EMPLOYER’S MANAGEMENT PREROGATIVE AND THE BASES OF RIGHTS
While the 1987 Constitution and the Labor Code do not have an equivalent provision expressly upholding the rights of employer, several decisions of the Supreme Court recognize employer’s rights as well.
These rights are contained in management prerogative. While the State affords the constitutional blanket of rendering protection to labor, it must also protect the right of employers to exercise what are clearly management prerogatives, so long as the exercise is without abuse of discretion.
Courts often decline to interfere in legitimate business decisions of employers. In fact, labor laws discourage interference in employer’s judgment concerning the conduct of their business. In general, management has the prerogative to discipline its employees and to impose appropriate penalties on erring workers pursuant to company rules and regulations.
An employer has a free reign and enjoys wide latitude of discretion to regulate all aspects of employment, including the prerogative to instill discipline in its employees and to impose penalties, including dismissal, upon erring employees.
This is a management prerogative, where the free will of management to conduct its own affairs to achieve its purpose takes form.
The only criterion to guide the exercise of its management prerogative is that the policies, rules and regulations on work-related activities of the employees must always be fair and reasonable and the corresponding penalties, when prescribed, commensurate to the offense involved and to the degree of the infraction.
(See Discussion in the book How to Design and Formulate Company Code of Discipline, pp. 13-14)
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