MANAGEMENT PREROGATIVE San Miguel Corporation vs NLRC SAN MIGUEL CORPORATION VS. NLRCGR. NO. 99266 MARCH 2, 1999PURISIMA, J.: FACTS1. In J u l y 19 9 0, S an M ig u el C orp or at i on , al l egi n g th e n eed t o s tr eam l in e its op er at i ons due to financial losses, shut down some of its plants and declared 55 positions as redundant, listed as follows: seventeen (17) employees in the Business Logistics Division ("BLD"), seventeen (17) in the Ayala Operations Center (AOC), and eighteen (18) in the Magnolia-Manila Buying Station ("MagnoliaMBS").2. C ons eq u ent l y, t h e pr i vat e r es p on d en t u ni on f il ed s ev er al gri e v anc e c as es f or t h e said retrenched employees, praying for the redeployment of the said employees to the other divisions of the company.3 .G ri e v anc e pr oc e ed i ngs wer e c on d uc t ed . H ow e ver , m os t of t h e em p l oy e es wer e redeployed, while others accepted early retirement. As a result only 17 employees remained when the parties proceeded to the third level (Step 3) of the grievanceprocedure.4.I n a m e eti n g on O c t ob er 2 6, 1 9 90 , p et iti on er inf or m ed pri v at e r es p on d ent u n i on th at if by October 30, 1990, the remaining 17 employees could not yet be redeployed; their services would be terminated on November 2, 1990. The said meeting adjourned when Mr. Daniel S. L. Borbon II, a representative of the union, declared that there was nothing more to discuss in view of the deadlock. ISSUE 1.W het h er or n ot S an Mi gu el C or p or ati on ex erc is ed a m a n ag em en t pr er og at i ve. 2.W het h er or n ot S an Mi gu el C or p or ati on vi ol at ed th e C ol l ec t i ve B ar g ai ni n g Agreement. HELD 1. YES. A b ol it i on of d ep ar t m ents or p os iti on s in t h e c om p an y is on e of th e r ec og ni z ed management prerogatives. Noteworthy is the fact that the private respondent does not question the validity of the business move of petitioner. In the absence of proof that the act of petitioner was ill-motivated, it is presumed that petitioner San Miguel Corporation acted in good faith. In fact, petitioner acceded to the demands of the private respondent union by redeploying most of the employees involved; such that from an original 17 excess employees in BLD, 15 were successfully redeployed. In AOC, out of the 17 original excess, 15 were redeployed. In the Magnolia Manila Buying Station, out of 18 employees, 6 were redeployed and only 12 were terminated. 2.NO , al l eg ed vi ol at i on of t h e C BA, is c h arg e ab l e ag ai ns t th e pr i vat e r es p on d en t u ni on . In abandoning the grievance proceedings and stubbornly refusing to avail of the remedies under the CBA, private respondent violated the mandatory provisions of the collective bargaining agreement. Collective Bargaining Deadlock is defined as "the situation between the labor and the management of the company where there is failure in the collective bargaining negotiations resulting in a stalemate" This situation, is non-existent in the present case since there is a Board assigned on the third level (Step 3), of the grievance machinery to resolve the conflicting views of the parties. Instead of asking the Conciliation Board composed of

five representatives each from the company and the union, to decide the conflict, private respondent union declared a deadlock, and thereafter, filed a notice of strike. The main purpose of the parties in adopting a procedure in the settlement of their disputes is to prevent a strike. This procedure must be followed in its entirety if it is to achieve its objective. x x x strikes held in violation of the terms contained in the collective bargaining agreement are illegal, specially when they provide for conclusive arbitration clauses. These agreements must be strictly adhered to and respected if their ends have to be achieved.

Jimmy Areno, Jr. vs. Sky Cable PCC Baguio G.R. No. 180302, February 5, 2010 Facts: Petitioner was an employee of Respondent Sky Cable. Pursuant to a complaint filed by a co-worker against the Petitioner, Respondent Sky Cable conducted an administrative investigation to determine the truth on the matter. Both parties were notified and given the opportunity to be heard. After the proper investigation, the panel found the allegations to be true, and by virtue of the Companys Code of Discipline, the Petitioner was suspended for three days. Despite the order of suspension, however, the Petitioner continued to report for work. When the matter was brought to the attention of the Respondent, the latter issued a 1st Notice of Termination, requiring the Petitioner to explain why he should not be terminated for insubordination. Unsatisfied by Petitioners explanation, Respondent terminated the Petitioner, giving notice therefor. Aggrieved, petitioner filed a case for illegal dismissal. The Labor Arbiter, NLRC and eventually the CA all agreed that the dismissal was valid. Unsatisfied, Petitioner filed the present petition for Certiorari.

Issue: Is the petition meritorious? Ruling: No. The decision to suspend petitioner was rendered after investigation and a finding by respondent that petitioner has indeed made malicious statements against a coemployee. It is axiomatic that appropriate disciplinary sanction is within the purview of management imposition. What should not be overlooked is the prerogative of an employer company to prescribe reasonable rules and regulations necessary for the proper conduct of its business and to provide certain disciplinary measures in order to implement said rules to assure that the same would be complied with. Respondent then acted within its rights as an employer when it decided to exercise its management prerogative to impose disciplinary measure on its erring employee. The suspension and subsequent termination were therefore valid. Pantoja vs. Sca Hygiene Products G.R. 163554, April 23, 2010 Facts:

Respondent, a corporation engaged in the manufacture, sale and distribution of industrial paper and tissue products, employed petitioner as a utility man on March 15, 1987. In a Notice of Transfer, respondent informed petitioner of its reorganization plan and offered him a position at Paper Mill No. 5 under the same terms and conditions of employment in anticipation of the eventual closure and permanent shutdown of Paper Mill No. 4 effective May 5, 1999. The closure and concomitant reorganization is in line with respondents decision to streamline and phase out the companys industrial paper manufacturing operations due to financial difficulties brought about by the low volume of sales and orders for industrial paper products. However, petitioner rejected respondents offer for his transfer. Thus, a notice of termination of employment was sent to petitioner as his position was declared redundant by the closure of Paper Mill No. 4. He then received his separation pay and thereafter executed a release and quitclaim in favor of respondent. On June 20, 2000, petitioner filed a complaint for illegal dismissal against respondent assailing his termination as without any valid cause. On March 23, 2001, the Labor Arbiter rendered a Decision dismissing petitioners complaint for lack of merit. Upon appeal by petitioner, the NLRC reversed the Labor Arbiters Decision by finding petitioners separation from employment illegal. The CA reversed the NLRCs Decision and reinstated the Labor Arbiters Decision dismissing the compliant. It ruled that there was no illegal dismissal as the act of petitioner in rejecting the transfer and accepting the separation pay constitutes a valid basis for the separation from employment. Issue: Is the respondent guilty of illegal dismissal? Ruling: No. Respondents right of management prerogative was exercised in good faith. Respondent presented evidence of the low volume of sales and orders for the production of industrial paper in 1999 which inevitably resulted to the companys decision to streamline its operations. This fact was corroborated by respondents VPTissue Manufacturing Director and was not disputed by petitioner. Exercising its management prerogative and sound business judgment, respondent decided to cut down on operational costs by shutting down one of its paper mill. In this case, the abolishment of Paper Mill No. 4 was undoubtedly a business judgment arrived at in the face of the low demand for the production of industrial paper at the time. Despite an apparent reason to implement a retrenchment program as a cost-cutting measure, respondent, however, did not outrightly dismiss the workers affected by the closure of Paper Mill No. 4 but gave them an option to be transferred to posts of equal rank and pay. This is an indication of good faith on respondents part as it exhausted other possible measures other than retrenchment. Besides, the employers prerogative to bring down labor costs by retrenching must be exercised essentially as a measure of last resort, after less drastic means have been tried and found wanting. Giving the workers an option to be transferred without any diminution in rank and pay specifically belie petitioners allegation that the alleged streamlining scheme was implemented as a ploy to ease out employees, thus, the absence of bad faith. Apparently, respondent

implemented its streamlining or reorganization plan with good faith, not in an arbitrary manner and without prejudicing the tenurial rights of its employees. PHARMACIA and UPJOHN, INC. (now PFIZER) VS. RICARDO P. ALBAYDA G.R. NO. 172724, AUGUST23, 2010 FACTS Pharmacia and Upjohn, Inc. were to distinct company. After merging, respondent was designated by petitioner Pharmacia and Upjohn (Pharmacia) as District Sales Manager. Sometime in1 99 9, t h er e was a d is tr ic t t erri t ori al c onf ig ur at i on f or th e n ew m ar k eti ng an d s al es dir ec t i on f or th e y ear 20 0 0. T h er eaf t er, r es p on d en t was as s i gn ed in t o an ot h er ar ea. R es p on d en t r equ es t ed t o b e r e t a i n e d t o h i s o r i g i n a l a r e a a n d c l a i m e d h e c o u l d n o t i m p r o v e t h e s a l e s o f p r o d u c t s i f h e w a s assigned to an unfamiliar territory. However, his request was denied. Despite several offer made by petitioner to respondent, the company concluded that it appeared to them that respondent would not accept any reason for the movement to another area and that nothing is acceptable to him except a Western Visayas assignment. R es p on d en t r ec ei v ed a m em or an d u m n otif yi ng h i m of t h e c omp an y s d ec is i on t o terminate his services after he repeatedly refused to report for work despite due notice. As a result, Respondent filed a complaint for constructive dismissal. ISSUE W het h er or n ot t h e r eas s i g n m ent of r es p on d en t was a v al id ex erc is e of p eti ti on ers m an ag em en t prerogative. HELD Yes. The SC rules that the CA had overstepped its legal mandate by reversing the findings of fact of the LA and the NLRC as it appears that both decisions were based on substantial evidence. There is no proof of arbitrariness or abuse of discretion in the process by which each body arrived at its own conclusions. Thus, th e CA s h oul d h av e d ef err ed t o s uc h s p ec i al i z ed ag en c i es wh ic h ar e c ons i d er ed exp er ts in m att ers wit hi n their jurisdictions. It is dangerous for the CA and even the SC to look into the wisdom of a management prerogative. Certainly, on e c an arg u e f or or ag ai ns t t h e pros and cons of tr an s f err i ng r es p on d en t t o an ot h er t err it or y. A bs ent a definite finding that such exercise of prerogative was tainted with arbitrariness and unreasonableness, the C A s h o u l d have left the s am e to petitioners better judgmen t. The r u l e i s w e l l s e t t l e d t h a t l a b o r l a w s d is c our ag e i nt er f er enc e wi th an em pl o y er's j ud g m en t i n t h e c ond uc t of his b us i n es s . E ven as th e l aw is s olic it ous of t h e welf ar e of em p l oy e es , it m us t als o pr o t ec t t h e ri g ht of an em p l oy er t o ex erc is e wh at ar e clearly management prerogatives. As long as the company's exercise of the same is in good faith to advance its interest and not for the purpose of defeating or circumventing the rights of employees under the laws or valid agreements, such exercise will be upheld.

DOCTRINE: Dis m is s al; d u e p r oc es s . I n t er m in at i on pr oc eed i n gs of e m pl o ye es , pr oc ed u r al du e pr oc es s c ons is ts of t h e t win r eq u ir em en ts of n ot ic e an d h ear i ng . T h e em p l o yer mus t f ur nis h th e em p l oy e e wit h t wo written notices before the termination of employment can be effected: (1) the first apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the second informs the employee of the employers decision to dismiss him. The requirement of a hearing is complied with as long as there was an opportunity to be heard, and not necessarily that an actual hearing was conducted. S e p ar ati on p a y. In th os e i ns t anc es wh er e an em pl o y ee h as b een v al id l y d is m is s ed f or c aus es oth er t h an s er i ous m is c on d uc t or t h os e r ef l ec ti n g on h is m or al c h ar ac t er, s ep ar ati on p ay m a y s t i ll b e gr an t ed af t er giving considerable weight to his long years of employment. In this case, equity considerations dictate that respondents tenure be computed from 1978, the year when respondent started working for Upjohn, and not only from 1996, when the merger of Pharmacia and Upjohn took place. M an ag em en t pr er og at i ve; t r ans f er of em p l oy ees . J uris pr ud enc e r ec og n iz es th e e xerc is e of m an ag em en t 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. T o d et er m in e th e v al id it y of th e t r ans f er of em p l oy ees , t h e em p l oy er m us t s h ow th at t h e tr ans f er is n ot un r eas on ab l e, i nc on ven i en t, or pr ej ud ic i al t o th e em p l oy ee; n or d oes it i n vol v e a d em ot i on in r an k or adiminution of his salaries, privileges and other benefits. Should the employer fail to overcome this burden of proof, the employees transfer shall be tantamount to constructive dismissal. EMPLOYMENT RESTRICTION

Issue: WON the one year employment ban imposed by Solidbank upon Rivera is null and void for being unreasonable and oppressive and for constituting restraint of trade? Held: The post retirement competitive employment ban is unreasonable because it has no geographical limits. Article 1306 of the NCC provides that the contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order or public policy. On the face of the Undertaking, the post retirement competitive employment ban is unreasonable because it has no geographical limits; respondent is barred from accepting any kind of employment in any competitive bank within the proscribed period. Although the period of one year may appear reasonable, the matter of whether the restriction is reasonable or unreasonable cannot be ascertained with finality solely from the terms and conditions of the Undertaking, or even in tandem with the Release, Waiver and Quitclaim. Employer is burdened to establish that a restrictive covenant barring an employee from accepting a competitive employment after retirement or resignation is not an unreasonable or oppressive, or in undue or unreasonable restraint of trade, thus, unenforceable for being repugnant to public policy. As the Court stated in Ferrazzini v.Gsell ,cases involving contracts in restraint of trade are to be judged according to their circumstances, to wit: x x x There are two principal grounds on which the doctrine is founded that a contract in restraint of trade is void as against public policy. One is, the injury to the public by being deprived of the restricted partys industry; and the other is, the injury to the party himself by being precluded from pursuing his occupation, and thus being prevented from supporting himself and his family. In cases where an employee assails a contract containing a provision prohibiting him or her from accepting competitive employment as against public policy, the employer has to adduce evidence to prove that the restriction is reasonable and not greater than necessary to protect the employers legitimate business interests. The restraint may not be unduly harsh or oppressive in curtailing the employees legitimate efforts to earn a livelihood and must be reasonable in light of sound public policy

Rivera vs Solidbank (2006) G.R. 163269 Facts: Rivera had been working for the Solidbank since 1977.In Dec 1994, deciding to devote his time and attention to his poultry business in Cavite, Rivera applied for retirement. Subsequently, Solidbank required Rivera to sign an undated Release, Waiver and Quitclaim, Rivera acknowledged receipt of the net proceeds of his separation and retirement benefits and promised that "[he] would not, at any time, in any manner whatsoever, directly or indirectly engage in any unlawful activity prejudicial to the interest of Solidbank, its parent, affiliate or subsidiary companies, their stockholders, officers, directors, agents or employees, and their successors in interest and will not disclose any information concerning the business of Solidbank, its manner or operation, its plans, processes, or data of any kind. "On May 1995, the Equitable employed Rivera as Manager of its Credit Investigation and Appraisal Division of its Consumers Banking Group. Upon discovering this, Solidbank First VicePresident for HRD Celia Villaros a wrote a letter informing Rivera that he had violated the Undertaking. She likewise demanded the return of all the monetary benefits he received in consideration of the SRP within five (5) days from receipt; otherwise, appropriate legal action would be taken against him, when Rivera refused, Solidbank filed complaint.