B. Transfer of employees

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1. CONCEPT

As a general rule, the right to transfer or reassign an employee is recognized as an employer’s exclusive right and the prerogative of management. (Abbott Laboratories [Philippines], Inc. v. NLRC, Bobadilla, G.R. No. 76959, 12 October 1987)

The management has a wide discretion to regulate all aspects of employment, including the transfer and re-assignment of employees according to the exigencies of the business. (Chateau Royale Sports and Country Club, Inc. v. Balba, G.R. No. 197492, 18 January 2017)

The exercise of management’s prerogative concerning the employees’ work assignments is based on its assessment of the qualifications, aptitudes and competence of its employees, and by moving them around in the various areas of its business operations it can ascertain where they will function with maximum benefit to the company. (Peckson v. Robinsons Supermarket Corporation, G.R. No. 198534, 03 July 2013)

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. (Ibid.)

a. Jurisprudential guidelines

1) A transfer is a movement from one position to another of equivalent rank, level or salary without break in the service or a lateral movement from one position to another of equivalent rank or salary;

2) The employer has the inherent right to transfer or reassign an employee for legitimate business purposes;

3) A transfer becomes unlawful where it is motivated by discrimination or bad faith or is effected as a form of punishment or is a demotion without sufficient cause; and

4) The employer must be able to show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee. (ICT Marketing Services, Inc. v. Sales, G.R. No. 202090, 09 September 2015)

b. Burden of proof on employer

In a constructive dismissal case, the burden of proof lies on the employer to prove that the transfer of the employee from one area of operation to another was for a valid and legitimate ground, like genuine business necessity. (Chateau Royale Sports and Country Club, Inc. v. Balba, G.R. No. 197492, 18 January 2017)

c. The 2 kinds of transfer

1) Transfer of position (in terms of role/designation); and

2) Transfer of assignment (in terms of geography).

1) Transfer of position

A transfer (of position) is a “movement from one position to another which is of equivalent rank, level or salary, without break in service.” (Dosch v. NLRC, Northwest Airlines, Inc., G.R. No. L-51182, 05 July 1983, citing Millares v. Subido, G.R. No. L-23281, 10 August 1976)

2) Transfer of assignment

Jurisprudence recognizes the exercise of management 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. (Herida v. F & C Pawnshop and Jewelry Store, G.R. No. 172601, 16 April 2009)

d. Employees who agree to transfers in their employment contract

An employee has no valid reason to disobey the order of transfer given by management, especially if he has tacitly given his consent thereto when he acceded to the company’s policy of hiring sales staff who are willing to be assigned anywhere in the Philippines which is demanded by the employer’s business. (Tinio v. CA, SMART Communications, Inc., G.R. No. 171764, 08 June 2007, citing Abbott Laboratories [Philippines], Inc. v. NLRC, Bobadilla, G.R. No. 76959, 12 October 1987)

Chateau Royale Sports and Country Club, Inc. v. Balba

Due to shortage of personnel at the Manila Office as a result of the resignation of three account managers and the director of sales and marketing, the employer directed complainants-employees to transfer from Nasugbu, Batangas to Manila. They refused.

To start with, he resignations of the account managers and the director of sales and marketing in the Manila office brought about the immediate need for their replacements with personnel having commensurate experiences and skills. With the positions held by the resigned sales personnel being undoubtedly crucial to the operations and business of the employer, the resignations gave rise to an urgent and genuine business necessity that fully warranted the transfer from the Nasugbu, Batangas office to the main office in Manila of the complainants, undoubtedly the best suited to perform the tasks assigned to the resigned employees because of their being themselves account managers who had recently attended seminars and trainings as such. The transfer could not be validly assailed as a form of constructive dismissal, for the management had the prerogative to determine the place where the employee is best qualified to serve the interests of the business given the qualifications, training and performance of the affected employee.

Secondly, although the complainants’ transfer to Manila might be potentially inconvenient for them because it would entail additional expenses on their part aside from their being forced to be away from their families, it was neither unreasonable nor oppressive. The employer rightly points out that the transfer would be without demotion in rank, or without diminution of benefits and salaries. Instead, the transfer would open the way for their eventual career growth, with the corresponding increases in pay. It is noted that their prompt and repeated opposition to the transfer effectively stalled the possibility of any agreement between the parties regarding benefits or salary adjustments.

Thirdly, the complainants did not show by substantial evidence that the employer was acting in bad faith or had ill-motive in ordering their transfer. In contrast, the urgency and genuine business necessity justifying the transfer negated bad faith on the part of the petitioner.

Lastly, the complainants, by having voluntarily affixed their signatures on their respective letters of appointment, acceded to the terms and conditions of employment incorporated therein. One of the terms and conditions thus incorporated was the prerogative of management to transfer and re-assign its employees from one job to another “as it may deem necessary or advisable,” to wit: The company reserves the right to transfer you to any assignment from one job to another, or from one department/section to another, as it may deem necessary or advisable.

Having expressly consented to the foregoing, the respondents had no basis for objecting to their transfer. The employee who has consented to the company’s policy of hiring sales staff willing to be assigned anywhere in the Philippines as demanded by the employer’s business has no reason to disobey the transfer order of management. Verily, the right of the employee to security of tenure does not give her a vested right to her position as to deprive management of its authority to transfer or re-assign her where she will be most useful. /end

2. LIMITATIONS

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. (Dosch v. NLRC, Northwest Airlines, Inc., G.R. No. L-51182, 05 July 1983, citing Millares v. Subido, G.R. No. L-23281, 10 August 1976)

To determine the validity of the transfer of employees, the employer must 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. (Herida v. F & C Pawnshop and Jewelry Store, G.R. No. 172601, 16 April 2009)

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, which has been defined as a quitting because continued employment is rendered impossible, unreasonable or unlikely; as an offer involving a demotion in rank and diminution in pay. (ICT Marketing Services, Inc. v. Sales, G.R. No. 202090, 09 September 2015)

Dosch v. NLRC, Northwest Airlines, Inc.

The acceptability of the proposition that transfers made by an employer for an illicit or underhanded purpose — e.g., to evade the duty to bargain collectively, or to defeat the welfare, right of collective bargaining, or discriminate against one or some of them on account of their union activities — is self-evident and cannot be gainsaid. The difficulty lies in the situation where no such illicit, improper or underhanded purpose can be ascribed to the employer, the objection to the transfer being ground solely upon the, personal inconvenience or hardship that will be caused to the employee by reason of the transfer. What then?

Withal, it is evident that the courteous tone of the employee’s letter did not alter the actuality of his refusal to accept the transfer decreed by his employer in the exercise of its sound business judgment and discretion; and that the transfer of an employee to an overseas post cannot be likened to a transfer from a city to another within the country, as in the case at bar.

In this case, the employee (Laplana) had to all intents and purposes resigned from her position. She had unequivocally asked that she be considered dismissed, herself suggesting the reason therefor –– retrenchment. When so dismissed, she accepted separation pay. On the other hand, the employer has not been shown to be acting otherwise than in good faith, and in the legitimate pursuit of what it considered its best interests, in deciding to transfer her to another office. There is no showing whatever that the employer was transferring Laplana to another work place, not because she would be more useful there, but merely “as a subterfuge to rid… (itself) of an undesirable worker,” or “to penalize an employee for… union activities…” The employer was moreover not unmindful of Laplana’s initial plea for reconsideration of the directive for her transfer to Laoag; in fact, in response to that plea not to be moved to the Laoag Office, the employer opted instead to transfer her to Manila, the main office, offering at the same time the normal benefits attendant upon transfers from an office to another.

The situation here presented is of an employer transferring an employee to another office in the exercise of what it took to be sound business judgment and in accordance with pre-determined and established office policy and practice, and of the latter having what was believed to be legitimate reasons for declining that transfer, rooted in considerations of personal convenience and difficulties for the family. Under these circumstances, the solution proposed by the employee herself, of her voluntary termination of her employment and the delivery to her of corresponding separation pay, would appear to be the most equitable. Certainly, the Court cannot accept the proposition that when an employee opposes his employer’s decision to transfer him to another work place, there being no bad faith or underhanded motives on the part of either party, it is the employee’s wishes that should be made to prevail. /end

3. PERSONAL INCONVENIENCE, NOT A GROUND TO REFUSE

An employee’s right to security of tenure does not give him a vested right to his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. (Tinio v. CA, SMART Communications, Inc., G.R. No. 171764, 08 June 2007)

We have long stated that the objection to the transfer being grounded solely upon the personal inconvenience or hardship that will be caused to the employee by reason of the transfer is not a valid reason to disobey an order of transfer. Such being the case, petitioner cannot adamantly refuse to abide by the order of transfer without exposing herself to the risk of being dismissed. Hence, her dismissal was for just cause in accordance with Article 282(a) of the Labor Code. (Herida v. F & C Pawnshop and Jewelry Store, G.R. No. 172601, 16 April 2009)

When the transfer of an employee is not unreasonable, or inconvenient, or 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. (Peckson v. Robinsons Supermarket Corporation, G.R. No. 198534, 03 July 2013)

4. DIFFERENT FROM A PROMOTION

A transfer is a movement from one position to another which is of equivalent rank, level or salary, without break in service. Promotion, on the other hand, 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. (Echo 2000 Commercial Corporation v. Obrero-Filipino-Echo 2000 Chapter-CLO, G.R. No. 214902, 11 January 2016)

For promotion to occur, there must be an 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. (Ibid.)

An employee is not bound to accept a promotion, which is in the nature of a gift or reward. Refusal to be promoted is a valid exercise of a right. Such exercise cannot be considered in law as insubordination, or willful disobedience of a lawful order of the employer, hence, it cannot be the basis of an employee’s dismissal from service. (Ibid.)

5. WHEN A CONSTRUCTIVE DISMISSAL

3 conditions to concur:

1) When the transfer is unreasonable, inconvenient or prejudicial to the employee;

2) When the transfer involves a demotion in rank or diminution of salaries, benefits and other privileges;

3) When the employer performs a clear act of discrimination, insensibility, or disdain towards the employee, which forecloses any choice by the latter except to forego his continued employment. (Tinio v. CA, SMART Communications, Inc., supra.)

•••••

BAR EXAM QUESTION

(Question XIX, Labor Law, 2018 Bar Exam)

Northeast Airlines sent notices of transfer, without diminution in salary or rank, to 50 ground crew personnel who were front-liners at Northeast Airlines counters at the Ninoy Aquino International Airport (NAIA). The 50 employees were informed that they would be distributed to various airports in Mindanao to anticipate robust passenger volume growth in the area. North Union, representing rank-and-file employees, filed unfair labor practice and illegal dismissal cases before the NLRC, citing, among others, the inconvenience of the 50 concerned employees and union discrimination, as 8 of the 50 concerned ground crew personnel were union officers. Also, the Union argued that Northeast Airlines could easily hire additional employees from Mindanao to boost its ground operations in the Mindanao airports.

a) Will the transfer of the 50 ground crew personnel amount to illegal dismissal? (2.5%)

SUGGESTED ANSWER:

No. Answer

Under labor law jurisprudence, the employer has management prerogative to regulate all aspects of employment, which includes the right to transfer employees. The two limitations of management prerogative are: (a) that it must be exercised in good faith; and (b) that it must be with due regard to the rights of the employees. Rule

In the case at bar, the Company validly exercised its management prerogative to transfer the 50 employees for legitimate business reason, which was in anticipation of robust passenger volume growth in Mindanao. Further, there was no diminution in salary or rank for the employees to be transferred. Hence, the transfer was exercised in good faith and with due regard to the rights of the employees. Apply

Thus, the transfer of the 50 ground crew personnel will not amount to illegal dismissal. Conclusion

•••••

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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