G.R. No. 154006 ; November 2, 2006
Star Paper Corporation, Petitioner, vs. Carlito Espiritu Tu, Tomas Paguirigan, Teodoro Subagan, Luisito Magnampo, Respondents.

FACTS

The respondents, employees of Star Paper Corporation, refused to sign a ratification sheet for an addendum to their Collective Bargaining Agreement that would reduce their leave benefits. Subsequently, they were issued memoranda for transfer to provincial assignments. On November 11, 1998, when they reported for work, they were barred from entering the company premises by a security guard and were instead instructed to receive their transfer memoranda, which they refused. They filed a complaint for constructive dismissal, alleging the transfer was an act of harassment and bad faith due to their refusal to ratify the CBA addendum.
The Labor Arbiter and the National Labor Relations Commission (NLRC) dismissed the complaint, ruling the transfer was a valid management prerogative based on employment contracts containing a provision for possible transfer. However, the NLRC awarded separation pay on grounds of equity. The respondents filed a petition for certiorari directly with the Court of Appeals (CA), bypassing a motion for reconsideration of the NLRC decision. The CA gave due course to the petition and reversed the NLRC, finding the dismissal illegal.

ISSUE

Whether the Court of Appeals erred in: (1) giving due course to the certiorari petition despite the respondents’ failure to file a motion for reconsideration with the NLRC; and (2) ruling that the respondents were illegally dismissed.

RULING

The Supreme Court affirmed the CA decision. On procedural grounds, the Court held that while a motion for reconsideration is generally indispensable, it may be dispensed with in exceptional circumstances. The CA correctly accepted the petition as the respondents had adequately explained the urgency, citing the company’s unilateral acts that undermined their rights, making the immediate resort to certiorari justified to prevent further injustice.
On the substantive issue, the Court upheld the CA’s finding of illegal constructive dismissal. The employer’s right to transfer must be exercised in good faith and without grave abuse of discretion. The sequence of events—the refusal to ratify the CBA addendum, the immediate service of transfer orders to distant provinces, and the act of barring the employees from work—collectively indicated bad faith. The transfer was not motivated by legitimate business needs but was a punitive measure for union activity, constituting constructive dismissal. The Court affirmed the award of separation pay in lieu of reinstatement due to strained relations, and full backwages from the time compensation was withheld until the finality of the Supreme Court’s decision.