Mercury Drug Corporation vs.

NLRC
G.R. No. 75662
September 15,1989
Facts:
Cesar Ladisla was employed by petitioner, Mercury Drug Corporation as Stock Analyst. On
Aug. 15, 1977, he was apprehended by representatives of Mercury Drug Corporation while in the act of
pilfering company property. He admitted the guilt to the investigating representatives. Mercury drug
filed an application for the termination of Ladislas employment.
Respondent opposed the aforesaid application for clearance to terminate his services alleging
among others, that his suspension and proposed dismissal were unfounded and baseless being premised
on the machinations and incriminatory acts of Ms. Leonora Suarez and Edgardo Imperial, Manager and
Retail Supervisor, respectively, of petitioner's Claro M. Recto Branch; and that he was not given the
opportunity to be heard nor allowed to explain his side before he was summarily suspended.
Issue: Whether or not Cesar Ladisla should be dismissed on the grounds of dishonesty and breach of
contract
Ruling:
Dismissal of a dishonest employee is to the best interest not only of management but also of
labor. As a measure of self-protection against acts inimical to its interest, a company has the right to
dismiss its erring employees. An employer cannot be compelled to continue in employment an
employee guilty of acts inimical to its interest, justifying loss of confidence in him. The law does not
impose unjust situations on either labor or management.
While the constitution is committed to the policy of social justice and the protection of laborers,
it should not be supposed that labor dispute will be automatically decided in favor of labor.
Management has also its own rights which are the enforcement of interest of simple fair play.

Rolando Revidad vs. NLRC

G.R. No. 111105
June 27, 1995
Facts:
AG & P terminated the services of 178 employees, including herein petitioners, under a
redundancy program, pursuant to a Presidential Directive to lay off 40% of the employees due to
financial losses incurred from 1989-1990. As a consequence, a complaint for illegal dismissal with
prayer for reinstatement.
The Labor Arbiter ordered the reinstatement of petitioners, with payment of full back wages, on
the ground that AG & P failed to substantiate the alleged losses it incurred in 1991 which resulted in the
retrenchment of its operations. The labor arbiter explicated in her aforesaid decision that while it had
been established that private respondent suffered serious losses from 1987 to 1990, it allegedly failed to
prove continuous losses in 1991 which would justify the temporary lay-off of herein petitioners.
Issue: Whether or not the temporary lay-off was valid and justified.
Ruling:
Yes. It has been sufficiently and convincingly established by AG & P before the voluntary
arbitrator that it was suffering financial reverses. Even the rank and file union at AG & P did not
contest the fact that management had been undergoing financial difficulties for the past several years.
Hence, the voluntary arbitrator considered this as an admission that indeed AG & P was actually
experiencing adverse business conditions which would justify the exercise of its management
prerogative to retrench in order to avoid the not so remote possibility of the closure of the entire
business which, in the opinion of the voluntary arbitrator, would in the last analysis be adverse to both
the management and the union.
Also, proof of actual financial losses incurred by the company is not a condition sine qua non,
for retrenchment. Retrenchment is one of the economic grounds to dismiss employees, which is
resorted to by an employer primarily to avoid or minimize business losses, as recognized in Article 283
of the Labor Code.
The employer bears the burden to prove his allegation of economic or business reverses with
clear and satisfactory evidence, it being in the nature of an affirmative defense. In this case, the private
respondent has been and is besieged by a continuing downtrend in both its business operations and
financial resources, thus amply justifying its resort to drastic cuts in personnel and costs.
The law in protecting the rights of the laborer authorizes neither oppression nor self-destruction
of the employer. While the Constitution is committed to the policy of social justice and the protection
of the working class, it should not be supposed that every labor dispute will be automatically decided in
favor of labor. Management also has its own rights, which as such are entitled to respect and
enforcement in the interest of simple fair play. Out of its concern for those with less privileges in life,
the Supreme Court has inclined more often than not toward the worker and upheld his cause with his
conflicts with the employer. Such favoritism, however, has not blinded the Court to rule that justice is
in every case for the deserving, to be dispensed in the light of the established facts and applicable law
and doctrine.

Star Paper Corporation vs. Ronaldo Simbol

G.R. No. 164774
April 12, 2006
Facts:
Simbol was employed by the company, as well as Alma Dayrit. The two got married. Prior to
the marriage, they were advised that one should resign pursuant to a company policy stating in case of
two of our employees (both singles, one male and another female) developed a friendly relationship
during the course of their employment and then decided to get married, one of them should resign to
preserve the policy that new applicants will not be allowed to be hired if in case he/she has a relative,
up to [the] 3rd degree of relationship, already employed by the company. Respondent's version though
stated that they were compelled to resign in view of an illegal company policy.
Petitioners allege that its policy "may appear to be contrary to Article 136 of the Labor Code"
but it assumes a new meaning if read together with the first paragraph of the rule. The rule does not
require the woman employee to resign. The employee spouses have the right to choose who between
them should resign. Further, they are free to marry persons other than co-employees. Hence, it is not
the marital status of the employee, per se, that is being discriminated. It is only intended to carry out its
no employment-for-relatives-within-the-third-degree-policy which is within the ambit of the
prerogatives of management.
Issue: Whether or not the policy of the employer banning spouses from working in the same company
violates the rights of the employee under the Constitution and the Labor Code or is a valid exercise of
management prerogative.
Ruling:
A bona fide occupational qualification exception states that unless the employer can prove that
the reasonable demands of the business require a distinction based on marital status and there is no
better available or acceptable policy which would better accomplish the business purpose, an employer
may not discriminate against an employee based on the identity of the employee's spouse. This is
parallel to the standard of reasonableness of the company policy employed by the Court.
In the case at bar, respondents were hired after they were found fit for the job, but were asked to
resign when they married a co-employee. Petitioners failed to show how the marriage of Simbol, then a
Sheeting Machine Operator, to Alma Dayrit, then an employee of the Repacking Section, could be
detrimental to its business operations. If the questioned rule will be uphold without valid justification,
the employer can create policies based on an unproven presumption of a perceived danger at the
expense of an employee's right to security of tenure.
The questioned policy may not facially violate Article 136 of the Labor Code but it creates a
disproportionate effect and under the disparate impact theory, the only way it could pass judicial
scrutiny is a showing that it is reasonable despite the discriminatory, albeit disproportionate, effect. The
failure of petitioners to prove a legitimate business concern in imposing the questioned policy cannot
prejudice the employee's right to be free from arbitrary discrimination based upon stereotypes of
married persons working together in one company.
Lastly, the absence of a statute expressly prohibiting marital discrimination in our jurisdiction
cannot benefit the petitioners. The protection given to labor in our jurisdiction is vast and extensive that
we cannot prudently draw inferences from the legislature's silence that married persons are not
protected under our Constitution and declare valid a policy based on a prejudice or stereotype. Thus,
for failure of petitioners to present undisputed proof of a reasonable business necessity, we rule that the
questioned policy is an invalid exercise of management prerogative.

Caltex, Inc. vs. Philippine Labor Organization

G.R. No. L-9915
May 27, 1959
Facts:
One Hidpion del Rosario was hired as laborer by Caltex. Two months after, he was suspended
by the company for insubordination, and later, file a petition with the Industrial court for authority to
dismiss him.The court found Hidpion guilty of the acts complained of. However, the court believed that
permanent dismissal was too severe; hence, it ordered the reinstatement without back wages.
Petitioner claims that the lower court committed a serious mistake of law and grave abuse of
discretion in compelling it to retain Hidpion in its employ, and in substituting its judgment for that of
petitioner in determining the fitness or qualification of a temporary employee to become regular.
Issue: Whether or not Caltex can dismiss a temporary employee.
Ruling:
Caltex has the right to place Hidpion under temporary or trial basis, considering the period of
time that said laborer had been working for petitioner. It is so to determine his fitness and competency.
The acts of insubordination for which Hidpion was found guilty consist of disorderly conduct and
willful disobedience, committed in a very short period of two months. Willful disobedience is a
justifiable ground for an employee's discharge. Hence, Caltex can dismiss Hidpion del Rosario.

Continental Steel Manufacturing Corporation vs. Montao

G.R. No. 182836
October 13, 2009
Facts:
Hortillano, an employee of Continental Steel and a member of the respondent labor union file a
claim for Paternity Leave, Bereavement Leave and Death and Accident Insurance for dependent,
pursuant to the CBA between the company and union, because his unborn child died when his wife had
a premature delivery.
Continental Steel granted the Paternity Leave but denied the clams for Bereavement Leave and
other death benefits. The denial was based on the contention that the express provision of the CBA did
not contemplate the death of an unborn child, a fetus, without legal personality. It argued that the
unborn child never died because it never acquired juridical personality, and a fetus that was delivered
dead could not be considered a dependent since it never needed any support nor did it ever acquire the
right to be supported. It further maintained that the wording of the CBA was clear and unambiguous, so
that the failure of the Union to have unborn child included in the definition of dependent, as used in the
CBA, bound the Union to the legally accepted definition of death.
Issue: Whether or not Hortillano is entitled to bereavement leave and other death benefits.
Ruling:
Yes. An unborn child can be considered a dependent under the CBA because as Continental
Steel itself defines as "one who relies on another for support; one not able to exist or sustain oneself
without the power or aid of someone else." Under said general definition, even an unborn child is a
dependent of its parents. Hortillano's child could not have reached 38-39 weeks of its gestational life
without depending upon its mother, Hortillano's wife, for sustenance. Additionally, it is explicit in the
CBA provisions in question that the dependent may be the parent, spouse, or child of a married
employee; or the parent, brother, or sister of a single employee. The CBA did not provide a
qualification for the child dependent, such that the child must have been born or must have acquired
civil personality, as Continental Steel avers. Without such qualification, then child shall be understood
in its more general sense, which includes the unborn fetus in the mother's womb.
Being for the benefit of the employee, CBA provisions on bereavement leave and other death
benefits should be interpreted liberally to give life to the intentions thereof. Time and again, the Labor
Code is specific in enunciating that in case of doubt in the interpretation of any law or provision
affecting labor, such should be interpreted in favor of labor. In the same way, the CBA and CBA
provisions should be interpreted in favor of labor.
Hence, Hortillano is entitled to the bereavement leave and other death benefits.

San Miguel Brewery Sales Force Union vs. Ople and San Miguel Corp.
G.R. No. L-53515 February 8, 1989
Facts:
A provision in the CBA entered into by petitioner and respondent provides that employees
within the appropriate bargaining unit shall be entitled to a basic monthly compensation plus
commission based on their respective sales. While the CBA was in force, the company introduced a
marketing scheme known as the "Complementary Distribution System" whereby wholesalers can
directly get beer products from any SMC offices. It would then reduce the take-home pay of the sales
force. The Union also sued the company for unfair labor practice on the ground that the CDS was
contrary to the existing marketing scheme and was violative of the CBA.
Issue: Whether or not the Complementary Distribution System is a valid exercise of management
prerogative.
Ruling:
Yes. Every business enterprise may adopt or devise means designed towards its goal of
increasing its profits. So long as a company's management prerogatives 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, they will be upheld.
San Miguel Corporation's offer to compensate the members of its sales force who will be
adversely affected by the implementation of the CDS by paying them a so-called "back adjustment
commission" to make up for the commissions they might lose as a result of the CDS proves the
company's good faith and lack of intention to bust their union.

LABOR RELATIONS
Case Digests

1. CONTINENTAL STEEL MANUFACTURING CORPORATION vs. MONTAO and

NMCSC-SUPER, G.R. No. 182836, October 13, 2009
2. STAR PAPER CORPORATION et. al vs. RONALDO D. SIMBOL, et. al, G.R. No. 164774,
April 12, 2006
3. ROLANDO REVIDAD, et. al vs. NLRC and AG&P, G.R. No. 111105 June 27, 1995
4. MERCURY DRUG CORPORATION vs. NATIONAL LABOR RELATIONS COMMISSION,
et. al, G.R. No. 75662 September 15, 1989
5. CALTEX INC. vs. PHILIPPINE LABOR ORGANIZATION, G.R. No. L-9915, May 27, 1959
6. SAN MIGUEL BREWERY SALES FORCE UNION (PTGWO) vs. OPLE and SAN MIGUEL
CORP., G.R. No. L-53515 February 8, 1989

Submitted by: Celina May R. Tang, Block A

Professor: Atty Mila Raquid-Arroyo