What would you do if your employer suddenly reduced your six-day workweek to just two or three days, cutting your salary by more than half without your consent? Many employees assume they have no choice but to accept such changes to keep their jobs. However, a recent Supreme Court ruling highlights that these actions may amount to illegal dismissal in the Philippines, particularly when employers unilaterally impose reduced workdays without complying with labor laws.
In the landmark case of Bacani v. Fiber Textile Manufacturing Corp., G.R. No. 271518, September 30, 2025, the Supreme Court En Banc provided critical jurisprudence under Philippine labor law. The High Court ruled that the unilateral imposition of reduced workdays and worker rotation schemes without employee consent and proper government compliance constitutes illegal constructive dismissal.
The actual facts of the case reveal the operational conflict that sparked the litigation. In 2017, Fiber Textile Manufacturing Corp. (FMC) hired the petitioners as production workers. Initially, these employees maintained a regular schedule, working six days a week. However, citing a severe shortage of raw materials that significantly disrupted production operations, FMC subsequently altered their schedules. The company reduced the employees' standard six-day workweek to only two to three days and implemented a temporary work rotation plan.
FMC defended its actions by claiming that it held a meeting with production supervisors and staff to openly discuss the raw material shortage and the implementation of the new work rotation schedule. According to the company, the workers reportedly agreed to the temporary work rotation plan during this meeting.
The workers strongly disputed this narrative, asserting that they never consented to the arrangement and were effectively dismissed when they were ultimately told not to return to work.
Seeking redress, the employees filed a formal complaint for constructive dismissal. While the Labor Arbiter initially ruled in favor of the workers, the National Labor Relations Commission and the Court of Appeals overturned that decision, upholding FMC’s actions as a valid exercise of management prerogative.
The Supreme Court fundamentally disagreed with the lower tribunals and found FMC fully liable for constructive dismissal. In the Decision written by Associate Justice Amy C. Lazaro-Javier, the High Court emphasized that while employers possess the management prerogative to adopt flexible work arrangements during economic difficulties or national emergencies, such measures must strictly comply with the requirements set out in Department of Labor and Employment (DOLE) Department Advisory No. 2, Series of 2009.
The Court clarified that to legally implement a flexible work arrangement, an employer must first consult the affected employees and obtain the voluntary support of the majority of the workers. Furthermore, the employer must formally notify the DOLE before implementing the arrangement and present concrete proof that the company is suffering from actual or reasonably imminent economic difficulties.
The High Court ruled that FMC failed to meet any of these legal standards. The Court explicitly stated that merely informing employees of an arrangement does not equate to securing their voluntary consent, meaning FMC failed to prove the workers agreed to the scheme.
Additionally, the company failed to notify the DOLE prior to implementation and failed to legally prove it was facing actual or imminent economic difficulties that would justify a schedule reduction.
FMC’s unlawful reduction of workdays amounted to constructive dismissal because it resulted in diminished salaries, making continued employment unreasonable for the workers. The Court reiterated 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.
Ultimately, this case serves as a powerful reminder that while Philippine labor law permits business flexibility, management prerogative is never a blank check to deprive workers of their livelihood without fairness, transparency, and strict statutory compliance.
If you are facing issues involving illegal dismissal, termination of employment, or constructive dismissal in Tarlac, Pampanga, and nearby provinces, Cunanan Law Office is ready to protect your rights. Reach out to our team today to schedule a legal consultation at Cunanan Law Office, Unit 10, Mr. Blue Building, MacArthur Highway, Brgy. Sto. Domingo 2nd, Capas, 2315 Tarlac, Philippines. You can also contact us by phone at +63 968 679 6617, via email at inquiries@mpeclaw.com, or visit our website at www.mpeclaw.com.