G.R. No. 112968 - People vs. Letigio

Respondent, Melvin R. Gnilo, was hired in April 1988 by Norkis Trading Co., Inc. as an Installment Collector, later holding various positions in the company.
Manuel Gaspar E. Albos, Jr., Senior Vice-President of Norkis Trading, was instrumental in the respondent’s career progress.
Respondent was eventually appointed as Credit and Collection Manager of Magna Financial Services Group, Inc.-Legaspi Branch – a sister company of Norkis – where he was responsible for the areas of Albay and Catanduanes and was provided travel and transportation allowances, as well as a service car.

A special audit conducted in Legaspi, Albay from March 13 to April 5, 2000 discovered that respondent forwarded monthly collection reports without verifying their accuracy.
The audit revealed that reports covering April to September 1999 were consistently overstated, particularly for accounts handled by one of the Installment Collectors (NIC), causing a misleading impression of a high collection efficiency.
The top management was misled into believing that the area under respondent’s supervision had achieved favorable performance.

Based on the audit findings, an Inquiry Assistance Panel charged respondent with negligence in his supervisory duties, which allegedly resulted in loss of trust and confidence.
On May 30, 2000, a memorandum issued by Norkis placed respondent under a 15-day suspension without pay, travel, and transportation allowance.
Respondent protested his suspension and requested a review, leading to another memorandum on June 30, 2000, ordering him to report to the head office for re-training or reassignment.
Subsequently, respondent was formally reassigned on July 28, 2000 as a Marketing Assistant reporting directly to petitioner Albos.
On October 4, 2000, respondent filed a complaint with the Labor Arbiter, alleging illegal suspension, constructive dismissal, non-payment of benefits, and damages.

The Labor Arbiter rendered a decision on March 30, 2001 dismissing the complaint, holding that the suspension was legal and that disciplinary measures—including the transfer—were within the employer’s prerogative.
Respondent’s appeal to the National Labor Relations Commission (NLRC) resulted in a Resolution on January 29, 2002 that reversed the LA’s decision, finding the transfer amounted to a demotion—hence, a constructive dismissal—and awarding backwages, separation pay, and attorney’s fees.
On June 24, 2002, during the remedial proceedings, the NLRC modified its award to include additional benefits such as the 13th month pay and a refund of the provident fund contribution.
Petitioners subsequently filed a petition for certiorari with the Court of Appeals (CA) and sought a Temporary Restraining Order, while respondent also filed a motion for execution of the NLRC decision.

The transfer was an exercise of their management prerogative and involved no demotion since the positions were of the same level in authority.
Respondent had accepted the new assignment unconditionally, and his prior performance issues justified the disciplinary action.
There was no basis for constructive dismissal and no bad faith in handling the matter.

The transfer from Credit and Collection Manager to Marketing Assistant substantially reduced his supervisory powers and responsibilities.
The demotion was accompanied by undignified treatment, including verbal abuse by petitioner Albos, which made his continued employment untenable.
The reduction in job functions and the loss of privileges—a service car and staff under his supervision—amounted to constructive dismissal.

The CA reviewed the issue of whether the transfer constituted a demotion through a comparative analysis of the two positions.
The Court noted that while the suspension was within the employer’s right to discipline, the reassignment stripped respondent of his managerial duties and downgraded his responsibilities.
Ultimately, the CA affirmed the NLRC’s findings that respondent’s reassignment was tantamount to a demotion and therefore constituted constructive dismissal.
Costs were ordered against petitioners, and the petition for review on certiorari was denied.

Whether the transfer of the respondent from the position of Credit and Collection Manager to that of Marketing Assistant constituted a demotion and, by extension, a constructive dismissal.

Was there a reduction in the scope of duties and responsibilities that effectively diminished the employee’s status and authority?
Did the transfer result in a loss of privileges (such as the service car and supervisory staff), thereby negatively affecting the employee’s employment benefits and standing?
Whether the exercise of the management prerogative in transferring or reassigning employees can, under certain circumstances, amount to constructive dismissal if it involves an unjustifiable demotion.

The extent to which findings by quasi-judicial agencies (Labor Arbiter, NLRC) and their consistency affect the final judicial determination.

Whether the CA is justified in giving high respect and finality to the factual findings of the NLRC and the Labor Arbiter unless there exists a clear conflict.
Whether the evidentiary record supports the finding that the reassignment significantly reduced the employee’s job functions and managerial authority.