After reading “Is the imposition of productivity standards a management prerogative?”, read also “Does The Continuous Rehiring Of A Project Employee Make Him A Regular Employee?”
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An employer has the inherent right to regulate all aspects of employment.
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This includes hiring, work assignments, working methods, the time, place and manner of work, work supervision, transfer of employees, lay-off of workers, and discipline, dismissal, and recall of employees.
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Failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to inefficiency may constitute just cause for either dismissal.
What does the term “management prerogative” mean?
Management Prerogative is defined as the inherent right of the employer to regulate all aspects of employment. The limitations to management prerogative are that (1) it must be complied with in good faith, and (2) it must not circumvent the rights of the employees under the Labor Code, or other existing laws.
Under the Doctrine of Management Prerogative, every employer has the inherent right to regulate, according to his own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, the time, place and manner of work, work supervision, transfer of employees, lay-off of workers, and discipline, dismissal, and recall of employees. The only limitations to the exercise of this prerogative are those imposed by labor laws and the principles of equity and substantial justice. (Jenny Peckson v. Robinsons Supermarket Corporation, G.R. No. 198534, 03 July 2013)
Simply put, an employer, by virtue of its right to regulate employment, has the prerogative to prescribe the standards of productivity which may be used as an incentive and/or a disciplinary scheme.
Notwithstanding the fact that a number of obligations on the part of the employer are imposed, the law likewise protects the right of the employer to expect from its employees a degree of diligence in the performance of their work, as well as good conduct and loyalty.
Jurisprudence says:
In the case of Armando Aliling v. Jose Feliciano, et. al. (G.R. No. 185829, 25 April 2012), the Supreme Court held that an employer is entitled to impose productivity standards for its employees, and the latter’s non-compliance therewith can lead to his termination from work.
In the case of Family Planning Organization of the Philippines v. NLRC (G.R. No. 75907, 23 March 1992), the Supreme Court ruled that:
It is the employer’s prerogative to prescribe reasonable rules and regulations necessary or proper for the conduct of its business or concern, to provide certain disciplinary measures to implement said rules and to assure that the same be complied with. At the same time, it is one of the fundamental duties of the employee to yield obedience to all reasonable rules, orders, and instructions of the employer, and willful or intentional disobedience thereof, as a general rule, justifies rescission of the contract of service and the peremptory dismissal of the employee.”
In the case of Armando Puncia v. Toyota Shaw Pasig, Inc. (G.R. No. 214399, 28 June 2016), the Supreme Court likewise ruled in the following manner:
“The practice of a company in laying off workers because they failed to make the work quota has been recognized in this jurisdiction. x x x. In the case at bar, the petitioners’ failure to meet the sales quota assigned to each of them constitutes a just cause of their dismissal, regardless of the permanent or probationary status of their employment. Failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to inefficiency may constitute just cause for either dismissal. Such inefficiency is understood to mean failure to attain work goals or work quotas, either by failing to complete the same within the allotted reasonable period, or by producing unsatisfactory results.” (Emphasis and underscoring supplied.)
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding illegal dismissal, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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