Atty. Ensign M. Icamen

Tag: Employee

  • 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

  • Guidelines on Taxes of Separation Benefits

    Guidelines on Taxes of Separation Benefits

    A Filipina advisor explains separation benefit tax rates to a concerned Filipino couple in an office.

    July 26, 2022

    BIR Revenue Memorandum Circular Nos. 66-26 and 26-2011 provides guidelines in the tax treatment of Separation Benefits received by officials and employees on account of their separation from employment due to death, sickness or other physical disability and the issuance of Certificate of Tax Exemption from income tax and from the withholding tax.

    1. Revenue Memorandum Order No. 66-2016

    2. Revenue Memorandum Order No. 26-2011

  • Valid Employee Quitclaim

    Valid Employee Quitclaim

    November 15, 2024

    Legal quitclaim document validated by Supreme Court ruling.

    As ruled by the Hon. Supreme Court in the case of Leo A. Abad et. al. vs. San Roque Metals Inc., G.R. No. 255368 – May 29, 2024, the requisites of a valid quitclaim executed by an employee are the following:

    A valid quitclaim must be voluntary, fair, and free from fraud.

    (1) the employees execute the deed of quitclaim voluntarily;

    (2) there is no fraud or deceit on the part of any of the parties;

    (3) the consideration of the quitclaim must be credible and reasonable; and,

    (4) the contract is not contrary to law, public order, public policy, morals, or good customs, or prejudicial to a third person with a right recognized by law. Absent these elements, the quitclaim may be invalidated. Consequently an invalidated quitclaim does not have the effect of res judicata between the parties.”

    Also in the same case, the Hon. Supreme Court ruled that “[W]hen the Court reviews a Decision of the CA in a petition for Certiorari assailing a ruling of the NLRC, its scope of review is limited to the correctness of review of the CA’s finding of grave abuse of discretion. In labor cases, the NLRC abuses its discretion when “its findings and conclusions are not supported by substantial evidence, which refers to that amount of relevant evidence that a reasonable might accept as adequate to justify a conclusion,” or when its ruling finds no basis in the evidence and applicable statutes and case law.”

  • Collusion and Grave Misconduct by Public Officers and Employees

    Collusion and Grave Misconduct by Public Officers and Employees

    October 1, 2021

    Collusion and Grave Misconduct in Philippine administrative law involving public officials.

    Grave misconduct committed by a public officer that will warrant his/her dismissal from the service must not be a mere failure to comply with the law. Also, an allegation of collusion must be proved by clear and convincing evidence to justify removal of a public officer from service.

    Legal standards for proving Collusion and Grave Misconduct among government employees.

    The case of Jaspe, Noel T. and Araneta, Ma. Negenia vs. Public Assistance and Corruption Prevention Office and Agustin Sonza G.R. No. 251940, July 12, 2021 grave misconduct that may warrant dismissal of a public officer was defined as follows:

    “Grave misconduct is defined as the “wrongful, improper or unlawful conduct motivated by a premeditated, obstinate or intentional purpose.” It is not mere failure to comply with the law. Failure to comply must be deliberate and must be done in order to secure benefits for the offender or for some other person.”

    “For a charge of grave misconduct or any grave offense to prosper, therefore, the evidence against the respondent should be competent and must be derived from direct knowledge. Reliance on mere allegations, conjectures and suppositions, as in this case, warrants the dismissal of the charge.”

    Likewise in the same case, it was pronounced that to warrant a dismissal of a public officer or employee from the service based on collusion with parties in a public bidding, the person charging collusion must prove it by clear and convincing evidence. The Supreme Court ruled that:

    “On this score, Desierto v. Ocampo pronounced that the complainant charging collusion must prove it by clear-and convincing evidence, thus:

    “Collusion implies a secret understanding whereby one party plays into another’s hands for fraudulent purposes. It may take place between and every contractor resulting in no competition, in which case, the government may declare a failure of bidding. Collusion may also ensue between contractors and the chairman and members of the PBAC to simulate or rig the bidding process, thus insuring the award to a favored bidder, to the-prejudice of the government agency and public service. For such acts of the chairman and the members of the PBAC, they may be held administratively liable for conduct grossly prejudicial to the best interest of the government service. Collusion by and among the members of the PBAC and/or contractors submitting their bids may be determined from their collective acts or omissions before, during and after the bidding process. The complainants are burdened to prove such collusion by clear and convincing evidence because if so proved, the responsible officials may be dismissed from the government service or meted severe administrative sanctions for dishonesty and conduct prejudicial to the government service.”

    Further, Desierto ordained that mere declaration of a lone winning bidder does not necessarily mean there was collusion, absent a showing that the BAC members were closely associated with the bidders, thus:

    “We believe that in this case, the complainants failed to prove that there was collusion by and among the contractors and the chairman and members of the PBAC. The PBAC may have erred in waiving the defects in the bids of Carwin Construction and Ed-Mar’s Construction on the belief that the defects were minor, but it does not follow that its members, including the respondent, conspired with the contractors to rig the bid process. Carwin Construction and Ed-Mar’s Construction may have, likewise, submitted defective bid documents but, absent any other evidence, it cannot thereby be concluded that there was conspiracy to rig the bid process to insure that PR T Construction would emerge the lone and winning bidder. The chairman and members of the PBAC may have, likewise, erred in the performance of their duties, but it does not necessarily mean that they did so in bad faith or with dishonesty.”