G.R. No.

80737 September 29, 1988

PHILIPPINE GRAPHIC ARTS INC., IGMIDIO R. SILVERIO AND CARLOS CABAL,
petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, ROSALINA M. PULPULAAN AND
EMELITA SALONGA, respondents.
Facts:
The petitioner corporation was forced by economic circumstances to require its workers to go on
mandatory vacation leave with pay but the same was charged against their respective earned
leaves. As a result, the private respondents filed complaints for unfair labor practice and
discrimination.
The Labor Arbiter dismissed the complaint for lack of merit.
Private respondents filed a partial appeal with the NLRC questioning the dismissal of the
complaint and contending that the resultant forced vacation leaves were actually without pay.
The NLRC affirmed the Labor Arbiters decision with modification. According to the NLRC,
the vacation leave was visited with arbitrariness, thus, a refund of the amount equivalent to the
earned leave must be made.
Hence, the petition for certiorari was filed by the petitioner corporation.
Issue:
Whether or not the forced vacation leave without pay is ULP and if not, whether or not it was
tainted with arbitrariness.
Ruling:

The Supreme Court ruled that there was no ULP. The corporation instituted the forced leave due
to economic crisis which the private respondents do not even question. Therefore, there is no
ULP.
The imposition of forced leave is not tainted with arbitrariness as this was not exercised for the
purpose of circumventing the rights of employees under special laws or valid agreements. It was
a valid exercise of management prerogative. It was a more human solution instead of a
retrenchment and reduction of personnel. In fact, it was only temporary and it was taken only
after notice and consultations with workers and supervisors.
The decision of the NLRC was set aside and the decision of the Labor Arbiter was reinstated.