Labor Law

PHILIPPINE INDUSTRIAL SECURITY AGENCY CORPORATION v. AGUINALDO G.R. No. 149974 June 15, 2005 Constructive dismissal, Management prerogative

Settled is the rule that findings of facts of the Court of Appeals are accorded respect, even finality, and will not be disturbed especially where such findings are supported by substantial evidence. One of the exceptions, however, is when there is a variance between the findings of the NLRC and the Court of Appeals, as in this case.

 

FACTS:

Philippine Industrial Security Agency Corporation (PISAC) hired Percival Aguinaldo as a security guard. He was assigned to secure the premises of Far East Bank & Trust Company (FEBTC) Branch in Santiago City, where he was promoted as Branch Head Guard.

 

Petitioner’s roving personnel, caught respondent without headgear and smoking while on duty. Respondent explained his side in a Memorandum.

 

petitioner security agency issued a memorandum to respondent directing him to report to the FEBTC main office in Malabon City for investigation. The following day, petitioner issued a Relief Order relieving Aguinaldo from his post at FEBTC Br., Santiago City.

 

The Branch Head of FEBTC wrote a Memorandum to petitioner requesting the retention of respondent in the same office but it was denied. But the same was denied.

 

Petitioner assigned respondent temporarily to FEBTC Malabon City Branch pending the opening of another Branch in Santiago City where according to said petitioner, he will be re-assigned.

 

This prompted respondent to file with the Office of the Labor Arbiter a complaint for illegal dismissal and non-payment of separation pay with damages against petitioner. However, it was denied for lack of merit.

 

On appeal, the NLRC reversed the appealed Decision

 

Hence, respondent filed with the CA a petition for certiorari under Rule 65. The CA granted the petition and setting aside the Decision of the NLRC.

 

ISSUE:

 

Whether or not Aguinaldo’s reassignment to another post that was not yet open amounted to constructive dismissal.

 

Whether the transfer of Aguinaldo was a valid exercise of management prerogative.

 

RULING:

 

A constructive dismissal is a quitting because continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a diminution in pay (Philippine Japan Active Carbon Corp. vs. NLRC, G.R. No. 83239, March 8, 1989). As further explained in Jarcia vs. NLRC (266 SCRA 97 [1997]):

 

‘In case of constructive dismissal, the employer has the burden of proving that the transfer and demotion of an employee are for valid and legitimate grounds such as genuine business necessity. Particularly, for a transfer not to be considered a constructive dismissal, the employer must be able to show that such transfer is not unreasonable, inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Failure of the employer to overcome this burden of proof, the employee’s demotion shall no doubt be tantamount to unlawful constructive dismissal.’

In the case at bar, petitioner was validly relieved from his post for violating a company policy. The petitioner did not contest this violation as he in fact admitted to committing it during the investigation, though with a valid and plausible explanation.

 

What tarnishes the whole scene is the fact that after petitioner was relieved from his old post in Santiago City, Isabela, he was temporarily reassigned to the head office of private respondent PISA in Malabon, Metro Manila pending the opening of another bank in Isabela. This act is unfair and downright oppressive considering that petitioner, along with his family, is a long-time resident of Santiago City, Isabela. The transfer would mean that petitioner would be away from his family or that he would bring his entire family to Manila entailing expenses.

 

While it is true that an employer is free to regulate, according to his own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, tools to be used, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, layoff of workers and the discipline, dismissal and recall of workers (San Miguel Brewery Sales vs. Ople, G.R. No. 53515, February 8, 1989), and this right to transfer employees forms part of management prerogatives, the employee’s transfer should not be unreasonable, nor inconvenient, nor prejudicial to him. It should not involve a demotion in rank or diminution of his salaries, benefits and other privileges, as to constitute constructive dismissal (PT&T vs. Laplana, G.R. No. 76645, July 23, 1991).

 

Settled is the rule that findings of facts of the Court of Appeals are accorded respect, even finality, and will not be disturbed especially where such findings are supported by substantial evidence. One of the exceptions, however, is when there is a variance between the findings of the NLRC and the Court of Appeals, as in this case.

 

Jurisprudence recognizes the exercise of management prerogative. For this reason, courts often decline to interfere in legitimate business decisions of employers. In fact, labor laws discourage interference in employers’ judgment concerning the conduct of their business.

 

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.

 

By transferring respondent to the Malabon City FEBTC Branch, petitioner resorted to constructive dismissal. A transfer amounts to constructive dismissal when the transfer is unreasonable, unlikely, inconvenient, impossible, or prejudicial to the employee, as in this case. It is defined as an involuntary resignation resorted when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee.

In constructive dismissal, the employer has the burden of proving that the transfer and demotion of an employee are for just and valid grounds, such as genuine business necessity. The employer must be able to show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of salary and other benefits. Should the employer fail to overcome this burden of proof, the employee’s transfer shall be tantamount to unlawful constructive dismissal.

 

In the case at bar, petitioner failed to overcome this burden of proof. Foremost, respondent explained that he was in complete attire that morning. However, the bank personnel informed him that the FEBTC armor car, on its way to deliver cash to the Central Bank Office in Tuguegarao, incurred mechanical trouble. So he immediately went outside to fetch a mechanic. It was then raining, hence, he got wet – the reason why he was not wearing his perching cap. Under the circumstances, his failure to wear his perching cap is justified. Thus, he should not be held liable for any violation of office regulations which warrants his transfer to another work place.

 

In Blue Dairy Corporation vs. NLRC, we ruled that:

“x x x the managerial prerogative to transfer personnel must not be exercised with grave abuse of discretion, bearing in mind the basic elements of justice and fair play. Having the right should not be confused with the manner in which that right is exercised. Thus, it cannot be used as a subterfuge by the employer to rid himself of an undesirable worker. x x x”

 

WHEREFORE, the petition is hereby DENIED.

 

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