Management prerogative

What constitutes constructive illegal dismissal? This is once more explained in this case of Ester, an employee of an automotive company (TAS).

Ester started working with TAS in 1972 as accounting clerk. Steadily she rose from the ranks and subsequently became the head of the accounting department and concurrently, secretary to the president and general manager as well as comptroller. Sometime in January 1993, the management asked her to give up the comptrollership and just concentrate on the preparation of the corporation’s Income Statement. Thus another comptroller was appointed and took over her functions and her office.

Ester then took a leave of absence for the whole month of February 1993 with the approval of management. On March 1, 1993 however, she did not report back to work. So on March 5, 1993, management already wrote Ester calling her attention that she had been absent without official leave since March 1,1993 and requiring her to explain her absence within three days from receipt otherwise her absence would be considered as abandonment of her duties and responsibilities.

However it was only on March 31, 1993 when Ester replied through her counsel and alleged that she had nothing to explain because in February 1993, she was already asked to verbally resign as comptroller by the company president and GM. Then she filed an action for constructive dismissal against TAS and its president and GM before the Labor Arbiter (LA) of the NLRC.

On October 29, 1993, the LA dismissed Ester’s complaint. The LA ruled that there was no constructive dismissal because Ester was holding multiple positions and TAS through its president and GM only exercised their management prerogative when they relieved her of the position of comptroller without reducing her salaries and other benefits. On the contrary the LA found that as per Ester’s own evidence, she was applying with a multinational company while she was on leave during the whole month of February 1993, thus showing that she had no intention to return to TAS. Was the LA correct?

Yes. Constructive dismissal is defined as quitting because continued employment is rendered impossible, unreasonable or unlikely, or when there is a demotion in rank or diminution in pay. It exists when an act of clear discrimination, insensibility or disdain by an employer has become so unbearable to the employee leaving him with no option but to forego with his continued employment.

Here, there was no diminution of Ester’s salary and other benefits. She was not harassed or discriminated upon or that TAS and its president and GM made it difficult for her to continue with her other duties. Absent any evidence of bad faith, it is within the exercise of management prerogative to transfer some of Ester’s duties if in their judgment, it would be more beneficial to the corporation. Ester’s belated reply to the company letter reminding her of her absence after her leave had expired in February 1993 even showed her lack of intention to report back to work and perform her other responsibilities. Instead she filed a case for constructive dismissal which is without any factual or legal basis (Velasco vs. Transit Automotive Supply, Inc. and de Dios, G.R. 171327, June 18, 2010).

Note: Books containing compilation of my articles on Labor Law and Criminal Law (Vols. I and II) are now available. Call tel. 7249445.

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