G.R. No. 174208 - Morales vs. Harbour Centre Port Terminal, Inc.

On 16 May 2000, Jonathan V. Morales was hired by Harbour Centre Port Terminal, Inc. (HCPTI) as an Accountant and Acting Finance Officer with a monthly salary of P18,000.00.
He was regularized on 17 November 2000.

Morales was promoted to Division Manager of the Accounting Department, with a monthly salary of P33,700.00 and additional allowances starting 1 July 2002.
After HCPTI transferred to new offices at Vitas, Tondo, Manila on 2 January 2003, an inter-office memorandum dated 27 March 2003 reassigned him to Operations Cost Accounting.

His new duties included monitoring and evaluating all consumables requests, gears, and equipment related to the corporation’s operations.
He was also tasked to interact with HCPTI’s sub-contractor, Bulk Fleet Marine Corporation.
The memorandum was issued by Danilo V. Singson (Administration Manager), noted by Johnny U. Filart (Vice President for Administration and Finance), and approved by CEO Vicente T. Suazo, Jr.

On 31 March 2003, Morales protested the reassignment by writing to Singson, contending that the transfer was a clear demotion since the position was not included in HCPTI’s plantilla.
Morales argued that the reassignment effectively placed him in a "floating" status, depriving him of the managerial privileges he previously enjoyed.
In response, Singson issued an inter-office memorandum on 4 April 2003 stating that the transfer of employees is a management prerogative and within the corporation’s right to balance employee skills with business needs.

Following the reassignment, Morales exhibited irregular attendance by being absent from work and/or arriving tardy during the ensuing month.
HCPTI responded by issuing several disciplinary memos:

A First Warning dated 29 April 2003 reminding Morales of his obligation to adhere to company rules.
A Second Warning on 6 May 2003.
A Notice to Report for Work and Final Warning dated 22 May 2003.

On 25 April 2003, Morales filed a complaint before the National Labor Relations Commission (NLRC), alleging constructive dismissal, and sought moral and exemplary damages as well as attorney’s fees.
His complaint alleged:

HCPTI suspended privileges enjoyed by managers, division chiefs, and section heads following the office transfer.
Upon being informed of an impending termination (purportedly by information from the Corporate Treasurer), his reassignment was a disguised form of termination.
The reassignment, not being included in the plantilla, effectively amounted to a demotion and termination.
He suffered humiliation from being deprived of proper office facilities and the absence of clear instructions regarding his new assignment.

HCPTI, along with officers Filart and Singson, filed their position papers asserting that Morales had abandoned his employment and was not constructively dismissed.
The Labor Arbiter rendered a Decision on 21 November 2003 dismissing Morales’ complaint for lack of merit, holding that the reassignment was a legitimate exercise of management prerogative, provided there was no demotion in salary or benefits.
On appeal, the NLRC’s Third Division reversed the Labor Arbiter’s Decision on 29 July 2005, finding that the reassignment was indeed a demotion.

Following the NLRC’s decisions and a subsequent unfavourable motion for execution, HCPTI elevated the case by filing a Rule 65 petition for certiorari before the Court of Appeals (CA), docketed as CA-G.R. SP No. 92491.
On 19 June 2006, the CA reversed the NLRC’s decision, holding that:

The reassignment was a valid exercise of management prerogative.
The transfer did not result in a demotion in rank, salary, or benefits and hence could not constitute constructive dismissal.
Morales’ subsequent conduct—taking a leave of absence and failing to report for work—demonstrated his refusal to accept the reassignment.

Morales’ motion for reconsideration was denied by the CA on 14 August 2006, leading him to file the petition for review with the Supreme Court.

Whether or not the change in the designation/position of the petitioner constituted constructive dismissal.
Whether or not the National Labor Relations Commission (NLRC) committed grave abuse of discretion.
Whether or not the NLRC decision, having gained finality, may be prevented from execution by reason of the petition for certiorari filed by the respondents.