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SMC VS NLRC Facts: innovation program was proposed by the petitioner among its employees, who will submit

to the corporation ideas and suggestions to be beneficial to the corporation. Private respondent, Rustico Vega, submitted an innovation proposal, this was suppose to eliminate certain alleged defects in the quality and taste of the product. However the petitioner rejected the proposal alleging that it is unacceptable. The PR filed a complaint against the petitioner before the regional arbitration branch of the ministry of labor and employment. The PR claimed entitlement to cash prize for the award of his proposal. The petitioner counterclaimed that the labor arbiter does not have jurisdiction that the PR bypassed the grievance machinery procedure under the CBA between them and available remedies provided under the rules of the innovation program. Issue: W/N labor arbiter and NLRC have jurisdiction Held: ART. 217. Jurisdiction of Labor Arbiters and the commission. (a) The Labor Arbiters shall have theoriginal and exclusive jurisdiction to hear and decide within thirty (30) working days after submission of the case by the parties for decision, the following cases involving are workers, whether agricultural or non-agricultural: 1. Unfair labor practice cases; 2. Those that workers may file involving wages, hours of work and other terms and conditions of employment; 3. All money claims of workers, including those based on non-payment or underpayment of wages, overtime compensation, separation pay and other benefits provided by law or appropriate agreement, except claims for employees' compensation, social security, medicare and maternity benefits; 4. Cases involving household services; and 5. Cases arising from any violation of Article 265 of this; Code, including questions involving the legality of strikes and lockouts. (b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters. (Emphasis supplied) The pivotal question to Our mind is whether or not the Labor Code has any relevance to the reliefs sought by the plaintiffs. For if the Labor Code has no relevance, any discussion concerning the statutes amending it and whether or not they have retroactive effect is unnecessary. It is obvious from the complaint that the plaintiffs have not alleged any unfair labor practice. Theirs is a simple action for damages for tortious acts allegedly committed by the defendants. Such being the case, the governing statute is the Civil Code and not the Labor Code. It results that the orders under review are based on a wrong premise.

the Court notes that the SMC Innovation Program was essentially an invitation from petitioner Corporation to its employees to submit innovation proposals, and that petitioner Corporation undertook to grant cash awards to employees who accept such invitation and whose innovation suggestions, in the judgment of the Corporation's officials, satisfied the standards and requirements of the Innovation Program 10 and which, therefore, could be translated into some substantial benefit to the Corporation. Such undertaking, though unilateral in origin, could nonetheless ripen into an enforceable contractual (facio ut des) 11 obligation on the part of petitioner Corporation under certain circumstances. Thus, whether or not an enforceable contract, albeit implied arid innominate, had arisen between petitioner Corporation and private respondent Vega in the circumstances of this case, and if so, whether or not it had been breached, are preeminently legal questions, questions not to be resolved by referring to labor legislation and having nothing to do with wages or other terms and conditions of employment, but rather having recourse to our law on contracts.

PEPSI VS GALANG Facts: the PRs were employees of the petitioner, they were suspected of complicity in the irregular disposition of empty pepsi cola bottles. Petitioners filed a criminal complaint for theft against them but this was later withdrawn and substituted with a criminal complaint for falsification of private document however the complaint was dismissed. Allegedly after an administrative investigation, the PRs were dismissed by the petitioner. The PRs then filed a complaint for illegal dismissal with the regional arbitration board. They also instituted in the RTC a separate civil action against the petitioners for damages arising from what they claimed to be their malicious prosecution. The petitioner moved to dismiss the civil complaint on the ground that the trial court had no jurisdiction over the case because it involved employee-employer relations that were exclusively cognizable by the labor arbiter. Issus: w/n the RTC has jurisdiction over the civil complaint filed by the PRs Held: Art 217 it is obvious from the complaint that the plaintiffs have not alleged any unfair labor practice. Theirs is a simple action for damages for tortious acts allegedly committed by the defendants. Such being the case, the governing statute is the Civil Code and not the Labor Code. It results that the orders under review are based on a wrong premise. It is the character of the principal relief sought that appears essential, in this connection. Where such principal relief is to be granted under labor legislation or a collective bargaining agreement, the case should fall within the jurisdiction of the Labor Arbiter and the NLRC, even though a claim for damages might be asserted as an incident to such claim.

It does not appear that there is a "reasonable causal connection" between the complaint and the relations of the parties as employer and employees. The complaint did not arise from such relations and in fact could have arisen independently of an employment relationship between the parties. No such relationship or any unfair labor practice is asserted. What the employees are alleging is that the petitioners acted with bad faith when they filed the criminal complaint which the Municipal Trial Court said was intended "to harass the poor employees" and the dismissal of which was affirmed by the Provincial Prosecutor "for lack of evidence to establish even a slightest probability that all the respondents herein have committed the crime imputed against them." This is a matter which the labor arbiter has no competence to resolve as the applicable law is not the Labor Code but the Revised Penal Code.

MEDINA VS BARTOLOME Facts: the petitioners filed a joint criminal complaint for oral defamation against the respondent for maliciously humilitating the petitioners with the use of slanderous language and other words and that the respondent enjoyed the act of dismissing the petitioners. The respondent averred that the court does not have jurisdiction over the the instant petition. The petitioners counterclaimed that the complaint for civil damages is clearly not based on an employer-employee relationship but on the manner of plaintiffs dismissal and the effects are flowing therefrom. Issue: w/n the court has jurisdiction Held: It is noticed that the defamatory remarks standing alone per se had been made the sole cause under the first cause of action, but it is alleged in connection with the manner in which the plaintiffs had been dismissed, and whether the statute of limitations would apply or not would be a matter of b evidence. IT has been alreadly settled by jurisprudence that mere asking for reinstatement does not remove from the CFI jurisdiction over the damages. The case must involve unfair labor practices to bring it within the jurisdiction of the CIR (now NLRC). The pivotal question to Our mind is whether or not the Labor Code has any relevance to the reliefs sought by the plaintiffs. For if the Labor Code has no relevance, any discussion concerning the statutes amending it and whether or not they have retroactive effect is unnecessary. It is obvious from the complaint that the plaintiffs have not alleged any unfair labor practice. Theirs is a simple action for damages for tortious acts allegedly committed by the defendants. Such being the case, the governing statute is the Civil Code and not the Labor Code. It results that the orders under review are based on a wrong premise.

SAN MIGUEL EMPLOYEES UNION VS BERSAMIRA Facts: San mig entered into contracts for merchandising services with lipercon and drite . these companies are independent contractors . in said contracts, it was expressly understood and agreed that

the workers employed by the contractors were to be paid by the latter, and that none of them were to be deemed employees or agents of San mig. There was to be no empoyer-employee relation between the contractors and or workers and on one hand, and san mig on the other.petitioner is a union with whom san mig had executed a CBA. Under this CBA, provides that temporary, probationary, or contract employees and workers are excluded from the bargaining unit and therefore, outside the scope of this agreement. The union advised san mig that some lipercon and drite workers had signed up for union membership and sought regularization of their employment with SMC., that they have been continuously working for 6 mos to 15 yrs for sanmig even appearing to be contractual workers, that their work is netiher causal nor seasonal. It was then demanded that the employment status of these workers be regularized. The union filed a notice of strike for unfair labor practice, cba violations and union busting. The respondent on the other hand, filed a verified complaint for injunction and damages which was granted by the court. The union then assailed the lack of jurisdiction of the court over the nature of action. Issue: w/n the court has jurisdiction over the case Held: A "labor dispute" as defined in Article 212 (1) of the Labor Code includes "any controversy or matter concerning terms and conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing, or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee." While it is SanMig's submission that no employer-employee relationship exists between itself, on the one hand, and the contractual workers of Lipercon and D'Rite on the other, a labor dispute can nevertheless exist "regardless of whether the disputants stand in the proximate relationship of employer and employee" (Article 212 [1], Labor Code, supra) provided the controversy concerns, among others, the terms and conditions of employment or a "change" or "arrangement" thereof (ibid). Put differently, and as defined by law, the existence of a labor dispute is not negative by the fact that the plaintiffs and defendants do not stand in the proximate relation of employer and employee. As the case is indisputably linked with a labor dispute, jurisdiction belongs to the labor tribunals. As explicitly provided for in Article 217 of the Labor Code, prior to its amendment by R.A. No. 6715 on 21 March 1989, since the suit below was instituted on 6 March 1989, Labor Arbiters have original and exclusive jurisdiction to hear and decide the following cases involving all workers including "1. unfair labor practice cases; 2. those that workers may file involving wages, hours of work and other terms and conditions of employment; ... and 5. cases arising from any violation of Article 265 of this Code, including questions involving the legality of striker and lockouts. ..." Article 217 lays down the plain command of the law.
Terms, tenure and conditions of their employment and the arrangement of those terms are thus involved bringing the matter within the purview of a labor dispute.


Facts: - Borromeo was a Manager of CB assigned at Regional Office inCebu City. However, prior to his last promotion and then unknown to theChina Bank, Borromeo, without authority from the ExecutiveCommittee or Board of Directors, approved several DAUD/BPaccommodations amounting to P2,441,375 in favor of JoelManiwan, with Edmundo Ramos as surety. DAUD/BP is theacronym for checks "Drawn Against Uncollected Deposits/BillsPurchased." Such checks, which are not sufficiently funded by cash, are generally not honored by banks. Further, a DAUD/BP accommodation is a credit accommodation granted to a few and select bank clients through the withdrawal of uncollected oruncleared check deposits from their current account. Under thepetitioner Banks standard operating procedures, DAUD/BPaccommodations may be granted only by a bank officer uponexpress authority from its Executive Committee or Board of Directors. May 23, 1997 - Nancy D. Yang, the CBanks Senior VP andHeadBranch Banking Group, informed the B (through amemorandum) that his approval of the DAUD/BPa ccommodations in favor of Maniwan w/o authority and/orapproval of higher management violated the petitioner BanksCode of Ethics. As such, B was directed to restitute the amount.

of P1,507,736.79 representing 90% of the total loss of P1,675,263.10 incurred by the petitioner Bank.However, in view of his resignation and considering the yearsof service in the petitioner Bank, the management earmarkedonly P836,637.08 from the respondents total separation benefitsor pay.- In the Letter dated May 26, 1997 addressed to B, RemediosCruz, CBanks VP of the HR Division, again informed him that themanagement would withhold the sum of P836,637.08 from hisseparation pay, mid-year bonus and profit sharing.- The said amount would be released upon recovery of the sumsdemanded from Maniwan in Civil Case No. 97174 filed againsthim by CBank with the RTC in Cagayan de Oro City.Consequently, the B, through counsel, made a demand on theCBank for the payment of his separation pay and other benefits.- The CBank maintained its position to withhold the sum of P836,637.08.- B filed with the NLRC, the complaint for payment of separationpay, mid-year bonus, profit share and damages against thepetitioner Bank.- The Labor Arbiter (LA)-dismissed the Bs complaint, for B hadcommitted a serious infraction when, in blatant violation of thebanks SOP and policies, he approved the DAUD/BPaccommodations in favor of Maniwan without authorization bysenior management. B even had admitted this breach in theletters that he wrote to the senior officers of CBank.- LA- made the finding that B offered to assign or convey aproperty that he owned to CBank, as well as proposed thewithholding of the benefits due him to answer for the losses thatthe petitioner Bank incurred on account of unauthorizedDAUD/BP accommodations.- LA also held that CBanks act of withholding the benefits duethe respondent was justified under its Code of Ethics and that Bas an officer of the CBank, was bound by the provisions of thesaid Code.- B appealed to the NLRC.- NLRC- affirmed in toto the findings and conclusions of the LA.And ruled that the LA committed no grave abuse of discretionwhen he decided the case on the basis of the position paperssubmitted by the parties.- B file a MR but the NLRC denied his motion. So he filed apetition for certiorari with the CA.- CA -set aside the decision of the NLRC and ordered that therecords of the case be remanded to the Labor Arbiter for furtherhearings on the factual issues involved.- CBank filed a MR but the CA denied as it found no compellingground to warrant reconsideration. ISSUES

Procedural WON the CA erred in remanding the case to the Labor Arbiter/WON Bs right to due process was violated by CBank since noadministrative investigation was conducted prior to thewithholding of his separation benefits Substantive WON B pledged his benefits as guarantee for the losses the bankincurred resulting from the unauthorized DAUD/BPaccommodations in favor of Maniwan/WON CBank could impose the penalty of restitution against B HELD Procedural YES, CA committed reversible error/NO, No formal administrative investigation was necessary Reasoning - It is settled that administrative bodies like the NLRC, includingthe Labor Arbiter, are not bound by the technical niceties of thelaw and procedure and the rules obtaining in courts of law.- Rules of evidence are not strictly observed in proceedingsbefore administrative bodies like the NLRC, where decisions maybe reached on the basis of position papers.- The holding of a formal hearing or trial is discretionary with theLabor Arbiter and is something that the parties cannot demandas a matter of right - As a corollary, trial-type hearings are not even required as thecases may be decided based on verified position papers, withsupporting documents and their affidavits.- The assailed CA decisions directive requiring him to conductfurther hearings constitutes undue interference with the LaborArbiters discretion.- To require the conduct of hearings would be to negate therationale and purpose of the summary nature of the proceedingsmandated by the Rules and to make mandatory the applicationof the technical rules of evidence.- As long as the decisions of the LA and the NLRC are devoid of any arbitrariness in the process of their deduction from theevidence proffered by the parties, all that is left is for the Courtto stamp its affirmation.- In this case, the factual findings of the Labor Arbiter and thoseof the NLRC concur on various points.- Due process simply demands an opportunity to be heard andthis opportunity was not denied Borromeo as he was, throughthe memoranda issued to him, given notice of the chargeagainst him. He was given the opportunity to be heard andconsidering his admissions, it became unnecessary to hold anyformal investigation. Substantive YES to both.

LA and NLRC concurred in finding that B indeedpledged his benefits and CBanks Code of Ethics expresslysanctions the imposition of restitution/forfeiture of benefits apartfrom or independent of the other penalties. Reasoning -CBanks Code of Ethics-Restitution may be imposedindependently or together with any other penalty in case of lossor damage to the property of the Bank, its employees, clients orother parties doing business with the Bank. The Bank may recover the amount involved by means of salary deduction or whatever legal means that will prom pt offenders to pay the amount involved. But restitution shallin no way mitigate the penalties attached to the violation orinfraction.-Forfeiture of benefits/privileges may also beeffected in cases where infractions or violations wereincurred in connection with or arising from theapplication/availment thereof. - It is well recognized that company policies andregulations are, unless shown to be grossly oppressive orcontrary to law, generally binding and valid on theparties and must be complied with until finally revised oramended unilaterally or preferably through negotiationor by competent authority. - Moreover, management has the prerogative to discipline itsemployees and to impose appropriate penalties on erringworkers pursuant to company rules and regulations. With morereason should these truisms apply to the respondent,who, by reason of his position, was required to act judiciously and to exercise his authority in harmony withcompany policies. - Obviously, in view of his voluntary separation from thepetitioner Bank, the imposition of the penalty of reprimand orsuspension would be futile. The petitioner Bank was left with noother recourse but to impose the ancillary penalty of restitution.It was certainly within the petitioner Banks prerogative toimpose on the respondent what it considered the appropriatepenalty under the circumstances pursuant to its company rulesand regulations.- Significantly, B is not wholly deprived of his separationbenefits. The LA stressed in his decision, "the separationbenefits due the complainant (Borromeo) were merelywithheld." The NLRC made the same conclusion.- B was not just a rank and file employee. At the time of hisresignation, he was the Asst. VP, Branch Banking Group for theMindanao area of CBank. His position

carried authority for theexercise of independent judgment and discretion, characteristicof sensitive posts in corporate hierarchy. As such,he was, asearlier intimated, required to act judiciously and to exercise hisauthority in harmony with company policies. Obiter - CBanks business is essentially imbued with public interest andowes great fidelity to the public it deals with.- It is expected to exercise the highest degree of diligence in theselection and supervision of their employees.- As a corollary, and like all other business enterprises, itsprerogative to discipline its employees and to imposeappropriate p enalties on erring workers pursuant to companyrules and regulations must be respected.- DAYAN v BPI ~ The law, in protecting the rights of labor,authorized neither oppression nor selfdestruction of anemployer company which itself is possessed of rights that must be entitled to recognition and respect Disposition Petition is GRANTED. CAS DECISION ANDRESOLUTION REVERSED AND SET ASIDE. NLRCS DECISION,affirming that of the Labor Arbiter, is REINSTATED

DELES VS NLRC Facts: petitioner was an employee of the respondent company (first phil industrial corp), he was the shift supervisor. He was placed under suspension for remiss with his duties after the respondent company conducted formal investigation (faulted in batch change). The petitioner, believing that the 3 month suspension is too harch, filed a complaint before NLRC. While in suspension, he was reported to have allowed two bar girls to enter the premises of the company, thus the respondent company requires petitioner to submit his written explanation. Another incident happened, it was found out that the petitioner tampered the automatic shutdown of gravitometer. Again he was asked by the respondent company to explain in writing. After conducting another investigation, he was dismissed by the respondent company for violations and breach of existing company policies. Petitioner, amended his complaint and added illegal dismissal with the claim of unpaid wages. Issue: w/n the RC has the right to regulate all aspects if the employment Held: petitioner loses sight of the fact that the right of an employer to regulate all aspects of employment is well settled. This right, aptly called management prerogative, gives employers the freedom to regulate, according to their discretion and best judgment, all aspects of employment, including work assignment, working methods, processes to be followed, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of workers.[10] In general, management has the prerogative to discipline its employees and to impose appropriate

penalties on erring workers pursuant to company rules and regulations. Thus, we find petitioners protestation unfounded. For, based on the record, respondent company imposed said penalty pursuant to the Company Code of Discipline which the labor agencies find to be fair and in accordance with law. In fact, the penalty for violating the provision on Neglect of Duty ranges from warning to dismissal depending on the gravity of the offense.[ petitioner, is tasked to perform key functions; he is bound by an exacting work ethic. He should have realized that his position requires the full trust and confidence of his employer in every exercise of managerial discretion insofar as the conduct of his employers business is concerned. However, as found a quo, he committed acts which betrayed the trust and confidence reposed on him. YRASUEGUI VS PAL Facts: the petitioner was dismissed for not qualifying with the requirements of pal in terms of weight. He was a cabin crew and for several years have been instructed by pal to reduce his weight. However, petitioner repeatedly refused to report for weight check . he was required to explain his refusal to undergo weight checks. From then on, nothing was heard from the petitioner, Pal finallt served petitioner a notice of administration charge for violation of company standards on weight requirements. The petitioner submitted his answer that he had been condoned by pal since no action was taken by the company. Then in 1993, petitioner was formally informed by pal that due to his inability to attain his ideal weight, his services were considered terminated. Petitioner filed a complaint for illegal dismissal against pal Issue: w/n pal has sufficient grounds to dismiss the petitioner Held: Yes. 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 establishcontinuing 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 employmentbecause 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[45] In short, the test of reasonableness of the company policy is used because it is parallel to BFOQ.[68] BFOQ is valid provided it reflects an inherent quality reasonably necessary for satisfactory job performance. Verily, there is no merit to the argument that BFOQ cannot be applied if it has no supporting statute. Too, the Labor Arbiter,[71] NLRC,[72] and CA[73] 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.[74] 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.

PHIL AMERICAN LIFE VS GREMAJE Facts: gremaje was employed by the phil American life as assistant vp and head of the pensions dept and in concurrentcapacity as trust officer of the philam savings bank. However petitioner herein (centeno and sotelo) offered her 250000 for her to vacate her position by December 1998, gremaje declined considering that there is no valid reason for her to leave. petitiners issued her a memorandum, instructing her to transfer to legal department, gremaje protested the sudden transfer. She also made of record that her department surpassed the target fund level volume set by the company. The respondents on the other hand appointed another person as replacement of her. During the Christmas season she was not able to receive giveaways, her name was not in the legal dept, pensions dept nor the list of employees in philamlife. This prompted the gremaje to file an instant case for illegal and constructive dismissal against the petitioner herein. The labor arbiter and NLRC ruled in favo0r of the petitioners, ruled that the company was just exercising a legitimate management prerogative. Respondent appealed before CA which reversed the decision of the LA and NLRC. Issue: w/n her transfer was a legitimate exercise of management prerogative Held: e have held that the right and privilege of the employer to exercise the so-called management prerogative is recognized, and the courts will not interfere with it. This privilege is inherent in the right of employers to control and manage their enterprise effectively. The right of employees to security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to change their assignments or to transfer them. Managerial prerogatives, however, are subject to limitations provided by law, collective bargaining agreements, and general principles of fair

play and justice.25 In the case of Blue Dairy Corporation v. NLRC,26 we explained the test for determining the validity of the transfer of employees, as follows: 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. 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. Should the employer fail to overcome this burden of proof, the employee's 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. ELMER M. MENDOZA, petitioner, vs. RURAL BANK OF LUCBAN, respondent G.R. No. 155421 July 7, 2004 Facts: On April 25, 1999, the Board of Directors of the Rural Bank of Lucban, Inc., issued Board Resolution Nos. 99-52 and 99-53, that in line with the policy of the bank to familiarize bank employees with the various phases of bank operations and further strengthen the existing internal control system[,] all officers and employees are subject to reshuffle of assignments. Moreover, this resolution does not preclude the transfer of assignment of bank officers and employees from the branch office to the head office and vice-versa." Petitioner filed a Complaint before Arbitration Branch No. IV of the National Labor Relations Commission (NLRC). The Complaint -- for illegal dismissal, underpayment, separation pay and damages. Petitioner argues that he was compelled to file an action for constructive dismissal, because he had been demoted from appraiser to clerk and not given any work to do, while his table had been placed near the toilet and eventually removed. He adds that the reshuffling of employees was done in bad faith, because it was designed primarily to force him to resign. After the NLRC denied his Motion for Reconsideration, petitioner brought before the CA a Petition for

Certiorari assailing the foregoing Resolution. The Court of appeals Find that no grave abuse of discretion could be attributed to the NLRC. Hence, this Petition. Issue: Whether the petitioner was constructively dismissed from his employment? Held: The Petition has no merit. Constructive dismissal is defined as an involuntary resignation resorted to when continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution of pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee. Jurisprudence recognizes the exercise of management prerogatives. For this reason, courts often decline to interfere in legitimate business decisions of employers. Indeed, labor laws discourage interference in employers' judgments concerning the conduct of their business. The law must protect not only the welfare of employees, but also the right of employers. In the pursuit of its legitimate business interest, management has the prerogative to transfer or assign employees from one office or area of operation to another -- provided there is no demotion in rank or diminution of salary, benefits, and other privileges; and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause. This privilege is inherent in the right of employers to control and manage their enterprise effectively. The right of employees to security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to change their assignments or to transfer them. The law protects both the welfare of employees and the prerogatives of management. Courts will not interfere with business judgments of employers, provided they do not violate the law, collective bargaining agreements, and general principles of fair play and justice. The transfer of personnel from one area of operation to another is inherently a managerial prerogative that shall be upheld if exercised in good faith -- for the purpose of advancing business interests, not of defeating or circumventing the rights of employees. "The reshuffling of its employees was done in good faith and cannot be made the basis of a finding of constructive dismissal. WHEREFORE, this Petition is DENIED, and the June 14, 2002 Decision and the September 25, 2002 Resolution of the Court of Appeals are AFFIRMED. Costs against petitioner.

PHIL AMERICAN EMROIDERIES VS EMBROIDERY AND GARMENT UNION Facts: the embroidery and garment union filed a complaint against the petitioner on the grounds of unfair labor practice. The company through albert Nasser, announced the closure of the machine made department, thereby dismissing all the members of the complainant, and the opening of a new department, the knitting department. The union members who were dismissed reiterated their unconditional offer to work, the company rejected their collective offer and instead insisted that the application be made individually by the union has been the practice of the company to lay off employees who could not fulfil their quotas. Issue: w/n the closing of the machine made department was justifiable and has legitimate reason Held: Even on the assumption that the workers in the department were already members of a labor union at the inception of the operation of the business in 1956, it cannot deter or prevent the decision of respondent to close the business if to proceed any further will only mean financial ruin or business collapse. What more in a case like the one at bar when it is distinctly shown that the motive of the complaining witnesses to suddenly join the union, after respondent had already decided to close the department, was to prevent respondent from proceeding with its decision to close and to secure for themselves a continuing employment? It is very clear from the records that the decision to close the department was for a justifiable and legitimate reason. To attribute the closing of the machine made department and the consequential separation of the employees affected therein, to the affiliation of the complaining witnesses to the complainant union is to subscribe to the illegal motive or purpose of the complainants and disregard entirely the legitimate and legal ground which motivated respondent company in closing the department, for I believe, no authority or law can stop an employer from closing operation of its business when it is on the red, much less are the employees empowered, by reason of their union affiliation or color, to compel the company to continue operation just so to secure for them (laborers or employees) continuous employment (Pages 8-9, Tabigne, J. - Dissenting, Annex "B" of Petition). we are convinced that petitioner company was not guilty of unfair labor practice as charged, and that the closure of its department where the members of respondent union were employed was not an act of discrimination or a means of dismissal but rather the result of continued losses in operations a ground that is entirely justified by law.

BUISER VS LEOGARDO FaCTS: the petitioners were employed by the private respondent (general telephone directory company) as sales representatives and charged with the duty of solicitiong adverstisements for inclusion in a telephone directory. The petitoners and the PR entered into an employment contracts, stipulated therein is that they are on a probationary status for a period of 18 mos, which during the period, the PR can terminated the petitioners even without notice of termination. The petitioners were dismissed by the PR for failing to meet their sales quota. They contended that under 281-282 of the labor code,

having served the company for over 6 mos, have become automatically regular employees, notwithstanding the agreement on the contrary. Issue: w/n the parties can agree on probation period Held: Generally, the probationary period of employment is limited to six (6) months. The exception to this general rule is When the parties to an employment contract may agree otherwise, such as when the same is established by company policy or when the same is required by the nature of work to be performed by the employee. In the latter case, there is recognition of the exercise of managerial prerogatives in requiring a longer period of probationary employment, especially where the employee must learn a particular kind of work such as selling, or when the job requires certain qualifications, skills, experience or training. Under the Labor Code, six (6) months is the general probationary period ' but the probationary period is actually the period needed to determine fitness for the job. This period, for lack of a better measurement is deemed to be the period needed to learn the job. The purpose of this policy is to protect the worker at the same time enable the employer to make a meaningful employee selection. In the case at bar, the petitioners' failure to meet the sales quota assigned to each of them constitute a just cause of their dismissal, regardless of the permanent or probationary status of their employment. Failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to inefficiency may constitute just cause for dismissal. Such inefficiency is understood to mean failure to attain work goals or work quotas, either by failing to complete the same within the alloted reasonable period, or by producing unsatisfactory results. This management prerogative of requiring standards availed of so long as they are exercised in good faith for the advancement of the employer's interest. TRADERS ROYAL BANK VS NLRC Facts: the private are employees of the petitioner. They filed a complaint against the petitioners for the diminution of benefits inclusing the holiday, midyear and year-end bonuses. Petitioner on the other hand, insisted that it had paid the employees holiday pay. The practice of giving them bonuses at year ends would depend on how profitable the operation of the bank had been. Issue: w/n the employees of the petioner can demand for an increase in their bonuses Held: A bonus is "a gratuity or act of liberality of the giver which the recipient has no right to demand as a matter of right" (Aragon vs. Cebu Portland Cement Co., 61 O.G. 4597). "It is something given in addition to what is ordinarily received by or strictly due the recipient." The granting of a bonus is basically a management prerogative which cannot be forced upon the employer "who may not be obliged to assume the onerous burden of granting bonuses or other benefits aside from the employee's basic salaries or wages" . . . (Kamaya Point Hotel vs. National Labor Relations Commission, Federation of Free Workers and Nemia Quiambao, G.R. No. 75289, August 31, 1989).

It is clear from the above-cited rulings that the petitioner may not be obliged to pay bonuses to its employees. The matter of giving them bonuses over and above their lawful salaries and allowances is entirely dependent on the profits, if any, realized by the Bank from its operations during the past year. the Bank may not be forced to distribute bonuses which it can no longer afford to pay and, in effect, be penalized for its past generosity to its employees.