[MANAGEMENT PREROGATIVE] ○ The LA was convinced that petitioners were guilty of constructive

31 BLUE DAIRY CORP. V. NLRC dismissal as he found the justification for Recalde's transfer
September 14, 1999 | Bellosillo, J. | unreasonable:
■ first, the unofficial trip on the way back to the office was
Petitioner/s: Blue Dairy Corporation and/or Edison T. Aviguetero and Pedro G. undertaken through the bidding of the Production
Miguel Manager;
Respondent/s: NLRC and Elvira R. Recalde ■ second, loss of trust and confidence must necessarily
occur in the performance of duties;
Doctrine: The managerial prerogative to transfer personnel must be exercised ■ and third, the new position of Recalde was too humiliating
without grave abuse of discretion, bearing in mind the basic elements of justice and and demeaning.
fair play. Having the right should not be confused with the manner in which that right ● The NLRC affirmed the ruling of the LA.
is exercised. Thus it cannot be used as subterfuge by the employer to rid himself of ● Blue Dairy insists that the transfer of Recalde from the laboratory to the
an undesirable worker. vegetable processing section was effected in the exercise of management
In particular, the employer must be able to show that the transfer is not prerogative.
unreasonable, inconvenient or prejudicial to the employee; nor does it involve a ○ It did not amount to a constructive dismissal as Recalde
demotion in rank or a diminution of his salaries, privileges and other benefits erroneously maintained. Moreover, petitioners submit that the
coring of lettuce together with the other production jobs connected
Facts: therewith is one of the most important aspects of the corporation's
● Blue Dairy Corp., engaged in the processing of dairy and chocolate existence.
products, juices and vegetables, hired on 14 May 1994 private respondent
Elvira R. Recalde as a food technologist in its laboratory. Ruling:
● Recalde accompanied Production Manager Editha N. Nicolas in conducting W/N the reassignment of Recalde was a valid exercise of management
a sensory evaluation of vanilla syrup in one of the outlets of a client. While prerogative – NO.
on their way back to the office a post fell on the company vehicle they were
riding due to a raging typhoon damaging the vehicle's windshield and side ● Indeed, it is the prerogative of management to transfer an employee from
mirror. one office to another within the business establishment based on its
○ Later, Recalde was transferred from the laboratory to the vegetable assessment and perception of the employee's qualifications, aptitudes and
processing section where she cored lettuce, minced and repacked competence, and in order to ascertain where he can function with maximum
garlic and performed similar work, and was restricted from entering benefit to the company. But, like other rights, there are limits thereto.
the laboratory. ○ The managerial prerogative to transfer personnel must be
○ She was unhappy. She considered her new job humiliating and exercised without grave abuse of discretion, bearing in mind the
menial. She later stopped reporting for work.  basic elements of justice and fair play. Having the right should not
○ The following day she sent a letter to petitioner Edison T. be confused with the manner in which that right is exercised. Thus
Aviguetero, the President and Chairman of the Board of Directors it cannot be used as subterfuge by the employer to rid himself of an
of Blue Dairy, stating that she will no longer report for work because undesirable worker. 
of their drastic and oppressive action. ○ In particular, the employer must be able to show that the transfer is
● Recalde then filed a complaint for constructive dismissal and non-payment not unreasonable, inconvenient or prejudicial to the employee; nor
premium pay. She also claimed overtime pay and damages. does it involve a demotion in rank or a diminution of his salaries,
● Blue Dairy contended that Recalde was given a less sensitive assignment privileges and other benefits.
outside of the laboratory on account of her dishonesty which resulted in loss ○ Should the employer fail to overcome this burden of proof, the
of trust and confidence. employees transfer shall be tantamount to constructive dismissal,
○ They seriously took into account the result of the investigation which has been defined as a quitting because continued
concerning the 21 October incident that Recalde was actually employment is rendered impossible, unreasonable or unlikely; as
scouting for a new residence using company vehicle without prior an offer involving a demotion in rank and diminution in pay.
permission. ○ Likewise, constructive dismissal exists when an act of clear
○ They ccorded credence to the narrations of Rolando V. Flores, discrimination, insensibility or disdain by an employer has become
driver of the damaged vehicle, to that effect which act of dishonesty so unbearable to the employee leaving him with no option but to
could even have merited dismissal from employment had they forego with his continued employment.
adhered simply to jurisprudential rule but took into account instead ● In the present case, petitioners failed to justify Recaldes transfer from the
the spirit of the approaching Christmas season. position of food technologist in the laboratory to a worker in the vegetable
● The LA ruled in favour of Recalde and ordered Blue Dairy to reinstate her to processing section.
her former position as food technologist with backwages and premium pay
 ○ Recalde was not provided an opportunity to refute the reason for
the transfer nor was Recalde notified in advance of her impending
transfer which was a demotion in rank.
○ Gaco v. NLRC: While due process required by law is applied in
dismissals, the same is also applicable to demotions as demotions
likewise affect the employment of a worker shoe right to continued
employment, under the same terms and conditions, is also
protected by law. Moreover, considering that demotion is, like
dismissal, also a punitive action, the employee being demoted
should, as in cases of dismissals, be given a chance to contest the
same.
● Breach of trust and confidence as a ground for dismissal from employment
must be related to the performance of the duties of the employee such as
would show him to be thereby unfit to continue working for the employer.
○ By analogy, breach of trust and confidence as a ground
for reassignment must be related to the performance of the duties
of the employee such as would show him to be thereby unfit to
discharge the same task. Clearly, the act of dishonesty imputed to
Recalde has no bearing at all to her work in the laboratory.
○ As food technologist in the laboratory, she occupied a highly
technical position requiring use of her mental faculty. As a worker in
the vegetable processing section, she performed mere mechanical
work. It was virtually a transfer from a position of dignity to a servile
or menial job.
○ Definitely, a transfer from a workplace where only highly trusted
authorized personnel are allowed access to a workplace that is not
as critical is another reason enough for Recalde to howl a protest.

Dispositive
WHEREFORE, the petition is DISMISSED. The Decision of public respondent
National Labor Relations Commission finding that private respondent Elvira R.
Recalde was constructively dismissed from employment and entitled to premium pay
is AFFIRMED. Petitioners Blue Dairy Corporation, Edison T. Aviguetero and Pedro G.
Miguel are ordered to reinstate private respondent Recalde as food technologist in
the laboratory without loss of seniority rights and privileges and with full back wages
inclusive of allowances and other benefits or their monetary equivalent to be
computed from her dismissal on 14 December 1994 up to actual reinstatement, and
to grant her premium pay of P55.00 for work performed on 22 May 1994, a Sunday.
Costs against petitioners.

Notes