SC: Flexible work scheme without consent illegal

INQUIRER PHOTO / NIÑO JESUS ORBETA

MANILA, Philippines — An employer that reduces employees’ workload and imposes a flexible work arrangement without their consent may be held liable for constructive dismissal, the Supreme Court ruled.

In a Sept. 30, 2025, decision made public on Tuesday, the Supreme Court en banc found Valenzuela City-based Fiber Textile Manufacturing Corp. (FMC) liable for constructively dismissing seven workers after unilaterally cutting their work schedule from six days a week to only two or three days in 2018.

The reduction in work days, implemented in violation of Department of Labor and Employment (Dole) rules, resulted in lower pay and eventually forced the workers to resign.

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The SC ordered FMC to pay the workers full back wages, allowances, other benefits due from the time of dismissal until the finality of the ruling, attorney’s fees equivalent to 10 percent of the total award, and separation pay equivalent to one month salary for every year of service.

Shortened workweek

The case stemmed from a complaint filed before the Dole by the seven former employees, who accused FMC of constructive illegal dismissal, shortened work hours, and nonremittance of mandatory contributions to the Social Security System, Philippine Health Insurance Corp. (PhilHealth), and Home Development Mutual Fund (Pag-IBIG).

Court records showed the workers were hired in June 2017 as folding operators, chemical mixers, color men, and dyeing operators, among others, with daily wages of P380. A year later, they were informed of the reduced work schedule and allegedly told to resign.

FMC argued that the shortened workweek was a cost-cutting measure intended to address financial losses.

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“Thus, while the Court commiserates with FMC, we do not agree that its misfortune sufficiently justified the drastic measure it employed to cope, especially as it was notably quick to put the brunt of the blow upon its workers,” the high court said in its 29-page ruling.

The tribunal found that FMC failed to comply with the requirements under Dole Department Order No. 2, Series of 2009, making its implementation of a rotating work scheme and flexible work arrangement unlawful.

“Constructive dismissal occurs when there is cessation of work because continued employment is rendered impossible, unreasonable, or unlikely; when there is a demotion in rank or diminution in pay or both,” the court said. “Here, petitioners suffered a decrease in their pay due to the unlawful adoption by FMC of rotation of workers and reduction of work days.”

The ruling reversed a 2023 Court of Appeals decision favoring FMC. The workers had earlier won before the labor arbiter in June 2019, but later lost after FMC appealed before the National Labor Relations Commission in September 2019. /cb