29/05/2026
The Supreme Court (SC) has ruled that the unilateral imposition of reduced workdays and worker rotation scheme amounts to constructive dismissal.
In a Decision written by Associate Justice Amy C. Lazaro-Javier, the SC En Banc found a textile manufacturing company liable for constructively dismissing seven of its production workers after reducing their six-day workweek to only two to three days and implementing a work rotation plan without their consent.
Fiber Textile Manufacturing Corp. (FMC) hired the petitioners in 2017 as production workers. Initially working six days a week, their schedules were later reduced to only two to three days a week due to the company’s alleged lack of raw materials.
FMC claimed that they held a meeting with production supervisors and staff to discuss the shortage of raw materials and the implementation of a work rotation schedule. During the meeting, the workers reportedly agreed to the temporary work rotation plan.
The workers filed a complaint for constructive dismissal, claiming that they were effectively dismissed when they were told not to return to work.
The Labor Arbiter ruled in favor of the workers, but the National Labor Relations Commission and the Court of Appeals upheld FMC’s actions as a valid exercise of management prerogative.
The SC disagreed. It emphasized that while employers may adopt flexible work arrangements during economic difficulties or national emergencies, these arrangements must comply with the requirements set out in Department of Labor and Employment (DOLE) Department Advisory No. 2, Series of 2009.
The SC explained that employers must first consult affected employees and obtain the voluntary support of the majority of workers. Employers must also notify the DOLE before implementing the arrangement and prove that the company is suffering from actual or reasonably imminent economic difficulties.
In this case, the SC held that FMC failed to prove that the workers voluntarily agreed to the reduced workdays and worker rotation scheme. The Court ruled that informing employees of the arrangement does not equate to securing their consent.
FMC also failed to notify the DOLE before implementation and failed to prove that it was suffering from actual or imminent economic difficulties that would justify the reduction of workdays.
The SC emphasized that while employers may adopt flexible work arrangements to prevent business losses, such measures must be exercised in good faith and with due regard to the rights of workers.
FMC’s unlawful reduction of workdays amounted to constructive dismissal because it resulted in diminished salaries, making continued employment unreasonable for the workers.
In his Concurring Opinion, Senior Associate Justice Marvic M.V.F. Leonen stressed that the requirement of mutual consent in flexible work arrangements originates from the consensual nature of employment contracts, such that employers cannot unilaterally alter work schedules in a manner that diminishes employees’ pay.
In his Concurring and Dissenting Opinion, Associate Justice Alfredo Benjamin S. Caguioa agreed that FMC remained liable for constructive dismissal for failing to prove that the workers voluntarily agreed to the reduced workdays and work rotation plan. However, he emphasized that FMC had no raw materials to work with for several months, significantly affecting production operations. Thus, he stated that FMC faced a reasonably imminent economic difficulty that could justify the temporary adoption of flexible work arrangements. (Courtesy of the SC Office of the Spokesperson)
Read the full text of the press release at https://sc.judiciary.gov.ph/?p=166345.
Read the full text of the Decision at https://sc.judiciary.gov.ph/?p=166344.
Originally Published by the Supreme Court Public Information Office on May 19, 2026.
