TRANSFER OF AN EMPLOYEE TO A BRANCH WHERE THE COMPANY DEEMS BEST SUITED FOR HER IS NOT CONSTRUCTIVE DISMISSAL

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Transfer of an employee is part of management prerogative. The company has the right to re-assign the employee to a branch she is best suited based on qualification and performance.

Thus, the SC held in the following case:

Automatic Appliances, Inc.vs. Deguidoy
G.R. No. 228088. December 4, 2019

Transfer; The Court respects the right of the employer to re-assign its employees to other stations, provided that the transfer is not unreasonable, inconvenient, prejudicial, or  involve a demotion in rank or a diminution of salaries, benefits, and other privileges; Management has the discretion to determine where its employees are best suited to work; Employee may not assail the management’s decision on the pretext of the inconvenience the transfer may cause; Labor laws; Labor laws are not one-sided; Labor dispute; Not every labor dispute shall be decided in favor of labor; Management prerogative; Employer may expect good performance, satisfactory work, diligence, good conduct and loyalty from its employees; Constructive dismissal; The management’s decision to transfer an employee shall not be assailed as a form of constructive dismissal in the absence of proof that the re-assignment involves a demotion in rank, diminution in pay, or was an act of discrimination or disdain; Transfer could not be assailed as a form of constructive dismissal, considering that the management had the prerogative to determine the place where the employee is best qualified to serve the interests of the business given the qualifications, training and performance of the affected employee;

Facts:

Petitioner Automatic Appliances, Inc. (AAI) hired Francia B. Deguidoy (Deguidoy) as a regular Sales CoOrdinator in its Cubao Branch. As a sales coordinator, she was tasked with selling merchandise and was required to maintain a branch sales quota.

Sometime in 2013, AAI suffered a decline in its sales and experienced economic difficulties. Consequently, it implemented cost-cutting measures, which included closing some of its branches. In line with the closure of its branches, it issued a Memorandum informing employees of its re-shuffling and re-assignment to AAI’s various branches.

As a result, Deguidoy was re-assigned from the Cubao branch to the Tutuban Branch. She accepted her re-assignment. While at the Tutuban Branch, she failed to reach her sales quota. Worse, she had 29 days of unexplained absences. Her sales performance continued to decline while her co-employees surpassed theirsales quotas.

Concerned about Deguidoy’s dismal performance at work, the management of AAI urged her to undergo counseling to improve her performance. During the counselling session, she explained that her poor performance at work was due to her weight gain, which rendered it difficult to stand and perform her tasks as a Sales Coordinator. In response, AAI suggested a lateral transfer as a receptionist clerk or invoicing clerk, where she could work behind a desk. However, she refused the offer.

Meanwhile, AAI received a letter from the Tutuban Branch Manager, Pontillas, notifying the management about Deguidoy’s performance. Pontillas likewise requested for additional sales personnel at the Tutuban Branch.

Hearing this, AAI conducted a review of Deguidoy’s records and sales outputs. This led to the discovery that she incurred numerous absences and had a low sales output. AAI issued Attendance Infraction Memos and an Inefficiency and Gross Negligence Memo of even date. She was placed under one-month suspension. She accepted the suspension and apologized for her faults.

Thereafter, Deguidoy reported back to work. On even date, AAI verbally informed her off an intended transfer to its Ortigas branch. Dismayed, she left during her lunch break, and never returned. AAI sent her a letter requiring her explain her failure to report for work. It was ignored. AAI sent another letter but still, the same was unheeded.

Unknown to AAI, Deguidoy filed a case for illegal dismissal with money claims.

LA Ruling:

The Labor Arbiter (LA) dismissed the complaint for illegal dismissal based on the finding that she was not terminated, but was simply being transferred to another branch.

However, the LA ordered the payment of proportionate 13^th month pay. In view of the LA Decision, AAI sent Deguidoy a notice to report for work. However, instead of reporting for work, she filed a Partial Memorandum of Appeal before the National Labor Relations Commission (NLRC).

On appeal, Deguidoy changed her cause of action from actual illegal dismissal to constructive dismissal.

NLRC Ruling:

The NLRC reversed and set aside the ruling of the LA and held that Deguidoy was was constructively dismissed.

Dissatisfied, AAI filed a Petition for Certiorari before the Court of Appeals (CA).

CA Ruling:

The CA affirmed with modification the NLRC’s ruling.

The CA found that Deguidoy was constructively dismissed. She was being transferred to the Ortigas branch, which was on the verge of being closed. Likewise, the evidence presented by AAI was not sufficient to prove that her transfer was intended to help her achieve a better sales performance.

Undeterred, AAI filed the petition for review on certiorari before the Supreme Court (SC).

Issue/s:

Whether or not the transfer of an employee, with performance issue, to a branch that is viewed as a means to increase her sales target constitutes constructive dismissal

Whether or not the transfer of an employee to a branch based on sales output and attendance constitutes discrimination which gives rise to constructive dismissal

Whether or not bad faith exists for having singled-out an employee in a transfer involving the re-assignments and reshuffling of several employees as well

Whether or not the transfer can be deemed as a ploy to ease out an employee when she was ordered to transfer to a branch which subsequently closed but was still operational at the time of the order, and the branch where she requested to be transferred likewise closed

SC Ruling:

The SC found that the petition is impressed with merit.

The SC held that constructive dismissal exists where there is cessation of work, because continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in pay and other benefits. It is regarded as a dismissal in disguise on an act amounting to dismissal but made to appear as if it were not. It may take place when the employer commits an act of clear discrimination, insensibility, or disdain, such that the employment becomes so unbearable on the part of the employee and leaves no choice except to forego continued employment.

The management’s decision to transfer an employee shall not be assailed as a form of constructive dismissal in the absence of proof that the re-assignment involves a demotion in rank, diminution in pay, or was an act of discrimination or disdain.

In the instant case, the intended transfer did not involve a demotion in rank or diminution in pay, salaries and benefits. Deguidoy was simply asked to transfer to a different location where she will be occupying the same position and performing the same functions.

Equally important, the decision to transfer Deguidoy came after a painstaking evaluation of her performance at the Tutuban branch. This was spurred by a letter sent by Pontillas reporting Deguidoy’s dismal performance at work. Because of the latter’s inability to cope with the demands of her work, Pontillas even requested for additional staff who could carry her load. An additional complement would have been unnecessary if she was able to perform her work adequately.

AAI was engaged in the business of selling appliances and other similar products. Consequently, it had a right to aim for a high volume of sales output, and device of ways and means to achieve a high sales target. In relation thereto, Deguidoy, as a sales coordinator, was tasked to assist the branch in achieving a high output of sales. Unfortunately, however, Deguidoy’s sales performance at the Tutuban Branch was very meager compared to that of the branch top performer, and consisted of a small contribution to the total branch output.

It becomes that AAI’s decision to transfer Deguidoy to the Ortigas branch was triggered by the need to streamline its operations. The Tutuban branch needed manpower, whose functions she could not fulfill. Meanwhile, the Ortigas branch was frequented by lesser customers, and was in need of additional personnel, for which Deguidoy could adequately respond. In fact, the re-assignment was viewed as a means to aid her increase her sale target.

Similar to the instant case, in Peckson, the Court respected the management’s decision to transfer its recalcitrant employee who was habitually tardy and inconsistent in attendance to a branch that would be less affected by her laziness. Equally important, in Benguet Electric Cooperative vs. Fianza,  the Court emphasized that the management has the discretion to determine where its employees are best suited to work. In this regard, the transfer could not be assailed as a form of constructive dismissal, considering that the management had the prerogative to determine the place where the employee is best qualified to serve the interests of the business given the qualifications, training and performance of the affected employee.

The records are bereft of proof that Deguidoy was discriminated against. AAI undertook a review of its company policies, rules and regulations, and sought to implement cost-cutting measures. This led to a decision to close down certain branches. In line with this, AAI implemented re-assignments and reshuffling of its personnel in its branches. Deguidoy was merely one of the many employees transferred. She was never singled out.

Moreover, neither did AAI act with disdain against Deguidoy. On the contrary, it even sought ways to help improve her performance at the Tutuban branch. The management called Deguidoy’s attention to discuss the reasons behind her dismal sales performance. Instead of imposing sanctions, the management evenoffered to give her counseling. She admitted her poor performance which was due to her weight gain making it difficult for her to stand and perform her tasks as a sales coordinator. As a solution, the management offered her a lateral transfer as a receptionist clerk or invoicing clerk, where she would not need to stand for prolonged periods of time. However, she refused the offer and promised to improve her performance.

In Best Wear Garments vs. De Lemos, et al., absent any proof of discrimination or disdain on the part of the employer in transferring its employees, it is unfair to charge the former with constructive dismissal simply on the employees’ insistence that the transfer to a new work assignment was against their will.

Although the Ortigas branch closed thereafter, what matters is that at the time the intended transfer was proposed to Deguidoy, the branch was still fully operational and in need of additional personnel. Interestingly, the 168 branch, where she requested to be transferred, likewise closed. This just shows that at the time the notice was sent to her, there was nothing questionable about AAI’s offer.

Furthermore, said allegation that AAI was scheming to rid itself of Deguidoy’s services, aside from being unsubstantiated, was disproved by the former’s continuous efforts to call her back to work. she immediately refused the intended transfer without discussing it further with her branch manager. She was given a notice to explain why she left for work. However, instead of taking the opportunity to converse with the management she opted to immediately file a case for illegal dismissal.

Based on the foregoing, the SC found that Deguidoy was not constructively dismissed.