MODULE 1: FUNDAMENTAL PRINCIPLES OF LABOR

■​ The right of the people, including those employed in the

public and private sectors, to form unions, associations, or
A.​ BASIC POLICY ON LABOR
societies for purposes not contrary to law shall not be
Maximum Aid and Protection to Labor abridged.
a.​ 1987 Constitution a.​ Freedom of Association clause: basis for employees’
i.​ Art. II, Sec. 18 (Protection-to Labor Clause 1) right to self-organization
■​ The State affirms labor as a primary social economic force. vi.​ Art. XIII, Sec. 3
It shall protect the rights of workers and promote their ■​ The State shall afford full protection to labor, local and
welfare. overseas, organized and unorganized, and promote full
a.​ Usually cited whenever SC rules in favor of Labor employment and equality of employment opportunities for
b.​ Is elaborated by Art. XIII, Sec. 3 all.
ii.​ Art. II, Sec. 20
■​ The State recognizes the indispensable role of the private It shall guarantee the rights of all workers to
sector, encourages private enterprise, and provides self-organization, collective bargaining and negotiations,
incentives to needed investments. and peaceful concerted activities, including the right to
a.​ Recognizes the indispensable role of the private sector strike in accordance with law. They shall be entitled to
b.​ Principle of Non-Oppression: Labor and capital shall not security of tenure, humane conditions of work, and a living
act oppressively against each other wage. They shall also participate in policy and
iii.​ Art. III, Sec. 1 decision-making processes affecting their rights and
■​ No person shall be deprived of life, liberty, or property benefits as may be provided by law.
without due process of law, nor shall any person be denied
the equal protection of the laws. The State shall promote the principle of shared
a.​ Twin rights only invoked against government responsibility between workers and employers and the
b.​ Due process against employers usually relates to preferential use of voluntary modes in settling disputes,
statutory and contractual due process and not including conciliation, and shall enforce their mutual
constitutional due process compliance therewith to foster industrial peace.
iv.​ Art. III, Sec. 4
■​ No law shall be passed abridging the freedom of speech, of The State shall regulate the relations between workers and
expression, or of the press, or the right of the people employers, recognizing the right of labor to its just share in
peaceably to assemble and petition the government for the fruits of production and the right of enterprises to
redress of grievances. reasonable returns to investments, and to expansion and
a.​ Relevant when it comes to PICKETING growth.
v.​ Art. III, Sec. 8 a.​ Elaborates on Art. II, Sec. 18
 MODULE 1: FUNDAMENTAL PRINCIPLES OF LABOR

b.​ Specifies who is protected, what rights are guaranteed, a.​ Participation in policy and decision
and what positive measures the state should take in making
order to enhance the welfare of labor i.​ Includes State decisions, not just
c.​ Not a source of direct enforceable rights, but clothes management ones
the labor sector with a status that the Constitution b.​ *Does not indicate right to co-manage
urges protection for via executive/legislative action and the business
judicial recognition; moreso an impetus to protect the v.​ Shared Responsibility
welfare of the working class 1.​ Principle of SR: based on provision prescribing
d.​ Salient Features preferential use of voluntary modes of settling
i.​ Extent of Protection: FULL PROTECTION disputes
ii.​ Coverage of Protection: Local and overseas, vi.​ Share in Fruits of Production: Recognition of labor to
organized and unorganized its just share
iii.​ Employment policy: FULL employment and EQUALITY vii.​ Capital’s Rights: ROI, expansion and growth
of employment opportunities for all e.​ Includes 2 things not present in the Labor Code:
1.​ Full does not mean that everybody should be i.​ Peaceful concerted activities
employed, but that the worker can find work at ii.​ Living wage
the prevailing rates of pay w/o undue difficulty iii.​ Participation in policy and decision making
(more job openings than applicants) vii.​ Art. XIII, Sec. 14
iv.​ Guarantees: 3 Kinds ■​ The State shall protect working women by providing safe
1.​ Collective and healthful working conditions, taking into account their
a.​ Self-Organization maternal functions, and such facilities and opportunities
b.​ Collective bargaining and negotiations that will enhance their welfare and enable them to realize
c.​ Peaceful concerted activities, including their full potential in the service of the nation.
right to strike
2.​ Individual b.​ Labor Code, Arts. 3 and 211
a.​ Security of tenure i.​ Art. 3: Declaration of Basic Policy
b.​ Humane work conditions
■​ The State shall afford protection to labor, promote full
c.​ Living wage
employment, ensure equal work opportunities regardless of
i.​ NOT minimum wage (rock-bottom)
sex, race or creed and regulate the relations between
ii.​ Wage where worker and his family
workers and employers. The State shall assure the rights of
can LIVE IN REASONABLE COMFORT
workers to self-organization, collective bargaining, security
(decent standard of living)
of tenure, and just and humane conditions of work.
3.​ Participation
 MODULE 1: FUNDAMENTAL PRINCIPLES OF LABOR

ii.​ Art. 211: Declaration of Policy c.​ Civil Code, Art. 1700
■​ A. It is the policy of the State: i.​ The relations between capital and labor are not merely
a.​ To promote and emphasize the primacy of free contractual. They are so impressed with public interest that
collective bargaining and negotiations, including labor contracts must yield to the common good. Therefore,
voluntary arbitration, mediation and conciliation, as such contracts are subject to the special laws* on labor
modes of settling labor or industrial disputes; unions, collective bargaining, strikes and lockouts, closed
b.​ To promote free trade unionism as an instrument for shop, wages, working conditions, hours of labor and similar
the enhancement of democracy and the promotion subjects.
of social justice and development; ​ *i.e. Labor Code
c.​ To foster the free and voluntary organization of a
strong and united labor movement; d.​ Illustrative Cases
d.​ To promote the enlightenment of workers i.​ Ranises v. ECC and SSS (G.R. 141709, Aug. 16,
concerning their rights and obligations as union
2005)
members and as employees;
■​ Facts: Rañises was a driver-messenger employed by
e.​ To provide an adequate administrative machinery for
ADCOMS International Inc., which was absorbed by Data
the expeditious settlement of labor or industrial
Craft Communication System from 1994-1998. On August
disputes;
1997, Rañises suffered chest pains while he was bringing
f.​ To ensure a stable but dynamic and just industrial
a guest to Puerto Azul for a seminar. He was brought to
peace; and
Makati Medical Center and was diagnosed with Coronary
g.​ To ensure the participation of workers in decision
Artery Disease/Antero Septal Wall, Myocardial Infarction.
and policy-making processes affecting their rights,
He filed for compensation benefits under PD 626, but was
duties and welfare.
denied by the SSS on the ground that the ailment is not
B. To encourage a truly democratic method of regulating the
work-related and that there is no causal relationship
relations between the employers and employees by means
between the alleged ailment and his work. The ECC
of agreements freely entered into through collective
affirmed SSS’s decision, which was affirmed by the CA.
bargaining, no court or administrative agency or official
■​ Issue: WON petitioner’s claim under PD 626 is
shall have the power to set or fix wages, rates of pay, hours
compensable
of work or other terms and conditions of employment,
■​ Ruling: The petition is GRANTED and the SSS is ordered to
except as otherwise provided under this Code. (As
pay the petitioner his compensation benefits under PD 626.
amended by Section 3, Republic Act No. 6715, March 21,
■​ Doctrine: PD 626 (Employees Compensation Act is a social
1989)
legislation and is attached to the State’s policy to give
maximum aid and protection to labor). Section 1(h) , Rule
 MODULE 1: FUNDAMENTAL PRINCIPLES OF LABOR

III of the ECC Amended Rules on Employees Compensation of Php 55, 400.00. Petitioner’s motion for reconsideration
now considers cardio-vascular disease as compensable was denied, hence the petition.
occupational disease, however, only when substantial ■​ Issue: WON private respondent is entitled to separation pay
evidence is adduced to prove any 3 conditions. The third ■​ Ruling: The petition is DISMISSED and NLRC’s Decision is
condition states that if a person was asymptomatic before AFFIRMED
subjecting himself to strain of work and showed signs and ■​ Doctrine: GR is that an employee who voluntarily leaves is
symptoms of cardiac injury during the performance of his not entitled to separation pay, unless a stipulation of
work/such symptoms and signs persisted, it is reasonable payment is made in the contract or Collective Bargaining
to claim a causal relationship. Agreement (CBA), or payment is sanctioned by established
■​ Application: Petitioner falls under this condition as he was employer practice or policy.
diagnosed with a myocardial infarction when he was ■​ Doctrine 2: If doubt exists between the evidence presented
employed as a driver-messenger by the companies. Prior to by the employer and the employee, the scales of justice
employment, both companies’ doctors certified that he was must be tilted in favor of the employee.
in good health and fit to work. Petitioner was subject to ■​ Application: Prior to Medelyn’s resigning from the
severe strain and fatigue as he was exposed to the stress corporation, three (3) previous employees were given
of everyday traffic due to his work. As such, his cardiac separation pay, which constitutes as evidence of a
condition can be considered as work-related considering company police/practice despite the corporation’s denial of
that there is no indication that he suffered from such. Although two of these employees were given ex gratia
cardiovascular disease prior to his employment as a payments for their service in the company, these payments
driver-messenger for both companies. were made on occasion of their separation from the
ii.​ Travelaire Tours Corp. and/or Ojeda v. NLRC and company. Regardless of the terminology used, the fact
Medelyn (G.R. No. 131523, Aug. 20, 1998) remains that sums were given to the resigned employees,
■​ Facts: Private respondent Medelyn was employed as chief establishing a form of separation pay practice. Considering
accountant of petitioner, Travelaire and Tours Corp. Medelyn that the corporation failed to present countervailing
resigned from the corporation in April 1994 and in 1995, evidence that other resigned employees did not receive
filed a complaint before the NLRC praying for separation separation pay, there is substantial evidence that support
pay, service incentive leave pay, and 13th month pay. Labor NLRC’s finding that it is a company practice to give
Arbiter Canizares, Jr. awarded the 13th month pay but separation pay to its resigning employees.
dismissed the other claims for lack of merit. Private
respondent filed an appeal before the NLRC alleging that
previous employees who resigned from the company were
granted separation pay. The NLRC modified the Decision
and ordered petitioner to pay separation pay in the amount
 MODULE 1: FUNDAMENTAL PRINCIPLES OF LABOR

iii.​ Magsaysay Maritime Corporation/Cruise Ships v. filed a petition for certiorari before the CA but was denied
NLRC and Cedol (G.R. No. 186180, Mar. 22, 2010) for lack of merit.
■​ Facts: In July 2004, Cedol entered into a 7-month contract ■​ Issue: WON the CA erred in holding the petitioners liable for
of employment with petitioner for its foreign principal as an $60k in total and permanent disability benefits despite the
assistant housekeeping manager on board the vessel company’s physician finding that the respondent’s illness
Costa Mediterranea. The respondent was pronounced fit to was not work-related
work following his Pre-Employment Medical Examination ■​ Ruling: The petition is GRANTED and the CA’s Decision is
(PEME). The respondent had already previously worked on REVERSED and SET ASIDE. The CA erred in not finding
board the petitioners’ other vessels from 2000-2004. In grave abuse of discretion on the part of the NLRC when the
November 2004, the respondent was brought to Andreas latter affirmed the labor arbiter’s decision to grant
Constantinou Medical Center in Cyprus after he felt pain in permanent and total disability benefits.
his lower right quadrant. In January 2005, he underwent ■​ Doctrine: Disability compensation under Section 20(B) of
two procedures which found lymphatic tumors in his body. the POEA-SEC requires the injury/illness to be (1)
The respondent returned to the Philippines the next month, work-related and (2) the work-related injury must have
and was placed under the medical care of the company existed during the term of the seafarer’s employment
physician, Dr. Susannah Ong-Salvador. In her initial medical contract. There must be a causal connection between the
report, she found the respondent to be suffering from illness/injury and the contracted job. Under Section 20(B)
lymphoma and declared his illness as non-work related. designates the physician as the assessor of the seaman’s
Following medical treatment, which included chemotherapy, disability. The same section states that a seafarer is
Dr. Ong-Salvador’s Medical Progress Report declared Cedol entitled to sickness allowance equivalent to basic wage
fit to resume sea duties following the complete remission until he is declared fit to work or the degree of permanent
of his lymphoma. In June 2006, the respondent filed a disability has been assessed within 120 days. As such, the
complaint for total and permanent disability benefits, seafarer must submit himself to a medical examination by
reimbursement of medical and hospital expenses, the company physician w/in 3 days upon his return except
damages, and attorney’s fees against the petitioners, when he is physically incapacitated to do so (written notice
claiming that he contracted his illness while working on in lieu of this).
board the petitioner’s vessel. The Labor Arbiter ruled in the ■​ Doctrine 2: Lymphoma is not listed as a disability under
respondent’s favor and awarded the respondent disability Section 32 of the 2000 POEA-SEC nor listed as an
compensation and $6K of attorney’s fees, finding that his occupational disease under Section 32-A thereof. However,
illness was work-related and hence compensable. The Section 20 (B), paragraph 4 provides that illnesses not
NLRC affirmed this Decision in toto, finding that the listed in Section 32 are disputably presumed as
respondent developed lymphoma after his exposure to an work-related. Burden of proof is placed upon the
extreme working environment on the vessel. The petitioners respondent to present substantial evidence to support a
 MODULE 1: FUNDAMENTAL PRINCIPLES OF LABOR

causal connection between the nature of his employment a.​ Policy is to apply the Code to a greater number of
and illness, or that the risk of contracting the illness was employees so that they can avail the benefits under the
increased by his working conditions. law
■​ Application: The respondent did not adduce proof to show a b.​ BUT, the law does not always favor labor. Mandate is
reasonable connection between his illness and his work. only to resolve doubt, if any, in favor of labor. If there is
The court found that Dr. Ong-Salvador’s Initial Medical no doubt in law interpretation, labor has no built-in
Report demonstrated sufficient evidence that the advantage
respondent’s illness was not work-related as the c.​ Based on constitutional mandate to afford maximum
respondent was not exposed to any carcinogenic fumes or aid and protection to labor
any viral infection in his workplace, and that her findings b.​ Illustrative Cases
were considered following multiple medical examinations i.​ Ditan v POEA Administrator et al. (G.R. 79560, Dec. 3,
vis-a-vis the respondent’s medical, family, and social 1990)
history. Her findings were not arbitrary and were not biased ■​ Facts: Ditan was recruited by Intraco Sales Corporation
in the company’s favor. The respondent also did not contest via local agent Asia World to work in Angola for
the findings of Dr. Ong-Salvador’s reports and did not seek 9-months as a welding supervisor. In November 1984,
the opinion of other doctors. In sum, there is no evidence Ditan arrived in Luanda and worked as an ordinary
on record that shows a relationship between the welder for Intraco’s central maintenance shop. In
respondent’s lymphoma and his work environment, nor December 1984, he was informed that he would be
whether or not his working conditions increased the risk of transferred to Kafunfo, where rebels had attacked,
his contracting of lymphoma. Although he passed the kidnapped, and killed expatriate workers during a raid in
PEME, this does not necessarily state the person’s real the area. Ditan was reluctant to go but was persuaded
state of health and merely determines whether one is fit to by threats that he would be sent home if he refused the
work at sea. reassignment. Following his transfer, the Unita rebels
attacked the diamond mining site where Ditan was
A LIBERAL INTERPRETATION OF THE LABOR CODE AND working and took him and 16 other Filipino hostages,
ITS IMPLEMENTING RULES along with other foreign workers. They were released in
When is Liberal Interpretation Allowed? March 1985 and Ditan eventually returned to the
a.​ Article 4 Philippines. The repatriated workers were assured by
INTRACO that they would be given priority in
■​ All doubts in the implementation and interpretation of the
re-employment abroad, however Ditan was excluded
provisions of this Code, including the IRR shall be resolved
from the same. He then filed a complaint against the
in favor of labor.
private respondents for breach of contract and other
 MODULE 1: FUNDAMENTAL PRINCIPLES OF LABOR

claims: salary for the unexpired 17 weeks of his There is no proof that any other properties have
contract; war risk bonus; value of his lost belongings; been lost/not recovered.
unpaid vacation leave; and moral and exemplary ●​ Breach of Contract and War Bonus: The petitioner
damages plus attorney’s fees. All claims were was subjected to severe risk when he was
dismissed by POEA Administrator Achacoso, which was reassigned to Kafunfo. Intraco pressured Ditan and
affirmed by the NLRC. even threatened him despite his objection. Private
■​ Issue: WON Ditan is entitled to his claims filed against respondents were remiss in the discharge of
the private respondents protection for the employee, neglecting and
■​ Issue 2: WON the NLRC erred in affirming the LA’s deliberately violating such duty by exposing Ditan to
Decision dismissing the claims real danger. Although the private respondents argue
■​ Ruling: The NLRC’s resolution is MODIFIED. Private that the employment contract with Ditan did not
respondents are DIRECTED to pay the petitioner US$4, indicate any particular place of assignment and that
675.00 for his unpaid salaries, nominal damages in the war risk bonus took effect after the petitioner’s
Php 20, 000.00 and 10% attorney’s fees. deployment to Angola, the circumstances of the
■​ Doctrine: case show that the petitioner is entitled to relief.
●​ Paid Vacation Leave: Employment contract provides ii.​ Lepanto Consolidated Mining Co. v. Moreno Dumapis
1 month paid vacation leave if the employee enters et al. (G.R. 163210, Aug. 13, 2008)
in a 2nd 9-12 months contract after the completion ■​ Facts: Petitioner is a mining corporation that employed
of the first one Dumapis, Tundagui, and Liagao to work at Victoria Area
●​ The Constitution mandates the protection of labor in Lepanto, Benguet. This area is a known “highgrade
and the sympathetic concern of the State for the area”. In September 2000, Dwayne Chambers, a
working class conformably to the social justice foreign consultant, conducted a routinary inspection of
policy. the respondents’ assigned area, and saw a group of
■​ Application: workers “highgrading” the ores found in that area.
●​ Vacation Pay: Employee is not entitled to vacation Chambers reported the incident to the security
pay as he did not enter into a 2nd contract with the investigation office, with 2 investigators issuing a Joint
employer after the expiration of the first. Affidavit attesting to the facts of the case. As a result,
Re-employment is not a right but dependent on the the respondents and their co-accused were dismissed
need for Ditan’s skills in another project from their employment. The respondents and their
●​ Cost of Belongings: Ditan’s belongings were co-accused filed a complaint for illegal dismissal with
returned to him by the rebels prior to his release. the LA, but it was dismissed for lack of merit. The
miners appealed the decision to the NLRC, who
declared the dismissal of the respondents as illegal,
 MODULE 1: FUNDAMENTAL PRINCIPLES OF LABOR

but affirmed the dismissal of the 9 other complainant substantial and founded on clearly established facts
miners. Petitioner filed with the CA assailing the sufficient enough to warrant dismissal.
Decision, which was affirmed by the latter. ■​ Application: The facts of the Joint Affidavit do not
■​ Issue: WON the CA committed grave and reversible contain facts that are of the investigators’ personal
error in affirming the NLRC’s Decision which declared as knowledge, as they only referred to the facts relayed by
illegal the dismissal from service of the respondents Chambers, Damoslog, Daguio, and Madao, as such,
●​ WON the CA’s strict application of the hearsay rule they can only be considered as hearsay evidence.
of the Rules of Court is uncalled for Furthermore, Damoslog submitted 2 conflicting sworn
●​ WON proof beyond reasonable doubt is not statements, but did not name any of the respondents in
required, it being sufficient that the employer has either statements. Lastly, Madao’s confession
reasonable ground to believe that the employees implicating Liagao was retracted in a Joint Affidavit with
are responsible for the misconduct which renders Tundagui, stating that he was made to answer
them unworthy of the trust and confidence self-incriminating questions and provided names of
demanded by their position innocent workers, and that he did not personally appear
■​ Ruling: Petition is DENIED. before the lawyer who notarized the said statement.
■​ Doctrine: Administrative bodies like the NLRC are not iii.​ Gandara Mill Supply v NLRC (G.R. 126703, Dec. 29,
bound by the technical rules of law and procedure in 1998)
courts of law (Art. 221, Labor Code). As such, the NLRC ■​ Facts: Private respondent is an employee of Milagros’
or the LA can decide the case using documents without small business enterprise. On February 6, 1995,
resorting to technical rules of evidence in regular court. Germano failed to report to work for 5 days since he
Despite a wider range of admissibility, evidence’s chose to be with his wife who was about to give birth.
probative value must also be considered. Admissibility Following this, the private respondent was absent for a
refers to the question of whether evidence can be long time, which affected the petitioner's business as it
considered, whereas probative value refers to whether only had two (2) employees for manual work. Two weeks
the admitted evidence proves an issue. These later, Germano returned to work, but was told that
fundamental evidentiary rules should not be someone had already been hired to take his place. He
disregarded. There is a need to determine whether then filed for a case of illegal dismissal with the DOLE.
existing evidence is substantial. The LA directed the parties to submit their position
■​ Doctrine 2: Proof beyond reasonable doubt is not papers, and despite multiple extensions, Milagros Sy
required to terminate an employee on loss of failed to comply. As such, the LA ruled in favor of
confidence, and that a basis for the same is sufficient. Germano and ordered Milagros Sy to pay Php 65,
However, this is not absolute. Such a basis must be 685.90 representing separation pay, backwages, SLIP
and attorneys fees. Petitioner appealed to the NLRC,
 MODULE 1: FUNDAMENTAL PRINCIPLES OF LABOR

but it was dismissed for petitioner’s failure to post a last beyond the 30 days as allowed by law, thereby also
cash or surety bond, to which the petitioner invoked making it constitutive of an illegal dismissal.
exemption on the ground that his business was small. Furthermore, a period of 3 months elapsed from the
■​ Issue: WON the NLRC acted with grave abuse of receipt of the assailed Resolution and the present
discretion in awarding the private respondent the Php petition, as such, this Petition was not filed on time. As
65, 685.90, dismissing petitioner’s appeal and in not such, the NLRC did not err in awarding the private
giving petitioner a chance to prove that the private respondent with the Php 65, 685.90 considering the
respondent was not illegally dismissed but merely facts of the case and is not excessive or tantamount to
suspended a deprivation of property, as separation pay and
■​ Ruling: Petition is DISMISSED for being filed out of backwages is binding upon the court once a finding of
time, being devoid of merit, and interposed for illegal dismissal is established.
purposes of delay
■​ Doctrine: Reglementary periods are observed so that Where the Law is Clear, the Law is to be Applied to the
orderly administration of justice is safeguarded. In this Facts of the Case
case, the principle of laches is applied, or a.​ Fetalino et. al., v COMELEC (G.R. 191890, Dec. 4, 2012)
failure/neglect for an unreasonable length of time to do ■​ Facts: On February 10, 1998, President Fidel Ramos
that which by exercising due diligence could or should
extended an interim appointment to the petitioners as
have been done earlier. This is based upon the
COMELEC commissioners, which was renewed as ad
discouragement of stale claims.
interim appointments 11 days later. However, Congress
■​ Doctrine: A prolonged absence without leave may adjourned in May 1998 before the Commission on
constitute a just cause of dismissal, but dismissal Appointments could act on the ad-interim appointments.
must be preceded by notice and hearing in observance Due to constitutional bans on presidential appointments,
of due-process. the petitions were no longer re-appointed as
■​ Application: Petitioner waived his right to be heard by Commissioners and only served as such from
failing to submit his position paper on time despite February-June 1998. In March 2005, the petitioners
multiple extensions and notices of the same. As such, applied for their retirement benefits and monthly pension
the NLRC did not commit grave error in handing its with COMELEC under RA 1568. This was initially approved
Decision without petitioner’s position paper as the by COMELEC, who granted them a pro-rated gratuity and
petitioner is considered to have waived his right. The pension. However, when the petitioners asked for a
private respondent was illegally dismissed due to the re-computation, COMELEC eventually later ruled that the
non-observance of due process of notice and hearing petitioners were not entitled to a lump sum benefit under
prior to the same. If the respondent was suspended the same law, as Section 1 of the same requires
and not dismissed, such suspension was expected to
 MODULE 1: FUNDAMENTAL PRINCIPLES OF LABOR

Commissioners to have completed their term of office in remedies, and special reliefs. Since this resolution does
order to be entitled to the benefits. not fall under any of the aforementioned, there is no
■​ Issue: WON the non renewal of petitioners’ ad interim violation of the finality of judgment rule.
appointments by the CA until Congress already adjourned
qualifies as retirement under the law and entitles them to PRINCIPLE OF NON-DIMINUTION OF BENEFITS
the full 5-year lump sum gratuity; a.​ Article 100 of the Labor Code
■​ Issue: WON COMELEC’s resolution initially granting the i.​ Nothing in this Book shall be construed to eliminate or in
gratuity is already final and executory; and any way diminish supplements, or other employee benefits
■​ Issue: WON petitioners now have a vested right over the full being enjoyed at the time of promulgation of this Code.
retirement benefits as provided by RA 1568 in view of the a.​ Non-diminution rule
finality of the aforementioned resolution b.​ Benefits that are given to employees cannot be taken
■​ Ruling: The petition is DISMISSED for lack of merit. back or reduced unilaterally by the employer because
■​ Doctrine: Section 1(1) of RA 1568 explicitly states that the benefit has become part of the employment
entitlement to the five-year lump sum gratuity occurs if contract, written or unwritten
there official has retired from public service for having c.​ Requisites for Non-Diminution of Benefits:
completed the term of office. The word ‘term’ should not be i.​ Deliberate and Consistent Grant: Benefit must
confused with ‘tenure’: term indicates the time in which the be given deliberately, not by error or mistake,
officer has a right to the office being held; tenure refers to and on a consistent schedule
the actual time in which the incumbent holds office. ii.​ Over a Significant Period of Time: Pattern
■​ Doctrine: Liberal application of labor laws do not apply if spanning several years. Short-lived/trial
laws are clear and unambiguous in its construction, or if practices may not give rise to a vested right
there are compelling reasons that warrant such application. iii.​ Free from Contingencies: Benefit should not be
■​ Application: Section 1 of RA 1568 is clear in stating that subject to fluctuating conditions that the
retirement entails the completion of the term of office and employees cannot control. If the benefit is
not tenure. Since a COMELEC Commissioner’s term is 7 inherently conditional, its withdrawal or
years and the petitioners clearly did not complete such adjustment might not fall under the prohibition.
term, they are not entitled to the lump-sum benefit under iv.​ Company Practice Rule: A 1-time or intermittent
Section 1 of RA 1568. There are no compelling reasons grant does not automatically ripen into a vested
that would warrant a liberal application of the law in their right. A 3-5 year consistent pattern of provision
favor. With regards to COMELEC’s resolution that initially is often considered strong evidence that a
granted the benefits, COMELEC did not violate finality of benefit has become company practice.
judgment rule since the 30 days rule is only applicable to
ordinary actions, special proceedings, provisional
 MODULE 1: FUNDAMENTAL PRINCIPLES OF LABOR

d.​ There is no unlawful diminution if the benefit being c.​ Hiring and Firing of Employees
claimed is a contingent or conditional benefit, such as a i.​ Employers have the exclusive right to decide and hire
bonus. people whom they think are capable of helping the company
e.​ XPN: Mutual agreement or collective bargaining grow and prosper. This is also applicable to business
between employees and employer acquisitions, mergers, and contracting and subcontracting.
f.​ XPN 2: Business necessity/survival of employer’s ii.​ The company also has the right to fire/dismiss employees
enterprise (subject to strict scrutiny) in accordance with causes and procedures as established
i.​ Will need robust proof that no less drastic by law. This must be exercised with caution and w/o abuse
measures are available of discretion as it affects employee’s right to security of
MANAGEMENT PREROGATIVE tenure.
a.​ What is MP? *No prior notice is required for end of
i.​ The employer’s bundle of rights in relation to all aspects of contract/completion of contract, as the employee
employment from pre-employment to post-employment. should be aware of the date of the same. This does not
ii.​ Under this doctrine, every employer has the inherent right apply to cases of termination of probationary
to regulate, according to his own discretion and judgment, employment.
all aspects of employment, including hiring, work iii.​ Coca-Cola Export Corporation v Cagayan (G.R. No.
assignments, working methods, time, manner and place of 180302, Feb. 5, 2010)
work, work supervision, transfer of employees, lay-offs, and ■​ Facts: CCEC provides employees with meal and
discipline, dismissal and recall of employees. transportation reimbursements for expenses incurred
iii.​ Labor laws also protect the rights of the employers by during overtime work (at least 4 hours on weekends
discouraging interference with their judgment vis-a-vis the and holidays, at least 2 hours on weekdays). The
conduct of their business. maximum reimbursement was Php150.00. Gancayan
b.​ Conditions in the Exercise of Management Prerogative was called to explain alleged alterations in 3 receipts
i.​ Must be in good faith (not for discriminatory, malicious or that she provided for reimbursement of meal expenses.
arbitrary reasons) CCEC sent notice to Gancayan to explain the receipts,
ii.​ Must be in accordance with but she claimed to have no personal knowledge of the
■​ Law receipt alteration. Following numerous hearings and a
■​ Collective Bargaining Agreements (CBA formal investigation, to which Gancayan only attended
■​ Employee contract once, she was formally dismissed for fraudulently
■​ Employer practice tampering with the receipts for her reimbursements in
■​ General principles of fair play and justice gross violation of company rules. Gancayan then filed a
complaint with the NLRC. The LA and NLRC both
 MODULE 1: FUNDAMENTAL PRINCIPLES OF LABOR

dismissed her complaint for lack of merit. On appeal, also has rights, which should be entitled to respect and
the CA ordered the immediate reinstatement of enforcement.
Gancayan without loss of seniority rights and with full ■​ Application: Gancayan’s act of altering the receipts for
backwages. On appeal to the SC, the Court initially meal expense reimbursement was deliberate and
declared that her dismissal was not grounded on any purposeful without any justifiable excuse. The gravity of
just cause as enumerated in Art. 282 of the Labor the situation lies in her dishonesty despite the fact that
Code as the termination letter did not mention its she was asking for small sums only. The petitioner
alleged loss of trust and confidence nor Gancayan’s company emphasized that there was clear and
delicate position as Senior Financial Accountant of the convincing evidence that demonstrated malicious intent
company. The current petition is based on petitioner’s as Gancayan frequently asked for reimbursements on
MR. days where she did not actually render overtime work
■​ Issue: WON loss of trust and confidence as a just through the tampered receipts and affidavits of various
cause for termination can also be applied to witnesses. On the other hand, Gancayan merely
supervisors or other personnel occupying positions of claimed innocence and failed to successfully refute the
responsibility accusations against her. Such constitutes justifiable
■​ Issue: WON respondent’s breach of petitioner’s trust is grounds for loss of confidence especially given
clearly supported and borne by the records Gancayan’s position as Senior Financial Accountant who
■​ Issue: WON respondent’s wrongful, malicious and often handled the funds and other sensitive matters in
fraudulent intent is evident from the records the company’s finances and operations. On the matter
■​ Issue: WON respondent’s dismissal is completely of due process, the petitioner company did not violate
commensurate to the severity of her acts the same as they gave multiple notices and
■​ Ruling: The Motion for Reconsideration is GRANTED and opportunities for Gancayan to explain herself and
the SC’s former Decision is REVERSED and SET ASIDE. provide evidence to refute the claims against her.
■​ Doctrine: Loss of trust and confidence is premised from However, she did not maximize this opportunity, as
the fact that an employee holds a position of trust and evidenced by her absence from subsequent hearings.
confidence. In order to constitute a just cause, the act Furthermore, Gancayan was properly notified of the
complained of must be work related and must be based charges against her before her termination.
on a willful breach of said trust and without a justifiable d.​ Discipline of Employees
excuse. i.​ Right to subject employees to disciplinary action whenever
■​ Doctrine: While the Constitution is committed to the they violate company rules and regulations to prevent
protection of the working class, not every labor dispute recurrence. This includes the right to impose reasonable
is automatically decided in their favor. Management penalties.
 MODULE 1: FUNDAMENTAL PRINCIPLES OF LABOR

ii.​ Areno Jr. v Skycable PCC Baguio (G.R. No. 180302, ■​ Issue: WON the CA erred in affirming the NLRC’s
Feb. 5, 2010) reversal of its original Decision finding that Soriano’s
■​ Facts: Petitioner was employed as a cable technician by testimony was not hearsay; (3rd testimony not hearsay)
the respondent. An accounting clerk of the same ■​ Issue: WON CA erred to consider that the suspension
company, Hyacinth Soriano, sent a complaint to the HR order was not signed and issued by a company official
manager alleging that the petitioner was spreading authorized to effect such suspension order, thus
false rumors about her. Following this, the petitioner petitioner did not violate any suspension order (was
insulted Soriano when he said that she was seen with actually signed by supervisor who was on investigation
Aldrin Estrada, their field service supervisor. committee)
Respondent required petitioner to submit his ■​ Issue: WON CA erred in affirming the 2nd Decision of
explanation of the incident, to which he denied all the NLRC on the alleged ground that petitioner knew of
allegations made against him. Following an his suspension
administrative investigation, he was found guilty and ■​ Issue: WON the CA erred in admitting Soriano’s
was suspended for 3 days. He was served a comment despite non-compliance with the CA’s order to
suspension order but refused to sign it. Despite this, file comment in lieu of the Rules. Furthermore, WON CA
he showed up for work, which led the respondent to violated Section 14, Art. VIII of the Constitution by not
issue a 1st Notice of Termination for insubordination. providing a legal basis for denying petitioner’s MR
Petitioner wrote again to the respondent requesting for ■​ Ruling: Petition is DENIED for lack of merit.
further investigation on his alleged acts against Soriano ■​ Doctrine: Willful disobedience requires 2 elements: (1)
but the respondent refused since there has been employee’s assailed conduct must have been willful and
substantial compliance with due process. Petitioner (2) order violated must have been reasonable, lawful,
then explained that he went to work despite the made known to the employee, and must pertain to
suspension order since Soriano’s testimony was duties which he had been engaged to discharge.
hearsay. Following another investigation on the ■​ Application: Petitioner was aware of his suspension but
insubordination case, petitioner was dismissed for only feigned ignorance of the same. The facts have
insubordination or willful disobedience in complying with proven that he was served the said order by his
the suspension order. Petitioner filed a complaint with supervisor but he declined to sign it.
the NLRC, with the LA dismissing the complaint. The ■​ Doctrine: An employer has the prerogative to prescribe
NLRC initially found his suspension and dismissal reasonable rules and regulations necessary for proper
illegal on appeal, but reconsidered and dismissed the conduct of its business and to provide certain
complaint. This was affirmed by the CA. disciplinary measures in order to implement said rules
to assure that the same would be complied with.
 MODULE 1: FUNDAMENTAL PRINCIPLES OF LABOR

■​ Application: The respondent issued the suspension as the petitioner was terminated for willful disobedience,
a result of a repeated infraction within a specific period insubordination and abandonment of work and gross
of time, as the petitioner had already committed a violation of company policy. The NLRC awarded her
previous offense. (Not a random decision) This was in separation and service incentive leave pay, but
line with the company’s Code of Discipline, and thus the reconsidered its Decision and removed the awarding of
respondent acted within their rights as an employer to service incentive leave. The CA dismissed the petition,
impose disciplinary measures on its erring employees. holding that there was no illegal dismissal.
■​ Doctrine: Due process in just dismissal ■​ Issue: WON the CA erred in
■​ Application: The respondent followed due process by ●​ Ruling that there was no illegal suspension and
issuing a 1st Notice of Termination for insubordination dismissal
and conducting an investigation prior to their Final ●​ Ruling that petitioner’s transfer from Bacolod to
Notice officially dismissing the petitioner from their Iloilo was a management prerogative and that it was
employment. a promotion
e.​ Transfer of Personnel ●​ Not granting the relief for reinstatement,
i.​ Right to transfer an employee from one office to another backwages, moral and exemplary damages and
within the business establishment provided that there is no attorney’s fees.
demotion in rank, salary, benefits and other privileges. ■​ Ruling: The petition is DENIED.
ii.​ An employee’s security of tenure does not give him a ■​ Doctrine: Management prerogative to transfer or assign
vested right in his position as it would deprive the company employees from one office or area of operation to
of its prerogative to change his assignment or transfer him another is allowed, provided there is no demotion in
where he will be most useful. rank or diminution of salary, benefits, and other
iii.​ Herida v F&C Pawnshop and Jewelry Store (G.R. No. privileges, and the action is not motivated by
172601, Apr. 16, 2009) discrimination, made in bad faith, or effected as a form
■​ Facts: Herida was an employee of petitioner, and was of punishment or demotion without sufficient cause. To
directed to report to the petitioner’s Guanco Branch in determine validity of transfer, the employer must show
Iloilo City. She was preventively suspended following her that the transfer is not unreasonable, inconvenient, or
refusal to follow the directive for 15 days. Petitioner prejudicial to the employee; nor involve a demotion in
filed a complaint for illegal dismissal, underpayment of rank. Failure to overcome the burden of proof means
wages, non-payment of separation pay, 13th month pay that the transfer was tantamount to constructive
and payment for moral and exemplary damages and dismissal. Objection to transfer on the grounds of
attorney’s fees. Following this, management informed personal inconvenience is not a valid reason to disobey
her that an investigation will be conducted, after which such order.
 MODULE 1: FUNDAMENTAL PRINCIPLES OF LABOR

■​ Application: Respondent’s transfer of the petitioner was ●​ Did PT&T exercise its management prerogative in
not arbitrary and done with ill intent. Respondents have transferring Laplana, or was it an act of bad faith or
standing policies that an employee must be single at discrimination?
the time of employment and must be willing to be ●​ Was Laplana's acceptance of separation pay a valid
transferred to any of its branches in the country. waiver of her right to contest her dismissal?
Petitioner cannot renege on a commitment she made at ■​ Ruling: The petition is GRANTED and NLRC’s Resolution
the time of her employment even if she has since is set aside.
gotten married, even if it leads to personal ■​ Doctrine: The employer is free to regulate all aspects of
inconvenience. Furthermore, respondents were willing employment with his discretion and judgment, including
to accommodate petitioner’s transportation and lodging transfer of employees. An employee’s right to security
expenses as a result of such inconvenience. of tenure does not give him the right to deprive the
iv.​ Philippine Telegraph v Laplana (G.R. No. 76645, Jul. company of its prerogative to change his assignment or
23, 1991) transfer him where he will be most useful.
■​ Facts: Laplana was the cashier of petitioner’s Baguio ■​ Application: There was no illegal dismissal since the
branch and was directed by treasurer Arogo to transfer employee had resigned from her position by asking to
to the company’s branch office in Laoag City. Laplana be retrenched, even suggesting the reason herself.
refused the transfer due to establishing Baguio as her When dismissed, she accepted separation pay. On the
permanent residence and would be away from her part of the employer, they were not shown to be acting
family. Following this, Laplana was informed that she in bad faith, and acted in legitimate pursuit of what it
would be transferred to Manila for a new job considered its best interests in transferring her to
assignment, to which she refused. Due to these another office. The circumstances of the case seem to
transfers, Laplana requested to be retrenched instead, be the most equitable options giving the same.
which led to the termination of her employment and f.​ Productivity Standards
separation pay. Laplana then filed a complaint with the i.​ Right to impose productivity and quality standards at work
Labor Arbiter’s office, alleging that she was forced to to prevent inefficiency, and impose reasonable rules to
terminate her employment by PT&T and that the ensure that employees comply with these standards
company’s act of transferring her was arbitrary and ii.​ Ex: Quota
without any purpose. The LA ruled in Laplana’s favor iii.​ Aliling v Feliciano et al. (G.R. 185829, Apr. 25, 2012)
and found that Laplana was illegally dismissed, which ■​ Facts: Respondent offered petitioner a job as an
was affirmed by the NLRC. account executive (sea freight sales) with a 6-month
■​ Issue: Was Laplana's termination due to retrenchment probationary period, which was made the basis for
lawful? confirmation for regular employment. However, the
 MODULE 1: FUNDAMENTAL PRINCIPLES OF LABOR

respondent assigned the petitioner to handle and ●​ Award back wages even if it did not order
market ground express (GX) instead of sea freight reinstatement
sales. A month after, respondent Mateo emailed the ●​ Award moral and exemplary damages even if it
petitioner expressing dissatisfaction with the latter’s found that petitioner was dismissed to prevent the
performance, asking that the GX shuttles should be at acquisition of his regular status
80% within a month. Thereafter on September 25, ■​ Ruling: Petition is PARTIALLY GRANTED (Fees/damages
2004, the HR manager Joseph Lariosa sent Aliling a are modified)
letter to explain his absence without leave a few days ■​ Doctrine: Art. 281 of the Labor Code provides that in
prior, to which Aliling said that he was present at work cases of probationary employment, the reasonable
and provided a copy of his timesheet. In a separate standards for regular employment must be made known
letter on September 27, Aliling tendered his resignation by the employer to the employee at the time of his
pursuant to San Mateo’s instructions. While the engagement.
company took no action on his resignation, Aliling then ■​ Application: Respondent did not inform petitioner Aliling
demanded reinstatement and a written apology that of the reasonable standards by which his probation
claimed that San Mateo forced him to resign. Lariosa would be measured against at the time of his
responded that Aliling’s case was still being evaluated, engagement. The 80% standard quota being
after which he informed the latter that he was communicated to Aliling was made after he signed his
terminated due to his non-satisfactory performance contract with WWWEC, especially considering that
during the probationary period and that he was paid his Aliling signed his contract as part of the sea freight
outstanding salary of nearly Php 7, 000.00. Before this sales section instead of his actual assignment for GX.
termination, Aliling had filed a Complaint for illegal As such, he is considered a regular employee, and thus
dismissal due to forced resignation, nonpayment of entitled to backwages from the time he was illegally
salaries and damages with the NLRC, stating that the dismissed last October 2004 to the finality of this
respondents did not inform him of the standards under Decision.
which he would qualify as a regular employee. The LA ■​ Doctrine: To justify fully the dismissal of an employee,
declared his termination as unjustified and ordered the employer must, as a rule, prove that the dismissal
respondents to pay Aliling for the unexpired portion of was for a just cause and that the employee was
his employment contract and all other benefits. The afforded due process prior to dismissal. As a
NLRC affirmed this decision, which was modified by the complementary principle, the employer has the onus of
CA. proving with clear, accurate, consistent, and convincing
■​ Issues: WON the CA failed to: evidence the validity of the dismissal. This applies to
●​ Order reinstatement of petitioner despite its finding probationary employees who also enjoy security of
of illegal dismissal from employment tenure.
 MODULE 1: FUNDAMENTAL PRINCIPLES OF LABOR

■​ Application: WWWEC failed to discharge its twin burden. iii.​ Traders Royal Bank v NLRC (G.R. No. 88168, Aug. 30,
The circumstances of the case show that the company 1990)
planned to terminate the petitioner’s employment for ■​ Facts: On November 1986, the TRB union filed a
alleged unauthorized absences, even prior to the letter-complaint against TRB with the Bureau of Labor
petitioner’s alleged failure to achieve his sales quota. Relations claiming that TBR paid their employees their
Even if Aliling explained and proved himself, the holiday pay but has withheld the basis of their
company still proceeded to dismiss the petitioner for computation, stating that the computation has allegedly
non-satisfactory performance, even if the termination decreased and constituted diminution in benefits
letter did not cite such. While failure to meet sales or enjoyed by the employees. In March 1987, the
work quotas may fall under gross inefficiency under Secretary of Labor certified the complaint to the NLRC.
Article 282, the quota imposed needs to be a valid In the meantime, the parties negotiated and agreed to
productivity standard done in good faith to validate a a CBA which provided that the whole of bonuses in
dismissal. WWWEC failed to prove that the 80% sales previous years is not demandable and that certain
quota was done in good faith, simply because it was bonuses are considered regular compensation while
not. others are entirely dependent on the bank’s income. In
■​ Doctrine: Dual process of termination: written September 1988, the NLRC rendered a decision in
notice-hearing-notice of termination favor of the employees.
■​ Application: Both notice requirements have not been ■​ Issue: WON the NLRC gravely abused its discretion in
properly observed. While WWWEC claims that the ordering it to pay mid-year/year-end bonus differential
memo informing Aliling of the likelihood of his for 1986 to its employees
termination would have constituted a charge sheet, ■​ Ruling: The petition is GRANTED. The NLRC’s Decision
there is no proof that such letter has been sent and is modified by deleting the award of bonus differentials
received by him. Furthermore, there was no hearing or to the employees for 1986.
conference taking place. ■​ Doctrine: A bonus is “a gratuity or act of liberality of the
g.​ Granting Bonus giver which the recipient has no right to demand as a
i.​ Right of the employer to grant employees bonuses for their matter of right”. It is a management prerogative which
industry and loyalty to the company. (Right to be generous) cannot be forced from the employer. It is not considered
ii.​ This means that employees are not automatically entitled as part of the labor standards in the same class as
to bonus, UNLESS it is a company policy or salaries, cost of living allowances, holiday pay, and
practice/stipulated in employment contract or CBA. As leave benefits in which diminution is strictly controlled.
such, bonuses are not an automatic demandable and ■​ Application: Petitioner is not obliged to pay bonuses to
enforceable right and employers are not obliged to grant its employees and such is entirely dependent on the
bonuses aside from the employee’s salary or wage
 MODULE 1: FUNDAMENTAL PRINCIPLES OF LABOR

profits realized by the Bank from its operations. The labor practice (union busting), non-payment of service
bonuses have decreased due to the bank’s decrease in incentive leave pay and payment of moral and
income, weakening considerably in 1986 on account of exemplary damages and attorney’s fees, and prayed for
political developments in the country. Nevertheless, the reinstatement and full backwages. Petitioners sent
Bank still gave out its usual 2 months basic mid year respondents a telegram directing them to return to
and 2 months gross year-end bonuses. Due to the work, and were informed by the respondents of the filed
circumstances, the respondents’ assertion that the complaint and their refusal to report for work given their
granting of bonuses to the employees had ripened into working environment. The LA ruled that the respondents
a company practice that may not be adjusted to the were not constructively dismissed by the petitioner and
prevailing financial situation of the Bank has no legal or that there was no unfair labor practice. The case was
moral bases. appealed to the NLRC, during which the petitioner filed
h.​ Change of Working Hours a Motion to Dismiss since respondents executed a
i.​ An employer is free to regulate, according to his own Waiver, Release, and Quitclaim. In October 2000, the
discretion and judgment, all aspects of employment (ex.: NLRC sustained the LA’s findings. On appeal with the
flexible working arrangements, reduction of work hours with CA, the same found respondents’ case partly
proper notice) meritorious. Petitioners appealed to the SC, hence the
ii.​ Must still be subject to conditions, such as good faith and instant case
legitimate business purposes, non-diminution rule, and ■​ Issue: WON the CA erred in reversing the LA’s ruling
mutual consent and communication that private respondents were not illegally dismissed
iii.​ Unicorn Safety Glass, Inc. v Basarte et al. (G.R. No. from their employment;
154689, Nov. 25, 2004) ■​ Issue: WON the CA erred in ruling that the release,
■​ Facts: Respondents were employees of petitioner and waiver and quitclaims executed by private respondents
normally worked 6x a week and paid on a weekly basis. Basarte and Flores were null and void
Respondents were also officers of the organized union ■​ Ruling: The petition is DENIED and the CA’s Decision is
of the petitioner, owned by Lily and Hilario Yulo. In AFFIRMED in toto
March 1998, Hilario issued a Memorandum informing ■​ Doctrine: Constructive dismissal is defined as quitting
respondents that their workdays would be reduced due because continued employment is rendered impossible,
to economic reasons. Despite their protestations, Yulo unreasonable or unlikely, as an offer involving a
proceeded with the reduction and implemented a demotion in rank and a diminution in pay. It does not
rotation scheme. In April 1998, respondents opted to always take the form as a diminution, as an act of clear
miss work and filed a complaint against the petitioner discrimination, insensibility, or disdain by the employer
with the NLRC for constructive dismissal and unfair that may become so unbearable on the part of the
 MODULE 1: FUNDAMENTAL PRINCIPLES OF LABOR

employee so as to foreclose any choice on his part ■​ Application: Although the petitioners exerted effort to
except to resign from such employment. make respondents return to work, there is no automatic
abandonment of work considering the constructive
Businesses have the management prerogative to dismissal, which is inconsistent with the idea of
regulate working hours, but such is not absolute. It abandonment.
must be exercised in good faith and with due regard to ■​ On the waivers and quitclaims*: While petitioners argue
the rights of labor. that the waivers and quitclaims were executed under
■​ Application: The petitioners were unable to prove that valid circumstances, especially considering that the
the reduction of the respondents’ working hours were complaint for illegal dismissal filed by respondents with
as a result of business necessity. The reasons the LA had been dismissed, their appeal for the NLRC
enumerated by the respondents in their March was still pending. In fact, petitioners filed to dismiss
memorandum were too general to actually substantiate the case on the ground that such waivers and
the need for the scheme and failed to prove that the quitclaims were executed, therefore showing that such
reduction was not meant to subdue the organized was in the best interest of the petitioners. Such were
union. Furthermore, the unbending stance of the even inadequate given the long-standing employment of
petitioners on the rotation scheme singled out some of the respondents.
respondents who were union officers, further showing i.​ Rules of Marriage
that the management prerogative was used to create i.​ Employers are allowed to establish policies on marriage,
an unjust situation on the same despite the latters’ but this is not an absolute rule and must be subject to the
willingness to discuss the work reduction with Hilario reasonable business necessity rule (legitimate business
Yulo. concerns that would justify discriminatory exercises that
■​ Doctrine: To constitute abandonment, two elements affect a certain amount of employees)
must concur: (1) the failure to report for work or ii.​ Duncan Association of Detailman-PTGWO v Glaxo
absence without valid or justifiable reason, and (2) a Wellcome Philippines (G.R. No. 162994, Sept. 17,
clear intention to sever the employer-employee 2004)
relationship, with the second element as the more
■​ Facts: Pedro Tecson was hired by respondent as a
determinative factor and being manifested by some
medical representative and signed a contract of
overt acts. Abandoning one's job means the deliberate,
employment that stipulates that he agrees to study and
unjustified refusal of the employee to resume his
abide by the company rules, which includes disclosing
employment and the burden of proof is on the employer
any existing or future relationship by consanguinity or
to show a clear and deliberate intent on the part of the
affinity with co-employees or employees of competing
employee to discontinue employment.
drug companies and to resign from the company should
 MODULE 1: FUNDAMENTAL PRINCIPLES OF LABOR

management consider the same as a conflict of ■​ Doctrine: It is a legitimate business practice to guard
interest. Tecson was initially assigned in the Camarines business confidentiality and protect a competitive
Sur-Camarines Norte sales area. Subsequently, he position by disqualifying applicants or employees who
entered into a romantic relationship and eventually are married to a competitor. This does not violate the
married Bettsy, an Albay Branch Coordinator of Astra equal protection clause since it is not aimed at
Pharmaceuticals (competitor of Glaxo). Even prior to the restricting a personal prerogative of the individual to get
marriage, Glaxo’s management had already informed married and was applied equally to men and women
Tecson of the potential conflict of interest with his alike. Such personal prerogative does not detract the
relationship, for which, Tecson continued to ask for time employer from using management prerogative to protect
to resolve such issues considering the company policy, its interests and ensure business success.
explaining that Bettsy would avail of Astra’s redundancy ■​ Application: Glaxo has the right to guard its trade
package due to the company’s merger with Zeneca, secrets and other confidential information, especially
another drug company. Eventually, Glaxo transferred considering the highly competitive nature of the
Tecson to the Butuan-Surigao-Agusan del Sur area, but pharmaceutical industry. The prohibition against
Tecson ignored such directive and continued working relationships with employees of competitor companies
within the Camarines Sur-Camarines Norte area. Due to is reasonable under the circumstances that such
the failure of company grievance mechanisms, they relationships might compromise the interests of the
submitted the matter for voluntary arbitration. Following company. Such policy does not restrict employees from
this, the National Conciliation and Mediation Board cultivating relationships and marrying people of their
rendered its Decision in 2000 declaring Glaxo’s policy own choosing. Furthermore, Tecson signed a contract
on relationship between its employees and persons which required him to study and follow the company’s
employed with competitor companies and affirmed policies upon joining Glaxo even prior to his
Tecson’s transfer. The CA reaffirmed such findings upon relationship. Considering that he voluntarily entered into
appeal. such a contract with Glaxo, the contract has the force
■​ Issue: WON the CA erred in of law between them and should be complied with in
●​ Affirming the NCMB’s finding that Glaxo’s good faith.
relationship policy is valid ■​ Doctrine: Constructive dismissal defined as a quitting,
●​ Not finding that Tecson was constructively an involuntary resignation resorted to when continued
dismissed when he was transferred to a new sales employment becomes impossible, unreasonable, or
territory, and deprived of the opportunity to attend unlikely; when there is a demotion in rank or diminution
products seminars and training sessions in pay; or when a clear discrimination, insensibility or
■​ Ruling: The petition is DENIED. disdain by an employer becomes unbearable to the
employee.
 MODULE 1: FUNDAMENTAL PRINCIPLES OF LABOR

■​ Application: Tecson was not demoted or unduly the business. In the absence of a bona fide
discriminated against by his transfer to Camarines Sur. occupational qualification invalidates a rule denying
Such was the exercise of management prerogative of employment to one spouse due to the employment of
Glaxo considering his relationship with Bettsy and the the other spouse in the same office. To justify a bona
proximity of their assigned working areas within the fide occupational qualification, the employer must prove
same region, which provides a potential information two factors: (1) that the employment qualification is
leak of Glaxo’s marketing strategies to Astra. reasonably related to the essential operation of the job
iii.​ MIGHT BE STAR PAPER CORPORATION V SIMBOL involved; and, (2) that there is a factual basis for
■​ Facts: Respondents were all regular employees of SPC. believing that all or substantially all persons meeting
Simbol and Comia married co-employees and resigned the qualification would be unable to properly perform
from the company due to the latter’s no relationships the duties of the job.
between co-employees policy. Estrella was in a ■​ Application: There is no business necessity to justify
relationship with a co-employee, but resigned after she the no-spouse policy in SPC. The policy is premised on
got pregnant. Simbol and Comia allege that they did not the mere fear that employees married to each other will
resign voluntarily but did so due to an illegal company be less efficient. If we uphold the questioned rule
policy. Estrella alleges that she severed her relationship without valid justification, the employer can create
with Zuniga (baby daddy) to avoid being dismissed, but policies based on an unproven presumption of a
chose to resign in exchange for her 13th month pay perceived danger at the expense of an employee’s right
after she was denied entry following returning to work to security of tenure.
after suffering an accident. Respondents complained of
unfair labor practice, constructive dismissal, separation
pay and attorney’s fees, which was dismissed by LA and
NLRC, but reversed by CA
■​ Issue: WON the CA erred in holding that the policy is
violative of the constitutional rights towards marriage
and the family of employees and of Art. 136 of the
Labor Code; and that respondents’ resignations were
far from voluntary
■​ Ruling: Decision of CA is affirmed.
■​ Doctrine: Anti-nepotism policies need to prove its
business necessity other than the perception that
spouses in the same workplace might adversely affect