JMM Promotion and Management, Inc. vs.

Court of Appeals
260 SCRA 319, G.R. No. 120095 August 5, 1996

Constitutional Law; Police Power; The latin maxim salus populi est suprema lex embodies the character of the entire
spectrum of public laws aimed at promoting the general welfare of the people under the State’s police power.—The latin
maxim salus populi est suprema lex embodies the character of the entire spectrum of public laws aimed at promoting
the general welfare of the people under the State’s police power. As an inherent attribute of sovereignty which virtually
“extends to all public needs,” this “least limitable” of governmental powers grants a wide panoply of instruments
through which the state, as parens patriae gives effect to a host of its regulatory powers.

Same; Same; Police power concerns government enactments which precisely interfere with personal liberty or property in
order to promote the general welfare or the common good.—Thus, police power concerns government enactments
which precisely interfere with personal liberty or property in order to promote the general welfare or the common
good. As the assailed Department Order enjoys a presumed validity, it follows that the burden rests upon petitioners to
demonstrate that the said order, particularly, its ARB requirement, does not enhance the public welfare or was
exercised arbitrarily or unreasonably.

Same; Same; The Artist Record Book requirement and the questioned Department Order related to its issuance were
issued by the Secretary of Labor pursuant to a valid exercise of the police power.—A thorough review of the facts and
circumstances leading to the issuance of the assailed orders compels us to rule that the Artist Record Book requirement
and the questioned Department Order related to its issuance were issued by the Secretary of Labor pursuant to a valid
exercise of the police power.

Same; Same; The welfare of Filipino performing artists, particularly the women was paramount in the issuance of
Department Order No. 3.—Clearly, the welfare of Filipino performing artists, particularly the women was paramount in
the issuance of Department Order No. 3. Short of a total and absolute ban against the deployment of performing artists
to “high-risk” destinations, a measure which would only drive recruitment further underground, the new scheme at the
very least rationalizes the method of screening performing artists by requiring reasonable educational and artistic skills
from them and limits deployment to only those individuals adequately prepared for the unpredictable demands of
employment as artists abroad. It cannot be gainsaid that this scheme at least lessens the room for exploitation by
unscrupulous individuals and agencies.

Same; Same; Apart from the State’s police power, the Constitution itself mandates government to extend the fullest
protection to our overseas workers.—In any event, apart from the State’s police power, the Constitution itself mandates
government to extend the fullest protection to our overseas workers. The basic constitutional statement on labor,
embodied in Section 18 of Article II of the Constitution provides: Sec. 18. The State affirms labor as a primary social
economic force. It shall protect the rights of workers and promote their welfare. More emphatically, the social justice
provision on labor of the 1987 Constitution in its first paragraph states: 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.

Same; Same; Protection to labor does not indicate promotion of employment alone.—Obviously, protection to labor does
not indicate promotion of employment alone. Under the welfare and social justice provisions of the Constitution, the
promotion of full employment, while desirable, cannot take a backseat to the government’s constitutional duty to
provide mechanisms for the protection of our workforce, local or overseas.

Same; Same; A profession, trade or calling is a property right within the meaning of our constitutional guarantees.—A
profession, trade or calling is a property right within the meaning of our constitutional guarantees. One cannot be
deprived of the right to work and the right to make a living because these rights are property rights, the arbitrary and
unwarranted deprivation of which normally constitutes an actionable wrong.
Same; Same; No right is absolute, and the proper regulation of a profession, calling, business or trade has always been
upheld as a legitimate subject of a valid exercise of the police power by the state.— Nevertheless, no right is absolute,
and the proper regulation of a profession, calling, business or trade has always been upheld as a legitimate subject of a
valid exercise of the police power by the state particularly when their conduct affects either the execution of legitimate
governmental functions, the preservation of the State, the public health and welfare and public morals. According to the
maxim, sic utere tuo ut alienum non laedas, it must of course be within the legitimate range of legislative action to
define the mode and manner in which every one may so use his own property so as not to pose injury to himself or
others.

Same; Same; So long as professionals and other workers meet reasonable regulatory standards no such deprivation
exists.—Locally, the Professional Regulation Commission has begun to require previously licensed doctors and other
professionals to furnish documentary proof that they had either re-trained or had undertaken continuing education
courses as a requirement for renewal of their licenses. It is not claimed that these requirements pose an unwarranted
deprivation of a property right under the due process clause. So long as professionals and other workers meet
reasonable regulatory standards no such deprivation exists.

Same; Same; The equal protection clause of the Constitution does not forbid classification for so long as such
classification is based on real and substantial differences having a reasonable relation to the subject of the particular
legislation.—The equal protection clause is directed principally against undue favor and individual or class privilege. It is
not intended to prohibit legislation which is limited to the object to which it is directed or by the territory in which it is to
operate. It does not require absolute equality, but merely that all persons be treated alike under like conditions both as
to privileges conferred and liabilities imposed. We have held, time and again, that the equal protection clause of the
Constitution does not forbid classification for so long as such classification is based on real and substantial differences
having a reasonable relation to the subject of the particular legislation. If classification is germane to the purpose of the
law, concerns all members of the class, and applies equally to present and future conditions, the classification does not
violate the equal protection guarantee.
 Serrano vs. National Labor Relations Commission
323 SCRA 445, G.R. No. 117040 January 27, 2000

Labor Law; Dismissal; Absent proof that management acted in a malicious or arbitrary manner, the Court will not
interfere with the exercise of judgment by an employer.—As we pointed out in another case, the “[management of a
company] cannot be denied the faculty of promoting efficiency and attaining economy by a study of what units are
essential for its operation. To it belongs the ultimate determination of whether services should be performed by its
personnel or contracted to outside agencies . . . [While there] should be mutual consultation, eventually deference is to
be paid to what management decides.”—Consequently, absent proof that management acted in a malicious or arbitrary
manner, the Court will not interfere with the exercise of judgment by an employer.

Same; Same; Termination of petitioner’s services was for an authorized cause, i.e., redundancy.—That the phase-out of
the security section constituted a “legitimate business decision”—is a factual finding of an administrative agency which
must be accorded respect and even finality by this Court since nothing can be found in the record which fairly detracts
from such finding. Accordingly, we hold that the termination of petitioner’s services was for an authorized cause, i.e.,
redundancy. Hence, pursuant to Art. 283 of the Labor Code, petitioner should be given separation pay at the rate of one
month pay for every year of service.

Same; Same; Due Process; It is now settled that where the dismissal of one employee is in fact for a just and valid cause
and is so proven to be but he is not accorded his right to due process x x x the dismissal shall be upheld but the employer
must be sanctioned for non-compliance with the requirements of or for failure to observe, due process.—This is not the
first time this question has arisen. In Sebuguero v. NLRC, workers in a garment factory were temporarily laid off due to
the cancellation of orders and a garment embargo. The Labor Arbiter found that the workers had been illegally
dismissed and ordered the company to pay separation pay and backwages. The NLRC, on the other hand, found that this
was a case of retrenchment due to business losses and ordered the payment of separation pay without backwages. This
Court sustained the NLRC’s finding. However, as the company did not comply with the 30-day written notice in Art. 283
of the Labor Code, the Court ordered the employer to pay the workers P2,000.00 each as indemnity. The decision
followed the ruling in several cases involving dismiss-als which, although based on any of the just causes under Art. 282,
were effected without notice and hearing to the employee as required by the implementing rules. As this Court said: “It
is now settled that where the dismissal of one employee is in fact for a just and valid cause and is so proven to be but he
is not accorded his right to due process, i.e., he was not furnished the twin requirements of notice and opportunity to be
heard, the dismissal shall be upheld but the employer must be sanctioned for non-compliance with the requirements of,
or for failure to observe, due process.”—

Same; Same; Same; Rule reversed a long standing policy that the dismissal or termination is illegal if effected without
notice to the employee.—The rule reversed a long standing policy theretofore followed that even though the dismissal is
based on a just cause or the termination of employment is for an authorized cause, the dismissal or termination is illegal
if effected without notice to the employee. The shift in doctrine took place in 1989 in Wenphil Corp. v. NLRC. In
announcing the change, this Court said: x x x However, the petitioner must nevertheless be held to account for failure to
extend to private respondent his right to an investigation before causing his dismissal. The rule is explicit as above
discussed. The dismissal of an employee must be for just or authorized cause and after due process. Petitioner
committed an infraction of the second requirement. Thus, it must be imposed a sanction for its failure to give a formal
notice and conduct an investigation as required by law before dismissing petitioner from employment. Considering the
circumstances of this case petitioner must indemnify the private respondent the amount of P1,000.00. The measure of
this award depends on the facts of each case and the gravity of the omission committed by the employer.

Same; Same; Same; The Due Process Clause of the Constitution is a limitation on government powers.—The first is that
the Due Process Clause of the Constitution is a limitation on governmental powers. It does not apply to the exercise of
private power, such as the termination of employment under the labor Code. This is plain from the text of Art. III, §1 of
the Constitution, viz.: “No person shall be deprived of life, liberty, or property without due process of law . . . .”—The
reason is simple: Only the State has authority to take the life, liberty, or property of the individual. The purpose of the
Due Process Clause is to ensure that the exercise of this power is consistent with what are considered civilized methods.
Same; Same; Same; Notice and hearing under the Due Process Clause before the power of organized society are brought
to bear upon the individual.—The second reason is that notice and hearing are required under the Due Process Clause
before the power of organized society are brought to bear upon the individual. This is obviously not the case of
termination of employment under Art. 283. Here the employee is not faced with an aspect of the adversary system. The
purpose for requiring a 30-day written notice before an employee is laid off is not to afford him an opportunity to be
heard on any charge against him, for there is none. The purpose rather is to give him time to prepare for the eventual
loss of his job and the DOLE an opportunity to determine whether economic causes do exist justifying the termination of
his employment.

Same; Same; Same; Not all notice requirements are requirements of due process.—Not all notice requirements are
requirements of due process. Some are simply part of a procedure to be followed before a right granted to a party can
be exercised. Others are simply an application of the Justinian precept, embodied in the Civil Code, to act with justice,
give everyone his due, and observe honesty and good faith toward one’s fellowmen. Such is the notice requirement in
Arts. 282-283. The consequence of the failure either of the employer or the employee to live up to this precept is to
make him liable in damages, not to render his act (dismissal or resignation, as the case may be) void. The measure of
damages is the amount of wages the employee should have received were it not for the termination of his employment
without prior notice. If warranted, nominal and moral damages may also be awarded.

Same; Same; Same; Employer’s failure to comply with the notice requirement does not constitute a denial of due process
but a mere failure to observe a procedure for the termination of employment which makes the termination of
employment merely ineffectual.—We hold, therefore, that, with respect to Art. 283 of the Labor Code, the employer’s
failure to comply with the notice requirement does not constitute a denial of due process but a mere failure to observe
a procedure for the termination of employment which makes the termination of employment merely ineffectual. It is
similar to the failure to observe the provisions of Art. 1592, in relation to Art. 1191, of the Civil Code in rescinding a
contract for the sale of immovable property. Under these provisions, while the power of a party to rescind a contract is
implied in reciprocal obligations, nonetheless, in cases involving the sale of immovable property, the vendor cannot
exercise this power even though the vendee defaults in the payment of the price, except by bringing an action in court
or giving notice of rescission by means of a notarial demand. Consequently, a notice of rescission given in the letter of an
attorney has no legal effect, and the vendee can make payment even after the due date since no valid notice of
rescission has been given.

Same; Same; Same; Whether the employee is reinstated or only granted separation pay, he should be paid full
backwages if he has been laid off without written notice at least 30 days in advance.—In sum, we hold that if in
proceedings for reinstatement under Art. 283, it is shown that the termination of employment was due to an authorized
cause, then the employee concerned should not be ordered reinstated even though there is failure to comply with the
30-day notice requirement. Instead, he must be granted separation pay in accordance with Art. 283. x x x If the
employee’s separation is without cause, instead of being given separation pay, he should be reinstated. In either case,
whether he is reinstated or only granted separation pay, he should be paid full backwages if he has been laid off without
written notice at least 30 days in advance.
 United Laboratories, Inc. vs. Domingo
658 SCRA 159, G.R. No. 186209 September 21, 2011

Labor Law; Security of Tenure; Management Prerogatives; Constructive Dismissal; Words and Phrases; Constructive
dismissal is a derivative of dismissal without cause; an involuntary resignation, nay, a dismissal in disguise—it occurs
when there is cessation of work because continued employment is rendered impossible, unreasonable, or unlikely as
when there is a demotion in rank or diminution in pay or when a clear discrimination, insensibility, or disdain by an
employer becomes unbearable to the employee leaving the latter with no other option but to quit.—The concept of
constructive dismissal is inapplicable to respondents. Constructive dismissal is a derivative of dismissal without cause; an
involuntary resignation, nay, a dismissal in disguise. It occurs when there is cessation of work because continued
employment is rendered impossible, unreasonable, or unlikely as when there is a demotion in rank or diminution in pay
or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee leaving the
latter with no other option but to quit. In turn, dismissal without cause is prohibited because of the Constitutional
security of tenure of workers.

Same; Same; Same; Same; It should be remembered that the entitlement of workers to security of tenure is correlative to
the right of enterprises to reasonable returns on investments—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.—It should be remembered, however, that the entitlement of workers to security of
tenure is correlative to the right of enterprises to reasonable returns on investments. The rights are measured each in
relation to the other. In one section under the same title of Article XIII, the Constitution mandates that “all workers shall
be entitled to security of tenure” and commands at the same time in the same way, that the State shall recognize the
right of enterprises to reasonable returns on investments, and to expansion and growth. Such that, in this jurisdiction,
we recognize that management has a wide latitude to regulate, according to his own discretion and judgment, all
aspects of employment, including the freedom to transfer and reassign employees according to the requirements of its
business. 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, on
the other hand, are subject to limitations provided by law, collective bargaining agreements, and general principles of
fair play and justice.

Same; Same; Same; Same; Security of tenure from which springs the concept of constructive dismissal is not an absolute
right.—Security of tenure from which springs the concept of constructive dismissal is not an absolute right. It cannot be
pleaded to avoid the transfer or assignment of employees according to the requirements of the employer’s business.
Such transfer or assignment becomes objectionable only when it is not for “reasonable returns on investments,” and for
“expansion and growth” which are constitutionally recognized employer’s rights, but is sought merely as a convenient
cover for oppression. No such thing transpired in the instant case.
 Duncan Association of Detailman-PTGWO vs. Glaxo Wellcome Philippines, Inc.
438 SCRA 343, G.R. No. 162994 September 17, 2004

Labor Law; Dismissals; Glaxo’s policy prohibiting an employee from having a relationship with an employee of a
competitior company is a valid exercise of management prerogative.—No reversible error can be ascribed to the Court
of Appeals when it ruled that Glaxo’s policy prohibiting an employee from having a relationship with an employee of a
competitor company is a valid exercise of management prerogative. Glaxo has a right to guard its trade secrets,
manufacturing formulas, marketing strategies and other confidential programs and information from competitors,
especially so that it and Astra are rival companies in the highly competitive pharmaceutical industry.

Same; Same; While our laws endeavor to give life to the constitutional policy on social justice and the protection of labor,
it does not mean that every labor dispute will be decided in favor of the workers; The law also recognizes that
management has rights which are also entitled to respect and enforcement in the interest of fair play.—That Glaxo
possesses the right to protect its economic interests cannot be denied. No less than the Constitution recognizes the right
of enterprises to adopt and enforce such a policy to protect its right to reasonable returns on investments and to
expansion and growth. Indeed, while our laws endeavor to give life to the constitutional policy on social justice and the
protection of labor, it does not mean that every labor dispute will be decided in favor of the workers. The law also
recognizes that management has rights which are also entitled to respect and enforcement in the interest of fair play.

Same; Same; The challenged company policy does not violate the equal protection clause of the Constitution.—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. 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 state in any of its manifestations or actions has been found to have become entwined or
involved in the wrongful private conduct. Obviously, however, the exception is not present in this case.

Same; Same; Glaxo does not impose an absolute prohibition against relationships between its employees and those of
competitor companies; What the company merely seeks to avoid is a conflict of interest between the employee and the
company that may arise out of such relationships.—From the wordings of the contractual provision and the policy in its
employee handbook, it is clear that Glaxo does not impose an absolute prohibition against relationships between its
employees and those of competitor companies. Its employees are free to cultivate relationships with and marry persons
of their own choosing. What the company merely seeks to avoid is a conflict of interest between the employee and the
company that may arise out of such relationships.

Same; Same; Constructive Dismissal; Definition of Constructive Dismissal.—The Court finds no merit in petitioners’
contention that Tecson was constructively dismissed when he was transferred from the Camarines Norte-Camarines Sur
sales area to the Butuan City-Surigao City-Agusan del Sur sales area, and when he was excluded from attending the
company’s seminar on new products which were directly competing with similar products manufactured by Astra.
Constructive dismissal is defined as a quitting, an involuntary resignation resorted to when continued employment
becomes impossible, unreasonable, or unlikely; when there is a demotion in rank or diminution in pay; or when a clear
discrimination, insensibility or disdain by an employer becomes unbearable to the employee. None of these conditions
are present in the instant case. The record does not show that Tecson was demoted or unduly discriminated upon by
reason of such transfer.
 Philippine Telegraph and Telephone Company vs. NLRC
272 SCRA 596, G.R. No. 118978 May 23, 1997

Labor Law; Dismissals; Petitioner’s policy of not accepting or considering as disqualified from work any woman worker
who contracts marriage runs afoul of the test of, and the right against discrimination afforded all women workers by our
labor laws and by no less than the Constitution.—In the case at bar, petitioner’s policy of not accepting or considering as
disqualified from work any woman worker who contracts marriage runs afoul of the test of, and the right against,
discrimination, afforded all women workers by our labor laws and by no less than the Constitution. Contrary to
pettioner’s assertion that it dismissed private respondent from employment on account of her dishonesty, the record
discloses clearly that her ties with the company were dissolved principally because of the company’s policy that married
women are not qualified for employment in PT&T, and not merely because of her supposed acts of dishonesty.

Same; Same; While loss of confidence is a just cause for termination of employment, it should not be simulated.—Verily,
private respondent’s act of concealing the true nature of her status from PT&T could not be properly characterized as
willful or in bad faith as she was moved to act the way she did mainly because she wanted to retain a permanent job in a
stable company. In other words, she was practically forced by that very same illegal company policy into
misrepresenting her civil status for fear of being disqualified from work. While loss of confidence is a just cause for
termination of employment, it should not be simulated. It must rest on an actual breach of duty committed by the
employee and not on the employer’s caprices. Furthermore, it should never be used as a subterfuge for causes which
are improper, illegal, or unjustified.

Same; Same; The primary standard of determining regular employment is the reasonable connection between the
activity performed by the employee in relation to the business or trade of the employer.—Private respondent, it must be
observed, had gained regular status at the time of her dismissal. When she was served her walking papers on January
29, 1992, she was about to complete the probationary period of 150 days as she was contracted as a probationary
employee on September 2, 1991. That her dismissal would be effected just when her probationary period was winding
down clearly raises the plausible conclusion that it was done in order to prevent her from earning security of tenure. On
the other hand, her earlier stints with the company as reliever were undoubtedly those of a regular employee, even if
the same were for fixed periods, as she performed activities which were essential or necessary in the usual trade and
business of PT&T. The primary standard of determining regular employment is the reasonable connection between the
activity performed by the employee in relation to the business or trade of the employer.

Same; Same; Policy of Philippine Air Lines requiring that prospective flight attendants must be single and that they will be
automatically separated from the service once they marry declared void in Zialcita, et al. v. Philippine Air Lines.—It would
be worthwhile to reflect upon and adopt here the rationalization in Zialcita, et al. vs. Philippine Air Lines, a decision that
emanated from the Office of the President. There, a policy of Philippine Air Lines requiring that prospective flight
attendants must be single and that they will be automatically separated from the service once they marry was declared
void, it being violative of the clear mandate in Article 136 of the Labor Code with regard to discrimination against
married women.

Same; Same; While it is true that the parties to a contract may establish any agreements, terms and conditions that they
may deem convenient, the same should not be contrary to law, morals, good customs, public order or public policy.—
Petitioner’s policy is not only in derogation of the provisions of Article 136 of the Labor Code on the right of a woman to
be free from any kind of stipulation against marriage in connection with her employment, but it likewise assaults good
morals and public policy, tending as it does to deprive a woman of the freedom to choose her status, a privilege that by
all accounts inheres in the individual as an intangible and inalienable right. Hence, while it is true that the parties to a
contract may establish any agreements, terms, and conditions that they may deem convenient, the same should not be
contrary to law, morals, good customs, public order, or public policy. Carried to its logical consequences, it may even be
said that petitioner’s policy against legitimate marital bonds would encourage illicit or common-law relations and
subvert the sacrament of marriage.

Same; Same; The relations between capital and labor are not merely contractual, impressed as they are with so much
public interest that the same should yield to the common good.—Parenthetically, the Civil Code provisions on the
contract of labor state that the relations between the parties, that is, of capital and labor, are not merely contractual,
impressed as they are with so much public interest that the same should yield to the common good. It goes on to intone
that neither capital nor labor should visit acts of oppression against the other, nor impair the interest or convenience of
the public. In the final reckoning, the danger of just such a policy against marriage followed by petitioner PT&T is that it
strikes at the very essence, ideals and purpose of marriage as an inviolable social institution and, ultimately, of the
family as the foundation of the nation. That it must be effectively interdicted here in all its indirect, disguised or
dissembled forms as discriminatory conduct derogatory of the laws of the land is not only in order but imperatively
required.