Case Digest: Morales v. Harbour Centre Port Terminal

G.R. No. 174208 : January 25, 2012




Regularized on 17 November 2000, Morales was promoted to Division Manager of the Accounting Department, for which he was compensated a monthly salary of P33,700.00, plus allowances starting 1 July 2002. Subsequent to HCPTIs transfer to its new offices at Vitas, Tondo, Manila on 2 January 2003, Morales received an inter-office memorandum dated 27 March 2003, reassigning him to Operations Cost Accounting, tasked with the duty of "monitoring and evaluating all consumables requests, gears and equipment" related to the corporations operations and of interacting with its sub-contractor, Bulk Fleet Marine Corporation.

Morales wrote Singson, protesting that his reassignment was a clear demotion since the position to which he was transferred was not even included in HCPTIs plantilla. Singson, the Administration Manager, answered by stating that the transfer was a management prerogative.

For the whole of the ensuing month Morales was absent from work and/or tardy. Singson issued to Morales a 29 April 2003 inter-office memorandum denominated as a First Warning. In view of the absences Morales continued to incur, HCPTI issued a Second Warning.

In the meantime, Morales filed a complaint dated 25 April 2003 against HCPTI, Filart and Singson, for constructive dismissal, moral and exemplary damages as well as attorneys fees.

LA dismissed the complaint for lack of merit. It ruled that Morales reassignment was a valid exercise of HCPTIs management prerogative which cannot be construed as constructive dismissal absent showing that the same was done in bad faith and resulted in the diminution of his salary and benefits. The NLRC however, reversed the decision. Its subsequent denial of HCPTIs motion for reconsideration prompted the latter to file a petition for certiorari before the CA. The CA reversed the findings of the NLRC. Hence, this petition.

ISSUE: Whether or not petitioner was constructively dismissed

HELD: Yes. CA Decision reversed and set aside

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.

In cases of a transfer of an employee, the rule is settled that the employer is charged with the burden of proving that its conduct and action are for valid and legitimate grounds such as genuine business necessity and that the transfer is not unreasonable, inconvenient or prejudicial to the employee. If the employer cannot overcome this burden of proof, the employees transfer shall be tantamount to unlawful constructive dismissal.

Record shows that HCPTI miserably failed to discharge the foregoing onus. While there was a lack of showing that the transfer or reassignment entailed a diminution of salary and benefits, one fact that must not be lost sight of was that Morales was already occupying the position of Division Manager at HCPTIs Accounting Department as a consequence of his promotion to said position on 22 October 2002.

Concurrently appointed as member of HCPTIs Management Committee (MANCOM) on 2 December 2002, Morales was subsequently reassigned by HCPTI "from managerial accounting to Operations Cost Accounting" on 27 March 2003, without any mention of the position to which he was actually being transferred. That the reassignment was a demotion is, however, evident from Morales new duties which, far from being managerial in nature, were very simply and vaguely described as inclusive of "monitoring and evaluating all consumables requests, gears and equipments related to HCPTIs operations" as well as "close interaction with its sub-contractor Bulk Fleet Marine Corporation."

Admittedly, the right of employees to security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to change their assignments or to transfer them. By management prerogative is meant the right of an 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.

Although jurisprudence recognizes said management prerogative, it has been ruled that the exercise thereof, while ordinarily not interfered with, is not absolute and is subject to limitations imposed by law, collective bargaining agreement, and general principles of fair play and justice. Thus, an employer may 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. Indeed, having the right should not be confused with the manner in which that right is exercised.