[G.R. No. 119205.  April 15, 1998]SIME DARBY PILIPINAS, INC., petitioner, vs. NATIONAL LABOR

RELATIONS COMMISSION (2ND DIVISION) and SIME DARBY SALARIED EMPLOYEES ASSOCIATION (ALU-TUCP), respondents.

Facts: Petitioner is engaged in the manufacture of automotive tires, tubes and

other rubber products. Private respondent is an association of monthly salaried

employees of petitioner at its Marikina factory. Beforehand, all company factory

workers in Marikina including members of private respondent union worked from

7:45am to 3:45pm with a 30-minute paid “on call” lunch break. 

Petitioner issued a memorandum to all factory- based employees advising all its

monthly salaried employees in its Marikina Tire Plant, except those in the

Warehouse and Quality Assurance Department working on shifts. 

Private respondent felt affected adversely by the change in the work schedule and

discontinuance of the 30-minute paid “on call” lunch break, hence the filling of

complaint for unfair labor practice, discrimination and evasion of liability. The

Labor Article dismissed the complainant on the ground that the change in the

work schedule and the elimination of the 30-minute paid lunch break of factory

workers constituted a valid exercise of management prerogative and did not

decrease the benefits granted to factory workers as the working time did not go

beyond 8 hours. Hence, this petition. 

Issue: Whether or not there was a diminution of benefits when the 30-minute

paid lunch break was eliminated 

Held: The right to fix the work, schedules of the employees rests principally on

their employer. The petitioner cities as reason for the adjustment the efficient

conduct of its business operations and its improved production. Since the

employees are no longer required during this one-hour lunch break, there is no

more need for them to be compensated for this period. The new work schedule

fully complies with the daily work period of eight (8) hours without violating the

Labor Code. Also, the new schedule applies to all employees in the factory

similarly situated whether they are union members or not; Even as the law is

solicitous of the welfare of the employees; it must also protect the right of an

employer to exercise what are clearly management prerogatives; Management

retains the prerogative, whenever exigencies of the service so require, to change

the working hours of its employees Petition is granted. The dismissed complaint

against petitioner for unfair labor practice is affirmed.

D E C I S I O NBELLOSILLO, J.:

Is the act of management in revising the work schedule of its employees and discarding their paid lunch break constitutive of unfair labor practice?

Sime Darby Pilipinas, Inc., petitioner, is engaged in the manufacture of automotive tires, tubes and other rubber products.  Sime Darby Salaried Employees Association (ALU-TUCP), private respondent, is an association of

monthly salaried employees of petitioner at its Marikina factory.  Prior to the present controversy, all company factory workers in Marikina including members of private respondent union worked from7:45 a.m. to 3:45 p.m. with a 30 minute paid “on call” lunch break.

On 14 August 1992 petitioner issued a memorandum to all factory-based employees advising all its monthly salaried employees in its Marikina Tire Plant, except those in the Warehouse and Quality Assurance Department working on shifts, a change in work schedule effective 14 September 1992 thus –TO: ALL FACTORY-BASED EMPLOYEESRE: NEW WORK SCHEDULE

Effective Monday, September 14, 1992, the new work schedule factory office will be as follows:

7:45 A.M. – 4:45 P.M. (Monday to Friday)7:45 A.M. – 11:45 P.M. (Saturday).

Coffee break time will be ten minutes only anytime between:9:30 A.M. –10:30 A.M. and2:30 P.M. –3:30 P.M.

Lunch break will be between:12:00 NN –1:00 P.M. (Monday to Friday).

Excluded from the above schedule are the Warehouse and QA employees who are on shifting.  Their work and break time schedules will be maintained as it is now.[1]

Since private respondent felt affected adversely by the change in the work schedule and discontinuance of the 30-minute paid “on call” lunch break, it filed on behalf of its members a complaint with the Labor Arbiter for unfair labor practice, discrimination and evasion of liability pursuant to the resolution of this Court in Sime Darby International Tire Co., Inc. v. NLRC.[2] However, the Labor Arbiter dismissed the complaint on the ground that the change in the work schedule and the elimination of the 30-minute paid lunch break of the factory workers constituted a valid exercise of management prerogative and that the new work schedule, break time and one-hour lunch break did not have the effect of diminishing the benefits granted to factory workers as the working time did not exceed eight (8) hours.

The Labor Arbiter further held that the factory workers would be justly enriched if they continued to be paid during their lunch break even if they were no longer “on call” or required to work during the break.  He also ruled that the decision in the earlier Sime Darby case[3] was not applicable to the instant case because the former involved discrimination of certain employees who were not paid for their 30-minute lunch break while the rest of the factory workers were paid; hence, this Court ordered that the discriminated employees be similarly paid the additional compensation for their lunch break.

Private respondent appealed to respondent National Labor Relations Commission (NLRC) which sustained the Labor Arbiter and dismissed the appeal.[4] However, upon motion for reconsideration by private respondent, the NLRC, this time with two (2) new commissioners replacing those who earlier retired, reversed its arlier decision of 20 April 1994 as well as the decision of the Labor Arbiter.[5] The NLRC considered the decision of this Court in the Sime Darby case of 1990 as the law of the case wherein petitioner was ordered to pay “the money value of these covered employees deprived of lunch and/or working time breaks.”  The public respondent declared that the new work schedule deprived the employees of the benefits of time-honored company practice of providing its employees a 30-minute paid lunch break resulting in an unjust diminution of company privileges prohibited by Art. 100 of the Labor Code, as amended.  Hence, this petition alleging that public respondent committed grave abuse of discretion amounting to lack or excess of jurisdiction:  (a) in ruling that petitioner committed unfair labor practice in the implementation of the change in the work schedule of its employees from 7:45 a.m. – 3:45 p.m. to 7:45 a.m. – 4:45 p.m. with one-hour lunch break from 12:00 nn to 1:00 p.m.; (b) in holding that there was diminution

of benefits when the 30-minute paid lunch break was eliminated; (c) in failing to consider that in the earlier Sime Darby case affirming the decision of the NLRC, petitioner was authorized to discontinue the practice of having a 30-minute paid lunch break should it decide to do so; and (d) in ignoring petitioner’s inherent management prerogative of determining and fixing the work schedule of its employees which is expressly recognized in the collective bargaining agreement between petitioner and private respondent.

The Office of the Solicitor General filed in lieu of comment a manifestation and motion recommending that the petition be granted, alleging that the 14 August 1992 memorandum which contained the new work schedule was not discriminatory of the union members nor did it constitute unfair labor practice on the part of petitioner.

We agree, hence, we sustain petitioner.  The right to fix the work schedules of the employees rests principally on their employer.  In the instant case petitioner, as the employer, cites as reason for the adjustment the efficient conduct of its business operations and its improved production.[6] It rationalizes that while the old work schedule included a 30-minute paid lunch break, the employees could be called upon to do jobs during that period as they were “on call.”  Even if denominated as lunch break, this period could very well be considered as working time because the factory employees were required to work if necessary and were paid accordingly for working.  With the new work schedule, the employees are now given a one-hour lunch break without any interruption from their employer.  For a full one-hour undisturbed lunch break, the employees can freely and effectively use this hour not only for eating but also for their rest and comfort which are conducive to more efficiency and better performance in their work.  Since the employees are no longer required to work during this one-hour lunch break, there is no more need for them to be compensated for this period.  We agree with the Labor Arbiter that the new work schedule fully complies with the daily work period of eight (8) hours without violating the Labor Code.[7] Besides, the new schedule applies to all employees in the factory similarly situated whether they are union members or not.[8]

Consequently, it was grave abuse of discretion for public respondent to equate the earlier Sime Darby case[9] with the facts obtaining in this case.  That ruling in the former case is not applicable here.  The issue in that case involved the matter of granting lunch breaks to certain employees while depriving the other employees of such breaks.  This Court affirmed in that case the NLRC’s finding that such act of management was discriminatory and constituted unfair labor practice.

The case before us does not pertain to any controversy involving discrimination of employees but only the issue of whether the change of work schedule, which management deems necessary to increase production, constitutes unfair labor practice.  As shown by the records, the change effected by management  with regard to working time is made to apply to all factory employees engaged in the same line of work whether or not they are members of private respondent union.  Hence, it cannot be said that the new scheme adopted by management prejudices the right of private respondent to self-organization.

Every business enterprise endeavors to increase its profits.  In the process, it may devise means to attain that goal.  Even as the law is solicitous of the welfare of the employees, it must also protect the right of an employer to exercise what are clearly management prerogatives.[10]Thus, management is free to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay off of workers and discipline, dismissal and recall of workers.[11] Further, management retains the prerogative, whenever exigencies of the service so require, to change the working hours of its employees.  So long as such prerogative is 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, this Court will uphold such exercise.[12]

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 dispute will be automatically decided in favor of labor.  Management also has right which, as such, are entitled to respect and enforcement in the interest of simple fair play.  Although this Court has inclined more often than not toward the worker and has upheld his cause in his conflicts with the employer, such as favoritism has not blinded the Court to the rule that justice is in every case for the deserving, to be dispensed in the light of the established facts and the applicable law and doctrine.[13]

WHEREFORE, the Petition is GRANTED.  The Resolution of the National Labor Relations Commission dated 29 November 1994 is SET ASIDE and the decision of the Labor Arbiter dated 26 November 1993 dismissing the complaint against petitioner for unfair labor practice is AFFIRMED.

SO ORDERED.

 

Sevilla vs. CAFACTS:

A contract by and between Noguera and Tourist World Service (TWS), represented by Canilao, wherein TWSleased the premises belonging to Noguera as branch office of TWS. When the branch office was opened, it was runby appellant Sevilla payable to TWS by any airline for any fare brought in on the efforts of Mrs. Sevilla, 4% was togo to Sevilla and 3% was to be withheld by the TWS.Later, TWS was informed that Sevilla was connected with rival firm, and since the branch office was

losing, TWS considered closing down its office.On January 3, 1962, the contract with appellee for the use of the branch office premises was terminatedand while the effectivity thereof was January 31, 1962, the appellees no longer used it. Because of this, Canilao, thesecretary of TWS, went over to the branch office, and finding the premises locked, he padlocked the premises.When neither appellant Sevilla nor any of his employees could enter, a complaint was filed by the appellantsagainst the appellees. TWS insisted that Sevilla was a mere employee, being the “branch manager” of its branch office and thatshe had no say on the lease executed with the private respondent, Noguera.

ISSUE:

W/N ER-EE relationship exists between Sevilla and TWS

HELD:

 The records show that petitioner, Sevilla, was not subject to control by the private respondent TWS. In thef i r s t   p lace ,   under   the con t rac t o f   l ease ,   she had  bound  herse l f   i n   so l i dum as  and fo r   ren ta l   payments , anarrangement that would belie claims of a master-servant relationship. That does not make her an employee of TWS,since a true employee cannot be made to part with his own money in pursuance of his employer’s business, orotherwise, assume any liability thereof.In the second place, when the branch office was opened, the same was run by the appellant Sevilla payableto TWS by any airline for any fare brought in on the effort of Sevilla. Thus, it cannot be said that Sevilla was underthe control of TWS. Sevilla in pursuing the business, relied on her own capabilities.It is further admitted that Sevilla was not in the company’s payroll. For her efforts, she retained 4% incommissions from airline bookings, the remaining 3% going to TWS. Unlike an employee, who earns a fixed salary,she earned compensation in fluctuating amount depending on her booking successes. The fact that Sevilla had been designated “branch manager” does not make her a TWS employee. Itappears that Sevilla is a bona fide travel agent herself, and she acquired an interest in the business entrusted toher. She also had assumed personal obligation for the operation thereof, holding herself solidary liable for thepayment of rentals.Wherefore, TWS and Canilao are jointly and severally liable to indemnify the petitioner, Sevilla.

Duncan Assoc. of Detailman-PTGWO vs. Glaxo Wellcome Phils., Inc. 

G.R. No. 162994, September 17, 2004FACTS:Tecson was hired by Glaxo as a medical representative on Oct. 24, 1995. Contract of employment signed by Tecson stipulates, among others, that he agrees to study and abide by the existing company rules; to disclose to management any existing future relationship by consanguinity or affinity with co-employees or employees with competing drug companies and should management find that such relationship poses a prossible conflict of interest, to

resign from the company. Company's Code of Employee Conduct provides the same with stipulation that management may transfer the employee to another department in a non-counterchecking position or preparation for employment outside of the company after 6 months. 

Tecson was initially assigned to market Glaxo's products in the Camarines Sur-Camarines Norte area and entered into a romantic relationship with Betsy, an employee of Astra, Glaxo's competition. Before getting married, Tecson's District Manager reminded him several times of the conflict of interest but marriage took place in Sept. 1998. In Jan. 1999, Tecson's superiors informed him of conflict of intrest. Tecson asked for time to comply with the condition (that either he or Betsy resign from their respective positions). Unable to comply with condition, Glaxo transferred Tecson to the Butuan-Surigao City-Agusan del Sur sales area. After his request against transfer was denied, Tecson brought the matter to Glaxo's Grievance Committee and while pending, he continued to act as medical representative in the Camarines Sur-Camarines Norte sales area. On Nov. 15, 2000, the National Conciliation and Mediation Board ruled that Glaxo's policy was valid...

ISSUE:Whether or not the policy of a pharmaceutical company prohibiting its employees from marrying employees of any competitor company is valid

RULING:On Equal ProtectionGlaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies, and other confidential programs and information from competitors. The prohibition against pesonal or marital relationships with employees of competitor companies upon Glaxo's employees is reasonable under the circumstances because relationships of that nature might compromise the interests of the company. That Glaxo possesses the right to protect its economic interest cannot be denied.It is the settled principle that the commands of the equal protection clause are addressed only to the state or those acting under color of its authority. Corollarily, it has been held in a long array of US Supreme Court decisions that the equal protection clause erects to shield against merely privately conduct, however, discriminatory or wrongful.The company actually enforced the policy after repeated requests to the employee to comply with the policy. Indeed the application of the policy was made in an impartial and even-handed manner, with due regard for the lot of the employee.

On Constructive Dismissal

Constructive dismissal is defined as a quitting, an involuntary resignation resorted to when continued employment becomes impossible, unreasonable or unlikely; when there is demotion in rank, or diminution in pay; or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee. None of these conditions are present in the instant case.

Pantoja v. SCA Hygiene Products April 23, 2010 G.R 163554 619 SCRA 216

Facts:

Respondent, a corporation engaged in the manufacture, sale, and distribution of industrial paper and tissue products, employed petitioner as a utility man. Petitioner was eventually assigned at respondent’s Paper Mill No. 4, the section which manufactures the company’s industrial paper products, as a back tender in charge of the proper operation of the section’s machineries.

In a Notice of Transfer, respondent informed the petitioner of its reorganization plan and offered hima position at Paper Mill No. 5 under the same terms and conditions of employment in anticipation of the eventual closure and permanent shutdown of Paper Mill No. 4. The closure and concomitant reorganization is in line with respondent’s decision to streamline and have out the company’s industrial paper manufacturing operations due to financial difficulties brought about by the low volume of sales and orders for industrial paper products. However petitioner rejected the transfer, thus a notice of termination of employment was sent as his position was decalred redundant by the closure of Paper Mill No. 4.

Petitioner filed a complaint for illegal dismissal against respondent assailing his termination as without any valid cause. He averred that the alleged redundancy never occurred as there was no permanent shutdown of Paper Mill no. 4 due to its continuous operation since his termination. In its defense, respondent refuted petitioner’s claim of illegal dismissal. It argued that petitioner has voluntarily separated himself from service by opting to avail of the separation benefits of the company instead of accepting reassignment/transfer to another position of equal rank and pay.

Issue: WON petitioner was illegally dismissed.

Ruling: No. Respondent’s right of management prerogative was exercised in good faith.

In this case, the abolishment of Paper Mill No. 4 was undoubtedly a business judgment arrived at in the face of the low demand for the production of industrial paper at the time. Despite an apparent reason to implement a retrenchment program as a cost-cutting measure, respondent, however, did not outrightly dismiss the workers affected by the closure of Paper Mill No. 4 but gave them an option to be transferred to post of equal rank and pay. As can be seen, retrenchment was utilized by respondent only as an available option in case the effected employee would not want to be transferred. Respondent did not proceed directly to retrench. This, to our mind, is an indication of good faith on respondent’s part as it exhausted other possible measures other than retrenchment.

Besides, the employer’s prerogative to bring down labor costs by retrenching must be exercised essentially as a measure of last resort, after less drastic means have been tried and found wanting. Giving the workers an option to be transferred without any diminution in rank and pay specifically belie petitioner’s allegation that the alleged streamlining scheme was implemented as a ploy to ease out employees, thus, the absence of bad faith. Apparently, respondent implemented its streamlining or reorganization plan with good faith, not in an arbitrary manner and without prejudicing the tenurial rights of its employees.