.00 a month. Hence, this complaint filed for unfair labor practice, violation of Article 100 of the Labor Code of the Philippines, and violation of the equal protection clause and due process of law in relation to paragraphs 6 and 8 of Article 32 of the New Civil Code of the Philippines.

Issue:

WON the no time card policy is a valid exercise of management prerogative.

Decision:

The Court held that given the discretion granted to the various divisions of SMC in the management and operation of their respective businesses and in the formulation and implementation of policies affecting their operations and their personnel, the no time card policy affecting all of the supervisory employees of the Beer Division is a valid exercise of management prerogative.The no time card policy undoubtedly caused pecuniary loss to respondents. However, SMC granted to respondents and other supervisory employees a 10% across-the-board increase in pay and night shift allowance, in addition to their yearly merit increase in basic salary, to cushion the impact of the loss.So long as a companys management prerogatives are exercised in good faith for the advancement of the employers interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, this Court will uphold them.

SHIELA T. DELA VICTORIA

Philippine Airlines, Inc. vs. NLRC,

225 SCRA 301

(Limitations of Management Prerogative)

Facts:

On March 15, 1985, the Philippine Airlines, Inc. (PAL) completely revised its 1966 Code of Discipline. The Code was circulated among the employees and was immediately implemented, and some employees were forthwith subjected to disciplinary measures embodied therein.

On August 20, 1985, the Philippine Airlines Employees Association (PALEA) filed a complaint before the National Labor Relations Commission (NLRC) for unfair labor practice with the following remarks: ULP with arbitrary implementation of PALs Code of Discipline without notice and prior discussion with Union by Management. PALEA alleged that copies of the Code had been circulated in limited numbers; tat being penal in nature the Code must conform with the prejudicial with the requirements of sufficient publication, and that the Code was arbitrary, oppressive, and prejudicial to the rights of the employees. It prayed that implementation of the Code be held in abeyance; that PAL should discuss the substance o the Code with PALEA; that employees dismissed under the Code be reinstated and their cases subjected to further hearing; and that PAL be declared guilty of unfair labor practice and be ordered to pay damages.

PAL filed a motion to dismiss the complaint asserting its prerogative as an employer to prescribe rules and regulations regarding employees conduct in carrying out their duties and functions, and alledging that by implementing the Code, it had not violated the collective bargaining agreement (CBA) or any provision of the Labor Code.

Issue:

Whether or not the formulation of a Code of Discipline among the employees is a shared responsibility of the employer and the employees.

Held:

So long as the a companys management prerogative s are exercise in good faith for the advancement of the employers interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, this Court will uphold them.

All this points to the conclusion that the exercise of managerial prerogatives is not unlimited. It is circumscribed by limitations found in law, a collective bargaining agreement, or the general principals of fair play and justice.

A line must be drawn between management prerogatives regarding business operations per se and those which affect the rights of the employees. In treating the latter, management should see to it that its employees are at least properly informed of its decisions or modes action. PAL asserts that all its employees have been furnished copies of the Code. Public respondents found to the contrary, which finding, to say the least is entitled to great respect.

DY

WILTSHIRE FILE CO., INC. VS. NLRC

193 SCRA 665

(Scope of MP: Hiring)

FACTS:

Private respondent Vicente Ong was the Sales Manager of petitioner from March 16,1981 up to June 18, 1985.2.On 13 June 1985, upon private respondent's return from a business and pleasure trip abroad, he was informed by the President of petitioner that his services were being terminated. Private respondent maintains that he tried to get an explanation from management of his dismissal but to no avail. When private respondent again tried to speak with the President of petitioner, the company's security guard handed him a letter which formally informed him that his services were being terminated upon the ground of redundancy.

ISSUE

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

HELD:

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

The financial troubles were not of private respondents making. Private respondent cannot insist on the retention of his position upon the ground that he had not contributed to the financial problems of Wiltshire.

The characterization of an employees services as superfluous or no longer necessary and, therefore, properly terminable, is an exercise of business judgment on the part of the employer. The wisdom and soundness of such characterization or decision is not subject to discretionary review provided, of course, that a violation

AIKO ELENI PALER

ALMODIEL VS. NLRC

223 SCRA 341

(Scope of MP: Promotion)

FACTS:

Petitioner is a CPA hired as Cost Accounting Manager of Respondent Raytheon Philippines, Inc. However, when the standard cost accounting system for Raytheon plans worldwide was adopted and installed in the Philippine operations, the services of the petitioner was reduced to only the submission of period reports.

On January 27, 1989, petitioner was told of the abolition of his position on the ground of redundance. He was constrained to file the complaint for illegal dismissal after his request to have him transferred to another department was denied. He also alleged that the functions of his position were absorbed by the Payroll/MIS/Finance Department which is headed by a resident alien without working permit from the DOLE. Petitioner also assails Raytheon's choice of Ang Tan Chai to head the Payroll/Mis/Finance Department, claiming that he is better qualified for the position.

ISSUE:

Naglibog kos issue ky redundance man gud ni nga case naka.sentro

HELD:

It has been consistently held that an objection founded on the ground that one has better credentials over the appointee is frowned upon so long as the latter possesses the minimum qualifications for the position. In the case at bar, since petitioner does not allege that Ang Tan Chai does not qualify for the position, the Court cannot substitute its discretion and judgment for that which is clearly and exclusively management prerogative. To do so would take away from the employer what rightly belongs to him as aptly explained in National Federation of Labor Unions v. NLRC: It is a well-settled rule that labor laws do not authorize interference with the employer's judgment in the conduct of his business. The determination of the qualification and fitness of workers for hiring and firing, promotion or reassignment are exclusive prerogatives of management. The Labor Code and its implementing Rules do not vest in the Labor Arbiters nor in the different Divisions of the NLRC (nor in the courts) managerial authority. The employer is free to determine, using his own discretion and business judgment, all elements of employment, "from hiring to firing" except in cases of unlawful discrimination or those which may be provided by law.

QUISTADIO

PT & T V. LAPLANA

G.R. No. 76645

(Scope of MP: Transfer)

Facts:

Alicia Laplana was the cashier of the Baguio City Branch Office of the Philippine Telegraph and Telephone Corporation (PT & T). Sometime in March 1984, PT & T's treasurer, Mrs. Alicia A. Arogo, directed Laplana to transfer to the company's branch office at Laoag City. Laplana refused the reassignment. She set out her reasons, mostly adjustments in the new workplace and family related matters. Mrs. Arogo reiterated her directive for Laplana's transfer to the Laoag branch. Apparently Laplana was not allowed to resume her work as cashier of the Baguio branch. As a result, Laplana requested to be retrenched. Termination of Laplana's employment on account of retrenchment thereupon followed. Laplana then filed a complaint against PT & T before the Labor Arbiter.

Issue:

Whether or not the termination of employment of Laplana was with valid ground

Held:

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

In this case, the employer has not been shown to be acting otherwise than in good faith, and in the legitimate pursuit of what it considered its best interests, in deciding to transfer Laplana to another office. There is no showing whatever that the employer was transferring Laplana to another work place, not because she would be more useful there, but merely as a subterfuge to rid . . . (itself) of an undesirable worker, or to penalize an employee for . . . union activities. . . . The employer was moreover not unmindful of Laplana's initial plea for reconsideration of the directive for her transfer to Laoag; in fact, in response to that plea not to be moved to the Laoag Office, the employer opted instead to transfer her to Manila, the main office, offering at the same time the normal benefits attendant upon transfers from an office to another.

RIPARIP

BLUE DAIRY CORP(Scope of MP: Transfer)

ROJALES

Pharmacia and Upjohn, Inc., et. al., v. Ricardo P. Albayda, Jr.,

(G.R No. 172724, August 23, 2010)

(Scope of MP: Transfer)

FACTS:

Albayda is a District Sales Manager of Petitioner Pharmacia and Upjohn, Inc. assigned in District XI in the Western Visayas. Pursuant to a district territorial configuration for the new marketing and sales direction for the year 2000, Albayda was informed in a memorandum that he will be reassigned as a District Sales Manager to District XII in the northern Mindanao, which he adamantly refused for reasons of personal inconvenience and dislocation from his family. Pharmacias National Sales and External Business Manager tried to convince him because being one of the top performing sales managers of the company, his skills and expertise are needed by the District office in Northern Mindanao which has been dismally performing in the past; however, Albayda still refused the transfer.

The Human Resource Manager also met with respondent telling him that he will be entitled to Relocation Benefits and Allowance and reiterated in a series of memorandum that his services were badly needed in Cagayan de Oro City due to the latters poor performance and also for his personal growth. Albayda was even given the option to transfer in Metro Manila with the same position as the District Manager, which he again refused. He viewed the transfer as the companys scheme to terminate his employment. He stopped answering these memorandums, so the company sent him another memo directing him to report for work within 5 days from receipt; otherwise, he will be terminated on the basis of being absent without official leave (AWOL). Until finally, the company sent him a memo notifying him of their decision to terminate his services on the ground of being AWOL and insubordination after he had repeatedly refused to report for work despite due notice, hence this complaint for constructive dismissal.

ISSUE:

Is the transfer of Albayda from Western Visayas to Cagayan de Oro City a valid exercise of companys management prerogative?

HELD:

YES. Jurisprudence recognizes the exercise of management prerogative to transfer or assign employees from one office or area to another, provided there is no demotion in rank, diminution of salary, benefits and other privileges, and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause.

The transfer in this case was a valid exercise of a legitimate management prerogative to maximize business opportunities, growth, and development of personnel, and the Albaydas expertise was needed to build the companys business in CDO, which dismally performed in 1999. There was no demotion as he will also be holding the same position, and the transfer did not indicate that his emoluments will be reduced. He was even informed that he will be entitled to relocation benefits and allowance. Furthermore, in his employment contract, he agreed that he was willing to be assigned to any work or workplace during the period of his employment as may be determined by the company whenever the operations require such assignment. There was no evidence showing that the restructuring of the company was done with ill motives or with malice and bad faith purposely to constructively terminate respondent. The very nature of a salesman is mobile and ambulant.

On the issue of due process, while no actual hearing was held, the same is not fatal, as only an ample opportunity to be heard is what the law requires in order to satisfy due process of law. The twin notice were complied with when respondent was sent a memo which served as a final warning directing him to report for work within 5 days otherwise he will be terminated on the ground of being AWOL. Upon receipt of this first memo, respondent could have asked for a conference with the company which he failed to do, hence the second memo informing him of the companys decision to terminate his services for being AWOL and for insubordination for deliberately ignoring the defying the lawful orders of his employer which is a valid ground for termination under Art. 282 (a) of the LC. He was, however, awarded separation pay as a measure of social justice as this was his 1st infraction and considering his 22 years of services with the company.

SALLACAY

ZAFRA et al VS CA

389 SCRA 200

(Scope of MP: Transfer)

FACTS:

Petitioner Zel T. Zafra was hired by PLDT as Operations Analyst II while co-petitioner Edwin B. Ecarma was hired as Junior Operations Analyst I. Both were regular rank-and-file employees assigned at the Regional Operations and Maintenance Control Center (ROMCC) of PLDTs Cebu Provincial Division. They were tasked to maintain the operations and maintenance of the telephone exchanges in the Visayas and Mindanao areas.

In March 1995, petitioners were chosen to attend a training program in Germany. ALCATEL, the foreign supplier, shouldered the cost of their training and travel expenses. Petitioners left for Germany on April 10, 1995 and stayed there until July 21, 1995.

While petitioners were in Germany, a certain Mr. R. Relucio, SwitchNet Division Manager, requested advice, if any of the training participants were interested to transfer to the Sampaloc ROMCC to address the operational requirements therein.

Upon petitioners return from Germany, a certain Mr. W.P. Acantillado, Senior Manager of the PLDT Cebu Plant, informed them about the memorandum. They balked at the idea, but PLDT, proceeded to transfer petitioners to the Sampaloc ROMCC effective January 3, 1996.

Petitioners left Cebu for Manila on December 27, 1995 to air their grievance to PLDT and to seek assistance from their union head office in Mandaluyong. PLDT ordered petitioners to report for work on January 16, 1996, but they asked for a deferment to February 1, 1996. Petitioners reported for work at the Sampaloc office on January 29, 1996. Meanwhile PLDT moved the effectivity date of their transfer to March 1, 1996. On March 13, 1996, petitioners again appealed to PLDT to no avail. And, because all their appeals fell on deaf ears, petitioners, while in Manila, tendered their resignation letters on March 21, 1996. Consequently, the expenses for their training in Germany were deducted from petitioners final pay.

On September 11, 1996, petitioners filed a complaint with the National Labor Relations Commission Regional Arbitration Branch No. 7 for alleged constructive dismissal and non-payment of benefits under the Collective Bargaining Agreement.

In their complaint, petitioners prayed that their dismissal from employment be declared illegal. They also asked for reinstatement with full backwages, refund of unauthorized deductions from their final pay, including damages, costs of litigation, and attorneys fees.

Respondent PLDT, for its part, averred that petitioners agreed to accept any assignment within PLDT in their application for employment and also in the undertaking they executed prior to their training in Germany. It prayed that petitioners complaint be dismissed.

ISSUE:

WON the petitioners were illegally dismissed.

DECISION:

The petitioners were illegally dismissed. The Court held that although transfer of an employee ordinarily lies within the ambit of management prerogatives, a transfer amounts to constructive dismissal when the transfer is unreasonable, inconvenient, or prejudicial to the employee, and involves a demotion in rank or diminution of salaries, benefits, and other privileges. In the present case, petitioners were unceremoniously transferred, necessitating their families relocation from Cebu to Manila. This act of management appears to be arbitrary without the usual notice that should have been done even prior to their training abroad. From the employees viewpoint, such action affecting their families is burdensome, economically and emotionally. It is no exaggeration to say that their forced transfer is not only unreasonable, inconvenient, and prejudicial, but to our mind, also in defiance of basic due process and fair play in employment relations.

TANCINCO

PT & T vs. CA

G.R. No. 152057

(Scope of MP: Transfer)

Facts:

PT & T is a domestic corporation engaged in the business of providing telegraph and communication services thru its branches all over the country. It employed various employees and among them are the private respondents of this case.

Sometime in 1997, after conducting series of studies regarding the profitability of its retail operations, its existing number of employees, PT & T came up with the Relocation and Restructuring Program. Thereafter, on August 11, 1997, private respondents herein received separate letters from PT & T giving them the option to choose the branch which they could be transferred. Then, they were expected to report on their assignment.

PT & T then offered benefits and allowances to those employees who would agree to transfer. However, private respondent rejected the offer and they were asked by PT & T to explain their reason. Private respondents explained that the said transfer would cause enormous difficulties on their part since their new assignment involves distant places which would require their separation from their families. Dissatisfied with the explanation, PT & T dismissed them from work on the ground of willful disobedience.

Issue: 1. Whether or not the transfers of private respondents are considered promotions.

2. Whether or not the dismissal was valid.

Held:

1. The transfers of private respondents are in fact promotions. Promotion, as we defined in Millares vs. Subido, is the advancement from one position to another with an increase in duties and responsibilities as authorized by law, and usually accompanied by an increase in salary. Apparently, the indispensable element for there to be a promotion is that there must be advancement from one position to another or an upward vertical movement of the employees rank or position. Any increase in salary should only be considered incidental but never determinative of whether or not a promotion is bestowed upon an employee. It is clear that there was an increase in the private respondents responsibility.

2. The dismissal was not valid. The admissions of the petitioner are conclusive on it. An employee cannot be promoted, even if merely as a result of a transfer, without his consent. A transfer that results in promotion or demotion, advancement or reduction or a transfer that aims to lure the employee away from his permanent position cannot be done without the employees consent.

There is no law that compels an employee to accept a promotion for the reason that a promotion is in the nature of a gift or reward, which a person has a right to refuse.[25] Hence, the exercise by the private respondents of their right cannot be considered in law as insubordination, or willful disobedience of a lawful order of the employer. As such, there was no valid cause for the private respondents dismissal.

DAN RUNILLE M. ABESAMIS

PHILIPPINE INDUSTRIAL SECURITY AGENCY CORPORATION vs. VIRGILIO DAPITON

320 SCRA 124

(Scope of MP: Transfer)

FACTS:

On November 2, 1990 petitioner hired respondent as a security guard. His initial assignment was at PCI Bank in Kalookan City.

During his tour of duty at PCIBank on January 25, 1994, respondent had a heated argument with his fellow security guard, Roderick Lumen. The incident almost led to a shootout. After investigation, petitioners chief investigator recommended their dismissal. Lumen was compelled to resign while respondent was suspended from work for seven (7) days.

Petitioner alleged that:

1. Respondent did not serve his suspension and instead went on a leave of absence. Nonetheless, he was assigned at the BPI Family Bank in Navotas when he reported back for duty. Allegedly, respondent refused to accept his assignment.

2. Later, he was assigned at Sevilla Candle Factory in Malabon. Three (3) weeks later, he abandoned his post and went on absence without leave (AWOL).

3. He was given another assignment at Security Bank and Trust Company. He was required to report for an interview and to undergo a neurological examination. Respondent refused and allegedly again went on AWOL.

On April 15, 1994, petitioner sent a telegram to respondent to report to its office for a conference. Respondent did not show up. Instead, on April 22, 1994, respondent filed the present illegal dismissal case.

Respondent denied petitioners allegations. He claimed that:

1. After he served his suspension, he was assigned at BPI Family Bank in Navotas. He accepted the new post. However, after a short period, he was relieved and was transferred to the Mercury Drugstore in Grand Central, Kalookan City. Again, after a brief tour of duty, he was relieved.

2. Later, he was posted at Sevilla Candle Factory. While on duty, he witnessed some shabu dealers doing their illegal trade. Fearful for his life, he left his post and requested petitioner to transfer him to another post.

3. He admitted that his assignment at Security Bank did not materialize for he failed to take the neurological test. He explained he could not pay the examination fee in the amount of P250.00. He asked petitioner to pay the said amount but it refused.

4. Thereafter, he was reduced to a mere reliever of absent security guards and was frequently transferred from one post to another.

The Labor Arbiter and the NLRC ruled in favor of the private respondent for lack of overwhelming evidence to show that it was the private respondent himself who abandoned his post and refused petitioners offer of new assignment.

ISSUE:

Are the Labor Arbiter and NLRC correct in their decision?

HELD:

YES, there was no deliberate intent on the part of the respondent to abandon his employment with petitioner. Petitioner cannot overinflate the significance of the fact that respondent often absented himself from work without an approved leave. It is a settled rule that mere absence or failure to report for work is not tantamount to abandonment of work. Even the failure to report for work after a notice to return to work has been served does not necessarily constitute abandonment nor does it bar reinstatement.

This is not to denigrate the inherent prerogative of an employer to transfer and reassign its employees to meet the requirements of its business. TRANSFERS can be effected pursuant to a company policy to transfer employees from one place of work to another place of work owned by the employer to prevent connivance among them. Likewise, the court have affirmed the right of an employer to transfer an employee to another office in the exercise of what it took to be sound business judgment and in accordance with pre-determined and established office policy and practice. Particularly so when no illicit, improper or underhanded purpose can be ascribed to the employer and the objection to the transfer was grounded solely on the personal inconvenience or hardship that will be caused to the employee by virtue of the transfer.

In security services, the transfer connotes a changing of guards or exchange of their posts, or their reassignment to other posts. However, all are considered given their respective posts.

Be that as it may, the prerogative of the management to transfer its employees must be exercised without grave abuse of discretion. The exercise of the prerogative should not defeat an employee's right to security of tenure. The employers privilege to transfer its employees to different workstations cannot be used as a subterfuge to rid itself of an undesirable worker.

In the case at bar, the evidence show that respondent enjoyed a single post at the PCIBank for three (3) years. It changed after his suspension. In a span of less than three (3) months, respondent was assigned to at least four (4) establishments, namely, BPI Family Bank, Mercury Drugstore, Sevilla Candle Factory and Philippine Savings Bank. He suddenly found himself being tossed to different posts and relieving absent security guards. Respondent was then left uncertain as to when and where his next assignments would be.

Considering the totality of the facts of this case, the labor officials below rightly found that the frequent transfers of respondent to different posts on short periods of time were indirect ways of dismissing him.

Jane S. Baker

CONSOLIDATED FOOD CORP. VS. NLRC

315 SCRA 129

(Scope of MP: Transfer)

Facts:

Petitioner Consolidated Food Corporation (CFC) is a domestic corporation engaged in the sale of food products, e.g., Presto Ice Cream. Private respondent Wilfredo M. Baron was a Bonded Merchandiser at CFC since November 1985 and received commendations for being a consistent member of the millionaires group, a title given to provincial salesmen who filled sales quotas in their assigned areas.

On 16 July 1990 a killer earthquake hit Baguio City causing severe damage in the area. Power lines were cut off and the roads to and from the city became impassable. Hence, the Presto ice cream products in the possession of customers and sales outlets in Baguio were damaged and became bad orders, due to this event, a cut off audit was conducted among others to determine accountabilities that should be liquidated on account of non-sales operations due to fortuitous event, and a plan for the reorganization of the Northern Luzon Sections (NL-1, 3 and 4) to create only one (1) section from the existing outlets On 1 December 1990 the field Audit Group submitted its report declaring that the quantity of bad orders stocks per Bad Orders Summary Sheets (BOSS) prepared by Baron was higher than the total quantity of bad orders stocks per confirmed customers listings. A memorandum signed by Unit Mgr. Abalos and approved by Gen. Mgr. Fadrilan Jr. was sent to Baron informing him of the discrepancies appearing in the audit of accountabilities and giving him opportunity to explain his side in writing. Meanwhile, his normal sales route was temporarily suspended until further notice but he was instructed to report daily to the head office in Pasig City. Petitioners declared however that before any decision could be formalized, private respondent should submit his written explanation on the points indicated within a period of seven (7) days from receipt of the memorandum. He was also requested to explain why no additional action should be taken against him for his continued absence from 18 March to 13 April 1991.

ISSUE:

NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction in holding that private respondent Baron was constructively dismissed simply because he was subjected to various audits concerning his sales activities.

HELD: This Court has defined a valid exercise of management prerogative as one which covers hiring, work assignment, working methods, time, place and manner of work, tools to be used, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of workers. Except as provided for or limited by special laws, employers are free to regulate, according to their own discretion and judgment, all aspects of employment. Re-assignments made by management pending investigation of irregularities allegedly committed by an employee fall within the ambit of management prerogative. The purpose of reassignments is no different from that of preventive suspension which management could validly impose as a disciplinary measure for the protection of the companys property pending investigation of any alleged malfeasance or misfeasance committed by the employee. In the instant case, although Baron had given his written explanation, petitioners found it unsatisfactory and his defense inexcusable. While there may be no direct evidence to prove that Baron actually and deliberately committed fraud or misappropriation of Company funds, there was substantial proof of the existence of irregularities committed by him in the use of the funds. We have ruled that substantial proof, and not clear and convincing evidence or proof beyond reasonable doubt, is sufficient as basis for the imposition of any disciplinary action upon the employee. The standard of substantial evidence is satisfied where the employer has reasonable ground to believe that the employee is responsible for the misconduct and his participation therein renders him unworthy of the trust and confidence demanded by his position. We find that petitioners acts of conducting audits and investigation on the alleged irregularities committed by private respondent and in reassigning him to another place of work pending the results of the investigation were based on valid and legitimate grounds. As such, these acts of management cannot amount to constructive dismissal. It is worthy to note that petitioners gave Baron every opportunity to raise his defense and fully explain the discrepancies in the funds in his possession.

By leaving his job without submitting the required final explanation on the alleged irregularities, private respondent deprived himself of the opportunity to face his accusers and prove his innocence of the charges hurled against him.

CABARON

FARROL v. CA

325 SCRA 311

(Scope of MP: Dismissal)

Facts:

WenifradoFarrolwas thestation cashier of RCPI Cotabato City Station. There was a 50K cash shortage in the branchs Peragram PettyCashFunds.Farrolwasrequiredtoexplainthecash shortage. Then he paid to 25K to RCPI. Hewasthenrequiredtoexplainwhyheshouldnotbe dismissed. Petitioner wrote to the Field Auditor stating that the missing funds wereused forthe payment ofthe retirement benefits earlierreferred bythe Branch Managerand thathe already paid 25k. After he made 2 more payments of the cash shortage, he was placed under preventive suspensions. However, he still made 2 payments of the balance. RCPI then sentFarrola letter informing him of the termination of his services for alleging that part of the cash shortage was used for payment of salaries and retirement benefits, disregard ofpoliciesinvolvingstatisticalreports,malversation/misappropriation (which is aground for dismissal),and loss of trustand confidence.

Unawareoftheterminationletter,herequestedhis reinstatementsincehispreventivesuspensionhadexpired. Farrol even manifested his willingness to settle the case. RCPI informedhimthathisemploymenthadalreadybeen terminated. The conflict was sent to the grievance committee.Two years later, itwas submitted for voluntary arbitration. VA ruled in favor ofFarrol. RCPI filed a petition for certiorari before the CA which reversed VA decision.CA also dismissed Motion for Reconsideration.Farrol nowfiledapetitionfor reviewoncertiorarionthe groundthathis dismissal wasillegalbecausehewasnot afforded due process and that he cannot be held liable for the loss of trustand confidence reposed in him.

Issue: WON he was legally terminated.

Decision:

He was NOT legally terminated. The Omnibus Rules resides on the employer to prove that there was valid cause for dismissal, and that he wasafforded the opportunity to be heard and defend himself. For the 1st notice, RCPI required petitioner to explain why he failedtoaccountfor theshortage. The2nd noticewas that informingFarrolof his termination. It does not clearly cite the reasons for dismissal, nor werethere facts and circumstances in support thereof. Even assuming there was a breach of trust and confidence, there was no evidence thatFarrolwas a managerial employee.For the term trustand confidence isrestrictedtomanagerial employees. It may not even be presumed that when there is a shortage, there is also a corresponding breach of trust. Cash shortages in a cashiers work may happen, and when there is no proof that the same was deliberately done for a fraudulent or wrongful purpose, it cannot constitute breach of trust so as to render the dismissal from work invalid. RCPI allegesthat under itsrules, petitioners infraction ispunishablebydismissal.However,employersrulescannotpreclude thestatefrom inquiring whetherstrictandrigid applicationorinterpretationwouldbetooharshtothe employee. This isFarrols 1st offense, to which the Court holds that dismissal is too harsh and grosslydisproportionate. Hence, although the employer has the prerogative to discipline or dismiss its employee, such prerogative cannot be exercised wantonly, but must be controlled by substantive due process and tempered by the fundamental policy of protection to labor enshrined in the Constitution.Infractions committed by an employee should merit only the corresponding sanction demanded by the circumstances. The penalty must be commensurate with the act, conduct or omission imputed to the employeeand imposed in connection with the employers disciplinary authority.

SHIELA T. DELA VICTORIA

Aurelio vs. NLRC,

211 SCRA 432

(Scope of MP: Reorganization and abolition of positions)

Facts:

Petitioner started as clinical instructor of the College of Nursing of Northwestern College in June 1977 with a basic salary of P 600.00 a month. In October 1979, petitioner was appointed Dean of the College of Nursing with a starting salary of P 3,000.00 a month. In September 1981, petitioner was promoted to College Administrator or Vice-President for Administration, retaining concurrently her position of dean of the College of Nursing, with an increased salary of P3, 500.00 per month. She was later promoted to Executive Vice-President with the corresponding salary of P7, 000.00.

On April 10, 1988, petitioners husband, Oscar Aurelio, a stockholder of respondent NWC, was elected Auditor. On May 1, 1988, the individual respondents, as Board of Directors, took over the management of respondent NWC. Since their election into office, the Board members have taken effective control of the college and have regularly exercised their corporate powers.

The new Board conducted a preliminary audit which revealed that the college was financially distressed, unable to meet its maturing obligations with its creditor bank. The new management headed by its President, embarked on realignment of positions and functions of the different department in order to minimize expenditures. As a result of the audit, NWC was compelled to abolish the administrative positions held by the petitioner. This new management unleashed a series of reorganization affecting the petitioner and her husband.

Issue:

W/N the abolition of positions is within management prerogative.

Held:

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

DY

GOLDEN THREAD KNITTING INDUSTIRES v. NLRC

304 SCRA 720

(Scope of MP: Reorganization and abolition of positions)

FACTS

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

ISSUE

WON there was illegal dismissal

HELD

YES, Dismissal is the ultimate penalty that can be meted to an employee. It must therefore be based on a clear and not on an ambiguous or ambivalent ground.

the case involving slashing of towels, the employees were not given procedural due process. There was no notice and hearing, only outright denial oftheir entry to the work premises by the security guards. The charges of serious misconduct were not sufficiently proved.-

the employees dismissed for redundancy, there was also denial ofprocedural due process. Hearing and notice were not observed. Thus, although the characterization of an employees services is a management function, it must first be proved with evidence, which was not done in this case. The company cannot merely declare that it was overmanned.-

to the employee dismissed for disrespect, the SC believed the story version of the company (which essentially said that the personnel manager was threatened upon mere service of a suspension order to the employee), but ruled that the dismissal could not be upheld. the dismissal will not be upheld where it appears that the employees act ofdisrespect was provoked by the employer. xxx the employee hurled incentives at the personnel manager because she was provoked by the baseless suspension imposed on her. The penalty of dismissal must be commensurate with the act, conduct, or omission to the employee.-

The dismissal was too harsh a penalty; a suspension of 1 week would have sufficed. GTK exercised their authority to dismiss without due regard to the provisions of the Labor Code. The right to terminate should be utilized with extreme caution because its immediate effects is to put an end to an employees present means of livelihood while its distant effects upon a subsequent finding of illegal dismissal. Is just as pernicious to the employer who will most likely be required to reinstate the subject employee and grant him full back wages and other benefits

AIKO ELENI PALER

PANTRANCO NORTH EXPRESS, INC. VS. NLRC

314 SCRA 740

(Scope of MP: Reorganization and abolition of positions)

FACTS:

Pantranco North Express is a government-owned and controlled corporation which provided transportation services to the public. However, it incurred huge financial losses so it implemented a job classification program for purposes of manpower reduction. Private respondent, Ayento, was an employee of the company. With the reorganization, positions were reclassified and restructured. Ayento's position, as Head of Registration Section, was abolished. Consequently, he was appointed as Registration Assistant. As a Registration Assistant, he actually was relieved of his supervisory function, no longer had any field work, nor entitled to overtime pay. His representation expenses and discretionary funds were also cancelled. He received instead a fixed amelioration allowance.

Ayento then filed a Complaint against Pantranco for unfair labor practice. It specifically alleged demotion of position and diminution of salary and benefits. Respondent company, on the other hand, argued that there was no demotion but a job-reclassification where petitioner's position was abolished due to the company's financial problems.

ISSUE:

WON there was demotion of position and diminution of salary and benefits.

HELD:

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

QUISTADIO

PANTOJA vs. SCA Hygiene Products Corp.

G.R. No. 163554

(Scope of MP: Reorganization and abolition of positions)

Facts:

Respondent SCA Hygiene Products Corp., a corporation engaged in the manufacture, sale and distribution of industrial paper and tissue products, employed Dannie M. Pantoja as a utility man on March 15, 1987. Pantoja was eventually assigned at respondents Paper Mill No. 4, the section which manufactures the companys industrial paper products, as a back tender in charge of the proper operation of the sections machineries. Sometime in 1999, in a notice of transfer, respondent informed Pantoja of its reorganization plan and offered him a position at Paper Mill No. 5 under the same terms and conditions of employment in anticipation of the eventual closure and permanent shutdown of Paper Mill No. 4. The closure and concomitant reorganization is in line with respondents decision to streamline and phase out the companys industrial paper manufacturing operations due to financial difficulties brought about by the low volume of sales and orders for industrial paper products. However, Pantoja rejected respondents offer for his transfer. Thus, a notice of termination of employment was sent to Pantoja as his position was declared redundant by the closure of Paper Mill No. 4. Pantoja then received his separation pay and thereafter executed a release and quitclaim in favor of respondent. He filed a complaint for illegal dismissal against respondent assailing his termination as without any valid cause. He averred that the alleged redundancy never occurred as there was no permanent shutdown of Paper Mill No. 4 due to its continuous operation since his termination.

Issue:

Whether or not there was illegal dismissal

Held:There was no illegal dismissal.

Respondents right of management prerogative was exercised in good faith. Respondent presented evidence of the low volume of sales and orders for the production of industrial paper in 1999 which inevitably resulted to the companys decision to streamline its operations. As held in International Harvester Macleod, Inc. v. Intermediate Appellate Court, the determination of the need to phase out a particular department and consequent reduction of personnel and reorganization as a labor and cost saving device is a recognized management prerogative which the courts will not generally interfere with.

In this case, the abolishment of Paper Mill No. 4 was undoubtedly a business judgment arrived at in the face of the low demand for the production of industrial paper at the time. Despite an apparent reason to implement a retrenchment program as a cost-cutting measure, respondent, however, did not outrightly dismiss the workers affected by the closure of Paper Mill No. 4 but gave them an option to be transferred to posts of equal rank and pay.

RIPARIP

STAR PAPER

ROJALES

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

(G.R. 162994, Sept. 17, 2004)

(Scope of MP: Employment Policies and stipulations)

Facts:

Petitioner Pedro Tecson was hired by respondent Glaxo as medical representative after Tecson had undergone training and orientation. Thereafter, Tecson signed a contract of employment which stipulates, among others, that he agrees to study and abide by existing company rules; to disclose to management any existing or future relationship by consanguinity or affinity with co-employees or employees of competing drug companies and should management find that such relationship poses a possible conflict of interest, to resign from the company. The Employee Code of Conduct of Glaxo similarly provides that an employee is expected to inform management of any existing or future relationship by consanguinity or affinity with co-employees or employees of competing drug companies.

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

Issue: Is Glaxos policy of prohibiting its employees from marrying an employee of a competitor company valid?

Held:

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

Tecsons contract of employment with Glaxo stipulates that Tescon agrees t