Dear PAO,

Five (5) years ago, I was assigned as a sales agent in Mandaluyong City. I was one of the top-performing sales agents in our company. However, just recently, my supervisor told me that there is a high possibility that I will be transferred to Calauan, Laguna, because the sales performance in that particular area is rapidly declining. The top management has already discussed the impending transfer with my supervisor, and I am scheduled to meet with them in a few days. However, I refuse to be transferred because my children are all studying in Mandaluyong City, and the poor sales in Calauan, Laguna, might affect my sales incentive, resulting in a lower income. Can I refuse to be transferred to Calauan, Laguna?

Julie

Dear Julie,

We regret to inform you that you may not refuse to be transferred on the basis of the reasons you just mentioned. It is a well-established principle that an employer holds the management prerogative to transfer employees as necessary, in pursuit of the overall best interest and operational efficiency of the business. In Automatic Appliances, Inc. vs. Deguidoy (G.R. No. 228088, 4 December 2019; Ponente: Honorable Associate Justice Jose C. Reyes, Jr.), the Supreme Court had the occasion to explain the management prerogative of companies to transfer their employees as follows:

“Particularly, under the doctrine of management prerogative, an employer possesses the inherent right to regulate, according to its ‘own discretion and judgment, all aspects of 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.’ This wide sphere of authority to regulate its own business may only be curbed by the limitations imposed by labor laws and the principles of equity and substantial justice. The importance of discouraging interference is necessary to ensure that the employer may in turn expect good performance, satisfactory work, diligence, good conduct and loyalty from its employees.

“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.’ 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. After all, the employer is in the best position to determine where its employees will thrive for the good of the company.

“It is imperative, however, to strike balance between the employees’ tenurial security on the one hand, and the employer’s management prerogative, on the other. In Rural Bank of Cantilan, Inc. v. Julve, and Peckson v. Robinsons Supermarket Corporation, et al., the Court laid down guidelines to ensure that both rights are protected:

“Concerning the transfer of employees, these are the following jurisprudential guidelines: (a) a transfer is a movement from one position to another of equivalent rank, level or salary without break in the service or a lateral movement from one position to another of equivalent rank or salary; (b) the employer has the inherent right to transfer or reassign an employee for legitimate business purposes; (c) a transfer becomes unlawful where it is motivated by discrimination or bad faith or is effected as a form of punishment or is a demotion without sufficient cause; (d) the employer must be able to show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee.” (Citations omitted)

In Peckson vs. Robinsons Supermarket Corporation (G. R. No. 198534; 3 July 2013; Ponente: Honorable Associate Justice Bienvenido L. Reyes), the Supreme Court elucidated that employers may transfer employees based on their qualifications and the needs of the business, as long as the transfer is reasonable, not prejudicial, and does not result in demotion or loss of pay or benefits:

“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. Should the employer fail to overcome this burden of proof, the employee’s transfer shall be tantamount to constructive dismissal, which has been defined as a quitting because continued employment is rendered impossible, unreasonable or unlikely; as an offer involving a demotion in rank and diminution in pay. Likewise, constructive dismissal 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.”

Thus, it is clear from the above that in the absence of proof that the employee’s transfer is being used to constructively dismiss an employee, then the management’s prerogative to transfer its employees will prevail.

We hope that we are able to answer your queries. This advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.

We appreciate your trust and support.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to [email protected]