MANAGEMENT PREROGATIVE ACTIVITY
Instructions:
Analyze each scenario. State:
1. Whether the management action is VALID or INVALID.
2. The legal basis or doctrine.
3. The controlling jurisprudence (if applicable).
CASE ANALYSIS
Scenario 1: The Efficiency Program
ABC Manufacturing removed chairs from assembly line workers to prevent
sleeping during work hours and improve efficiency. The company presented
studies showing decreased productivity due to operators resting excessively.
Workers filed a complaint claiming violation of humane working conditions.
Questions:
1. Is the removal of chairs a valid exercise of management prerogative?
2. What determines its validity?
Scenario 1 ANSWER
1. VALID
2. Management prerogative exercised in good faith for efficiency.
Doctrine: Management may regulate work methods if not arbitrary.
Case: Royal Plant Workers’ Union v. Coca-Cola (2013)
Scenario 2: Office Romance Policy
XYZ Pharmaceuticals implemented a policy prohibiting employees from
maintaining romantic relationships with employees of competitor companies.
An employee was asked to resign after marrying an employee of a
competitor.
Questions:
1. Is the policy valid?
2. What legitimate interest may justify the policy?
Scenario 3: Pregnancy Suspension
A private school indefinitely suspended a teacher for being pregnant outside
of marriage until she gets married. The school claims it is protecting its
moral standards.
Questions:
1. Is this a valid exercise of management prerogative?
2. What doctrine applies?
Scenario 4: Work Pool Arrangement
DEF Media Company maintains a “work pool” of cameramen who are
repeatedly rehired for every television season for 8 consecutive years. They
perform tasks necessary to the company’s regular broadcasting operations.
The company claims they are project employees.
Questions:
1. Are they project employees or regular employees?
2. What factors determine their status?
Scenario 5: Withdrawal of Bonus
For 12 consecutive years, GHI Corporation gave a fixed Christmas bonus
equivalent to one month salary without any written condition. This year,
management stopped giving the bonus due to cost-cutting measures.
Questions:
1. Can employees demand the bonus?
2. Has it ripened into a company practice?
Scenario 6: Conditional Productivity Bonus
JKL Company provides a “Performance Incentive Bonus” only if the company
achieves a 20% annual profit growth. This year, profits declined and no
bonus was given.
Employees claim it forms part of their wages.
Questions:
1. Is the bonus part of wage?
2. Is management obligated to pay it?
Scenario 7: Clearance Requirement
An employee resigned and demanded immediate release of his final pay. The
employer refused to release it pending completion of clearance and return of
company laptop and ID.
Questions:
1. Is withholding final pay valid?
2. What is the legal basis?
Scenario 8: Retaliatory Transfer
An employee actively organizing a union was suddenly transferred to a
remote provincial branch without business necessity. The transfer
significantly increased travel expenses and disrupted his family life.
Questions:
1. Is the transfer valid?
2. When does transfer become constructive dismissal?
Scenario 9: Non-Compete Clause
A senior marketing director signed a contract prohibiting her from working
for any competitor in the Philippines for two (2) years after resignation. She
resigned and joined a direct competitor six months later.
Questions:
1. Is the non-compete clause valid?
2. What makes a non-compete clause enforceable?