The Supreme Court (SC) has held that there are various laws imposing all kinds of burdens and obligations upon the employer in relation to his employees, and yet as a rule it has always upheld the employer’s prerogative to regulate all aspects of employment relating to the employees’ work assignment, the working methods and the place and manner of work. Indeed, labor laws discourage interference with an employer’s judgment in the conduct of his business. (Tinio vs. Court of Appeals, G.R. No. 171764, June 8, 2007, 524 SCRA 533, 539.)

In Rural Bank of Cantilan, Inc. vs. Julve, the SC had occasion to summarize the general jurisprudential guidelines affecting the right of the employer to regulate employment, including the transfer of its employees.

Under the doctrine of management prerogative, every employer has the inherent right to regulate, according to his own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, the time, place and manner of work, work supervision, transfer of employees, lay-off of workers, and discipline, dismissal, and recall of employees. The only limitations to the exercise of this prerogative are those imposed by labor laws and the principles of equity and substantial justice.

While the law imposes many obligations upon the employer, nonetheless, it also protects the employer’s right to expect from its employees not only good performance, adequate work, and diligence, but also good conduct and loyalty. In fact, the Labor Code does not excuse employees from complying with valid

company policies and reasonable regulations for their governance and guidance.

Concerning the transfer of employees, these are the following jurisprudential guidelines: (a) a transfer is a movement from one position to another of equivalent rank, level or salary without break in the service or a lateral movement from one position to another of equivalent rank or salary; (b) the employer has the inherent right to transfer or reassign an employee for legitimate business purposes; (c) a transfer becomes unlawful where it is motivated by discrimination or bad faith or is effected as a form of punishment or is a demotion without sufficient cause; (d) the employer must be able to show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee.

In Philippine Japan Active Carbon Corporation v. NLRC, it was held that the exercise of management’s prerogative concerning the employees’ work assignments is based on its assessment of the qualifications, aptitudes and competence of its employees, and by moving them around in the various areas of its business operations it can ascertain where they will function with maximum benefit to the company.

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. An employee’s right to security of tenure does not give him such a vested right in 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, nor inconvenient, nor 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.

As a privilege inherent in the employer’s right to control and manage its enterprise effectively, its freedom to conduct its business operations to achieve its purpose cannot be denied.

If the transfer of an employee 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.

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 that right is exercised.

Thus, it cannot be used as a subterfuge by the employer to rid himself of an undesirable worker. In particular, 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 in 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 with his continued employment.

As further held in Philippine Japan Active Carbon Corporation, when the transfer of an employee 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 all other rights, there are limits to the exercise of managerial prerogative to transfer personnel, and on the employer is laid the burden to show that the same is without grave abuse of discretion, bearing in mind the basic elements of justice and fair play. Indeed, management prerogative may not be used as a subterfuge by the employer to rid himself of an undesirable worker. (Peckson vs. Robinsons Supermarket Corporation, G.R. No. 198534, July 3, 2013)

See here the procedure to observe when the employee refuses to receive employer’s notice.

In addition, the company should send another copy by registered mail and keep the registry receipt for future reference.

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The test of constructive dismissal is whether a reasonable person in the employee’s position would have felt compelled to give up his position under the circumstances. It is an act amounting to dismissal but made to appear as if it were not. Constructive dismissal is, therefore, a dismissal in disguise.

As such, the law recognizes and resolves this situation in favor of employees in order to protect their rights and interests from the coercive acts of the employer.

In fact, the employee who is constructively dismissed may be allowed to keep on coming to work.

In Siemens Philippines, Inc. vs. Domingo, [582 Phil. 86 (2008)] it was declared that “an employee who is forced to surrender his position through the employer’s unfair or unreasonable acts is deemed to have been illegally terminated and such termination is deemed to be involuntary.”

Constructive dismissal does not always involve forthright dismissal or diminution in rank, compensation, benefit and privileges. There may be constructive dismissal if an act of clear discrimination, insensibility or disdain by an employer becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued employment.

As a reminder, the Supreme Court states the doctrine in Aguilar vs. Burger Machine Holdings Corporation, [536 Phil. 985 (2006)] to wit –

“The test of constructive dismissal is whether a reasonable person in the employee’s position would have

felt compelled to give up his position under the circumstances. Based on the factual considerations in the instant case, we hold that the hostile and unreasonable working conditions of petitioner justified the finding of the Labor Arbiter and the NLRC that petitioner was constructively dismissed. Petitioner’s performance may not have been exceptional as he ranked 14th in the quality food service control survey for the 1st quarter of 2002. But he was certainly not grossly inefficient as Burger Machine pictured him to be. In fact, he received several citations and was able to comply with the directive to reduce his shortages for the month of November 2001. From all indications, there is really no ground to dismiss petitioner for gross inefficiency. And, as Burger Machine saw it, the only way to get rid of the latter was to constructively dismiss him.”

No employee should be subjected to constant harassment, ridicule and inhumane treatment on the basis of management prerogative or even for poor performance at work.

The means does not justify the end; thus, the same should be in accordance with the norms of due process.

Again, the employee who is constructively dismissed may be allowed to keep on coming to work. Constructive dismissal is therefore a dismissal in disguise. The law recognizes and resolves this situation in favor of employees in order to protect their rights and interests from the coercive acts of the employer. [Uniwide Sales Warehouse Club vs. NLRC, G.R. No. 154503, February 29, 2008]

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The rule is that one who alleges a fact has the burden of proving it; thus, the employees are burdened to prove their allegation that the employer dismissed them from their employment. It must be stressed that the evidence to prove this fact must be clear, positive and convincing. (Machica vs. Roosevelt Services Center, Inc., 523 Phil. 199 (2006))

The rule that the employer bears the burden of proof in illegal dismissal cases finds no application here because the employer denies having dismissed the employees.

There can be no question as to the legality or illegality of a dismissal if the employee has not discharged his burden to prove the fact of dismissal by substantial evidence.

While it is true that in constructive dismissal cases, the employer is charged with the burden of proving that its conduct and action or the transfer of an employee are for valid and legitimate grounds such as genuine business necessity. However, it is likewise true that in constructive dismissal cases, the employee has the burden to prove first the fact of dismissal by substantial evidence.

Only then when the dismissal is established that the burden shifts to the employer to prove that the dismissal was for just and/or authorized cause. The logic is simple — if there is no dismissal, there can be no question as to its legality or illegality. [Galang vs. Boie Takeda Chemicals Inc., 790 Phil. 582, 599 (2016)]

In a case where the employee relied primarily on his allegations that he was misled by the Company into resigning and that he was actually retrenched, these uncorroborated and self-serving allegations, especially considering the existence of a resignation letter and a quitclaim (both bearing his signature), fall short of the evidence required under the law to discharge the burden to prove that he was dismissed by the Company.

In Gemina, Jr. vs. Bankwise, Inc., the SC ruled that the employee had indeed failed to state circumstances substantiating his claim of constructive dismissal as the employee therein had not claimed to have suffered a demotion in rank or diminution in pay or other benefits. Instead, the said employee only claimed to have been subjected to several acts of harassment by several officers of the employer-company, including being asked to take a forced leave of absence, demanding back the employee’s service vehicle, and delaying the release of employee’s salaries and allowances in order to compel him to quit employment.

Before the employer must bear the burden of proving that the dismissal was legal, the employee must first establish by substantial evidence the fact of his dismissal from service. Bare allegations of constructive dismissal, when uncorroborated by the evidence on record, cannot be given credence.

Where the claim is that of construction dismissal, an act, to be considered as amounting to constructive dismissal, there must be a display of utter discrimination or insensibility on the part of the employer so intense that it becomes unbearable for the employee to continue with his employment.

Where the circumstances relayed by employee in constructive dismissal case were not clear-cut indications of bad faith or some malicious design on the part of employer to make his working environment insufferable, the burden is not discharged.

In Gan vs. Galderma Philippines, Inc., the SC held that where the employee alleges that he involuntarily resigned due to circumstances in his employment that are tantamount to constructive dismissal, the employee must prove his allegations with particularity.

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Indeed, in illegal dismissal cases, the burden of proof is on the employer in proving the validity of dismissal. However, the fact of dismissal, if disputed, must be duly proven by the complainant.

The SC cited the holding in Machica vs. Roosevelt Services Center, Inc.:

“The rule is that one who alleges a fact has the burden of proving it; thus, petitioners were burdened to prove their allegation that respondents dismissed them from their employment. It must be stressed that the evidence to prove this fact must be clear, positive and convincing. The rule that the employer bears the burden of proof in illegal dismissal cases finds no application here because the respondents deny having dismissed the petitioners.”

Further, the SC held that there can be no question as to the legality or illegality of a dismissal if the employee has not discharged his burden to prove the fact of dismissal by substantial evidence, to wit:

“It is true that in constructive dismissal cases, the employer is charged with the burden of proving that

its conduct and action or the transfer of an employee are for valid and legitimate grounds such as genuine business necessity. However, it is likewise true that in constructive dismissal cases, the employee has the burden to prove first the fact of dismissal by substantial evidence. Only then when the dismissal is established that the burden shifts to the employer to prove that the dismissal was for just and/or authorized cause. The logic is simple — if there is no dismissal, there can be no question as to its legality or illegality.”

Applying the abovementioned principles in the present case, the employee clearly has the burden of proving that he was dismissed by the Company, in light of the Company’s allegation that he resigned voluntarily and was not dismissed.

Hence, The employee must first prove that he was actually dismissed by the Company before the legality of such dismissal can even be raised as an issue.

However, even a cursory perusal of the evidence on record would show that the employee failed to prove the fact of dismissal. He relied primarily on his allegations that he was misled by the Company into resigning and that he was actually retrenched. These uncorroborated and self-serving allegations, especially considering the existence of a resignation letter and a quitclaim (both bearing The employee’s signature), fall short of the evidence required under the law to discharge The employee’s burden to prove that he was dismissed by the Company.

The SC illustrates the point citing Gemina, Jr. vs. Bankwise, Inc., where the employee had indeed failed to state circumstances substantiating his claim of constructive dismissal as the employee therein had not claimed to have suffered a demotion in rank or diminution in pay or other benefits. Instead, the said employee only claimed to have been subjected to several acts of harassment by several officers of the employer-company, including being asked to take a forced leave of absence, demanding back the employee’s service vehicle, and delaying the release of employee’s salaries and allowances in order to compel him to quit employment.

Citing Philippine Rural Reconstruction Movement (PRRM) v. Pulgar, the SC ruled, that:

“It is a well-settled rule, however, that before the employer must bear the burden of proving that the dismissal was legal, the employee must first establish by substantial evidence the fact of his dismissal from service. Bare allegations of constructive dismissal, when uncorroborated by the evidence on record, cannot be given credence.”

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Nonetheless, when the floating status lasts for more than six (6) months, the employee may be considered to have been constructively dismissed.

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 that right is exercised. Thus, it cannot be used as a subterfuge by the employer to rid himself of an undesirable worker.

Read more on constructive dismissal here: Constructive Dismissal Definition and Concept

In particular, 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 in 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 with his continued employment.

Being piece-rate workers assigned to individual sew- ing machines, employees’ earnings depended on the quality and quantity of finished products. That their work output might have been affected by the change in their specific work assignments does not necessarily imply that any resulting reduction in pay is tantamount to constructive dismissal. Workers under piece-rate employment have no fixed salaries and their compensation is computed on the basis of accomplished tasks.

In the case of Suldao vs. Cimech System Construction, Inc., while the employee’s transfer was valid, the manner by which the employer unjustifiably prevented him from returning to work on several occasions runs counter to the claim of good faith on the part of the corporation.

By reporting for work, the employee manifested his willing- ness to comply with the regulations of the corporation and his desire to continue working for the latter. However, he was barred from entering the premises without any explanation.

This is a clear manifestation of disdain and insensibility on the part of an employer towards a particular employee and a veritable hallmark of constructive dismissal.

Thus, the Court held that while the decision to transfer employees to other areas of its operations forms part of the well-recognized prerogatives of management, it must be stressed, however, that the managerial prerogative to transfer personnel must not be exercised with 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 that 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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Read more on procedural due process discussion by Atty. Elvin:

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Twin Requirements of Notice and Hearing

Procedural Due Process for Other Types of Employment

Notice to Explain: Contents and Requirements