Atty. Ensign M. Icamen

Tag: DOLE

  • Transfer of Employee, Constructive Dismissal, Management Prerogative

    Transfer of Employee, Constructive Dismissal, Management Prerogative

    constructive dismissal case involving employee transfer

    Alt text: constructive dismissal case involving employee transfer

    July 26, 2022

    Companies have management prerogative to regulate all aspects of employment which includes the right to prescribe to its employees the manner on how a work shall be performed and to re-assign or transfer employees. Abusive exercise of management prerogative may amount to constructive dismissal of an employee.

    Case in point is Morales vs. Harbor Centre Port Terminal, Inc. [1] Morales, a division manager of the company’s accounting department, was transferred to operations cost accounting with duties of monitoring and evaluating all consumables request.

    Morales protested the transfer stating that the same was a clear demotion as the position of operation cost accounting was not even in the plantilla of the company. The company responded by reminding Morales that transfer of employees is a management prerogative.

    For the ensuing month, Morales would either be tardy or absent from work. Thereafter, on April 29, 2003 the company issued a warning reminding Morales that as employee he is subject to company rules and regulations and he may be disciplinarily dealt with.

    In view of Morales’ continues absence or tardiness, a second warning was issued on May 6, 2003 and another “notice to report for work & final warning” on May 22, 2003.

    In the meantime however, 3 days before the first warning was issued or on April 25, 2003, Morales already filed a case for illegal dismissal against the company and its officers.

    In his complaint before the Labor Arbiter (LA), Morales stated that he was constructively dismissed. On the other hand, the company argued that Morales’ transfer was a valid exercise of management prerogative and Morales abandoned his new work assignment. The LA dismissed Morales’ complaint ruling that his transfer was a valid exercise of management prerogative. On appeal the National Labor Relations Commission (NLRC) reversed the LA finding that Morales’ transfer was a clear demotion. The Court of Appeals, on petition for certiorari, reversed the NLRC. The Supreme Court reinstated the NLRC ruling.

    What is a Constructive Dismissal?

    Constructive dismissal exists where there is cessation of work because “continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in pay” and other benefits. Aptly called a dismissal in disguise or an act amounting to dismissal but made to appear as if it were not, constructive dismissal may, likewise, exist if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued employment.

    In cases of a transfer of an employee, the rule is settled that the employer is charged with the burden of proving that its conduct and action are for valid and legitimate grounds such as genuine business necessity and that the transfer is not unreasonable, inconvenient or prejudicial to the employee. If the employer cannot overcome this burden of proof, the employee’s transfer shall be tantamount to unlawful constructive dismissal.

    What is a Management Prerogative and How May a Company Validly Exercise It?

    Admittedly, the right of employees to security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to change their assignments or to transfer them. By management prerogative is meant the right of an employer to regulate all aspects of employment, such as the freedom to prescribe work assignments, working methods, processes to be followed, regulation regarding transfer of employees, supervision of their work, lay-off and discipline, and dismissal and recall of workers.

    Although jurisprudence recognizes said management prerogative, it has been ruled that the exercise thereof, while ordinarily not interfered with, is not absolute and is subject to limitations imposed by law, collective bargaining agreement, and general principles of fair play and justice.

    Thus, an employer may 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. Indeed, having the right should not be confused with the manner in which that right is exercised.

    References

    [1] G.R. No. 174208 – January 25, 2012

  • Non-Regularization of Probationary Employee

    Non-Regularization of Probationary Employee

    July 22, 2022

    HR reviewing employment contracts related to non-regularization of probationary employee.

    Probationary employee enjoys security of tenure. Their employment cannot be terminated on employer’s bare claim that the employee failed to qualify. There are some procedures and parameters that must be considered.

    Employers often have mistaken assumption that when they hire an employee on a probationary status such employee may be terminated at will at the end of the probationary period. It must be noted that probationary employees also enjoy security of tenure. Although, the rule in terminating their employment is slightly different as it does not require the application of a two-notice rule, non-regularization of a probationary employee cannot be arbitrarily exercised by the employer.

    Court decision document highlighting non-regularization of probationary worker legal case in the Philippines.

    In a little old case of Abbott Laboratories, Philippines, et. al. vs. Pearlie Ann F. Alcaraz,[1] the Supreme Court laid down some guidelines about a probationary employee.

    1. A probationary employee, like a regular employee, enjoys security of tenure. However, in cases of probationary employment, aside from just or authorized causes of termination, an additional ground is provided under Article 295 of the Labor Code, i.e., the probationary employee may also be terminated for failure to qualify as a regular employee in accordance with the reasonable standards made known by the employer to the employee at the time of the engagement.
    1. The services of an employee who has been engaged on probationary basis may be terminated for any of the following: (a) a just or (b) an authorized cause; and (c) when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer.
    1. It should be noted however that Section 6(d), Rule I, Book VI of the Implementing Rules of the Labor Code provides that if the employer fails to inform the probationary employee of the reasonable standards upon which the regularization would be based on at the time of the engagement, then the said employee shall be deemed a regular employee. Where no standards are made known to the employee at that time, he shall be deemed a regular employee.
    1. The employer is made to comply with two (2) requirements when dealing with a probationary employee: first, the employer must communicate the regularization standards to the probationary employee; and second, the employer must make such communication at the time of the probationary employee’s engagement. If the employer fails to comply with either, the employee is deemed as a regular and not a probationary employee.
    1. Keeping with these rules, an employer is deemed to have made known the standards that would qualify a probationary employee to be a regular employee when it has exerted reasonable efforts to apprise the employee of what he is expected to do or accomplish during the trial period of probation. This goes without saying that the employee is sufficiently made aware of his probationary status as well as the length of time of the probation. The exception to this is when the job is self-descriptive in nature, for instance, in the case of maids, cooks, drivers, or messengers.
    1. The rule on notifying a probationary employee of the standards of regularization should not be used to exculpate an employee who acts in a manner contrary to basic knowledge and common sense in regard to which there is no need to spell out a policy or standard to be met.
    1. In the same light, an employee’s failure to perform the duties and responsibilities which have been clearly made known to him constitutes a justifiable basis for a probationary employee’s non-regularization.
    Employer and employee discussing non-regularization of probationary worker during evaluation meeting.

    A different procedure is applied when terminating a probationary employee; the usual two-notice rule does not govern. Employee to meet the standards of the employer in case of probationary employment, it shall be sufficient that a written notice is served the employee, within a reasonable time from the effective date of termination.

    Legal Reference

    [1] G.R. No. 192571, July 23, 2013