Chapter Five

MANAGEMENT PREROGATIVES
TOPICS PER SYLLABUS
B. Transfer of Employees

B.
TRANSFER OF EMPLOYEES
1. CONCEPT.
a. Two (2) kinds of transfer. - A transfer means a movement:
1. From one position to another of equivalent rank, level or salary, without a break in the service; 1 or
2. From one office to another within the same business establishment.2
b. Other forms of transfer. - The prerogative to transfer is broad enough to include the following
prerogatives that involve movements of personnel:
1. Prerogative to reorganize;
2. Prerogative to promote; and
3. Prerogative to demote.
These prerogatives will be discussed hereunder.
2. SOME PRINCIPLES ON THE PREROGATIVE TO TRANSFER EMPLOYEES.
The exercise of the prerogative to transfer or assign employees from one office or area of operation to another
is valid provided there is no demotion in rank or diminution of salary, benefits and other privileges. The transfer
should not be motivated by discrimination or made in bad faith or effected as a form of punishment or demotion
without sufficient cause.3
The Court cannot look into the wisdom of the transfer of an employee.4
Commitment made by the employee in the employment contract to be re-assigned anywhere in the Philippines
is binding on him.5
Even if the employee is performing well in his present assignment, management may reassign him to a new
post.6
The transfer of an employee may constitute constructive dismissal when it amounts to an involuntary
resignation resorted to when continued employment is rendered impossible, unreasonable or unlikely; when
there is a demotion in rank and/or a diminution in pay; or when a clear discrimination, insensibility or disdain
by the employer becomes unbearable to the employee leaving him with no option but to forego with his
continued employment.7
More specifically, the following three (3) conditions must concur in order for the transfer to be considered as
constructive dismissal:
1) When the transfer is unreasonable, inconvenient or prejudicial to the employee;
2) When the transfer involves a demotion in rank or diminution of salaries, benefits and other privileges; and
3) When the employer performs a clear act of discrimination, insensibility, or disdain towards the employee,
which forecloses any choice by the latter except to forego his continued employment. 8
Transfer made in compliance with a government order does not amount to constructive dismissal. 9
Burden of proof in transfer cases is on the employer. 10
An employee cannot claim any vested right to his position. While an employee may have a right to security of
tenure, this does not give her such a vested right to her position as would deprive the employer of its
 prerogative to change her assignment or transfer her where her service will be most beneficial to the employers
interest.11
The refusal of an employee to be transferred may be held justified if there is a showing that the transfer was
directed by the employer under questionable circumstances. For instance, the transfer of employees during the
height of their unions concerted activities in the company where they were active participants is illegal. 12
An employee who refuses to be transferred, when such transfer is valid, is guilty of insubordination or willful
disobedience of a lawful order of an employer under Article 282 of the Labor Code. 13 For example: The
dismissal of a medical representative who acceded in his employment application to be assigned anywhere in
the Philippines but later refused to be transferred from Manila to a provincial assignment, was held valid. The
reason is that when he applied and was accepted for the job, he agreed to the policy of the company regarding
assignment anywhere in the Philippines as demanded by his employers business operation. 14
Refusal to transfer due to parental obligations, additional expenses, inconvenience, hardship and anguish is not
valid. An employee could not validly refuse lawful orders to transfer based on these grounds. 15
Refusal to transfer to overseas assignment is valid.16
Refusal to transfer consequent to promotion is valid.17
Transfer pursuant to the company policy of preventing connivance is valid. 18
Transfer in accordance with pre-determined and established office policy and practice is valid. 19
Rotation among employees of banks as required in the Manual of Regulations for Banks and Other Financial
Intermediaries issued by the Bangko Sentral ng Pilipinas is valid. 20
Transfer due to the standard operating procedure of rotating employees from the day shift to the night shift is
valid.21
Transfer to avoid conflict of interest is valid.22
A transfer from one position to another occasioned by the abolition of the position is valid. 23
Reassignment and transfer pending investigation of irregularities is valid.24
3. PREROGATIVE TO REORGANIZE.
Implementation of a job evaluation program or a reorganization is valid for as long as it is not contrary to law,
morals or public policy25 and it is carried out in good faith.26
If the purpose of a reorganization is to be achieved, changes in the positions and rankings of the employees
should be expected. To insist on ones old position and ranking after a reorganization would render such
endeavor ineffectual.27
It is hard to accept the claim that an employer would go through all the expenditure and effort incidental and
necessary to a reorganization just to dismiss a single employee whom they no longer deemed desirable. 28
Reorganization does not necessarily give rise to promotional increases.29
4. PREROGATIVE TO PROMOTE.
a. Promotion, defined.
Promotion is the advancement from one position to another involving increase in duties and responsibilities
as authorized by law and usually accompanied by an increase in compensation and benefits. 30
b. Transfer vs. Promotion.
Promotion denotes a scalar ascent of an officer or an employee to another position, higher either in rank or
salary. Transfer, on the other hand, involves lateral movement from one position to another of equivalent level, rank
or salary.31
c. Some principles on promotion.
An employee has the right to refuse promotion. There is no law which compels an employee to accept
a promotion. Promotion is in the nature of a gift or reward. Any person may refuse to accept a gift or
reward. Such refusal to be promoted is a valid exercise of such right and he cannot be punished
therefor.32
 An employee cannot be promoted without his consent even if merely as a result of a transfer. A
transfer that results in promotion or demotion, advancement or reduction or a transfer that aims to lure
the employee away from his permanent position cannot be done without his consent. 33
An employee cannot be dismissed because of his refusal to be promoted. It cannot amount to
insubordination or willful disobedience of a lawful order of the employer. 34
Employers decision on whether to promote an employee or not is valid for as long as it does not
appear to have been actuated by bad faith.35
5. PREROGATIVE TO DEMOTE.
a. Concept.
Demotion involves a situation where an employee is relegated to a subordinate or less important position
constituting a reduction to a lower grade or rank with a corresponding decrease in duties and responsibilities and
usually accompanied by a decrease in salary. 36
b. Some principles on demotion.
Demotion may result from transfer when the same results in reduction in position and rank or
diminution in salary.37
Transfer from a highly technical position to one requiring mechanical work - virtually a transfer from
a position of dignity to a servile or menial job - is demotion.38
Change in workplace may result in demotion. Hence, there is demotion in the case of transfer of an
employee from the laboratory - the most expensive work area, on a per square-meter basis in the
companys premises - to the vegetable processing section which involves processing of vegetables
alone. Definitely, this is a transfer from a workplace where only highly trusted authorized personnel
are allowed to access to a workplace that is not as critical. 39
Mere title or position held by an employee in a company does not determine whether a transfer
constitutes a demotion. Rather, it is the totality of the following circumstances, to wit: economic
significance of the work, the duties and responsibilities conferred, as well as the rank and salary of the
employee, among others, that establishes whether a transfer is a demotion. 40
The employer has the right to demote and transfer an employee who has failed to observe proper
diligence in his work and incurred habitual tardiness and absences and indolence in his assigned
work.41
Demotion may be validly imposed due to failure to comply with productivity standards. 42
Due process principle in termination cases applies to demotions. 43 Simply put, even the employers
right to demote an employee requires the observance of the twin-notice requirement.44

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Endnotes:

1 Coca-Cola Bottlers Philippines,Inc. v. Del Villar, G.R. No. 163091, Oct. 6, 2010.

2 Sentinel Security Agency, Inc. v. NLRC, G.R. No. 122468, Sept. 3, 1998; Blue Dairy Corporation v. NLRC, G.R. No.
129843, Sept. 14, 1999.

3 Pharmacia and Upjohn, Inc. v. Albayda, Jr. , G.R. No. 172724, Aug. 23, 2010.

4 Id.
5 Id.

6 Id. ; See also Abbott Laboratories (Phils. ) , Inc. v. NLRC, G.R. No. L-76959, Oct. 12, 1987, 154 SCRA 713.

7 Floren Hotel v. NLRC, G.R. No. 155264, May 6, 2005; Mendoza v. Rural Bank of Lucban, G.R. No. 155421, July 7,
2004; Suldao v. Cimech System Construction, Inc. , G.R. No. 171392, Oct. 30, 2006; Blue Dairy Corporation v.
NLRC, G.R. No. 129843, Sept. 14, 1999, 314 SCRA 401.

8 Tinio v. CA, G.R. No. 171764, June 8, 2007; Mendoza v. Rural Bank of Lucban, G.R. No. 155421, July 7, 2004.

9 Bisig Manggagawa sa Tryco v. NLRC, G.R. No. 151309, Oct. 15, 2008.

10 The Philippine American Life and General Insurance Co. v. Gramaje, G. R. No. 156963, Nov. 11, 2004; Suldao v.
Cimech System Construction, Inc. , G.R. No. 171392, Oct. 30, 2006.

11 OSS Security & Allied Services, Inc. v. NLRC, G.R. No. 112752, Feb. 9, 2000; See also Tan v. NLRC, G.R. No.
128290, Nov. 24, 1998, 299 SCRA 169, 180.

12 Yuco Chemical Industries, Inc. v. Ministry of Labor and Employment, G.R. No. 75656, May 28, 1990.

13 Pharmacia and Upjohn, Inc. v. Albayda, Jr. , G.R. No. 172724, Aug. 23, 2010; San Miguel Corp. v. Pontillas, G.R.
No. 155178, May 7, 2008.

14 Abbott Laboratories, Inc. v. NLRC, G.R. No. 76959, Oct. 12, 1987.

15 Allied Banking Corporation v. CA, G.R. No. 144412, Nov. 18, 2003; Homeowners Savings and Loan Association, Inc.
v. NLRC, G.R. No. 97067, Sept. 26, 1996, 262 SCRA 406.

16 Allied Banking Corporation v. CA, G.R. No. 144412, Nov. 18, 2003]; Dosch v. NLRC, G.R. No. L-51182, July 5,
1983, 208 Phil. 259; 123 SCRA 296.

17 Dosch v. NLRC, [supra.

18 Cinema, Stage and Radio Entertainment Free Workers v. CIR, G.R. No. L-19879, Dec. 17, 1966, 18 SCRA 1068.

19 Philippine Industrial Security Agency v. Dapiton, G.R. No. 127421, Dec. 8, 1999, 320 SCRA 124, 138.

20 Allied Banking Corporation v. CA, G.R. No. 144412, Nov. 18, 2003.

21 Castillo v. CIR, G.R. Nos. L-26124 and L-32725, May 29, 1971, 39 SCRA 75.

22 Duncan Association of Detailman-PTGWO v. Glaxo Welcome Philippines, Inc. , G.R. No. 162994, Sept. 17, 2004.

23 Benguet Electric Cooperative v. Fianza, G.R. No. 158606, March 9, 2004; Equitable Banking Corporation v. NLRC,
G.R. No. 102467, June 13, 1997, 339 Phil. 541.

24 Duldulao v. The CA and Baguio Colleges Foundation, G.R. No. 164893, March 1, 2007; Consolidated Food Corp. v.
NLRC, G.R. No. 118647, Sept. 23, 1999, 315 SCRA 129; 373 Phil. 751, 762.
25 Hongkong and Shanghai Banking Corporation Employees Union v. NLRC, G.R. No. 125038, Nov. 6, 1997, 281
SCRA 509;See also Nagkahiusang Namumuo sa Dasuceco-National Federation of Labor (NAMADA-NFL) v.
Davao Sugar Central Co. , Inc. , G.R. No. 145848, Aug. 0, 2006.

26 SCA Hygiene Products Corp. Employees Association-FFW v. SCA Hygiene Products Corp. , G.R. No. 182877, Aug. 9,
2010.

27 Arrieta v. NLRC, G.R. No. 126230, Sept. 18, 1997, 279 SCRA 326.

28 Ibid.

29 SCA Hygiene Products Corp. Employees Association-FFW v. SCA Hygiene Products Corp. , G.R. No. 182877, Aug. 9,
2010.

30 Coca-Cola Bottlers Philippines,Inc. v. Del Villar, G.R. No. 163091, Oct. 6, 2010; Millares v. Subido, G.R. No. L-
23281, Aug. 10, 1967, 20 SCRA 954, 127 Phil. 370, 378.

31 Millares v. Subido, G.R. No. L-23281, Aug. 10, 1967, 20 SCRA 954, 127 Phil. 370, 378.

32 Dosch v. NLRC, G.R. No. 51182, July 5, 1983; See also Erasmo v. Home Insurance & Guaranty Corporation, G.R.
No. 139251, Aug. 29, 2002.

33 Philippine Telegraph & Telephone Corporation v. CA, G.R. No. 152057, Sept. 29, 2003.

34 Ibid.

35 Nagkahiusang Namumuo sa Dasudeco-National Federation of Labor [NAMADA-NFL] v. Davao Sugar Central Co. , Inc. ,
G.R. No. 145848, Aug. 9, 2006.

36 Coca-Cola Bottlers Philippines,Inc. v. Del Villar, G.R. No. 163091, Oct. 6, 2010; Tinio v. CA, G.R. No. 171764, June 8,
2007.

37 Philippine Wireless, Inc. [Pocketbell] v. NLRC, G.R. No. 112963, July 20, 1999; Brillantes v. Guevarra, G.R. No. L-
22586, Feb. 27, 1969, 27 SCRA 138; Fernando v. Sto. Tomas, G.R. No. 112309, July 28, 1994, 234 SCRA 546;
Coca-Cola Bottlers Philippines,Inc. v. Del Villar, G.R. No. 163091, Oct. 6, 2010.

38 Blue Dairy Corporation v. NLRC, G.R. No. 129843, Sept. 14, 1999; Quisaba v. Sta. Ines-Melale Veneer and
Plywood, Inc. , No. L-38088, Aug. 30, 1974, 58 SCRA 771.
39 Blue Dairy Corporation v. NLRC, supra.

40 Tinio v. CA, G.R. No. 171764, June 8, 2007; See also Rural Bank of Cantilan, Inc. v. Julve, G.R. No. 169750, Feb.
27, 2007.

41 Petrophil Corporation v. NLRC, G.R. No. L-64048, Aug. 29, 1986; International Harvester Macleod, Inc. v. IAC,
G.R. No. 73287, May 18, 1987.

42 Leonardo v. NLRC, G.R. No. 125303, June 16, 2000 and Fuerte v. Aquino, G.R. No. 126937, June 16, 2000.
43 Leonardo v. NLRC, supra; Blue Dairy Corporation v. NLRC, supra; Jarcia Machine Shop and Auto Supply, Inc. v.
NLRC, G.R. No. 118045, Jan. 2, 1997, 266 SCRA 97.

44 Floren Hotel v. NLRC, G.R. No. 155264, May 6, 2005; Jarcia Machine Shop and Auto Supply, Inc. v. NLRC, supra.