Myline Cordial

Philippine Industrial Security Agency Corporation (PISAC) vs. Percival Aguinaldo
G.R. No. 149974. June 15, 2005

FACTS: On April 11, 1988, petitioner Philippine Industrial Security Agency Corporation (PISAC), hired respondent Percival Aguinaldo, as a security guard. He was assigned to secure the premises of Far East Bank & Trust Company (FEBTC) Branch in Santiago City. In 1993, he was promoted as Branch Head Guard.
During spot inspection respondent was caught without headgear and smoking while on duty by petitioners roving personnel. Petitioner sent an explanation but he was relieved from his post. After he was relieved from his old post in Santiago City, Isabela, he was temporarily reassigned to the head office of PISAC in Malabon, Metro Manila pending the opening of another bank in Isabela.

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.

The LA dismissed the complaint but the NLRC reversed the decision on appeal. On petitioner’s motion for reconsideration, NLRC reinstated the decision of the LA dismissing the case. Court of Appeals ruled that the re-assignment is unfair and downright oppressive and constitutes constructive dismissal.

ISSUE: Whether or not the act of petitioner in temporarily reassigning respondent to the head office of PISA in Malabon, Metro Manila pending the opening of another bank in Isabela is a valid exercise of management prerogative.

RULING: No. The Court held that 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. It is defined as an involuntary resignation resorted when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee

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 and this right to transfer employees forms part of management prerogatives, the employees 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
Management has the right to transfer its employees as part of management prerogative. But like all rights, the same cannot be exercised with unbridled discretion. The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the basic element of justice and fair play.

NOTES:

What is the extent of the rights and prerogatives of management?
Our laws recognize and respect the exercise by management of certain rights and prerogatives. 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.