JULITO SAGALES, petitioner, committed. Truly, Sagales has more than paid his due.

Nevertheless, it is
vs.
RUSTAN’S COMMERCIAL CORPORATION, respondent.
In October 1970, Julito Sagales was employed by Rustan’s Commercial
Corporation as chief cook in one of Rustan’s restaurants. He was an
excellent employee receiving numerous awards. However, in June 2001,
Sagales was caught stealing a bag of squid heads worth P50.00. Sagales was
not able to produce a receipt for the said squid heads at that time. In the
same month, Sagales underwent inquest proceedings for qualified theft in
the local fiscal’s office. In the said proceeding, Sagales was able to produce
the receipt for the said squid heads. He also averred that the squid heads
are actually scraps of the restaurant and are not fit to be served to
customers; so if indeed he really wanted to steal and profit, he would have
stolen better quality squid heads. The fiscal dismissed the case against
Sagales for lack of evidence.
useless to reinstate Sagales because he should have been retired already at
the time of this decision. So instead of reinstatement, Sagales was awarded
separation pay computed at one-month salary for every year of service;
backwages were also awarded.
The Supreme Court also emphasized: the right of every employee to
security of tenure is all the more secured by the Labor Code by providing
that “the employer shall not terminate the services of an employee except
for a just cause or when authorized” by law. However, the employer, in
exercising its right to terminate employees for just and authorized causes
must impose a penalty commensurate with the act, conduct, or omission
imputed to the employee.

But at the end of the same month, the legal division of Rustan conducted its
own investigation where Sagales and his lawyer appeared. The security
guards testified against Sagales. The chief cashier also testified that the
squid heads were unpaid. In July 2001, after investigation by Rustan, Sagales
was terminated.

ISSUE: Whether or not Sagales’s termination is valid.

HELD: No. Termination is too harsh in this case. The Supreme Court took
into consideration the various circumstances attendant to the case. Sagales
has worked for Rustan for almost 31 years; (2) his tireless and faithful
service is attested by the numerous awards he has received; (3) the
incident in June 2001 was his first offense in his long years of service; (4) the
value of the squid heads worth P50.00 is negligible; (5) Rustan practically did
not lose anything as the squid heads were considered scrap goods and
usually thrown away in the wastebasket; (6) the ignominy and shame
undergone by Sagales in being imprisoned, however momentary, is
punishment in itself; and (7) Sagales was already preventively suspended for
one month, which is already a commensurate punishment for the infraction
Sumifro vs. Baya
Facts
Baya filed an illegal/constructive dismissal against AMS Farming Corporation
(AMSFC) and Davao Fruits Corporation (DFC), before the NLRC.
Baya was employed as a supervisor and joined the union of supervisors, and
eventually, formed AMS Kapalong Agrarian Reform Beneficiaries
Multipurpose Cooperative (AMSKARBEMCO), the basic agrarian reform
organization of the regular employees of AMSFC.
Baya was reassigned to a series of supervisory positions in AMSFC’s sister
company also joined the supervisory positions and became a member of the
latter’s supervisory union.
Later on and upon AMSKARBEMCO’s petition before the Department of
Agrarian Reform (DAR), some 220 hectares of AMSFC’s 513-hectare banana
plantation were covered by the Comprehensive Agrarian Reform Law.
Eventually, said portion was transferred to AMSFC’s regular employees as
Agrarian Reform Beneficiaries (ARBs), including Baya.
ARBs held a referendum in order to choose as to which group between
AMSKARBEMCO or SAFFPAI, an association of pro-company beneficiaries,
they wanted to belong. 280 went to AMSKARBEMCO while 85 joined
SAFFPAI.
When AMSFC learned that AMSKARBEMCO entered into an export
agreement with another company, it summoned AMSKARBEMCO officers,
including Baya, to lash out at them and even threatened them that the
ARBs’ takeover of the lands would not push through. Thereafter, Baya was
again summoned, this time by a DFC manager, who told the former that he
would be putting himself in a “difficult situation” if he will not shift his
loyalty to SAFFPAI; this notwithstanding, Baya politely refused to betray his
cooperative. A few days later, Baya received a letter stating that his
secondment with DFC has ended, thus, ordering his return to AMSFC.
However, upon Baya’s return to AMSFC on August 30, 2002, he was
informed that there were no supervisory positions available; thus, he was
assigned to different rank-and-file positions instead.
Baya filed a Complaint. LA ruled in Baya’s favor.
NLRC found that the termination of Baya’s employment was not caused by
illegal/ constructive dismissal, but by the cessation of AMSFC’s business
operation or undertaking in large portions of its banana plantation due to
the implementation of the agrarian reform program. Thus, the NLRC opined
that Baya is not entitled to separation pay as such cessation was not
voluntary, but rather involuntary, on the part of AMSFC as it was an act of
the State, i.e., the agrarian reform program, that caused the same.
Issues
1. Whether or not NLRC committed grave abuse of discretion;
2. Whether or not Abaya was constructive dismissal;
3. Whether or not AMSFC and DFC are liable to Baya for separation
pay, moral damages, and attorney’s fees;
4. Whether or not Sumifru should be held solidarily liable with
AMSFC’s for Baya’s monetary awards.
Held
1. Yes.“To justify the grant of the extraordinary remedy of certiorari,
the petitioner must satisfactorily show that the court or quasi-
judicial authority gravely abused the discretion conferred upon it.
Grave abuse of discretion connotes a capricious and whimsical
exercise of judgment, done in a despotic manner by reason of
passion or personal hostility, the character of which being so patent
and gross as to amount to an evasion of positive duty or to a virtual
refusal to perform the duty enjoined by or to act at all in
contemplation of law.” Guided by the foregoing considerations, the
Court finds that the CA correctly ascribed grave abuse of discretion
on the part of the NLRC in reversing the LA ruling, as the LA’s finding
that Baya was constructively dismissed from employment is
supported by substantial evidence.
2. Yes. “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. Aptly called a dismissal in
disguise or an act amounting to dismissal but made to appear as if it
were not, constructive dismissal may, likewise, exist if an act of clear
discrimination, insensibility, or disdain by an employer becomes so
unbearable on the part of the employee that it could foreclose any
choice by him except to forego his continued employment.”
In Peckson v. Robinsons Supermarket Corp., the Court held that the
burden is on the employer to prove that the transfer or demotion of
an employee was a valid exercise of management prerogative and
was not a mere subterfuge to get rid of an employee; failing in
which, the employer will be found liable for constructive
dismissal, viz.:
In case of a constructive dismissal, the employer has the burden of proving
that the transfer and demotion of an employee are for valid and legitimate
grounds such as genuine business necessity. Particularly, for a transfer not
to be considered a constructive dismissal, the employer must be able to
show that such transfer is not unreasonable, inconvenient, or prejudicial to
the employee; nor does it involve a demotion in rank or a diminution of his
salaries, privileges and other benefits. Failure of the employer to overcome
this burden of proof, the employee’s demotion shall no doubt be
tantamount to unlawful constructive dismissal.
In this case, a judicious review of the records reveals that the top
management of both AMSFC and DFC, which were sister companies at the
time, were well-aware of the lack of supervisory positions in AMSFC. This
notwithstanding, they still proceeded to order Baya’s return therein, thus,
forcing him to accept rank-and-file positions. Notably, AMSFC and DFC failed
to refute the allegation that Baya’s “end of secondment with DFC” only
occurred after: (a) he and the rest of AMSKARBEMCO officials and members
were subjected to harassment and cooperative busting tactics employed by
AMSFC and DFC; and (b) he refused to switch loyalties from AMSKARBEMCO
to SAFFPAI, the pro-company cooperative. In this relation, the Court cannot
lend credence to the contention that Baya’s termination was due to the
ARBs’ takeover of the banana plantation, because the said takeover only
occurred on September 20, 2002, while the acts constitutive of constructive
dismissal were performed as early as August 30, 2002, when Baya returned
to AMSFC. Thus, AMSFC and DFC are guilty of constructively dismissing
Baya.
3. Yes. Under the doctrine of strained relations, the payment of
separation pay is considered an acceptable alternative to
reinstatement when the latter option is no longer desirable or
viable. On one hand, such payment liberates the employee from
what could be a highly oppressive work environment. On the other
hand, it releases the employer from the grossly unpalatable
obligation of maintaining in its employ a worker it could no longer
 trust.”36 Thus, it is more prudent that Baya be awarded separation
pay, instead of being reinstated, as computed by the CA.
Further, and as aptly pointed out by both the LA and the CA, the acts
constitutive of Baya’s constructive dismissal are clearly tainted with bad
faith as they were done to punish him for the actions of his cooperative,
AMSKARBEMCO, and for not switching his loyalty to the pro-company
cooperative, SAFFPAI. This prompted Baya to litigate in order to protect his
interest and to recover what is properly due him. Hence, the award of moral
damages and attorney’s fees are warranted.
4. Yes. Finally, Sumifru’s contention that it should only be held liable
for the period when Baya stayed with DFC as it only merged with
the latter and not with AMSFC is untenable. Section 80 of the
Corporation Code of the Philippines clearly states that one of the
effects of a merger is that the surviving company shall inherit not
only the assets, but also the liabilities of the corporation it merged
with, to wit:
Section 80. Effects of merger or consolidation. – The merger or consolidation
shall have the following effects:
1. The constituent corporations shall become a single corporation
which, in case of merger, shall be the surviving corporation
designated in the plan of merger; and, in case of consolidation, shall
be the consolidated corporation designated in the plan of
consolidation;
2. The separate existence of the constituent corporations shall cease,
except that of the surviving or the consolidated corporation;
3. The surviving or the consolidated corporation shall possess all the
rights, privileges, immunities and powers and shall be subject to all
the duties and liabilities of a corporation organized under this Code;
4. The surviving or the consolidated corporation shall thereupon and
thereafter possess all the rights, privileges, immunities and
franchises of each of the constituent corporations; and all property,
real or personal, and all receivables due on whatever account,
including subscriptions to shares and other choses in action, and all
and every other interest of, or belonging to, or due to each
constituent corporation, shall be deemed transferred to and vested
in such surviving or consolidated corporation without further act or
deed; and
5. The surviving or consolidated corporation shall be responsible and
liable for all the liabilities and obligations of each of the constituent
corporations in the same manner as if such surviving or
consolidated corporation had itself incurred such liabilities or
obligations; and any pending claim, action or proceeding brought by
or against any of such constituent corporations may be prosecuted
by or against the surviving or consolidated corporation. The rights of
creditors or liens upon the property of any of such constituent
corporations shall not be impaired by such merger or consolidation.
In this case, it is worthy to stress that both AMSFC and DFC are guilty of acts
constitutive of constructive dismissal performed against Baya. As such, they
should be deemed as solidarily liable for the monetary awards in favor of
Baya. Meanwhile, Sumifru, as the surviving entity in its merger with DFC,
must be held answerable for the latter’s liabilities, including its solidary
liability with AMSFC arising herein. Verily, jurisprudence states that “in the
merger of two existing corporations, one of the corporations survives and
continues the business, while the other is dissolved and all its rights,
properties and liabilities are acquired by the surviving corporation,” as in
this case.
CHATEAU ROYALE SPORTS AND COUNTRY CLUB, INC., Petitioner, v.
RACHELLE G. BALBA and MARINEL N. CONSTANTE, Respondents
G.R. No. 197492, January 18, 2017
TOPIC: Constructive dismissal
PONENTE: Bersamin
FACTS:
Petitioner Chateau Royale hired respondents as Account Executives.
They were then promoted to Account Managers after almost a year. As part
of their duties, respondents were instructed by the Director of Sales and
Marketing to forward all proposals, event orders and contracts for an
orderly and systematic bookings in the operation of the petitioner’
s business. However, they failed to comply with the directive. Accordingly, a
notice to explain was served on them, to which they promptly responded.
After investigation, respondents were found to have committed acts of
insubordination, and that they were suspended for seven (7) days.
However, said suspension order was lifted before its implementation.
Respondents then filed a complaint for illegal suspension and non-
payment of allowances and commissions. Respondents amended their
complaint to include constructive dismissal based on their information from
the Chief Financial Officer of the petitioner on the latter’s plan to transfer
them to the Manila Office. The proposed transfer was prompted by the
shortage of personnel at the Manila Office as a result of the resignation of
three account managers and the director of sales and marketing. Despite
attempts to convince them to accept the transfer to Manila, they declined
because their families were living in Nasugbu, Batangas.
LA found that respondents had been constructively dismissed. NLRC
reversed the same and dismissed the complaint for lack of merit. CA granted
the petition for certiorari and set aside NLRC’s decision.
ISSUE:
Whether or not the transfer of respondents constitutes constructive
dismissal.
HELD: NO.
The Supreme Court held that the petitioner was able to discharge its
burden, and thus establishedthat, contrary to the claim of the respondents
that they had been constructively dismissed, their transfer had been an
exercise of the petitioner’s legitimate management prerogative.
First, the resignations of the account managers and the director of
sales and marketing in the Manila office brought about the immediate need
for their replacements with personnel having commensurate experiences
and skills. With the positions held by the resigned sales personnel being
undoubtedly crucial to the operations and business of the petitioner, the
resignations gave rise to an urgent and genuine business necessity that
fully warranted the transfer from the Nasugbu, Batangas office to the
main office in Manila of the respondents, undoubtedly the best suited to
perform the tasks assigned to the resigned employees because of their
being themselves account managers who had recently attended seminars
and trainings as such.
Secondly, although the respondents’ transfer to Manila might be
potentially inconvenient for them because it would
entail additional expenses on their part aside from their being forced to be
away from their families, it was neither unreasonable nor oppressive. The
petitioner rightly points out that the transfer would be without demotion
in rank, or without diminution of benefits and salaries. Instead, the
transfer would open the way for their eventual career growth, with the
corresponding increases in pay.
Thirdly, the respondents did not show by substantial evidence that
the petitioner was acting in bad faith or had ill-motive in ordering their
transfer. In contrast, the urgency and genuine business necessity justifying
the transfer negated bad faith on the part of the petitioner.
 Lastly, the respondents, by having voluntarily affixed their Case Title
signatures on their respective letters of appointment, acceded to the :
ECHO 2000 COMMERCIAL CORPORATION, EDWARD N. ENRIQUEZ,
terms and conditions of employment incorporated therein. One of the LEONORA K. BENEDICTO and ATTY. GINA WENCESLAO v. OBRERO
terms and conditions thus incorporated was the prerogative of FILIPINO – ECHO 2000 CHAPTER – CLO, ARLO C. CORTES and
management to transfer and re-assign its employees from one job to DAVE
SOMIDO
another “as it may deem necessary or advisable.”
G.R. No.
:
G.R. No. 214092
Date
:
11 January 2016
Ponente
:
Associate Justice Bienvenido L. Reyes
Facts
Arlo C. Cortes (Cortes) and Dave Somido (Somido) were employees of
Echo 2000 Commercial Corporation (Echo) as Forklift Operator and
Warehouse Checker, respectively.
The respondents and their co-owners formed Obrero Filipino – Echo
2000 Commercial Chapter (Union). Cortes was elected Vice
President while Somido became an active member. The
respondents claimed that the Union’s President, Secretary and one of the
board members were subsequently harassed, discriminated and
eventually terminated from employment by Echo.
Enriquez issued a memorandum informing the respondents of their
transfer to the Delivery
Section, which was within the premises of Echo's warehouse. The
transfer would entail no
change in ranks, status and salaries.
Somido wrote Echo a letter indicating his refusal to be promoted as a
"Delivery Supervisor". He
explained that he was already happy as a Warehouse Checker. Further,
he was not ready to be a
Delivery Supervisor since the position was sensitive and required more
expertise and training,
which he did not have. Cortes similarly declined Echo's offer of promotion
claiming that he was
contented in his post then as a Forklift Operator. He also alleged that he
would be more
productive as an employee if he remained in his post. He
also lacked prior supervisory
experience.
Enward N. Enriquez (Enriquez), sans consent of the respondents, (2)
informed the latter of their Whether Echo and its officers are guilty of unfair labor practice.
assignments/designations as Delivery Supervisors. Echo alleged that the No!
respondents did not (3)
perform the new duties assigned to them. Hence, they were each issued Whether Echo's officers, who are sued as nominal parties, should be held
a memorandum requiring liable to pay the
them to explain in writing their failure to abide with the new assignments. respondents their money claims.
Echo clarified through No!
a memo that the respondents were designated as "Delivery Coordinators" Held
and not "Supervisors." The offer of transfer is, in legal contemplation, a promotion, which the
Thereafter, successive memoranda were issued by Echo to the respondents validly
respondents, who refused to refused. Such refusal cannot be the basis for the respondents' dismissal
acknowledge receipt and comply with the directives therein. The from service. The
Memoranda dated July 20, finding of unfair labor practice and the award of moral and exemplary
2009 suspended them without pay for five days for their damages do not
alleged insubordination. The however follow solely by reason of the dismissal.
Memoranda dated August 8, 2009 informed them of their Article 212 (13) of the Labor Code distinguishes from each other as
termination from employment, follows the concepts of
effective August 15, 2009, by reason of their repeated refusal to managerial, supervisory and rank-and-file employees:
acknowledge receipt of Echo's "Managerial employee" is one who is vested with the powers or
memoranda and flagrant defiance to assume the duties of Delivery prerogatives to lay down and
Coordinators. execute management policies and/or to hire, transfer, suspend, lay-off,
The respondents filed before the National Labor Relations Commission recall, discharge,
(NLRC) a complaint assign or discipline employees. Supervisory employees are those who, in
against Echo for unfair labor practice, illegal dismissal, illegal suspension, the interest of the
illegal deductions and employer, effectively recommend such managerial actions if the exercise
payment of money claims, damages and attorney's fees. The of such authority is
respondents claimed that they were not merely routinary or clerical in nature but requires the use of
offered promotions, which were mere ploys to remove them as rank-and- independent judgment. All
file employees, and oust employees not falling within any of the above definitions are
them as Union members. considered rank-and-file
The petitioners insisted that the respondents were merely transferred, employees for purposes of this Book.
and not promoted. Further, As to the extent of management prerogative to transfer/promote
the respondents arrogantly refused to comply with Enriquez's directives. employees, and the differences
Their insubordination between transfer on one hand, and promotion, on the other, Coca-Cola
constituted just cause to terminate them from employment. Bottlers Philippines, Inc.
Issues v. Del Villar is instructive, viz:
(1) [L]abor laws discourage interference in employers' judgment concerning
Whether the respondents were illegally suspended and terminated, the conduct of their
hence, entitled to business.
payment of their money claims, damages and attorney's fees. In the pursuit of its legitimate business interest,
Yes, the respondents were management has the prerogative to transfer
illegally suspended and terminated but not entitled to payment of or assign employees from one office or area of operation to another –
damages. provided there is no
demotion in rank or diminution of salary, benefits, and other privileges; assigns teams to man the trucks, oversees the loading of goods, checks
and the action is not the conditions of the
motivated by discrimination, made in bad faith, or effected as a form of trucks, coordinates with account specialists in the outlets regarding their
punishment or delivery concerns, and
demotion without sufficient cause supervises other about their performance in the warehouse. A Delivery
. x x x. Supervisor/Coordinator's
x x x In the case of Blue Dairy Corporation v. National Labor Relations duties and responsibilities are apparently not of the same weight as
Commission, we those of a Warehouse
described in more detail the limitations on the right of management to Checker or Forklift Operator. Hence, despite the fact that no salary
transfer employees: increases were effected, the
x x x [I]t cannot be used as a subterfuge by the employer to rid himself assumption of the post of a Delivery Supervisor/Coordinator should be
of an undesirable considered a promotion.
worker. In particular, the employer must be able to show that The respondents' refusal to accept the same was therefore valid.
the transfer is not Notwithstanding the illegality of the respondents' dismissal, the Court
unreasonable, inconvenient or prejudicial to the employee; nor does it finds no sufficient basis to
involve a demotion award moral and exemplary damages.
in rank or a diminution of his salaries, privileges and other benefits. x x x. A dismissal may be contrary to law but by itself alone, it does not
x x x x A transfer is a movement from one position to another which is of establish bad faith to entitle the
equivalent rank, dismissed employee to moral damages. The award of moral and
level or salary, without break in service. exemplary damages cannot be
Promotion, on the other hand, is the advancement justified solely upon the premise that the employer dismissed his
from one position to another with an increase in duties and employee without just or
responsibilities as authorized by authorized cause.
law, and usually accompanied by an increase in salary In the instant case, the right not to accept an offered promotion
. x x x. pertained to each of the
Promotion to occur, there must be an advancement from one position to respondents. However, they exhibited disrespectful behavior by their
another or an upward repeated refusal to receive
vertical movement of the employee's rank or position. Any increase in the memoranda issued by Echo and by their continued presence in their
salary should only be respective areas without
considered incidental but never determinative of whether or not a any work output. The Court thus finds that although the respondents'
promotion is bestowed upon an dismissal from service for
employee. An employee is not bound to accept a promotion, which is in just cause was unwarranted, there is likewise no basis for the award of
the nature of a gift or moral and exemplary
reward. Refusal to be promoted is a valid exercise of a right damages in their favor. Echo expectedly imposed disciplinary penalties
. Such exercise cannot be considered upon the respondents for
in law as insubordination, or willful disobedience of a lawful order of the the latter's intransigence.
employer, hence, it Albeit the Court is not convinced of the character and extent of the
cannot be the basis of an employee's dismissal from service. measures taken by Echo, bad
In the case at bench, a Warehouse Checker and a Forklift Operator are faith cannot be inferred solely from the said impositions. Anent the
rank-and-file employees. National Labor Relations
On the other hand, the job of a Delivery Commission (NLRC) and Court of Appeals’ (CA) conclusion that Echo
Supervisor/Coordinator requires the exercise of committed unfair labor
discretion and judgment from time to time. Specifically, a Delivery practice, the Court disagrees.
Supervisor/Coordinator
Unfair labor practices violate the constitutional right of workers . They are only solidarily liable with the corporation for the illegal
and employees to self- termination of
organization, are inimical to the legitimate interests of both labor and services of employees if they acted with malice or bad faith. In Philippine
management, including American Life and
their right to bargain collectively and otherwise deal with each other in General Insurance v. Gramaje,
an atmosphere of bad faith is defined as a state of mind affirmatively operating
freedom and mutual respect, disrupt industrial peace and hinder the with furtive design or with some motive of self-interest or ill will or for
promotion of healthy and ulterior purpose. It
stable labor-management relations. implies a conscious and intentional design to do a wrongful act for a
The respondents allege that their transfer/promotion was intended to dishonest purpose or
deprive the Union of moral obliquity
leadership and membership. They claim that other officers .
were already dismissed. The In the instant petition, the respondents failed to specify and sufficiently
foregoing, however, lacks substantiation. Unfair labor practice is a prove the alleged acts of
serious charge, and the Enriquez, Benedicto and Atty. Wenceslao from which malice or bad faith
respondents failed to show that the petitioners conclusively interfered can be concluded
with, restrained, or coerced
employees in the exercise of their right to self-organization.
Enriquez, Benedicto and Atty. Wenceslao cannot be held
personally liable for the
respondents’ money claims.
Lambert Pawnbrokers and Jewelry Corporation, expounds on the
liabilities of corporate officers
to employees. The Court declared:
As a general rule, only the employer-corporation, partnership or
association or any other
entity, and not its officers, which may be held liable for illegal dismissal of
employees or for
other wrongful acts
. This is as it should be because a corporation is a juridical entity with
legal personality separate and distinct from those acting for and in its
behalf and, in general,
from the people comprising it. A corporation, as a juridical entity, may act
only through its
directors, officers and employees. Obligations incurred as a result of the
directors' and
officers' acts as corporate agents, are not their personal liability but the
direct responsibility
of the corporation they represent.
It is settled that in the absence of malice and bad faith, a
stockholder or an officer of a corporation cannot be made personally
liable for corporate
liabilities
Case Digest: Republic v. Pacheo
G.R. No. 178021 : January 25, 2012
REPUBLIC OF THE PHILIPPINES, represented by the CIVIL SERVICE
COMMISSION, Petitioner,v.MINERVA M.P. PACHEO, Respondent.
MENDOZA, J.:
FACTS:
Pacheo was a Revenue Attorney IV, Assistant Chief of the Legal Division of
the Bureau of Internal Revenue(BIR) in Revenue Region No. 7 (RR7), Quezon
City. The BIR issued Revenue Travel Assignment Order (RTAO)No. 25-2002,
ordering the reassignment of Pacheo as Assistant Chief, Legal Division from
RR7 in Quezon City to RR4 in San Fernando, Pampanga.
Pacheo questioned the reassignment through her Letter addressed to Rene
G. Banez, then Commissioner of Internal Revenue (CIR). She considered her
transfer from Quezon City to Pampanga as amounting to a constructive
dismissal.
Due to the then inaction of the BIR, Pacheo filed a complaint before the
CSC- National Capital Region (CSC-NCR), praying for the nullification of RTAO
No. 25-2002. The BIR, through its Deputy Commissioner for Legal and
Inspection Group, Edmundo P. Guevara (Guevara), denied Pacheos protest
for lack of merit. It contended that her reassignment could not be
considered constructive dismissal as she maintained her position as
Revenue Attorney IV and was designated as Assistant Chief of Legal Division.
Pacheo appealed to the CSC where the latter granted the same. However,
the CSC held that rules and so holds that the withholding by the BIR of her
salaries is justified as she is not entitled thereto since she is deemed not to
have performed any actual work in the government on the principle of no
work no pay. Still not satisfied, Pacheo moved for reconsideration. She
argued that the CSC erred in not finding that she was constructively
dismissed and, therefore, entitled to back salary. However, the motion was
dismissed.
Undaunted, Pacheo sought recourse before the CA via a petition for review.
The CA reversed the CSC decision, stating that Pacheo was constructively
dismissed. Hence, this petition.
ISSUE: Whether or not the CA erred in ruling that Pacheo was constructively
dismissed and entitled to backwages
HELD: No.
Political Law- transfer or assignment of personnel cannot be done when
the same is a preliminary step toward his removal or a scheme to lure him
away from his permanent position.
While a temporary transfer or assignment of personnel is permissible even
without the employee's prior consent, it cannot be done when the transfer
is a preliminary step toward his removal, or a scheme to lure him away from
his permanent position, or when it is designed to indirectly terminate his
service, or force his resignation. Such a transfer would in effect circumvent
the provision which safeguards the tenure of office of those who are in the
Civil Service.
Significantly, Section 6, Rule III of CSC Memorandum Circular No. 40, series
of 1998, defines constructive dismissal as a situation when an employee
quits his work because of the agency heads unreasonable, humiliating, or
demeaning actuations which render continued work impossible. Hence, the
employee is deemed to have been illegally dismissed. This may occur
although there is no diminution or reduction of salary of the employee. It
may be a transfer from one position of dignity to a more servile or menial
job.
The CSC, through the OSG, contends that the deliberate refusal of Pacheo to
report for work either in her original station in Quezon City or her new place
of assignment in San Fernando, Pampanga negates her claim of constructive
dismissal.

It is clear, however, from E.O. 292, Book V, Title 1, Subtitle A, Chapter 5,

Section 26 (7) that there is no such duty to first report to the new place of
assignment prior to questioning an alleged invalid reassignment imposed
upon an employee. Pacheo was well within her right not to report
immediately to RR4, San Fernando, Pampanga, and to question her
reassignment.

Reassignments involving a reduction in rank, status or salary violate an

employees security of tenure, which is assured by the Constitution, the
Administrative Code of 1987, and the Omnibus Civil Service Rules and
Regulations. Security of tenure covers not only employees removed without
cause, but also cases of unconsented transfers and reassignments, which
are tantamount to illegal/constructive removal.

Having ruled that Pacheo was constructively dismissed, is she entitled to

reinstatement and back wages? The Court agrees with the CA that she is
entitled to reinstatement, but finds Itself unable to sustain the ruling that
she is entitled to full back wages and benefits. It is a settled jurisprudence
that an illegally dismissed civil service employee is entitled to back salaries
but limited only to a maximum period of five (5) years, and not full back
salaries from his illegal dismissal up to his reinstatement.

Petition Denied