Related article: The Different Grounds for Termination of Employment
The right of an employer to regulate all aspects of employment, aptly called “management prerogative,” gives employers the freedom to regulate, according to their discretion and best judgment, all aspects of employment, including work assignment, working methods, processes to be followed, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of workers. In this light, courts often decline to interfere in legitimate business decisions of employers. In fact, labor laws discourage interference in employers’ judgment concerning the conduct of their business (Phil. Industrial Security Agency Corp. v. Aguinaldo, 499 Phil. 215, 225 [2005]).
Among the employer’s management prerogatives is the right to prescribe reasonable rules and regulations necessary or proper for the conduct of its business or concern, to provide certain disciplinary measures to implement said rules and to assure that the same would be complied with. At the same time, the employee has the corollary duty to obey all reasonable rules, orders, and instructions of the employer; and willful or intentional disobedience thereto, as a general rule, justifies termination of the contract of service and the dismissal of the employee (Malabago vs. National Labor Relations Commission G.R. No. 165465, September 13, 2006). Disregard of the Rules and Regulations of a Company falls squarely on paragraph (a) of Article 297 (formerly Article 282) of the Labor Code, which provides:
“Article 297. Termination by Employer. – An employer may terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or his representative in connection with his work;”
Generally, these are all the legal bases in order for the employee to be terminated on the ground of the latter’s disregard of the Company rules and regulations. However, employers must also take note of the following test or checklist in order for an employee to be validly dismissed on the ground of disregard or violation of Company Rules and Regulations. Thus, jurisprudence instructs that the employer’s orders, regulations, or instructions must be:
- Reasonable and lawful,
- Sufficiently known to the employee, and
- In connection with the duties which the employee has been engaged to discharge. (Family Planning Organization of the Philippines, Inc. v. NLRC, G.R. No. 75907, March 23, 1992)
Hence, if an employee willfully disregarded Company’s Code of Discipline, applying the foregoing test will validate the dismissal of the erring employee on the said ground. However, suppose an employee performed an act which is both being commonly practiced by some employees and at the same time in clear violation of a Code of Conduct, can it still be considered as willful disregard of Company’s Code of Conduct? The case of St. Luke’s Medical Center, Inc. vs. Sanchez 753 SCRA 218, March 11, 2015 is enlightening.
In the said case, a nurse knowingly brought out numerous medical items with her which is a clear violation of the Company’s Code of Discipline. After observing proper procedure, her employer terminated her on the ground of violation of the Code of Discipline. The nurse reasoned out that she merely “hoarded” the questioned items, and such act was purportedly practiced by the other staff members in their Unit.
On a related point, the Supreme Court ruled that, while there were previous incidents of “hoarding,” it appears that such acts were – in similar fashion – furtively made and the items secretly kept, as any excess items found in the concerned nurse’s possession would have to be confiscated. Hence, the fact that no one was caught and/or sanctioned for transgressing the prohibition therefor does not mean that the so-called “hoarding” practice was tolerated by Company. Besides, whatever maybe the justification behind the violation of the company rules regarding excess medical supplies is immaterial since it has been established that an infraction was deliberately committed. Doubtlessly, the deliberate disregard or disobedience of rules by the employee cannot 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 reiterate, it is the duty of the employee to obey all reasonable rules, orders, and instructions of the employer, and willful or intentional disobedience thereto, as a general rule, justifies rescission of the contract of service and the peremptory dismissal of the employee (Malabago vs. National Labor Relations Commission G.R. No. 165465).
Sanctioning employee’s disregard or disobedience of a reasonable rule or order laid down by management would be disastrous to the discipline and order within the enterprise. It is in the interest of both the employer and the employee to preserve and maintain order and discipline in the work environment. Deliberate disregard of company rules or defiance of management prerogative cannot be countenanced. This is not to say that the employees have no remedy against rules or orders they regard as unjust or illegal. They can object thereto, ask to negotiate thereon, bring proceedings for redress against the employer. But until and unless the rules or orders are declared to be illegal or improper by competent authority, the employees ignore or disobey them at their peril (Benguet Electric Cooperative vs. Fianza 425 SCRA 41, March 09, 2004).
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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