2. Management Rights

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Management Rights

vis-à-vis Employees’ Rights


Employees’ Rights Management Prerogatives
1.Security of Tenure 1.Hire
2.Self Organization 2.Fire
3.Collective Bargaining 3.Transfer
4.Just and Humane Conditions of 4.Promote/Demote
Work 5.Lay Off
5.Strikes/Concerted Actions 6.Lay Down Policies
6.Participation in Decision Making 7.Discipline
7.Just Share in the Fruits of 8.Working Hours
Production 9.Working Procedures
8.Labor Standards
9.CBA Rights
Employee Selection
• "If the employer can compel the employee to work
against the latter's will, this is servitude. If the
employee can compel the employer to give him work
against the employer's will, this is oppression.“
(Pampanga Bus Co., Inc v. Pambusco Employees’
Union, Inc, citing Mills v. United States Printing Co., 99
App. Div., 605; 91 N.Y.S., 185, 189-192.)
To Discipline and/or Dismiss
• Jumuad vs. Hi-Flyer Food, Inc.
• Management has the prerogative to discipline its employees
and to impose appropriate penalties on erring workers
pursuant to company rules and regulations.
• As long as it is exercised in good faith for the advancement
of the employer’s interest and not for the purpose of
circumventing the rights of employees under special laws or
under valid agreements.
To Prescribe Reasonable
Rules and Regulations
• San Miguel Corp. v. NLRC, GR No. 146121-22
• An employer has the prerogative to prescribe reasonable
rules and regulations necessary for the proper conduct of
its business, to provide certain disciplinary measures in
order to implement said rules and to assure that the same
would be complied with. An employer enjoys a wide
latitude of discretion in the promulgation of policies, rules
and regulations on work-related activities of the employees.
Leus v. St. Scholastica’s College
• An employer undeniably has the right to discipline its
employees and, if need be, dismiss them if there is a valid
cause to do so. However, the conduct of the employee is not
considered by law as disgraceful or immoral. Further, the
employers at the time of the controversy, does not have any
policy or rule against an employee who engages in pre-
marital sexual relations and conceives a child as a result
thereof. There being no valid basis in law or even in
employer’s policy and rules, the dismissal of the employee
is not a valid exercise of management prerogative.
To Transfer/Reassign Employees
• Alert Security and Investigation Agency vs. Pasawilan
• “x x x 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. x x
x“
Bisig Manggawa sa Tryco vs. NLRC
• When the transfer is not unreasonable or inconvenient, or
prejudicial to the employee and it does not involve a
demotion in rank or diminution of salaries, benefits and
other privileges, the employee may not complain that it
amounts to constructive dismissal.
• Management prerogative extends to the management ‘s
right to regulate, according to its own discretion and
judgment, all aspects of employment including the
freedom to transfer and reassign employees from one area
to another according to the requirements of its business.
Aguanza vs. Asian Terminal Inc.
• The transfer of employees has been traditionally among the
acts identified as a management prerogative subject only to
limitations found in law, collective bargaining agreement,
and general principles of fair play and justice. Even as the
law is solicitous of the welfare of employees, it must also
protect the right of an employer to exercise what are
clearly management prerogatives. The free will of
management to conduct its own business affairs to achieve
its purpose cannot be denied.
Endico vs. Quantum Foods Distribution Center
• In the pursuit of its legitimate business interests, especially
during adverse business conditions, management has the
prerogative to 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,
bad faith, or effected as a form of punishment or demotion
without sufficient cause. This privilege is inherent in the right
of employers to control and manage their enterprises
effectively. 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.
PT&T vs. Court of Appeals
• There is no law that compels an employee to accept a
promotion for the reason that a promotion is in the
nature of a gift or reward, which a person has a right
to refuse. Hence, the exercise by the private
respondents of their right cannot be considered in law
as insubordination, or willful disobedience of a lawful
order of the employer. As such, there was no valid
cause for the private respondents dismissal.
Dosch vs. NLRC
• "A transfer is a movement from one position to another of
equivalent rank, level or salary, without break in the service.
Promotion, on the other hand, is the advancement from one
position to another with an increase in duties and
responsibilities as authorized by law, and usually accompanied
by an increase in salary. Whereas, promotion denotes a scalar
ascent of a senior officer or employee to another position,
higher either in rank or salary, transfer refers to lateral
movement from one position to another, of equivalent rank,
level or salary."
• There is no law that compels an employee to accept a
promotion, as a promotion is in the nature of a gift or a reward,
which a person has a right to refuse.
Mendoza vs. Rural Bank of Lucban
• In the pursuit of its legitimate business interest, management
has the prerogative to 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. This privilege is inherent in
the right of employers to control and manage their enterprise
effectively. 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.
Norkis Trading Co., vs. NLRC
• 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.
• There was no showing of any valid and legitimate
reason for the verbal transfer order and in fact the
employee was not given any work to do.
PLDT vs. Paquio
• By its very nature, management prerogative must be
exercised always with the principles of fair play and justice.
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. The
employer bears the burden of proving that the transfer of
the employee has complied with the foregoing test.
Duldulao vs. Court of Appeals
• 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.
To Set Productivity Standards
Right to Demote
• Leonardo v. NLRC
• The right to demote an employee also falls within the
category of management prerogatives. An employer is
entitled to impose productivity standards for its
workers, and in fact, non-compliance may be visited
with a penalty even more severe than demotion. Said
arrangement is an allowable exercise of company
rights.
Policy on Post-employment Ban
• Rivera vs. Solidbank
• In determining whether the contract is reasonable or not,
the trial court should consider the following factors: (a)
whether the covenant protects a legitimate business
interest of the employer; (b) whether the covenant creates
an undue burden on the employee; (c) whether the
covenant is injurious to the public welfare; (d) whether the
time and territorial limitations contained in the covenant
are reasonable; and (e) whether the restraint is reasonable
from the standpoint of public policy.
Policy on Marital Discrimination
• To justify a bona fide occupational qualification, the employer
must prove two factors: (1) that the employment qualification is
reasonably related to the essential operation of the job
involved; and, (2) that there is a factual basis for believing that
all or substantially all persons meeting the qualification would
be unable to properly perform the duties of the job. (Star
Paper Corp., vs. Simbol)
• Duncan and PT&T instruct us that the requirement of
reasonableness must be clearly established to uphold the
questioned employment policy. The employer has the burden to
prove the existence of a reasonable business necessity. The
burden was successfully discharged in Duncan but not in PT&T.
Policy on Weight Management
• Yrasuegui v. PAL
• Employment in particular jobs may not be limited to persons
of a particular sex, religion, or national origin unless the
employer can show that sex, religion, or national origin is an
actual qualification for performing the job. The qualification
is called a bona fide occupational qualification (BFOQ). In
short, the test of reasonableness of the company policy is
used because it is parallel to BFOQ. BFOQ is valid “provided
it reflects an inherent quality reasonably necessary for
satisfactory job performance.”

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