Case Summary (G.R. No. 198534)
Procedural Posture and Timeline
- Petitioner employed by RSC since November 3, 1987; serving as Category Buyer as of October 26, 2006.
- Reassignment memorandum dated October 26, 2006, effective November 1, 2006, notified petitioner of transfer to Provincial Coordinator.
- RSC demanded written explanation for refusal to accept transfer by memorandum dated November 13, 2006 (48-hour deadline), and again on November 23, 2006 (final chance). Petitioner replied on November 27, 2006.
- Petitioner filed a constructive dismissal complaint on November 9, 2006. Subsequent instructions to report to Metroeast Depot (November 30 and December 8, 2006) were ignored.
- Labor Arbiter (LA) dismissed petitioner’s complaint on May 30, 2007. Petitioner tendered a written “forced” resignation on June 22, 2007.
- National Labor Relations Commission (NLRC) affirmed the LA on February 25, 2009. Court of Appeals (CA) affirmed on June 8, 2011. The Supreme Court denied the petition and affirmed the CA decision (Decision under review).
Issue Presented
Central Legal Questions
- Whether the reassignment of petitioner from Category Buyer to Provincial Coordinator constituted a demotion amounting to constructive dismissal.
- Whether the reassignment was a valid exercise of management prerogative, or whether it was effected in bad faith, as punishment, or without due process.
- Whether the employer discharging its burden of proof showing the transfer was not unreasonable, inconvenient, or prejudicial to the employee.
Relevant Legal Standards
Governing Legal Principles
- Management prerogative: Employers have the inherent right to regulate employment aspects (hiring, work assignments, working methods, transfer of employees, discipline) subject to limits imposed by law, equity, and substantial justice (doctrine summarized in Rural Bank of Cantilan).
- Transfer vs. Demotion: A lawful transfer is a lateral movement of equivalent rank, level or salary without break in service. A transfer is unlawful if motivated by discrimination, bad faith, as punishment, or if it effects a demotion or diminution of salary/benefits.
- Constructive dismissal: Occurs when continued employment is rendered impossible, unreasonable or unlikely, or when an employee is offered a demotion involving reduction in rank or pay, or when employer acts with clear discrimination, insensibility or disdain making continued employment intolerable (Blue Dairy standard).
- Burden of proof: Employer must show the transfer is for legitimate business purposes, not unreasonable, inconvenient, or prejudicial; management’s exercise of prerogative must not be a subterfuge to rid the company of an undesirable worker.
Material Facts Found by the Labor Tribunal and Appellate Bodies
Factual Findings
- RSC reassigned petitioner from Category Buyer to Provincial Coordinator, both classified as Job Level 5 positions with the same salary structure and benefits according to the respondents.
- Petitioner refused to accept the reassignment, refused to turn over responsibilities to the incoming Category Buyer (Milo Padilla), and ignored direct instructions to report to Metroeast Depot on two occasions (November 30 and December 8, 2006).
- Petitioner had a record of habitual tardiness and performance issues: a 2005 performance rating of 2.8/4.0 (“below expectation”), 57 tardies in 2005 (13 in June–July 2005), suspensions for policy violations and for tardiness/absences in 2005–2006.
- Petitioner filed a constructive dismissal complaint on November 9, 2006 but continued to receive salary while on “floating status” until the LA decision; she tendered a resignation only after the LA ruled against her.
- Petitioner alleged embarrassment and bad faith: that RSC cut off her email access, circulated memoranda changing her designation, and subjected her to mockery. The tribunals found these actions to be reasonable responses to her refusal to accept reassignment rather than evidence of intolerable conduct.
Labor Arbiter and NLRC Reasoning
Tribunal Conclusions and Rationale
- The LA ruled that reassignment and job classification are management prerogatives; the transfer was lateral (no demotion) and justified by business necessity—specifically, the need for punctuality, diligence and attentiveness in the Category Buyer role which petitioner failed to demonstrate. The LA considered petitioner’s refusal to accept reassignment as insubordination warranting dismissal.
- The NLRC affirmed: Provincial Coordinator was not a mere clerical rank-and-file post but required discretion, independent judgment, and a recommendatory function affecting Category Buyer decisions. The NLRC reiterated that management may reassign employees for legitimate business reasons provided there is no demotion or bad faith, and it found no evidence of discrimination or punitive motive.
Court of Appeals and Supreme Court Review
Appellate Treatment and Final Ruling
- The CA affirmed the NLRC, noting the constitutional and jurisprudential deference accorded to factual findings of labor tribunals when supported by substantial evidence.
- The Supreme Court applied established jurisprudential guidelines on management prerogative and constructive dismissal (citing Rural Bank of Cantilan, Philippine Japan Active Carbon, Blue Dairy, Jarcia Machine Shop) and held that: (a) the reassignment was a lateral transfer within the same Job Level and did not involve diminution of salary or benefits; (b) the Provincial Coordinator position required discretion and was not merely clerical; (c) petitioner’s persistent refusal to accept reassignment and to follow instructions amounted to neglect of duty and insubordination; (d) RSC discharged its burden proving the transfer was not unreasonable, inconvenient, or prejudicial; and (e) petitioner’s allegations of bad faith and humiliation did not establish constructive dismissal. The Supreme Court therefore affirmed the CA decision.
Application of Legal Standards to the Facts
Legal Analysis and Application
- Management prerogative was exercised within its permissible bounds: tribunals found legitimate business reasons (concern over petitioner’s punctuality and performance for a frontline Category Buyer role) and demonstrated that the alternate position was substantively equivalent in rank and compensation.
- The employer carried its evidentiary burden: documentary evidence of position classification, petitioner’s perfor
Case Syllabus (G.R. No. 198534)
Case Caption, Procedural Posture, and Disposition
- Petition for Review on Certiorari to the Supreme Court from the Court of Appeals Decision dated June 8, 2011 in CA-G.R. SP No. 109604.
- The CA decision affirmed the National Labor Relations Commission (NLRC) Decision dated February 25, 2009 in NLRC NCR Case No. 00-11-09316-06/NLRC LAC No. 002020-07, which in turn affirmed the Labor Arbiter (LA) Decision dated May 30, 2007 dismissing petitioner Jenny F. Peckson’s complaint for constructive dismissal.
- Supreme Court Decision authored by Justice Reyes, J., dated July 03, 2013 (G.R. No. 198534), AFFIRMED the Decision of the Court of Appeals dated June 8, 2011.
- Concurrences in the Supreme Court decision: Sereno, C.J. (Chairperson), Leonardo-De Castro, Bersamin, Villarama, Jr., and Reyes, JJ., concur.
Antecedent Employment Facts and Chronology
- Petitioner Jenny F. Peckson began employment with Robinsons Supermarket Corporation (RSC) as a Sales Clerk on November 3, 1987.
- As of October 26, 2006, petitioner held the position of Category Buyer; she was reassigned by Roena Sarte (Assistant Vice-President for Merchandising) to the position of Provincial Coordinator, effective November 1, 2006.
- Petitioner refused to turn over responsibilities to the newly assigned Category Buyer and refused to accept the Provincial Coordinator assignment, alleging the reassignment was a demotion (non-supervisory and clerical in nature).
- Petitioner filed a complaint for constructive dismissal on November 9, 2006 against RSC, Sarte, Jody Gadia, and Ruby Alex.
- RSC, through Sarte, issued memoranda demanding explanation of petitioner’s refusal:
- Memorandum dated November 13, 2006: asked for explanation within 48 hours, cited company disciplinary rule Offenses Subject to Disciplinary Action No. 4.07 regarding disobedience and refusal to obey instructions which may warrant suspension.
- Memorandum dated November 23, 2006: reiterated demand to explain in writing within 48 hours and warned that failure to present her side could be deemed waiver of right to be heard.
- Petitioner replied with a one-paragraph response on November 27, 2006 stating she could not accept Provincial Coordinator because she saw it as a demotion.
- Additional instructions from Sarte:
- November 30, 2006: instructed petitioner to report to RSC’s Metroeast Depot to help prepare shipping manifests for Cagayan de Oro and Bacolod; witnesses stated petitioner did not comply.
- December 8, 2006: again instructed petitioner to report with reasons related to Christmas preparations; petitioner again refused.
- Petitioner was placed on “floating status”; she alleges embarrassment and mockery by suppliers and co-employees, and that management cut off her email access and sent memoranda notifying clients and branches of the reassignment.
- After the Labor Arbiter decision, petitioner tendered a written “forced” resignation on June 22, 2007, complaining of ridicule and compulsion to accept the Provincial Coordinator position without due process.
Parties’ Contentions and Key Assertions
- Petitioner’s contentions:
- The reassignment from Category Buyer to Provincial Coordinator was a demotion and amounted to constructive dismissal.
- The Provincial Coordinator position was non-supervisory and clerical; the real duties of Category Buyer (analyzing stock levels, setting order points, sourcing suppliers, monitoring stock per store, recommending replenishment, negotiating discounts) were distinct and superior.
- The reassignment was done in bad faith and without due process; respondents manipulated organizational charts after the complaint, cut off her email access, publicized reassignment to clients and branches, placed her on floating status for seven months, and thereby made continued employment intolerable.
- Respondents’ contentions:
- The reassignment was a valid exercise of management prerogative and was not a demotion; both positions were Job Level 5 with similar salary structure, benefits, and level of responsibility.
- The transfer aimed to address petitioner’s lack of punctuality, diligence and attentiveness; Category Buyer was a “frontline position” requiring those traits, which petitioner lacked.
- Respondents pointed to petitioner’s tardiness and performance records: 13 instances of tardiness in June–July 2005, 57 instances for the entire 2005, a 2005 performance rating of 2.8/4.0 (“below expectation”), suspensions in 2006 for 20 instances of tardiness and absences (July–September 2006), and a seven-day suspension in September–October 2005 for violating company policy (seen having lunch with a company supplier).
- Respondents maintained that management acted without illegal motive and that the reassignment sought to give petitioner a chance to improve work ethic.
Labor Arbiter Findings and Rationale (May 30, 2007)
- Labor Arbiter Arthur L. Amansec dismissed petitioner’s complaint for constructive dismissal.
- LA findings:
- Job reassignment/classification is management prerogative.
- The transfer from Category Buyer to Provincial Coordinator was not a demotion because both positions commanded the same salary structure, required similar high degree of responsibility, honesty and integrity.
- Petitioner lacked the qualities (punctuality, diligence, attentiveness) necessary for the Category Buyer position.
- Petitioner’s persistent refusal to accept the new position and to turn over responsibilities amounted to insubordination, which justified dismissal.
- No showing of illegal motive by respondents in effecting the reassignment.
NLRC Decision and Analysis (February 25, 2009)
- The NLRC sustained the LA’s findings and dismissed the complaint for constructive dismissal.
- Key NLRC determinations:
- The transfer was a lateral movement: Category Buyer and Provincial Coordinator belonged to Job Level 5; no significant disparity in skill, experience and aptitude requirements.
- The Provincial Coordinator position was not a mere clerical or rank-and-file