Echo 2000 Commercial Corporation vs. FILIPINO-ECHO 2000 CHAPTER-CLO, G.R.
No. 214092, January 11, 2016


Echo, a unionized company, received information about shortages in peso value arising from the movement of products to and from its warehouse. After an immediate audit, Echo suspected that there was a conspiracy among the employees in the warehouse.  Since an uninterrupted investigation was necessary, Echo, in the exercise of its management prerogative, decided to re-assign the staff.  The respondents were among those affected.

A memorandum was issued transferring respondents to Delivery Section. Somido wrote Echo a letter indicating his refusal to be  promoted  as  a  “Delivery  Supervisor.”    He  explained  that  he  was already happy as a Warehouse Checker.  Further, he was not ready to be a Delivery Supervisor  since  the position  was  sensitive  and  required  more expertise and training, which he did not have. Cortes similarly declined Echo’s offer of promotion claiming that he was contented in his post then as a Forklift Operator.  He also alleged that he would be more productive as an employee if he remained in his post.  He also lacked prior supervisory experience.

Echo, sans  consent  of  the  respondents,  informed  the  latter  of  their  assignments/designations,  effective  July  17, 2009, as Delivery Supervisors. Echo alleged that the respondents did not perform the new duties assigned to them.  Hence, they were each issued a memorandum requiring them to explain in writing their failure to abide with the new assignments. Echo clarified through another memo that the respondents were designated as “Delivery Coordinators” and not “Supervisors.”

Thereafter,  successive  memoranda  were  issued  by  Echo  to  the respondents,  who  refused  to  acknowledge  receipt  and  comply  with  the directives therein.  The Memoranda suspended them without  pay  for  five  days  for  their  alleged  insubordination. Another Memoranda were issued informing them of their termination from employment by reason of their repeated refusal to  acknowledge  receipt  of  Echo’s memoranda  and  flagrant  defiance  to assume the duties of Delivery Coordinators. Respondents  filed  before  the  NLRC  a complaint against Echo for unfair labor practice, illegal dismissal, illegal suspension, illegal deductions and payment of money claims, damages and attorney’s  fees. The  respondents  claimed  that  they  were  offered promotions,  which  were  mere  ploys  to  remove  them  as  rank-and-file employees, and oust them as Union members. The petitioners, on the other hand, insisted that the respondents were merely transferred, and not promoted.

See Sample Notice Promoting Employee on Trial Period

LA Ruling:

LA  Hernandez  dismissed  the complaint  stating that the  claims  of  union-busting, harassment and discrimination were not supported by evidence; no promotions occurred as the duties of the Delivery Supervisors/Coordinators were merely reportorial in nature and not indicative of any authority to hire, fire  or  change  the  status  of  other  employees; and  Echo  properly exercised its management prerogative to order the transfer, and this was done without intended changes in the ranks, salaries, status or places of assignment of the respondents. Respondents filed  an  appeal  assailing  LA  Hernandez’s  ruling.

NLRC Ruling:

In sustaining the respondents’ arguments, the NLRC explained that at the time of the former’s dismissal, they had been employed by Echo for several  years  since  2002  and  2004,  respectively.    There  were no prior untoward incidents.  However, things changed when the Union was formed. When the two did not agree to be transferred, they were terminated for insubordination, a  mere  ploy  to  lend  a  semblance  of  legality  to a pre-conceived management strategy.   The NLRC denied the petitioners’ motion for reconsideration.

Petitioners filed a petition for certiorari.

CA Ruling:

The CA affirmed in toto the NLRC’s ruling holding that  the  dismissal  of  [the respondents] was tainted with bad faith as they were dismissed by ECHO for   refusing   to   accept   their   promotion   as   Delivery Supervisor[s]/Coordinator[s]. The act  of  transferring  [the  respondents]  from  Forklift  Operator  and Warehouse  Checker to  Delivery  Supervisors/Coordinators  was aimed to remove them among the rank-and-file employees which amounts to union interference.  Without the leadership of Cortes, as Vice-President, and Somido, as an active member, the union would be severely weakened, especially since most of its officers were already terminated by ECHO.

Petitioners  filed  a  motion  for  reconsideration,  which  the CA denied. Thus, the petition.


Whether or not the personnel movement was a transfer or promotion.

Whether or not the refusal was a valid ground for dismissal

SC Ruling:

The SC partially granted the petition holding that the  offer  of  transfer  is,  in  legal contemplation, a promotion, which the  respondents  validly  refused. Such refusal cannot be the basis for the  respondents’  dismissal  from service.  The finding of unfair labor practice  and  the  award  of  moral and  exemplary  damages  do  not however follow solely by reason of the dismissal.

Related: Transfer that results in promotion may be refused by employee

Citing Coca-Cola Bottlers Philippines, Inc. v. Del Villar the management has the prerogative to transfer or assign employees from one office or area of operation to another – provided there is no demotion in rank or diminution of salary, benefits, and other privileges; and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause. 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.

An employee is not bound to accept a promotion, which is in the nature of a gift or reward.  Refusal to be promoted is a valid exercise of a right.  Such exercise cannot be considered in law as insubordination, or willful disobedience of a lawful order of the employer, hence, it cannot be the basis of an employee’s dismissal from service.

Hence, despite the fact that no salary increases were effected, the assumption of the post of a Delivery Supervisor/Coordinator should be considered a promotion.  The respondents’ refusal to accept the same was therefore valid.

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