EH403 - Digests - Topic 13 Management Prerogative

403 NOTES | LABOR LAW REVIEW | ATTY.
JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021
LABOR LAW REVIEW 2020-2021 to another was for a valid and legitimate ground, like
EH403 CASE DIGESTS genuine business necessity.
TOPIC 13: MANAGEMENT PREROGATIVE
Here, petitioner has duly discharged such burden. First,
01 CHATEAU ROYALE SPORTS & COUNTRY CLUB the resignations gave rise to an urgent and genuine
VS. BALBA, ET AL. business necessity that fully warranted the transfer to
GR NO. 197492, January 18, 2017, the main office in Manila since respondents are
BERSAMIN undoubtedly the best suited to perform the tasks
assigned to the resigned employees because of they are
Management prerogative to transfer employees also account managers and who had recently attended
from one area of operation to another seminars and trainings as such.
The right of the employee to security of tenure does not Second, the transfer was neither unreasonable nor
give her a vested right to her position as to deprive oppressive and there is no demotion in rank, or without
management of its authority to transfer or re-assign her diminution of benefits and salaries. In fact, such transfer
where she will be most useful. would open the way for their career growth.
Respondents are Account Manager of petitioner- Third, the respondents did not show by substantial
corporation in Nasugbu, Batangas. They received Notice evidence that the petitioner was acting in bad faith or
of Transfer directing them to report to work in the had ill-motive in ordering their transfer.
Manila Office since there was shortage of personnel by
reason of resignation of its three Account Managers. Lastly, by having voluntarily affixed their signatures on
Respondents declined which prompted the petitioner to their respective letters of appointment, they had
reprimand them. Thereafter, respondents filed for a acceded to the terms and conditions of employment
complaint for constructive dismissal against petitioner. incorporated therein including the provision on the
possibility of transfer to the main office.
In its complaint, respondents argued that the transfer
was not for valid cause and without consideration of the 02 DIWA ASIA PUBLISHING v DE LEON
proximity of the place and without improvements in the G.R. No. 203587, August 13, 2018
employment package. On the other hand, petitioner First Division, Tijam J.
argued that the transfer is crucial and indispensable and
Demotion; Constructive Dismissal
respondents’ respective letter of appointment provides
for the possibility of their transfer to the Manila office, The test of constructive dismissal is whether a
which had been made known to them and in which they reasonable person in the employee's position would
assented to. have felt compelled to give up his position under the
circumstances.
Are respondents constructively dismissed?
De Leon was hired by petitioner and began working as
its Human Resource (HR) Manager on August 2, 2001,
NO. The right of the employee to security of tenure does
becoming a regular employee on February 2, 2002.
not give her a vested right to her position as to deprive
management of its authority to transfer or reassign her In 2003, the Executive Director for HR instructed her to
where she will be most useful. submit all work and decisions, which she previously had
the liberty to handle and make, for review and
A transfer to constitutes constructive dismissal when it evaluation. Respondent perceived that she was being
demoted, and filed a complaint against Diwa for
is unreasonable, inconvenient or prejudicial to the
Constructive Dismissal.
employee, or involves a demotion in rank or diminution
of salaries, benefits and other privileges, or when the Was De Leon constructively dismissed?
acts of discrimination, insensibility or disdain on the part
of the employer become unbearable for the employee, YES. Constructive dismissal is a cessation of work
forcing him to forego her employment. because continued employment is rendered impossible,
unreasonable or unlikely; when there is a demotion in
rank or diminution in pay or both; or when a clear
The burden of proof lies with the employer to prove that
discrimination, insensibility, or disdain by an employer
the transfer of the employee from one area of operation becomes unbearable to the employee. It is an act
1
403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021
amounting to dismissal but made to appear as if it were

not. In other words, it is a dismissal in disguise.
There is constructive dismissal when an employee's

functions, which were originally supervisory in nature,
were reduced; and such reduction is not grounded on
valid grounds such as genuine business necessity.
The reduction in respondent's duties and responsibilities

as HR Manager amounted to a demotion that was
tantamount to constructive dismissal.

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403 NOTES | LABOR LAW REVIEW | ATTY.

JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021

amounting to dismissal but made to appear as if it were

There is constructive dismissal when an employee's

The reduction in respondent's duties and responsibilities

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