October 9, 2014

AAA Inc.
306 San Sebastian St.,
Recto Avenue, Manila

Dear Sir/Madam:

In response to your query, I have analyzed whether or not the transfer of your
employees under the labor rationalization scheme you set to implement is a demotion.

Your company is set to implement a labor rationalization scheme. Under this plan, you
will reduce the number of Executive Systems Administrators (ESA) from 100 to 50, and
will transfer back 50 of 100 ESAs to their previous and lower position of Head Technical
Support. To prevent any complaints, you plan to maintain the salaries of the ESAs
relegated to Heads of Technical Support.

In my opinion, the transfer of employees from Executive Systems Administrators to
Head Technical Support is a demotion.

In the case of Coca-Cola Bottlers Philippines Inc. vs. Angelu Del Villar (October 6, 2010, GR
No. 163091), Supreme Court enumerated and defined different kinds of employees
movement in an organization, to wit:

A transfer is a movement from one position to another which is of equivalent
rank, level or salary, without break in service. Promotion, on the other hand, is
the advancement from one position to another with an increase in duties and
responsibilities as authorized by law, and usually accompanied by an increase in
salary. Conversely, demotion involves a situation where an employee is
relegated to a subordinate or less important position constituting a reduction to a
lower grade or rank, with a corresponding decrease in duties and responsibilities,
and usually accompanied by a decrease in salary.

Your employees will be transferred to the rank of Head Technical Support which is
subordinate to their present rank as Executive Systems Administrators. Adopting the
case of Coca-Cola Bottlers Philippines Inc. vs. Angelu Del Villar (October 6, 2010, GR No.
163091), this is a demotion and not a mere transfer. First, the positions, Executive
Systems Administrators and Head Technical Support, are not of equivalent rank.
Second, since the positions are not of equivalent rank, their duties and responsibilities
are not of the same weight also. The transfer will change the nature of work of the
employees and there will be a reduction in the duties and responsibilities since a Head
Technical Support has a lesser duties compared to an Executive Systems Administrator,
a higher position.

With regards to the salaries and benefits of the employees, Supreme Court answered
this issue in the case of Norkis Trading Co., Inc. and/or Manuel Gaspar Albos Jr. vs. Melvin
Gnilo (February 11, 2008, G.R. No. 159730). In this case, respondent was transferred from
the position of Credit and Collection Manager to Marketing Assistant without any
change in his salary. Supreme Court ruled that the respondents change of rank is a
demotion. Despite the fact the change in position did not result in the reduction of his
salary, there was a reduction in his duties and responsibilities which amounted to a
demotion. The respondent, being a Credit and Collection Manager before, was vested
with all the duties and responsibilities of a managerial employee. When he became a
Marketing Assistant, his work became clerical in nature and does not involve the
exercise of any discretion. The latter position includes data gathering on vital marketing
information relevant to motorcycles and making reports to his direct supervisor. In
short, the respondent became a mere staff member in the office of the Senior Vice-
President for Marketing.

Applying the decision of the court in the case of Norkis Trading Co., Inc. and/or Manuel
Gaspar Albos Jr. vs. Melvin Gnilo (February 11, 2008, G.R. No. 159730) to your case, the
transfer of your employees from Executive Systems Administrators to Head Technical
Support is a demotion regardless of whether or not there will be a reduction of salary
and benefits since theres a reduction of duties and responsibilities.

The transfer back of the 50 Executive Systems Administrators to their previous and
lower position of Head Technical Support, regardless whether or not there is a
reduction in the salary and benefits, is a demotion because the transfer is from a higher
rank to a lower rank which would result to a reduction in the duties and responsibilities
of the employees.



Very truly yours,


(Atty.) Roven Arellano
















MEMORANDUM

TO: AAA Inc.
FROM: (Atty.) Roven Arellano
RE: Transfer of Employees
DATE: October 9, 2014


QUESTION PRESENTED
Is the transfer of employees under the labor rationalization scheme which AAA
inc. is set to implement a demotion?

ANSWER
The transfer of employees from Executive Systems Administrators to Head
Technical Support is a demotion.

FACTS
AAA Inc. is set to implement a labor rationalization scheme. Under this plan, the
company will reduce the number of Executive Systems Administrators (ESA) from 100
to 50, and will transfer back 50 of 100 ESAs to their previous and lower position of Head
Technical Support. To prevent any complaints, the company plans to maintain the
salaries of the ESAs relegated to Heads of Technical Support.

DISCUSSION

In the case of Coca-Cola Bottlers Philippines Inc. vs. Angelu Del Villar (October 6,
2010, GR No. 163091), Supreme Court enumerated and defined different kinds of
employees movement in an organization, to wit:

A transfer is a movement from one position to another which is of
equivalent rank, level or salary, without break in service. Promotion, on the
other hand, is the advancement from one position to another with an increase in
duties and responsibilities as authorized by law, and usually accompanied by an
increase in salary. Conversely, demotion involves a situation where an employee
is relegated to a subordinate or less important position constituting a reduction to
a lower grade or rank, with a corresponding decrease in duties and
responsibilities, and usually accompanied by a decrease in salary.

The employees will be transferred to the rank of Head Technical Support which
is subordinate to their present rank as Executive Systems Administrators. Adopting the
case of Coca-Cola Bottlers Philippines Inc. vs. Angelu Del Villar (October 6, 2010, GR No.
163091), this is a demotion and not a mere transfer. First, the positions, Executive
Systems Administrators and Head Technical Support, are not of equivalent rank.
Second, since the positions are not of equivalent rank, their duties and responsibilities
are not of the same weight also. The transfer will change the nature of work of the
employees and there will be a reduction in the duties and responsibilities since a Head
Technical Support has a lesser duties compared to an Executive Systems Administrator,
a higher position.

With regards to the salaries and benefits of the employees, Supreme Court
answered this issue in the case of Norkis Trading Co., Inc. and/or Manuel Gaspar Albos Jr.
vs. Melvin Gnilo (February 11, 2008, G.R. No. 159730). In this case, respondent was
transferred from the position of Credit and Collection Manager to Marketing Assistant
without any change in his salary. Supreme Court ruled that the respondents change of
rank is a demotion. Despite the fact the change in position did not result in the
reduction of his salary, there was a reduction in his duties and responsibilities which
amounted to a demotion. The respondent, being a Credit and Collection Manager
before, was vested with all the duties and responsibilities of a managerial employee.
When he became a Marketing Assistant, his work became clerical in nature and does
not involve the exercise of any discretion. The latter position includes data gathering on
vital marketing information relevant to motorcycles and making reports to his direct
supervisor. In short, the respondent became a mere staff member in the office of the
Senior Vice-President for Marketing.

Applying the decision of the court in the case of Norkis Trading Co., Inc. and/or
Manuel Gaspar Albos Jr. vs. Melvin Gnilo (February 11, 2008, G.R. No. 159730) to the instan
case, the transfer of your employees from Executive Systems Administrators to Head
Technical Support is a demotion regardless of whether or not there will be a reduction
of salary and benefits since theres a reduction of duties and responsibilities.

CONCLUSION

The transfer back of the 50 Executive Systems Administrators to their previous
and lower position of Head Technical Support, regardless whether or not there is a
reduction in the salary and benefits, is a demotion because the transfer is from a higher
rank to a lower rank which would result to a reduction in the duties and responsibilities
of the employees.