Unwritten Company Policy and Illegal Dismissal: The Bangloy Case

The Supreme Court has long held that an employer's right to manage its business is not absolute. When a company policy can cost an employee his or her job, that policy must be written, clear, and properly communicated. The 1998 case of Bangloy v. Manila Broadcasting Company remains a leading illustration of this principle—and a warning to employers who rely on undocumented rules to justify termination.

The Facts: A Radio Employee Runs for Office

Samuel Bangloy was a production supervisor and radio commentator at DZJC-AM, a station owned by Manila Broadcasting Company (MBC). In 1992, he decided to run for Board Member in Ilocos Norte. Citing Republic Act No. 6646—which requires media personalities who are candidates for public office to take a leave of absence during the campaign period—he applied for a 50-day leave.

MBC returned his application with a memo citing a supposed “company policy”: employees who ran for public office were considered resigned. Bangloy said he had never been informed of this policy in writing. He proceeded with his candidacy, lost the election, and attempted to return to work. MBC refused to take him back.

The company later cited several grounds for his termination: the unwritten policy, an alleged 30-day leave limit, the claim that RA 6646 did not apply to his role, and the assertion that his return was “late.” MBC also said his radio program had been cancelled and his position abolished.

The Court's Ruling: Policy Must Be Written and Published

The Labor Arbiter ruled in Bangloy's favor, finding illegal dismissal for lack of due process and ordering reinstatement with backwages. The NLRC affirmed but deleted the awards for damages and attorney's fees. MBC appealed to the Supreme Court, arguing that the NLRC had intruded on management prerogative.

The Supreme Court sided with Bangloy. The Court emphasized that there was no evidence the unwritten policy had been effectively communicated to employees. The station manager admitted the policy was never put in writing and was only verbally announced—and Bangloy testified he was not present when that announcement was made.

The Court was explicit: a rule as important as one that treats an employee who runs for public office as resigned “must be written and published so as to lend certainty to its existence and definiteness to its scope.” The Court also gave weight to Bangloy's good faith belief that he could take leave without resigning, noting that he had received conflicting signals, including verbal assurances from his station manager.

Proportionality in Discipline: Dismissal Was Too Harsh

Although Bangloy technically overstayed his approved leave by 11 days, the Court found dismissal disproportionate. Citing the principle of proportionality in disciplinary actions—and noting Bangloy's six years of service with no prior offenses—the Court modified the penalty to a one-month suspension. It drew a parallel to Dolores v. NLRC, where a longer unauthorized absence did not justify dismissal. The core finding of illegal dismissal and the order of reinstatement were upheld.

The Legal Framework: Management Prerogative and Just Causes

Philippine labor law recognizes management prerogative—the employer's right to manage its business and set policies. But this right is not absolute. It must be exercised in good faith and with due regard for employee rights.

Under Article 282 of the Labor Code (now Article 297 after renumbering), willful disobedience or insubordination is a just cause for termination. But for disobedience to justify dismissal, jurisprudence requires that:

• the employer's order must be lawful and reasonable;
• the order must be known to the employee;
• the order must be connected with the employee's duties; and
• the employee's disobedience must be willful or intentional.

An unwritten policy that an employee never knew about fails the second requirement. As the Bangloy case shows, an employer cannot rely on a rule that was never properly communicated.

Practical Takeaways

• Put critical policies in writing. Rules that can lead to termination must be documented. Verbal policies are legally precarious.
• Communicate and publish. Policies must be effectively communicated to all employees—ideally upon hiring and through regular updates. Mere verbal announcements are insufficient if disputed.
• Ensure accessibility. Employees should be able to find the rules easily, whether through an employee handbook, manual, or digital platform.
• Apply policies consistently. Inconsistent enforcement invites claims of discrimination or unfair labor practice.
• Follow due process. Even with a written policy, an employer must still give notice and an opportunity to be heard before termination.

For employees, the case is a reminder to seek written confirmation of any rule that affects job security—and to clarify doubts with HR or a supervisor before acting.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.