MANAGEMENT PREROGATIVE

Management Prerogative;Penalty of Suspension

G.R. No. 217896, June 26, 2019

THE HERITAGE HOTEL, MANILA, PETITIONER, v. LILIAN SIO, RESPONDENT.

DOCTRINE:An employer has a free reign and enjoys wide latitude of discretion to regulate all
aspects of employment, including the prerogative to instill discipline in its employees and to
impose penalties, including dismissal, upon erring employees.

FACTS:

Sio was involved in two separate incidents which led to the questioned suspensions. Both the
LA and the NLRC found that, in both occasions, Sio committed the acts which justified her
suspension. For the first incident, the labor tribunals found that she arrogantly talked to the VIP
client, Tiozon and the PAGCOR employee, Bumatay. For the second incident, she made
utterances which embarrassed another client, Mendoza. Moreover, the labor tribunals found that
Sio was afforded procedural due process. In both instances, she submitted her explanations.
During the administrative hearings, she failed to refute the allegations and to present evidence to
controvert them. Instead, she even apologized to the complainants.

Issue

Whether the CA erred in ruling that the NLRC committed grave abuse of discretion amounting
to lack or excess of jurisdiction when the latter affirmed the LA's decision and found that the
suspensions of Sio were valid and legal.

Ruling

The CA erred in ruling that Sio was invalidly suspended on such basis. Administrative bodies
like the NLRC are not bound by the technical niceties of law and procedure and the rules
obtaining in courts of law.Rules of evidence are not strictly observed in proceedings before
administrative bodies and the Court has allowed cases to be decided on the basis of position
papers and other documents without necessarily resorting to technical rules of evidence as
observed in the regular courts of justice.

ARTICLE 227. [221] Technical Rules Not Binding and Prior Resort to Amicable
Settlement. — In any proceeding before the Commission or any of the Labor Arbiters, the
rules of evidence prevailing in courts of law or equity shall not be controlling and it is
the spirit and intention of this Code that the Commission and its members and the Labor
 Arbiters shall use every and all reasonable means to ascertain the facts in each case
speedily and objectively, without regard to technicalities of law or procedure, all in the
interest of due process.

The NLRC did not err, much less commit grave abuse of its discretion, when it affirmed the
findings of the LA that Sio was validly and legally suspended.

The Court finds that the penalties of suspension imposed upon Sio were not without valid bases
and were reasonably proportionate to the infractions committed.The improper remarks hurled
against valued guests and an employee of a valued client, in the present case, pose a greater
threat to the interest of an employer and all the more merits a similar, if not graver, penalty.

TOPIC:

Management Prerogative

DOCTRINE:

The managerial prerogative to transfer personnel must be exercised without grave abuse
of discretion, bearing in mind the basic elements of justice and fair play. In particular, the
employer must be able to show that the transfer is not unreasonable, inconvenient or prejudicial
to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges
and other benefits.

G.R. No. 227550, August 14, 2019

UNIVERSITY OF MANILA, REPRESENTED BY EMILY DE LEON AS PRESIDENT,

DOING BUSINESS UNDER THE NAME AND STYLE BENGUET PINES TOURIST
INN, PETITIONER, v. JOSEPHINE P. PINERA, * YOLANDA A. CALANZA AND
LEONORA P. SONGALIA,** RESPONDENTS

FACTS:

Respondents Calanza, Pinera and Songalia were all hired by Atty. Delos Santos and his
mother Cordelia, to work in BPTI as receptionists and all-around employees, in 1984, 1993 and
1999, respectively. Petitioner University of Manila is engaged in the business of operating hotels
and restaurants. In here, the order alleged to be violated is the order to transfer workplace from
Baguio to Manila. Petitioner justified the transfer as a legitimate business strategy in order to
avert the continuous anomaly going on in the company. The anomaly referred to herein was the
case of the missing booklets of unused official receipts being blamed against Calanza, and the
allegations that all respondents were reporting to nearby Dely's Inn during office hours and their
failure to report the alleged theft of supplies committed by Atty. Delos Santos.

ISSUE:

Whether the order is legitimate business prerogative.

Ruling:

No. While it is the prerogative of the management to transfer an employee from one
office to another within the business establishment based on its assessment and perception of the
employee's qualifications, aptitudes and competence, and in order to ascertain where he can
function with maximum benefit to the company, this prerogative is not without limit. The
managerial prerogative to transfer personnel must be exercised without grave abuse of discretion,
bearing in mind the basic elements of justice and fair play. Having the right should not be
confused with the manner in which that right is exercised. Thus, it cannot be used as a subterfuge
by the employer to rid himself of an undesirable worker. In particular, the employer must be able
to show that the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor
does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits.

Topic:

Exercise of Management Prerogative

Doctrine:

The right of management to transfer its employees as part of management prerogative cannot be
exercised with unbridled discretion. The managerial prerogative to transfer personnel must be
exercised without grave abuse of discretion, bearing in mind the basic element of justice and fair
play.

G.R. No. 226369

ISABELA-I ELECTRIC COOP., INC., REPRESENTED BY ITS GENERAL MANAGER,

ENGR. VIRGILIO L. MONTANO, Petitioner
vs.
VICENTE B. DEL ROSARIO, JR., Respondent
FACTS: Pursuant to the reorganization plan, Isabela-I Electric Cooperative, Inc. (ISELCO)
declared all positions vacant and subjected all employees to evaluation.

As a result, Respondent Vicente B. Del Rosario, Jr., then Management Internal Auditor (Salary
Rank 20) became the Area Operations Management Department Manager (Salary Rank 19)
although his former position was not abolished. The new position entailed lesser responsibilities
than those pertaining to his former position and an incumbent of lesser qualifications than him
was appointed to thereto. He then filed a complaint for illegal dismissal with damages against
ISELCO claiming that he was unlawfully demoted and therefore constructively dismissed.

According to ISELCO the position given him was the result of the company's assessment of his
qualifications, aptitude, and competence. He was appointed Area Operations Management
Department Manager because the company had ascertained that his assignment would produce
maximum benefit to the operations of the company. Moreover, an employee do not have a vested
right in his or her position, otherwise, the employer would be deprived of its prerogative to move
an employee to another assignment where he would be most useful.  If the purpose of
reorganization were to be achieved, changes in the positions and rankings of the employees
should be expected. To insist on one's old position and ranking after the reorganization would
render such endeavor ineffectual. 

ISSUES:

1. Whether Respondent was constructively dismissed. (YES)

Yes. The right of management to transfer its employees as part of management prerogative
cannot be exercised with unbridled discretion. The managerial prerogative to transfer personnel
must be exercised without grave abuse of discretion, bearing in mind the basic element of justice
and fair play.

While it is true that an employer’s right to transfer employees forms part of management
prerogatives, the employee's transfer should not be unreasonable, nor inconvenient, nor
prejudicial to him. It should not involve a demotion in rank or diminution of his salaries, benefits
and other privileges, as to constitute constructive dismissal.

Demotion involves a situation in which an employee is relegated to a subordinate or less

important position constituting a reduction to a lower grade or rank, with a corresponding
decrease in duties and responsibilities, and usually accompanied by a decrease in salary. This
was exactly what happened to respondent. Although respondent retained the appellation
"manager," his new rank was in fact a demotion from his former position.

In addition, Respondent has all the qualifications to continue holding his former position, which
after the reorganization, was not abolished. For no apparent reason, petitioner opted to appoint,
even in an acting capacity, a non-CPA as Management Internal Auditor. In fine, petitioner
arbitrarily, removed respondent from his post in the guise of a supposed reorganization and
exercise of management prerogative.
DECEMBER 2019
G.R. No. 228088, December 04, 2019
AUTOMATIC APPLIANCES, INC, SAMSON F. LIM, CORNELIO P.
BUENAVENTURA and CHRISTINE M. PONTILLAS, Petitioners, v. FRANCIA B.
DEGUIDOY, RESPONDENT

TOPIC: Management Prerogative

DOCTRINE: The management enjoys the discretion to assign and transfer employees to other
work stations. Particularly, under the doctrine of  management   prerogative,   an employer
possesses the inherent rig t to regulate, according to its "own discretion and judgment, all
aspects   f employment, including hiring, work assignments, working methods, the time, place
and manner of work, work supervision, transfer of employees, lay-off of workers, and discipline,
dismissal,  and  recall  of  employees."
FACTS: Sometime in 2013, AAI suffered a decline in its sales and experienced economic
difficulties.    As a result, Deguidoy was re-assigned from  the Cubao branch to the Tutuban
Branch.  She accepted her re-assignment. While at the Tutuban Branch, Deguidoy failed  to 
reach  her  sales quota.   Worse, the   Branch   Attendance   Time Log   Report   showed   that she
incurred   29  days  of  unexplained   absences   from  March   to  August 2013.   Added to this,
her sales performance continued to decline while her co-employees surpassed their sales quotas.
The management  of AAI urged her to undergo counselirtg to improve her performance.   
During  the counseling  session,  Deguidoy  explained  that her poor perfonnance at work was
due to her weight gain, which rendered it difficult to stand and perform her tasks as a Sales
Coordinator.'  In response, AAI  suggested  a lateral  transfer  as a receptionist  clerk  or
invoicing  clerk, where she could work behind a desk.  However, she refused the offer.
Deguidoy  was   placed  under  one-month  suspension. She accepted the suspension and
apologized for her faults. AAI  sent Deguidoy  a letter  requiring  her to explain her failure to
report for work.  Deguidoy ignored the said letter. AAI sent another letter on October 19, 2013. 
Still, the same was unheeded. Unknown  to AAI, Deguidoy  filed a case for illegal dismissal with
money claims including 13th month pay. 
ISSUE: Whether Deguidoy was constructively dismissed by AAI.
RULING: Management enjoys the prerogative to transfer its employees and regulate their
work assignments. The transfer is valid inasmuch as it does not involve a demotion in rank or
diminution in pay or benefits, and was carried out in good faith and justified by business
exigencies.Accordingly, the employer may  determine,  in  accordance  with  its sound business
judgment, its employees work assignments.  This discretion to impose work assignments, or
corollarily, transfer the employees shall be based on the employer's  assessment of the
"qualifications, aptitudes and competence  of its employees."34     The employer is allowed to
move them around various areas of its business     operations to ascertain where they will
function with maximum benefit to the company.35   After all, the employer is in the best position
to determine where its employees will thrive for the good of the company.
Seemingly, it was actually Deguidoy who continuously and contumaciously  refused  to  abide 
by the  notices  and  orders  sent  by AAI. Worse, her conduct is not reflective of one who was
treated with disdain or discriminated against.  Rather, she immediately refused the intended
transfer without discussing it further with her branch manager.   She was a given a notice  to
explain  why she  left for work  on October  7,  2013.    However, instead  of  taking  the 
opportunity  to  converse  with  the  management,  she opted to immediately file a case for illegal
dismissal. Indeed, an employee enjoys the right to be protected against any act of discrimination
or disdain which renders his/her continued employment unreasonable or unlikely. However, this
should not be used by the employee as a bargaining chip to insist on his/her desired assignment.
Management has the right to assign an employee at any station, if it believes that the transfer is
best for its business.  Absent any bad faith on its part, the Court shall not interfere with the
management’s prerogative.

G.R. No. 220647, December 10, 2019

NOLI D. APARICIO AND RENAN CLARITO, PETITIONERS, v. MANILA
BROADCASTING COMPANY, RESPONDENT
TOPIC: Just and Authorized Causes/ Management Prerogative
DOCTRINE: Redundancy exists when an employee's services are in excess of what is
reasonably demanded by the actual requirements of the enterprise. While a declaration of
redundancy is ultimately a management decision, and the employer is not obligated to keep in its
payroll more employees than are needed for its day-to-day operations, management must not
violate the law nor declare redundancy without sufficient basis.

FACTS: On February 28, 2002, they were surprised to receive a Notice dated February 22, 2002
from MBC President Roberto Nicdao, Jr., terminating their employment with separation pay
effective thirty (30) days from notice or on March 31, 2002. Noel Aparicio, Delmer Dilig and
Abelardo Brillantes signed a quitclaim, believing their dismissal was valid. The rest sued for
illegal dismissal. After preliminary conference before the labor arbiter, their money claims were
settled except their claims for moral damages, exemplary damages, and attorney's fees. The
validity of their dismissal was also not amicably settled. MBC in an Answer, argued that FFES
Bacolod, a relay station of DZRH, was shut down. The employees assigned there, including Noli
Aparicio and Renan Clarito were retrenched. Although DYEZ-AM was not similarly shut down,
its manpower was downsized. Delmer Dilig and Abelardo Brillantes who were assigned there got
retrenched because the station needed only the service of two (2) not four (4) radio technician.
The retrenched employees, thereafter, received their separation pay equivalent to one (1) month
salary for every year of service effective thirty (30) days from notice.
ISSUE: Whether petitioners were validly dismissed on ground of redundancy.
RULING: Yes. A valid redundancy program requires the following: (1) written notice served
on both the employees and the Department of Labor and Employment (DOLE) at least one [1]
month prior to the intended date of termination of employment; (2) payment of separation pay
equivalent to at least one [1] month pay for every year of service; (3) good faith in abolishing the
redundant positions; and (4) fair and reasonable criteria in ascertaining what positions are to be
declared redundant and accordingly abolished, taking into consideration such factors as (a)
preferred status; (b) efficiency; and (c) seniority, among others.
FFES Bacolod was shut down as relay station of DZRH. Its continued operation was deemed
unnecessary because DZRH anyway could be heard in Bacolod through FFES Iloilo.
Consequently, petitioners who were both assigned at FFES Bacolod had to go, as well. Courts
will not interfere unless management is shown to have acted arbitrarily or maliciously. For it is
the management which is clothed with exclusive prerogative to determine the qualification and
fitness of an employee for hiring or firing, promotion or reassignment. Indeed, an employer has
no legal obligation to keep more employees than are necessary for its business operation.
G.R. No. 225115, January 27, 2020
DEL MONTE FRESH PRODUCE (PHILIPPINES), INC., PETITIONER, v. DEL
MONTE FRESH SUPERVISORS UNION, RESPONDENT.

TOPIC: MANAGAMENT PREROGATIVE; COMPANY POLICIES

DOCTRINE:
FACTS: Del Monte Fresh Supervisors Union (respondent) is the exclusive bargaining
representative of the supervisory employees of petitioner Del Monte Fresh Produce (Philippines),
Inc. (petitioner). Following unsuccessful attempts at mediation and conciliation, respondent filed
in behalf of 18 supervisor-members a Complaint with the Voluntary Arbitrator for " accrued
differentials and salary adjustments due to under payment of salary resulting from the non-
implementation of the supervisors' salary structure" as laid out in " company policies [which] are
binding between the employer and employees
ISSUE:
1. whether management prerogatives of petitioner apply when it comes to determining the salary
range applicable to its employees
2. whether implementation of the terms of these policies, in particular Section 1.2.4 of the Local
Policy relating to the minimum rates for regularized employees, is mandatory
RULING:
1. There is  no question that employers enjoy management prerogative when it comes to the
formulation of business policies, including those that affect their employees. However,
company policies that are an outcome of an exercise of management prerogative can
implicate the rights and obligations of employees, and to that extent they become part of
the employment contract, as when the violation of policies is considered a ground for
contract termination.42 In previous cases, petitioner itself invoked company policy to
justify termination of employment contracts. In the present case, petitioner admits to
being governed by and having implemented the Local Policy and Global Policy. The text
itself indicates that such policies are effective upon approval.
2. Section 2.1.2.4 of the Local Policy gives "no discretion to the hiring manager since it
uses the word ' shall' in providing that "upon regularization or successful completion of
the probationary or 'introductory' period, the regular employee shall be granted a salary
increase to raise his salary before regularization to the minimum rate. 47 These are textual
interpretations by the CA that the petitioner glossed over in favor of a mere contextual
approach. The CA even anticipated such contextual arguments by pointing out that the
policies do not preclude petitioner from making an assessment of the individual merits of
probationary employees; petitioner may decide that said employees do not meet its
standards for regularization
G.R. No. 225115, January 27, 2020
DEL MONTE FRESH PRODUCE (PHILIPPINES), INC., PETITIONER, v. DEL MONTE
FRESH SUPERVISORS UNION, RESPONDENT.

TOPIC: MANAGAMENT PREROGATIVE; COMPANY POLICIES

DOCTRINE:
FACTS: Del Monte Fresh Supervisors Union (respondent) is the exclusive bargaining
representative of the supervisory employees of petitioner Del Monte Fresh Produce
(Philippines), Inc. (petitioner). Following unsuccessful attempts at mediation and
conciliation, respondent filed in behalf of 18 supervisor-members a Complaint with the
Voluntary Arbitrator for " accrued differentials and salary adjustments due to under
payment of salary resulting from the non-implementation of the supervisors' salary
structure" as laid out in " company policies [which] are binding between the employer
and employees
ISSUE:
1. whether management prerogatives of petitioner apply when it comes to determining
the salary range applicable to its employees
2. whether implementation of the terms of these policies, in particular Section 1.2.4 of
the Local Policy relating to the minimum rates for regularized employees, is mandatory
RULING:
1. There is no question that employers enjoy management prerogative when it
comes to the formulation of business policies, including those that affect their
employees. However, company policies that are an outcome of an exercise of
management prerogative can implicate the rights and obligations of employees,
and to that extent they become part of the employment contract, as when the
violation of policies is considered a ground for contract termination. 42 In previous
cases, petitioner itself invoked company policy to justify termination of
employment contracts. In the present case, petitioner admits to being governed
by and having implemented the Local Policy and Global Policy. The text itself
indicates that such policies are effective upon approval.
2. Section 2.1.2.4 of the Local Policy gives "no discretion to the hiring manager
since it uses the word ' shall' in providing that "upon regularization or successful
completion of the probationary or 'introductory' period, the regular employee shall
be granted a salary increase to raise his salary before regularization to the
minimum rate.47 These are textual interpretations by the CA that the petitioner
glossed over in favor of a mere contextual approach. The CA even anticipated
such contextual arguments by pointing out that the policies do not preclude
petitioner from making an assessment of the individual merits of probationary
employees; petitioner may decide that said employees do not meet its standards
for regularization
TOPIC: MANAGEMENT PREROGATIVES

CASE TITLE AND DOCTRINE:

MARK E. SAMILLANO vs. VALDEZ SECURITY AND INVESTIGATION AGENCY, INC.I EMMA V.
LICUANAN,

G.R. No. 239396 June 23, 2020

Mere absence or failure to report for work is not tantamount to abandonment even when a notice to return to
work has been served. It is well to note that petitioner's complaint of illegal dismissal is coupled with a prayer for
reinstatement which clearly negates the claim of abandoment. Settled is the rule that the act of filing an illegal
dismissal complaint is inconsistent with abandonment of employment, moreso when it includes reinstatement as
a relief prayed for.

FACTS:

On December 3, 2013, petitioner was relieved from his post upon the request of Sister Christina Maguyo, a
representative of Mornesse. The request was made after petitioner and his co-security guard Nilo Mamigo
impleaded Mornesse in the complaint for money claims. On the same date, Mamigo was also relieved from his post
due to abandonment of work when he went on absence without leave (AWOL).

Petitioner and Mamigo filed a complaint for illegal dismissal with money claims, moral and exemplary damages and
attorney's fees against the respondent company and Licuanan. Petitioner and Mamigo asserted that they were
dismissed from service without just cause and that no valid reason was given to justify their unceremonious
dismissal. Further, the respondent company did not furnish them a notice of termination in wanton disregard of law.
For their part, the respondents maintained in their Position Paper that there was no dismissal, much less illegal
dismissal, since petitioner and Mamigo went AWOL, abandoned their work and refused to report to work without
justifiable reason.

The respondents stressed that petitioner's refusal to follow their lawful order to report to their head office for re-
assignment or deployment constitutes insubordination. LA and NLRC held that petitioner and Mamigo were not
dismissed from service when they were merely relieved from their posts upon the client's request. However, CA
ruled that petitioner and Mamigo were dismissed from service for just cause. It enunciated that petitioner and
Mamigo refused to report back to work despite having been served with return to work notices, an act that is
tantamount to "grossly abandoning or neglecting your work." The CA, however, found that they were not afforded
due process prior to their dismissal since no evidence was presented to show that return to work notices were sent to
them.

ISSUE AND RULING:

Whether or not there was just cause for petitioner's termination from employment.

No. Petitioner was not dismissed from the service. Most contracts for services provide that the client may request the
replacement of security guards assigned to it. In such setting, the security agency has the right to transfer or assign
its employees from one area of operation to another subject to the condition that there is no demotion in rank or
diminution of salary, benefits, and other privileges, and the transfer is not motivated by discrimination or bad faith,
or effected as a form of punishment or demotion without sufficient cause. Known as placement "on floating or
reserved status," this industry practice does not constitute dismissal, as the assignments primarily depend on the
contracts entered into by the agency with third parties, and is a valid exercise of management prerogative provided it
is carried out in good faith.

Petitioner was relieved from his post on December 3, 2013 upon the request of the respondent company's client. A
Memorandum/Relieve Order was issued informing him that he shall be reassigned or transferred to another post. He
was instructed to report in complete uniform at the respondent company's head office on December 5, 2013 at 9:00
a.m. Clearly, petitioner was not dismissed from service but was merely placed on temporary "off-detail" or floating
status.
TOPIC: MANAGEMENT PREROGATIVE

CASE TITLE AND DOCTRINE:

EAST CAM TECH CORPORATION, v. BAMBIE T. FERNANDEZ, et al

GR NO. 222289 JUNE 8, 2020

The Court only upholds management prerogative as long as it is exercised in good faith for
the advancement of the employer's interest and not for the purpose of defeating or
circumventing the employees' rights under special laws and valid agreements.

FACTS:

Respondents previously filed an illegal dismissal complaint against East Cam, which resulted in
their reinstatement. Upon returning to East Cam, they were reassigned to the sewing line of the
sample department. They noticed that the machines assigned to them were old and worn out.
They were stationed at a place far from the sample room where all the special machines were
located. They felt singled out in terms of work because they were the only ones required to meet
a production quota and to submit hourly reports.

On January 12, 2010, East Cam charged them of negligence of duty for failure to comply with
the production quota. On February 27, 2010, they were dismissed from the service for failure to
answer the charge. This prompted the filing of a new complaint against East Cam, for illegal
dismissal with prayer for reinstatement, backwages, other money claims, damages, and attorney's
fees.

LA and NLRC dismissed the complaint for lack of merit. The LA upheld the management
prerogative of East Cam to regulate all aspects of employment, and NLRC held that there was
habituality in the neglect of duty where the commission of the same act occurs more than once.
The CA however concluded that their failure to meet the quota did not justify the charge of gross
and habitual neglect of duty that led to their dismissal.

ISSUE AND RULING:

WON the respondents were illegally dismissed.

YES.

In Aliling, the Court recognized management prerogative to fix a quota for its employees, and
failure to meet the quota constitutes gross negligence, provided that such quota was imposed in
good faith.

Here, East Cam, as the employer, has the right to impose production quotas in its production line
based on its TMS for job orders one and two. However, East Cam failed to prove that it acted in
good faith when it did not adduce any evidence that its TMS were attainable based on the
quantity it wanted to produce for a given time, quality of the product to be produced, the
machines they have, and the skill sets of their employees. Further, East Cam failed to rebut the
respondents' allegations that: (1) the machines assigned to them were old and worn out, (2) they
were stationed at a place far from the sample room where all the special machines are located,
and (3) they were the only ones required to meet a production quota and to submit hourly reports.