Case Summary (G.R. No. 228088)

Management Prerogative in Employee Transfers

The management of a corporation possesses the discretion to assign and transfer employees to different workstations. Such transfers are deemed valid as long as they do not result in a demotion in rank or a reduction in pay or benefits, and are executed in good faith based on legitimate business needs. The case at hand involves a petition for review on certiorari, challenging the decisions of the Court of Appeals and the National Labor Relations Commission regarding the alleged constructive dismissal of Francia B. Deguidoy by Automatic Appliances, Inc. (AAI).

• Management has the discretion to transfer employees.
• Transfers must not involve demotion or reduction in pay/benefits.
• Transfers should be justified by business exigencies.

Background of the Case

Francia B. Deguidoy was employed by AAI as a Sales Coordinator and was later reassigned to the Tutuban Branch due to the company's economic difficulties and branch closures. Despite accepting the reassignment, Deguidoy's performance declined, leading to management's concerns and a recommendation for counseling. Following her refusal of a proposed lateral transfer, she was informed of an intended transfer to the Ortigas branch, which she did not accept, leading to her filing a case for illegal dismissal.

• Deguidoy was hired as a Sales Coordinator and later reassigned.
• Her performance declined, prompting management intervention.
• She refused a proposed lateral transfer and subsequently filed for illegal dismissal.

Rulings of the Labor Arbiter and NLRC

The Labor Arbiter dismissed Deguidoy's complaint for illegal dismissal, concluding that she was not terminated but merely transferred. However, the NLRC later reversed this decision, ruling that Deguidoy was constructively dismissed due to AAI's actions, which were deemed calculated to force her out of employment. The NLRC ordered AAI to pay backwages and separation pay.

• Labor Arbiter found no illegal dismissal, only a transfer.
• NLRC ruled in favor of constructive dismissal, ordering backwages and separation pay.

Court of Appeals Decision

The Court of Appeals affirmed the NLRC's ruling with modifications, determining that Deguidoy's transfer to a branch that was about to close constituted constructive dismissal. The CA ordered her reinstatement and full backwages from the date of her intended transfer until actual reinstatement, citing insufficient evidence from AAI to justify the transfer.

• CA affirmed NLRC's ruling of constructive dismissal.
• Ordered reinstatement and full backwages for Deguidoy.

Issue of Constructive Dismissal

The primary issue in this case is whether Deguidoy was constructively dismissed. AAI contends that Deguidoy's change in allegations from actual to constructive dismissal violates due process. AAI argues that the transfer was a valid exercise of management prerogative based on Deguidoy's poor performance and that she was not barred from returning to work.

• The core issue is the validity of the constructive dismissal claim.
• AAI argues that the transfer was justified and not a dismissal.

AAI's Justification for Transfer

AAI maintains that the transfer was not intended to dismiss Deguidoy but was a necessary business decision based on her performance issues. AAI asserts that it consistently communicated with Deguidoy regarding her work performance and offered her alternative positions to help her improve.

• AAI claims the transfer was a legitimate business decision.
• Management attempted to assist Deguidoy in improving her performance.

Court's Ruling on Management Prerogative

The Court ruled that management has the inherent right to regulate employment aspects, including employee transfers. The transfer must not be unreasonable or prejudicial to the employee. In this case, the intended transfer did not involve a demotion or reduction in pay, and was based on a legitimate need to streamline operations.

• Management has the right to regulate employment aspects.
• Transfers must not be unreasonable or prejudicial.

Evaluation of Deguidoy's Performance

The Court noted that Deguidoy's performance was evaluated before the transfer decision. Her low sales output and numerous absences were documented, justifying AAI's decision to transfer her to a branch where she could potentially perform better. The transfer was ...continue reading

Case Syllabus (G.R. No. 228088)

Background of the Case

• The case involves a petition for review on certiorari under Rule 45 of the Revised Rules of Court filed by Automatic Appliances, Inc. (AAI) against Francia B. Deguidoy.
• The petition seeks to reverse the Decision dated March 31, 2016, and the Resolution dated November 3, 2016, rendered by the Court of Appeals (CA), which affirmed the National Labor Relations Commission (NLRC) ruling that Deguidoy was constructively dismissed.
• AAI is a corporation established under Philippine law, with petitioners including its former President, Vice President for Human Resource, and a Branch Manager.

Employment History

• Deguidoy was hired by AAI on June 3, 1998, as a regular Sales Coordinator at the Cubao Branch, responsible for selling merchandise and maintaining a sales quota.
• In 2013, AAI faced economic difficulties and implemented cost-cutting measures, leading to branch closures and employee re-assignments.

Employee Re-assignment and Performance Issues

• On July 1, 2013, AAI issued a memorandum informing employees of their reassignment due to branch closures, resulting in Deguidoy being moved to the Tutuban Branch, which she accepted.
• Deguidoy subsequently failed to meet her sales quotas and incurred 29 days of unexplained absences from March to August 2013.
• On June 14, 2013, management urged her to undergo counseling due to her work performance, which she attributed to weight gain affecting her ability to perform her duties.
• AAI offered a lateral transfer to a less physically demanding positio...continue reading