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764 SUPREME COURT REPORTS ANNOTATED _______________

Chu vs. National Labor Relations Commission *FIRST DIVISION.


73 765
AGUSTIN CHU, petitioner, vs. NATIONAL LABOR VOL. 232, JUNE 2, 1994 765
RELATIONS COMMISSION and VICTORIAS MILLING Chu vs. National Labor Relations Commission
COMPANY, INC., respondents. Same; Same; Right to transfer or re-assign employee;
Labor Law; Management Prerogatives; The freedom to Jurisprudence proscribes transfers or reassignments of employees
administer the affairs of a business enterprise such that the costs of when such acts are unreasonable and cause inconvenience or
running it would be below the expected earnings or receipts. In short, prejudice to them.Of course, like other prerogatives, the right to
the elbow room in the quest for profits.An owner of a business transfer or re-assign is subject to limitations arising under the law,
enterprise is given considerable leeway in managing his business contract or general principles of fair play and justice (Abbot
because it is deemed important to society as a whole that he should Laboratories (Phil.) Inc. v. NLRC; 154 SCRA 713 [1987]).
succeed. Our law, therefore, recognizes certain rights as inherent in Jurisprudence proscribes transfers or reassignments of employees
the management of business enterprises. These rights are when such acts are unreasonable and cause inconvenience or
collectively called management prerogatives or acts by which one prejudice to them (Philippine Japan Active Carbon Corporation v.
directing a business is able to control the variables thereof so as to NLRC, supra).
enhance the chances of making a profit. Together, they may be Same; Same; Same; Before the right to transfer or re-assign
taken as the freedom to administer the affairs of a business employee can be deemed to have been waived or contracted away, the
enterprise such that the costs of running it would be below the stipulation to that effect must be clearly stated so as to leave no room
expected earnings or receipts. In short, the elbow room in the quest to doubt the intentions of the parties.We find nothing in the
for profits (Fernandez and Quiason, The Law on Labor Relations, Special Contract of Employment invoked by petitioner wherein
1963 ed., p. 43). private respondent had waived its right to transfer or re-assign
Same; Same; One of the prerogatives of management is the right petitioner to any other position in the company. Before such right
to transfer employees in their work stations.One of the can be deemed to have been waived or contracted away, the
prerogatives of management, and a very important one at that, is stipulation to that effect must be clearly stated so as to leave no
the right to transfer employees in their work station. In Philippine room to doubt the intentions of the parties. The mere specification
Japan Active Carbon Corporation v. National Labor Relations in the employment contract of the position to be held by the
Commission, 171 SCRA 164 (1989), we held: It is the employers employee is not such stipulation.
prerogative, based on its assessment and perception of its Same; Same; Same; The rotation was made in good faith and
employees qualifications, aptitudes, and competence to move them was not discriminatory, and that there was no demotion in rank or
around in the various areas of its business operations in order to a diminution of salary, benefits and privileges.Petitioners bare
ascertain where they will function with maximum benefit to the assertion that the transfer was unreasonable and caused him
company. An employees right to security of tenure does not give him inconvenience cannot override the fact, as found by the Labor
such a vested right in his position as would deprive the company of Arbiter and respondent Commission, that the rotation was made in
its prerogative to change his assignment or transfer him where he good faith and was not discriminatory, and that there was no
will be most useful. When his transfer is not unreasonable, nor demotion in rank or a diminution of his salary, benefits and
inconvenient, nor prejudicial to him, and it does not involve a privileges.
demotion in rank or a diminution of his salaries, benefits, and other
privileges, the employee may not complain that it amounts to a SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
constructive dismissal.
The facts are stated in the opinion of the Court. February 27, 1989, petitioner filed a complaint for illegal
Legaspi, Rufon, Necesario & Asso. Law Office for dismissal, contending that he was constructively dismissed
petitioner. from his employment (RAB IV Case No. 06-02-10081-89).
Decena, Tabat, Jardaleza & Taoso Law Offices for In support of his decision holding that there was no
private respondent. constructive dismissal of petitioner, the Labor Arbiter said
that: (1) petitioner was transferred to the Sugar Sales
QUIASON, J.: Department from the Warehousing, Sugar, Shipping and
Marine Department, both of which are under the Sugar Sales
This is a petition for certiorari under Rule 65 of the Revised Area; (2) petitioners transfer was without change in rank or
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salary; (3) petitioners designation in either department was
766 SUPREME COURT REPORTS ANNOTATED
the same; (4) the personnel rotation was pursuant to
Chu vs. National Labor Relations Commission organizational changes done in the valid exercise of
Rules of Court to reverse and set aside the Decision of the management prerogatives; (5) there was no bad faith in the
Fourth Division of the National Labor Relations Commission transfer of petitioner, as other employees similarly situated as
(NLRC) in Case No. 06-02-10081-89 which dismissed he were likewise affected; and (6) petitioner failed to show that
petitioners appeal and its Resolution dated March 20, 1992, he was prejudiced by the changes or transferred to a
which denied petitioners motion for reconsideration. 767
We dismiss the petition. VOL. 232, JUNE 2, 1994 767
Chu vs. National Labor Relations Commission
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demeaning or humiliating position.
Petitioner retired from the service of private respondent upon Petitioner appealed to the NLRC which, in a resolution
reaching the age of sixty under its regular retirement dated January 13, 1992, affirmed the Labor Arbiters decision.
program. He was granted an extension of service by the Board In a resolution dated March 20, 1992, the NLRC denied
of Directors of private respondent under a Special Contract of petitioners motion for reconsideration.
Employment. The contract provided, inter alia,that its term
II
was for a period of one year commencing on August 1, 1988;
that petitioner was employed as Head of the Warehousing, In this petition, petitioner contends that there was no valid
Sugar, Shipping and Marine Department; and that he was to exercise of management prerogative because: (1) his transfer
receive a basic salary of P6,941.00 per month. violated the Special Contract of Employment which was the
Private respondent issued Memorandum No. 1012-PS law between the parties; and (2) said transfer was
dated December 12, 1988 and Memorandum No. 1028-PS unreasonable and caused inconvenience to him.
dated January 16, 1989, both providing for a rotation of the Petitioner argues that private respondents prerogative to
personnel and other organizational changes. Pursuant to the transfer him was limited by the Special Contract of
memoranda, petitioner was transferred to the Sugar Sales Employment, which was the law between the parties. Thus,
Department. petitioner urges that private respondent, by employing him
Petitioner protested his transfer and requested a specifically as Head of the Warehousing, Sugar, Shipping, and
reconsideration thereof, which was denied. Consequently, on
Marine Department, waived its prerogative to reassign him In Abbot Laboratories (Phils.) Inc. v. NLRC, 154 SCRA
within the term of the contract to another department. 713(1987), we also held in referring to the prerogative of
We disagree. transfer of employees that:
An owner of a business enterprise is given considerable This is a function associated with the employers inherent right to
leeway in managing his business because it is deemed control and manage effectively its enterprise. Even as the law is
important to society as a whole that he should succeed. Our solicitous of the welfare of employees, it must also protect the right
law, therefore, recognizes certain rights as inherent in the of an employer to exercise what are clearly management
prerogatives. The free will of management to conduct its own
management of business enterprises. These rights are
business affairs to achieve its purpose cannot be denied.
collectively called management prerogatives or acts by which
Of course, like other prerogatives, the right to transfer or
one directing a business is able to control the variables thereof
reassign is subject to limitations arising under the law,
so as to enhance the chances of making a profit. Together,
contract or general principles of fair play and justice (Abbot
they may be taken as the freedom to administer the affairs of
Laboratories (Phil.) Inc. v. NLRC, 154 SCRA 713 [1987]).
a business enterprise such that the costs of running it would
Jurisprudence proscribes transfers or reassignments of
be below the expected earnings or receipts. In short, the elbow
employees when such acts are unreasonable and cause
room in the quest for profits (Fernandez and Quiason, The
inconvenience or prejudice to them (Philippine Japan Active
Law on Labor Relations, 1963 ed., p. 43).
Carbon Corporation v. NLRC, supra).
One of the prerogatives of management, and a very
We find nothing in the Special Contract of Employment
important one at that, is the right to transfer employees in
invoked by petitioner wherein private respondent had waived
their work station. In Philippine Japan Active Carbon
its right to transfer or re-assign petitioner to any other
Corporation v. National Labor Relations Commission, 171
position in the company. Before such right can be deemed to
SCRA 164 (1989), we held:
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have been waived or contracted away, the stipulation to that
768 SUPREME COURT REPORTS ANNOTATED effect must be clearly stated so as to leave no room to doubt
Chu vs. National Labor Relations Commission the intentions of the parties. The mere specification in the
It is the employers prerogative, based on its assessment and
employment contract of the position to be held by the employee
perception of its employees qualifications, aptitudes, and is not such stipulation.
competence to move them around in the various areas of its business As held in Philippine Japan Active Carbon Corporation v.
operations in order to ascertain where they will function with National Labor Relations Commission, supra:
maximum benefit to the company. An employees right to security of 769
tenure does not give him such a vested right in his position as would VOL. 232, JUNE 2, 1994 769
deprive the company of its prerogative to change his assignment or Chu vs. National Labor Relations Commission
transfer him where he will be most useful. When his transfer is not An employees right to security of tenure does not give him such a
unreasonable, nor inconvenient, nor prejudicial to him, and it does vested right in his position as would deprive the company of its
not involve a demotion in rank or a diminution of his salaries, prerogatives to change his assignment or transfer him where he will
benefits, and other privileges, the employee may not complain that be most useful.
it amounts to a constructive dismissal. Petitioners bare assertion that the transfer was unreasonable
and caused him inconvenience cannot override the fact, as
found by the Labor Arbiter and respondent Commission, that
the rotation was made in good faith and was not
discriminatory, and that there was no demotion in rank or a
diminution of his salary, benefits and privileges.
WHEREFORE, the petition for certiorari is DISMISSED.
SO ORDERED.
Davide, Jr., Bellosillo and Kapunan, JJ., concur.
Cruz, (Chairman), J., On leave.
Petition dismissed.
Note.Court cannot accept the proposition that when an
employee opposes his employers decision to transfer him to
another workplace, there being no bad faith or underhanded
motives on the part of either party, it is the employees wishes
that should be made to prevail (Philippine Telegraph and
Telephone Corporation vs. Laplana, 199 SCRA 485).

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