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Labor Relations and Regulations: Management Prerogatives

The document discusses management prerogatives or the exclusive rights granted to business owners. It defines management prerogatives as the right to control and direct the business. The key rights discussed include the right to hire and fire, transfer employees, promote and demote, discipline workers, establish policies and working hours, and organize the business. Employers have flexibility to regulate employment as long as they follow legal procedures and do not abuse their discretion.

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gene peralta
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209 views13 pages

Labor Relations and Regulations: Management Prerogatives

The document discusses management prerogatives or the exclusive rights granted to business owners. It defines management prerogatives as the right to control and direct the business. The key rights discussed include the right to hire and fire, transfer employees, promote and demote, discipline workers, establish policies and working hours, and organize the business. Employers have flexibility to regulate employment as long as they follow legal procedures and do not abuse their discretion.

Uploaded by

gene peralta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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LA B OR R EL A TI ON S A N D

REG U L A T IO N S
A NAGEM ENT PRE ROGAT IVES
M
MANAGEMENT PREROGATIVES
• DEFINITION: AN EXCLUSIVE AND SPECIAL RIGHT, POWER OR PRIVILEGE GRANTED
TO BUSINESS OWNERS.
• PROPERTY RIGHT ATTRIBUTED TO THE OWNER OF A BUSINESS ESTABLISHMENT
• PAR.4, SEC. 3, ART. XIII, PHILIPPINE CONSTITUTION:
• “THE STATE SHALL REGULATE THE RELATIONS BETWEEN WORKERS AND EMPLOYERS,
RECOGNIZING THE X X X RIGHT OF ENTERPRISES TO REASONABLE RETURNS OF
INVESTMENTS, AND TO EXPANSION & GROWTH.”•

• ART. 428 OF THE CIVIL CODE: •


• “THE OWNER HAS THE RIGHT TO ENJOY AND DISPOSE OF A THING, WITHOUT OTHER
LIMITATIONS THAN THOSE ESTABLISHED BY LAW.”
BASED ON WHAT WE WAS STATED…
• THE OWNER OF A BUSINESS ESTABLISHMENT HAS, AMONG OTHERS, THE RIGHT
TO CONTROL OR DIRECT ITS BUSINESS, THE RIGHT TO ITS FRUITS AND THE
RIGHT TO DISPOSE THE SAME, SUBJECT TO THE REGULATIONS OF THE POLICE
POWER OF THE STATE.
• EXAMPLE.
• WHEN AN OWNER OF A BUSINESS ENTERPRISE, AFTER OPERATING A PROFITABLE
BUSINESS FOR SEVERAL YEARS AND DECIDES TO CLOSE THE SAME FOR HE IS
ALREADY TIRED OF DOING BUSINESS AND WANTS TO TRAVEL ABROAD FOR
VACATION, ABSOLUTELY, HE CAN CLOSE THE BUSINESS. HOWEVER, HE IS OBLIGED TO
PAY SEPARATION PAY TO WORKERS AS MANDATED BY LAW. (ART. 283, LABOR CODE.)
MOST COMMON MANAGEMENT PREROGATIVES
• THE RIGHT TO HIRE
• THE RIGHT TO DISMISS (FIRE/TERMINATE)
• THE RIGHT TO TRANSFER• THE RIGHT TO PROMOTE AND DEMOTE
• THE RIGHT TO DISCIPLINE
• THE RIGHT TO LAY DOWN POLICIES
• THE RIGHT TO ESTABLISH WORKING HOURS
• THE RIGHT TO ORGANIZE AND REORGANIZE
• THE RIGHT TO REASONABLE RETURN ON INVESTMENT
• THE RIGHT TO EXPANSION AND GROWTH
THE RIGHT TO HIRE
• THE COMPANY HAS THE EXCLUSIVE RIGHT TO PURCHASE LABOR FROM ANY PERSON WHOM
IT CHOOSES. THUS, THE TRANSFEREE IN GOOD FAITH OF A BUSINESS ESTABLISHMENT HAS
NO OBLIGATION TO ABSORB EMPLOYEES OF THE TRANSFEROR AND TO CONTINUE ON
EMPLOYING THEM. (MDII EMPLOYEES ASSOCIATION VS PRESIDENTIAL ASSISTANT ON LEGAL
AFFAIRS, 79 SCRA 40)•
• THERE IS NO LAW WHICH REQUIRES THE PURCHASER TO ABSORB THE EMPLOYEES OF THE
SELLING CORPORATION. AS THERE IS NO SUCH LAW, THE MOST THAT THE PURCHASING
COMPANY MAY DO, FOR PURPOSES OF PUBLIC POLICY AND SOCIAL JUSTICE, IS TO GIVE
PREFERENCE TO THE QUALIFIED SEPARATED EMPLOYEES OF THE SELLING COMPANY, WHO
IN THEIR JUDGMENT ARE NECESSARY IN THE CONTINUED OPERATION OF THE BUSINESS
ESTABLISHMENT. (SAN FELIPE NERI SCHOOL OF MANDALUYONG VS NLRC, ET AL., GR NO.
78350, 9/11/91)
THE RIGHT TO DISMISS
• THE COMPANY HAS THE RIGHT TO DISMISS EMPLOYEES IN ACCORDANCE
WITH THE CAUSES AND PROCEDURES ESTABLISHED BY LAW. THIS
PARTICULAR RIGHT MUST BE EXERCISED WITH CAUTION AND WITHOUT
ABUSE OF DISCRETION BECAUSE TERMINATION AFFECTS THE RIGHT OF THE
WORKER TO SECURITY OF TENURE.
• ART.
279 – IN CASES OF REGULAR EMPLOYMENT, TERMINATION ON THE
GROUNDS OF JUST AND AUTHORIZED CAUSES, SUBJECT TO THE
REQUIREMENTS OF DUE PROCESS.
THE RIGHT TO DISMISS (CONTINUED)
• END OF CONTRACT? COMPLETION OF CONTRACT/PHASE?
• NO PRIOR NOTICE IS REQUIRED.
• TERMINATION OF PROBATIONARY EMPLOYMENT?
• NOTICE SERVED ON EMPLOYEE WITHIN A REASONABLE TIME
• ANY DECISION OF TERMINATION SHALL BE WITHOUT PREJUDICE TO THE
RIGHT OF THE WORKER TO CONTEST THE SAME BY FILING A COMPLAINT
WITH THE RAB OF THE NLRC.
• VALIDITY OF 30 DAY PREVENTIVE SUSPENSIONS.
THE RIGHT TO TRANSFER
• THE COMPANY HAS THE RIGHT TO TRANSFER AN EMPLOYEE FROM ONE
OFFICE TO ANOTHER WITHIN THE BUSINESS ESTABLISHMENT PROVIDED THAT
THERE IS NO DEMOTION IN RANK, SALARY, BENEFITS AND OTHER
PRIVILEGES.
• THIS IS A PRIVILEGE INHERENT IN THE EMPLOYER’S RIGHT TO CONTROL AND
CONDUCT ITS BUSINESS ENTERPRISE AND CONDUCT OF ITS BUSINESS
OPERATIONS TO ACHIEVE ITS PURPOSE. IT CANNOT BE DENIED TO THE
EMPLOYER.
THE RIGHT TO TRANSFER (CONTINUED)
• IT IS THE EMPLOYER’S PREROGATIVE, BASED ON ITS ASSESSMENT ON THE FOLLOWING EMPLOYEE
ATTRIBUTES:
• QUALIFICATIONS
• APTITUDES
• COMPETENCE

• AN EMPLOYEE’S 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 THE EE’S TRANSFER IS NOT UNREASONABLE, NOR INCONVENIENT, NOR PREJUDICIAL TO
HIM, AND IT DOES NOT INVOLVE A DEMOTION IN RANK OR DIMINUTION IN SALARIES, BENEFITS
AND PRIVILEGES, THE EMPLOYEE MAY NOT COMPLAIN THAT IT AMOUNTS TO CONSTRUCTIVE
DISMISSAL. (PT&T VS NLRC, GR NO. 76645, JULY 23, 1991; ALLIED BANK VS CA, GR NO. 144412,
11/18/03)
THE RIGHT TO PROMOTE AND DEMOTE
• THE COMPANY HAS THE RIGHT TO PROMOTE EMPLOYEES.
• PROMOTION:
• SCALAR ASCENT OF AN EMPLOYEE TO ANOTHER POSITION HIGHER IN RANK OR
SALARY. THE RIGHT TO PROMOTE CARRIES WITH IT THE RIGHT TO DEMOTE.

• THERE IS NO LAW THAT COMPELS AN EMPLOYEE TO ACCEPT A PROMOTION,


AS A PROMOTION IS IN THE NATURE OF A GIFT OR REWARD, WHICH A
PERSON HAS A RIGHT TO REFUSE. HE WHO USES HIS WON RIGHT, INJURES
NO ONE. (MILARES VS SUBIDO, 20 SCRA 954; PT&T CORP. VS NLRC, GR NO.
152057, 9/29/03)
THE RIGHT TO DISCIPLINE
• THE RIGHT OF THE EMPLOYER TO SUBJECT HIS EMPLOYEES TO DISCIPLINARY MEASURES AND THE NEED
FOR DISCIPLINE HAVE BEEN JUDICIALLY NOTICED.
• SUCCESS IN INDUSTRIES AND PUBLIC SERVICES IS THE FOUNDATION IN WHICH JUST WAGES MAY BE
PAID. THERE CAN BE NO SUCCESS WITHOUT EFFICIENCY. THERE CAN BE NO EFFICIENCY WITHOUT
DISCIPLINE. THUS, WHEN THEY VIOLATE THE RULES OF DISCIPLINE, EMPLOYEES AND LABORERS
JEOPARDIZE THE INTEREST NOT ONLY OF THE EMPLOYER BUT ALSO OF THEIR OWN. IN VIOLATING THE
RULES OF DISCIPLINE, THEY AIM AT KILLING THE HEN THAT LAYS GOLDEN EGGS. LABORERS WHO
TRAMPLE DOWN THE RULES SET FOR AN EFFICIENT SERVICE ARE, IN EFFECT, PARTIES TO A
CONSPIRACY AGAINST NOT ONLY TO CAPITAL BUT ALSO TO LABOR.
• THE EMPLOYER HAS THE RIGHT TO INSTILL DISCIPLINE IN HIS EMPLOYEES AND TO IMPOSE
REASONABLE PENALTIES ON ERRING EMPLOYEES PURSUANT TO COMPANY RULES AND REGULATIONS.
(SMC VS NLRC, GR NO. 87277, MAY 12, 1989)IF THE UNDESIRABLE ONE REMAINS IN SERVICE, IT WILL
DEMORALIZE THE OTHER EMPLOYEES (SHOEMART VS NLRC GR NO. 74229, 8/11/1989)
THE RIGHT TO LAY DOWN POLICIES, ESTABLISH WORKING
HOURS, AND TO ORGANIZE AND REORGANIZE

• INGENERAL TERMS, AN EMPLOYER IS FREE TO REGULATE, ACCORDING TO


HIS OWN DISCRETION AND JUDGMENT, ALL ASPECTS OF EMPLOYMENT,
INCLUDING WORK ASSIGNMENTS, WORKING METHODS, TIME, PLACE AND THE
MANNER OR WORK, TOOLS TO BE USED, PROCESSES TO BE FOLLOWED,
SUPERVISION OF WORKERS AND WORKING REGULATIONS. (SMC SALES VS
OPLE, GR NO. 53515,FEB. 8, 1989)
THE RIGHT TO REASONABLE RETURN OF INVESTMENT
AND THE RIGHT TO EXPANSION AND GROWTH

• EVERY BUSINESS ENTERPRISE ENDEAVOURS TO


INCREASE ITS PROFIT AND IN THE PROCESS IT MAY
ADOPT OR DEVISE MEANS DESIGNED TOWARDS
EXPANSION AND GROWTH.

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