Mendoza vs Rural Bank of Lucban, July 7, 2004

FACTS:
On April 25, 1999, the Board of Directors of the Rural Bank of Lucban,
Inc., issued Board Resolutions Nos. 99-52 and 99-53 Which states that in line
with the policy of the bank for familiarization and further strengthening the
existing internal control system, all officers and employees are subject of
reshuffle of assignments. Employees are also hereby reshuffled to their new
assignments without changes in their current compensation and other
benefits.
On May 3, 1999 in undated letter petitioner Elmer Mendoza expressed
his opinion on the reshuffle, stating that such act is deemed to be a demotion
without any legal basis and his being reshuffled to Clerk of Meralco Collection
is a blatant harassment and thus constitutes unfair labor practice.
The banks board chairman replied that, it was never the intention of the
management to downgrade his position, stating that his current compensation
maintained. Emphasizing that the reshuffle was to have sound internal control
and balance the evaluation of its employees. Furthermore, the reshuffle shall
be made at the discretion of the of the management. The management merely
shifted the duties of employees, their position title may be retained if requested
formally. Being a standard procedure the reshuffle is also a prerogative of the
bank management.
On June 7, 1999 petitioner submitted to the banks Tayabas manager a
letter which applied for a leave of absence due to an ailment. On June 21, 1999
another letter for leave of absence was submitted for twenty days. While on his
second leave of absence the petitioner filed a complaint before the Arbitration
Branch IV of the NLRC for illegal dismissal, underpayment, separation pay and
damages against the Rural Bank of Lucban.
The Labor Arbiter upheld the petitioner’s claims. On appeal, the NLRC
reversed the decision. The motion for reconsideration was denied. Petitioner
then brought the case before the CA. The CA stated that the reshuffling of its
employees was done in good faith and cannot be made a basis of constructive
dismissal.
ISSUE:
Whether or not the petitioner was constructively dismissed from his
employment.
RULING:
The petition has no merit. Constructive dismissal is defined as an
involuntary resignation resorted to when continued employment is rendered
impossible, unreasonable or unlikely; when there is a demotion in rank or a
diminution of pay; or when a clear discrimination, insensibility or disdain by
an employer becomes unbearable to the employee. Petitioner argues that he
was compelled to file an action for constructive dismissal, because he was
demoted from appraiser to clerk, he was not given any work to do and his table
was placed near the toilet and eventually removed. Adding that his reshuffling
was done in bad faith because it was designed to force him to resign.
Jurisprudence recognizes the exercise of management prerogatives. For
this reason, courts often decline to interfere in legitimate business decisions of
employers. Indeed, labor laws discourage interference in employers judgments
concerning the conduct of their business. The law must protect not only the
welfare of employees, but also the right of employers.
Moreover, the conduct of managerial prerogative to transfer has its
limitations. The employer must be able to show that transfer is not
unreasonable, inconvenient or prejudicial to the employee, nor does it involve a
demotion in rank or diminution of his salaries, privileges and other benefits.
In the instant case the court finds no reason to disturb the conclusion of
the NLRC and the CA that there was no constructive dismissal. The transfer
was made in pursuit of respondent’s policy to familiarize bank employees with
various phases of bank operations and strengthen its internal control system.
The petitioner was not singled out all employees were also reassigned. Neither
was there any demotion of petitioners rank or any diminution of his salary,
privileges and other benefits. Petitioner has also offered no sufficient evidence
to support his allegations, that he had been positioned near the comfort room,
made to work without a table and had no assignment.
Wherefore the petition is denied.