403 NOTES | LABOR LAW REVIEW | ATTY.
JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021
LABOR LAW REVIEW 2020-2021
EH403 CASE DIGESTS
TOPIC 13: MANAGEMENT PREROGATIVE
01 CHATEAU ROYALE SPORTS & COUNTRY CLUB
VS. BALBA, ET AL.
GR NO. 197492, January 18, 2017,
BERSAMIN
Management prerogative to transfer employees
from one area of operation to another
The right of the employee to security of tenure does not
give her a vested right to her position as to deprive
management of its authority to transfer or re-assign her
where she will be most useful.
Respondents are Account Manager of petitioner-
corporation in Nasugbu, Batangas. They received Notice
of Transfer directing them to report to work in the
Manila Office since there was shortage of personnel by
reason of resignation of its three Account Managers.
Respondents declined which prompted the petitioner to
reprimand them. Thereafter, respondents filed for a
complaint for constructive dismissal against petitioner.
In its complaint, respondents argued that the transfer
was not for valid cause and without consideration of the
proximity of the place and without improvements in the
employment package. On the other hand, petitioner
argued that the transfer is crucial and indispensable and
respondents’ respective letter of appointment provides
for the possibility of their transfer to the Manila office,
which had been made known to them and in which they
assented to.
Are respondents constructively dismissed?
NO. The right of the employee to security of tenure does
not give her a vested right to her position as to deprive
management of its authority to transfer or reassign her
where she will be most useful.
A transfer to constitutes constructive dismissal when it
is unreasonable, inconvenient or prejudicial to the
employee, or involves a demotion in rank or diminution
of salaries, benefits and other privileges, or when the
acts of discrimination, insensibility or disdain on the part
of the employer become unbearable for the employee,
forcing him to forego her employment.
The burden of proof lies with the employer to prove that
the transfer of the employee from one area of operation
1
to another was for a valid and legitimate ground, like
genuine business necessity.
Here, petitioner has duly discharged such burden. First,
the resignations gave rise to an urgent and genuine
business necessity that fully warranted the transfer to
the main office in Manila since respondents are
undoubtedly the best suited to perform the tasks
assigned to the resigned employees because of they are
also account managers and who had recently attended
seminars and trainings as such.
Second, the transfer was neither unreasonable nor
oppressive and there is no demotion in rank, or without
diminution of benefits and salaries. In fact, such transfer
would open the way for their career growth.
Third, the respondents did not show by substantial
evidence that the petitioner was acting in bad faith or
had ill-motive in ordering their transfer.
Lastly, by having voluntarily affixed their signatures on
their respective letters of appointment, they had
acceded to the terms and conditions of employment
incorporated therein including the provision on the
possibility of transfer to the main office.
02 DIWA ASIA PUBLISHING v DE LEON
G.R. No. 203587, August 13, 2018
First Division, Tijam J.
Demotion; Constructive Dismissal
The test of constructive dismissal is whether a
reasonable person in the employee's position would
have felt compelled to give up his position under the
circumstances.
De Leon was hired by petitioner and began working as
its Human Resource (HR) Manager on August 2, 2001,
becoming a regular employee on February 2, 2002.
In 2003, the Executive Director for HR instructed her to
submit all work and decisions, which she previously had
the liberty to handle and make, for review and
evaluation. Respondent perceived that she was being
demoted, and filed a complaint against Diwa for
Constructive Dismissal.
Was De Leon constructively dismissed?
YES. Constructive dismissal is a cessation of work
because continued employment is rendered impossible,
unreasonable or unlikely; when there is a demotion in
rank or diminution in pay or both; or when a clear
discrimination, insensibility, or disdain by an employer
becomes unbearable to the employee. It is an act
 403 NOTES | LABOR LAW REVIEW | ATTY. JEFFERSON MARQUEZ | FIRST SEMESTER | 2020-2021

amounting to dismissal but made to appear as if it were

not. In other words, it is a dismissal in disguise.

There is constructive dismissal when an employee's

functions, which were originally supervisory in nature,
were reduced; and such reduction is not grounded on
valid grounds such as genuine business necessity.

The reduction in respondent's duties and responsibilities

as HR Manager amounted to a demotion that was
tantamount to constructive dismissal.