San Miguel Corp v. Ople
NLRC
SMC-Sales Union (PTGWO) and SMC CBA: “employees entitled to
basic monthly compensation plus commission based on their respective
sales”
• The current marketing scheme goes like this: the Route Salesmen
were assigned specific territories within which to sell their stocks
of beer, and wholesalers had to buy beer products from them.
The company introduced a new marketing scheme called the
Complementary Distribution System (CDS) whereby their beer products
would be offered for sale directly to wholesalers through San Miguel’s
sales offices instead of the Route Salesmen. The company shall then
pay back adjustment commissions to the petitioners PTGWO.
PTGWO filed for unfair labor practice and a notice of strike against the
respondent company, arguing that the CDS violated the CBA because
the CDS would allegedly reduce the salesemen’s and their truck drivers’
take-home pay. Allegedly, such a scheme would unfairly compete with
them.
HELD: CDS did not violate CBA and SMC did not indirectly bust
the union.
The CDS was a valid exercise of the company’s management
prerogatives.
− An employer is free to regulate, according to his own discretion,
all aspects of employment, as long he does not exceed the limits
of special laws. This includes hiring, work assignments, working
methods, manner of work, the tools to be used, and processes to
be followed.
To increase profits, a business enterprise may adopt means to
accomplish such goal.
As long as a company’s management prerogatives are done:
1. in good faith for the advancement of the employer’s interest and
2. not for circumventing the employees’ rights under special laws or valid
agreements, then the Court shall uphold such.
In this case, the company’s good faith is manifested by the fact that
they offered to compensate the members of its sales force via their back
adjustment commissions to make up for the commissions they might lose
because of the CDS. This proves that the company did not want to bust
their union.
PT&T v.
De Guzman was initially hired by PT&T as a reliever for an employee on
maternity leave, specifically as a Supernumerary Project Worker, for a
fixed period
− Her services as reliever were renewed twice to replace another
employee who went on leave. After the second period, her services
were terminated
− A month after, De Guzman was asked to join as a probationary
employee
In the job application form, she indicated in the portion for civil status
that she was single although she contracted marriage a few months
earlier (May)
− De Guzman made the same representation in the 2nd and 3rd
reliever agreements
When PT&T learned about the same, its branch supervisor sent a
memorandum to De Guzman requiring her to explain the discrepancy.
− Memo: She was reminded about the company’s policy of not
accepting married women for employment
− Reply: De Guzman stated that she was not aware of PT&T’s
policy regarding married women at the time, and that all along she
had not deliberately hidden her true civil status
She was thus terminated and filed a case for illegal dismissal
HELD: ILLEGALLY DISMISSED
The Court cited the Constitution, CEDAW, the Labor Code, and other
laws to emphasize the state policy towards eliminating discrimination
against women.
Article 136 of the Labor Code explicitly prohibits discrimination merely
by reason of the marriage of a female employee:
It shall be unlawful for an employer to require as a condition of
employment or continuation of employment that a woman 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 marriage.
On the other hand, it is recognized that regulation of manpower by the
company falls within the so-called management prerogatives.
− An employer is free to regulate, according to his discretion and
best business judgment, all aspects of employment, from hiring to
firing, except in cases of unlawful discrimination or those
which may be provided by law.
PT&T’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 PT&T’s assertion that it dismissed De Guzman from
employment on account of her dishonesty, the record discloses clearly
that her ties with the company were dissolved principally because of their
policy, and not merely because of her supposed acts of dishonesty:
1. Memorandum: “you’re fully aware that the company is not
accepting married women employee (sic), as it was verbally
instructed to you.”
2. Termination notice: De Guzman was made to understand that her
severance from the service was not only by reason of her
concealment of her married status but, over and on top of that,
was her violation of the policy against marriage
De Guzman’s act of concealing the true nature of her status could not
be properly characterized as willful or in bad faith as she was moved to
act that way because she wanted to retain a permanent job in a stable
company.
Carried to its logical consequences, it may even be said that PT&T’s
policy against legitimate marital bonds would encourage illicit or common-
law relations and subvert the sacrament of marriage.
Ymbong v. ABSCBN
Ymbong was a talent at ABSCBN’s regional station in Cebu, co-
anchoring Hoy Gising and TV Patrol Cebu. He also worked as a drama
and voice talent.
His stint in ABS-CBN later extended to radio when ABS-CBN Cebu
launched its AM station DYAB in 1995 where he worked as drama and
voice talent, spinner, scriptwriter and public affairs program anchor.
ABS head office issued a policy on employees seeking public office:
1. Any employee who intends to run for any public office position,
must file his/her letter of resignation, at least thirty (30) days
prior to the official filing of the certificate of candidacy.
2. Any employee who intends to join a political party or who intends
to aggressively campaign for a candidate must file a request for
leave subject to management approval.
Because of the impending May 1998 elections and based on his
immediate recollection of the policy at that time, Dante Luzon, Assistant
Station Manager of DYAB issued a memo reiterating the policy.
− However, the memorandum reads “services rendered by the
concerned employee/talent to this company will then be
temporarily suspended for the entire campaign/election period.”
− He later clarified that the suspension applies only to those who will
campaign for a political party or candidate and that those who
seek public office must resign from their position.
Ymbong notified Luzon that he would leave the radio station for a couple
of months as he would be campaigning for the administration ticket.
− However, Ymbong did not campaign for another since unknown to
ABS, he was a candidate in the election himself for the position of
councilor.
Unfortunately, Ymbong lost in the elections. Ymbong then tried to come
back to ABS, but they were refused access therero, saying that he no
longer works for ABS due to the company policy.
− ABS, without reinstating Ymbong, allowed him to wind up his
shows on the radio station.
Ymbong then filed a complaint for illegal dismissal:
− He contends that the policy runs counter to the employees’right
of suffrage
− ABS contends that their policy regarding public office was binding
against Ymbong, thus, the removal was valid.
HELD: The policy is a valid exercise of management prerogative.
Working for the government and the company at the same time is clearly
disadvantageous and prejudicial to the rights and interest not only of the
company but the public as well. In the event an employee wins in an
election, he cannot fully serve, as he is expected to do, the interest of
his employer.
In the event the employee loses in the election, the impartiality and cold
neutrality of an employee as broadcast personality is suspect, thus
readily eroding and adversely affecting the confidence and trust of the
listening public to employer’s station.
− ABS itself justifies the policy as a tool to preserve its objectivity,
neutrality, and credibility.
It is a rule that a management prerogative is upheld when it is exercised
in good faith for the advancement of the employer’s interest and not for
the purpose of circumventing the rights of the employees under laws and
agreements.
− It is well within its rights to ensure that it maintains its objectivity
and credibility and freeing itself from any appearance of
impartiality so that the confidence of the viewing and listening
public in it will not be in any way eroded.
Furthermore, the Fair Elections Act supports the view that an employee
in the news industry is deems resign upon seeking office, if so required
by the employer.
The court also said that the memorandum issued by Luzon did not
supersede the Policy since Luzon issued the memorandum beyond the
scope of his authority. The policy being valid, Ymbong was deemed
resigned upon running for office as councilor.
 Goya Inc v Goya Employees Union
Petitioner Goya, Inc. (Company), hired contractual employees from
PESO Resources Development Corporation (PESO) to perform
temporary and occasional services in its factory.
This prompted respondent Union to request for a grievance conference
on the ground that the contractual workers do not belong to the
categories of employees stipulated in the CBA ( Probationary, Regular
or Casual )
− the Union asserted that the hiring of contractual employees from
PESO is not a management prerogative and in gross violation of
the CBA tantamount to unfair labor practice (ULP).
− It noted that the contractual workers engaged have been assigned
to work in positions previously handled by regular workers and
Union members. With the hiring of contractual employees, the Union
contended that it would no longer have probationary and casual
employees from which it could obtain additional Union members.
Company argued that its act of contracting out service was a
management prerogative.
ISSUE: W/N Company’s engagement of contractual workers
from PESO was a valid exercise of management prerogative-
NO
The Company kept on harping that both the VA and the CA conceded
that its engagement of contractual workers from PESO was a valid
exercise of management prerogative.
− It is confused. To emphasize, declaring that a particular act falls
within the concept of management prerogative is significantly
different from acknowledging that such act is a valid exercise
thereof.
− What the VA and the CA correctly ruled was that the Company's
act of contracting out/outsourcing is within the purview of
management prerogative. Both did not say, however, that such act
is a valid exercise thereof.
Obviously, this is due to the recognition that the CBA provisions agreed
upon by the Company and the Union delimit the free exercise of
management prerogative pertaining to the hiring of contractual
employees.
As repeatedly held, the exercise of management prerogative is not
unlimited; it is subject to the limitations found in law, collective bargaining
agreement or the general principles of fair play and justice. Evidently,
this case has one of the restrictions — the presence of specific CBA
provisions cited by the Company.
Thus, the Company's engagement of PESO was indeed a management
prerogative.
This management prerogative of contracting out services, however, is
not without limitation. In contracting out services, the management must
be motivated by good faith and the contracting out should not be
resorted to circumvent the law or must not have been the result of
malicious arbitrary actions.
It is familiar and fundamental doctrine in labor law that the CBA is the
law between the parties and they are obliged to comply with its provisions
Tabuk Coop v. Duclan
Petitioner TAMPCO is a duly registered cooperative engaged in the
business of obtaining investments from its members. TAMPCO
introduced Special Investment Loans (SILs) to its members and
prospective borrowers.
− A year after, TAMPCO realized that the SILs adversely affected
its ability to lend under the regular loan program so its BOD issued
BA No. 55 which completely prohibited the grant of SILs.
Despite these 2 issuances, respondent Duclan and the other officers of
the cooperative (incl. its former GM) continued to approve and release
additional SILs to Falgui and Kotoken.
Eventually, Falgui claimed insolvency and Kotoken failed to pay back
her loans. Upon discovery of the said irregularity, respondent Dulcan was
suspended and was ordered to collect the amount lost with a threat that
should she fail to do so, she would be dismissed.
Duclan failed to collect and was dismissed, prompting her to file a
complaint for illegal dismissal.
HELD: VALIDLY DIMISSMISED
An employee's willful and repeated disregard of a resolution issued by a
cooperative's BOD declaring a moratorium on the approval and release
of loans, placing the resources and savings of its members in a
precarious state, constitutes willful disobedience which justifies the
penalty of dismissal under Article 282 of the Labor Code.
She cannot question the BOD’s decision as regards the General
Manager, whom the BOD permitted to retire and collect his benefits in
full. Such decision is management’s prerogative on which the courts
cannot interfere unless they violate labor laws, CBA and general
principles of fairness and justice.
- Management is not precluded from condoning the infractions of
its employees; as with any other legal right, the management
prerogative to discipline employees and impose punishment may be
waived. As far as respondent is concerned, TAMPCO chose not
to waive its right to discipline and punish her since this is its
privilege as the holder of such right.
- It cannot be said that respondent was discriminated against or
singled out, for among all those indicted, only the former General
Manager was accorded leniency; the rest, including respondent,
were treated on equal footing.
- As to why the former General Manager was allowed to retire, this
precisely falls within the realm of management prerogative; what
matters, as far as the Court is concerned, is that respondent was
not singled out and treated unfairly
 Central Azucarera v. Heirs of Apostol
Apostol was a Motor Pool Over-All Repairs Supervisor of Central
Azucarera. As a supervisor, one of the pre-requisites accorded to the
respondent was the enjoyment of a company house where the
respondent could live so long as he remains as a CAB employee.
Later, after an inspection of one of CAB’s security guards, it was found
that Apostol was using his company house, as well as other company
equipment to repair privately owned vehicles.
A memorandum was issued against him by the resident manager for
violating Rule 9 of the Rules of Discipline — Utilizing material or
equipment of the Company, including power for doing private work
without permission
− he was asked to report within 24 hours to explain in writing, the
situation
− HE WAS PUT IMMEDIATELY ON PREVENTIVE SUSPENSION
− In response, respondent Apostol said that he was repairing his
personal vehicle using his personal equipment
holding a position of trust and confidence; and (2) there must be
an act that would justify the loss of trust and confidence.
A perusal of the entirety of the records would reveal that all the
requirements for the valid dismissal of the respondent exist.
1. The position of the respondent is one of trust and
confidence and responsibility as a supervisor
2. The respondent did what he did due to his position in the
company
3. His violation of the company rules carries with it an impact
to the operations and management of a company and a
company’s decision to terminate an employee for these
purposes is a decision that should be respected

This was followed by his termination and filing of a complaint for

constructive dismissal, illegal suspension.
LA ruled in favor of the petitioner company. NLRC reversed for the
respondent Apostol
CA affirmed NLRC.
− The CA averred that, while CAB was compliant with the twin
notice requirement, the respondent's violation "cannot be
considered as so grave as to be characterized either as serious
misconduct or could lead to a loss of trust and confidence

Issue: W/N the CA usurped the petitioner company’s management

prerogative to determine the penalty commensurate to the offense
committed, which had been the subject of prior notice to Mr. Apostol,
who knew the consequences of his violation? – YES

Ratio:
According to the case of Top Form Mfg. Co., Inc. vs. NLRC,
− an employer has a distinct prerogative to dismiss an employee
if the former has ample reason to distrust the latter or if
there is sufficient evidence to show that the employee has been
guilty of breach of trust.
Following the ruling in The Coca-Cola Export Corporation v. Gacayan
− the employers have a right to impose a penalty of dismissal on
employees by reason of loss of trust and confidence. More so, in
the case of supervisors or personnel occupying positions of
responsibility, loss of trust, justifies termination of
employment.
This discourse is further clarified in the recent case of Alaska Milk
Corporation, and the Estate of Wilfred Uytengsu vs. Ernesto L. Ponce
− ruled that, in order to invoke this cause, certain requirements must
be complied with, namely: (1) the employee concerned must be