However, this constitutional commitment to the policy of social justice does not mean that every labor dispute shall be automatically decided in favor of labor. It must also be remembered that in protecting the rights of the workers, the law does not authorize the oppression of the employer.

Hence, due regard is likewise given to the right of an employer to manage its operations according to reasonable standards and norms of fair play. This means that an employer has free reign over every aspect of its business, including the dismissal of its employees, as long as the exercise of its management prerogative is done reasonably, in good faith, and in a manner not otherwise intended to defeat or circumvent the rights of workers.

Accordingly, Article 297 of the Labor Code affirms the right of an employer to dismiss a miscreant employee on account of the latter’s willful disobedience.

Significantly, jurisprudence ordains that for an employee to be validly dismissed on the ground of willful disobedience, the employer must prove by substantial evidence that: (i) “the employee’s assailed conduct must have been willful or intentional, the willfulness being characterized by a wrongful and perverse attitude; and (ii) the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge.

In the case of Mamaril vs. The Red System Company, Inc. [G.R. No. 229920, July 04, 2018], the Supreme Court (SC) held, in ruling for the validity of the dismissal of the employee, that the lifeblood of Red

System’s business is the safe transport and delivery of Coca-Cola products from the warehouse to the customers. As such, Red System imposed stringent guidelines to ensure the safe and efficient delivery of all the products.

Specifically, drivers were repeatedly reminded to place a tire choke, shift the engine to first gear, and pull the hand brake, upon parking the truck. Compliance with these safety measures was essential to prevent the sudden movement of the truck while parked and pushed by a forklift during loading and unloading operations. Likewise, caution was necessary to avoid damage to the new trucks. Moreover, extra-care was mandated in hauling Coca-Cola products to avoid accidents which would result in needless delays and unnecessary expenses and ruin Red System’s good will.

The SC further noted that the Red System was not remiss in reminding its drivers of the importance of abiding by their safety regulations. To ensure a strict observance of the rules, the company required its drivers to attend various safety seminars, in addition to a mandated pre-employment orientation. In fact, the complainant in said case attended a pre-orientation seminar and five safety seminars over the course of his two-year stint with Red System.

Added to this, the safety rules were also written in Red System’s Code of Conduct. There can be no doubt as to the lawfulness, reasonableness and necessity of Red System’s safety instructions. Moreover, the rules pertained to the duties performed by complainant. Accordingly, complainant was duty-bound to comply with such safety orders, as his main task consisted in driving and delivering fragile products. This notwithstanding, the complainant still willfully and negligently failed to abide by the safety rules.

The records show that three days after complainant was employed, he failed to put a tire choke, and worse, shifted the truck’s gear to neutral. As a result, the parked vehicle moved causing damage to Coca-Cola products valued at Php 14,556.00, in addition to the damage he caused to the truck. To make matters worse, instead of reporting the incident to his supervisor, as mandated under Red System’s rules, complainant deliberately concealed the incident. If not for his belated admission in an administrative hearing on a different incident, Red System would not have learned about his prior misdeed.

To make matters worse, complainant was again found to have committed the same violation of Red System’s safety rules. On November 12, 2011, he parked the truck with plate number PIK 726, without again putting a tire choke and engaging the hand brake. Due to his failure to perform the required safety standards, the truck moved backwards and hit another vehicle. This caused damage amounting to Php 25,500.00.

Brazenly, the complainant again purposely concealed the incident. Red System belatedly learned of the accident only after conducting an investigation, after it was surprised to receive Job Order from Motormall Davao Corporation for the repair of the said truck.

Clearly, complainant’s acts constituted a violation of Red System’s company policy. Rule 5, Section 2(b)(3) of Red System’s Code of Conduct penalizes other acts of negligence or inefficiency in the performance of duties or in the care, custody and/or use of company property, funds and/or equipment, where the amount of loss or damage amounts of more than Php 25,000.00. A violation of such rule warrants a penalty of dismissal.

Notably, the complainant violated Red System’s safety rules twice, and caused damage amounting to over Php 40,000.00. To make matters worse, he even deliberately and willfully concealed his transgressions. Such flagrant violation of the rules, coupled with the perversity of concealing the incidents, patently show a wrongful and perverse mental attitude rendering his acts inconsistent with proper subordination. Indubitably, this shows that complainant was indeed guilty of willful disobedience of Red System’s lawful orders.

Guided by the ruling in St. Luke’s Medical Center, Inc. v. Sanchez, the SC held that the deliberate disregard or disobedience by an employee of the rules, shall not be countenanced, as it may encourage him or her to do even worse and will render a mockery of the rules of discipline that employees are required to observe. To allow a recalcitrant employee to remain in employ shall amount to coddling an obstinate employee at the expense of the employer.

Thus, taking all the circumstances collectively, the Court is convinced that Red System had sufficient and valid reason for terminating complainant’s services, as his continued employment would be patently inimical to its interest. It is evident from the circumstances that Red System’s decision to terminate him was exercised in good faith, for the advancement of its interest and not for the purpose of defeating or circumventing the latter’s rights.

The SC finally held that this valid exercise of management prerogative must be upheld.

See here the procedure to observe when the employee refuses to receive employer’s notice.

In addition, the company should send another copy by registered mail and keep the registry receipt for future reference.

Learn how to Validly Terminate Employee in the Philippines with this Tutorial Video of Atty. Elvin

Read more on procedural due process discussion by Atty. Elvin:

Read more on procedural due process by Atty. Villanueva:

Twin Requirements of Notice and Hearing

Procedural Due Process for Other Types of Employment

Notice to Explain: Contents and Requirements

A common situation involving this ground is when a superior gives an order to a subordinate but the latter refuses to comply.

However, for insubordination to arise, the order given must be lawful. There is no duty to perform an illegal act even if the one demanding is a boss. Hence, a superior cannot charge his staff with insubordination if the task he wants done is illegal.

If the willful disobedience by an employee is committed against an unreasonable order or one not connected with his duties, such act cannot be a valid ground for dismissal.

To be valid, the order mentioned here must be:

(1) Reasonable and lawful,

(2) Known to the employee, and

(3) Pertains to the duties which the employee has been engaged to discharge.

What is reasonable depends on the circumstances. The reasonableness and lawfulness of a rule, order or instruction depend on the circumstances availing in each case.

Reasonableness pertains to the kind or character of directives and commands and to the manner in

which they are made.

However, when the law requires that the order must be lawful and reasonable, it does not end there. The act of the employee disregarding such order must also be intentional.

Thus, in order for the ground of “willful disobedience” to be considered a just cause to terminate employment, the following requisites must concur:

(1) The employee’s assailed conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and

(2) The order violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties which he had been engaged to discharge.

In Lakpue Drug Inc. v. Belga, willfulness is described as one that is “characterized by a wrongful and perverse mental attitude rendering the employee’s act inconsistent with proper subordination.

While it is true that the employer may promulgate rules and regulations and enforce the same to the point of dismissal of violators, such prerogative is limited by the standards of good faith and consideration of the plight of worker and circumstances.

As held by the Court, it is true that an employer is given wide latitude of discretion in managing its own affairs. The broad discretion includes the implementation of company rules and regulations and the imposition of disciplinary measures on its employees.

But the exercise of a management prerogative like this is not limitless, but hemmed in by good faith and a due consideration of the rights of the worker. In this light, the management prerogative will be upheld for as long as it is not wielded as an implement to circumvent the laws and oppress labor.

Learn how to Validly Terminate Employee in the Philippines with this Tutorial Video of Atty. Elvin

Read more on procedural due process discussion by Atty. Elvin:

Read more on procedural due process by Atty. Villanueva:

Twin Requirements of Notice and Hearing

Procedural Due Process for Other Types of Employment

Notice to Explain: Contents and Requirements

Marriage of employee cannot be prohibited by employer

No-spouse policies may come in two types: The no-spouse employment policies and anti-nepotism employment policies. The first one bans only spouses from working in the same company while the second bans all immediate family members, including spouses, from working in the same company.

There is no doubt that the management, as part of its prerogative, can impose rules, regulations and policies as long as these are not contrary to law, morals, good customs, public order or public policy. These rules, regulations and policies should be reasonable and lawful.

Hence, 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.[1]

Can the employer prohibit marriage or dismiss employees who contract marriage during employment?

In the case of PT&T vs. NLRC,[2] the Supreme Court ruled that such policy is not valid. In said case, a company policy must be reasonable under the circumstances to qualify as a valid exercise of management prerogative.[3] The Court ratiocinated that PT&T’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.

The same ruling was made in Zialcita, et al. vs. Philippine Air Lines,[4] a decision that emanated from the Office of the President, a policy of Philippine Air Lines requiring that prospective flight attendants must be single and that they will be automatically separated from the service once they marry was declared void, it being violative of the clear mandate in Article 136 of the Labor Code with regard to discrimination against married women.

Gualberto, et al. vs. Marinduque Mining & Industrial Corporation[5] considered as void a policy of the same nature.  In said case, the company, in dismissing from the service the complainant, invoked a policy of the firm to consider female employees in the project it was undertaking as separated the moment they get married due to lack of facilities for married women.  The employer further claimed that complainant was employed in the project with an oral understanding that her services would be terminated when she gets married.  Branding the policy of the employer as an example of “discriminatory chauvinism” tantamount to denying equal employment opportunities to women simply on account of their sex, the appellate court struck down said employer policy as unlawful in view of its repugnance to the Civil Code, Presidential Decree No. 148 and the Constitution.

Learn how to Validly Terminate Employee in the Philippines with this Tutorial Video of Atty. Elvin

In a 2006 case of Starpaper Corporation vs. Simbol,[6] the question was 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.

The Court held that the company 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 it 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.  The Court said that if it were to uphold the questioned rule without valid justification, the employer could create policies based on an unproven presumption of a perceived danger at the expense of an employee’s right to security of tenure.[7]

Disparate impact and disparate treatment

The case of Star Paper Corporation vs. Simbol[8] brought about the concepts of disparate impact and disparate treatment on employment discrimination into our shores.

In disparate treatment analysis, the complainant must prove that an employment policy is discriminatory on its face. No-spouse employment policies requiring an employee of a particular sex to either quit, transfer, or be fired are facially discriminatory. For example, an employment policy prohibiting the employer from hiring wives of male employees, but not husbands of female employees, is discriminatory on its face.[9]

While in disparate impact, complainant must prove that a facially neutral policy has a disproportionate effect on a particular class. For example, although most employment policies do not expressly indicate which spouse will be required to transfer or leave the company, the policy often disproportionately affects one sex.[10]

Thus, when the Court was confronted with argument that the employer’s policy will apply only when one employee marries a co-employee, but they are free to marry persons other than co-employees, the Court held that 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. The failure of the employer to prove a legitimate business concern in imposing the questioned policy cannot prejudice the employee’s right to be free from arbitrary discrimination based upon stereotypes of married persons working together in one company.[11]

Policy prohibiting marriage with employees of competitor was held valid

In the case of Duncan Association of Detailman-PTGWO and Pedro Tecson vs. Glaxo Wellcome Philippines, Inc.,[12] the Court passed on the validity of the policy of a pharmaceutical company prohibiting its employees from marrying employees of any competitor company. It was held that Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential programs and information from competitors. The Court considered the prohibition against personal or marital relationships with employees of competitor companies upon Glaxo’s employees reasonable under the circumstances because relationships of that nature might compromise the interests of Glaxo. In laying down the assailed company policy, the Court recognized that Glaxo only aims to protect its interests against the possibility that a competitor company will gain access to its secrets and procedures.

[1] Art. 1306, Civil Code, cited in PT&T vs. NLRC, G.R. No. 118978, May 23, 1997.

[2] G.R. No. 118978, May 23, 1997.

[3] See Star Paper Corporation vs. Simbol, G.R. No. 164774, April 12, 2006.

[4] Case No. RO4-3-3398-76; February 20, 1977.

[5] CA-G.R. No. 52753-R, June 28, 1978.

[6] G.R. No. 164774, April 12, 2006.

[7] See Starpaper Corporation vs. Simbol, G.R. No. 164774, April 12, 2006.

[8] G.R. No. 164774, April 12, 2006.

[9] See ibid.

[10] See ibid.

[11] Star Paper Corporation vs. Simbol, G.R. No. 164774, April 12, 2006.

[12] See G.R. No. 162994, September 17, 2004.

A common situation involving this ground is when a superior gives an order to a subordinate but the latter refuses to comply.

However, for insubordination to arise, the order given must be lawful. There is no duty to perform an illegal act even if the one demanding is a boss. Hence, a superior cannot charge his staff with insubordination if the task he wants done is illegal.

If the willful disobedience by an employee is committed against an unreasonable order or one not connected with his duties, such act cannot be a valid ground for dismissal.[1]

To be valid, the order mentioned here must be:

(1) Reasonable and lawful,

(2) Known to the employee, and

(3) Pertains to the duties which the employee has been engaged to discharge.[2]

What is reasonable depends on the circumstances.

The reasonableness and lawfulness of a rule, order or instruction depend on the circumstances availing in each case.  Reasonableness pertains to the kind or character of directives and commands and to the manner in which they are made.[3]

However, when the law requires that the order must be lawful and reasonable, it does not end there. The act of the employee disregarding such order must also be intentional.

Thus, in order for the ground of “willful disobedience” to be considered a just cause to terminate employment, the following requisites must concur:

(1) The employee’s assailed conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and

(2) The order violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties which he had been engaged to discharge.[4]

Learn how to Validly Terminate Employee in the Philippines with this Tutorial Video of Atty. Elvin In Lakpue Drug Inc. v. Belga,[5] willfulness was described as one that is “characterized by a wrongful and perverse mental attitude rendering the employee’s act inconsistent with proper subordination.[6]

While it is true that the employer may promulgate rules and regulations and enforce the same to the point of dismissal of violators, such prerogative is limited by the standards of good faith and consideration of the plight of worker and circumstances.

As held by the Court, it is true that an employer is given wide latitude of discretion in managing its own affairs. The broad discretion includes the implementation of company rules and regulations and the imposition of disciplinary measures on its employees. But the exercise of a management prerogative like this is not limitless, but hemmed in by good faith and a due consideration of the rights of the worker. In this light, the management prerogative will be upheld for as long as it is not wielded as an implement to circumvent the laws and oppress labor.[7]

It may dawn upon an employee who does not want to comply with an order to file a case questioning its validity thinking that his filing will give him an excuse not to follow such command.

The Supreme Court ruled that it would be dangerous doctrine indeed to allow employees to refuse to comply with rules and regulations, policies and procedures laid down by their employer by the simple expedient of formally challenging their reasonableness or the motives which inspired them, or filing a strike notice with the Department of Labor and Employment, or, what amounts to the same thing, to give the employees the power to suspend compliance with company rules or policies by requesting that they be first subject of collective bargaining. It would be well nigh impossible under these circumstances for any employer to maintain discipline in its establishment.[8]

An employer may issue show-cause memo to an erring employee and require him to answer within a specified period. But the worker may not submit his reply. Can that be considered as willful disobedience?

In one case, failure of an employee to answer memoranda of the employer was held clearly intentional. It showed the employee’s perverse attitude to defy the reasonable orders which undoubtedly pertain to his duties as an employee.[9]

[1] Mañebo vs. NLRC, G.R. No. 107721, January 10, 1994.

[2] Manila Broadcasting Company vs. NLRC, G.R. No. 121975, August 20, 1998 citing BLTC Co. v. Court of Appeals, 71 SCRA 471 (1976); Mañebo v. NLRC, 229 SCRA 240 (1994); Nuez v. NLRC, 239 SCRA 518 (1994); AHS/Philippines, Inc. v. Court of Appeals, 257 SCRA 319 (1996); Stolt-Nielsen Marine Services (Phils.), Inc. v. NLRC, 258 SCRA 643 (1996); Gregorio Isabelo vs. National Labor Relations Commission, G.R. Nos. 113366-68, July 24, 1997.

[3] Escobin vs. NLRC, G.R. No. 118159, April 15, 1998 citing Azucena, The Labor Code with Comments and Cases, Vol. II, 1993 rev. ed., p. 557.

[4] Micro Sales Operation Network v. NLRC, G.R. No. 155279, October 11, 2005, 472 SCRA 328, 335-336; R.B. Michael Press vs. Galit, G.R. No. 153510, February 13, 2008.

[5] G.R. No. 166379, October 20, 2005, 473 SCRA 617, 624.

[6] R.B. Michael Press vs. Galit, Ibid.

[7] Dongon vs. Rapid Movers and Forwarders Co., Inc., G.R. No. 163431, August 28, 2013.

[8] GTE Directories Corporation vs. Hon. Augusto s. Sanchez and GTE Directories Corporation Employees Union, G.R. No. 76219, May 27, 1991 citing Batangas Transportation Co. vs. Bagong Pagkakaisa of the Employees and Laborers of the Batangas Trans. Co., 7 Phil. 108, 112 (1949).

[9] Ace Promotion and Marketing Corp. vs. Ursabia, G.R. No. 171703, September 22, 2006.