ALBERT O. TINIO vs Court of Appeals, SMART Co.
This petition for review on certiorari seeks to annul and set aside the Decision and Resolution of the Court of Appeals dated
October 25, 2005 and March 2, 2006, respectively, in CA-G.R. SP No. 90677 which reversed and set aside the Decision of the
National Labor Relations Commission (NLRC) dated July 30, 2004, and its Resolution dated April 20, 2005, for having been
issued with grave abuse of discretion amounting to lack or excess of jurisdiction. The appellate court reinstated the Decision of
the Labor Arbiter dated December 9, 20035 which dismissed petitioner’s complaint for lack of merit.
On December 1, 2002, Smart Communications, Inc. (SMART) employed petitioner Albert O. Tinio as its General Manager for
Visayas/Mindanao (VISMIN) Sales and Operations based in Cebu. On May 2003, private respondent Alex O. Caeg, Group
Head, Sales and Distribution of SMART, under the supervision of co-respondent Anastacio Martirez, informed petitioner of his
new assignment as Sales Manager for Corporate Sales in SMART’s Head Office in Makati City, effective June 1, 2003.
However, petitioner deferred action on his assignment until he had been apprised of the duties and responsibilities of his new
position and the terms and conditions of his relocation. Financial assistance shall be provided for his physical transfer to
Manila. Petitioner reported to SMART’s Head Office in Makati and discussed with Ann Margaret V. Santiago, HRD Group
Head, his job description, functions, responsibilities, salary and benefits, as well as options for relocation/transfer of his family
to Manila.
Petitioner did not report for work. He instead filed a complaint for constructive dismissal with claims for moral and exemplary
damages and attorney’s fees against SMART and private respondents Caeg and Martirez.
The Labor Arbiter rendered judgment finding that petitioner was not constructively or illegally dismissed; hence, the complaint
was ordered dismissed. But the Labor Arbiter awarded financial assistance to petitioner in the amount of P235,400.00.10
On appeal, the NLRC reversed the Labor Arbiter’s decision and declared that petitioner was illegally dismissed, awarded him
full backwages, including the corresponding 13th month pay, moral and exemplary damages, as well as attorney’s fees.
Private respondents’ motion for reconsideration was denied. The Court of Appeals reversed and set aside the Decision of the
NLRC and reinstated the Decision of the Labor Arbiter dismissing the complaint for lack of merit. Motion for reconsideration
was denied.
ISSUE:
1. Whether or not private respondents’ act of transferring petitioner to its Head Office in Makati was a valid exercise
of management prerogative.
2.Whether or not the petitioner was constructively dismissed
Yes. Smart validly exercised their management prerogative. Court has consistently recognized and upheld the prerogative of
management to transfer an employee from one office to another within the business establishment, provided there is no
demotion in rank or a diminution of salary, benefits and other privileges. As a rule, the Court will not interfere with an
employer’s prerogative to regulate all aspects of employment which include among others, work assignment, working methods
and place and manner of work.
The doctrine is well-settled that it is the employer’s prerogative, based on its assessment and perception of its employees’
qualifications, aptitudes and competence, to move them around in the various areas of its business operations in order to
ascertain where they will function with maximum benefit to the company. This is a privilege inherent in the employer’s right to
control and manage his enterprise effectively. The freedom of management to conduct its business operations to achieve its
purpose cannot be denied. When his transfer is not unreasonable, or inconvenient, or prejudicial to him, and it does not
involve a demotion in rank or a diminution of his salaries, benefits and other privileges, the employee may not complain that it
amounts to a constructive dismissal.
The employer must be able to show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee; nor
does it involve a demotion in rank or a diminution of his salaries, privileges, and other benefits. Should the employer fail to
overcome this burden of proof, the employee’s transfer shall be tantamount to constructive dismissal, which has been defined
as a quitting because continued employment is rendered impossible, unreasonable or unlikely; as an offer involving a
demotion in rank and diminution of pay. Likewise, constructive dismissal exists when an act of clear discrimination, insensibility
or disdain by an employer has become so unbearable to the employee leaving him with no option but to forego his continued
employment.
Transfer from Cebu to Makati does not represent a demotion in rank or diminution of salaries, benefits and other privileges. It
was a lateral transfer with the same salaries, benefits and privileges. The title of Corporate Sales Manager, as correctly
pointed out by the appellate court, is not derogatory to the petitioner considering that he will still receive the same benefits and
salary he received as Senior Manager
We find that petitioner was not demoted since his transfer from Cebu to Makati was being implemented due to a valid
corporate reorganization to streamline management operations. The act of management in reorganizing as well as transferring
its employees to achieve its stated objectives is a legitimate exercise of their management prerogatives, barring any showing
of bad faith which is absent in the instant case. Despite the change of petitioner’s title from "Senior Manager" to "Corporate
Sales Manager," he still enjoyed the same rank and salary. By the very nature of their employment, sales executives are
expected to travel. They should anticipate re-assignment according to the demands of the employer’s business. In the instant
case, petitioner premised his deliberate and unjustified refusal to return to work on the belief that he had been constructively
dismissed, despite attempts by SMART to accommodate his demands. Petitioner’s deliberate and unjustified refusal to resume
his employment, a form of neglect of duty, despite attempts by the company to hear out his grievances, constitutes
abandonment. Petitioner’s failure to report for work, or absence without valid or justifiable reason, coupled with a clear
intention to sever employer-employee relationship, leads us to no other conclusion than that he abandoned his work. As such,
the award of financial assistance in the amount of P235,400 given by the Labor Arbiter and affirmed by the appellate court
must be deleted for lack of basis.
Petition is DENIED. MODIFICATION that the award of financial assistance be DELETED for lack of basis.
Employee dismissal; constructive dismissal. In constructive dismissal cases, the employer has the burden of proving that the
transfer of an employee is for just or valid ground, such as genuine business necessity. The employer must demonstrate that
the transfer is not unreasonable, inconvenient, or prejudicial to the employee and that the transfer does not involve a demotion
in rank or a diminution in salary and other benefits. “If the employer fails to overcome this burden of proof, the employee’s
transfer is tantamount to unlawful constructive dismissal.” [Merck Sharp and Dohme (Philippines) v. Robles, G.R. No. 176506,
November 25, 2009] Petitioners failed to satisfy the burden of proving that the transfer was based on just or valid ground.
Petitioners’ bare assertions of imminent threat from the respondents are mere accusations which are not substantiated by any
proof. The Supreme Court agreed with the Court of Appeals in ruling that the transfer of respondents amounted to a demotion.
It is a well-entrenched rule that findings of facts of the NLRC, affirming those of the Labor Arbiter, are accorded respect and
due consideration when supported by substantial evidence. The Supreme Court, however, found that the doctrine of great
respect and finality has no application to the case at bar. The Labor Arbiter dismissed Arnaiz, et al.’s complaints on mere
technicality. The NLRC, upon appeal, then came up with three divergent rulings. At first, it remanded the case to the Labor
Arbiter. However, in a subsequent resolution, it decided to resolve the case on the merits by ruling that Arnaiz, et al. were
constructively dismissed. But later on, it again reversed itself in its third and final resolution of the case and ruled in favor of
Julie’s bakeshop. Therefore, contrary to Reyes’s claim, the NLRC did not, on any occasion, affirm any factual findings of the
Labor Arbiter. The Court of Appeals is thus correct in reviewing the entire records of the case to determine which findings of
the NLRC is sound and in accordance with law. Besides, the Court of Appeals may still resolve factual issues by express
mandate of the law despite the respect given to administrative findings of fact.
