D.

PREVENTIVE SUSPENSION
Preventive suspension may be defined as the temporary removal of an employee
charged for violation of company rules from his present status or position. Preventive
suspension is usually imposed against subject employee while the company is
conducting an investigation for his alleged violation in order to prevent him from causing
further harm or damage to the company or his co-employees.
Preventive suspension is not a disciplinary measure, and should not be confused with
suspension imposed as a penalty.

Legal Basis
The right of employer to impose preventive suspension is not found in the Labor Code
itself.
The oft-cited legal basis for imposition of preventive suspension is Section 8 and
Section 9 of Rule XXIII, Book V, of the Omnibus Rules Implementing the Labor Code,
as amended by Department Order No. 9, Series of 1997, which read as follows:
Section 8. Preventive suspension. The employer may place the worker
concerned under preventive suspension only if his continued employment poses
a serious and imminent threat to the life or property of the employer or of his coworkers.
Section 9. Period of suspension. No preventive suspension shall last longer than
thirty (30) days. The employer shall thereafter reinstate the worker in his former
or in a substantially equivalent position or the employer may extend the period of
suspension provided that during the period of extension, he pays the wages and
other benefits due to the worker. In such case, the worker shall not be bound to
reimburse the amount paid to him during the extension if the employer decides,
after completion of the hearing, to dismiss the worker.
Interestingly, the above-quoted provisions are no longer reproduced in the present
Omnibus Rules, as amended by Department Order No. 40, Series of 2003, which
supersedes Department Order 9-97.
It is opined, however, that the removal of said provisions from the omnibus rules did not
diminish the right of the employer to impose preventive suspension, considering that the
justification for upholding the right is necessity itself, i.e., when continued employment
poses threats to the life of the employer or his co-worker.

When Employee may be Placed under Preventive Suspension

The employer may place the worker concerned under preventive suspension
only if his continued employment poses a serious and imminent threat to the life or
property of the employer or of his co-workers.
It is not the nature or gravity of the charge against the employee that should be
made the basis for placing him under preventive suspension.
Thus, in a case, the Court held that it is improper for the employer to place under
preventive suspension employees charged of violation of school rules and regulations
on the wearing of uniform, tardiness or absence, and maliciously spreading false
accusations against the school.

Maximum Period of Preventive Suspension

The maximum period of preventive suspension under the rule is 30 days. After
that period, the worker must be reinstated to his former position, or in a substantially
equivalent position. If the employer does not want to reinstate his employee for
whatever reason, he has the option to extend the period of suspension with the
condition that he must pay the worker his wages and other benefits during the entire
period of extension.
The latter option is called payroll reinstatement (as opposed to the former which
is called actual reinstatement).
In case the employer opts for payroll reinstatement, the employee is not bound to
reimburse wages and benefits paid even if he is ultimately dismissed from service, and
regardless of whether the ground for preventive suspension is proved to be valid.

Payment of Wages during Preventive Suspension

The employee placed under preventive suspension is not entitled to payment of
wages. This rule, however, presupposes that the suspension is valid. If the suspension
is invalid or illegal, the employee shall be entitled to payment of wages during the entire
period of illegal suspension.
Likewise, if the suspension is extended beyond the 30-day limit, the employee
shall be entitled to wages and other benefits for the period of the extension.

When Preventive Suspension amounts to Constructive Dismissal

When preventive suspension exceeds the maximum period allowed without
reinstating the employee either by actual or payroll reinstatement or when preventive
suspension is for indefinite period constructive dismissal will set in.

Source:
http://www.laborlaw.usc-law.org/2009/08/02/preventive-suspension-during-terminationproceeding/

CASES UNDER PREVENTIVE SUSPENSION

MARICALUM MINING CORPORATION vs. ANTONIO DECORION

GR 158637
April 12, 2006

FACTS
Decorion was a regular employee of Maricalum Mining who started out as a Mill
Mechanic assigned to the Concentrator Maintenance Department and was later
promoted to Foreman I. On April 11, 1996, the Concentrator Maintenance Supervisor
called a meeting which Decorion failed to attend as he was then supervising the
workers under him. Because of his alleged insubordination for failure to attend the
meeting, he was placed under preventive suspension on the same day. He was also
not allowed to report for work the following day. A month after or on May 12, 1996,
Decorion was served a Notice of Infraction and Proposed Dismissal to enable him to
present his side. On May 15, 1996, he submitted to the Personnel Department his
written reply to the notice. A grievance meeting was held upon Decorions request on
June 5, 1996, during which he manifested that he failed to attend the meeting on April
11, 1996 because he was then still assigning work to his men. He maintained that he
has not committed any offense and that his service record would show his efficiency.On
July 23, 1996, Decorion filed before the NLRC-RAB a complaint for illegal dismissal and
payment of moral and exemplary damages and attorneys fees.
In the meantime, the matter of Decorions suspension and proposed dismissal
was referred to Atty. Roman G. Pacia, Jr., Maricalum Minings Chief and Head of Legal
and Industrial Relations, who issued a memorandum on August 13, 1996,
recommending that Decorions indefinite suspension be made definite with a warning
that a repetition of the same conduct would be punished with dismissal. Maricalum
Minings Resident Manager issued a memorandum on August 28, 1996, placing
Decorion under definite disciplinary suspension of six (6) months which would include
the period of his preventive suspension which was made to take effect retroactively from
April 11, 1996 to October 9, 1996.
On September 4, 1996, Decorion was served a memorandum informing him of
his temporary lay-off due to Maricalum Minings temporary suspension of operations
and shut down of its mining operations for six (6) months, with the assurance that in the
event of resumption of operations, he would be reinstated to his former position without
loss of seniority rights. Decorion, through counsel, wrote a letter to Maricalum Mining on
October 8, 1996, requesting that he be reinstated to his former position. The request

was denied with the explanation that priority for retention and inclusion in the skeleton
force was given to employees who are efficient and whose services are necessary
during the shutdown.
Maricalum Mining insists that Decorion was not dismissed but merely
preventively suspended on April 11, 1996. Petitioner contends that constructive
dismissal occurs only after the lapse of more than six (6) months from the time an
employee is placed on a floating status as a result of temporary preventive suspension
from employment. Thus, it goes on to argue, since Decorion was suspended for less
than six (6) months, his suspension was legal.
Decorion, on the other hand, maintained that he was dismissed from employment
on April 11, 1996 as he was then prevented from reporting for work. He avers that had
the intention of Maricalum Mining been to merely suspend him, it could have manifested
this intention by at least informing him of his suspension. As it happened, he was not
served with any notice relative to why he was disallowed to report for work. The
grievance meeting conducted on June 5, 1996 was allegedly called only after he had
repeatedly requested reconsideration of his dismissal.
ISSUE
Whether or not respondent was dismissed by petitioner company.

HELD
The SC held that sections 8 and 9 of Rule XXIII, Book V of the Implementing
Rules are explicit that preventive suspension is justified where the employees
continued employment poses a serious and imminent threat to the life or property of the
employer or of the employees co-workers. Without this kind of threat, preventive
suspension is not proper.
In this case, Decorion was suspended only because he failed to attend a meeting
called by his supervisor. There is no evidence to indicate that his failure to attend the
meeting prejudiced his employer or that his presence in the companys premises posed
a serious threat to his employer and co-workers. The preventive suspension was clearly
unjustified. What is more, Decorions suspension persisted beyond the 30-day period
allowed by the Implementing Rules. Preventive suspension which lasts beyond the
maximum period allowed by the Implementing Rules amounts to constructive dismissal.
Similarly, from the time Decorion was placed under preventive suspension on
April 11, 1996 up to the time a grievance meeting was conducted on June 5, 1996, 55
days had already passed. Another 48 days went by before he filed a complaint for illegal
dismissal on July 23, 1996. Thus, at the time Decorion filed a complaint for illegal
dismissal, he had already been suspended for a total of 103 days.

Maricalum Minings contention that there was as yet no illegal dismissal at the
time of the filing of the complaint is evidently unmeritorious. Decorions preventive
suspension had already ripened into constructive dismissal at that time. While actual
dismissal and constructive dismissal do take place in different fashion, the legal
consequences they generate are identical. Decorions employment may not have been
actually terminated in the sense that he was not served walking papers but
there is no doubt that he was constructively dismissed as he was forced to quit
because continued employment was rendered impossible, unreasonable or unlikely by
Maricalum Minings act of preventing him from reporting for work.
Petition is denied.

PHILIPPINE AIRLINES, INC vs NATIONAL LABOR RELATIONS COMMISSION

GR 114307
July 8, 1998

FACTS
1. Private respondent Edilberto Castro was hired as manifesting clerk by petitioner.
2. On March 12, 1984, respondent, together with co-employee Arnaldo Olfindo,
were apprehended by government authorities while about to board a flight en
route to Hongkong in possession of P39, 850.00 and P6, 000.00 respectively, in
violation of Central Bank (CB) Circular 265, as amended by CB Circular 383.
3. When informed of the incident, PAL required respondent to explain within 24
hours why he should not be charged administratively.
4. Upon failure of the latter to submit his explanation thereto, he was placed on
preventive suspension effective March 27, 1984 for grave misconduct.
5. Respondent, through PALEA, sought not only the dismissal of his case but
likewise prayed for his reinstatement, to which appeal, PAL failed to make a reply
thereto.
6. Three years and six months after his suspension, PAL issued a resolution finding
respondent guilty of the offense charged but nonetheless reinstated the latter
explaining that the period within which he was out of work shall serve as his
penalty for suspension.
7. Upon his reinstatement, respondent filed a claim against PAL for back wages
and salary increases granted under the CBA covering the period of his
suspension which the latter, however, denied on account that under the existing
CBA, an employee under suspension is not entitled to the CBA salary increases
granted during the period covered by his penalty.
8. Judgment is rendered limiting the suspension imposed upon the complainant to
one month, and the respondent to pay complainant his salaries, benefits, and
other privileges from April 26, 1984 up to September 18, 1987 and to grant
complainant his salary increases accruing during the period aforesaid.

ISSUE
Whether or not an employee who has been preventively suspended beyond the
maximum 30-day period is entitled to back wages and salary increases granted
under the CBA during his period of suspension

HELD
Preventive suspension is a disciplinary measure for the protection of the
companys property pending investigation of any alleged malfeasance or misfeasance
committed by the employee.
Sections 3 and 4, Rule XIV of the Omnibus Rules Implementing the Labor Code
respectively provides that the employer may place the worker concerned under
preventive suspension if his continued employment poses a serious and imminent
threat to the life or property of the employer or of his co-workers, and that no preventive
suspension shall last longer than 30 days. The employer shall thereafter reinstate the
worker in his former or in a substantially equivalent position or the employer may extend
the period of suspension provided that during the period of extension, he pays the
wages and other benefits due to the workers. It is undisputed that the period of
suspension of respondent lasted for three (3) years and six months.
PAL, therefore, committed a serious transgression when it manifestly delayed the
determination of respondents culpability in the offense charged. PAL stated lamely in its
petition that due to numerous administrative cases pending at that time, the Committee
inadvertently failed to submit its recommendation to management.
The rules clearly provide that a preventive suspension shall not exceed a
maximum period of 30 days, after which period, the employee must be reinstated to his
former position. If the suspension is otherwise extended, the employee shall be entitled
to his salaries and other benefits that may accrue to him during the period of such
suspension. The provisions of the rules are explicit and direct; hence, there is no reason
to further elaborate on the same.
PAL faults the Labor Arbiter and the NLRC for allegedly equating preventive
suspension as remedial measure with suspension as penalty for administrative
offenses. A distinction between the two measures was clearly elucidated by the Court
in the case of Beja Sr. v. CA. Imposed during the pendency of an administrative
investigation, preventive suspension is not a penalty in itself. It is merely a measure of
precaution so that the employee who is charged may be separated, for obvious
reasons, from the scene of his alleged misfeasance while the same is being
investigated. While the former may be imposed on a respondent during the
investigation of the charges against him, the latter is the penalty which may only be
meted upon him at the termination of the investigation or the final disposition of the
case.
The petition is dismissed.

ANTONIO M. BOLASTIG
vs.
HON. SANDIGANBAYAN (Third Division) and THE PEOPLE OF THE PHILIPPINES
G.R. No. 110503, August 4, 1994

FACTS
Antonio M. Bolastig is the governor of the province of Samar. Information was
filed against him and two others Pedro Ason the provincial treasurer and Prudencio
Macabenta the property officer of the province- for alleged overpricing of 100 reams of
onion skin paper in violation of Anti-graft and Corrupt Practices Act. The Sandiganbayan
acting upon the motion of the Special Prosecutor suspended the Petitioner for 90 days
with the strength of the provision of sec. 13 of the Anti graft and corrupt practices act
which provides for the preventive suspension of public officers if they are under criminal
prosecution under valid information under the same act or under title 7, Book II of the
RPC, or for any offense involving fraud upon government or public funds or property as
basis. However, herein petitioner contends that his suspension was a mindless and
meaningless exercise and it was imposed without regard to the spirit and intent of the
law in which it is based. He further contends that his suspension may deprive his
constituents of the services of an elected official elected by them. Sandiganbayan
rejected the motion of the accused hence this petition.

ISSUE
Whether the Sandiganbayan is correct in suspending herein petitioner as
Governor with the strength of Sec. 13 of the Anti Graft and Corrupt Practices Act.

HELD
Yes, it is now settled that sec 13 of Republic Act No. 3019 makes it mandatory
for the Sandiganbayan to suspend any public officer against whom a valid information
charging violation of the law, Book II, Title 7 of the RPC, or any offense involving fraud
upon government or public funds or property is filed. The fact that an elected officials
preventive suspension may deprive his constituents of the official elected by them is not
a sufficient basis for reducing what is otherwise a mandatory suspension provided by
law.

RENATO S. GATBONTON
vs.
NLRC
G.R. No. 146779, January 23, 2006

FACTS
Renato Gatbonton is an associate professor of respondent Mapua Institute of
Technology (MIT), Faculty of Civil Engineering. A civil engineering student of
respondent MIT filed a complaint against petitioner for unfair/unjust grading system,
sexual harassment and conduct unbecoming of an academician. Pending investigation
Gatbonton was placed under a 30-day preventive suspension. He filed a complaint for
illegal suspension, damages and attorneys fees. LA ruled that his suspension is illegal.
Both respondents and petitioner filed their appeal from the Labor Arbiters Decision, with
petitioner questioning the dismissal of his claim for damages. NLRC granted
respondents appeal and set aside the Labor Arbiters decision. CA affirmed the NLRC.
Hence, the present petition.

ISSUE
Whether or not there is a valid justification for the 30-day preventive suspension
under the Labor Code.

HELD
The court held that: Preventive suspension is a disciplinary measure for the
protection of the companys property pending investigation of any alleged malfeasance
or misfeasance committed by the employee. The employer may place the worker
concerned under preventive suspension if his continued employment poses a serious
and imminent threat to the life or property of the employer or of his co-workers.
However, when it is determined that there is no sufficient basis to justify an employees
preventive suspension, the latter is entitled to the payment of salaries during the time of
preventive suspension. R.A. No. 7877 imposed the duty on educational or training
institutions to promulgate rules and regulations in consultation with and jointly approved
by the employees or students or trainees and Gatbontons preventive suspension was

based on respondent MITs Rules and Regulations for the Implemention of the AntiSexual Harassment Act of 1995, or R.A. No. 7877.
Rule II Section 1 of the MIT Rules and Regulations provides: Section 1. Preventive
Suspension of Accused in Sexual Harassment Cases. Any member of the educational
community may be placed immediately under preventive suspension during the
pendency of the hearing of the charges of grave sexual harassment against him if the
evidence of his guilt is strong and the school head is morally convinced that the
continued stay of the accused during the period of investigation constitutes a distraction
to the normal operations of the institution or poses a risk or danger to the life or property
of the other members of the educational community.
The Mapua Rules is one of those issuances that should be published for its
effectivity, since its purpose is to enforce and implement R.A. No. 7877, In fact, the
Mapua Rules itself explicitly required publication of the rules for its effectivity thus, at the
time of his suspension, the Mapua Rules were not yet legally effective, and therefore
the suspension had no legal basis. Moreover, even assuming that the Mapua Rules are
applicable, the Court finds that there is no sufficient basis to justify his preventive
suspension since it is not shown that evidence of petitioners guilt is strong and that the
school head is morally convinced that petitioners continued stay during the period of
investigation constitutes a distraction to the normal operations of the institution; or that
petitioner poses a risk or danger to the life or property of the other members of the
educational community.
Even under the Labor Code, petitioners preventive suspension finds no valid
justification. As provided in Section 8, Rule XXIII, Book V of the Omnibus Rules
Implementing the Labor Code:
Sec. 8. Preventive Suspension. The employer may place the worker concerned under
preventive suspension if his continued employment poses a serious threat to the life or
property of the employer or of his coworkers.
Petition is PARTIALLY GRANTED. (damages denied because no showing of
Badfaith by MIT)

JOSE P. ARTIFICIO
vs.
NATIONAL LABOR RELATIONS COMMISSION
G.R. No. 172988, July 26, 2010

FACTS
Petitioner Jose P. Artificio was employed as security guard by respondent RP
Guardians Security Agency, Inc., a corporation duly organized and existing under
Philippine Laws and likewise duly licensed to engage in the security agency business.
Sometime in June 2002, Artificio had a heated argument with a fellow security
guard, Merlino B. Edu (Edu). On 25 July 2002, Edu submitted a confidential report 5 to
Antonio A. Andres (Andres), Administration & Operations Manager, requesting that
Artificio be investigated for maliciously machinating Edu's hasty relief from his post and
for leaving his post during night shift duty to see his girlfriend at a nearby beerhouse.
On 29 July 2002, another security guard, Gutierrez Err (Err), sent a report 6 to
Andres stating that Artificio arrived at the office of RP Guardians Security Agency, Inc.
on 25 June 2002, under the influence of liquor. When Artificio learned that no salaries
would be given that day, he bad-mouthed the employees of RP Guardians Security
Agency, Inc. and threatened to "arson" their office.
On even date, Andres issued a Memorandum temporarily relieving Artificio from
his post and placing him under preventive suspension pending investigation for conduct
unbecoming a security guard, such as, abandonment of post during night shift duty, light
threats and irregularities in the observance of proper relieving time. He also directed
Artificio to report to the office of RP Guardians Security Agency, Inc. and submit his
written answer immediately upon receipt of the memorandum.
In another memorandum, Andres informed Artificio that a hearing will be held on
12 August 2002.
Without waiting for the hearing to be held, Artificio filed on 5 August 2002, a
complaint for illegal dismissal, illegal suspension, non-payment of overtime pay, holiday
pay, premium pay for holiday and rest days, 13th month pay, and damages. He also
prayed for payment of separation pay in lieu of reinstatement. 10
Labor Arbiter rendered a decision dated 6 October 2003, finding respondents guilty of
illegal suspension and dismissal. It was also held that Artificio should have been
allowed to confront Edu and Err before he was preventively suspended. Since the
complainant does not seek reinstatement, he is entitled to limited backwages and
separation pay.

On appeal, the NLRC, set aside the decision of the Labor Arbiter ruling that the
Labor Arbiter erred in considering preventive suspension as a penalty. The motion for
reconsideration filed by Artificio was denied for lack of merit. Artificio next filed a petition
for certiorari before the Court of Appeals which rendered a decision affirming the NLRC
decision. Artificio filed a motion for reconsideration which the Court of Appeals again
denied.
ISSUES
1. Wether or not Petitioner Artificio's preventive suspension was justified
2. Whether or not, he is entitled to backwages and separation pay

HELD
1. Yes. Sections 8 and 9 of Rule XXIII, Implementing Book V of the Omnibus
Rules Implementing the Labor Code provides that preventive suspension is justified
where the employee's continued employment poses a serious and imminent threat to
the life or property of the employer or of the employee's co-workers. Without this kind of
threat, preventive suspension is not proper.
In this case, Artificio's preventive suspension was justified since he was
employed as a security guard tasked precisely to safeguard respondents' client. His
continued presence in respondents' or its client's premises poses a serious threat to
respondents, its employees and client in light of the serious allegation of conduct
unbecoming a security guard such as abandonment of post during night shift duty, light
threats and irregularities in the observance of proper relieving time.
Besides, Management has the prerogative to discipline its employees and to
impose appropriate penalties on erring workers pursuant to company rules and
regulations.
This Court has upheld a company's management prerogatives so long as they
are exercised in good faith for the advancement of the employer's interest and not for
the purpose of defeating or circumventing the rights of the employees under special
laws or under valid agreements.
Significantly, Artificio regrettably chose not to present his side at the
administrative hearing scheduled to look into the factual issues that accompanied the
accusation against him. In fact, he avoided the investigation into the charges by filing
his illegal dismissal complaint ahead of the scheduled investigation. He, on his own
decided that his preventive suspension was in fact illegal dismissal and that he is
entitled to backwages and separation pay. Indeed, Artificio would even reject
reinstatement revealing his bent to have his own way through his own means. As aptly

noted by the NLRC, Artificio preempted the investigation that could have afforded him
the due process of which he would then say he was denied.
2. Yes for Backwages. No for separation pay.
That resolved, we next proceed to the benefits due Artificio.
Having determined that the imposition on Artificio of preventive suspension was
proper and that such suspension did not amount to illegal dismissal, we see no basis for
the grant of backwages.
Nonetheless, given the attendant circumstances in this case, namely, that Artificio
had been working with the company for a period of sixteen (16) years and without any
previous derogatory record, the ends of social and compassionate justice would be
served if Artificio be given some equitable relief in the form of separation pay. Artificio is
entitled to separation pay considering that while reinstatement is an option, Artificio
himself has never, at anytime after the notice of preventive suspension intended to
remain in the employ of private respondents.

E. CONSTRUCTIVE DISMISSAL
Constructive dismissal is an employers act amounting to dismissal but made to
appear as if it were not a dismissal in disguise. In most cases of constructive
dismissal, the employee is allowed to continue to work, but is simply reassigned, or
demoted, or his pay diminished without a valid reason to do so.
Constructive dismissal does not always involve forthright dismissal or diminution
in rank, compensation, benefit and privileges. There may be constructive dismissal if an
act of clear discrimination, insensibility or disdain by an employer becomes so
unbearable on the part or the employee that it could foreclose any choice by him except
to forego his continued employment

CASES UNDER CONSTRUCTIVE DISMISSAL

University of the Immaculate Concepcion vs. NLRC

G.R. No. 181146, January 26, 2011

FACTS
Teodora C. Axalan is a regular faculty member holding the position of Associate
Professor II in the University of the Immaculate Conception in Davao. She was
dismissed due to 2 instances wherein she was allegedly absent without leave, attending
seminars in Quezon City and Baguio City, respectively.
On the first instance, Axalan claimed that she held online classes. She was
convinced that she cannot be considered absent and opted not to write the letter of
apology requested of her by the University President to avoid any administrative charge.
On the second instance, Axalan claimed that she asked permission from the VP for
Academics who denied giving the same.
After conducting hearings and receiving evidence, the ad hoc grievance
committee found Axalan to have incurred AWOL on both instances and recommended
that Axalan be suspended without pay for six months on each AWOL charge. The
university president approved the committees recommendation and wrote Axalan a
letter informing her of her absences and of her total penalty of one-year suspension
without pay for both AWOL charges effective immediately.

ISSUE
Whether or not there was constructive dismissal.
HELD
NO, there was no constructive dismissal, Axalan having been validly validly
suspended for cause and in accord with procedural due process.
Constructive dismissal 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 this case however, there was no cessation of employment relations between

the parties. It is unrefuted that Axalan promptly resumed teaching at the university right
after the expiration of the suspension period. In other words, Axalan never quit.
Hence, Axalan cannot claim that she was left with no choice but to quit, a crucial
element in a finding of constructive dismissal. Thus, Axalan cannot be deemed to have
been constructively dismissed.
Significantly, at the time the Labor Arbiter rendered his Decision on 11 October
2004, Axalan had already returned to her teaching job at the university on 1 October
2004. The Labor Arbiters Decision ordering the reinstatement of Axalan, who at the
time had already returned to work, is thus absurd.
There being no constructive dismissal, there is no legal basis for the Labor
Arbiters order of reinstatement as well as payment of backwages, salary differentials,
damages, and attorneys fees. Thus, the third issue raised in the petition is now moot.
The Court recognizes the right of employers to discipline its employees for
serious violations of company rules after affording the latter due process and if the
evidence warrants. The university, after affording Axalan due process and finding her
guilty of incurring AWOL on two separate occasions, acted well within the bounds of
labor laws in imposing the penalty of six-month suspension without pay for each
incidence of AWOL.
As a learning institution, the university cannot be expected to take lightly
absences without official leave among its employees, more so among its faculty
members even if they happen to be union officers. To do so would send the wrong
signal to the studentry and the rest of its teaching staff that irresponsibility is widely
tolerated in the academe.
The law protects both the welfare of employees and the prerogatives of
management. Courts will not interfere with prerogatives of management on the
discipline of employees, as long as they do not violate labor laws, collective bargaining
agreements if any, and general principles of fairness and justice.

Morales vs. Harbour Centre Port Terminal Inc.,

G.R. No. 174208, January 25, 2012
FACTS
Petitioner was hired by respondent Harbour Centre Port Terminal, Inc. (HCPTI)
as an Accountant and Acting Finance Officer, with a monthly salary of P18,000. Morales
was later on promoted to Division Manager of the Accounting Department, for which he
was compensated a monthly salary of P33,700.00, plus allowances . Subsequent to
HCPTIs transfer to its new offices at Vitas, Tondo, Manila Morales received an interoffice memorandum reassigning him to Operations Cost Accounting, tasked with the
duty of monitoring and evaluating all consumables requests, gears and equipment
related to the corporations operations and of interacting with its sub-contractor, Bulk
Fleet Marine Corporation. Morales wrote Singson, protesting that his reassignment was
a clear demotion since the position to which he was transferred was not even included
in HCPTIs plantilla. In response to Morales grievance Singson issued an inter-office
memorandum to the effect that transfer of employees is a management prerogative
and that HCPTI had the right and responsibility to find the perfect balance between the
skills and abilities of employees to the needs of the business. For the whole of the
ensuing month Morales was absent from work and/or tardy. Singson issued to Morales
a memorandum denominated as a First Warning reminding Morales that, as an
employee of HCPTI, he was subject to its rules and regulations and could be
disciplinarily dealt with pursuant to its Code of Conduct. In view of the absences
Morales continued to incur, HCPTI issued a Second Warning and a Notice to Report for
Work and Final Warning. In the meantime, Morales filed a complaint against HCPTI,
Filart and Singson, for constructive dismissal. Respondent filed their position paper,
arguing that Morales abandoned his employment and was not constructively dismissed.

ISSUE
WON petitioner was constructively dismissed.

HELD
Constructive dismissal exists where there is cessation of work because
"continued employment is rendered impossible, unreasonable or unlikely, as an offer
involving a demotion in rank or a diminution in pay and other benefits. In cases of a
transfer of an employee, the rule is settled that the employer is charged with the burden
of proving that its conduct and action are for valid and legitimate grounds such as
genuine business necessity and that the transfer is not unreasonable, inconvenient or
prejudicial to the employee. If the employer cannot overcome this burden of proof, the
employees transfer shall be tantamount to unlawful constructive dismissal.
Petitioner was constructively dismissed. He was already occupying the position
of Division Manager at HCPTIs Accounting Department and as a consequence of his
promotion to said position. That the reassignment was a demotion is evident from
Morales new duties which, far from being managerial in nature, were very simply and
vaguely described as inclusive of monitoring and evaluating all consumables requests,
gears and equipments related to [HCPTIs] operations as well as close interaction with
its sub-contractor Bulk Fleet Marine Corporation. Morales demotion is evident from the
fact that his reassignment entailed a transfer from a managerial position to one which
was not even included in the corporations plantilla.
While ordinarily management prerogative is not interfered with, it is also not
absolute and is subject to limitations imposed by law, collective bargaining agreement,
and general principles of fair play and justice. Thus, an employer may 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. Respondent however failed to justify the demotion
of petitioner on the ground that it was reorganizing its business structure, this was
evidenced by the fact that Morales was able to prove that HCPTIs existing plantilla did
not include an Operations Cost Accounting Department and/or an Operations Cost
Accountant. As the party belatedly seeking to justify the reassignment due to the
supposed reorganization of its corporate structure, HCPTI, in contrast, did not even
bother to show that it had implemented a corporate reorganization and/or approved a
new plantilla of positions which included the one to which Morales was being
transferred. On the allegation of abandonment on the part of petitioner As a just and
valid ground for dismissal, at any rate, abandonment requires the deliberate, unjustified
refusal of the employee to resume his employment, without any intention of returning.
Since an employee like Morales who takes steps to protest his dismissal cannot
logically be said to have abandoned his work, it is a settled doctrine that the filing of a
complaint for illegal dismissal is inconsistent with abandonment of employment.

Megaforce Security & Allied Services vs. Lactao

G.R. No. 160940, July 21, 2008

FACTS
On April 28, 1998, Megaforce hired Lactao as a security guard. He was detailed
at Merville Park Subdivision in Paraaque City. On April 4, 2000, he filed with the
Arbitration Branch of the NLRC a complaint against Megaforce for underpayment of
wages, non-payment of overtime pay, service incentive leave pay and 13th month pay.
On May 3, 2000, Lactao was reassigned to ABB Industry, Inc. in Sucat, Paraaque City
but wasa recalled by Megaforce directing him to report to the Headquarters for proper
disposition and new assignment.
When Lactao reported to the Headquarters but he was not given a new
assignment. Believing he was terminated, Lactao amended his complaint on June 7,
2000 to one for illegal dismissal with prayer for reinstatement with the same prayer for
underpayment of wages, non-payment of overtime pay, service incentive leave pay and
13th month pay, plus moral and exemplary damages and attorney's fees.
Lactao
claims that in retaliation to his filing of the complaint Megaforce constructively dismissed
him by relieving him from his post and not giving him a new assignment.
In its Position Paper , Megaforce denied the illegal dismissal charge. The Labor
Arbiter dismissed the complaint for lack of merit. On appeal, the NLRC set aside the
LAs decision, ruling that Lactao was constructively dismissed. Hence, the present
petition.
ISSUE
Whether or not Lactao was constructively dismissed making the dismissal illegal.
HELD
In cases involving security guards, a relief and transfer order in itself does not
sever employment relationship between a security guard and his agency. An employee
has the right to security of tenure, but this does not give him such a vested right in his
position as would deprive the company of its prerogative to change his assignment or
transfer him where his service, as security guard, will be most beneficial to the client.
Temporary "off-detail" or the period of time security guards are made to wait until they
are transferred or assigned to a new post or client does not constitute constructive
dismissal as their assignments primarily depend on the contracts entered into by the
security agencies with third parties. Indeed, the Court has repeatedly recognized that

"off-detailing" is not equivalent to dismissal, so long as such status does not continue
beyond a reasonable time; when such a "floating status" lasts for more than six months,
the employee may be considered to have been constructively dismissed.
However, in the present case, while the charge of illegal dismissal may have
been premature because Lactao has not been given a new assignment or temporary
"off-detail" for a period of seven days only when he amended his complaint, the
continued failure of Megaforce to offer him a new assignment during the proceedings of
the case before the LA and beyond the reasonable six-month period makes it liable for
constructive dismissal.
There is constructive dismissal if an act of clear discrimination, insensibility, or
disdain by an employer becomes so unbearable on the part of the employee that it
would foreclose any choice by him except to forego his continued employment. It exists
where there is cessation of work because continued employment is rendered
impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a
diminution in pay.
The Court cannot accept the contention of Megaforce that Lactao did not report
to work after his recall and had abandoned his job since it failed to present credible
proof of any act on the part of Lactao to abandon his employment. Moreover, it is a
settled doctrine that the filing of a complaint for illegal dismissal is inconsistent with
abandonment of employment. An employee who takes steps to protest his dismissal
cannot logically be said to have abandoned his work. The filing of such complaint is
proof enough of his desire to return to work, thus negating any suggestion of
abandonment.
Under Article 279 of the Labor Code, as amended, an employee who is unjustly
dismissed from work shall be entitled to reinstatement without loss of seniority rights
and other privileges; to his full backwages, inclusive of allowances; and to other benefits
or their monetary equivalent computed from the time his compensation was withheld
from him up to the time of his actual reinstatement. Thus, Lactao is entitled to
reinstatement and backwages as a necessary consequence.

Nippon Housing Phils. vs. Leynes

G.R. No. 177816, August 3, 2011

FACTS
Petitioner, originally engaged in the business of providing building maintenance
From its original ventured into building management and gained Bay Gardens
Condominium Project (the Project) of the Bay Gardens Condominium Corporation
(BGCC) as its first and only building maintenance client. In this regard, petitioner hired
respondent Maiah Angela Leynes on 26 March 2001 for the position of Property
Manager, with a salary of P40,000.00 per month. Her responsibilities include surveying
the requirements of the government and the client for said project, the formulation of
house rules and regulations, the preparation of the annual operating and capital
expenditure budget, hiring and deployment of manpower, salary and position
determination as well as the assignment of the schedules and responsibilities of
employees.
Leynes had a misunderstanding with the building engineer of the project
(Cantuba) and barred the latters entry to the site. The Engr. also accused the former of
conceit, pride and poor managerial skills. Takada, the NHPI's Vice President issued a
memorandum attributing the incident to "simple personal differences" and directing
Leynes to allow Engr. Cantuba to report back for work. Disappointed with this
management decision, she submitted a letter to NHPIs President (Ota) asking for an
emergency leave of absence for the supposed purpose of coordinating with her lawyer
regarding her resignation letter. NHPI offered the Property Manager position to Engr.
Carlos Jose as a consequence Leynes' signification of her intention to resign. However,
she sent another letter expressing her intention to return to work and to call off her
planned resignation. However, she received a letter from the management to report
instead to the main office as one in a floating status because someone already
occupies her post.
Aggrieved, Leynes filed a complaint against petitioner for illegal dismissal, unpaid
salaries, benefits, damages and attorney's fees. The Labor arbiter found that the
petitioners act of putting Leynes on a floating status was equivalent to termination
without just cause. The NLRC ruled that NHPI's placement of Leynes on floating status
was necessitated by the client's contractually guaranteed right to request for her relief.
However, this was later on reversed by the CA, hence, this present petition before the
SC.

ISSUE
WON petitioners' decision to place respondent on floating status is tantamount to
constructive dismissal. (Alternative: what is the effect of withdrawn resignation?)
HELD
No, the placement of Leynes on a floating status due to redundancy is valid.
There is no constructive dismissal. The factual antecedents suggest that NHPI's
immediate hiring of Engr. Jose as the new Property Manager for the Project was
brought about by Leynes' own rash announcement of her intention to resign from her
position. Although she subsequently changed her mind and sent Reyes a letter by
telefax announcing the reconsideration of her planned resignation and her intention to
return to work, Leynes evidently had only herself to blame for precipitately setting in
motion the events which led to NHPI's hiring of her own replacement.
The rule is settled, however, that "off-detailing" is not equivalent to dismissal, so
long as such status does not continue beyond a reasonable time and that it is only when
such a "floating status" lasts for more than six months that the employee may be
considered to have been constructively dismissed. A complaint for illegal dismissal filed
prior to the lapse of said six-month and/or the actual dismissal of the employee is
generally considered as prematurely filed.
Since the petitioner has no other client for the building management side of its
business, it acted within its prerogatives when it eventually terminated Leynes' services
on the ground of redundancy. One of the recognized authorized causes for the
termination of employment, redundancy exists when the service capability of the
workforce is in excess of what is reasonably needed to meet the demands of the
business enterprise. A redundant position is one rendered superfluous by any number
of factors, such as overhiring of workers, decreased volume of business, dropping of a
particular product line previously manufactured by the company or phasing out of
service activity priorly undertaken by the business An employer has no legal obligation
to keep more employees than are necessary for the operation of its business.
Considering that Leynes was terminated from service upon an authorized cause,
we find that the CA likewise erred in faulting NHPI for supposedly failing to notify said
employee of the particular act or omission leveled against her and the ground/s for
which she was dismissed from employment. Where dismissal, however, is for an
authorized cause like redundancy, the employer is, instead, required to serve a written
notice of termination on the worker concerned and the DOLE, at least one month from
the intended date thereof. For its failure to comply strictly with the 30-day minimum
requirement for said notice and effectively violating Leynes' right to due process, NHPI
should be held liable to pay nominal damages in the sum of P50,000.00.

Duldulao vs. Court of Appeals,

G.R. No. 164893, March 1, 2007

FACTS
Petitioner Constancia P. Duldulao was hired by respondent Baguio Colleges
Foundation (BCF) as secretary/clerk-typist and assigned to the College of Law
sometime in June of 1987. In August 1996, a certain law student filed a complaint
against petitioner for alleged irregularities in the performance of her work. Petitioner was
told to submit her answer to the complaint and given several extensions within which to
do so. Despite the extensions, she failed to submit her answer.
On 1 October 1996, Dean Honorato V. Aquino of the College of Law informed
respondents President, Atty. Edilberto B. Tenefrancia, of petitioners failure to file her
answer and recommended the assignment of petitioner outside the College of Law, not
only because of such failure to answer but also her having admitted fraternizing with
students of the College. On the same day, respondents Vice President for
Administration, Leonardo S. dela Cruz, issued a Department Order to Mrs. Duldulao
informing her of her transfer to the Office of the Principals of the High School and
Elementary Departments.
On 21 January 1997, the Administrative Investigating Committee found the
Department Order appropriate since it was intended to prevent the controversy between
petitioner and the complaining student from adversely affecting a harmonious
relationship within the College of Law among all its constituents.
On 17 February 1997, petitioner filed a complaint for constructive dismissal with
prayer for moral and exemplary damages and attorneys fees before the NLRC
Regional Arbitration Branch-Cordillera Administrative Region. She stated that aside from
being tainted with procedural lapses in violation of her right to due process, the transfer
also amounted to her demotion in rank. The NLRC dismissed the complaint for lack of
merit which decision was affirmed by the Court of Appeals.

ISSUE
Whether petitioners transfer as secretary/clerk-typist from the College of Law to
the High School and Elementary Departments amounts to constructive dismissal.

HELD
There was no constructive dismissal. There is constructive dismissal if an act of
clear discrimination, insensibility, or disdain by an employer becomes so unbearable on
the part of the employee that it would foreclose any choice by him except to forego his
continued employment. It exists where there is cessation of work because "continued
employment is rendered impossible, unreasonable or unlikely, as an offer involving a
demotion in rank and a diminution in pay." The factual milieu in this case is different. It is
the employers prerogative, based on its assessment and perception of its employees
qualifications, aptitudes, and competence, to move them around in the various areas of
its business operations in order to ascertain where they will function with maximum
benefit to the company. An employees right to security of tenure does not give him such
a vested right in his position as would deprive the company of its prerogative to change
his assignment or transfer him where he will be most useful. When his transfer is not
unreasonable, nor inconvenient, nor prejudicial to him, and it does not involve a
demotion in rank or a diminution of his salaries, benefits, and other privileges, the
employee may not complain that it amounts to a constructive dismissal. The transfer of
petitioner does not amount to a demotion in rank and status. Petitioner was a
secretary/clerk-typist of the College of Law. As such secretary/clerk-typist, she would
only have to perform the same duties in the Office of the Principals of the High School
and Elementary Departments. Petitioner was not denied due process. Reassignments
made by management pending investigation of irregularities allegedly committed by an
employee fall within the ambit of management prerogative. The transfer, while incidental
to the pending charges against petitioner, was not meant to be a penalty, but rather a
preventive measure to avoid further damage to the College of Law. The purpose of
reassignments is no different from that of preventive suspension which management
could validly impose as a measure of protection of the companys property pending
investigation of any malfeasance or misfeasance committed by the employee.