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Management Prerogative in Relation to Employee Dismissal
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Management prerogative is a right pertaining to the employer in managing his business.
An owner of a business enterprise is given considerable leeway in managing his business because it is deemed important to society as a whole that he should succeed. Our law, therefore, recognizes certain rights as inherent in the management of business enterprises. These rights are collectively called management prerogatives or acts by which one directing a business is able to control the variables thereof so as to enhance the chances of making a profit. (Homeowners Savings and Loan Association, Inc. vs. National Labor Relations Commission, G.R. No. 97067, September 26, 1996)
An employer has the right to exercise its management prerogative in dealing with its company’s affairs including its right to dismiss its erring employees. The Court recognized the right of the employer to regulate all aspects of employment, such as the freedom to prescribe work assignments, working methods, processes to be followed, regulation regarding transfer
of employees, supervision of their work, lay-off and discipline, and dismissal and recall of workers. In fact, it is a general principle of labor law to discourage interference with an employer’s judgment in the conduct of his business.
Even as the law is solicitous of the welfare of the employees, it also recognizes employer’s exercise of management prerogatives. Thus, for as long as the company’s exercise of judgment is in good faith to advance its interest and not for the purpose of defeating or circumventing the rights of employees under the laws or valid agreements, such exercise will be upheld. (Gaite vs. Filipino Society of Composers, et al., G.R. No. 219324, August 8, 2018)
The courts will decline to interfere in legitimate business decisions of employers. Labor laws discourage interference in employer’s judgment concerning the conduct of their business. (Philippine Industrial Security Agency Corporation vs. Aguinaldo, G.R. No. 149974, June 15, 2005)
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In general, the management has prerogative to discipline, free reign to regulate all aspects of employment, prerogative to impose penalties, and prerogative to dismiss. (The Coca-Cola Export Corporation vs. Gacayan, G.R. No. 149433, December 15, 2010)
