Ledesma VS.

NLRC was told by petitioner that he did not

want private respondent to in the
Doctrines: hacienda anymore since private
respondent’s loyalty was with the
1. There is a constructive dismissal workers and not with the petitioner.
when the reassignment of an employee
involves a demotion in rank or Private respondent filed a complaint of
discrimination in pay. illegal dismissal.

2. Demotion of private respondent is Labor Arbiter ruling - ruled that private

tantamount to a constructive dismissal respondent was not dismissed but was
because merely given a new assignment and that
his act of refusing to report for work in
Facts: his new assignment constituted
abandonment
Private respondent Orlando Ondon was
employed as a security guard by Further, the change of private
petitioner company at its hacienda respondent’s assignment from security
Teresa situated in Negros Occidental guard to laborer was justified as
under the management of petitioner respondent’s breach the trust and
Arturo Ledesma. confidence of his employer by
maintaining a stand contrary to that of
The hacienda is covered by the the management.
Comprehensive Agrariran Reform
Program (CARP), a team from the NLRC Ruling – reversed the decision of
Department of Agrarian Reform visited the labor arbiter and found that private
the hacienda and conducted a meeting respondent was illegally dismissed. The
to explain to the workers their options transfer of private respondent from the
under the said law: position of security guard to the position
of a laborer was a demotion.
1. Actual Land Distribution or
2. Stock Distribution Further the private respondent’s refusal
to accept the transfer did not amount to
After the said meeting, private abandonment of work for he
respondent campaigned for actual land immediately filed his complaint for illegal
distribution while the petitioner dismissal.
campaigned for the stock distribution.
ISSUE: Whether or not private
Due to this, private respondent was respondent was
prevented from reporting for work and illegally/constructively dismissed?
HELD: Yes, in the case at bar, the
demotion of private respondent is
tantamount to a constructive dismissal.
One does not need to stretch his
imagination to distinguish the work of a
security guard and that of a common
agricultural laborer in a sugar plantation.

Likewise, there was a diminution of

salary, for a security guard is paid on a
monthly basis while a laborer in the
sugar plantation is paid either on daily or
piece work basis.

Lastly, laborers do not work year round

but only when needed and off – season
months, they are not required to work at
all.
The Philippine American Life and CBA, general principles of fair play and
General Insurance Co., VS. Gramaje justice.

Doctrines 6. the managerial prerogative to transfer

personnel must be exercised without
1. Discrimination is the unequal grave abuse of discretion bearing in
treatment of employees, which is mind the basic elements of justice and
proscribed as an unfair labor practice by fair play. the employer must be able to
Article 248(e) of the Labor Code. show that the transfer is not
unreasonable, inconvenient or
Discrimination is the failure to treat all prejudicial to the employee; nor does it
persons equally when no reasonable involve a demotion in rank or a
distinction can be found between those diminution of his salaries, privileges and
favoured and those not favoured. other benefits

2. Bad faith is defined as a state of mind Facts

affirmatively operating with furtive
design or with some motive of self – In 1997: Atty. Angelita Gramaje was
interest or ill will or for an ulterior employed by Philamlife as Assistant VP,
purpose. It implies a conscious and heading the Pensions Department.
intentional design to do a wrongful act
In 1998: The management staff of the
for a dishonest purpose or moral
Pensions Dept were transferred to another
obliquity.
division, leaving her to run the Pensions
Department single-handedly with only one
3. Constructive dismissal has been assistant.
defined as a quitting because of
continued employment is rendered The Chair of Philamlife, Cuisa, suddenly
impossible, unreasonable or unlikely; as offered Gramaje 250,000 as severance fee
an offer involving a demotion in rank and asking her to leave her position.
diminution in pay.
 He explained in a meeting that in
4. Constructive dismissal exists when an offering her the severance fee, he
is in fact sparing her the
act of clear discrimination, insensibility
hardships that she will undergo in
or disdain by an employer has become the legal department which she
unbearable to the employee leaving him will be transferred to.
with no option but to forego with his
continued employment. Cuisa issued a memorandum instructing
Gramaje to transfer to the legal department.
5. Managerial prerogatives, however,
are subject to limitations provided by  Gramaje protested the sudden
unexplained transfer and
 stressed that the was hired faith, or effected as a form of
because of her marketing, punishment or demotion without
finance and fund management sufficient cause.
skills, not her legal skills.
In the case at bar, bad faith and
 She also said that her department
was performing very well, discrimination on the part of petitioner
surpassing its P15m target hitting are profusely perceived from its actions.
almost 20m.
As early as 23 August 1998, Philam life
While on Gramaje was on sick leave, she had already advertised in the Manila
found out that Cuisa had appointed Bulletin for a replacement.
someone else as head of the Pensions
department, and that her whole department
Cuisa in a memorandum announced the
was physically transferred to another
appointment of Gramaje’s replacement
building.
during the time that respondent was still
Hence, Gramaje filed the instance case for on official sick leave.
illegal constructive dismissal.
Gramaje’s transfer to the Legal
 LA: No illegal dismissal. Department was unreasonable,
 NLRC: Upheld LA. inconvenient and prejudicial to
 CA: Found constructive her. Cuisa must have known that
dismissal. Gramaje has no adequate exposure in
the field of litigation, and yet she was
Issue: W/N transferring Gramaje was transferred to the Legal Department
constructively dismissed? which would have placed her in a very
inopportune position because she would
Held: Yes, It may be true that in the be heading a team of lawyers who are
transfer of respondent from the far more experienced than she was. It
Pensions Department to the Legal was a poor business decision and it is
Department, there was no demotion in unlikely that the officers of petitioner
rank nor diminution of the salaries, would have made such a decision,
benefits and privileges. But this is not except to inconvenience or prejudice
the only standard that must be satisfied respondent. Thus, under the
in order to substantiate the transfer. circumstances, the decision to transfer
was unreasonable.
Management has the prerogative to
transfer or assign employees, provided There was discrimination since Gramaje
there is no demotion in rank or was made to single handedly run the
diminution of salary, benefits, and other entire pensions department.
privileges; and the action is not
motivated by discrimination made in bad
She formally rejected the offer of
250,000 separation pay, but Philam life
never commented or replied to her
rejection letter.

Constructive dismissal exists when an

act of clear discrimination, insensibility
or disdain by an employer has become
so unbearable to the employee leaving
him with no option but to forego with his
continued employment.

 The circumstances which

prevailed in the working
environment of the respondent
clearly demonstrate this.

 The transfer of respondent from

the Pensions Department to the
Legal Department was not a
legitimate exercise of
management prerogative on the
part of petitioner. Before the order
to transfer was made,
discrimination, bad faith, and
disdain towards respondent were
already displayed by petitioner.
Lucky Textile Mills VS. NLRC a new corporation” this rehabilitation
plan was approved.
Doctrines: “Floating Status”
The Securities and Exchange
1. It is settled that when the bonafide Commission issued a registration
suspension of operation of a business or number for the new corporation named
undertaking exceeds 6 months, then the Lucky Textile Mills, Inc. (LUCKY).
worker’s employment shall be deemed EASTEX completely ceased operation.
terminated.
LUCKY agreed to “operate the former
In the case at bar, Nolasco’s “floating business” utilizing the assets of
status” could not last for an EASTEX. At the assumption of
unreasonable period. As it was operations, Nolasco was not hired by
established that he did not abandon his LUCKY.
work, his dismissal without cause,
without prior notice and hearing, was Nolasco filed a case to the NLRC
illegal. against both corporation (EASTEX AND
LUCKY) alleging that since resumption
Facts: of the normal operation of the
Nolasco was employed for 17 years as corporation he was not given any notice
property custodian of Eastern Textile to report back for duty, which amounted
Mills, Inc. (EASTEX) a domestic to his termination without cause.
corporation engaged in textile, receiving Issue: Whether or not Nolasco was
a monthly allowance of 320 pesos. illegaly dismissed?
EASTEX went on a “temporary Held: Yes, More than 6 months had
shutdown” and in the process, laid off elapsed from the time private
some of its employees. Thereafter, the respondent Nolasco was asked to stop
company suffered reverses and could working as property custodian. Having
not pay its indebtedness of 5 million worked faithfully for EASTEX for 17
dollars to its banks and because of this years without any derogatory record, he
reverses by virtue of a writ of attachment waited patiently for an advice to return to
issued by the RTC of Manila, the work. When no notice reached him,
company’s asset were attached. putting him on a prolonged floating
Nolasco was ordered to stop working, status, he was constrained to file the
the reason given being “temporary complaint for illegal dismissal in the
shutdown” DOLE.

EASTEX held a special meeting of its Applying Article 279 of the Labor Code,
stockholders, during which a resolution Nolasco, as a regular employee who
was passed authorizing “the formation of enjoyed security of tenure, cannot be
dismissed except for cause. Moreover,
there was no due process in terminating
his employment, there was not notice
and hearing.

It is settled that when the bonafide

suspension of operation of a business or
undertaking exceeds 6 months, then the
worker’s employment shall be deemed
terminated.

In the case at bar, Nolasco’s “floating

status” could not last for an
unreasonable period. As it was
established that he did not abandon his
work, his dismissal without cause,
without prior notice and hearing, was
illegal.