Pimentel, Mark Anthony B.

JD 1C1
Legal Research
Employers have the freedom and prerogative, according to their
discretion and best judgment, to regulate and control all aspects of
employment in their business organizations. Such aspects of
employment include hiring, work assignments, working-methods, time,
place and manner of work, supervision of workers, working regulations,
transfer of employees, work suspension, lay-off of workers and
discipline, dismissal and recall of workers. (Philippine Airlines vs. NLRC,
G.R. No. 115785, August 4, 2000).
As in case of AAA Inc. who wanted to implement a labor
rationalization scheme with the intention of reducing the number of
Executive Systems Administrators from 100 to 50 and transferring back
the other 50 to their previous and lower position of Head Technical
Support and maintaining the salaries of ESAs. AAA Inc., however,
believes that there is no demotion considering that there is no change
in pay and benefits of the employees transferred back to their previous
Jurisprudence has shown that there is demotion when an
employee is appointed to a position that results in a diminution in
duties, responsibilities, status or rank which may or may not involve a
reduction in salary. Where an employee is appointed to a position with
the same duties and responsibilities with a rank and salary higher than
those he enjoyed in his previous position, there is no demotion and the
appointment is valid. (Virginia D. Bautista vs. Civil Service Commission
and Development Bank of the Philippines, G.R. No. 185215, July 22,
2010). Also, citing the case of Norkis Trading Co., Inc. and/or Manuel
Gaspar E. Albos, Jr. vs Melvin Nilo, G.R. No. 159730, the court ruled that
the transfer of respondent from Credit and Collection Manager to
Marketing Assistant did not result in the reduction of his salary, there was
a reduction in his duties and responsibilities which amounted to a
demotion tantamount to a constructive dismissal as correctly held by the
NLRC and the CA.
It is clear from the abovementioned statements that there is
demotion if a person’s appointment resulted in a diminution of his
duties, responsibilities, status or rank even though there is no
reduction in his salary. The mere showing that there is a reduction or
lowering in position, rank or responsibilities as a result of a transfer
from the previous one, considering that there is no change in pay and
benefits would still constitutes a demotion.
Therefore, if the said labor rationalization scheme will be fully
implemented by AAA Inc. there would be a clear manifestation of