Transfer and Constructive Dismissal when Merges as Issues in an Illegal Dismissal Complaint
Complaint for constructive / illegal dismissal based on claim of illegal transfer usually faces the clash of two sets of different burden of proof. That is, burden on the employer side (in case of proving validity of transfer) and burden on the side of employee (to prove the fact of dismissal in a claim of constructive dismissal).
A transfer is a “movement from one position to another which is of equivalent rank, level or salary, without break in service.” Promotion, on the other hand, is the “advancement from one position to another with an increase in duties and responsibilities as authorized by law, and usually accompanied by an increase in salary.” (Tinio vs. CA, G.R. No. 171764, June 8, 2007)
It has been consistently recognized and upheld by the Courts that the prerogative of management to transfer an employee from one office to another within the business establishment, is a management prerogative 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. Labor laws discourage interference with an employer’s judgment in the conduct of his business.
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.
An employee’s right to security of tenure does not give him a vested right to his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. 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.
But, like other rights, there are limits thereto. The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the basic elements of justice and fair play. Having the right should not be confused with the manner in which the right is exercised. Thus, it cannot be used as a subterfuge by the employer to rid himself of an undesirable worker.
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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.
As a rule, the burden of proof lies in the employer to prove that the transfer of the employee from one area of operation to another was for a valid and legitimate ground, like genuine business necessity. (Chateau Royale Sports and Country Club, Inc. vs. Balba, G.R. No. 197492, January 18, 2017.)
The burden of proof in constructive dismissal cases is on the employer to establish that the transfer of an employee is for valid and legitimate grounds, i.e., that the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of salaries, privileges and other benefits. If the employer fails to overcome this burden of proof, the employee’s transfer shall be tantamount to constructive dismissal.
Constructive dismissal is 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.
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.
The burden of proof in constructive dismissal cases is on the employer to establish that the transfer of an employee is for valid and legitimate grounds, i.e., that the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of salaries, privileges and other benefits.
Hence, it may be gleaned from the foregoing discourse that a transfer is deemed to be constructive dismissal when three conditions concur: first, when the transfer is unreasonable, inconvenient or prejudicial to the employee; second, when the transfer involves a demotion in rank or diminution of salaries, benefits and other privileges; and third, when the employer performs a clear act of discrimination, insensibility, or disdain towards the employee, which forecloses any choice by the latter except to forego his continued employment. (See Tinio case)
For instance, in Tinio case, the transfer from Cebu to Makati was not unreasonable, inconvenient or prejudicial to the petitioner considering that it was a transfer from the provincial office to the main office of SMART. The position would entail greater responsibilities because it would involve corporate accounts of top establishments in Makati which are significantly greater in value than the individual accounts in Visayas and Mindanao. In terms of career advancement, the transfer was even beneficial and advantageous since he was being assigned the corporate accounts of the choice clients of SMART. Moreover, the transfer was not economically inconvenient because all expenses relative thereto were to be borne by SMART.
Also, the 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.
Mere title or position held by an employee in a company does not determine whether a transfer constitutes a demotion. Rather, it is the totality of the following circumstances, to wit: economic significance of the work, the duties and responsibilities conferred, as well as the same rank and salary of the employee, among others, that establishes whether a transfer is a demotion.
In the case of Chateau Royale Sports (January 18, 2017, G.R. No. 197492), potentially inconvenient does not necessarily mean unreasonable or oppressive:
Transfer from Nasugbu, Batangas to Manila might be potentially inconvenient for them because it would entail additional expenses on their part aside from their being forced to be away from their families, it was neither unreasonable nor oppressive. The petitioner rightly points out that the transfer would be without demotion in rank, or without diminution of benefits and salaries. Instead, the transfer would open the way for their eventual career growth, with the corresponding increases in pay. It is noted that their prompt and repeated opposition to the transfer effectively stalled the possibility of any agreement between the parties regarding benefits or salary adjustments.
Transfer that is based on sound business judgment is not constitutive of constructive dismissal (Asian Marine Transport, G.R. No. 212082. November 24, 2021)
Not every inconvenience, disruption, difficulty, or disadvantage that an employee must endure sustains a finding of constructive dismissal (Asian Marine Transport, G.R. No. 212082. November 24, 2021)
Transfer that would result in additional living expenses and a diminution of employees’ pay, since Asian Marine would not provide them with relocation assistance benefits (Asian Marine, G.R. No. 212082. November 24, 2021)
- Asian’s justification for transfer is customary practice to reshuffle to address the exigencies of its maritime travel business.
- The SC was not convinced because:
- The permit issued by MARINA shall be valid for one voyage only. Thus, contrary to what petitioner claimed, it cannot be deduced from the permits that there was a real need to transfer or reshuffle employees, or that these had long been established as a company practice.
- considered as competent evidence to prove that it has regular work rotation program.
- These permits do not prove anything in relation to the alleged practice of reshuffling crewmembers.
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