G.R. No. L-43835 March 31, 1981
Domingo F. Bondoc, petitioner, vs. People’s Bank and Trust Company, Bank of the Philippine Islands (Surviving Bank) and Jacobo C. Clave (as Presidential Executive Assistant), respondents.

FACTS

Petitioner Domingo F. Bondoc was the manager of the Department of Economic Research and Statistics at People’s Bank and Trust Company. In May 1973, he reported certain anomalies committed by bank officers to a director, leading to Central Bank sanctions against several officers. Subsequently, in September 1973, the bank’s board of directors resolved to abolish Bondoc’s department, deeming it redundant, especially in light of a projected merger with the Bank of the Philippine Islands. Bondoc was offered separation pay.
Bondoc opposed his termination before the National Labor Relations Commission (NLRC), alleging his dismissal was a reprisal for whistleblowing. The Labor Arbiter recommended reinstatement with backwages. The NLRC reversed this, approving the termination and ordering enhanced separation pay. The Secretary of Labor then reversed the NLRC, ordering reinstatement. On appeal, the Presidential Executive Assistant reinstated the NLRC’s decision approving the termination. Bondoc filed this certiorari petition, arguing the Presidential Executive Assistant committed grave abuse of discretion.

ISSUE

Whether the Presidential Executive Assistant committed grave abuse of discretion in confirming the abolition of Bondoc’s position and his termination instead of ordering reinstatement.

RULING

The Supreme Court ruled there was no grave abuse of discretion. The legal logic centered on the nature of Bondoc’s employment as a managerial employee. Bondoc held a confidential managerial position, appointed annually by the bank’s board of directors. His tenure was at the pleasure of the management, contingent upon retaining its trust and confidence and the continuing need for his services.
The Court acknowledged that vindictive motives might have influenced the department’s abolition. However, it emphasized the employer’s management prerogative to reorganize operations, abolish positions, and terminate managerial personnel when such positions are deemed redundant or unnecessary for business efficiency, as in a merger. Under the applicable Termination Pay Law and prevailing jurisprudence, an employer could dismiss an employee without a fixed-term contract at any time, with or without cause, subject to payment of separation pay. Policy Instructions from the Secretary of Labor explicitly stated that prior clearance was not required to terminate managerial employees to ensure effective management.
While the Constitution guarantees security of tenure, this pertains to regular employment and requires termination only for just or authorized causes. For confidential managerial employees, the right to dismiss is broader, anchored on the loss of trust and confidence and legitimate business needs like reorganization. The Court found no oppressive abridgment of Bondoc’s tenure rights, as he knew his position was discretionary. On equitable grounds, the Court modified the award, ordering the surviving bank to pay Bondoc separation pay equivalent to seven months’ salary and allowances.