Unreasonable use of prerogative

When is the transfer of an employee considered as illegal "constructive dismissal"? This is answered in this case of Lito, Tom, Doro, and Sito who worked in a paper manufacturing company (SPC).

Four employees were hired by SPC in various capacities as machine operator, bookbinding head and/or helper in the company’s main plant in Metro Manila since all of them were residing in Metro Manila. At the time of their employment they were made to fill up and sign an information sheet (IS) as a condition for employment. In the said IS, Lito, Tom, Doro and Sito unconditionally and explicitly agreed to be transferred to any branch office of the company within the country.

In the course of their employment, the four employees were made to sign the ratification of an addendum to the existing Collective Bargaining Agreement (CBA) reducing their leave benefits of 15 days for every year of service. They four however refused to sign. From then on, they were subjected to acts of harassment until later on when they reported for work, they were not allowed entry by the company’s security guard. Instead, the guard instructed them to see the personnel manager who handed to them a memorandum of transfer (memo) ordering them to report for work in the SPC’s branch offices at Iloilo, Cebu, Davao and Cagayan de Oro effective upon receipt of said memo. Lito et. al. refused to receive the memo and subsequently sued the company before the NLRC for constructive dismissal.

For its part SPC denied the charge, averring that the transfer had for its sole purpose, the best interest of the company and that it was an undertaking which the four employees agreed to when they signed the IS and the employment contracts with the company where they unconditionally and explicitly expressed their willingness to be transferred to any branch office of the SPC within the country. SPC likewise cited the past record of the four employees and averred that during their employment they committed several offenses like unexcused absences, tardiness and non-rendering of overtime services for which they were imposed disciplinary sanctions. Was SPC guilty of illegal constructive dismissal?

Yes. Where an employee complains of constructive dismissal due to his transfer, it is the employer who bears the burden of proving that the transfer is for just and valid grounds, such as genuine business necessity; and that such transfer is not unreasonable, inconvenient, or prejudicial to the employee. The failure to discharge such burden makes the employer liable for illegal constructive dismissal.

In this case, while SPC argues that the transfer was an act of management right and prerogative and that the employees willingly agreed to it in the Information Sheet they signed, it still has to show that said transfer was done in good faith and was not motivated by ill will. The management prerogative to transfer personnel must be exercised without grave abuse of discretion and putting to mind the basic elements of justice and fair play. SPC’s order for Lito et.al. to report for work in its provincial branches on the very same day that they were served with the memo is extremely unreasonable as the relocation would unduly inconvenience not only the four transferees but their respective families. The combined circumstances of the immediate transfer of Lito et.al to far-off provinces after their refusal to sign the addendum to the CBA, and SPC’s emphasis on the alleged previous infractions at work, point to the fact that the transfers are motivated by ill will on its part. SPC failed to sufficiently prove that the transfer is for a just and valid cause and is not unreasonable, inconvenient, or prejudicial to the employee, making it liable for illegal constructive dismissal (Star Paper Corporation vs. Espiritu et. al. G. R. 154006, November 2, 2006)

E-mail at: [email protected] or [email protected]