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Cebu Royal Plant vs.

Deputy Minister of Labor


No. L-58639. August 12, 1987.*
CEBU ROYAL PLANT (SAN MIGUEL CORPORATION), petitioner, vs. THE HONORABLE DEPUTY
MINISTER OF LABOR and RAMON PILONES, respondents.
Labor; Illegal Dismissal; Probationary Period; An employee who is allowed to work after a probationary
period shall be considered a regular employee.As there is no mention of the basis of the above order,
we may assume it was the temporary payroll authority submitted by the petitioner showing that the private
respondent was employed on probation on February 16, 1978. Even supposing that it is not self-serving,
we find nevertheless that it is self-defeating. The six-month period of probation started from the said date
of appointment and so ended on August 17, 1978, but it is not shown that the private respondent's
employment also ended then; on the contrary, he continued working as usual. Under Article 282 of the
Labor Code, "an employee who is allowed to work after a probationary period shall be considered a
regular employee." Hence, Pilones was already on permanent status when he was dismissed on August
21, 1978, or four days after he ceased to be a probationer.
Same; Same; Reinstatement; Employer's protestations that reinstatement of the employee would
prejudice public health, not believed.The petitioner claims it could not have dismissed the private
respondent earlier because the x-ray examination was made only on August 17, 1978, and the results
were not immediately available. That excuse is untenable. We note that when the petitioner had all of six
months during which to conduct such examination, it chose to wait until exactly the last day of the
probation period. In the light of such delay, its protestations now that reinstatement of Pilones would
prejudice public health cannot but sound hollow and hypocritical. By its own implied admission, the
petitioner had exposed its customers to the employee's disease because of its failure to examine him
before entrusting him with the functions of a "syrup man." Its belated concern for the consuming public is
hardly persuasive, if not clearly insincere and self-righteous.
Same; Same; Same; Constitution; Security of tenure; Since the private respondent was already a regular
employee when he was dismissed, he could validly claim the security of tenure guaranteed to him by the
Constitution and the Labor Code.We are satisfied that whether his employment began on February 16,
1978, or even earlier as he claims, the private respondent was already a regular employee when he was
dismissed on August 21, 1978. As such, he could validly claim the security of tenure guaranteed to him
by the Constitution and the Labor Code.
Same; Same; Absence of a medical certificate from a competent public health authority, indicates that the
employee's disease is not of such a nature that it will not be cured within a period of 6 months even with
proper medical treatment, and thus his dismissal was a severe and unlawful sanction.The record does
not contain the certification required by the above rule. The medical certificate offered by the petitioner
came from its own physician, who was not a "competent public health authority," and merely stated the
employee's disease, without more. We may surmise that if the required certification was not presented, it
was because the disease was not of such a nature or seriousness that it could not be cured within a
period of six months even with proper medical treatment. If so, dismissal was unquestionably a severe
and unlawful sanction.
Same; Same; Prior clearance rule in force at the time requires that it must be obtained prior to the
operative act of termination of an employee.It is also worth noting that the petitioner's application for
clearance to terminate the employment of the private respondent was filed with the Ministry of Labor only
on August 28, 1978, or seven days after his dismissal. As the NLRC has repeatedly and correctly said,
the prior clearance rule (which was in force at that time) was not a "trivial technicality." It required "not just
the mere filing of a petition or the mere attempt to procure a clearance" but that "the said clearance be
obtained prior to the operative act of termination."

Same; Same; Same; Reinstatement; Employer's attempt to circumvent the law by separating the
employee after 5 months service to prevent him from becoming a regular employee and then rehiring him
on probation again without security of tenure, contrary to the mandate of social justice; Reinstatement of
employee, conditioned on his fitness to resume his work as certified by competent authority.We agree
that there was here an attempt to circumvent the law by separating the employee after five months'
service to prevent him from becoming a regular employee, and then rehiring him on probation, again
without security of tenure. We cannot permit this subterfuge if we are to be true to the spirit and mandate
of social justice. On the other hand, we have also the health of the public and of the dismissed employee
himself to consider. Hence, although we must rule in favor of his reinstatement, this must be conditioned
on his fitness to resume his work, as certified by competent authority.
Same; Same; Same; Concern for the lowly worker reaffirmed.We take this opportunity to reaffirm our
concern for the lowly worker who, often at the mercy of his employers, must look up to the law for his
protection. Fittingly, that law regards him with tenderness and even favor and always with faith and hope
in his capacity to help in shaping the nation's future. It is error to take him for granted. He deserves our
abiding respect. How society treats him will determine whether the knife in his hands shall be a caring tool
for beauty and progress or an angry weapon of defiance and revenge. The choice is obvious, of course. If
we cherish him as we should, we must resolve to lighten "the weight of centuries" of exploitation and
disdain that bends his back but does not bow his head.
Same; Same; Same; Back wages for 3 years only and reinstatement only upon certification by a
competent public health authority that the employee is fit to return to work.The petition is DISMISSED
and the temporary restraining order of November 18,1981, is LIFTED. The Order of the public respondent
dated July 14, 1981, is AFFIRMED, but with the modification that the back wages shall be limited to three
years only and the private respondent shall be reinstated only upon certification by a competent public
health authority that he is fit to return to work.

PETITION to review the order of the Ministry of Labor.


The facts are stated in the opinion of the Court.
CRUZ, J.:
The private respondent was removed by the petitioner and complained to the Ministry of Labor. His
complaint was dismissed by the regional director, who was, however, reversed by the public respondent.
Required to reinstate the separated employee and pay him back wages, the petitioner has come to us,
faulting the Deputy Minister with grave abuse of discretion. We have issued in the meantime a temporary
restraining order.
The public respondent held that Ramon Pilones, the private respondent, was already a permanent
employee at the time of his dismissal and so was entitled to security of tenure. The alleged ground for his
removal, to wit, "pulmonary tuberculosis minimal," was not certified as incurable within six months as to
justify his separation. Additionally, the private respondent insists that the petitioner should have first
obtained a clearance, as required by the regulations then in force, for the termination of his employment.
The petitioner for its part claims that the private respondent was still on probation at the time of his
dismissal and so had no security of tenure. His dismissal was not only in conformity with company policy
but also necessary for the protection of the public health, as he was handling ingredients in the
processing of soft drinks which were being sold to the public. It is also argued that the findings of the
regional director, who had direct access to the facts, should not have been disturbed on appeal. For these
same reasons, it contends, the employee's reinstatement as ordered by the public respondent should not
be allowed.

The original findings were contained in a one-page order3 reciting simply that "complainant was
employed on a probationary period of employment for six (6) months. After said period, he underwent
medical examination for qualification as regular employee but the results showed that he is suffering from
PTB minimal. Consequently, he was informed of the termination of his employment by respondent." The
order then concluded that the termination was "justified." That was all.
As there is no mention of the basis of the above order, we may assume it was the temporary payroll
authority submitted by the petitioner showing that the private respondent was employed on probation on
February 16, 1978. Even supposing that it is not self-serving, we find nevertheless that it is self-defeating.
The six-month period of probation started from the said date of appointment and so ended on August 17,
1978, but it is not shown that the private respondent's employment also ended then; on the contrary, he
continued working as usual. Under Article 282 of the Labor Code, "an employee who is allowed to work
after a probationary period shall be considered a regular employee." Hence, Pilones was already on
permanent status when he was dismissed on August 21, 1978, or four days after he ceased to be a
probationer.
The petitioner claims it could not have dismissed the private respondent earlier because the x-ray
examination was made only on August 17, 1978, and the results were not immediately available. That
excuse is untenable. We note that when the petitioner had all of six months during which to conduct such
examination, it chose to wait until exactly the last day of the probation period. In the light of such delay, its
protestations now that reinstatement of Pilones would prejudice public health cannot but sound hollow
and hypocritical. By its own implied admission, the petitioner had exposed its customers to the
employee's disease because of its failure to examine him before entrusting him with the functions of a
"syrup man." Its belated concern for the consuming public is hardly persuasive, if not clearly insincere and
self-righteous.
There is proof in fact that the private respondent was first hired not on February 16, 1978, but earlier in
1977. This is the 1977 withholding tax statement5 issued for him by the petitioner itself which it does not
and cannot deny. The petitioner stresses that this is the only evidence of the private respondent's earlier
service and notes that he has not presented any co-worker to substantiate his claim. This is perfectly
understandable. Given the natural reluctance of many workers to antagonize their employers, we need
not wonder why none of them testified against the petitioner.
We are satisfied that whether his employment began on February 16, 1978, or even earlier as he claims,
the private respondent was already a regular employee when he was dismissed on August 21, 1978. As
such, he could validly claim the security of tenure guaranteed to him by the Constitution and the Labor
Code.
The applicable rule on the ground for dismissal invoked against him is Section 8, Rule I, Book VI, of the
Rules and Regulations Implementing the Labor Code reading as follows:

"Sec. 8. Disease as a ground for dismissal.Where the employee suffers from a disease and
his continued employment is prohibited by law or prejudicial to his health or to the health of his
co-employees, the employer shall not terminate his employment unless there is a certification by
a competent public health authority that the disease is of such nature or at such a stage that it
cannot be cured within a period of six (6) months even with proper medical treatment. If the
disease or ailment can be cured within the period, the employer shall not terminate the
employee but shall ask the employee to take a leave. The employer shall reinstate such
employee to his former position immediately upon the restoration of his normal health."

The record does not contain the certification required by the above rule. The medical certificate offered by
the petitioner came from its own physician, who was not a "competent public health authority," and merely
stated the employee's disease, without more. We may surmise that if the required certification was not
presented, it was because the disease was not of such a nature or seriousness that it could not be cured
within a period of six months even with proper medical treatment. If so, dismissal was unquestionably a
severe and unlawful sanction.
It is also worth noting that the petitioner's application for clearance to terminate the employment of the
private respondent was filed with the Ministry of Labor only on August 28, 1978, or seven days after his
dismissal.6 As the NLRC has repeatedly and correctly said, the prior clearance rule (which was in force at
that time) was not a "trivial technicality." It required "not just the mere filing of a petition or the mere
attempt to procure a clearance" but that "the said clearance be obtained prior to the operative act of
termination. "
We agree that there was here an attempt to circumvent the law by separating the employee after five
months' service to prevent him from becoming a regular employee, and then rehiring him on probation,
again without security of tenure. We cannot permit this subterfuge if we are to be true to the spirit and
mandate of social justice. On the other hand, we have also the health of the public and of the dismissed
employee himself to consider. Hence, although we must rule in favor of his reinstatement, this must be
conditioned on his fitness to resume his work, as certified by competent authority.
We take this opportunity to reaffirm our concern for the lowly worker who, often at the mercy of his
employers, must look up to the law for his protection. Fittingly, that law regards him with tenderness and
even favor and always with faith and hope in his capacity to help in shaping the nation's future. It is error
to take him for granted. He deserves our abiding respect. How society treats him will determine whether
the knife in his hands shall be a caring tool for beauty and progress or an angry weapon of defiance and
revenge. The choice is obvious, of course. If we cherish him as we should, we must resolve to lighten "the
weight of centuries" of exploitation and disdain that bends his back but does not bow his head.
WHEREFORE, the petition is DISMISSED and the temporary restraining order of November 18, 1981, is
LIFTED. The Order of the public respondent dated July 141981, is AFFIRMED, but with the modification
that the back wages shall be limited to three years only and the private respondent shall be reinstated
only upon certification by a competent public health authority that he is fit to return to work. Costs against
the petitioner.

SO ORDERED.
Teehankee (Chairman, C.J.), Narvasa, Paras and Gancayco, JJ., concur.
Petition dismissed. Order affirmed.
Notes.Employee who was illegally dismissed is entitled to receive his back wages from date of his
illegal dismissal. The period of pendency of decision of a case should not be deducted in the computation
of back wages. (New Manila Candy Workers Union vs. Court of Industrial Relations, 86 SCRA 37.)
Reinstatement is a restoration to a state from which one has been removed or separated. It is the return
to the position from which he was removed and assuming again the functions of the office already held.
(Union of Supervisors vs. Secretary of Labor, 128 SCRA 442.)

MANUEL SOSITO, petitioner, vs. AGUINALDO DEVELOPMENT CORPORATION, respondent.


Gr No. L-48926, Dec. 14, 1987

Constitutional Law; Labor Laws; While the constitution commit' ted to the policy of social justice and the
protection of the working class, it should not be supposed that every labor dispute will be automatically
decided in favor of labor.While the Constitution is committed to the policy of social justice and the
protection of the working class, it should not be supposed that every labor dispute will be automatically
decided in favor of labor. Management also has its own rights which, as such, are entitled to respect and
enforcement in the interest of simple fair play. Out of its concern for those with less privileges in life, this
Court has inclined more often than not toward the worker and upheld his cause in his conflicts with the
employer. Such favoritism, however, has not blinded us to the rule that justice is in every case for the
deserving, to be dispensed in the light of the established f acts and the applicable law and doctrine.
Same; Same; Compassionate measure offered by the company deserves commendation and support.
We note that under the law then in force the private respondent could have validly reduced its work force
because of its financial reverses without the obligation to grant separation pay. This was permitted under
the original Article 272(a), of the Labor Code, which was in force at the time. To its credit, however, the
company voluntarily offered gratuities to those who would agree to be phased out pursuant to the terms
and conditions of its retrenchment program, in recognition of their loyalty and to tide them over their own
financial difficulties. The Court feels that such compassionate measure deserves commendation and
support but at the same time rules that it should be available only to those who are qualified therefor. We
hold that the petitioner is not one of them.

PETITION to review the decision of the National Labor Relations Commission.


The facts are stated in the opinion of the Court.
CRUZ, J.:
We gave due course to this petition and required the parties to file simultaneous memoranda on the sole
question of whether or not the petitioner is entitled to separation pay under the retrenchment program of
the private respondent.
The facts are as follows:
Petitioner Manuel Sosito was employed in 1964 by the private respondent, a logging company, and was
in charge of logging importation, with a monthly salary of P675.00, when he went on indefinite leave with
the consent of the company on January 16, 1976.2 On July 20, 1976, the private respondent, through its
president, announced a retrenchment program and offered separation pay to employees in the active
service as of June 30, 1976, who would tender their resignations not later than July 31, 1976. The
petitioner decided to accept this offer and so submitted his resignation on July 29, 1976, "to avail himself
of the gratuity benefits" promised. However, his resignation was not acted upon and he was never given
the separation pay he expected. The petitioner complained to the Department of Labor, where he was
sustained by the labor arbiter. The company was ordered to pay Sosito the sum of P4,387.50,
representing his salary for six and a half months. On appeal to the National Labor Relations Commission,
this decision was reversed and it was held that the petitioner was not covered by the retrenchment
program. The petitioner then came to us.

For a better understanding of this case, the memorandum of the private respondent on its retrenchment
program is reproduced in full as follows:
"July 20, 1976
"Memorandum To: ALL EMPLOYEES
"Re: RETRENCHMENT PROGRAM
"As you are all aware, the operations of wood-based industries in the Philippines for the last two (2) years
were adversely affected by the worldwide decline in the demand for and prices of logs and wood
products. Our company was no exception to this general decline in the market, and has suffered
tremendous losses. In 1975 alone, such losses amounted to nearly P20,000,000.00.
"The company has made a general review of its operations and has come to the unhappy decision of the
need to make adjustments in its manpower strength if it is to survive. This is indeed an unfortunate and
painful decision to make, but it leaves the company no alternative but to reduce its tremendous and
excessive overhead expense in order to prevent an ultimate closure.
"Although the law allows the Company, in a situation such as this, to drastically reduce it manpower
strength without any obligation to pay separation benefits, we recognize the need to provide our
employees some financial assistance while they are looking for other jobs.
"The Company therefore is adopting a retrenchment program whereby employees who are in the active
service as of June 30, 1976 will be paid separation benefits in an amount equivalent to the employee's
one-half (1/2) month's basic salary multiplied by his/her years of service with the Company. Employees
interested in availing of the separation benefits offered by the Company must manifest such intention by
submitting written letters of resignation to the Management not later than July 31, 1976. Those whose
resignations are accepted shall be informed accordingly and shall be paid their separation benefits.
"After July 31, 1976, this offer of payment of separation benefits will no longer be available. Thereafter,
the Company shall apply for a clearance to terminate the services of such number of employees as may
be necessary in order to reduce the manpower strength to such desired level as to prevent further losses.

"(SGD.)
JOSE G. RICAFORT
President
"N.B.

"For additional information


and/or resignation forms,
please see Mr. Vic Maceda
or Atty. Ben Aritao."
It is clear from the memorandum that the offer of separation pay was extended only to those who were in
the active service of the company as of June 30, 1976. It is equally clear that the petitioner was not
eligible for the promised gratuity as he was not actually working with the company as of the said date.
Being on indefinite leave, he was not in the active service of the private respondent although, if one were

to be technical, he was still in its employ. Even so, during the period of indefinite leave, he was not
entitled to receive any salary or to enjoy any other benefits available to those in the active service.
It seems to us that the petitioner wants to enjoy the best of two worlds at the expense of the private
respondent. He has insulated himself from the insecurities of the floundering firm but at the same time
would demand the benefits it offers. Being on indefinite leave from the company, he could seek and try
other employment and remain there if he should find it acceptable; but if not, he could go back to his
former work and argue that he still had the right to return as he was only on leave.
There is no claim that the petitioner was temporarily laid off or forced to go on leave; on the contrary, the
record shows that he voluntarily sought the indefinite leave which the private respondent granted. It is
strange that the company should agree to such an open-ended arrangement, which is obviously onesided. The company would not be free to replace the petitioner but the petitioner would have a right to
resume his work as and when he saw fit.
We note that under the law then in force the private respondent could have validly reduced its work force
because of its financial reverses without the obligation to grant separation pay. This was permitted under
the original Article 272(a), of the Labor Code, which was in force at the time, To its credit, however, the
company voluntarily offered gratuities to those who would agree to be phased out pursuant to the terms
and conditions of its retrenchment program, in recognition of their loyalty and to tide them over their own
financial difficulties. The Court feels that such compassionate measure deserves commendation and
support but at the same time rules that it should be available only to those who are qualified therefor. We
hold that the petitioner is not one of them.
While the Constitution is committed to the policy of social justice and the protection of the working class, it
should not be supposed that every labor dispute will be automatically decided in favor of labor.
Management also has its own rights which, as such, are entitled to respect and enforcement in the
interest of simple fair play. Out of its concern for those with less privileges in life, this Court has inclined
more often than not toward the worker and upheld his cause in his conflicts with the employer. Such
favoritism, however, has not blinded us to the rule that justice is in every case for the deserving, to be
dispensed in the light of the established facts and the applicable law and doctrine.
WHEREFORE, the petition is DISMISSED and the challenged decision AFFIRMED, with costs against
the petitioner.
SO ORDERED.
Teehankee (C.J.), Narvasa, Paras and Gancayco, JJ., concur.
Petition dismissed, Decision affirmed.
"Art. 272. Termination by employer.An employer may terminate an employment without a definite
period for any of the following just causes:
"(a) the closing or cessation of operation of the establishment or enterprise, or where the employer has to
reduce his work force by more than one-half due to serious business reverses, unless the closing is for
the purpose of circumventing the provisions of this Chapter; x x x."
Notes.A person is not an independent contractor where he only manages a particular business
belonging to another (CMS Estate vs. SSS, 132 SCRA 108.)
In the absence of existence of employer-employee relationship between the parties, the former CFI had
authority to assume jurisdiction over the case. (National Mines & Allied Workers' Union vs. Valero, 132
SCRA 578.)

PHILIPPINE JAPAN ACTIVE CARBON CORPORATION AND TOKUICHI SATOFUKA, petitioners, vs.
NATIONAL LABOR RELATIONS COMMISSION and OLGA S. QUIANOLA, respondents.
G.R. No. 83239 March 8, 1989
Labor Law; Dismissal; Constructive dismissal defined. A constructive discharge is defined as: A quitting
because continued employment is rendered impossible, unreasonable or unlikely; as, an offer involving a
demotion in rank and a diminution in pay.
Same; Same; Same; Private respondents assignment as Production Secretary of the Production
Department was not unreasonable and did not constitute a constructive dismissal. In this case, the private
respondents assignment as Production Secretary of the Production Department was not unreasonable
as it did not involve a demotion in rank (her rank was still that of a department secretary) nor a change in
her place of work (the office is in the same building), nor a diminution in pay, benefits, and privileges. It
did not constitute a constructive dismissal.
Same; Same; Employees right to security of tenure does not give him a vested right in his position as
would deprive the company of its prerogative to change his assignment or transfer him where he will be
most useful.It is the employers prerogative, based on its assessment and perception of its employees
qualifications, aptitudes, and competence, to move them around in the various areas of its business
operations in order to ascertain where they will function with maximum benefit to the company. An
employees right to security of tenure does not give him such a vested right in his position as would
deprive the company of its prerogative to change his assignment or transfer him where he will be most
useful. When his transfer is not unreasonable, nor inconvenient, nor prejudicial to him, and it does not
involve a demotion in rank or a diminution of his salaries, benefits, and other privileges, the employee
may not complain that it amounts to a constructive dismissal.
Same; Same; Abandonment; Petitioners contention that private respondents absence from work on June
2 to June 3, 1986 constituted an abandonment of her job rejected.On the other hand, we reject the
petitioners contention that the private respondents absence from work on June 2 to June 3, 1986
constituted an abandonment of her job in the company resulting in the forfeiture of the benefits due her.
While she was guilty of insubordination of having refused to move out of her position as Executive
Secretary to the Executive Vice-President and General Manager of the company, dismissal from the
service would be a draconian punishment for it, as her complaint for illegal dismissal was filed in good
faith.
PETITION for review from the decision of the National Labor Relations Commission.
The facts are stated in the opinion of the Court.
Dominguez & Paderna Law Offices Co. for petitioners.
The Solicitor General for public respondent.
B.E. Militar and Associate Law Offices for private respondent.
GRIO-AQUINO, J.:
This is a petition for review of the decision dated November 27, 1987 in NLRC Case No. 1966-LR-XI-86,
entitled Olga S. Quianola, Complainant-Appellee vs. Philippine Japan Active Carbon Corporation and/or
Tokuichi Satofuka, Respondents-Appellants, affirming the decision dated June 5, 1987 of the Labor
Arbiter finding that the private respondent Olga S. Quianola was illegally dismissed and ordering the
appellants to reinstate her with back wages and damages.

The private respondent, who had been employed in petitioner corporation since January 19, 1982, as
Assistant Secretary/ Export Coordinator, was promoted on May 20, 1983 to the position of Executive
Secretary to the Executive Vice President and General Manager. On May 31, 1986, for no apparent
reason at all and without prior notice to her, she was transferred to the Production Department as
Production Secretary, swapping positions with Ester Tamayo. Although the transfer did not amount to a
demotion because her salary and workload remained the same, she believed otherwise so she rejected
the assignment and filed a complaint for illegal dismissal. The Labor Arbiter found, on the basis of the
evidence of both parties, that the transfer would amount to constructive dismissal, hence, her refusal to
obey the transfer order was justified (pp. 76-77, Rollo). The Labor Arbiter further observed that:
There was something perverse in the way she was dismissed from her work. She was
dismissed for causes that are unjustified, if not entirely non-existent, and foisted on her by
respondents illegal act the motivation of which reeks with bad faith. Accordingly, they should be
assessed and required to pay complainant the sum of P25,000 as damages and P5,000 as
attorneys fee.
he dispositive portion of his decision reads as follows:
WHEREFORE, judgment is hereby rendered declaring complainant Olga Quianolas
dismissal illegal and for respondents to reinstate her to her former position with back wages
equivalent to one year in the amount of P33,684 (P2,807 x 12 months) only, without loss of
seniority rights and other benefits also equivalent to one year or until the finality of this Decision,
whichever is higher.
Likewise, respondents are hereby assessed and ordered to pay complainant the sum of
P25,000.00 as damages plus P5,000 as attorneys fee.
Total Awards: P63,684 only, exclusive of other benefits herein granted but not yet
computed.
Upon appeal to the NLRC, the Commission approved the Labor Arbiters decision but reduced to P10,000
the award of moral damages and the attorneys fees to 10% of the judgment.
The employer filed a petition for review of that decision in this Court alleging that:
1. The decisions of the Labor Arbiter and of the NLRC are tainted with grave abuse of discretion
in finding that the private respondent was constructively and illegally dismissed as a result of her
transfer or assignment to the Office of the Production Manager even if she would have received
the same salary, rank, rights and privileges;
2. In ordering her reinstatement with full back wages and without loss of seniority rights and
other benefits;
3. In awarding to the private respondent moral damages of P10,000 and attorneys fees
equivalent to 10% of the judgment; and
4. In not declaring that private respondent forfeited all her benefits for having abandoned her job
on June 2 to 3, 1986 and for insubordination.
In her comment to the petition, the private respondent argued that she was dismissed without due
process because she was not given the opportunity to be heard concerning the causes of her transfer.
Upon a careful consideration of the petition and the documents annexed thereto as well as private
respondents comment, We find the petition to be meritorious.

A constructive discharge is defined as: A quitting because continued employment is rendered


impossible, unreasonable or unlikely; as, an offer involving a demotion in rank and a diminution in pay.
In this case, the private respondents assignment as Production Secretary of the Production Department
was not unreasonable as it did not involve a demotion in rank (her rank was still that of a department
secretary) nor a change in her place of work (the office is in the same building), nor a diminution in pay,
benefits, and privileges. It did not constitute a constructive dismissal.
It is the employers prerogative, based on its assessment and perception of its employees qualifications,
aptitudes, and competence, to move them around in the various areas of its business operations in order
to ascertain where they will function with maximum benefit to the company. An employees right to
security of tenure does not give him such a vested right in his position as would deprive the company of
its prerogative to change his assignment or transfer him where he will be most useful. When his transfer
is not unreasonable, nor inconvenient, nor prejudicial to him, and it does not involve a demotion in rank or
a diminution of his salaries, benefits, and other privileges, the employee may not complain that it amounts
to a constructive dismissal.
On the other hand, we reject the petitioners contention that the private respondents absence from work
on June 2 to June 3, 1986 constituted an abandonment of her job in the company resulting in the
forfeiture of the benefits due her. While she was guilty of insubordination for having refused to move out
of her position as Executive Secretary to the Executive Vice-President and General Manager of the
company, dismissal from the service would be a draconian punishment for it, as her complaint for illegal
dismissal was filed in good faith.
WHEREFORE, the decision of the NLRC insofar as it orders the petitioner to reinstate the private
respondent is affirmed, but she shall be reinstated to her position as Production Secretary of the
Production Department of petitioners corporation without loss of seniority rights and other privileges. The
awards of back wages, moral damages and attorneys fees to the private respondent are hereby set
aside. No pronouncement as to costs.
SO ORDERED.
Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.
Decision affirmed.
Notes.The right to dismiss or otherwise impose disciplinary sanctions upon an employee for just cause
and valid cause, pertains in the first place to the employer, as well as the authority to determine the
existence of said cause in accordance with the norms of due process. (Richardson vs. Demetrion, 142
SCRA 505.)
Prerogative of management to dismiss or lay-off a managerial employee must be made without abuse of
discretion. (D.M. Consunji, Inc. vs. NLRC, 143 SCRA 204.)

ABBOTT LABORATORIES (PHILIPPINES), INC., and JAIME C. VICTA, petitioners, vs. NATIONAL
LABOR RELATIONS COMMISISON and ALBERT BOBADILLA, respondents.
GR No. L-76959. October 12, 1987.
Labor; Dismissal due to insubordination; Hiring, firing, transfer, demotion and promotion of employees, a
management prerogative but subject to certain limitations.The hiring, firing, transfer, demotion, and
promotion of employees has been traditionally identified as a management prerogative subject to
limitations found in law, a collective bargaining agreement, or general principles of fair play and justice.
This is a function associated with the employer's inherent right to control and manage effectively its
enterprise. Even as the law is solicitous of the welfare of employees, it must also protect the right of an
employer to exercise what are clearly management prerogatives. The free will of management to conduct
its own business affairs to achieve its purpose cannot be denied. (See Dangan v. National Labor
Relations Commission, 127 SCRA 706).
Same; Same; Transfer, General rule that the right to transfer or reassign an employee is an employer's
exclusive right and a management prerogative.As a general rule, the right to transfer or reassign an
employee is recognized as an employer's exclusive right and the prerogative of management.
Same; Same; Same; An employee had no valid reason to disobey the order of transfer as he had tacitly
given his consent thereto; Case at bar. Therefore, Bobadilla had no valid reason to disobey the order of
transfer. He had tacitly given his consent thereto when he acceded to the petitioners' policy of hiring sales
staff who are willing to be assigned anywhere in the Philippines which is demanded by the petitioners'
business.
Same; Same; Same; Same; By the very nature of his employment a drug salesman or medical
representative is expected to travel and should anticipate reassignment; Reassignments are part of the
employment contract of the employee.By the very nature of his employment, a drug salesman or
medical representative is expected to travel. He should anticipate reassignment according to the
demands of their business. It would be a poor drug corporation which cannot even assign its
representatives or detail men to new markets calling for opening or expansion or to areas where the need
for pushing its products is great. Mere so if such reassignments are part of the employment contract.
PETITION for certiorari to review the decision of the National Labor Relations Commission.
The facts are stated in the opinion of the Court.
GUTIERREZ, JR., J.:
This is a petition for review on certiorari of the decision of respondent National Labor Relations
Commission (NLRC) which set aside the Labor Arbiter's decision dismissing the complaint and instead
entered a new decision ordering the complainant's reinstatement with full backwages from the date of his
termination until his actual reinstatement.
The antecedent facts as found by the Labor Arbiter and reiterated in the NLRC decision are undisputed:
"Complainant Bobadilla started his employment with respondent company sometime in May
1982. After undergoing training, in September, 1982, complainant was designated professional
medical representative (PMR) and was assigned to cover the sales territory comprising of Sta.
Cruz, Binondo and a part of Quiapo and Divisoria, of the Metro Manila district. In connection with
the respondent company's marketing and sales operations, it has been its policy and
established practice of undertaking employment movements and/or reassignments from one
territorial area to another as the exigencies of its operations require and to hire only applicant
salesmen, including professional medical representatives (PMRs) who are willing to take
provincial assignments, at least insofar as male applicants were concerned. Likewise,

respondent company had made reassignments or transfers of sales personnel, which included
PMRs, from one territorial area of responsibility to another on a more or less regular basis.
"In complainant's application for employment with respondent company, he agreed to the
following: 1) that if employed, he will accept assignment in the provinces and/or cities anywhere
in the Philippines; 2) he is willing and can move into and live in the territory assigned to him; and
(3) that should any answer or statement in his application for employment be found false or
incorrect, he will be subject to immediate dismissal, if then employed.
"On 22 July 1983, respondent Victa called complainant to his office and informed the latter that
he was being transferred effective 1 August 1983 to the newly opened Cagayan territory
comprising the provinces of Cagayan, Nueva Vizcaya and Isabela. The transfer order was made
formal in a memorandum dated 29 July 1983. Among the reasons given for complainant's
selection as PMR for the Cagayan territory were: 'The territory required a veteran and seasoned
PMR who can operate immediately with minimum training and supervision. Likewise, a PMR
who can immediately exploit the vast business potential of the area.
"In a letter dated 1 August 1983, which was received by Abbott on 4 August 1983, complainant,
thru his lawyer, objected to the transfer on the grounds that it was not only a demotion but also
personal and punitive in nature without basis legally and factually.
"On 8 August 1983, Victa issued another inter-office correspondence to complainant, giving the
latter up to 15 August 1983 within which to comply with the transfer order, otherwise his name
would be dropped from the payroll for having abandoned his job. When complainant failed to
report to his new assignment, Abbott assigned thereat Fausto Antonio T. Tibi, another PED PMR
who was priorly covering the provinces of Nueva Ecija and Tarlac.
"Meanwhile, complainant filed applications for vacation leave from 2 to 9 August 1983, and then
from 10 to 13 August 1983. And on 18 August 1983, he filed the present complaint.
" After due consideration of the evidence adduced by the parties, the Arbiter below ruled for the
respondent on the ground that the complainant is guilty of gross insubordination."
On appeal, the respondent National Labor Relations Commission reversed the Arbiter's decision and held
that herein petitioners had no valid and justifiable reason to dismiss the complainant. The National Labor
Relations Commission ordered the latter's reinstatement with back wages.
A motion for reconsideration subsequently filed by the petitioners was denied.
On September 8,1986, the petitioners filed their second motion for reconsideration which was not
favorably acted upon by respondent National Labor Relations Commission as the record of the case had
already been transmitted to the labor arbiter for the execution of its decision.
On December 16, 1986, the petitioners and the private respondent agreed before the labor arbiter that
the former would bring the case before this Court.
Hence, this present petition.
Petitioners assigned as errors the following:
"x x x [R]espondent NLRC acted in excess of jurisdiction and/or grave abuse of discretion in
that
a] Respondent NLRC disregarded settled law and altered the parties' contract when it
stated that private respondent's prior consent was necessary for the validity of his transfer,
rendering his consequent dismissal f or insubordination illegal.

b] Granting arguendo that prior consent of an employee is required for the validity of his
transfer to another territory, private respondent had explicitly given such prior consent as a
condition for his hiring and continued employment by petitioner Abbott.
c] Respondent NLRC abused its discretion when it declared private respondent's
dismissal illegal despite his clear and willful insubordination."
When asked to comment on the petition as counsel for NLRC, the Solicitor General, assisted by Assistant
Solicitor General Zoilo A. Andin and Trial Attorney Alexander Q. Gesmundo, agreed with the petitioners'
stand that the dismissal of the private respondent from his employment was for valid reasons.
The main issue in this case is whether or not Albert Bobadilla could be validly dismissed from his
employment on the ground of insubordination for refusing to accept his new assignment.
We are constrained to answer in the affirmative.
The hiring, firing, transfer, demotion, and promotion of employees has been traditionally identified as a
management prerogative subject to limitations found in law, a collective bargaining agreement, or general
principles of fair play and justice. This is a function associated with the employer's inherent right to control
and manage effectively its enterprise. Even as the law is solicitous of the welfare of employees, it must
also protect the right of an employer to exercise what are clearly management prerogatives. The free will
of management to conduct its own business affairs to achieve its purpose cannot be denied. (See
Dangan v, National Labor Relations Commission, 127 SCRA 706).
As a general rule, the right to transfer or reassign an employee is recognized as an employer's exclusive
right and the prerogative of management.
We agree with the Labor Arbiter's conclusions that:
"Settled is the rule in this regard that an employer, except when limited by special laws, has the
right to regulate, according to his own discretion and judgment, all aspects of employment,
which includes, among others, hiring, work assignments, place and manner of work,
working
regulations and transfer of employees in accordance with his operational demands
and
requirements. This right flows from ownership and from the established rule that labor law
does not authorize the substitution of judgment of the employer in the conduct of his
business, unless
it is shown to be contrary to law, morals or public policy (NLU v. InsularYebana Tobacco Corp., 2 SCRA 924, 931; and Republic Savings Bank v, Court of Industrial
Relations, 21 SCRA 226, 235).
"x x x Abbott, in accordance with the demands and requirements of its marketing and sales
operations, adopted a policy to hire only sales applicants who are willing to accept assignments
in the provinces anywhere in the Philippines, and to move into and live in the territory assigned
to them.
The existence and implementation of this policy are clearly discernible from the questions
appearing in the application form under the heading: TO BE FILLED BY SALES APPLICANTS
ONLY/ and the fact that Abbott, depending upon the needs of its marketing and sales
operations, periodically made transfers or reassignments of its sales people.
"Complainant was precisely hired because he manifested at the outset as a job applicant his
willingness to follow the conditions of his employment. In line with the policy, as practiced,
Abbott, thru Jaime Victa, issued an inter-office correspondence transferring complainant to a
newly opened sales territorythe Cagayan Region, comprising the provinces of Cagayan,
Nueva Vizcaya and Isabela, According to respondents, complainant was selected as PMR for

the region primarily because he was a veteran and seasoned PMR who can operate
immediately with minimum training and supervision,
That complainant is a veteran and seasoned PMR is admitted. In fact, it is even conceded by
respondents that complainant was the leader of his peers in PED, as indicated in the letter dated
20 December 1982 of Jaime Victa to complainant. That the Cagayan Region is relatively
inaccessible cannot be debated. That the territory needed a responsible PMR who could work
under the least supervision is a judgment of respondents. And that this judgment was arrived at
upon consultations among the PED Marketing Manager Jaime Victa, the Director for
Administration Francisco Lim, and the General Manager A. C. Bout, has been proven by
respondents.
"It appearing, therefore, that the order to transfer complainant is based upon a judgment of his
employer Abbott, which judgment to transfer is in line with a company practice which is not
contrary to law, morals or public policy. hence, beyond the competence of this office to question,
the refusal of complainant to obey the lawful order of Abbott is gross insubordinationa valid
cause for dismissal.
"Complainant asserted that the true reason for his transfer was the personal ill motives on the
part of respondent Victa who resented the derogatory remarks attributed to him, as purportedly
shown in Victa's memoranda dated 20 December 1982 and 26 April 1983. However, a cursory
reading of said memoranda in question will show that the same were legitimately issued by Victa
in the exercise of his functions as PED Manager. And the fact that complainant never lifted a
finger to formally question said memoranda is a mute admission on his part that the allegations
therein are true.
"Complainant also alleged that his transfer was a demotion. However, no explanation was given
much less any evidence presented in support of the allegation. On the other hand, it is clear that
there was no change in complainant's position and salary, privileges and benefits he was
receiving while in Manila. With respect to the sales commission, Abbott claimed that had
complainant accepted the assignment, he could have earned more because the sales prospects
in the Cagayan Territory, which comprises Nueva Vizcaya, Isabela and Cagayan Province were
much higher than the territory assigned to him in Manila. Besides, the assignment offered an
important avenue for future promotion, respondent concluded." (pp. 6-9, Labor Arbiter's
decision).
Therefore, Bobadilla had no valid reason to disobey the order of transfer. He had tacitly given his consent
thereto when he acceded to the petitioners' policy of hiring sales staff who are willing to be assigned
anywhere in the Philippines which is demanded by the petitioners' business.
By the very nature of his employment, a drug salesman or medical representative is expected to travel.
He should anticipate reassignment according to the demands of their business. It would be a poor drug
corporation which cannot even assign its representatives or detail men to new markets calling for opening
or expansion or to areas where the need for pushing its products is great. More so if such reassignments
are part of the employment contract.
WHEREFORE, the petition is hereby GRANTED. The questioned decision of the National Labor
Relations Commission is SET ASIDE. The decision of the Labor Arbiter dated April 16, 1985 is
REINSTATED.
SO ORDERED.
Fernan (Chairman), Bidin and Corts, JJ., concur.
Feliciano, J., no part. Former firm is counsel for one party.

Petition granted.

Notes.Employer company in dismissing the employee has the prerogative to prescribe reasonable rules
and regulations necessary for the conduct of its business and to provide disciplinary rules to implement
said rules and to assure that the same would be followed. (Soco vs. Mercantile Corporation of Davao,
148 SCRA 526.)

Dismissed employee granted separation pay for equitable considerations for his 18 years of service.
(Soco vs, Mercantile Corporation of Davao, 148 SCRA 526.) [Abbott Laboratories (Phils.) Inc. vs. NLRC,
154 SCRA 713(1987)]

RURAL BANK OF CANTILAN, INC., and WILLIAM HOTCHKISS III, petitioners, vs. ARJAY RONNEL
H. JULVE, respondent.
G.R. No. 169750. February 27, 2007.*
Labor Law; Management Prerogatives; Under the doctrine of management prerogative, every employer
has the inherent right to regulate, according to his own discretion and judgment, all aspects of
employment, including hiring, work assignments, working methods, the time, place and manner of work,
work supervision, transfer of employees, lay-off of workers, and discipline, dismissal, and recall of
employees; Employees are not excused from complying with valid company policies and reasonable
regulations for their governance and guidance.Under the doctrine of management prerogative, every
employer has the inherent right to regulate, according to his own discretion and judgment, all aspects of
employment, including hiring, work assignments, working methods, the time, place and manner of work,
work supervision, transfer of employees, lay-off of workers, and discipline, dismissal, and recall of
employees. The only limitations to the exercise of this prerogative are those imposed by labor laws and
the principles of equity and substantial justice. While the law imposes many obligations upon the
employer, nonetheless, it also protects the employers right to expect from its employees not only good
performance, adequate work, and diligence, but also good conduct and loyalty. In fact, the Labor Code
does not excuse employees from complying with valid company policies and reasonable regulations for
their governance and guidance.
Same; Same; Transfers and Reassignments; Guidelines.Concerning the transfer of employees, these
are the following jurisprudential guidelines: (a) a transfer is a movement from one position to another of
equivalent rank, level or salary without break in the service or a lateral movement from one position to
another of equivalent rank or salary; (b) the employer has the inherent right to transfer or reassign an
employee for legitimate business purposes; (c) a transfer becomes unlawful where it is motivated by
discrimination or bad faith or is effected as a form of punishment or is a demotion without sufficient cause;
(d) the employer must be able to show that the transfer is not unreasonable, inconvenient, or prejudicial
to the employee.
Same; Same; Same; Words and Phrases; Constructive Dismissal, Defined.Constructive dismissal is
defined as quitting when continued employment is rendered impossible, unreasonable, or unlikely as the
offer of employment involves a demotion in rank and diminution of pay.
Same; Same; Same; Bookkeepers; Under any standard, the work of the bookkeeper and bank assistant
branch head, charged with preparing financial reports and monthly bank reconciliations, as well as head
of the Accounting Department of a branch, constitutes supervisory and administrative tasks which entail
great responsibility.Respondent contends that the abolition of his position as planning and marketing
officer and his appointment as bookkeeper I and assistant branch head of the Madrid Branch is a
demotion. However, a look at the functions of his new position shows the contrary. The bookkeeper and
assistant branch head is not only charged with preparing financial reports and monthly bank
reconciliations, he is also the head of the Accounting Department of a branch. Under any standard, these
are supervisory and administrative tasks which entail great responsibility. Moreover, respondents transfer
did not decrease his pay.
PETITION for review on certiorari of the decision and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Julius A. Magno for petitioners.
Henry C. Filoteo and James Reserva for respondent.

SANDOVAL-GUTIERREZ, J.:

For our resolution is the instant Petition for Review on Certiorari assailing the Decision of the Court of
Appeals (Twenty Second Division, Cagayan de Oro City) dated September 23, 2004 in CA-G.R. SP No.
77206 and its Resolution of September 6, 2005.
The facts of this case as found by the Court of Appeals are:
On August 1, 1997, the Rural Bank of Cantilan, Inc., petitioner, hired respondent as a management
trainee. Later, he was appointed as planning and marketing officer.
On June 18, 2001, William Hotchkiss III (also a petitioner), president of petitioner bank, issued a
memorandum addressed to all its branch managers informing them of the abolition of the positions of
planning and marketing officer and remedial officer; that this was undertaken in accordance with the
banks Personnel Streamlining Program; and that the operations officer shall absorb the functions of the
abolished offices.
On July 18, 2001, Hotchkiss sent respondent a memorandum stating that he has been appointed
bookkeeper I at the banks branch in Madrid, Surigao del Sur effective immediately with the same salary
corresponding to his old position. Initially, respondent agreed to accept the appointment, but eventually,
he changed his mind and made the following notation on Hotchkiss memorandum, thus:
I am withdrawing my signature on this appointment because I feel that this is a demotion (on t
he position itself and allowances) and not a lateral transfer as what the President told me
yesterday. I believe I do not deserve a demotion.
Thank you.
On August 9, 2001, Hotchkiss appointed respondent as bookkeeper I and assistant branch head of the
Madrid branch. However, he did not report for work.
On September 11, 2001, Hotchkiss directed respondent to explain why he should not be sanctioned for
his failure to assume his new post at the Madrid branch.
The following day, respondent submitted his written explanation, which partly reads:
I regret to say that I am not accepting the position of Asst. Branch Head of RBCI-Madrid Branch
for the very reason that the papers were not left with me by the Admin. Officer after she let me
read them. Considering that Asst. Branch Head is a newly-created position, I requested her for a
copy of the said papers first so I can thoroughly study them before making my decision. But she
immediately took them back from me after I told her about this.
On September 14, 2001, respondent filed with the Regional Arbitration Branch No. XIII, National Labor
Relations Commission (NLRC), Butuan City, a complaint for constructive dismissal against petitioners,
docketed as NLRC Case No. RAB-1309002762001.
On January 14, 2002, the Labor Arbiter rendered a Decision, the dispositive portion of which is partly
reproduced below:
WHEREFORE, premises considered, judgment is hereby entered:
1. Declaring complainant as constructively illegally dismissed;
2. Ordering respondents to reinstate complainant to his former or equivalent position without
loss of seniority rights with full back wages from the time his salary was withheld from him up to
the time he is actually reinstated;
3. To pay complainant his partial back wages in the amount of P57,165.33 computed up to the
date of this decision as follows:

A.
BACK WAGES FROM 16 Oct 2001 to 15 Jan 2002 (4 months) (Partial)
P12,192.50+1,000 x 4
= P52,768.00
Plus P52,768/13 (13th mo. Pay)
= P4,397.33
TOTAL BACKWAGES P57,165.33
and
4. Ordering respondents to pay complainant moral and exemplary damages in the total amount
of P100,000.00 plus P15,718.53, as attorneys fees which is equivalent to 10% of the total
monetary award.
Complainants other claims are dismissed for lack of merit.
SO ORDERED.
On appeal by petitioners, the NLRC, in its Resolution dated November 19, 2002, set aside the Labor
Arbiters judgment, thus:
WHEREFORE, foregoing premises considered, the appealed decision is Vacated and Set
Aside. In lieu thereof, a new judgment is rendered dismissing the above-entitled case for lack of
merit.
SO ORDERED.
The NLRC held that respondents reassignment is not a demotion. There was neither diminution in
functions and pay. Thus, he was not constructively dismissed from employment. Moreover, respondent
himself admitted that he decided not to report for work at his new station. Yet, he continued receiving his
salaries and allowances.
Respondent filed a motion for reconsideration but it was denied by the NLRC.
Respondent then filed with the Court of Appeals a petition for certiorari, docketed as CA-G.R. SP No.
77206.
On September 23, 2004, the Court of Appeals rendered its Decision granting the petition, thus:
WHEREFORE, the instant Petition is hereby GRANTED. The NLRC Resolutions dated 19
November 2002 and 26 February 2003 are hereby ANNULLED and SET ASIDE. The Labor
Arbiters Decision dated 14 January 2002 is hereby REINSTATED.
SO ORDERED.
Petitioners filed a motion for reconsideration. However, it was denied by the appellate court in its
Resolution dated September 6, 2005.

The only issue before us is whether the Court of Appeals erred in holding that respondent was
constructively dismissed from employment.
In resolving this issue, we rely on the following guide posts:

Under the doctrine of management prerogative, every employer has the inherent right to regulate,
according to his own discretion and judgment, all aspects of employment, including hiring, work
assignments, working methods, the time, place and manner of work, work supervision, transfer of
employees, lay-off of workers, and discipline, dismissal, and recall of employees. The only limitations to
the exercise of this prerogative are those imposed by labor laws and the principles of equity and
substantial justice.
While the law imposes many obligations upon the employer, nonetheless, it also protects the employers
right to expect from its employees not only good performance, adequate work, and diligence, but also
good conduct and loyalty. In fact, the Labor Code does not excuse employees from complying with valid
company policies and reasonable regulations for their governance and guidance.
Concerning the transfer of employees, these are the following jurisprudential guidelines: (a) a transfer is a
movement from one position to another of equivalent rank, level or salary without break in the service or a
lateral movement from one position to another of equivalent rank or salary; (b) the employer has the
inherent right to transfer or reassign an employee for legitimate business purposes;5 (c) a transfer
becomes unlawful where it is motivated by discrimination or bad faith or is effected as a form of
punishment or is a demotion without sufficient cause; (d) the employer must be able to show that the
transfer is not unreasonable, inconvenient, or prejudicial to the employee.
Constructive dismissal is defined as quitting when continued employment is rendered impossible,
unreasonable, or unlikely as the offer of employment involves a demotion in rank and diminution of pay.
In light of the above guidelines, we agree with the NLRC in ruling that respondent was not constructively
dismissed from employment.
Respondent contends that the abolition of his position as planning and marketing officer and his
appointment as book-keeper I and assistant branch head of the Madrid Branch is a demotion. However, a
look at the functions of his new position shows the contrary. The bookkeeper and assistant branch head
is not only charged with preparing financial reports and monthly bank reconciliations, he is also the head
of the Accounting Department of a branch. Under any standard, these are supervisory and administrative
tasks which entail great responsibility. Moreover, respondents transfer did not decrease his pay.
Nor was respondents transfer motivated by ill-will or prejudice on the part of petitioners. His position was
not the only one abolished pursuant to the banks Personnel Streamlining Program. We recall that the
position of remedial officer was likewise abolished. Petitioners reason was to acquire savings from the
salaries it would pay to full-time personnel in these positions.
Finally, we note that despite respondents refusal to accept the new appointment, petitioners did not
dismiss him. Rather, it was he who opted to terminate his employment when he purposely failed to report
for work.
In fine, we hold that the Court of Appeals erred when it concluded that respondent was constructively
dismissed from employment.
WHEREFORE, we GRANT the petition and REVERSE the Decision of the Court of Appeals in CA-G.R.
SP No. 77206. The Resolutions of the NLRC dated November 19, 2002 and February 26, 2003,
dismissing respondents complaint are AFFIRMED.

SO ORDERED.
Puno (C.J., Chairperson), Corona and Garcia, JJ., concur.
Azcuna, J., On Official Leave.

Petition granted, judgment reversed.


Notes.Employers rules cannot preclude the State from inquiring whether the strict and rigid application
or interpretation thereof would be harsh to the employee. (Farrol vs. Court of Appeals, 325 SCRA 331
[2000])
The right of an employer to regulate all aspects of employment, aptly called management prerogative,
gives employers the freedom to regulate, according to their discretion and best judgment, all aspects of
employment, including work assignment, working methods, processes to be followed, working
regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and
recall of workers. (Deles, Jr. vs. National Labor Relations Commission, 327 SCRA 540 [2000]) [Rural
Bank of Cantilan, Inc. vs. Julve, 517 SCRA 17(2007)]

BLUE DAIRY CORPORATION and/or EDISON T. AVIGUETERO and PEDRO G. MIGUEL, petitioners,
vs. NATIONAL LABOR RELATIONS COMMISSION and ELVIRA R. RECALDE, respondents.
G.R. No. 129843. September 14, 1999.*
Labor Law; Management Prerogatives; Transfers; It is the prerogative of management to transfer an
employee from one office to another within the business establishment based on its assessment and
perception of the employees qualifications, aptitudes and competence, and in order to ascertain where
he can function with maximum benefit to the company.No grave abuse of discretion was committed by
the NLRC. Indeed, it is the prerogative of management to transfer an employee from one office to another
within the business establishment based on its assessment and perception of the employees
qualifications, aptitudes and competence, and in order to ascertain where he can function with maximum
benefit to the company. This is a privilege inherent in the employers right to control and manage his
enterprise effectively. The freedom of management to conduct its business operations to achieve its
purpose cannot be denied.
Same; Same; Same; The managerial prerogative to transfer personnel must be exercised without grave
abuse of discretion, bearing in mind the basic elements of justice and fair playit cannot be used as a
subterfuge by the employer to rid himself of an undesirable worker.But, like other rights, there are limits
thereto. The managerial prerogative to transfer personnel must be exercised without grave abuse of
discretion, bearing in mind the basic elements of justice and fair play. Having the right should not be
confused with the manner in which that right is exercised. Thus, it cannot be used as a subterfuge by the
employer to rid himself of an undesirable worker.
Same; Same; Same; Constructive Dismissal; Words and Phrases; The employer must be able to show
that the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it involve a
demotion in rank or a diminution of his salaries, privileges and other benefits.The employer must be
able to show that the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it
involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Should the
employer fail to overcome this burden of proof, the employees transfer shall be tantamount to
constructive dismissal, which has been defined as a quitting because continued employment is rendered
impossible, unreasonable or unlikely; as an offer involving a demotion in rank and diminution in pay.
Likewise, constructive dismissal exists when an act of clear discrimination, insensibility or disdain by an
employer has become so unbearable to the employee leaving him with no option but to forego with his
continued employment.
Same; Same; Same; Same; Demotion; Due Process; While due process required by law is applied in
dismissals, the same is also applicable to demotions as demotions likewise affect the employment of a
worker whose right to continued employment, under the same terms and conditions, is also protected by
law.Petitioners failed to justify Recaldes transfer from the position of food technologist in the laboratory
to a worker in the vegetable processing section. We recall that what triggered Recaldes transfer was the
21 October incident where she was found to have allegedly utilized company vehicle in looking for a new
residence during office hours without permission from management. In petitioners view, she was
dishonest such that they lost their trust and confidence in her. Yet, it does not appear that Recalde was
provided an opportunity to refute the reason for the transfer. Petitioners merely relied on the narrations of
the company driver. Nor was Recalde notified in advance of her impending transfer which was, as we
shall elucidate later, a demotion in rank. In Gaco v. NLRC we notedWhile due process required by law
is applied in dismissals, the same is also applicable to demotions as demotions likewise affect the
employment of a worker whose right to continued employment, under the same terms and conditions, is
also protected by law. Moreover, considering that demotion is, like dismissal, also a punitive action, the
employee being demoted should, as in cases of dismissals, be given a chance to contest the same.

Same; Illegal Dismissals; Reassignments; Loss of Trust and Confidence; Breach of trust and confidence
as a ground for dismissal from employment must be related to the performance of the duties of the
employee such as would show him to be thereby unfit to continue working for the employer; Breach of
trust and confidence as a ground for reassignment must be related to the performance of the duties of the
employee such as would show him to be thereby unfit to discharge the same task.Petitioners
overstretched the effect of Recaldes claimed wrongdoing. We have ruled that breach of trust and
confidence as a ground for dismissal from employment must be related to the performance of the duties
of the employee such as would show him to be thereby unfit to continue working for the employer. By
analogy, breach of trust and confidence as a ground for reassignment must be related to the performance
of the duties of the employee such as would show him to be thereby unfit to discharge the same task.
Clearly, the act of dishonesty imputed to Recalde has no bearing at all to her work in the laboratory.
Same; Same; Same; Demotions; The transfer of an employee from being a food technologist in the
laboratory, occupying a highly technical position requiring use of her mental faculty, to being a worker in
the vegetable processing section performing mere mechanical work, is virtually a transfer from a position
of dignity to a servile or menial job, a demotion in rank, beyond doubt.We find insignificant the
submission of petitioners that the coring of lettuce together with the other production jobs connected
therewith is one of the most important aspects of the corporations existence and that those assigned to
the vegetable processing section are mostly professionals like teachers, computer secretaries and
forestry graduates. Rather, the focus should be on the comparison between the nature of Recaldes work
in the laboratory and in the vegetable processing section. As food technologist in the laboratory, she
occupied a highly technical position requiring use of her mental faculty. As a worker in the vegetable
processing section, she performed mere mechanical work. It was virtually a transfer from a position of
dignity to a servile or menial job. We agree with the observation of the Office of the Solicitor General that
the radical change in Recaldes nature of work unquestionably resulted in, as rightly perceived by her, a
demeaning and humiliating work condition. The transfer was a demotion in rank, beyond doubt.
Same; Same; Same; Same; A transfer from a workplace where only highly trusted authorized personnel
are allowed access to a workplace that is not as critical is another reason enough for an employee to
howl a protest.The laboratory is the place where the quality of the totality of petitioners products such
as dairy, juices, chocolates and vegetables is tested. On the other hand, the vegetable processing
section, as the name implies, involves processing of vegetables alone. Definitely, a transfer from a
workplace where only highly trusted authorized personnel are allowed access to a workplace that is not
as critical is another reason enough for Recalde to howl a protest.
Same; Same; Back wages; To be included in the computation of back wages are the illegally dismissed
employees allowances and other benefits or their monetary equivalent.We reiterate that the NLRC did
not commit grave abuse of discretion in affirming the ruling of the Labor Arbiter that petitioners are guilty
of constructive dismissal. Recalde is entitled to reinstatement as food technologist without loss of
seniority rights and privileges and with full back wages, as directed by the Labor Arbiter. We clarify
however that conformably with Art. 279 of the Labor Code, as amended by Sec. 34 of RA 6715, to be
included in the computation of back wages are the illegally dismissed employees allowances and other
benefits or their monetary equivalent.
SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
The facts are stated in the opinion of the Court.
Esmeraldo U. Guloy for petitioners.
The Solicitor General for public respondent.

BELLOSILLO, J.:

BLUE DAIRY CORPORATION, engaged in the processing of dairy and chocolate products, juices and
vegetables, hired on 14 May 1994 private respondent Elvira R. Recalde as a food technologist in its
laboratory with the following specific functions: microanalysis of toppings and syrup, onions and garlic,
and liquid mixes (soft serve and milk shake); physical and chemical analysis of liquid mixes, including raw
materials for toppings and syrup and its inspection; routine computation for liquid mixes and supervision
while weighing the materials; performing chlorine test for lettuce, red onion, white onion and green
pepper; preparation of forms for toppings and syrup; sensory evaluation of toppings and syrup; product
development (assistant); and, preparation of food coloring for orange syrup production.
On 22 May 1994, a Sunday, Recalde reported for work but claimed that she was not given her premium
pay.
On 21 October 1994 Recalde accompanied Production Manager Editha N. Nicolas in conducting a
sensory evaluation of vanilla syrup in one of the outlets of a client. While on their way back to the office a
post fell on the company vehicle they were riding due to a raging typhoon damaging the vehicles
windshield and side mirror.
On 3 December 1994 Recalde was transferred from the laboratory to the vegetable processing section
where she cored lettuce, minced and repacked garlic and performed similar work, and was restricted from
entering the laboratory. She was unhappy. She considered her new job humiliating and menial. On 14
December 1994 she stopped reporting for work. The following day she sent a letter to petitioner Edison T.
Aviguetero, the President and Chairman of the Board of Director of Blue Dairy Corporation, reading
I would like to inform you that I will no longer report for work because of your drastic and
oppressive action. And besides, I have already filed a case against BLUE DAIRY CORPORATION
and/or EDISON T. AVIGUETERO,
PEDRO G. MIGUEL x x x x
On 16 December 1994 Recalde filed a complaint against petitioner Blue Dairy Corporation, Edison T.
Aviguetero and Pedro G. Miguel3 for constructive dismissal and non-payment of premium pay. She also
claimed overtime pay as well as moral and exemplary damages plus attorneys fees.
Petitioners contended that Recalde was given a less sensitive assignment outside of the laboratory on
account of her dishonesty which resulted in loss of trust and confidence. They seriously took into account
the result of the investigation concerning the 21 October incident that Recalde was actually scouting for a
new residence using company vehicle without prior permission from the General Manager and during
office hours, in violation of par. IV, subpars. B and G, of the companys General Rules and Regulations.
Petitioners accorded credence to the narrations of Rolando V. Flores, driver of the damaged vehicle, to
that effect which act of dishonesty could even have merited dismissal from employment had they adhered
simply to jurisprudential rule but took into account instead the spirit of the approaching Christmas season.
The Labor Arbiter was convinced that petitioners were guilty of constructive dismissal as he found the
justification for Recaldes transfer unreasonable: first, the unofficial trip on the way back to the office on
21 October was undertaken through the bidding of the Production Manager; second, loss of trust and
confidence must necessarily occur in the performance of duties; and third, the new position of Recalde
was too humiliating and demeaning. The Labor Arbiter also found that petitioners failed to grant premium
pay to Recalde for her work performed on 22 May 1994, a Sunday.
On 31 October 1996 petitioners were thus ordered to reinstate Recalde to her former position as food
technologist assisting in the quality assurance processes of the company and performing laboratory work
without loss of seniority rights and privileges, with full back wages as well as to grant her premium pay,
initially computed thus

Back Wages:
12/14/94 - 12/30/96 = 24.53 mos.
P183.33 x 30 days x 24.53 mos. - - - - - - - - P134,912.54

Premium Pay for Rest Day:


(May 22, 1994): P183.33 x 30% = P55.00
55.00

TOTAL AWARD: - - - - - - - - - - - - - - - - - - - P134,967.54


The other claims were dismissed for lack of merit.
On 30 April 1997 public respondent National Labor Relations Commission (NLRC) affirmed the ruling.5
On 19 June 1997 reconsideration was denied.
Petitioners insist that the transfer of Recalde from the laboratory to the vegetable processing section was
effected in the exercise of management prerogative. It did not amount to a constructive dismissal as
Recalde erroneously maintained.
Moreover, petitioners submit that the coring of lettuce together with the other production jobs connected
therewith is one of the most important aspects of the corporations existence; in fact, those assigned to
the vegetable processing section are mostly professionals like teachers, computer secretar-ies and
forestry graduates.
No grave abuse of discretion was committed by the NLRC. Indeed, it is the prerogative of management to
transfer an employee from one office to another within the business establishment based on its
assessment and perception of the employees qualifications, aptitudes and competence, and in order to
ascertain where he can function with maximum benefit to the company. This is a privilege inherent in the
employers right to control and manage his enterprise effectively. The freedom of management to conduct
its business operations to achieve its purpose cannot be denied.
But, like other rights, there are limits thereto. The managerial prerogative to transfer personnel must be
exercised without grave abuse of discretion, bearing in mind the basic elements of justice and fair play.
Having the right should not be confused with the manner in which that right is exercised. Thus, it cannot
be used as a subterfuge by the employer to rid himself of an undesirable worker.9 In particular, the
employer must be able to show that the transfer is not unreasonable, inconvenient or prejudicial to the
employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other
benefits.10 Should the employer fail to overcome this burden of proof, the employees transfer shall be
tantamount to constructive dismissal, which has been defined as a quitting because continued
employment is rendered impossible, unreasonable or unlikely; as an offer involving a demotion in rank
and diminution in pay. Likewise, constructive dismissal exists when an act of clear discrimination,
insensibility or disdain by an employer has become so unbearable to the employee leaving him with no
option but to forego with his continued employment.

In the present case, petitioners failed to justify Recaldes transfer from the position of food technologist in
the laboratory to a worker in the vegetable processing section. We recall that what triggered Recaldes
transfer was the 21 October incident where she was found to have allegedly utilized company vehicle in
looking for a new residence during office hours without permission from management. In petitioners view,
she was dishonest such that they lost their trust and confidence in her. Yet, it does not appear that
Recalde was provided an opportunity to refute the reason for the transfer. Petitioners merely relied on the
narrations of the company driver. Nor was Recalde notified in advance of her impending transfer which
was, as we shall elucidate later, a demotion in rank. In Gaco v. NLRC13 we noted
While due process required by law is applied in dismissals, the same is also applicable to
demotions as demotions likewise affect the employment of a worker whose right to continued
employment, under the same terms and conditions, is also protected by law. Moreover,
considering that demotion is, like dismissal, also a
punitive action, the employee being
demoted should, as in cases of dismissals, be given a chance to contest the
same.
Further, petitioners overstretched the effect of Recaldes claimed wrongdoing. We have ruled that breach
of trust and confidence as a ground for dismissal from employment must be related to the performance of
the duties of the employee such as would show him to be thereby unfit to continue working for the
employer. By analogy, breach of trust and confidence as a ground for reassignment must be related to
the performance of the duties of the employee such as would show him to be thereby unfit to discharge
the same task. Clearly, the act of dishonesty imputed to Recalde has no bearing at all to her work in the
laboratory.
Further still, granting that Recalde was proved guilty of dishonesty, the companys General Rules and
Regulations provide the corresponding sanctions therefor. Recalde appears to have no prior record of
infractions. For leaving post temporarily without permission during working hours committed for the first
time, warning is imposable, whereas for unauthorized use of any company vehicle committed for the
first time, the commensurate penalty is 15 days suspension. Although petitioners invoked the pertinent
provisions of the rules and regulations which Recalde allegedly violated, for reasons known only to them,
they disregarded those sanctions. Instead, they gave her a less sensitive assignment outside of the
laboratory as they claimed that had they adhered to the rules she would have been dismissed outright for
her dishonesty in the unauthorized use of company property. Then too is their claim that they were moved
by compassion on account of the then approaching Christmas season. Commendable as this
compassionate gesture may seem, nevertheless, petitioners failed to realize that it was not relief from
dismissal which they provided to Recalde when they assigned her to the vegetable processing section but
discomfiture.
We find insignificant the submission of petitioners that the coring of lettuce together with the other
production jobs connected therewith is one of the most important aspects of the corporations existence
and that those assigned to the vegetable processing section are mostly professionals like teachers,
computer secretaries and forestry graduates. Rather, the focus should be on the comparison between
the nature of Recaldes work in the laboratory and in the vegetable processing section. As food
technologist in the laboratory, she occupied a highly technical position requiring use of her mental faculty.
As a worker in the vegetable processing section, she performed mere mechanical work. It was virtually a
transfer from a position of dignity to a servile or menial job. We agree with the observation of the Office of
the Solicitor General that the radical change in Recaldes nature of work unquestionably resulted in, as
rightly perceived by her, a demeaning and humiliating work condition. The transfer was a demotion in
rank, beyond doubt.
Another aspect of comparison is the workplaces themselves. Petitioners admitted in their answer to
Recaldes complaint that

Respondents Laboratory is the most expensive area, on a persquare-meter basis, in the


companys premises. It is
here where the quality of the companys products is tested and assured.
Since these products are food items
ingested by the consuming public, this Laboratory becomes
several folds critical. Hence, only highly trusted authorized personnel are allowed access to this place.
In other words, the laboratory is the place where the quality of the totality of petitioners products such as
dairy, juices, chocolates and vegetables is tested. On the other hand, the vegetable processing section,
as the name implies, involves processing of vegetables alone. Definitely, a transfer from a workplace
where only highly trusted authorized personnel are allowed access to a workplace that is not as critical is
another reason enough for Recalde to howl a protest.
We reiterate that the NLRC did not commit grave abuse of discretion in affirming the ruling of the Labor
Arbiter that petitioners are guilty of constructive dismissal. Recalde is entitled to reinstatement as food
technologist without loss of seniority rights and privileges and with full back wages, as directed by the
Labor Arbiter. We clarify however that conformably with Art. 279 of the Labor Code, as amended by Sec.
34 of RA 6715, to be included in the computation of back wages are the illegally dismissed employees
allowances and other benefits or their monetary equivalent.
WHEREFORE, the petition is DISMISSED. The Decision of public respondent National Labor Relations
Commission finding that private respondent Elvira R. Recalde was constructively dismissed from
employment and entitled to premium pay is AFFIRMED. Petitioners Blue Dairy Corporation, Edison T.
Aviguetero and Pedro G. Miguel are ordered to reinstate private respondent Recalde as food technologist
in the laboratory without loss of seniority rights and privileges and with full back wages inclusive of
allowances and other benefits or their monetary equivalent to be computed from her dismissal on 14
December 1994 up to actual reinstatement, and to grant her premium pay of P55.00 for work performed
on 22 May 1994, a Sunday. Costs against petitioners.
SO ORDERED.
Mendoza, Quisumbing and Buena, JJ., concur.
Petition dismissed; Questioned decision affirmed.
Notes.Being sidelined temporarily is a standard stipulation in employment contracts, as the availability
of assignment for security guards is primarily dependent on the contracts entered into by the agency with
third parties; In security agency parlance, being placed off detail or on floating status means waiting to
be posted. (Sentinel Security Agency, Inc. vs. National Labor Relations Commission, 295 SCRA 123
[1998])
On the basis of the qualifications, training and performance of the employee, the prerogative to determine
the place or station where he or she is best qualified to serve the interests of the company belongs to the
employer. (Tan vs. National Labor Relations Commission, 299 SCRA 169 [1998])
[Blue Dairy Corporation vs. NLRC, 314 SCRA 401(1999)]

PHILIPPINE TELEGRAPH AND TELEPHONE CORPORATION, petitioner, vs. ALICIA LAPLANA,


Hon. RICARDO ENCARNACION, and NATIONAL LABOR RELATIONS COMMISSION, respondents.
G.R. No. 76645. July 23, 1991.*
Labor Law; Illegal Dismissal; Employer has the inherent right to transfer or assign an employee in the
pursuit of its legitimate business interest subject only to the condition that it be not motivated by
discrimination or bad faith.There can be no quarrel with the Arbiters formulation of the general principle
governing an employers prerogative to transfer his employees from place to place or from one position to
another. The Arbiter acknowledges the inherent right of an employer to transfer or assign an employee in
the pursuit of its legitimate business interests subject only to the condition that it be not motivated by
discrimination or (made) in bad faith, or xx effected as a form of punishment or demotion without sufficient
cause. This is a principle uniformly adhered to by this Court.
Same; Same; Security of Tenure; An employees right to security of tenure does not give him such a
vested right in his position as would deprive the company of its prerogative to change his assignment or
transfer him.It is the employers prerogative, based on its assessment and perception of its employees
qualifications, aptitudes, and competence, to move them around in the various areas of its business
operations in order to ascertain where they will function with maximum benefit to the company. An
employees right to security of tenure does not give him such a vested right in his position as would
deprive the company of its prerogative to change his assignment or transfer him where he will be most
useful. When his transfer is not unreasonable, nor inconvenient, nor prejudicial to him, and it does not
involve a demotion in rank or diminution of his salaries, benefits, and other privileges, the employee may
not complain that it amounts to a constructive dismissal.
Same; Same; Same; The employee (Laplana) had to all intents and purposes resigned from her
position.In this case, the employee (Laplana) had to all intents and purposes resigned from her
position. She had unequivocally asked that she be considered dismissed, herself suggesting the reason
thereforretrenchment. When so dismissed, she accepted separation pay. On the other hand, 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 her 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 x x (itself) of an undesirable worker, or to penalize
an employee for x x union activities x x.
Same; Same; Same; Court cannot accept the proposition that when an employee opposes his employers
decision to transfer him to another work place, there being no bad faith or underhanded motives on the
part of either party, it is the employees wishes that should be made to prevail.The situation here
presented is of an employer transferring an employee to another office in the exercise of what it took to
be sound business judgment and in accordance with predetermined and established office policy and
practice, and of the latter having what was believed to be legitimate reasons for declining that transfer,
rooted in considerations of personal convenience and difficulties for the family. Under these
circumstances, the solution proposed by the employee herself, of her voluntary termination of her
employment and the delivery to her of corresponding separation pay, would appear to be the most
equitable. Certainly, the Court cannot accept the proposition that when an employee opposes his
employers decision to transfer him to another work place, there being no bad faith or underhanded
motives on the part of either party, it is the employees wishes that should be made to prevail.
PETITION for certiorari to review the resolution of the National Labor Relations Commission.
The facts are stated in the opinion of the Court.
D.P. Mercado & Associates for petitioner.

NARVASA, J.:
Alicia Laplana was the cashier of the Baguio City Branch Office of the Philippine Telegraph and
Telephone Corporation (hereafter, simply PT & T). Sometime in March 1984, PT & Ts treasurer, Mrs.
Alicia A. Arogo, directed Laplana to transfer to the companys branch office at Laoag City. Laplana
refused the reassignment and proposed instead that qualified clerks in the Baguio Branch be trained for
the purpose. She set out her reasons therefor in her letter to Mrs. Arogo dated March 27, 1984, viz.:
1. I have established Baguio City as my permanent residence. Working in Laoag will involve
additional expenses like for my board and lodgingly, fare, and other miscellaneous expenses. My
salary alone will not be enoughthere will be no savings and my family will spend more on
account of my transfer.
2. I will be away from my family. A far assignment would be a big sacrifice on my part keeping
me away from my husband and family which might affect my efficiency.
3. Since I have been with PT & T for more than six years already, I have learned to work with my
co-employees here more effectively. Working in another place with entirely different environment
will require long adjustment period, thereby affecting performance of my job.
On April 12, 1984, Mrs. Arogo reiterated her directive for Laplanas transfer to the Laoag Branch, this time
in the form of a written Memorandum, informing Laplana that effective April 16, 1984, you will be
reassigned to Laoag branch assuming the same position of branch cashier, and ordering her to turn
over your accountabilities such as PCF, undeposited collections, used and unused official receipts, other
accountable forms and files to Rose Caysido who will be in charge of cashiering in Baguio.
Apparently Laplana was not allowed to resume her work as Cashier of the Baguio Branch when April 16,
1984 came. She thereupon wrote again to Mrs. Arogo advising that the directed transfer was
unacceptable, reiterating the reasons already given by her in her first letter dated March 27, 1984. On
April 30, 1984, Laplana received a telegram from Mrs. Arogo reading as follows:
PLEASE REPORT TO MANILA ON MAY 2, 1984 FOR NEW JOB ASSIGNMENT
IF YOU DONT REPORT ON MAY 2, 1984, WE WILL CONSIDER THIS AS
ABANDONMENT OF YOUR JOB AND THIS MIGHT CONSTRAIN US TO IMPOSE DISCIPLINARY
ACTION AGAINST YOU
YOU CAN GET YOUR CASH ADVANCE FOR TRANSPORTATION FROM MRS.
BAUTISTA TODAY.
On May 8, 1984, Laplana in turn sent a telex message to Mrs. Arogo which reads as follows:
I LOVE WORKING FOR OUR COMPANY HOWEVER I AM SORRY I CANNOT ACCEPT YOUR
JOB OFFER IN MANILA. THANK YOU AND RETRENCH ME INSTEAD. MY BEST REGARDS.
Thereafter, Laplana sent a letter to Mrs. Arogo on May 15, 1984, expatiating on her telex message and
reiterating her request to be retrenched, as follows:
Dear Mrs. Arogo:
Thank you for the job in Manila. However, I cannot accept the said offer because I have
established Baguio City as my permanent residence. Considering the high cost of living in Manila it will
surely involve additional expenses on my part. My salary alone will not be enough to sustain my
expenses. Furthermore, a far assignment will be a big sacrifice on my part keeping me away from my
husband which might affect my health due to an entirely new environment and climate, thereby affecting
my efficiency.

In view of the above reasons, I hereby request management to retrench me.


xxxxx.
Termination of Laplanas employment on account of retrenchment thereupon followed. On May 19, 1984,
PT & T issued an Employeess Service Report which contained the following remarks regarding
Laplana: Services terminated due to retrenchment with corresponding termination pay effective May 16,
1984. And on June 30, 1984, Mrs. Arogo sent a Memorandum to the companys Baguio Branch Manager
embodying the computation of the separation and 13th month pay due to Laplana, together with a check
for the amount thereof, P2,512.50 and a quitclaim deed, and instructing said manager to have the
quitclaim signed by Alicia Laplana before releasing the check and return all copies of said form x x
immediately. On July 4, 1984, Laplana signed the quitclaim and received the check representing her
13th month and separation pay.
On October 9, 1984, Laplana filed with the Labor Arbiters Office at Baguio City, thru the CLAO, a
complaint against PT &T, its Baguio Northwestern Luzon Branch, Baguio City, and Paraluman Bautista,
Area Manager. In her complaint, she set forth substantially the facts just narrated, and alleged, as right of
action, that when she insisted on her right of refusing to be transferred, the Defendants made good its
warning by terminating her services on May 16, 1984 on alleged ground of retrenchment, although the
truth is, she was forced to be terminated and that there was no ground at all for the retrenchment; that
the companys act of transferring is not only without any valid ground but also arbitrary and without any
purpose but to harass and force x x (her) to eventually resign.
In answer, the defendants alleged that
1) Laplana was being transferred to Laoag City because of increase in sales due to the
additional
installations of vodex line;
2) in connection with her transfer, Laplana had been informed that she would be given ten (10)
days
relocation allowance and transportation expense from Baguio to Laoag City;
3) the company was exercising management prerogatives in transferring complainant x x and
there is no
showing that this exercise was arbitrarily and whimsically done;
4) Laplanas services were terminated on her explicit declaration that she was willing to be
retrenched
rather than be assigned to Laoag City or Manila;
5) in any event, the company had been actually suffering losses; in fact, in June, 1984, several
employees
were retrenched because of losses incurred due to rising costs in wages,
rentals, production supplies and other operational costs.
Upon the issues thus raised, judgment was rendered on March 28, 1985 by the Labor Arbiter in Laplanas
favor. The Arbiters verdict was made to rest essentially on the following pronouncements (made
avowedly in reliance on the doctrine laid down by this Court in Helmut Dosch v. NLRC and Northwest
Airlines, Inc., G.R. No. 51182, July 5, 19832), to wit:
Transferring an employee from one place to another is not by itself unlawful. It is within
the inherent right of an employer to transfer or assign an employee in the pursuit of its legitimate
business interests. However, this right is not absolute.
Transfer becomes unlawful where it is motivated by discrimination or in bad faith, or is
effected as a form of punishment or demonition without sufficient cause.

The transfer of the complainant from Baguio City to Laoag City or to Manila is patently a demotion
and a form of punishment without just cause and would cause untold suffering on the part of the
complainant. x x.
With these premises in mind, the Arbiter ruled that the complainant was illegally dismissed xx (and her)
acceptance of separation pay xx cannot cure the illegality of her dismissal because it was forced upon
hershe was compelled to accept the lesser evil, and that there was no evidence to show that the
complainant was retrenched to prevent losses, but that on the contrary, it is continuously expanding and
improving its facilities, and hiring new employees. Accordingly, he ordered
1) PT & T to reinstate immediately the complainant, Alicia R. Laplana, to her former position or
equivalent
position without loss of seniority rights and benefits earned with full back wages
and benefits less
P2,512.50, the amount she received as separation, from the time her
compensation was suspended until
reinstated;
2) the dismissal of the claim for moral and exemplary damages for lack of merit; and
3) the dismissal of the case against Mrs. Paraluman Bautista also for lack of merit.
The National Labor Relations Commission affirmed the Arbiters judgment and dismissed the
respondents appeal, by Resolution dated August 5, 1986.3
There can be no quarrel with the Arbiters formulation of the general principle governing an employers
prerogative to transfer his employees from place to place or from one position to another. The Arbiter
acknowledges the inherent right of an employer to transfer or assign an employee in the pursuit of its
legitimate business interests subject only to the condition that it be not motivated by discrimination or
(made) in bad faith, or x x effected as a form of punishment or demotion without sufficient cause. This is
a principle uniformly adhered to by this Court.
The case law on the matter is succinctly set out by a noted commentator on Labor Relations Law as
follows:
x x Except as limited by special laws, the employer is free to regulate, according to his own
discretion and judgment, all aspects of employment, including hiring, work assignments,
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. This flows from the established rule
that labor law does not authorize the substitution of
the judgment of the employer in the
conduct of his business and does not deprive the employer of the right to select or dismiss his
employees for any cause, except in cases of unlawful discrimination (NLU v. Insular-Yebana
Tobacco Corp., 2 SCRA 924, 931; Republic Savings Bank v. CIR, 21 SCRA 226, 235).
x x The employer has the prerogative of making transfers and reassignment of employees to
meet the requirements of the business. Thus, where the rotation of employees from the day shift
to the night shift was a standard operating procedure of management, an employee who had
been on the day shift for some time may be transferred to the night shift (Castillo v. CIR, 39
SCRA 81). Similarly, transfers effected pursuant to a company policy to transfer employees from
one theater to other theaters operated by the employer, in order to prevent connivance among
them, was sustained (Cinema, Stage and Radio Entertainment Free Workers v. CIR, 18 SCRA
1071). Similar transfers and re-assignments of employees have been upheld such as the
reassignment of one from a position of supervisor to that of engineer at the power house
(Interwood Employees Assn. v. Interwood, 99 Phil. 82), or the transfer of the union president from
his position of messenger clerk in a hotel to purely office work and two other unionists from the
position of hotel guard to line and elevator men, without diminution of pay or other employees
rights (Bay view Hotel Employees Union v. Bay View Hotel, L-10393, March 30, 1960), or the

temporary assignment of a sales clerk to another section of the store (Marcaida v. PECO, 63
O.G. 8559).
Subsequent decisions of this Court have made no deviation from the doctrine. In Philippine Japan Active
Carbon Corp. v. NLRC, promulgated on March 8, 1989,6 this Court made the following pronouncement,
to wit:
It is the employers prerogative, based on its assessment and perception of its employees
qualifications, aptitudes, and competence, to move them around in the various areas of its
business operations in order to ascertain where they will function with maximum benefit to the
company. An employees right to security of tenure does not give him such a vested right in his
position as would deprive the company of its prerogative to change his assignment or transfer
him where he will be most useful. When his transfer is not unreasonable, nor inconvenient, nor
prejudicial to him, and it does not involve a demotion in rank or diminution of his salaries,
benefits, and other privileges, the employee may not complain that it amounts to a constructive
dismissal.
In Yuco Chemical Industries, Inc. v. MOLE, et al. (judgment promulgated on May 28, 1990),7 the same
general principles on transfer were restated. The Court said:
x x. In a number of cases, the Court has recognized and upheld the prerogative of management
to transfer an employee from one office to another within the business establishment provided
that there is no demotion in rank or diminution of his salary, benefits and other privileges. This is
a privilege inherent in the employers right to control and manage its enterprise effectively. Even
as the law is solicitous of the employees welfare, it cannot ignore the right of the employer to
exercise what are clearly and obviously management prerogatives. The freedom of management
to conduct its business operations to achieve its purpose cannot be denied.
But like all other rights, there are limits. 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. But the transfer can be upheld when there is no
showing that it is unnecessary, inconvenient and prejudicial to the displaced employee.
The acceptability of the proposition that transfers made by an employer for an illicit or underhanded
purposee.g., to evade the duty to bargain collectively, or to defeat the employees right of collective
bargaining, or discriminate against one or some of them on account of their union activitiesis selfevident and cannot be gainsaid. The difficulty lies in the situation where no such illicit, improper or
underhanded purpose can be ascribed to the employer, the objection to the transfer being ground solely
upon the personal inconvenience or hardship that will be caused to the employee by reason of the
transfer. What then?
In Dosch v. NLRC, supra, this Court found itself unable to agree with the NLRC that the petitioner
employee was guilty of disobedience and insubordination in refusing to accept his transfer from the
Philippines to an overseas post. Said the Court:
x x. The only piece of evidence on which (respondent employer) Northwest bases the charge of
contumacious refusal is petitioners letter dated August 28, 1975 to R.C. Jenkins wherein
petitioner acknowledged receipt of the formers memorandum dated August 18, 1975,
appreciated his promotion to Director of International Sales but at the same time regretted that at
this time for personal reasons and reasons of my family, I am unable to accept the transfer from
the Philippines and thereafter expressed his preference to remain in my position of ManagerPhilippines until such time that my services in that capacity are no longer required by Northwest

Airlines. From this evidence, We cannot discern even the slightest


less imply insubordination on the part of petitioner.

hint of defiance, much

Withal, it is evident that the courteous tone of the employees letter did not alter the actuality of his refusal
to accept the transfer decreed by his employer in the exercise of its sound business judgment and
discretion; and that the transfer of an employee to an overseas post cannot be likened to a transfer from a
city to another within the country, as in the case at bar.
In this case, the employee (Laplana) had to all intents and purposes resigned from her position. She had
unequivocally asked that she be considered dismissed, herself suggesting the reason therefor
retrenchment. When so dismissed, she accepted separation pay. On the other hand, 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 her 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 xx (itself) of an undesirable worker, or to penalize an employee
for xx union activities xx. The employer was moreover not unmindful of Laplanas 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.
The situation here presented is of an employer transferring 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, and of the latter having what was believed to be legitimate reasons for declining
that transfer, rooted in considerations of personal convenience and difficulties for the family. Under these
circumstances, the solution proposed by the employee herself, of her voluntary termination of her
employment and the delivery to her of corresponding separation pay, would appear to be the most
equitable. Certainly, the Court cannot accept the proposition that when an employee opposes his
employers decision to transfer him to another work place, there being no bad faith or underhanded
motives on the part of either party, it is the employees wishes that should be made to prevail. In adopting
that proposition by way of resolving the controversy, the respondent NLRC gravely abused its discretion.
WHEREFORE, the writ of certiorari prayed for is GRANTED and the Resolution of August 5, 1986 of
respondent NLRC is thereby nullified and set aside, and the termination of services of private respondent
is declared legal and proper. No costs.
SO ORDERED.
Cruz, Gancayco, Grio-Aquino and Medialdea, JJ., concur.
Writ granted. Resolution nullified and set aside.
Note.Employees right to security of tenure does not give him a vested right in his position as would
deprive the company of its prerogative to change his assignment or transfer him where he will be most
useful. (Phil-Japan Active Carbon Corp. vs. National Labor Relations Commission, 171 SCRA 164.)

ARMANDO G. YRASUEGUI, petitioner, vs. PHILIPPINE AIRLINES, INC., respondent.


G.R. No. 168081.

October 17, 2008.*

Labor Law; Termination of Employment; Common Carriers; Air Transportation; Weight Standards;
Obesity; An employee may be dismissed the moment he is unable to comply with his ideal weight as
prescribed by the weight standardsthe dismissal would fall under Article 282(e) of the Labor Code.A
reading of the weight standards of PAL would lead to no other conclusion than that they constitute a
continuing qualification of an employee in order to keep the job. Tersely put, an employee may be
dismissed the moment he is unable to comply with his ideal weight as prescribed by the weight
standards. The dismissal of the employee would thus fall under Article 282(e) of the Labor Code. As
explained by the CA: x x x
[T]he standards violated in this case were not mere orders of the employer; they were the prescribed
weights that a cabin crew must maintain in order to qualify for and keep his or her position in the
company. In other words, they were standards that establish continuing qualifications for an employees
position. In this sense, the failure to maintain these standards does not fall under Article 282(a) whose
express terms require the element of willfulness in order to be a ground for dismissal. The failure to meet
the employers qualifying standards is in fact a ground that does not squarely fall under grounds (a) to (d)
and is therefore one that falls under Article 282(e)the other causes analogous to the foregoing. By its
nature, these qualifying standards are norms that apply prior to and after an employee is hired. They
apply prior to employment because these are the standards a job applicant must initially meet in order to
be hired. They apply after hiring because an employee must continue to meet these standards while on
the job in order to keep his job. Under this perspective, a violation is not one of the faults for which an
employee can be dismissed pursuant to pars. (a) to (d) of Article 282; the employee can be dismissed
simply because he no longer qualifies for his job irrespective of whether or not the failure to qualify was
willful or intentional. x x x
Same; Same; Same; Same; Same; Same; The obesity of a cabin crew, when placed in the context of his
work as flight attendant, becomes an analogous cause under Article 282(e) of the Labor Code that
justifies his dismissal from the servicehis obesity may not be unintended, but is nonetheless
voluntary.In fine, We hold that the obesity of petitioner, when placed in the context of his work as flight
attendant, becomes an analogous cause under Article 282(e) of the Labor Code that justifies his
dismissal from the service. His obesity may not be unintended, but is nonetheless voluntary. As the CA
correctly puts it, [v]oluntariness basically means that the just cause is solely attributable to the employee
without any external force influencing or controlling his actions. This element runs through all just causes
under Article 282, whether they be in the nature of a wrongful action or omission. Gross and habitual
neglect, a recognized just cause, is considered voluntary although it lacks the element of intent found in
Article 282(a), (c), and (d).
Same; Same; Same; Same; Same; Same; Bona Fide Occupational Qualification (BFOQ) Defense; Words
and Phrases; Employment in particular jobs may not be limited to persons of a particular sex, religion, or
national origin unless the employer can show that sex, religion, or national origin is an actual qualification
for performing the jobqualification referred to as bona fide occupational qualification (BFOQ).
Employment in particular jobs may not be limited to persons of a particular sex, religion, or national origin
unless the employer can show that sex, religion, or national origin is an actual qualification for performing
the job. The qualification is called a bona fide occupational qualification (BFOQ). In the United States,
there are a few federal and many state job discrimination laws that contain an exception allowing an
employer to engage in an otherwise unlawful form of prohibited discrimination when the action is based
on a BFOQ necessary to the normal operation of a business or enterprise.

Same; Same; Same; Same; Same; Same; Same; Same; Meiorin Test; The Constitution, the Labor
Code, and RA No. 7277 or the Magna Carta for Disabled Persons contain provisions similar to Bona Fide
Occupational Qualification (BFOQ); The test of reasonableness of the company policy is used because it
is parallel to Bona Fide Occupational Qualification (BFOQ)Bona Fide Occupational Qualification
(BFOQ) is valid provided it reflects an inherent quality reasonably necessary for satisfactory job
performance; Under the Meiorin Test, (1) the employer must show that it adopted the standard for a
purpose rationally connected to the performance of the job, (2) the employer must establish that the
standard is reasonably necessary to the accomplishment of that work-related purpose, and, (3) the
employer must establish that the standard is reasonably necessary in order to accomplish the legitimate
work-related purpose.Petitioner contends that BFOQ is a statutory defense. It does not exist if there is
no statute providing for it. Further, there is no existing BFOQ statute that could justify his dismissal. Both
arguments must fail. First, the Constitution, the Labor Code, and RA No. 7277 or the Magna Carta for
Disabled Persons contain provisions similar to BFOQ. Second, in British Columbia Public Service
Employee Commission (BSPSERC) v. The British Columbia Government and Service Employees Union
(BCGSEU), 3 SCRA 3 (1999), the Supreme Court of Canada adopted the so-called Meiorin Test in
determining whether an employment policy is justified. Under this test, (1) the employer must show that it
adopted the standard for a purpose rationally connected to the performance of the job; (2) the employer
must establish that the standard is reasonably necessary to the accomplishment of that work-related
purpose; and (3) the employer must establish that the standard is reasonably necessary in order to
accomplish the legitimate work-related purpose. Similarly, in Star Paper Corporation v. Simbol, 487 SCRA
228 (2006), this Court held that in order to justify a BFOQ, the employer must prove that (1) the
employment qualification is reasonably related to the essential operation of the job involved; and (2) that
there is factual basis for believing that all or substantially all persons meeting the qualification would be
unable to properly perform the duties of the job. In short, the test of reasonableness of the company
policy is used because it is parallel to BFOQ. BFOQ is valid provided it reflects an inherent quality
reasonably necessary for satisfactory job performance.
Same; Same; Same; Civil Law; A common carrier, from the nature of its business and for reasons of
public policy, is bound to observe extraordinary diligence for the safety of the passengers it transports.
There is no merit to the argument that BFOQ cannot be applied if it has no supporting statute. Too, the
Labor Arbiter, NLRC, and CA are one in holding that the weight standards of PAL are reasonable. A
common carrier, from the nature of its business and for reasons of public policy, is bound to observe
extraordinary diligence for the safety of the passengers it transports. It is bound to carry its passengers
safely as far as human care and foresight can provide, using the utmost diligence of very cautious
persons, with due regard for all the circumstances. The law leaves no room for mistake or oversight on
the part of a common carrier. Thus, it is only logical to hold that the weight standards of PAL show its
effort to comply with the exacting obligations imposed upon it by law by virtue of being a common carrier.
Same; Same; Same; Same; The weight standards of an airline should be viewed as imposing strict norms
of discipline upon its employeesthe primary objective of said airline in the imposition of the weight
standards for cabin crew is flight safety, for it cannot be gainsaid that cabin attendants must maintain
agility at all times in order to inspire passenger confidence on their ability to care for the passengers when
something goes wrong.The business of PAL is air transportation. As such, it has committed itself to
safely transport its passengers. In order to achieve this, it must necessarily rely on its employees, most
particularly the cabin flight deck crew who are on board the aircraft. The weight standards of PAL should
be viewed as imposing strict norms of discipline upon its employees. In other words, the primary objective
of PAL in the imposition of the weight standards for cabin crew is flight safety. It cannot be gainsaid that
cabin attendants must maintain agility at all times in order to inspire passenger confidence on their ability
to care for the passengers when something goes wrong. It is not farfetched to say that airline companies,
just like all common carriers, thrive due to public confidence on their

safety records. People, especially the riding public, expect no less than that airline companies transport
their passengers to their respective destinations safely and soundly. A lesser performance is
unacceptable.
Same; Same; Same; Same; The task of a cabin crew or flight attendant is not limited to serving meals or
attending to the whims and caprices of the passengerspassenger safety goes to the core of the job of a
cabin attendant; On board an aircraft, the body weight and size of a cabin attendant are important factors
to consider in case of emergencyaircrafts have constricted cabin space, and narrow aisles and exit
doors.The task of a cabin crew or flight attendant is not limited to serving meals or attending to the
whims and caprices of the passengers. The most important activity of the cabin crew is to care for the
safety of passengers and the evacuation of the aircraft when an emergency occurs. Passenger safety
goes to the core of the job of a cabin attendant. Truly, airlines need cabin attendants who have the
necessary strength to open emergency doors, the agility to attend to passengers in cramped working
conditions, and the stamina to withstand grueling flight schedules. On board an aircraft, the body weight
and size of a cabin attendant are important factors to consider in case of emergency. Aircrafts have
constricted cabin space, and narrow aisles and exit doors. Thus, the arguments of respondent that
[w]hether the airlines flight attendants are overweight or not has no direct relation to its mission of
transporting passengers to their destination; and that the weight standards has nothing to do with
airworthiness of respondents airlines, must fail.
Same; Same; Same; Same; Judicial Notice; That an obese cabin attendant occupies more space than a
slim one is an unquestionable fact which courts can judicially recognize without introduction of evidence
it would also be absurd to require airline companies to reconfigure the aircraft in order to widen the aisles
and exit doors just to accommodate overweight cabin attendants; The biggest problem with an overweight
cabin attendant is the possibility of impeding passengers from evacuating the aircraft, should the
occasion call for itbeing overweight necessarily impedes mobility.There is no need to individually
evaluate their ability to perform their task. That an obese cabin attendant occupies more space than a
slim one is an unquestionable fact which courts can judicially recognize without introduction of evidence.
It would also be absurd to require airline companies to reconfigure the aircraft in order to widen the aisles
and exit doors just to accommodate overweight cabin attendants like petitioner. The biggest problem with
an overweight cabin attendant is the possibility of impeding passengers from evacuating the aircraft,
should the occasion call for it. The job of a cabin attendant during emergencies is to speedily get the
passengers out of the aircraft safely. Being overweight necessarily impedes mobility. Indeed, in an
emergency situation, seconds are what cabin attendants are dealing with, not minutes. Three lost
seconds can translate into three lost lives. Evacuation might slow down just because a wide-bodied cabin
attendant is blocking the narrow aisles. These possibilities are not remote.
Estoppel; Good faith demands that what is agreed upon shall be done.Petitioner is also in estoppel. He
does not dispute that the weight standards of PAL were made known to him prior to his employment. He
is presumed to know the weight limit that he must maintain at all times. In fact, never did he question the
authority of PAL when he was repeatedly asked to trim down his weight. Bona fides exigit ut quod
convenit fiat. Good faith demands that what is agreed upon shall be done. Kung ang tao ay tapat kanyang
tutuparin ang napagkasunduan.
Administrative Law; Appeals; Factual findings of administrative agencies do not have infallibility and must
be set aside when they fail the test of arbitrariness.We are not unmindful that findings of facts of
administrative agencies, like the Labor Arbiter and the NLRC, are accorded respect, even finality. The
reason is simple: administrative agencies are experts in matters within their specific and specialized
jurisdiction. But the principle is not a hard and fast rule. It only applies if the findings of facts are duly
supported by substantial evidence. If it can be shown that administrative bodies grossly misappreciated
evidence of such nature so as to compel a conclusion to the contrary, their findings of facts must
necessarily be reversed. Factual findings of administrative agencies do not have infallibility and must be
set aside when they fail the test of arbitrariness.

Bill of Rights; Equal Protection Clause; In the absence of governmental interference, the liberties
guaranteed by the Constitution cannot be invokedthe Bill of Rights is not meant to be invoked against
acts of private individuals.To make his claim more believable, petitioner invokes the equal protection
clause guaranty of the Constitution. However, in the absence of governmental interference, the liberties
guaranteed by the Constitution cannot be invoked. Put differently, the Bill of Rights is not meant to be
invoked against acts of private individuals. Indeed, the United States Supreme Court, in interpreting the
Fourteenth Amendment, which is the source of our equal protection guarantee, is consistent in saying
that the equal protection erects no shield against private conduct, however discriminatory or wrongful.
Private actions, no matter how egregious, cannot violate the equal protection guarantee.
Labor Law; Payroll Reinstatement; The option to exercise actual reinstatement or payroll reinstatement
belongs to the employer.The law is very clear. Although an award or order of reinstatement is selfexecutory and does not require a writ of execution, the option to exercise actual reinstatement or payroll
reinstatement belongs to the employer. It does not belong to the employee, to the labor tribunals, or even
to the courts.
Same; Separation Pay; Exceptionally, separation pay is granted to a legally dismissed employee as an
act social justice, or based on equityin both instances, it is required that the dismissal (1) was not for
serious misconduct, and (2) does not reflect on the moral character of the employee.A legally
dismissed employee is not entitled to separation pay. This may be deduced from the language of Article
279 of the Labor Code that [a]n employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual reinstatement. Luckily for petitioner, this
is not an ironclad rule. Exceptionally, separation pay is granted to a legally dismissed employee as an act
social justice, or based on equity. In both instances, it is required that the dismissal (1) was not for
serious misconduct; and (2) does not reflect on the moral character of the employee. Here, We grant
petitioner separation pay equivalent to one-half (1/2) months pay for every year of service. It should
include regular allowances which he might have been receiving. We are not blind to the fact that he was
not dismissed for any serious misconduct or to any act which would reflect on his moral character. We
also recognize that his employment with PAL lasted for more or less a decade.

PETITION for review on certiorari of a decision of the Court of Appeals.


The facts are stated in the opinion of the Court.
Ramel C. Muria for petitioner.
Bienvenido T. Jamoralin, Jr. for respondent.
REYES, R.T., J.:
THIS case portrays the peculiar story of an international flight steward who was dismissed because of his
failure to adhere to the weight standards of the airline company.
He is now before this Court via a petition for review on certiorari claiming that he was illegally dismissed.
To buttress his stance, he argues that (1) his dismissal does not fall under 282(e) of the Labor Code; (2)
continuing adherence to the weight standards of the company is not a bona fide occupational
qualification; and (3) he was discriminated against because other overweight employees were promoted
instead of being disciplined.

After a meticulous consideration of all arguments pro and con, We uphold the legality of dismissal.
Separation pay, however, should be awarded in favor of the employee as an act of social justice or based
on equity. This is so because his dismissal is not for serious misconduct. Neither is it reflective of his
moral character.
The Facts
Petitioner Armando G. Yrasuegui was a former international flight steward of Philippine Airlines, Inc.
(PAL). He stands five feet and eight inches (58) with a large body frame. The proper weight for a man of
his height and body structure is from 147 to 166 pounds, the ideal weight being 166 pounds, as mandated
by the Cabin and Crew Administration Manual of PAL.
The weight problem of petitioner dates back to 1984. Back then, PAL advised him to go on an extended
vacation leave from December 29, 1984 to March 4, 1985 to address his weight concerns. Apparently,
petitioner failed to meet the companys weight standards, prompting another leave without pay from
March 5, 1985 to November 1985.
After meeting the required weight, petitioner was allowed to return to work. But petitioners weight
problem recurred. He again went on leave without pay from October 17, 1988 to February 1989.
On April 26, 1989, petitioner weighed 209 pounds, 43 pounds over his ideal weight. In line with company
policy, he was removed from flight duty effective May 6, 1989 to July 3, 1989. He was formally requested
to trim down to his ideal weight and report for weight checks on several dates. He was also told that he
may avail of the services of the company physician should he wish to do so. He was advised that his case
will be evaluated on July 3, 1989.
On February 25, 1989, petitioner underwent weight check. It was discovered that he gained, instead of
losing, weight. He was overweight at 215 pounds, which is 49 pounds beyond the limit. Consequently, his
off-duty status was retained.
On October 17, 1989, PAL Line Administrator Gloria Dizon personally visited petitioner at his residence to
check on the progress of his effort to lose weight. Petitioner weighed 217 pounds, gaining 2 pounds from
his previous weight. After the visit, petitioner made a commitment3 to reduce weight in a letter addressed
to Cabin Crew Group Manager Augusto Barrios. The letter, in full, reads:
Dear Sir:
I would like to guaranty my commitment towards a weight loss from 217 pounds to 200
pounds from today until 31 Dec. 1989.
From thereon, I promise to continue reducing at a reasonable percentage until such time
that my ideal weight is achieved.
Likewise, I promise to personally report to your office at the designated time schedule
you will set for my weight check.

Respectfully Yours,
F/S Armando Yrasuegui
Despite the lapse of a ninety-day period given him to reach his ideal weight, petitioner remained
overweight. On January 3, 1990, he was informed of the PAL decision for him to remain grounded until
such time that he satisfactorily complies with the weight standards. Again, he was directed to report every
two weeks for weight checks.

Petitioner failed to report for weight checks. Despite that, he was given one more month to comply with
the weight requirement.
As usual, he was asked to report for weight check on different dates. He was reminded that his grounding
would continue pending satisfactory compliance with the weight standards.5
Again, petitioner failed to report for weight checks, although he was seen submitting his passport for
processing at the PAL Staff Service Division.
On April 17, 1990, petitioner was formally warned that a repeated refusal to report for weight check would
be dealt with accordingly. He was given another set of weight check dates.6 Again, petitioner ignored the
directive and did not report for weight checks. On June 26, 1990, petitioner was required to explain his
refusal to undergo weight checks.
When petitioner tipped the scale on July 30, 1990, he weighed at 212 pounds. Clearly, he was still way
over his ideal weight of 166 pounds.
From then on, nothing was heard from petitioner until he followed up his case requesting for leniency on
the latter part of 1992. He weighed at 219 pounds on August 20, 1992 and 205 pounds on November 5,
1992.
On November 13, 1992, PAL finally served petitioner a Notice of Administrative Charge for violation of
company standards on weight requirements. He was given ten (10) days from receipt of the charge within
which to file his answer and submit controverting evidence.
On December 7, 1992, petitioner submitted his Answer. Notably, he did not deny being overweight. What
he claimed, instead, is that his violation, if any, had already been condoned by PAL since no action has
been taken by the company regarding his case since 1988. He also claimed that PAL discriminated
against him because the company has not been fair in treating the cabin crew members who are
similarly situated.
On December 8, 1992, a clarificatory hearing was held where petitioner manifested that he was
undergoing a weight reduction program to lose at least two (2) pounds per week so as to attain his ideal
weight.
On June 15, 1993, petitioner was formally informed by PAL that due to his inability to attain his ideal
weight, and considering the utmost leniency extended to him which spanned a period covering a total
of almost five (5) years, his services were considered terminated effective immediately.
His motion for reconsideration having been denied, petitioner filed a complaint for illegal dismissal against
PAL.
Labor Arbiter, NLRC and CA Dispositions
On November 18, 1998, Labor Arbiter Valentin C. Reyes ruled that petitioner was illegally dismissed. The
dispositive part of the Arbiter ruling runs as follows:
WHEREFORE, in view of the foregoing, judgment is hereby rendered, declaring the
complainants dismissal illegal, and ordering the respondent to reinstate him to his former position
or substantially equivalent one, and to pay him:
a. Back wages of Php10,500.00 per month from his dismissal on June 15, 1993 until
reinstated, which for purposes of appeal is hereby set from June 15, 1993 up to August 15, 1998
at P651,000.00;
b. Attorneys fees of five percent (5%) of the total award.

SO ORDERED.
The Labor Arbiter held that the weight standards of PAL are reasonable in view of the nature of the job of
petitioner. However, the weight standards need not be complied with under pain of dismissal since his
weight did not hamper the performance of his duties. Assuming that it did, petitioner could be transferred
to other positions where his weight would not be a negative factor. Notably, other overweight employees,
i.e., Mr. Palacios, Mr. Cui, and Mr. Barrios, were promoted instead of being disciplined.
Both parties appealed to the National Labor Relations Commission (NLRC).
On October 8, 1999, the Labor Arbiter issued a writ of execution directing the reinstatement of petitioner
without loss of seniority rights and other benefits.
On February 1, 2000, the Labor Arbiter denied the Motion to Quash Writ of Execution of PAL.
On March 6, 2000, PAL appealed the denial of its motion to quash to the NLRC.
On June 23, 2000, the NLRC rendered judgment in the following tenor:
WHEREFORE, premises considered[,] the Decision of the Arbiter dated 18 November 1998 as
modified by our findings herein, is hereby AFFIRMED and that part of the dispositive portion of
said decision concerning complainants entitlement to back wages shall be deemed to refer to
complainants entitlement to his full back wages, inclusive of allowances and to his other benefits
or their monetary equivalent instead of simply back wages, from date of dismissal until his actual
reinstatement or finality hereof. Respondent is enjoined to manifests (sic) its choice of the form of
the reinstatement of complainant, whether physical or
through payroll within ten (10) days from
notice failing which, the same shall be deemed as complainants reinstatement through payroll
and execution in case of non-payment shall accordingly be issued by the Arbiter. Both appeals of
respondent thus, are DISMISSED for utter lack of merit.
According to the NLRC, obesity, or the tendency to gain weight uncontrollably regardless of the amount
of food intake, is a disease in itself. As a consequence, there can be no intentional defiance or serious
misconduct by petitioner to the lawful order of PAL for him to lose weight.
Like the Labor Arbiter, the NLRC found the weight standards of PAL to be reasonable. However, it found
as unnecessary the Labor Arbiter holding that petitioner was not remiss in the performance of his duties
as flight steward despite being overweight. According to the NLRC, the Labor Arbiter should have limited
himself to the issue of whether the failure of petitioner to attain his ideal weight constituted willful defiance
of the weight standards of PAL.
PAL moved for reconsideration to no avail. Thus, PAL elevated the matter to the Court of Appeals (CA)
via a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure.
By Decision dated August 31, 2004, the CA reversed31 the NLRC:
WHEREFORE, premises considered, we hereby GRANT the petition. The assailed NLRC
decision is declared NULL and VOID and is hereby SET ASIDE. The private respondents complaint is
hereby DISMISSED. No costs.
SO ORDERED.
The CA opined that there was grave abuse of discretion on the part of the NLRC because it looked at
wrong and irrelevant considerations in evaluating the evidence of the parties. Contrary to the NLRC
ruling, the weight standards of PAL are meant to be a continuing qualification for an employees position.
The failure to adhere to the weight standards is an analogous cause for the dismissal of an employee
under Article 282(e) of the Labor Code in relation to Article 282(a). It is not willful disobedience as the
NLRC seemed to suggest. Said the CA, the element of willfulness that the NLRC decision cites is an

irrelevant consideration in arriving at a conclusion on whether the dismissal is legally proper. In other
words, the relevant question to ask is not one of willfulness but one of reasonableness of the standard
and whether or not the employee qualifies or continues to qualify under this standard.
Just like the Labor Arbiter and the NLRC, the CA held that the weight standards of PAL are reasonable.
Thus, petitioner was legally dismissed because he repeatedly failed to meet the prescribed weight
standards. It is obvious that the issue of discrimination was only invoked by petitioner for purposes of
escaping the result of his dismissal for being overweight.
On May 10, 2005, the CA denied petitioners motion for reconsideration. Elaborating on its earlier ruling,
the CA held that the weight standards of PAL are a bona fide occupational qualification which, in case of
violation, justifies an employees separation from the service.
Issues
In this Rule 45 petition for review, the following issues are posed for resolution:
I.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONERS
OBESITY CAN BE A GROUND FOR DISMISSAL UNDER PARAGRAPH (e) OF ARTICLE 282 OF THE
LABOR CODE OF THE PHILIPPINES;
II.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONERS
DISMISSAL FOR OBESITY CAN BE PREDICATED ON THE BONA FIDE OCCUPATIONAL
QUALIFICATION (BFOQ) DEFENSE;
III.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONER
WAS NOT UNDULY DISCRIMINATED AGAINST WHEN HE WAS DISMISSED WHILE OTHER
OVERWEIGHT CABIN ATTENDANTS WERE EITHER GIVEN FLYING DUTIES OR PROMOTED;
IV.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED WHEN IT BRUSHED ASIDE
PETITIONERS CLAIMS FOR REINSTATEMENT [AND] WAGES ALLEGEDLY FOR BEING MOOT AND
ACADEMIC.
Our Ruling
I. The obesity of petitioner is a ground for dismissal under Article 282(e) of the Labor Code.
A reading of the weight standards of PAL would lead to no other conclusion than that they constitute a
continuing qualification of an employee in order to keep the job. Tersely put, an employee may be
dismissed the moment he is unable to comply with his ideal weight as prescribed by the weight
standards. The dismissal of the employee would thus fall under Article 282(e) of the Labor Code. As
explained by the CA:
x x x [T]he standards violated in this case were not mere orders of the employer; they were the
prescribed weights that a cabin crew must maintain in order to qualify for and keep his or her
position in the company. In other words, they were standards that establish continuing qualifications for
an employees position. In this sense, the failure to maintain these standards does not fall under Article
282(a) whose express terms require the element of willfulness in order to be a ground for dismissal. The
failure to meet the employers qualifying standards is in fact a ground that does not squarely fall under

grounds (a) to (d) and is therefore one that falls under Article 282(e)the other causes analogous to the
foregoing.
By its nature, these qualifying standards are norms that apply prior to and after an employee is
hired. They apply prior to employment because these are the standards a job applicant must initially meet
in order to be hired. They apply after hiring because an employee must continue to meet these standards
while on the job in order to keep his job. Under this perspective, a violation is not one of the faults for
which an employee can be dismissed pursuant to pars. (a) to (d) of Article 282; the employee can be
dismissed simply because he no longer qualifies for his job irrespective of whether or not the failure to
qualify was willful or intentional. x x x
Petitioner, though, advances a very interesting argument. He claims that obesity is a physical
abnormality and/or illness. Relying on Nadura v. Benguet Consolidated, Inc., he says his dismissal is
illegal:
Conscious of the fact that Naduras case cannot be made to fall squarely within the specific
causes enumerated in subparagraphs 1(a) to (e), Benguet invokes the provisions of subparagraph 1(f)
and says that Naduras illnessoccasional attacks of asthmais a cause analogous to them.
Even a cursory reading of the legal provision under consideration is sufficient to convince anyone
that, as the trial court said, illness cannot be included as an analogous cause by any stretch of
imagination.
It is clear that, except the just cause mentioned in sub-paragraph 1(a), all the others expressly
enumerated in the law are due to the voluntary and/or willful act of the employee. How Naduras
illness could be considered as analogous to any of them is beyond our understanding, there being no
claim or pretense that the same was contracted through his own voluntary act.
The reliance on Nadura is off-tangent. The factual milieu in Nadura is substantially different from the case
at bar. First, Nadura was not decided under the Labor Code. The law applied in that case was Republic
Act (RA) No. 1787. Second, the issue of flight safety is absent in Nadura, thus, the rationale there cannot
apply here. Third, in Nadura, the employee who was a miner, was laid off from work because of illness,
i.e., asthma. Here, petitioner was dismissed for his failure to meet the weight standards of PAL. He was
not dismissed due to illness. Fourth, the issue in Nadura is whether or not the dismissed employee is
entitled to separation pay and damages. Here, the issue centers on the propriety of the dismissal of
petitioner for his failure to meet the weight standards of PAL. Fifth, in Nadura, the employee was not
accorded due process. Here, petitioner was accorded utmost leniency. He was given more than four (4)
years to comply with the weight standards of PAL.
In the case at bar, the evidence on record militates against petitioners claims that obesity is a disease.
That he was able to reduce his weight from 1984 to 1992 clearly shows that it is possible for him to lose
weight given the proper attitude, determination, and self-discipline. Indeed, during the clarificatory hearing
on December 8, 1992, petitioner himself claimed that [t]he issue is could I bring my weight down to ideal
weight which is 172, then the answer is yes. I can do it now.
True, petitioner claims that reducing weight is costing him a lot of expenses. However, petitioner has
only himself to blame. He could have easily availed the assistance of the company physician, per the
advice of PAL. He chose to ignore the suggestion. In fact, he repeatedly failed to report when required to
undergo weight checks, without offering a valid explanation. Thus, his fluctuating weight indicates
absence of willpower rather than an illness.
Petitioner cites Bonnie Cook v. State of Rhode Island, Department of Mental Health, Retardation and
Hospitals, decided by the United States Court of Appeals (First Circuit). In that case, Cook worked from
1978 to 1980 and from 1981 to 1986 as an institutional attendant for the mentally retarded at the Ladd
Center that was being operated by respondent. She twice resigned voluntarily with an unblemished

record. Even respondent admitted that her performance met the Centers legitimate expectations. In
1988, Cook re-applied for a similar position. At that time, she stood 52 tall and weighed over 320
pounds. Respondent claimed that the morbid obesity of plaintiff compromised her ability to evacuate
patients in case of emergency and it also put her at greater risk of serious diseases.
Cook contended that the action of respondent amounted to discrimination on the basis of a handicap.
This was in direct violation of Section 504(a) of the Rehabilitation Act of 1973, which incorporates the
remedies contained in Title VI of the Civil Rights Act of 1964. Respondent claimed, however, that morbid
obesity could never constitute a handicap within the purview of the Rehabilitation Act. Among others,
obesity is a mutable condition, thus plaintiff could simply lose weight and rid herself of concomitant
disability.
The appellate Court disagreed and held that morbid obesity is a disability under the Rehabilitation Act and
that respondent discriminated against Cook based on perceived disability. The evidence included expert
testimony that morbid obesity is a physiological disorder. It involves a dysfunction of both the metabolic
system and the neurological appetitesuppressing signal system, which is capable of causing adverse
effects within the musculoskeletal, respiratory, and cardiovascular systems. Notably, the Court stated that
mutability is relevant only in determining the substantiality of the limitation flowing from a given
impairment, thus mutability only precludes those conditions that an individual can easily and quickly
reverse by behavioral alteration.
Unlike Cook, however, petitioner is not morbidly obese. In the words of the District Court for the District of
Rhode Island, Cook was sometime before 1978 at least one hundred pounds more than what is
considered appropriate of her height. According to the Circuit Judge, Cook weighed over 320 pounds in
1988. Clearly, that is not the case here. At his heaviest, petitioner was only less than 50 pounds over his
ideal weight.
In fine, We hold that the obesity of petitioner, when placed in the context of his work as flight attendant,
becomes an analogous cause under Article 282(e) of the Labor Code that justifies his dismissal from the
service. His obesity may not be unintended, but is nonetheless voluntary. As the CA correctly puts it,
[v]oluntariness basically means that the just cause is solely attributable to the employee without any
external force influencing or controlling his actions. This element runs through all just causes under Article
282, whether they be in the nature of a wrongful action or omission. Gross and habitual neglect, a
recognized just cause, is considered voluntary although it lacks the element of intent found in Article
282(a), (c), and (d).
II. The dismissal of petitioner can be predicated on the bona fide occupational qualification
defense.
Employment in particular jobs may not be limited to persons of a particular sex, religion, or national origin
unless the employer can show that sex, religion, or national origin is an actual qualification for performing
the job. The qualification is called a bona fide occupational qualification (BFOQ). In the United States,
there are a few federal and many state job discrimination laws that contain an exception allowing an
employer to engage in an otherwise unlawful form of prohibited discrimination when the action is based
on a BFOQ necessary to the normal operation of a business or enterprise.
Petitioner contends that BFOQ is a statutory defense. It does not exist if there is no statute providing for
it. Further, there is no existing BFOQ statute that could justify his dismissal.
Both arguments must fail.
First, the Constitution, the Labor Code, and RA No. 7277or the Magna Carta for Disabled Persons62
contain provisions similar to BFOQ.

Second, in British Columbia Public Service Employee CommissionA (BSPSERC) v. The British Columbia
Government and Service Employees Union (BCGSEU), the Supreme Court of Canada adopted the socalled Meiorin Test in determining whether an employment policy is justified. Under this test, (1) the
employer must show that it adopted the standard for a purpose rationally connected to the performance of
the job; (2) the employer must establish that the standard is reasonably necessary to the accomplishment
of that work-related purpose; and (3) the employer must establish that the standard is reasonably
necessary in order to accomplish the legitimate work-related purpose. Similarly, in Star Paper Corporation
v. Simbol, this Court held that in order to justify a BFOQ, the employer must prove that (1) the
employment qualification is reasonably related to the essential operation of the job involved; and (2) that
there is factual basis for believing that all or substantially all persons meeting the qualification would be
unable to properly perform the duties of the job.
In short, the test of reasonableness of the company policy is used because it is parallel to BFOQ. BFOQ
is valid provided it reflects an inherent quality reasonably necessary for satisfactory job performance.
In Duncan Association of Detailman-PTGWTO v. Glaxo Wellcome Philippines, Inc., the Court did not
hesitate to pass upon the validity of a company policy which prohibits its employees from marrying
employees of a rival company. It was held that the company policy is reasonable considering that its
purpose is the protection of the interests of the company against possible competitor infiltration on its
trade secrets and procedures.
Verily, there is no merit to the argument that BFOQ cannot be applied if it has no supporting statute. Too,
the Labor Arbiter, NLRC, and CA are one in holding that the weight standards of PAL are reasonable. A
common carrier, from the nature of its business and for reasons of public policy, is bound to observe
extraordinary diligence for the safety of the passengers it transports. It is bound to carry its passengers
safely as far as human care and foresight can provide, using the utmost diligence of very cautious
persons, with due regard for all the circumstances.
The law leaves no room for mistake or oversight on the part of a common carrier. Thus, it is only logical to
hold that the weight standards of PAL show its effort to comply with the exacting obligations imposed
upon it by law by virtue of being a common carrier.
The business of PAL is air transportation. As such, it has committed itself to safely transport its
passengers. In order to achieve this, it must necessarily rely on its employees, most particularly the cabin
flight deck crew who are on board the aircraft. The weight standards of PAL should be viewed as
imposing strict norms of discipline upon its employees.
In other words, the primary objective of PAL in the imposition of the weight standards for cabin crew is
flight safety. It cannot be gainsaid that cabin attendants must maintain agility at all times in order to
inspire passenger confidence on their ability to care for the passengers when something goes wrong. It is
not farfetched to say that airline companies, just like all common carriers, thrive due to public confidence
on their safety records. People, especially the riding public, expect no less than that airline companies
transport their passengers to their respective destinations safely and soundly. A lesser performance is
unacceptable.
The task of a cabin crew or flight attendant is not limited to serving meals or attending to the whims and
caprices of the passengers. The most important activity of the cabin crew is to care for the safety of
passengers and the evacuation of the aircraft when an emergency occurs. Passenger safety goes to the
core of the job of a cabin attendant. Truly, airlines need cabin attendants who have the necessary
strength to open emergency doors, the agility to attend to passengers in cramped working conditions, and
the stamina to withstand grueling flight schedules.
On board an aircraft, the body weight and size of a cabin attendant are important factors to consider in
case of emergency. Aircrafts have constricted cabin space, and narrow aisles and exit doors. Thus, the
arguments of respondent that [w]hether the airlines flight attendants are overweight or not has no direct

relation to its mission of transporting passengers to their destination; and that the weight standards has
nothing to do with airworthiness of respondents airlines, must fail.
The rationale in Western Air Lines v. Criswell relied upon by petitioner cannot apply to his case. What
was involved there were two (2) airline pilots who were denied reassignment as flight engineers upon
reaching the age of 60, and a flight engineer who was forced to retire at age 60. They sued the airline
company, alleging that the age-60 retirement for flight engineers violated the Age Discrimination in
Employment Act of 1967. Age-based BFOQ and being overweight are not the same. The case of
overweight cabin attendants is another matter. Given the cramped cabin space and narrow aisles and
emergency exit doors of the airplane, any overweight cabin attendant would certainly have difficulty
navigating the cramped cabin area.
In short, there is no need to individually evaluate their ability to perform their task. That an obese cabin
attendant occupies more space than a slim one is an unquestionable fact which courts can judicially
recognize without introduction of evidence. It would also be absurd to require airline companies to
reconfigure the aircraft in order to widen the aisles and exit doors just to accommodate overweight cabin
attendants like petitioner.
The biggest problem with an overweight cabin attendant is the possibility of impeding passengers from
evacuating the aircraft, should the occasion call for it. The job of a cabin attendant during emergencies is
to speedily get the passengers out of the aircraft safely. Being overweight necessarily impedes mobility.
Indeed, in an emergency situation, seconds are what cabin attendants are dealing with, not minutes.
Three lost seconds can translate into three lost lives. Evacuation might slow down just because a widebodied cabin attendant is blocking the narrow aisles. These possibilities are not remote.
Petitioner is also in estoppel. He does not dispute that the weight standards of PAL were made known to
him prior to his employment. He is presumed to know the weight limit that he must maintain at all times. In
fact, never did he question the authority of PAL when he was repeatedly asked to trim down his weight.
Bona fides exigit ut quod convenit fiat. Good faith demands that what is agreed upon shall be done. Kung
ang tao ay tapat kanyang tutuparin ang napagkasunduan.
Too, the weight standards of PAL provide for separate weight limitations based on height and body frame
for both male and female cabin attendants. A progressive discipline is imposed to allow non-compliant
cabin attendants sufficient opportunity to meet the weight standards. Thus, the clear-cut rules obviate any
possibility for the commission of abuse or arbitrary action on the part of PAL.
III.

Petitioner failed to substantiate his claim that he was discriminated against by PAL.

Petitioner next claims that PAL is using passenger safety as a convenient excuse to discriminate against
him. We are constrained, however, to hold otherwise. We agree with the CA that [t]he element of
discrimination came into play in this case as a secondary position for the private respondent in order to
escape the consequence of dismissal that being overweight entailed. It is a confession-and-avoidance
position that impliedly admitted the cause of dismissal, including the reasonableness of the applicable
standard and the private respondents failure to comply. It is a basic rule in evidence that each party
must prove his affirmative allegation.
Since the burden of evidence lies with the party who asserts an affirmative allegation, petitioner has to
prove his allegation with particularity. There is nothing on the records which could support the finding of
discriminatory treatment. Petitioner cannot establish discrimination by simply naming the supposed cabin
attendants who are allegedly similarly situated with him. Substantial proof must be shown as to how and
why they are similarly situated and the differential treatment petitioner got from PAL despite the similarity
of his situation with other employees.

Indeed, except for pointing out the names of the supposed overweight cabin attendants, petitioner
miserably failed to indicate their respective ideal weights; weights over their ideal weights; the periods
they were allowed to fly despite their being overweight; the particular flights assigned to them; the
discriminating treatment they got from PAL; and other relevant data that could have adequately
established a case of discriminatory treatment by PAL. In the words of the CA, PAL really had no
substantial case of discrimination to meet.
We are not unmindful that findings of facts of administrative agencies, like the Labor Arbiter and the
NLRC, are accorded respect, even finality. The reason is simple: administrative agencies are experts in
matters within their specific and specialized jurisdiction.But the principle is not a hard and fast rule. It only
applies if the findings of facts are duly supported by substantial evidence. If it can be shown that
administrative bodies grossly misappreciated evidence of such nature so as to compel a conclusion to the
contrary, their findings of facts must necessarily be reversed. Factual findings of administrative agencies
do not have infallibility and must be set aside when they fail the test of arbitrariness.
Here, the Labor Arbiter and the NLRC inexplicably misappreciated evidence. We thus annul their findings.
To make his claim more believable, petitioner invokes the equal protection clause guaranty of the
Constitution. However, in the absence of governmental interference, the liberties guaranteed by the
Constitution cannot be invoked. Put differently, the Bill of Rights is not meant to be invoked against acts
of private individuals. Indeed, the United States Supreme Court, in interpreting the Fourteenth
Amendment,which is the source of our equal protection guarantee, is consistent in saying that the equal
protection erects no shield against private conduct, however discriminatory or wrongful.Private actions, no
matter how egregious, cannot violate the equal protection guarantee.
IV. The claims of petitioner for reinstatement and wages are moot.
As his last contention, petitioner avers that his claims for reinstatement and wages have not been
mooted. He is entitled to reinstatement and his full backwages, from the time he was illegally dismissed
up to the time that the NLRC was reversed by the CA.
At this point, Article 223 of the Labor Code finds relevance:
In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee,
insofar as the reinstatement aspect is concerned, shall immediately be executory, even pending appeal.
The
employee shall either be admitted back to work under the same terms and conditions prevailing
prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The
posting of a bond by the employer shall not stay the execution for reinstatement provided herein.
The law is very clear. Although an award or order of reinstatement is self-executory and does not require
a writ of execution, the option to exercise actual reinstatement or payroll reinstatement belongs to the
employer. It does not belong to the employee, to the labor tribunals, or even to the courts.
Contrary to the allegation of petitioner that PAL did everything under the sun to frustrate his immediate
return to his previous position, there is evidence that PAL opted to physically reinstate him to a
substantially equivalent position in accordance with the order of the Labor Arbiter. In fact, petitioner duly
received the return to work notice on February 23, 2001, as shown by his signature.
Petitioner cannot take refuge in the pronouncements of the Court in a case that [t]he unjustified refusal of
the employer to reinstate the dismissed employee entitles him to payment of his salaries effective from
the time the employer failed to reinstate him despite the issuance of a writ of execution and even if the
order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the
employer to reinstate and pay the wages of the employee during the period of appeal until reversal by the
higher court. He failed to prove that he complied with the return to work order of PAL. Neither does it

appear on record that he actually rendered services for PAL from the moment he was dismissed, in order
to insist on the payment of his full back wages.
In insisting that he be reinstated to his actual position despite being overweight, petitioner in effect wants
to render the issues in the present case moot. He asks PAL to comply with the impossible. Time and
again, the Court ruled that the law does not exact compliance with the impossible.
V.

Petitioner is entitled to separation pay.

Be that as it may, all is not lost for petitioner.


Normally, a legally dismissed employee is not entitled to separation pay. This may be deduced from the
language of Article 279 of the Labor Code that [a]n employee who is unjustly dismissed from work shall
be entitled to reinstatement without loss of seniority rights and other privileges and to his full back wages,
inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual reinstatement. Luckily for petitioner, this
is not an ironclad rule.
Exceptionally, separation pay is granted to a legally dismissed employee as an act social justice, or
based on equity. In both instances, it is required that the dismissal (1) was not for serious misconduct;
and (2) does not reflect on the moral character of the employee.
Here, We grant petitioner separation pay equivalent to one-half (1/2) months pay for every year of
service. It should include regular allowances which he might have been receiving. We are not blind to the
fact that he was not dismissed for any serious misconduct or to any act which would reflect on his moral
character. We also recognize that his employment with PAL lasted for more or less a decade.
WHEREFORE, the appealed Decision of the Court of Appeals is AFFIRMED but MODIFIED in that
petitioner Armando G. Yrasuegui is entitled to separation pay in an amount equivalent to one-half (1/2)
months pay for every year of service, which should include his regular allowances. [Yrasuegui vs.
Philippine Airlines, Inc., 569 SCRA 467 (2008)]

STAR PAPER CORPORATION, JOSEPHINE ONGSITCO & SEBASTIAN CHUA, petitioners, vs.
RONALDO D. SIMBOL, WILFREDA N. COMIA & LORNA E. ESTRELLA, respondents.
G.R. No. 164774. April 12, 2006.*
Labor Law; Management Prerogatives; Employer Policies; Nepotism; It is true that the policy of the
petitioners prohibiting close relatives from working in the same company takes the nature of an antinepotism employment policy.It is true that the policy of petitioners prohibiting close relatives from
working in the same company takes the nature of an anti-nepotism employment policy. Companies adopt
these policies to prevent the hiring of unqualified persons based on their status as a relative, rather than
upon their ability. These policies focus upon the potential employment problems arising from the
perception of favoritism exhibited towards relatives. With more women entering the workforce, employers
are also enacting employment policies specifically prohibiting spouses from working for the same
company. We note that two types of employment policies involve spouses: policies banning only spouses
from working in the same company (no-spouse employment policies), and those banning all immediate
family members, including spouses, from working in the same company (anti-nepotism employment
policies).
Same; Same; Same; Same; Two Theories of Employment DiscriminationDisparate Treatment and
Disparate Impact; Words and Phrases; Under the disparate treatment analysis, the employer must prove
that an employment policy is discriminatory on its face; To establish disparate impact, the complainants
must prove that a facially neutral policy has a disproportionate effect on a particular class.Unlike in our
jurisdiction where there is no express prohibition on marital discrimination, there are twenty state statutes
in the United States prohibiting marital discrimination. Some state courts have been confronted with the
issue of whether no-spouse policies violate their laws prohibiting both marital status and sex
discrimination. In challenging the anti-nepotism employment policies in the United States, complainants
utilize two theories of employment discrimination: the disparate treatment and the disparate impact.
Under the disparate treatment analysis, the plaintiff must prove that an employment policy is
discriminatory on its face. No-spouse employment policies requiring an employee of a particular sex to
either quit, transfer, or be fired are facially discriminatory. For example, an employment policy prohibiting
the employer from hiring wives of male employees, but not husbands of female employees, is
discriminatory on its face. On the other hand, to establish disparate impact, the complainants must prove
that a facially neutral policy has a disproportionate effect on a particular class. For example, although
most employment policies do not expressly indicate which spouse will be required to transfer or leave the
company, the policy often disproportionately affects one sex.
Same; Same; Same; Marital Status Discrimination; The courts narrowly interpreting marital status to refer
only to a persons status as married, single, divorced, or widowed reason that if the legislature intended a
broader definition it would have either chosen different language or specified its intent.The courts
narrowly interpreting marital status to refer only to a persons status as married, single, divorced, or
widowed reason that if the legislature intended a broader definition it would have either chosen different
language or specified its intent. They hold that the relevant inquiry is if one is married rather than to whom
one is married. They construe marital status discrimination to include only whether a person is single,
married, divorced, or widowed and not the identity, occupation, and place of employment of ones
spouse. These courts have upheld the questioned policies and ruled that they did not violate the marital
status discrimination provision of their respective state statutes.
Same; Same; Same; Same; Words and Phrases; The courts that have broadly construed the term
marital status rule that it encompassed the identity, occupation and employment of ones spouse, and
strike down the no-spouse employment policies based on the broad legislative intent of the state statute,
and further hold that the absence of a bona fide occupational qualification invalidates a rule denying
employment to one spouse due to the current employment of the other spouse in the same office; This is
known as the bona fide occupational qualification exception.The courts that have broadly construed the
term marital status rule that it encompassed the identity, occupation and employment of ones spouse.

They strike down the no-spouse employment policies based on the broad legislative intent of the state
statute. They reason that the no-spouse employment policy violate the marital status provision because it
arbitrarily discriminates against all spouses of present employees without regard to the actual effect on
the individuals qualifications or work performance. These courts also find the no-spouse employment
policy invalid for failure of the employer to present any evidence of business necessity other than the
general perception that spouses in the same workplace might adversely affect the business.They hold
that the absence of such a bona fide occupational qualification invalidates a rule denying employment to
one spouse due to the current employment of the other spouse in the same office. Thus, they rule that
unless the employer can prove that the reasonable demands of the business require a distinction based
on marital status and there is no better available or acceptable policy which would better accomplish the
business purpose, an employer may not discriminate against an employee based on the identity of the
employees spouse. This is known as the bona fide occupational qualification exception.
Same; Same; Same; Same; Occupational Qualifications; To justify a bona fide occupational qualification,
the employer must prove two factors: (1) that the employment qualification is reasonably related to the
essential operation of the job involved; and, (2) that there is a factual basis for believing that all or
substantially all persons meeting the qualification would be unable to properly perform the duties of the
job.We note that since the finding of a bona fide occupational qualification justifies an employers nospouse rule, the exception is interpreted strictly and narrowly by these state courts. There must be a
compelling business necessity for which no alternative exists other than the discriminatory practice. To
justify a bona fide occupational qualification, the employer must prove two factors: (1) that the
employment qualification is reasonably related to the essential operation of the job involved; and, (2) that
there is a factual basis for believing that all or substantially all persons meeting the qualification would be
unable to properly perform the duties of the job. The concept of a bona fide occupational qualification is
not foreign in our jurisdiction. We employ the standard of reasonableness of the company policy which is
parallel to the bona fide occupational qualification requirement. In the recent case of Duncan Association
of Detailman-PTGWO and Pedro Tecson v. Glaxo Wellcome Philippines, Inc., we passed on the validity
of the policy of a pharmaceutical company prohibiting its employees from marrying employees of any
competitor company.
Same; Same; Same; Same; Same; The cases of Duncan Association of Detailment-PTGWO v. Glaxo
Wellcome Philippines, Inc., G.R. No. 162994, 17 September 2004, 438 SCRA 343, and Philippine
Telegraphy and Telephone Company v. National Labor Relations Commission, G.R. No. 118978, 23 May
1997, 272 SCRA 596, instruct that the requirement of reasonableness must be clearly established to
uphold a questioned employment policy.The cases of Duncan and PT&T instruct us that the
requirement of reasonableness must be clearly established to uphold the questioned employment policy.
The employer has the burden to prove the existence of a reasonable business necessity. The burden was
successfully discharged in Duncan but not in PT&T.
Same; Same; Same; Same; Same; That the company did not just want to have two (2) or more of its
employees related between the third degree by affinity and/or consanguinity is lamethe policy is
premised on the mere fear that employees married to each other will be less efficient; If the court were to
uphold the questioned rule without valid justification, the employer can create policies based on an
unproven presumption of a perceived danger at the expense of an employees right to security of
tenure.Petitioners sole contention that the company did not just want to have two (2) or more of its
employees related between the third degree by affinity and/or consanguinity is lame. That the second
paragraph was meant to give teeth to the first paragraph of the questioned rule is evidently not the valid
reasonable business necessity required by the law. It is significant to note that in the case at bar,
respondents were hired after they were found fit for the job, but were asked to resign when they married a
co-employee. Petitioners failed to show how the marriage of Simbol, then a Sheeting Machine Operator,
to Alma Dayrit, then an employee of the Repacking Section, could be detrimental to its business
operations. Neither did petitioners explain how this detriment will happen in the case of Wilfreda Comia,
then a Production Helper in the Selecting Department, who married Howard Comia, then a helper in the

cutter-machine. The policy is premised on the mere fear that employees married to each other will be less
efficient. If we uphold the questioned rule without valid justification, the employer can create policies
based on an unproven presumption of a perceived danger at the expense of an employees right to
security of tenure.
Same; Same; Same; Same; Same; The failure to prove a legitimate business concern in imposing an
employer policy cannot prejudice the employees right to be free from arbitrary discrimination based upon
stereotypes of married persons working together in one company.Petitioners contend that their policy
will apply only when one employee marries a co-employee, but they are free to marry persons other than
co-employees. The questioned policy may not facially violate Article 136 of the Labor Code but it creates
a disproportionate effect and under the disparate impact theory, the only way it could pass judicial
scrutiny is a showing that it is reasonable despite the discriminatory, albeit disproportionate, effect. The
failure of petitioners to prove a legitimate business concern in imposing the questioned policy cannot
prejudice the employees right to be free from arbitrary discrimination based upon stereotypes of married
persons working together in one company.
Same; Same; Same; Same; The protection given to labor in this jurisdiction is vast and extensive that the
Supreme Court cannot prudently draw inferences from the legislatures silence that married persons are
not protected under the Constitution and declare valid a policy based on a prejudice or stereotype.The
absence of a statute expressly prohibiting marital discrimination in our jurisdiction cannot benefit the
petitioners. The protection given to labor in our jurisdiction is vast and extensive that we cannot prudently
draw inferences from the legislatures silence that married persons are not protected under our
Constitution and declare valid a policy based on a prejudice or stereotype. Thus, for failure of petitioners
to present undisputed proof of a reasonable business necessity, we rule that the questioned policy is an
invalid exercise of management prerogative. Corollarily, the issue as to whether respondents Simbol and
Comia resigned voluntarily has become moot and academic.
Same; Illegal Dismissals; Voluntary Resignation; In voluntary resignation, an employee is compelled by
personal reason(s) to disassociate himself from employmentit is done with the intention of relinquishing
an office, accompanied by the act of abandonment.The contention of petitioners that Estrella was
pressured to resign because she got impregnated by a married man and she could not stand being
looked upon or talked about as immoral is incredulous. If she really wanted to avoid embarrassment and
humiliation, she would not have gone back to work at all. Nor would she have filed a suit for illegal
dismissal and pleaded for reinstatement. We have held that in voluntary resignation, the employee is
compelled by personal reason(s) to dissociate himself from employment. It is done with the intention of
relinquishing an office, accompanied by the act of abandonment. Thus, it is illogical for Estrella to resign
and then file a complaint for illegal dismissal. Given the lack of sufficient evidence on the part of
petitioners that the resignation was voluntary, Estrellas dismissal is declared illegal.
PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.


F.F. Bonifacio, Jr. for petitioners.
Ernesto R. Arellano for respondents.

PUNO, J.:

We are called to decide an issue of first impression: whether the policy of the employer banning spouses
from working in the same company violates the rights of the employee under the Constitution and the
Labor Code or is a valid exercise of management prerogative.
At bar is a Petition for Review on Certiorari of the Decision of the Court of Appeals dated August 3, 2004
in CA-G.R. SP No. 73477 reversing the decision of the National Labor Relations Commission (NLRC)
which affirmed the ruling of the Labor Arbiter.
Petitioner Star Paper Corporation (the company) is a corporation engaged in tradingprincipally of paper
products. Josephine Ongsitco is its Manager of the Personnel and Administration Department while
Sebastian Chua is its Managing Director.
The evidence for the petitioners show that respondents Ronaldo D. Simbol (Simbol), Wilfreda N. Comia
(Comia) and Lorna E. Estrella (Estrella) were all regular employees of the company.
Simbol was employed by the company on October 27, 1993. He met Alma Dayrit, also an employee of
the company, whom he married on June 27, 1998. Prior to the marriage, Ongsitco advised the couple that
should they decide to get married, one of them should resign pursuant to a company policy promulgated
in 1995, viz.:
1. New applicants will not be allowed to be hired if in case he/she has [a] relative, up to [the] 3rd
degree of relationship, already employed by the company.
2. In case of two of our employees (both singles [sic], one male and another female) developed a
friendly relationship during the course of their employment and then decided to get married, one
of them should resign to preserve the policy stated above.
Simbol resigned on June 20, 1998 pursuant to the company policy.
Comia was hired by the company on February 5, 1997. She met Howard Comia, a co-employee, whom
she married on June 1, 2000. Ongsitco likewise reminded them that pursuant to company policy, one
must resign should they decide to get married. Comia resigned on June 30, 2000.
Estrella was hired on July 29, 1994. She met Luisito Zuiga (Zuiga), also a co-worker. Petitioners stated
that Zuiga, a married man, got Estrella pregnant. The company allegedly could have terminated her
services due to immorality but she opted to resign on December 21, 1999.
The respondents each signed a Release and Confirmation Agreement. They stated therein that they have
no money and property accountabilities in the company and that they release the latter of any claim or
demand of whatever nature.
Respondents offer a different version of their dismissal. Simbol and Comia allege that they did not resign
voluntarily; they were compelled to resign in view of an illegal company policy. As to respondent Estrella,
she alleges that she had a relationship with co-worker Zuiga who misrepresented himself as a married
but separated man. After he got her pregnant, she discovered that he was not separated. Thus, she
severed her relationship with him to avoid dismissal due to the company policy. On November 30, 1999,
she met an accident and was advised by the doctor at the Orthopedic Hospital to recuperate for twentyone (21) days. She returned to work on December 21, 1999 but she found out that her name was on-hold
at the gate. She was denied entry. She was directed to proceed to the personnel office where one of the
staff handed her a memorandum. The memorandum stated that she was being dismissed for immoral
conduct. She refused to sign the memorandum because she was on leave for twenty-one (21) days and
has not been given a chance to explain. The management asked her to write an explanation. However,
after submission of the explanation, she was nonetheless dismissed by the company. Due to her urgent
need for money, she later submitted a letter of resignation in exchange for her thirteenth month pay.

Respondents later filed a complaint for unfair labor practice, constructive dismissal, separation pay and
attorneysfees. They averred that the aforementioned company policy is illegal and contravenes Article
136 of the Labor Code. They also contended that they were dismissed due to their union membership.
On May 31, 2001, Labor Arbiter Melquiades Sol del Rosario dismissed the complaint for lack of merit,
viz.:
[T]his company policy was decreed pursuant to what the respondent corporation perceived as
management prerogative. This management prerogative is quite broad and encompassing for it
covers hiring, work assignment, working method, 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 law, an employer is free to regulate,
according to his own discretion and judgment all the aspects of employment.9 (Citations
omitted.)
On appeal to the NLRC, the Commission affirmed the decision of the Labor Arbiter on January 11, 2002.
Respondents filed a Motion for Reconsideration but was denied by the NLRC in a Resolution dated
August 8, 2002.
They appealed to respondent court via Petition for Certiorari. In its assailed Decision dated August 3,
2004, the Court of Appeals reversed the NLRC decision, viz.:
WHEREFORE, premises considered, the May 31, 2002 (sic) Decision of the National Labor
Relations Commission is hereby REVERSED and SET ASIDE and a new one is entered as
follows:
(1) Declaring illegal, the petitioners dismissal from employment and ordering private respondents
to reinstate petitioners to their former positions without loss of seniority rights with full back wages
from the time of their dismissal until actual reinstatement; and
(2) Ordering private respondents to pay petitioners attorneys fees amounting to 10% of the
award and thecost of this suit.
On appeal to this Court, petitioners contend that the Court of Appeals erred in holding that:
1. X X X THE SUBJECT 1995 POLICY/REGULATION IS VIOLATIVE OF THE
CONSTITUTIONAL RIGHTS
TOWARDS MARRIAGE AND THE FAMILY OF EMPLOYEES AND OF
ARTICLE 136 OF THE LABOR CODE; AND
2. X X X RESPONDENTS RESIGNATIONS WERE FAR FROM VOLUNTARY.
We affirm.
The 1987 Constitution states our policy towards the protection of labor under the following provisions,
viz.:
Article II, Section 18. The State affirms labor as a primary social economic force. It shall protect
the rights of workers and promote their welfare.
xxx
Article XIII, Sec. 3. The State shall afford full protection to labor, local and overseas, organized
and unorganized, and promote full employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in accordance with

law. They shall be entitled to security of tenure, humane conditions of work, and a living wage.
They shall also participate in policy and decision-making processes affecting their rights and
benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers and
employers, recognizing the right of labor to its just share in the fruits of production and the right of
enterprises to reasonable returns on investments, and to expansion and growth.
The Civil Code likewise protects labor with the following provisions:
Art. 1700. The relation between capital and labor are not merely contractual. They are so
impressed with public interest that labor contracts must yield to the common good. Therefore, such
contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts,
closed shop, wages, working
conditions, hours of labor and similar subjects.
Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor
of the safety and decent living for the laborer.
The Labor Code is the most comprehensive piece of legislation protecting labor. The case at bar involves
Article 136 of the Labor Code which provides:
Art. 136. It shall be unlawful for an employer to require as a condition of employment or
continuation of employment that a woman employee shall not get married, or to stipulate expressly or
tacitly that upon getting married a woman employee shall be deemed resigned or separated, or to
actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of
her marriage.
Respondents submit that their dismissal violates the above provision. Petitioners allege that its policy
may appear to be contrary to Article 136 of the Labor Code but it assumes a new meaning if read
together with the first paragraph of the rule. The rule does not require the woman employee to resign.
The employee spouses have the right to choose who between them should resign. Further, they are free
to marry persons other than co-employees. Hence, it is not the marital status of the employee, per se,
that is being discriminated. It is only intended to carry out its no-employment-for-relatives-within-the-thirddegree-policy which is within the ambit of the prerogatives of management.
It is true that the policy of petitioners prohibiting close relatives from working in the same company takes
the nature of an anti-nepotism employment policy. Companies adopt these policies to prevent the hiring
of unqualified persons based on their status as a relative, rather than upon their ability. These policies
focus upon the potential employment problems arising from the perception of favoritism exhibited towards
relatives.
With more women entering the workforce, employers are also enacting employment policies specifically
prohibiting spouses from working for the same company. We note that two types of employment policies
involve spouses: policies banning only spouses from working in the same company (no-spouse
employment policies), and those banning all immediate family members, including spouses, from working
in the same company (anti-nepotism employment policies).
Unlike in our jurisdiction where there is no express prohibition on marital discrimination, there are twenty
state statutes in the United States prohibiting marital discrimination. Some state courts have been
confronted with the issue of whether no-spouse policies violate their laws prohibiting both marital status
and sex discrimination.

In challenging the anti-nepotism employment policies in the United States, complainants utilize two
theories of employment discrimination: the disparate treatment and the disparate impact. Under the
disparate treatment analysis, the plaintiff must prove that an employment policy is discriminatory on its
face. No-spouse employment policies requiring an employee of a particular sex to either quit, transfer, or
be fired are facially discriminatory. For example, an employment policy prohibiting the employer from
hiring wives of male employees, but not husbands of female employees, is discriminatory on its face.
On the other hand, to establish disparate impact, the complainants must prove that a facially neutral
policy has a disproportionate effect on a particular class. For example, although most employment
policies do not expressly indicate which spouse will be required to transfer or leave the company, the
policy often disproportionately affects one sex.
The state courts rulings on the issue depend on their interpretation of the scope of marital status
discrimination within the meaning of their respective civil rights acts. Though they agree that the term
marital status encompasses discrimination based on a persons status as either married, single,
divorced, or widowed, they are divided on whether the term has a broader meaning. Thus, their decisions
vary.
The courts narrowly interpreting marital status to refer only to a persons status as married, single,
divorced, or widowed reason that if the legislature intended a broader definition it would have either
chosen different language or specified its intent. They hold that the relevant inquiry is if one is married
rather than to whom one is married. They construe marital status discrimination to include only whether a
person is single, married, divorced, or widowed and not the identity, occupation, and place of
employment of ones spouse. These courts have upheld the questioned policies and ruled that they did
not violate the marital status discrimination provision of their respective state statutes.
The courts that have broadly construed the term marital status rule that it encompassed the identity,
occupation and employment of ones spouse. They strike down the no-spouse employment policies
based on the broad legislative intent of the state statute. They reason that the no-spouse employment
policy violate the marital status provision because it arbitrarily discriminates against all spouses of present
employees without regard to the actual effect on the individuals qualifications or work performance.
These courts also find the no-spouse employment policy invalid for failure of the employer to present any
evidence of business necessity other than the general perception that spouses in the same workplace
might adversely affect the business. They hold that the absence of such a bona fide occupational
qualification invalidates a rule denying employment to one spouse due to the current employment of the
other spouse in the same office. Thus, they rule that unless the employer can prove that the reasonable
demands of the business require a distinction based on marital status and there is no better available or
acceptable policy which would better accomplish the business purpose, an employer may not
discriminate against an employee based on the identity of the employees spouse. This is known as the
bona fide occupational qualification exception.
We note that since the finding of a bona fide occupational qualification justifies an employers no-spouse
rule, the exception is interpreted strictly and narrowly by these state courts. There must be a compelling
business necessity for which no alternative exists other than the discriminatory practice. To justify a bona
fide occupational qualification, the employer must prove two factors: (1) that the employment qualification
is reasonably related to the essential operation of the job involved; and, (2) that there is a factual basis for
believing that all or substantially all persons meeting the qualification would be unable to properly perform
the duties of the job.
The concept of a bona fide occupational qualification is not foreign in our jurisdiction. We employ the
standard of reasonableness of the company policy which is parallel to the bona fide occupational
qualification requirement. In the recent case of Duncan Association of Detailman-PTGWO and Pedro
Tecson v. Glaxo Wellcome Philippines, Inc.,we passed on the validity of the policy of a pharmaceutical
company prohibiting its employees from marrying employees of any competitor company. We held that

Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other
confidential programs and information from competitors. We considered the prohibition against personal
or marital relationships with employees of competitor companies upon Glaxos employees reasonable
under the circumstances because relationships of that nature might compromise the interests of Glaxo. In
laying down the assailed company policy, we recognized that Glaxo only aims to protect its interests
against the possibility that a competitor company will gain access to its secrets and procedures.
The requirement that a company policy must be reasonable under the circumstances to qualify as a valid
exercise of management prerogative was also at issue in the 1997 case of Philippine Telegraph and
Telephone Company v. NLRC. In said case, the employee was dismissed in violation of petitioners policy
of disqualifying from work any woman worker who contracts marriage. We held that the company policy
violates the right against discrimination afforded all women workers under Article 136 of the Labor Code,
but established a permissible exception, viz.:
[A] requirement that a woman employee must remain unmarried could be justified as a bona
fide occupational qualification, or BFOQ, where the particular requirements of the job would
justify the same, but not on the ground of a general principle, such as the desirability of spreading
work in the workplace. A requirement of that nature would be valid provided it reflects an inherent
quality reasonably necessary for satisfactory job performance. (Emphases supplied.)
The cases of Duncan and PT&T instruct us that the requirement of reasonableness must be clearly
established to uphold the questioned employment policy. The employer has the burden to prove the
existence of a reasonable business necessity. The burden was successfully discharged in Duncan but not
in PT&T.
We do not find a reasonable business necessity in the case at bar.
Petitioners sole contention that the company did not just want to have two (2) or more of its employees
related between the third degree by affinity and/or consanguinity is lame. That the second paragraph
was meant to give teeth to the first paragraph of the questioned rule is evidently not the valid reasonable
business necessity required by the law.
It is significant to note that in the case at bar, respondents were hired after they were found fit for the job,
but were asked to resign when they married a co-employee. Petitioners failed to show how the marriage
of Simbol, then a Sheeting Machine Operator, to Alma Dayrit, then an employee of the Repacking
Section, could be detrimental to its business operations. Neither did petitioners explain how this detriment
will happen in the case of Wilfreda Comia, then a Production Helper in the Selecting Department, who
married Howard Comia, then a helper in the cutter-machine. The policy is premised on the mere fear that
employees married to each other will be less efficient. If we uphold the questioned rule without valid
justification, the employer can create policies based on an unproven presumption of a perceived danger
at the expense of an employees right to security of tenure.
Petitioners contend that their policy will apply only when one employee marries a co-employee, but they
are free to marry persons other than co-employees. The questioned policy may not facially violate Article
136 of the Labor Code but it creates a disproportionate effect and under the disparate impact theory, the
only way it could pass judicial scrutiny is a showing that it is reasonable despite the discriminatory, albeit
disproportionate, effect. The failure of petitioners to prove a legitimate business concern in imposing the
questioned policy cannot prejudice the employees right to be free from arbitrary discrimination based
upon stereotypes of married persons working together in one company.
Lastly, the absence of a statute expressly prohibiting marital discrimination in our jurisdiction cannot
benefit the petitioners. The protection given to labor in our jurisdiction is vast and extensive that we
cannot prudently draw inferences from the legislatures silence that married persons are not protected
under our Constitution and declare valid a policy based on a prejudice or stereotype. Thus, for failure of
petitioners to present undisputed proof of a reasonable business necessity, we rule that the questioned

policy is an invalid exercise of management prerogative. Corollary, the issue as to whether respondents
Simbol and Comia resigned voluntarily has become moot and academic.
As to respondent Estrella, the Labor Arbiter and the NLRC based their ruling on the singular fact that her
resignation letter was written in her own handwriting. Both ruled that her resignation was voluntary and
thus valid. The respondent court failed to categorically rule whether Estrella voluntarily resigned but
ordered that she be reinstated along with Simbol and Comia.
Estrella claims that she was pressured to submit a resignation letter because she was in dire need of
money. We examined the records of the case and find Estrellas contention to be more in accord with the
evidence. While findings of fact by administrative tribunals like the NLRC are generally given not only
respect but, at times, finality, this rule admits of exceptions, as in the case at bar.
Estrella avers that she went back to work on December 21, 1999 but was dismissed due to her alleged
immoral conduct. At first, she did not want to sign the termination papers but she was forced to tender her
resignation letter in exchange for her thirteenth month pay.
The contention of petitioners that Estrella was pressured to resign because she got impregnated by a
married man and she could not stand being looked upon or talked about as immoral is incredulous. If she
really wanted to avoid embarrassment and humiliation, she would not have gone back to work at all. Nor
would she have filed a suit for illegal dismissal and pleaded for reinstatement. We have held that in
voluntary resignation, the employee is compelled by personal reason(s) to dissociate himself from
employment. It is done with the intention of relinquishing an office, accompanied by the act of
abandonment. Thus, it is illogical for Estrella to resign and then file a complaint for illegal dismissal. Given
the lack of sufficient evidence on the part of petitioners that the resignation was voluntary, Estrellas
dismissal is declared illegal.
IN VIEW WHEREOF, the Decision of the Court of Appeals in CA-G.R. SP No. 73477 dated August 3,
2004 is AFFIRMED.

SO ORDERED.
Sandoval-Gutierrez, Corona, Azcuna and Garcia, JJ., concur.
Judgment affirmed.
Notes.The right to fix the work schedules of the employees rests principally on their employer. (Sime
Darby Pilipinas, Inc. vs. National Labor Relations Commission, 289 SCRA 86 [1998])
Rules and regulations operative in a workplace issued by employers are deemed part of the contract of
employment binding upon the employees who enter the service, on the assumption that they are
knowledgeable of such rules. (Salavarria vs. Letran College, 296 SCRA 184 [1998])
[Star Paper Corporation vs. Simbol, 487 SCRA 228(2006)]

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