Q: Is a special retirement plan different from those contemplated under the LC as agreed upon by the parties valid?
A: Yes. A pilot who retires after 20 years of service or after flying 20,000 hours would still be in the prime of his life and at the peak of his career, compared to one who retires at the age of 60 years old. Based on this peculiar circumstance that PAL pilots are in, the parties provided for a special scheme of retirement different from that contemplated in the LC. Conversely, the provisions of Art. 287 of the LC could not have contemplated the situation of PAL's pilots. Rather, it was intended for those who have no more plans of employment after retirement, and are thus in need of financial assistance and reward for the years that they have rendered service. (PAL v. Airline Pilots Ass’n of the Phils., G.R. No. 143686, Jan.15, 2002)
Q: In ‘55, Hilaria was hired as a grade school teacher at the Sta. Catalina College. In ‘70, she applied for and was granted a 1 yr LOA without pay due to the illness of her mother. After the expiration in ‘71 of her LOA, she had not been heard from by Sta. Catalina. In the meantime, she was employed as a teacher at the San Pedro Parochial School during SY ‘80‐‘81 and at the Liceo de San Pedro, during SY ’81‐‘82. In ‘82, she applied anew at Sta. Catalina which hired her. On Mar 22,
‘97, during the 51st Commencement Exercises of Sta. Catalina, Hilaria was awarded a Plaque of Appreciation for 30 yrs of service and P12,000 as gratuity pay. On May 31, ‘97, Hilaria reached the compulsory retirement age of 65. Sta. Catalina pegged her retirement benefits at P59,038.35. Deducted was the amount of P12,000 representing the gratuity pay which was given to her.
Should the gratuity pay be deducted from the retirement benefits?
A: No. As for the ruling of the CA affirming that of the NLRC that the P12,000 gratuity pay earlier awarded to Hilaria should not be deducted from the retirement benefits due her, the same is in order.
Gratuity pay is separate and distinct from retirement benefits. It is paid purely out of generosity.
Q: What is the difference between gratuity pay and retirement benefits?
A:
GRATUITY PAY RETIREMENT BENEFITS It is paid to the
beneficiary for the past services or favor rendered purely out of
the generosity of the giver or grantor. It is not intended to pay a worker
for actual services rendered or for actual
performance. It is a money benefit or bounty
given to the worker, the purpose of which is to reward Ee’s who have rendered satisfactory service to the company.
Are intended to help the Ee enjoy the remaining years of his life, releasing
him from the burden of worrying for his financial support, and are a form of
reward for his loyalty to the Er. (Sta. Catalina College and Sr. Loreta Oranza, vs. NLRC and Hilaria Tercera, G.R. No.
144483. November 19, 2003, J. Carpio‐Morales)
b. Retirement pay under RA 7641 vis‐à‐vis retireent benefits under SSS and GSIS laws
Q: What is retirement pay under the LC in relation to retirement benefits under SSS and GSIS laws?
A:
Social Security Law
Revised Government
Service Insurance Act
Employees Compensation
Act Compulsory
upon all E e s n o t o v e r 6 0 years of age and their Ers.
1.Filipinos recruited in the Phils. by foreign ‐ based
Ers for
employment abroad may be covered by the SSS on a voluntary basis.
2.
Compulsory upon all self‐
employed persons earning P1,800 or more per annum.
Compulsory for all permanent Ees below 60 years of age upon
appointment to permanent status, and for all elective officials for the duration of their tenure.
1. Any person, whether elected or appointed, in the service of an Er is a covered Ee if he receives compensation for such service.
Compulsory upon all Ers and their Ees not over 60 years of age;
Provided, that an Ee who is over 60 years of age and paying
contributions to qualify for the retirement or life insurance benefit administered by the System shall be subject to compulsory coverage.
Note: The Ees Compensation Commission shall ensure adequate coverage of Filipino Ees employed abroad, subject to regulations as it may prescribe. (Art. 170) Any person compulsorily covered by the GSIS including the members of the AFP, and any person employed as casual, emergency, temporary, substitute or contractual, or any person compulsorily covered by the SSS are covered by the Ee’s Compensation Program.
(1997 Bar Question)
E. MANAGEMENT PREROGATIVE
Q: What is Management Prerogative?
A:
GR: It is the right of an Er to regulate, according to his own discretion and judgment, all aspects of employment, including:
1. Hiring
2. Work assignments 3. Working methods
4. Time, place and manner of work 5. Tools to be used
6. Processes to be followed 7. Supervision of workers 8. Working regulations 9. Transfer of Ees 10. Work supervision 11. Lay‐off of workers 12. Discipline 13. Dismissal 14. Recall of workers
XPNs: Otherwise limited by special laws.
Note: So long as a company’s prerogatives are exercised in good faith for the advancement of the Er’sinterest and not for the purpose of defeating or circumventing the rights of the Ees under special laws or under valid agreements, the Supreme Court will uphold them.
Q: 1. An exclusive school for girls, run by a religious order, has a policy of not employing unwed mothers, women with live‐in partners, and lesbians. Is the policy violative of any provision of the LC on employment of women?
2. The same school dismissed 2 female faculty members on account of pregnancy out of wedlock.
Did the school violate any provision of the LC on employment of women?
A:
1. No, the policy does not violate the LC. The practice is a valid exercise of management function. Considering the nature and reason for existence of the school, it may adopt such policy as will advance its laudable objectives. In fact, the policy accords with the constitutional precept of inculcating ethical and moral values in schools. The school policy does not discriminate against women solely on account of sex (Art. 135, LC) nor are the acts prohibited under Art. 137 of the LC.
2. No, because to tolerate pregnancy out of wedlock will be a blatant contradiction of
the school's laudable mission which, as already stated, accords with high constitutional precepts. This answer does not contradict the ruling in Chua‐Qua where the teacher merely fell in love with a bachelor student and the teacher, also single, did not get pregnant out of wedlock. (2000 Bar Question)
Q: Little Hands Garment Company, an unorganized manufacturer of children's apparel with around 1,000 workers, suffered losses for the 1st first time in history when its US and European customers shifted their huge orders to China and Bangladesh.
The management informed its Ees that it could no longer afford to provide transportation shuttle services. Consequently, it announced that a normal fare would be charged depending on the distance traveled by the workers availing of the service.
Was the Little Hands Garments Company within its rights to withdraw this benefit which it had unilaterally been providing to its Ees?
A: Yes, because this is a management prerogative which is not due any legal or contractual obligation. – The facts of the case do not state the circumstances through which the shuttle service may be considered as a benefit that ripened into a demandable right. There is no showing that the benefit has been deliberately and consistently granted, i.e. with the employer’s full consciousness that despite its not being bound by law or contract to grant it, it just the same granted the benefit.
(2005 Bar Question)
1.DISCIPLINE
Q: Discuss briefly the Er’s right to discipline his Ees.
A: The Er has the prerogative to instill discipline in his Ees and to impose reasonable penalties, including dismissal, on erring Ees pursuant to company rules and regulations. (San Miguel Corporation v. NLRC, G.R. No. 87277, May 12, 1989)
Q: Is the power of the Er to discipline his Ees absolute?
A: No. While management has the prerogative to discipline its Ees and to impose appropriate penalties on erring workers, pursuant to company rules and regulations, however, such management prerogatives must be exercised in good faith for the advancement of the Er’s interest and not for the purpose of defeating or circumventing the rights of the Ees under special laws and valid agreements.
(PLDT vs. Teves, G.R. No. 143511, November 10, 2010)
Q: May the Er be compelled to share with its Ees the prerogative of formulating a code of discipline? Is a code of discipline unilaterally formulated by the Er enforceable?
A: The Er has the obligation to share with its Ees its prerogative of formulating a code of discipline. This is in compliance with the State’s policy stated in Article 211 of the Labor Code, to ensure the participation of workers in decision and policy‐
making processes affecting their rights, duties and welfare. The exercise of management prerogatives has, furthermore, never been considered to be boundless. This obligation is not dispensed with by a provision in the collective bargaining agreement recognizing the exclusive right of the Er to make and enforce company rules and regulations to carry out the functions of management without having to discuss the same with the union and much less obtain the latter’s conformity thereto. A code of discipline unilaterally formulated and promulgated by the Er would be unenforceable. (Philippine Airlines, Inc. vs. NLRC et al., G.R. No. August 13, 1993.)
2.TRANSFER OF EMPLOYEES
Q: Discuss briefly the Er’s right to transfer and reassign Ees.
A: In the pursuit of its legitimate business interests, especially during adverse business conditions, management has the prerogative to transfer or assign Ees 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, bad faith, or effected as a form of punishment or demotion without sufficient cause. This privilege is inherent in the right of Ers to control and manage their enterprises effectively.
Note: The right of Ees to security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to change their assignments or to transfer them. (Endico v.
Quantum Foods Distribution Center, G.R. No. 161615, Jan. 30, 2009)
Q: May the Er exercise his right to transfer an Ee and compel the latter to accept the same if said transfer is coupled with or is in the nature of promotion?
A: No. There is no law that compels an Ee to accept promotion, as a promotion is in the nature of a gift
or a reward, which a person has a right to refuse.
When an Ee refused to accept his promotion, he was exercising his right and cannot be punished for it. While it may be true that the right to transfer or reassign an Ee is an Er’s exclusive right and the prerogative of management, such right is not absolute. (Dosch vs. NLRC and Northwest Airlines, G.R. No. 51182, July 5, 1983)
Q: Who has the burden of proving that the transfer was reasonable?
A: The Er must be able to show that the transfer is not unreasonable, inconvenient or prejudicial to the Ee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Should the Er fail to overcome this burden of proof, the Ee’s transfer shall be tantamount to constructive dismissal. (Blue Dairy Corporation v.
NLRC, 314 SCRA 401 [1999])
3.PRODUCTIVITY STANDARD
Q: May an Er impose productivity standards for its workers?
A: Yes. An Er is entitled to impose productivity standards for its workers, and in fact, non‐
compliance may be visited with a penalty even more severe than demotion. The practice of a company in laying off workers because they failed to make the work quota has been recognized in this jurisdiction. Failure to meet the sales quota assigned to each of them constitute a just cause of their dismissal, regardless of the permanent or probationary status of their employment. Failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to inefficiency may constitute just cause for dismissal. Such inefficiency is understood to mean failure to attain work goals or work quotas, either by failing to complete the same within the allotted reasonable period, or by producing unsatisfactory results. This management prerogative of requiring standards may be availed of so long as they are exercised in good faith for the advancement of the Er’s interest.
(Leonardo vs. NLRC, G.R. No. 125303, June 16, 2000)
4.GRANT OF BONUS
Q: What is a bonus?
A: It is an amount granted and paid to an Ee for his industry and loyalty which contributed to the success of the Ers business and made possible the realization of profits.
Q: Can bonus be demanded?