Dosch vs. NLRC
G.R. No. L-51182. July 5, 1983 Facts:
Helmut Dosch, an American citizen, married to a Filipina, was the resident Manager of Northwest Airlines, Inc. in the Philippines. He has to his credit 11 years of continuous service with the company, including 9 years as Northwest Manager with station at Manila. He received an inter-office communication from R.C. Jenkins, Northwest's Vice President for Orient Region based in Tokyo, promoting him to the position of Director of International Sales and transferring him to Northwest's General Office in Minneapolis, U.S.A., effective immediately.
Dosch in his letter, expressed appreciation for the promotion and at the same time regretted that "for personal reasons and reasons involving his family, he is unable to accept a transfer from the Philippines and that he would, therefore, prefer to remain in his position, of Manager-Philippines until such time that his services in that capacity are no longer required by the company. Petitioner tried to resume his duties as Manager after an authorized vacation but the Vice-President for the Orient Region of Northwest advised petitioner that in view of his letter, his status as an employee of the company ceased on the close of business and the company therefore considers his letter to be a resignation without notice.
Issue: Whether or not the employer’s letter constitute a transfer as a valid exercise of a management prerogative.
Held:
No. The Supreme Court treats the Jenkins letter as directing the promotion of the petitioner from his position as Philippine manager to Director of International Sales in Minneapolis, U.S.A. It is not merely a transfer order but "it is more in the nature of a promotion that a transfer, the latter being merely incidental to such promotion." The inter-office communication of Vice President Jenkins is captioned "Transfer" but it is basically and essentially a promotion for the nature of an instrument is characterized not by the title given to it but by its body and contents. The communication informed the petitioner that effective August 18, 1975, he was to be promoted to the position of Director of International Sales, and his compensation would be upgraded and the payroll accordingly adjusted. Petitioner was, therefore, advanced to a higher position and rank and his salary was increased and that is a promotion.
There is no law that compels an employee to accept a promotion, as a promotion is in the nature of a gift or a reward, which a person has a right to refuse. When petitioner refused to accept his promotion to Director of International Sales, he was exercising a right and he cannot be punished for it as qui jure suo utitur neminem laedit. He who uses his own legal right injures no one. While it may be true that the right to transfer or reassign an employee is an employer's exclusive right and the prerogative of management, such right is not absolute. The right of an employer to freely select or discharge his employee is limited by the paramount police power for the relations between capital and labor are not merely contractual but impressed with public interest (Article 1700, New Civil Code). And neither capital nor labor shall act oppressively against each other. The Court did not agree to Northwest's submission that petitioner was guilty of disobedience and insubordination which respondent Commission sustained. Petitioners acknowledgment of his promotion and the way he expressed his desire to remain in his position in the Philippines for reasons involving his family, the Court could not discern even the slightest hint of defiance, much less imply insubordination on the part of petitioner.
The Court emphasized the long and faithful years of service that petitioner had rendered to respondent company, eleven good years, nine of which as Manager with station at Manila. It is plainly abusive of the company and oppressive to the petitioner that the latter is peremptorily dismissed on the shallow claim of "resignation without notice,". The Court ordered petitioner's reinstatement to his former position with full backwages for three (3) years without loss of seniority rights and other benefits recognized by law, including attorney's fees equivalent to 10% of the total monetary benefits which the petitioner may recover, and ordered petitioners reinstatement.
PT&T vs. Court of Appeals
G.R. No. 152057. September 29, 2003 Facts:
PT&T is a domestic corporation engaged in the business of providing telegraph and communication services thru its branches all over the country.
Sometime in 1997, after conducting several studies, PT and T came up with a Relocation and Restructuring Program that aimed to (a) sustain its retail operations (b) decongest surplus workforce in some branches, to promote efficiency and productivity; (c) lower expenses incidental to hiring and training new personnel; and (d) avoid retrenchment of employees occupying redundant positions. The company offered relocation benefits/allowances to employees who would agree to be transferred to new PT and T branches in the provinces. Moreover, employees who would agree to the transfer would be considered promoted.
In line with the petitioner’s program, seven employees were directed by the company to “relocate” to their new PT&T branches. The seven employees however rejected the petitioner company’s offer on the reason that the said transfers involved distant places which would require their separation from their families.
Due to the employee’s refusal, the company dismissed the seven employees on the ground that their refusal amounted to insubordination and willful disobedience to a lawful order. As the seven employees were all members of a registered labor union, their union in behalf of them, filed with the Labor Arbiter a complaint for unfair labor practice and illegal dismissal against PT&T.
The petitioner company’s defense was that the transfers were valid exercise of management prerogative. The Labor Arbiter dismissed the complaint and upheld the company, but on appeal, the National Labor Relations Commission declared the employee’s dismissal as illegal. The Court of Appeals affirmed the NLRC’s ruling.
Issue:
(1) Whether or not the transfers initiated by petitioner PT and T to its employees were in the nature of a promotion.
(2) Whether or not the dismissal of the employees was valid on the ground that there was insubordination and willful disobedience to a lawful order.
Held:
(1) The employee’s transfers are promotions in nature even if they were not accompanied by an increase in salary.
It was petitioner company itself that admitted to this fact as was stated in their position paper submitted to the Labor Arbiter. With or without a corresponding increase in salary, the respective transfers of the private respondents were in fact promotions, following the ruling enunciated in Homeowners Savings and Loan Association, Inc. v. NLRC:
… [P]romotion, as we defined in Millares v, Subido, is “the advancement from one position to another with an increase in duties and responsibilities as authorized by law, and usually accompanied by an increase in salary.” Apparently, the indispensable element for there to be a promotion is that there must be“advancement from one position to another” or an upward vertical movement of the employee’s rank or position. Any increase in salary should only be considered incidental but never determinative of whether or not a promotion is bestowed upon an employee.
(2) An employee cannot be promoted, even if merely as a result of transfer, without his consent. A transfer that results in promotion or demotion, advancement or reduction or a transfer that aims to ‘lure the employee away from his permanent position cannot be done without the employees’
consent.
There is no law that compels an employee to accept a promotion for the reason that a promotion is in the nature of a gift or reward, which a person has a right to refuse. Hence, the exercise by the private respondents of their right cannot be considered in law as insubordination, or willful disobedience of a lawful order of the employer. As such, there was no valid cause for the private respondents’ dismissal.
As the questioned dismissal is not based on any of the just or valid grounds under Article 282 of the Labor Code, the NLRC correctly ordered the private respondents’ reinstatement without loss of seniority rights and the payment of back wages from the time of their dismissal up to their actual reinstatement.
Mendoza vs. Rural Bank of Lucban G.R. No. 155421, July 7, 2004 Facts:
On April 25, 1999, the Board of Directors of the Rural Bank of Lucban, Inc., issued Board Resolution Nos. 99-52 and 99-53, ordering the reshuffling of its and employees in line with the policy of the bank to familiarize bank employees with the various phases of bank operations and further strengthen the existing internal control system.
In that Board resolution, Mendoza was assigned to Clerk-Meralco collection from the position of Appraiser. Petitioner in an undated letter to the Bank’s Board Chairman stated that the transfer was in effect a demotion on his part without legal basis and is a blatant harassment on from the employer as a prelude petitioners termination in due time. That it resulted to unfair labor practice.
The Board’s Chairman in his reply, only reiterated that the reason behind the resolution on the reshuffling of its employees was merely familiarize bank employees with the various phases of bank operations and further strengthen the existing internal control system.
On June 7, 2009, petitioner in a letter applied for leave of absence due to an ailment good for ten days, and another was submitted for 30 days. Within this period, petitioner filed a complaint before Arbitration Branch No. IV of the National Labor Relations Commission against the Rural Bank of Lucban for illegal dismissal, underpayment, separation pay and damages. The Labor Arbiter upheld petitioner’s claims but then it was reversed by the NLRC on appeal. The Court of Appeals also found no grave abuse of discretion on the part of the NLRC.
Issue: Whether or not the reshuffling or transfer is deemed to be a demotion on petitioner’s position.
Held:
Constructive dismissal is defined as an involuntary resignation resorted to when continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution of pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee.
In the pursuit of its legitimate business interest, management has the prerogative to transfer or assign employees from one office or area of operation to another — provided there is no demotion in rank or diminution of salary, benefits, and other privileges; and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause. This privilege is inherent in the right of employers to control and manage their enterprise effectively. The right of employees to security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to change their assignments or to transfer them. Managerial prerogatives, however, are subject to limitations provided by law, collective bargaining agreements, and general principles of fair play and justice.
Management Prerogative to Transfer Employees. Jurisprudence recognizes the exercise of management prerogatives. For this reason, courts often decline to interfere in legitimate business decisions of employers. Indeed, labor laws discourage interference in employers’ judgments concerning the conduct of their business. The law must protect not only the welfare of employees, but also the right of employers. In the pursuit of its legitimate business interest, management has the prerogative to transfer or assign employees from one office or area of operation to another -- provided there is no demotion in rank or diminution of salary, benefits, and other privileges; and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause. This privilege is inherent in the right of employers to control and manage their enterprise effectively. The right of employees to security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to change their assignments or to transfer them.
Petitioner’s Transfer Lawful. Petitioner’s transfer was made in pursuit of respondent’s policy to “familiarize bank employees with the various phases of bank operations and further strengthen the existing internal control system” of all officers and employees. We have previously held that employees may be transferred -- based on their qualifications, aptitudes and competencies -- to positions in which they can function with maximum benefit to the company. There appears no justification for denying an employer the right to transfer employees to expand their competence and maximize their full potential for the advancement of the establishment. Petitioner was not singled out; other employees were also reassigned without their express consent. Neither was there any demotion in the rank of petitioner; or any diminution of his salary, privileges and other benefits. This fact is clear in respondent’s Board Resolutions, the April 30, 1999 letter of Bank President Daya to Branch Manager Cada, and the May 10, 1999 letter of Daya to petitioner.
Duncan Association of Detailman vs. Glaxo Wellcome Phils.
G.R. 162994, September 17, 2004 Facts:
Petitioner Tecson was hired by respondent Glaxo Wellcome Phils. as a medical representative. Tecson signed a contract of employment, which stipulates among others, that he agrees to disclose existing or future relationship with co-employees and employees of competing companies that should such relationship poses a conflict of interest, to resign from the company. Despite repeated warnings, Tecson and Bettsy, an employee of a competing company, got married. Glaxo transferred Tecson to Butuan, but he defied such orders and continued acting as medical representative in Camarines area. The National Conciliation and Mediation board rendered as valid the policy and the right to transfer.
Issue: Whether or not the policy constitutes a prohibition against marriage.
Held:
No.
Glaxo’s policy prohibiting an employee from having a relationship is a valid exercise of management prerogatives as relationships of that nature might compromise the interests of the company. Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential programs and information for competitors.
The right to protect its economic interests is recognized by the constitution which recognizes the right of enterprises to adopt and enforce such a policy to protect its right to reasonable returns on investments and for expansion and growth. Indeed, while our laws endeavor to give life to the constitutional policy on social justice and the protection of labor, it does not mean that every labor dispute will be decided in favor of the workers.
The law also recognized that management has rights which are also entitled to respect and enforcement in the interest of fair play. The challenged company policy does not violate the equal protection clause of the constitution as such clause is addressed only to the state or those acting under color of its authority.
The policy being questioned is not a policy against marriage. An employee of the company remains free to marry anyone of his or her choosing. The policy is aimed at restricting a personal prerogative that belongs only to the individual. However, an employee’s personal decision does not detract the employer from exercising management prerogatives to ensure maximum profit and business success.
PLDT vs. Paquio
G.R. No. 152689, October 12, 2005 Facts:
In 1994, PLDT assessed the performance of the 27 Exchanges comprising the GMM Network. Upon receipt of the ratings, Alfredo Paguio, Head of the Garnet Exchange, sent a letter to his immediate supervisor and Asst. VP criticizing the PLDT criteria for performance rating as unfair because they depended on manpower after receiving its appraisal rating. He also suggested that the criteria failed to recognize that exchanges with new plants could easily meet the objectives of GMM compared to those with old plants.
Despite Paguio’s criticism, Garnet Exchange, the oldest plant in GMM, obtained the top rating in the GMM. Nevertheless, Paguio reiterated his letter to Santos and objected to the performance rating as it was based only on the attainment of objectives, without considering other relevant factors. Two years later on June 1996, PLDT rebalanced the manpower of the East Center. Paguio wrote Santos and requested reconsideration of the manpower rebalancing, claiming it was unfair to Garnet Exchange because as the oldest exchange in the East Center, it was disallowed to use contractors for new installations and was not made beneficiary of the cut-over bonus.
He was then was reassigned as Head for Special Assignment at the Office of the GMM East Center and asked to turn over his functions as Garnet Exchange Head to Tessie Go. Believing that his transfer was a disciplinary action, Paguio requested the first VP for a formal hearing of the charges against him and asked that his reassignment be deferred. He also filed a complaint against his supervisor for grave abuse of authority and manipulation of the East Center performance. Findings were that the memo was in order as it was based on the finding that Paguio was not a team player and cannot accept decisions of management, which is short of insubordination. He was then advised to transfer to any group in the company that may avail of his services. Likewise, another memo informed Paguio that his transfer was not in the nature of a disciplinary action that required investigation and that he agreed with the reasons of the transfer. Aggrieved, Paguio files a complaint for illegal dismissal with prayer for reinstatement and damages which was later amended to illegal demotion with prayer for reversion to old position, damages and attorney’s fees.
Issue: Whether or not the transfer of Paguio is legal.
Held:
PLDT alleges that the NLRC ruling would allow a change of cause of action since the complaint alleged “illegal demotion” while the decision involved
“illegal transfer.” Prefatorily, we note from the records that there has been no change of cause of action from “illegal demotion” to “illegal transfer.”
Illegal demotion is a type of illegal transfer. Moreover, it is familiar and fundamental doctrine that it is not the title of the action but the allegations in the pleading that determines the nature of the action. An employer is free to regulate, according to his own discretion and judgment, all aspects of employment, including the transfer of employees. It is the employer’s prerogative, based on its assessment and perception of its employees’
qualifications, aptitudes, and competence, to deploy its employees in the various areas of its business operations in order to ascertain where they will function with maximum benefit to the company. An employee’s right to security of tenure does not give him such a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful.
Nonetheless, there are limits to the management prerogative. While it may be conceded that management is in the best position to know its operational
Nonetheless, there are limits to the management prerogative. While it may be conceded that management is in the best position to know its operational