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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
- The managerial prerogative to transfer personnel must be exercised without 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.
- In particular, 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 his salaries, privileges and other benefits.
- Should the employer fail to overcome this burden of proof, the employee’s transfer shall be tantamount to constructive dismissal.
(Jenny Peckson vs. Robinsons Supermarket Corporation, G.R. No. 198534, July 3, 2013)
Management Prerogative to Transfer
The right of an employer to regulate all aspects of employment, aptly called “management prerogative,” gives employers the freedom to regulate, according to their discretion and best judgment, all aspects of employment, including work assignment, working methods, processes to be followed, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of workers. In this light, 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. (St. Luke’s Medical Center, Inc. vs. Maria Theresa Sanchez, G.R. No. 212054, March 11, 2015)
The “management prerogative” is the employer’s right to control various aspects of employment. Essentially, it gives employers the authority to manage their business as they see fit.
In fact, the Courts usually don’t interfere much in these decisions as long as they are considered legitimate business choices. Labor laws even discourage meddling in the employer’s judgment when it comes to running their business. So, the management prerogative gives employers the power to make decisions about how work is done and how the workforce is managed, with the understanding that the law generally respects their right to do so.
Employer’s Exercise of Management Prerogative to Transfer
Management has a wide latitude to conduct its own affairs, so long as it exercises its management prerogative in good faith for the advancement of its interest and not to defeat or circumvent employee rights under the law or valid agreements. Its management prerogative must likewise not be used in a way that is unreasonable, inconvenient, or prejudicial to the employees involved. (Asian Marine Transport Corporation vs. Allen Caseres, G.R. No. 212082, November 24, 2021)
The employer has the freedom to make decisions about how to run the business, including transferring employees, as long as they do it honestly and with the goal of benefiting the company. This authority shouldn’t be used to go against the rights of employees established by the law or agreements with the company. Additionally, the employer should make these decisions in a fair and sensible manner, without causing unnecessary problems or harm to the employees affected. So, while the employer has a lot of say in how things are done, it should be done with fairness and consideration for the well-being of the employees.
Criteria for a Reasonable Transfer
The management enjoys the discretion to assign and transfer employees to other work stations. The transfer is valid inasmuch as it does not involve a demotion in rank or diminution in pay or benefits, and was carried out in good faith and justified by business exigencies. (Automatic Appliances, Inc. vs. Francia Deguidoy, G.R. No. 228088, December 4, 2019)
When it comes to moving employees to different work locations, the employer has the authority to make those decisions. However, for the transfer to be considered reasonable, it shouldn’t result in a lower job position, a cut in salary or benefits, and it should be done with honesty and a valid reason related to the needs of the business. So, as long as the transfer doesn’t mean a decrease in job status or compensation, and the employer has a legitimate and fair reason for the transfer, it’s considered a reasonable and valid decision.
Transfer of Employees vis-à-vis Constructive Dismissal
Taking the case of Tan vs. NLRC (359 Phil.499):
The transfer of an employee from one area of operation to another is a management prerogative and is not constitutive of constructive dismissal, when the transfer is based on sound business judgment, unattended by demotion in rank or a diminution of pay or bad faith.
Thus, in Philippine Japan Active Carbon Corp. v. NLRC (G.R. No. 83239, March 8, 1989), the Supreme Court ruled:
“It is the employer’s prerogative, based on its assessment and perception of its employees’ qualifications, aptitudes, and competence, to move them around 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. When his transfer is not unreasonable, nor inconvenient, nor prejudicial to him, and it does not involve a demotion in rank or a diminution of his salaries, benefits, and other privileges, the employee may not complain that it amounts to a constructive dismissal.”
When a company decides to move an employee from one work area to another, it’s considered a management decision and not automatically seen as a way of pushing the employee to quit. This is true as long as the transfer is made for good reasons, like what’s best for the business, and it doesn’t involve a reduction in job status, pay, or benefits, and it’s done with honesty.
The above legal precedent even emphasized that the company’s decision to transfer an employee is part of its right to manage its operations. This doesn’t count as forcing the employee to leave their job, as long as the transfer is based on sensible business judgment and doesn’t result in a lower position or less pay. Further the other case highlighted that employees don’t have an absolute right to stay in a particular job location. If the transfer is reasonable, not inconvenient or harmful to the employee, and doesn’t involve a drop in rank or loss of salary and benefits, the employee can’t claim that it’s a form of being forced to quit.
Read also: ON TRANSFER OF EMPLOYEES
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