I. Limitations on management prerogative; police power of the State

Frequency: ★ ★ ★☆☆

1. CONCEPT

Management prerogative – is the inherent right of the employer, 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. (Peckson v. Robinsons Supermarket Corporation, G.R. No. 198534, 03 July 2013)

2. LIMITATIONS

The exercise of management prerogative, however, is not absolute as it must be exercised in good faith and with due regard to the rights of labor. (Julie’s Bakeshop v. Arnaiz, G.R. No. 173882, 15 February 2012)

The only limitations to the exercise of this prerogative are those imposed by labor laws and the principles of equity and substantial justice. (Peckson v. Robinsons Supermarket Corporation, supra.)

3. BUSINESS JUDGMENT RULE / NON-INTERFERENCE BY COURTS

In light of management prerogative, courts often decline to interfere in legitimate business decisions of employers. (Ibid.)

In fact, labor laws discourage interference in employers’ judgment concerning the conduct of their business. (Ibid.)

Disclaimer: All information herein is for educational and general information only intended for those preparing for the bar exam. These should not be taken as professional legal advice or opinion. Please consult a competent lawyer to address your specific concerns. Any statements or opinions of the author are solely his own and do not reflect that of any organization he may be connected.

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