DECISION

This is a petition for certiorari seeking to annul and set aside the resolution, dated 26
February 2003, of the public respondent National Labor Relations Commission in NLRC CA No.
M-006976-2000 (RAB-10-0600386-2001), which on appeal set aside the decision, dated 26
March 2002, of Labor Arbiter Benjamin E. Pelaez.
The antecedents of this petition are:
Private respondent Ma. Mae Depita-Uy was employed as a medical representative of
petitioner Glaxo Smith-Kline Philippines, Inc. (hereinafter referred to as Glaxo), on 11 July
1989, and was assigned in Davao City from 1990 until 1993. She was transferred to Cagayan de
Oro City where she remained until 02 August 2001, the day when she was instructed by her
employer to report to Butuan City.
The dispute between the district manager and private respondent arise, based on the
formers allegations against the latter(private respondent), for her:
1. Failure to coordinate PAG resulting to a No PAG of the petitioner;
2. Failure to attend the Territory Marketing Program( TMP) updating in Cebu;
3. Failure to be at McDonalds at 9AM for a meeting based on their agreement;
4. For allegedly shouting at her on their phone conversations ; and
5. sleeping on companys time.
Another basis of petitioners contention on private respondents lapses in the company is
her negative attitude and disposition resulting to sour relationship with colleagues affecting
their teamwork and over-all output, based on colleagues claims against her.
With all these basis, private respondent was suspended and subsequently re-assigned to a
different location(Butuan City, Surigao City and Agusan Del Sur) of her own choice. However,
she failed to report to her new assignment as ordered. Thus she was terminated by the herein
petitioner.
Consequently, she filed a complaint for illegal dismissal before the Labor Arbiter,
contending that her transfer from Cagayan de Oro City to the Hanbury Division initiated during
the pendency of the illegal suspension case, is without justifiable reasons. Without her consent,
it constitutes constructive dismissal violative of her right to security of tenure.
On the other hand, the petitioner contends that the private respondent was validly
suspended for sleeping on company time and for her willful refusal to carry out the instructions
of her superior in violation of the companys rules and regulations.
With respect to the transfer of assignment of the private respondent, the petitioner
maintains that it was a valid exercise of its management prerogative.
On 26 March 2002, Executive Labor Arbiter Benjamin E. Pelaez, rendered a decision
declaring the suspension of the private respondent illegal. However, dismissed private
respondents complaint for constructive illegal dismissal, for lack of merit.

On appeal by the private respondent to the public respondent National Labor Relations
Commission, the said public respondent set aside the 26 March 2002 decision of Executive
Labor Arbiter Benjamin E. Pelaez, and declared that the private respondent was illegally
dismissed from employment.
The Supreme Court ruled that :
1. Considering the chronological sequence of events with specific length of time as basis of
private respondents suspension and subsequently her termination, the following dates are
worth noting:
- 27 April 2001 -- start of the teamwork problem;
- 8 May 2001 -- effective date of suspension on the ground of insubordination based
on failure to attend meeting on PAG discussion and TMP training in Cebu; and
- 3 August 2001 -- date of transfer to solve the teamwork problem
As early as the first quarter of 2001, some measures to remedy the situation and improve
the business operation was already instituted by the petitioner but to no avail until finally it was
forced to exercise its management prerogative by transferring complainant effective 3 August
2001. This disproves the charge of bad faith in the exercise of management prerogative by the
petitioner company.
Also, the Supreme Court ruled that it is well settled that labor laws discourage
interference with an employers judgment in the conduct of his business. Even as the law is
solicitous of the welfare of the employees, it must also protect the right of an employer to
exercise what are clearly management prerogatives. The free will of management to conduct its
own business affairs to achieve its purpose cannot be denied, as sited in the cases of Chemical
Industries v. Ministry of Labor, et. al., G.R. No. 75656, May 28, 1990; San Miguel Brewery
Sales Force Union (PTGWO) v. Ople, et. al., G.R. No. 53625, 8 February 1989; Abbot
Laboratories (Phils.), Inc. v. NLRC, et. al., G.R. No. 76159, 12 October 1987].
Additionally, As long as the Companys exercise of the same is in good faith to advance
its interest and not for the purpose of circumventing the rights of employees under the laws or
valid agreements, such exercise shall be upheld. [Caltex Refinery Employees Association
(CREA) v. NLRC, et. al., G.R. No. 102993, 14 July 1995; Maya Farms Employees
Organization, et. al. v. NLRC, et. al., G.R. No. 106256, 28 December 1994].
2. On the issue of constructive dismissal, the Court ruled that the transfer of the private
respondent from Cagayan de Oro City to the Hanbury Division is exercised with good
faith, justified and reasonable.
The growing antagonism and animosity among the medical representatives members of the
Cagayan de Oro City team which appears to be irreconcilable -- the justification advanced by
the petitioner for the transfer of the private respondent -- has been established by the evidence
on record.
The irreconcilable antagonism and animosity among the team members of the Cagayan de
Oro City team are verily shown by the complaint filed by the nine (9) medical representatives.
They are her colleagues, ascribing to said private respondents negative attitudes which greatly
affected teamwork, cohesiveness and companys image towards VIPs. They signed affidavits of
complaint against the private respondent detailing what they perceive to be the negative
behavior/attitude exhibited by the private respondent. The failure of team members to arrive at

an amicable settlement of their differences as shown by the undisputed fact that they were not
able to come up with a proposal agreed upon and signed by all of them.
3. In view of the foregoing, the Court ruled that private respondents allegation that her
transfer was in bad faith just because it was done during the pendency of the illegal
suspension case she filed against the petitioner, to be without merit.
It bears to reiterate that good faith is always presumed and therefore, he who charges another
with bad faith must prove it.
In the case at bench, private respondent failed to prove that petitioner was actuated with bad
faith when she was transferred from Cagayan de Oro City to her new assignment.
Having ruled that the transfer of private respondent was a valid and lawful exercise by
petitioner of its management prerogative, thus, there was no justifiable reason for private
respondents stubborn refusal to report to her new assignment.
4. With respect to separation pay, the Court ruled that that the private respondent is not
entitled to its payment.
Separation pay is defined as the amount that an employee receives at the time of his
severance from the service and is designed to provide the employee with the income during the
period that he is looking for another employment. Under the Labor Code, it is payable to an
employee whose services are validly terminated as a result of retrenchment, closure of business,
or disease.
In the case of PLDT vs. NLRC, the Supreme Court, ruled that separation pay may be
awarded in those instances where the employee is validly dismissed but for causes other
than serious misconduct or those involving moral turpitude.
5. Neither do the Court find any basis for the award of moral and exemplary damages, as
well as attorneys fees in favor of the private respondent.
All told, the Court is constrained to agree with the findings of the LA and consequently rule,
that it was an error and grave abuse of discretion for the NLRC to hold petitioner liable for the
illegal dismissal of said private respondent.
Thus, the petition is granted and the assailed resolutions of public respondent NLRC are
reversed and set aside. The decision of the Labor Arbiter dated 26 March 2002, is hereby
reinstated.