Ymbong vs. ABS-CBN Broadcasting Corporation

A company policy requiring employees who file certificates of candidacy for elective public office to resign is a valid exercise of management prerogative, provided it is issued in good faith for the advancement of the employer's interest and is justified by a reasonable business necessity such as preserving the media company's objectivity, neutrality, and credibility; the employee's overt act of running for public office constitutes voluntary resignation, not dismissal, such that due process requirements in termination cases do not apply.

Ernesto G. Ymbong had worked for ABS-CBN Broadcasting Corporation at its regional station in Cebu since 1993, initially as a television talent co-anchoring programs such as Hoy Gising and TV Patrol Cebu, and later extending to radio work when ABS-CBN Cebu launched its AM station DYAB in 1995, where he served as drama and voice talent, spinner, scriptwriter, and public affairs program anchor. Another talent, Leandro Patalinghug, also worked for ABS-CBN Cebu starting 1995 as talent, director, and scriptwriter for various radio programs aired over DYAB. On January 1, 1996, the ABS-CBN Head Office in Manila issued Policy No. HR-ER-016, entitled "Policy on Employees Seeking Public Office," which required any employee intending to run for public office to file a letter of resignation at least thirty days prior to the official filing of the certificate of candidacy, and required those intending to campaign for a candidate or political party to file a request for leave of absence subject to management approval.

Ernesto G. Ymbong began working for ABS-CBN Broadcasting Corporation in 1993 at its regional station in Cebu as a television talent, co-anchoring Hoy Gising and TV Patrol Cebu. His stint later extended to radio when ABS-CBN Cebu launched its AM station DYAB in 1995, where he worked as drama and voice talent, spinner, scriptwriter, and public affairs program anchor. Leandro Patalinghug likewise worked for ABS-CBN Cebu starting 1995, serving as talent, director, and scriptwriter for various radio programs aired over DYAB. On January 1, 1996, the ABS-CBN Head Office in Manila issued Policy No. HR-ER-016, the "Policy on Employees Seeking Public Office," which required any employee intending to run for public office to file a letter of resignation at least thirty days prior to the official filing of a certificate of candidacy, and required those intending to openly campaign for a candidate or political party to file a request for leave of absence subject to management approval.

Because of the impending May 1998 elections, Dante Luzon, Assistant Station Manager of DYAB, issued a memorandum on March 25, 1998, informing all concerned that any employee or talent who wanted to run for any position in the coming election would have to file a leave of absence upon filing a certificate of candidacy, with services temporarily suspended for the entire campaign and election period. Luzon later admitted, however, that upon double-checking the exact text of the policy and confirming with the ABS-CBN Head Office, the policy actually required resignation for those who would actually run in elections and leave for those who intended to campaign. After the issuance of the March 25, 1998 Memorandum, Ymbong got in touch with Luzon. Luzon claimed that Ymbong told him he would leave radio for a couple of months to campaign for the administration ticket, and that it was only after the elections that they discovered Ymbong had actually run for councilor of Lapu-Lapu City. Ymbong, for his part, claimed that in accordance with the March 25, 1998 Memorandum, he informed Luzon through a letter that he would take a leave of absence from March 8, 1998 to May 18, 1998 since he was running for councilor. As for Patalinghug, he approached Luzon and advised him that he would run as councilor for Naga, Cebu; Luzon clarified that Patalinghug would be considered resigned, not merely on leave, upon filing his certificate of candidacy. Patalinghug accordingly submitted a letter of resignation on April 13, 1998, expressly referencing the company policy requiring resignation of any person connected to ABS-CBN who seeks an elected position in government.

Both Ymbong and Patalinghug lost in the May 1998 elections. Both later attempted to return to ABS-CBN Cebu, but Luzon informed them they could no longer work there because of company policy, a position stressed in subsequent meetings with no exceptions allowed. ABS-CBN agreed, out of pure liberality, to allow them to wind up their participation in the radio drama Nagbabagang Langit, since it was rating well and to avoid an abrupt ending. The winding-up dragged on, prompting Luzon to issue a memorandum to Ymbong on September 14, 1998, reminding him that his services as drama talent had been automatically terminated when he ran for a local government position, and terminating all his drama participation effective immediately, except his involvement as drama spinner/narrator of Nagbabagang Langit until Patalinghug wrapped it up. Ymbong contended that after the expiration of his leave of absence, he reported back to work as a regular talent and continued to receive his salary, and that the September 14, 1998 memorandum terminating his services came as a surprise.

Ymbong filed an illegal dismissal complaint against ABS-CBN, Luzon, and DYAB Station Manager Veneranda Sy, arguing that the ground cited for his dismissal was not among those enumerated in the Labor Code and that the company policy violated his constitutional right to suffrage. Patalinghug likewise filed an illegal dismissal complaint. ABS-CBN prayed for dismissal, contending there was no employer-employee relationship and that Ymbong and Patalinghug were talents, not employees, as evidenced by their talent contracts, though the company maintained its standing policy on persons connected with the company who run for public office.

• Validity of Company Policy: Petitioner argued that Policy No. HR-ER-016 is a clear interference with and gross violation of an employee's constitutional right to suffrage, and that the CA erred in upholding it.
• Supersession by Memorandum: Petitioner maintained that the March 25, 1998 Memorandum issued by Luzon was an exercise of management power to which an employee must defer, and that as far as he was concerned, it superseded the subject company policy; ABS-CBN could not disown the acts of its officers, especially since it prejudiced his property rights.
• Validity of Dismissal: Petitioner argued that the ground relied upon by ABS-CBN for his termination was not among the just and authorized causes provided in the Labor Code, and that even assuming the company policy was valid, his automatic termination was a blatant disregard of his right to due process, as he was never asked to explain why he did not tender his resignation before running for public office.
• Respect for Factual Findings: Petitioner asseverated that both the Labor Arbiter and the NLRC were consistent in finding him illegally dismissed, and that factual findings of labor administrative officials, if supported by substantial evidence, are accorded great respect and even finality.

• Validity of Policy: Respondent countered that the validity of policies such as Policy No. HR-ER-016 had long been upheld by the Court, which had ruled that a media company has a right to impose a policy providing that employees who file certificates of candidacy shall be considered resigned, and that management prerogatives may limit employee rights as long as they are not exercised contrary to law.
• Right to Suffrage Not Violated: Respondent argued that nothing in the company policy prohibits employees from running for public office or accepting public appointive positions, and thus it cannot be considered violative of the constitutional right of suffrage; the policy was justified by reasonable business necessity, as it was issued to protect the company from public misconceptions and to preserve its objectivity, neutrality, and credibility.
• Voluntary Resignation: Respondent argued that Ymbong's unilateral act of filing his certificate of candidacy was an overt act tantamount to voluntary resignation under the clear mandate of Policy No. HR-ER-016, and that Ymbong misled his superiors by making them believe he was going on leave to campaign for administration candidates when he in fact ran for councilor; he failed to adduce a copy of the letter he claimed to have sent to Luzon.
• CA's Authority to Reverse: Respondent asseverated that the CA was not precluded from making its own findings, especially where the NLRC committed grave abuse of discretion in failing to apply the company policy to Ymbong when it readily applied the same to Patalinghug.

• Validity of Company Policy: Whether Policy No. HR-ER-016 is valid.
• Supersession: Whether the March 25, 1998 Memorandum issued by Luzon superseded Policy No. HR-ER-016.
• Resignation vs. Dismissal: Whether Ymbong, by seeking an elective post, is deemed to have resigned and not dismissed by ABS-CBN.

• Validity of Company Policy: Yes. Policy No. HR-ER-016 is a valid exercise of management prerogative, justified by the reasonable business necessity of preserving the company's objectivity, neutrality, and credibility, and it does not violate the constitutional right to suffrage since it does not prohibit employees from running for public office.
• Supersession: No. The March 25, 1998 Memorandum did not supersede Policy No. HR-ER-016, having been issued by Luzon beyond the scope of his authority and in absolute contradiction with the head office policy; it is therefore void.
• Resignation vs. Dismissal: Yes. Ymbong is deemed resigned when he ran for councilor; his overt act of running for public office is tantamount to voluntary resignation, and since there was no dismissal, the due process requirements applicable to termination cases do not apply.

• Validity of Company Policy: The Court relied on Manila Broadcasting Company vs. NLRC, which upheld a similar company policy requiring employees who file certificates of candidacy to be considered resigned, on the grounds that working for the government and the company simultaneously is prejudicial to both, and that an employee who loses an election would have suspect impartiality eroding public confidence in the station. ABS-CBN's rationale, embodied in the policy itself, was to remain apolitical and protect itself from public misconceptions by preserving its objectivity, neutrality, and credibility. The Court reaffirmed the principle that management prerogatives exercised in good faith for the advancement of the employer's interest, and not to circumvent employee rights, will be upheld. Congress itself endorsed this exercise of management prerogative by enacting Republic Act No. 9006 (Fair Election Act), Section 6.6 of which provides that mass media practitioners who are candidates for elective public office shall be deemed resigned if so required by their employer. The policy does not prohibit employees from running for public office; it merely requires resignation as a condition, and thus does not violate the right to suffrage.

• Supersession: While Luzon, as Assistant Station Manager for Radio, possessed policy-making powers in relation to administering the network's radio station in the Cebu region, the exercise of such power had to be in accord with the general rules and regulations imposed by the ABS-CBN Head Office. The March 25, 1998 Memorandum, which only required employees to go on leave if they intended to run, was in absolute contradiction with Policy No. HR-ER-016, which required resignation. Having been issued beyond the scope of Luzon's authority, the memorandum was void and could not supersede the head office policy. Luzon himself admitted in his Sworn Statement that upon double-checking the policy and confirming with the Head Office, he learned the policy required resignation for those who would actually run. Since the officer who issued the memorandum acknowledged it was not in harmony with the head office policy, it could not serve as a source of right for Ymbong.

• Resignation vs. Dismissal: Because Policy No. HR-ER-016 remained the subsisting company policy, Ymbong was deemed resigned when he ran for councilor. His overt act of running for public office was tantamount to resignation; he was separated from ABS-CBN not because he was dismissed but because he resigned. Since there was no termination to speak of, the due process requirements in dismissal cases could not be applied. The Court rejected Ymbong's claim that he was not in a position to know which issuance was correct, noting that he was most likely fully aware of the subsisting policy, which explained why he told Luzon he would only campaign for the administration ticket rather than run himself. The Court found no proof of Ymbong's claimed letter to Luzon informing him of his plan to run; the document he identified as Annex "A" was in fact the September 14, 1998 Memorandum, not his letter. Had Ymbong been truthful, his superiors would have clarified the prevailing policy, as Luzon did with Patalinghug.

• Management Prerogative — A company may validly exercise management prerogatives, including the imposition of policies requiring employees who run for public office to resign, so long as these are exercised in good faith for the advancement of the employer's interest and not for the purpose of defeating or circumventing the rights of employees under special laws or valid agreements. The Court applied this doctrine by upholding Policy No. HR-ER-016 as justified by ABS-CBN's need to maintain its objectivity, neutrality, and credibility as a media organization.

• Deemed Resignation by Filing Certificate of Candidacy — An employee's overt act of running for public office, pursuant to a valid company policy requiring resignation, constitutes voluntary resignation and not dismissal. Because the separation is by operation of the employee's own voluntary act, no dismissal occurs and the due process requirements applicable to termination cases do not apply. The Court applied this by holding that Ymbong was deemed resigned when he filed his certificate of candidacy for councilor.

• Validity of Subordinate Memoranda Against Head Office Policy — A memorandum issued by a subordinate officer possessing policy-making powers, but which contradicts a subsisting policy issued by higher management, is void for having been issued beyond the scope of the officer's authority and cannot supersede the head office policy. The Court applied this in nullifying Luzon's March 25, 1998 Memorandum.

• "What is involved in this case is an unwritten company policy considering any employee who files a certificate of candidacy for any elective or local office as resigned from the company. Although §11(b) of R.A. No. 6646 does not require mass media commentators and announcers such as private respondent to resign from their radio or TV stations but only to go on leave for the duration of the campaign period, we think that the company may nevertheless validly require them to resign as a matter of policy." — This passage, quoted from Manila Broadcasting Company vs. NLRC, articulates the foundational rule that a media company may validly require employees who run for public office to resign as a matter of policy, even absent statutory compulsion, and serves as the controlling precedent for the validity of Policy No. HR-ER-016.

• "Ymbong's overt act of running for councilor of Lapu-Lapu City is tantamount to resignation on his part. He was separated from ABS-CBN not because he was dismissed but because he resigned. Since there was no termination to speak of, the requirement of due process in dismissal cases cannot be applied to Ymbong." — This passage states the ratio decidendi on the third issue: that the act of running for public office under a valid company policy constitutes voluntary resignation, not dismissal, and therefore due process requirements in termination cases are inapplicable.

• "So long as a company's management prerogatives are exercised in good faith for the advancement of the employer's interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, this Court will uphold them." — This is the canonical formulation of the management prerogative doctrine as applied in this case, establishing the test for validity: good faith, advancement of employer's interest, and no circumvention of employee rights.

• Manila Broadcasting Company vs. NLRC, G.R. No. 121975, August 20, 1998, 294 SCRA 486 — Controlling precedent. The Court relied on this case to uphold the validity of a company policy requiring employees who file certificates of candidacy to be considered resigned, establishing that media companies may validly impose such requirements as a matter of policy to protect their objectivity and public credibility.
• San Miguel Brewery Sales Force Union (PTGWO) vs. Ople, G.R. No. 53515, February 8, 1989, 170 SCRA 25 — Followed. Cited for the principle that management prerogatives exercised in good faith for the advancement of the employer's interest, and not to circumvent employee rights, will be upheld.
• Abbott Laboratories (Phils.) Inc. vs. NLRC, No. L-76959, October 12, 1987, 154 SCRA 713 — Followed. Cited for the proposition that the law protects not only the welfare of employees but also the right of an employer to exercise management prerogatives in conducting its business affairs.

• Section 6.6, Republic Act No. 9006 (Fair Election Act) — Provides that any mass media columnist, commentator, announcer, reporter, on-air correspondent, or personality who is a candidate for any elective public office shall be deemed resigned if so required by their employer, or shall take a leave of absence during the campaign period. The Court cited this provision as legislative endorsement of the exercise of management prerogative in requiring media employees who run for public office to resign.
• Section 11(b), Republic Act No. 6646 — Referenced in Manila Broadcasting Company vs. NLRC as providing that mass media commentators and announcers need only go on leave for the duration of the campaign period, but the Court held that a company may nevertheless validly require them to resign as a matter of policy beyond what the statute requires.
• Policy No. HR-ER-016, ABS-CBN Broadcasting Corporation — The company policy entitled "Policy on Employees Seeking Public Office," requiring employees who intend to run for public office to file a letter of resignation at least thirty days prior to filing a certificate of candidacy. The Court upheld its validity as a valid exercise of management prerogative and applied it to deem Ymbong resigned upon filing his certificate of candidacy.

Chief Justice Renato C. Corona (Chairperson), Associate Justice Teresita J. Leonardo-De Castro, Associate Justice Lucas P. Bersamin, and Associate Justice Estela M. Perlas-Bernabe (designated additional member per Special Order No. 1207 dated February 23, 2012).