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Illegal dismissal of managers and executives – Atty JBJ

Source: DIRECT FROM THE LABOR FRONT By Atty Josephus Jimenez

Business executives and managers are also employees. When they are illegally dismissed or are subjected to unfair labor practices or denied of their basic rights, they can seek redress before the labor tribunals. Whilst labor laws are generally designed to protect the most vulnerable sectors of the working class, that is the rank-and-file, the casual workers, the project employees, the contractuals, and the other ‘’children of the lesser gods’’, it does not follow that managerial employees and executives are without rights arising from labor laws. This legal truism has been demonstrated time and time again, in an array of labor jurisprudence. Many of the Supreme Court rulings along this line have been promulgated just a few months ago.

In the case of J V Morales vs. Harbor Centre Port Terminal

(GR 1742208), the Highest Court of the land, on January 25, 2012, declared that the demotion of a manager was tantamount to an illegal dismissal. In the case of R Real vs. Sangu Philippines (GR 168757), the Court on January 11, 2011, ordered a Korean Company to reinstate its Filipino General Manager for having been dismissed without just cause. In San Miguel Properties Inc. vs. G R S Gucaban (GR 1539822), the Supreme Court awarded an illegally dismissed manager with reinstatement, full backwages and moral damages.

In the case of Morales, the High Tribunal stressed that whenever the transfer of a manager results to demotion in rank or diminution in salary or benefits, the same shall be considered, in the eyes of the law, a dismissal. In this case, the purported transfer of Morales was a clear case of demotion because from a managerial position, he was directed to occupy a position, which does not even exist in the Company’s organizational structure, nor included in the Company plantilla. The employer cannot justify this kind of to transfer, resulting demotion by simply invoking its prerogative to transfer employees. As aptly warned in Article 19 of the Civil Code, ‘’every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due and observe honesty and good faith.”

In the case of Real, the company raised a technical legal issue, that the labor agencies allegedly did not have jurisdiction over this dispute because Real was supposedly a corporate officer, thus, his case, to the mind of the Company lawyer, must be litigated under the Corporation Code and not under the Labor Code. The High Court did not agree saying that only those corporate officers whose positions are created by law are to be handled by the civil courts. Furthermore, the Court held that there was no just cause to terminate the manager’s employment. Thus, Real’s dismissal was illegal. And his case was subject to the jurisdiction of the Labor Arbiter and the NLRC. Rightly so, if we may say.

In the case of Gucaban, the Supreme Court did not agree with management that the manager tendered her resignation. There was no evidence at all of the clear intent to relinquish her position. The management’s theory of ‘’constructive resignation’’ did not find credence in the minds of the Justices. On the contrary, the Court found and held that management was guilty of ‘’constructive dismissal.’’ This is the kind of termination which is merely assumed, deduced or made so in the contemplation of law, because of some injustice in the harsh, unfair and inhuman treatment made by an employer against an employee. Such unfairness would then render continued employment highly unlikely, unjust and unfair to the employee.

Gucaban was awarded moral damages, in addition to reinstatement and full backwages because of the supposed highhanded manner by which she was treated. She alleged that she was pressured to resign and to execute a quitclaim releasing the Company from any and all liabilities arising from her employment. This was done to Gucaban under the supposed misrepresentation that there was an impending corporate reorganization. She was supposedly misled into concluding that resignation would be an option more beneficial to her. All these were allegedly preceded by a series of pressures and unfair treatment, which supposedly pushed Gucaban to the edge of despair and surrender.

These three cases, decided recently by the Highest Tribunal of the land, has demonstrated that, indeed, business executives and managers, just like, the rank-and-file workers, are entitled to equal protection of our labor laws.