1. Duncan Association v. Glaxo welcome, G.R. No. 162994, Sept.

17, 2004
Facts:
The Employee Code of Conduct of Glaxo similarly provides that an employee is expected to inform
management of any existing or future relationship by consanguinity or affinity with co-employees or employees of
competing drug companies. If management perceives a conflict of interest or a potential conflict between such
relationship and the employees employment with the company, the management and the employee will explore the
possibility of a "transfer to another department in a non-counterchecking position" or preparation for employment
outside the company after six months.
Issue: Whether or not the prohibition imposed by Glaxo is a valid exercise of its management prerogative?
Ruling:
The challenged company policy does not violate the equal protection clause of the Constitution as petitioners
erroneously suggest. It is a settled principle that the commands of the equal protection clause are addressed only to
the state or those acting under color of its authority.24 Corollarily, it has been held in a long array of U.S. Supreme
Court decisions that the equal protection clause erects no shield against merely private conduct, however,
discriminatory or wrongful. The only exception occurs when the state29 in any of its manifestations or actions has
been found to have become entwined or involved in the wrongful private conduct.27 Obviously, however, the
exception is not present in this case. Significantly, the company actually enforced the policy after repeated requests
to the employee to comply with the policy. Indeed, the application of the policy was made in an impartial and evenhanded manner, with due regard for the lot of the employee.
2. SCA Hygiene Employees Association vs. SCA Hygience Products Corp, G.R. 182877, Aug. 9, 2010
Facts:
Respondent Corporation has an existing Collective Bargaining Agreement with Petitioner. Sometime in
2003, Respondent conducted a company-wide job evaluation as provided for in their CBA agreement and as a result,
22 daily paid rank and file employees were given a rank of Job level 2. The employees association then requested
that the 22 employees be given a raise and other benefits as the new job level constitutes a promotion. Respondent
Corporation denied this saying that the evaluation did not constitute a promotion and that the 22 employees were still
occupying the same position, albeit different job level, hence there was no promotion. The parties agreed to submit to
labor arbitration. The Arbitrator ruled in favor of the unions but upon appeal, the CA reversed the decision stating that
the job evaluation was not designed to provide any conversion or adjustment to the salaries of the employees and
that there was no promotion as the workers remained as rank and file. Hence, this petition.
Issue: Were the workers entitled to a 10% increase in salary?
Ruling:
It is a well-settled rule that labor laws do not authorize interference with the employers judgment in the conduct
of its business. The Labor Code and its implementing rules do not vest managerial authority in the labor arbiters or in
the different divisions of the National Labor Relations Commission or in the courts. The hiring, firing, transfer,
demotion, and promotion of employees have been traditionally identified as a management prerogative subject to
limitations found in the law, a collective bargaining agreement, or in general principles of fair play and justice. This is
a function associated with the employers 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. Accordingly, this Court has recognized and affirmed the prerogative of management to implement
a job evaluation program or a re-organization for as long as it is not contrary to law, morals or public policy. In the
case at bar, petitioner has failed to convince this Court that respondent acted in bad faith in implementing the job

evaluation program. There is no showing that it was intended to circumvent the law and deprived the 22 daily paid
workers the benefits they are supposed to receive.
3. Julie Bakeshop v. Henry Arnaiz, G.R. No. 173882, Feb. 15, 2012
FACTS:
Petitioners assail the CAs decision reversing the NLRCs Resolutions and ordering that petitioners to reinstate
respondents and to pay them their backwages and their other monetary benefits for having been constructively
dismissed. Reyes hired respondents as chief bakers in his three franchise branches of Julies Bakeshop.
Respondents filed separate complaints against petitioners for underpayment of wages, payment of premium pay for
holiday and rest day, service incentive leave pay, 13th month pay, COLA, and attorneys fees. Subsequently, in a
memorandum, Reyes reassigned respondents as utility/security personnel tasked to clean the outside vicinity of his
bakeshops and to maintain peace and order in the area. Upon service of the memo, respondents, however, refused
to sign the same and likewise refused to perform their new assignments by not reporting for work. Thereafter, Reyes,
in a letter-memo, directed respondents to report back for work and to explain why they failed to assume their duties
as utility/security personnel. A second letter-memorandum of the same tenor was also sent to respondents. However,
Respondents did not heed both memoranda.
ISSUE: Was the transfer/reassignment of respondents to another position without diminution in pay and other
privileges a valid exercise of management prerogative; hence, not tantamount to constructive dismissal?
RULING:
No, there was no a valid exercise of management prerogative and hence, the transfer/reassignment of
respondents to another position without diminution in pay and other privileges is still considered as constructive
dismissal. The Court held that management is free to regulate, according to its own discretion and judgment, all
aspects of employment, including hiring, work assignments, working methods, time, place and manner of work,
processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay
off of workers and discipline, dismissal and recall of workers. The exercise of management prerogative, however, is
not absolute as it must be exercised in good faith and with due regard to the rights of labor.
In constructive dismissal cases, the employer has the burden of proving that the transfer of an employee is for
just or valid ground, such as genuine business necessity. The employer must demonstrate that the transfer is not
unreasonable, inconvenient, or prejudicial to the employee and that the transfer does not involve a demotion in rank
or a diminution in salary and other benefits. "If the employer fails to overcome this burden of proof, the employees
transfer is tantamount to unlawful constructive dismissal."
In the present case, petitioners failed to satisfy the burden of proving that the transfer was based on just or valid
ground. Petitioners bare assertions of imminent threat from the respondents were mere accusations which were not
substantiated by any proof. The court cannot make conclusions based on mere assumptions and suppositions. The
Court found no compelling reason to justify the transfer of respondents from chief bakers to utility/security personnel.
What the Court saw was that respondents transfer was an act of retaliation on the part of petitioners due to the
formers filing of complaints against them, and thus, was clearly made in bad faith. The managerial prerogative to
transfer personnel must be exercised without grave abuse of discretion. It must always bear in mind the basic
elements of justice and fair play. Having the right must not be confused with the manner that right is exercised.