TOPIC: Union Leave with Prior Managements Approval Policy

MALAYAN EMPLOYEES
ASSOCIATION-FFW and
RODOLFO MANGALINO
Vs
MALAYAN INSURANCE
COMPANY, INC.,
FACTS:
In the CBA of Respondent Malayan Insurance Company, Inc. and Petitioner Malayan Employees
Association, the Company allows union officials to avail of union leaves with pay for the purpose of attending
grievance meetings and other union activities.
Subsequently, the company issued a rule requiring not only the prior notice the CBA expressly requires,
but prior approval by the Department Head before the union and its members can avail of union leaves.
When Mangalino filed union leave applications, his department head disapproved the applications
because the department was undermanned at that time. Despite the disapproval, Mangalino proceeded to take
the union leave. The company suspended him for one week and, thereafter, for a month, for his second offense.
The union now asserts that any change in the CBA grant requires union conformity, otherwise, Art. 255 of the
Labor Code, one which guarantees the right of employees to participate in the companys policy and decisionmaking process on matters directly affecting their interest, is violated.
ISSUE:
Whether or not Mangalinos suspensions were valid.
HELD:
Yes, it is valid. The CBA reserved for the company the full and complete authority in managing and
running its business. The grant of union leave privileges under the CBA cannot be considered separately from
this management prerogative. There was no change in the CBA as the court saw nothing in the wordings of the
union leave provision that removes from the company the right to prescribe reasonable rules and regulations to
govern the manner of availing of union leaves, particularly the prerogative to require prior approval Precisely,
prior notice is expressly required under the CBA so that the company can appropriately respond to the request
for leave. In this sense, the rule requiring prior approval only made express what is implied in the terms of the
CBA.
The prior approval policy fully supported the validity of the suspensions the company imposed on
Mangalino. The court point out additionally that as an employee, Mangalino had the clear obligation to comply
with the management disapproval of his requested leave while at the same time registering his objection to the
company regulation and action. That he still went on leave, in open disregard of his superiors orders, rendered
Mangalino open to the charge of insubordination, separately from his absence without official leave.

TOPIC: Rules on Marriage between employees of competitor-employers

Rules against Marriage, when valid
G.R. No. 162994
September 17, 2004
DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A. TECSON, petitioners,
vs.
GLAXO WELLCOME PHILIPPINES, INC., Respondent.
FACTS:
Petitioner Tecson was hired by respondent Glaxo as medical representative assigned to market Glaxos
products in Camarines sales area. Tecson signed a contract of employment which stipulates, among others, that
he agrees to disclose to management any existing or future relationship by consanguinity or affinity with coemployees or employees of competing drug companies and should management find that such relationship
poses a possible conflict of interest, to resign from the company. The same was included in the Employee Code
of Conduct of Glaxo.
Tecson entered into a romantic relationship with Bettsy who is an employee of Astra Phamaceuticals, a
competitior of Glaxo. She was Astras Branch Coordinator tasked to supervise the district managers and medical
representatives of Astra in Albay.
Tecson received several reminders from his District Manager regarding the conflict of interest his
relationship might engender. Still, Tecson and Bettsy got married. When Tecson was given time to comply with
the company policy, but years passed and Tecson failed to heed. Glaxo then transferred Tecson to Butuan CitySurigao City-Agusan Del Sur sales are which Tecson defied and continued acting as medical representative in
Camarines sales area. Tecson brought the matter in Tecson was not issued samples of products which were
competing with similar products manufactured by Astra and was not included in product conference regarding
such products. Tecson assails the validity of the policy on the ground that it violates the equal protection clause
of the Constitution because it creates invalid distinctions among employees on account only of marriage.
ISSUE:
Whether or not Glaxos policy prohibiting its employees from marrying an employee of a competitor
company is valid.
HELD:
Yes, it is valid. Glaxos policy is a valid exercise of management prerogative. Glaxo has a right to guard
its trade secrets, manufacturing formulas, marketing strategies and other confidential programs and information
from competitors.
The prohibition against personal or marital relationships with employees of competitor companies upon
Glaxos employees is reasonable under the circumstances because relationships of that nature might
compromise the interests of the company. The Constitution recognizes the right of enterprises to adopt and
enforce such a policy to protect its right to reasonable returns on investments and to expansion and
growth. While our laws endeavor to give life to the constitutional policy on social justice and the
protection of labor, it does not mean that every labor dispute will be decided in favor of the workers. The
law also recognizes that management has rights which are also entitled to respect and enforcement in the
interest of fair play.
The challenged company policy does not violate the equal protection clause of the Constitution as
petitioners erroneously suggest. It is a settled principle that the commands of the equal protection clause are
addressed only to the state or those acting under color of its authority.

TOPIC: Rules on Marriage between employees of competitor-employers

Rules against Marriage, when not valid
G.R. No. 118978 May 23, 1997
PHILIPPINE TELEGRAPH AND TELEPHONE COMPANY, * petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and GRACE DE GUZMAN, respondents.
FACTS:
Grace de Guzman was initially hired by petitioner PT&T as a probationary employee. In the job
application, she indicated in the portion for civil status that she was single although she had contracted marriage
a few months earlier. When petitioner company learned about the same, private respondent was required to
explain and was reminded about the companys policy of not accepting married women for employment.
Respondent De Guzman stated that she was not aware of the policy and that all along she had not deliberately
hidden her true civil status. Unconvinced, petitioned dismissed De Guzman from the company. De Guzman
filed a complaint for illegal dismissal. Labor Arbiter ruled that De Guzman was illegally dismissed and that it
was apparent that she had been discriminated against on account of her having contracted marriage in violation
of company rules. NLRC affirmed the decision of Labor Arbiter. Hence, this petition.
ISSUE:
Whether or not De Guzman was illegally dismissed.
HELD:
Yes, there was an illegal dismissal. Acknowledged as paramount in the due process scheme is the
constitutional guarantee of protection to labor and security of tenure. Thus, an employer is required, as a
condition sine qua non prior to severance of the employment ties of an individual under his employ, to
convincingly establish, through substantial evidence, the existence of a valid and just cause in dispensing
with the services of such employee, one's labor being regarded as constitutionally protected property.
In the case at bar, petitioner's policy of not accepting or considering as disqualified from work any
woman worker who contracts marriage runs afoul of the test of, and the right against, discrimination,
afforded all women workers by our labor laws and by no less than the Constitution. Contrary to
petitioner's assertion that it dismissed private respondent from employment on account of her dishonesty, the
record discloses clearly that her ties with the company were dissolved principally because of the company's
policy that married women are not qualified for employment in PT & T, and not merely because of her supposed
acts of dishonesty.
Verily, private respondent's act of concealing the true nature of her status from PT & T could not be
properly characterized as willful or in bad faith as she was moved to act the way she did mainly because she
wanted to retain a permanent job in a stable company. In other words, she was practically forced by that very
same illegal company policy into misrepresenting her civil status for fear of being disqualified from work.
While loss of confidence is a just cause for termination of employment, it should not be simulated. 24 It must
rest on an actual breach of duty committed by the employee and not on the employer's caprices. 25 Furthermore,
it should never be used as a subterfuge for causes which are improper, illegal, or unjustified.
Petitioner's policy is not only in derogation of the provisions of Article 136 of the Labor Code on the
right of a woman to be free from any kind of stipulation against marriage in connection with her
employment, but it likewise assaults good morals and public policy, tending as it does to deprive a woman of
the freedom to choose her status, a privilege that by all accounts inheres in the individual as an intangible and
inalienable right. While it is true that the parties to a contract may establish any agreements, terms, and
conditions that they may deem convenient, the same should not be contrary to law, morals, good customs,
public order, or public policy. Carried to its logical consequences, it may even be said that petitioner's policy

against legitimate marital bonds would encourage illicit or common-law relations and subvert the sacrament of
marriage.
TOPIC: Rules on Marriage between employees of competitor-employers
Reasonable Business necessity rule as applied to the Prohibition against marriage policy OR
Bonafide Occupational Qualification Exception Rule
G.R. No. 164774
April 12, 2006
STAR PAPER CORPORATION, JOSEPHINE ONGSITCO & SEBASTIAN CHUA, Petitioners,
vs.
RONALDO D. SIMBOL, WILFREDA N. COMIA & LORNA E. ESTRELLA, Respondents.
FACTS:
Respondents Simbol, Comia and Estrella were all regular employees of petitioner Star Paper Corporation, a
company engaged in trading-principally of paper products. The company alleged that on account of the company policy,
that when its employees (male and female) decided to get married, one of them should resign, the respondents resigned.
Respondents offered a different version of their dismissal claiming that they did not resign voluntarily but
compelled to resign in view of an illegal company policy.
Respondents filed a complaint for unfair labor practice, constructive dismissal and separation pay averring that
the aforementioned company policy is illegal and contravenes Art 136 of the Labor Code. Petitioner insists that the policy
was a valid exercise of management prerogative.
ISSUE:
Whether 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.
HELD:
Yes, the policy violates the rights of the employees. It is true that the policy of petitioners prohibiting close
relatives from working in the same company takes the nature of an anti-nepotism employment policy. These policies focus
upon the potential employment problems arising from the perception of favoritism exhibited towards relatives.
However, the court found the no-spouse employment policy invalid for failure of the employer to present any
evidence of business necessity other than the general perception that spouses in the same workplace might adversely
affect the business. The absence of such a bona fide occupational qualification invalidates a rule denying employment to
one spouse due to the current employment of the other spouse in the same office. Thus, they rule 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 employees spouse. This is known as the bona fide occupational
qualification exception.
To justify a bona fide occupational qualification, the employer must prove two factors: (1) that the employment
qualification is reasonably related to the essential operation of the job involved; and, (2) that there is a factual basis for
believing that all or substantially all persons meeting the qualification would be unable to properly perform the duties of
the job.
The Court did not find a reasonable business necessity in the case at bar. 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. Neither did petitioners explain how this detriment will happen in the case of
Wilfreda Comia, then a Production Helper in the Selecting Department, who married Howard Comia, then a helper in the
cutter-machine. The policy is premised on the mere fear that employees married to each other will be less efficient. If we
uphold the questioned rule without valid justification, the employer can create policies based on an unproven presumption
of a perceived danger at the expense of an employees 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. 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.

TOPIC: Rules on Marriage between employees of competitor-employers

Reasonable Business necessity rule as applied to the Prohibition against marriage policy OR
Bonafide Occupational Qualification Exception Rule

G.R. No. 168081, October 17, 2008

ARMANDO G. YRASUEGUI, petitioners,
vs.
PHILIPPINE AIRLINES, INC., respondents.
FACTS:
Petitioner Armando G. Yrasuegui was a former international flight steward of Philippine Airlines, Inc.
(PAL). He stands five feet and eight inches (58) with a large body frame. The proper weight for a man of his
height and body structure is from 147 to 166 pounds, the ideal weight being 166 pounds, as mandated by the
Cabin and Crew Administration Manual of PAL.
Petitioner had a weight problem which prompted PAL to send him to an extended vacation and was
allowed to return to work once he lost all the excess weight. But the problem recurred. Despite the lapse of a
ninety-day period given him to reach his ideal weight, petitioner remained overweight. Petitioner was formally
warned that a repeated refusal to report for weight check would be dealt with accordingly. On failure to report
for weight monitoring, PAL finally served petitioner a Notice of Administrative Charge for violation of
company standards on weight requirements. Petitioner insists that he is being discriminated as those similarly
situated were not treated the same. Petitioner was formally informed that due to his inability to attain his ideal
weight, his services were considered terminated effective immediately.
ISSUE: WON he was validly dismissed.
HELD: YES. A reading of the weight standards of PAL would lead to no other conclusion than that they
constitute a continuing qualification of an employee in order to keep the job. The dismissal of the employee
would thus fall under Article 282(e) of the Labor Code.
The court held that the obesity of petitioner, when placed in the context of his work as flight attendant,
becomes an analogous cause under Article 282(e) of the Labor Code that justifies his dismissal from the service.
The dismissal of petitioner can be predicated on the bona fide occupational qualification defense.
Employment in particular jobs may not be limited to persons of a particular sex, religion, or national origin
unless the employer can show that sex, religion, or national origin is an actual qualification for
performing the job. The qualification is called a bona fide occupational qualification (BFOQ). In short, the test
of reasonableness of the company policy is used because it is parallel to BFOQ. BFOQ is valid provided it
reflects an inherent quality reasonably necessary for satisfactory job performance.
The business of PAL is air transportation. As such, it has committed itself to safely transport its
passengers. In order to achieve this, it must necessarily rely on its employees, most particularly the cabin flight
deck crew who are on board the aircraft. The weight standards of PAL should be viewed as imposing strict
norms of discipline upon its employees.
The primary objective of PAL in the imposition of the weight standards for cabin crew is flight safety.
Separation pay, however, should be awarded in favor of the employee as an act of social justice or based on
equity. This is so because his dismissal is not for serious misconduct. Neither is it reflective of his moral
character.

TOPIC: Rules on pregnancy out of wedlock and pre-marital sexual relations.

G.R. No. 187226, January 28, 2015
CHERYLL SANTOS LEUS, Petitioner,
vs.
ST. SCHOLASTICAS COLLEGE WESTGROVE AND/OR SR. EDNA QUIAMBAO, OSB, Respondents.
FACTS:
Respondent SSCW is a catholic and sectarian educational institution which hired petitioner Leus as an
assistant to SSCWs Director. The petitioner and her boyfriend conceived a child out of wedlock. She was
directed to explain why she should not be dismissed for engaging in pre-marital sexual relations and getting
pregnant as a result thereof, which amounts to serious misconduct unbecoming of an employee of a Catholic
school. In her answer, petitioner explained that her pregnancy out of wedlock does not amount to serious
misconduct or conduct unbecoming of an employee. She averred that she is unaware of any school policy
stating that being pregnant out of wedlock is considered as a serious misconduct and, thus, a ground for
dismissal.
Nevertheless, petitioner was terminated on the ground of serious misconduct. SSCW stressed that premarital sexual relations between two consenting adults with no impediment to marry, even if they subsequently
married, amounts to immoral conduct. She further pointed out that SSCW finds unacceptable the scandal
brought about by the petitioners pregnancy out of wedlock as it ran counter to the moral principles that SSCW
stands for and teaches its students.
Petitioner filed a complaint for illegal dismissal.
ISSUE:
Whether or not the petitioners pregnancy out of wedlock constitutes a valid ground to terminate her
employment.
HELD:
No, it is not a valid ground. The Supreme Court ruled that the employees pregnancy out of wedlock was
neither disgraceful nor immoral because the employee and the father of her child were both unmarried and had
no impediment to marry each other. In deciding if an act was disgraceful and/or immoral, the circumstances of
each case must be considered and evaluated in light of the prevailing norms of conduct. These norms, in turn,
are determined by public and secular morality -- not religious morality.
Thus, in contemplation of the law, disgraceful or immoral conduct specifically refers to acts which are
detrimental or dangerous to those conditions upon which depend the existence and progress of human society,
and not to those conducts prohibited by the beliefs of one religion. The Supreme Court noted that there is no law
which prohibits consensual sexual activity between two unmarried persons, or otherwise penalizes an unwed
mother for her sexual conduct. Hence, even though it is not in accord with the doctrines of the Catholic Church,
the employees act was deemed not disgraceful or immoral within the contemplation of the law.
The situation would be different had either the employee or the father of her child was married. That
would mean that they had an extramarital affair, which the Supreme Court stated to be disgraceful and immoral
under the contemplation of the Manual for Regulations of Private School (MPRS) for offending the sanctity of
marriage, which is a basic unit of society.

The Supreme Court further found that the school failed to submit sufficient evidence to prove its
allegation that the employees indiscretion caused grave scandal to the school and its students, thus warranting
her dismissal. The Supreme Court, thus, concluded that it was an abuse of management prerogative to terminate
the employee for her premarital sexual relations.

TOPIC: Non-compete or non-involvement clause

G.R. No. 163512

February 28, 2007

DAISY B. TIU, Petitioner

vs.
PLATINUM PLANS PHIL., INC., Respondent.
FACTS:
Petitioner Tiu was the Division Marketing Director of Platinum Plans Philippines Inc, a domestic
corporation engaged in the pre-need industry. Tiu was rehired as Senior Assistant Vice-President and Territorial
Operations Head in charge of its HongKong and Asean operations for a term of five years as executed in the
contract of employment. However, after more than two years, petitioner stopped reporting for work and few
months thereafter, became the Vice President for Sales of Professional Pension Plans, Inc, a corporation
likewise engaged in the pre-need industry.
Respondent PPPI sued petitioner for damages before the RTC alleging that petitioner violated the noninvolvement clause in her contract of employment which states that the in case of separation from the company,
whether voluntary or for cause, the employee shall not for the next two years thereafter, engage in or be
involved with any corporation, association or entity whether directly or indirectly, engaged in the same business
or belonging to the same pre-need industry as the employer.
Petitioner countered that the non-involvement clause was unenforceable for being against public order
or public policy. First, the restraint imposed was much greater than what was necessary to afford respondent a
fair and reasonable protection. Petitioner contended that the transfer to a rival company was an accepted
practice in the pre-need industry. Since the products sold by the companies were more or less the same, there
was nothing peculiar or unique to protect. Second, respondent did not invest in petitioners training or
improvement. At the time petitioner was recruited, she already possessed the knowledge and expertise required
in the pre-need industry and respondent benefited tremendously from it. Third, a strict application of the noninvolvement clause would amount to a deprivation of petitioners right to engage in the only work she knew.
ISSUE:
Whether the non-involvement clause is valid.
HELD:
A non-involvement clause is not necessarily void for being in restraint of trade as long as there are
reasonable limitations as to time, trade, and place. In this case, the non-involvement clause has a time limit: two
years from the time petitioners employment with respondent ends. It is also limited as to trade, since it only
prohibits petitioner from engaging in any pre-need business akin to respondents.
More significantly, considering the position held by the petitioner, she had been privy to confidential and
highly sensitive marketing strategies of respondents business. To allow her to engage in a rival business soon
after she leaves would make respondents trade secrets vulnerable especially in a highly competitive marketing
environment. In sum, the court found the non-involvement clause not contrary to public welfare and not greater
than is necessary to afford a fair and reasonable protection to respondent.
Not being contrary to public policy, the non-involvement clause, which petitioner and respondent freely
agreed upon, has the force of law between them, and thus, should be complied with in good faith.

NOTE:
Q: What is a Non-Compete Clause?
A non- compete clause (also called non-involvement clause) is a term used in contract law under which one
party (usually an employee) agrees not to enter into or start a similar profession or trade in competition against
another party (usually the employer).