When transfer of employees is valid


Persida Acosta

Dear PAO,
My colleagues and I are managers of a growing restaurant that originated from Bulacan. There had been mass transfers of the middle management of the company to a known fast food chain and we are among those who kept faith in our company. Our contract provides for a clause that we can be transferred by the company to any other branch that it deems best and whenever it is necessary, without diminution in rank and benefits. I have been working for our Norzagaray branch for four years already and most of my colleagues were already in their station for almost the same time, all of which are located in Region III (Central Luzon). Most of the middle managers that resigned in our company are located in the National Capital Region (NCR). Last month, the owners of the company decided to transfer us to the vacancies in the NCR, which we vehemently objected to. In this regard, we want to know if they can use the clause in our employment contract allowing us to be arbitrarily transferred so that our case will not be considered as one under constructive illegal dismissal.
Sincerely yours,

Dear Yolly,
In the case of Chateau Royale Sports and Country Club, Inc. vs Rachelle Balba, et al. (G.R. No. 197492, 18 January 2017),penned by the Honorable Associate Justice Lucas P. Bersamin, who discussed about management prerogative in case of office transfers, the importance of the clauses in the employment contract, and the burden of proof in cases for constructive illegal, viz.:

“In the resolution of whether the transfer of the respondents from one area of operation to another was valid, finding a balance between the scope and limitation of the exercise of management prerogative and the employees’ right to security of tenure is necessary. We have to weigh and consider, on the one hand, that 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; and, on the other, that the transfer constitutes constructive dismissal when it is unreasonable, inconvenient or prejudicial to the employee, or involves a demotion in rank or diminution of salaries, benefits and other privileges, or when the acts of discrimination, insensibility or disdain on the part of the employer become unbearable for the employee, forcing him to forego her employment.

“In this case of constructive dismissal, the burden of proof lies in the petitioner as 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. We are satisfied that the petitioner duly discharged its burden, and thus established that, contrary to the claim of the respondents that they had been constructively dismissed, their transfer had been an exercise of the petitioner’s legitimate management prerogative.

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“Having expressly consented to the foregoing, the respondents had no basis for objecting to their transfer. According to Abbot Laboratories (Phils.), Inc. vs National Labor Relations Commission, 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.” [Emphasis supplied]

Your situation falls squarely in the above-cited case. It is clear from the foregoing that the court usually tempers the employer’s right to management prerogative and the employees’ right to security of tenure. In the situation at hand, the managers were likewise transferred to a different area than that they have been handling for the past years. However, while the court recognized the potential inconvenience it may bring to them, the court looked through the fact that there was indeed necessity on the part of the business to constitute such transfer. The court also looked upon the contract, which the managers themselves acceded to, and the certainty that no diminution in benefits and ranks will attend the transfer of the managers. In the particular case too, the employees are unable to substantially show that bad faith attended their transfers and that the same is not actually a necessity for the business.

Given the above, if you are unable to substantially point out that the owners of your company decided merely on whim and bad faith such that there was really no necessity for your transfers, it would be probable that your transfer shall not amount to constructive illegal dismissal. Moreover, since you have admitted that your employment contract provided for the probability of transfer in case of need, you are bound by this provision as a party to the said contract. Nevertheless, you should be vigilant and wary that in any case, you have to receive an equal or better benefit upon your transfer, since there must not be any diminution in your ranks and benefits.

Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.

We hope that we were able to enlighten you on the matter.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net


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