Employee Transfers: Balancing Management Prerogative with Employee Rights

Unirock Corporation v. Court of Appeals and Eduardo Pajarito, G.R. No. 192113, September 07, 2020

Imagine being told to pack up your life and move to a different city for your job with just three days’ notice. This was the reality for Eduardo Pajarito, a heavy equipment operator who found himself at the center of a legal battle with his employer, Unirock Corporation. The case raises crucial questions about the limits of management’s power to transfer employees and the rights of workers to reasonable notice and consideration of personal circumstances.

Eduardo Pajarito was employed by Unirock Corporation as a heavy equipment operator. In March 2005, he was ordered to transfer to Davao, a distant province, with only three days to prepare. Pajarito requested a delay until his children’s school year ended, but Unirock terminated him for insubordination. The central legal issue was whether Pajarito’s dismissal was justified under the grounds of willful disobedience and abandonment of work.

Legal Context: Understanding Employee Transfers and Dismissal

The right of an employer to transfer employees is recognized under Philippine labor law, but it is not absolute. Article 297 of the Labor Code allows an employer to terminate an employee for serious misconduct or willful disobedience to lawful orders. However, for disobedience to be considered a just cause for termination, it must be willful and the order must be reasonable, lawful, and related to the employee’s duties.

The Supreme Court has consistently upheld the management’s prerogative to transfer employees provided there is no demotion in rank or diminution of salary and benefits. Yet, this right must be exercised without grave abuse of discretion and with consideration of justice and fair play. The Court has ruled that transfers cannot be used as a means to penalize employees for union activities or to rid the company of undesirable workers.

Key provisions of the Labor Code relevant to this case include:

Article 297. [282] Termination by Employer. – An employer may terminate an employment for any of the following causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work[.]

In everyday terms, this means an employer can legally fire an employee who intentionally refuses to follow a reasonable work order. However, if the order is unreasonable or if the employee’s refusal is justified by personal circumstances, the dismissal may be deemed illegal.

Case Breakdown: The Journey of Eduardo Pajarito

Eduardo Pajarito’s ordeal began on March 14, 2005, when he received a transfer order from Unirock Corporation to move to Davao, effective March 17. The order included additional benefits like relocation and meal allowances, but Pajarito found the three-day notice too short to uproot his family, particularly with his children’s school year nearing its end.

On March 18, Pajarito filed a request for mediation and conciliation with the National Labor Relations Commission (NLRC), believing he was already dismissed. He submitted a written explanation to Unirock on March 19, requesting a delay until April 1 to allow his children to finish their studies. Despite this, Unirock terminated him on March 31 for insubordination and abandonment of work.

Pajarito then filed a complaint for illegal dismissal. The Labor Arbiter initially dismissed his complaint, finding his termination valid. However, on appeal, the NLRC reversed this decision, ordering his reinstatement with back wages and indemnity. Unirock sought reconsideration, leading the NLRC to modify its ruling, declaring Pajarito retrenched and awarding him retrenchment pay and financial assistance.

Dissatisfied, Pajarito escalated the case to the Court of Appeals (CA), which annulled the NLRC’s retrenchment decision and reinstated the original ruling with modifications, awarding separation pay in lieu of reinstatement and full back wages.

The Supreme Court upheld the CA’s decision, emphasizing that Pajarito’s request for a delay was reasonable and did not constitute willful disobedience. The Court noted:

“Pajarito’s plea to reschedule his transfer from March 17, 2005 to April 1, 2005, to enable his children to wrap up in school prior to his transfer, was reasonable and can hardly be considered as tainted with a perverse mental attitude, so as to amount to willful disobedience.”

Furthermore, the Court rejected Unirock’s claim of abandonment, pointing out that Pajarito’s swift filing of an illegal dismissal complaint was inconsistent with an intention to abandon his job.

Practical Implications: Navigating Employee Transfers and Dismissals

This ruling underscores the importance of reasonableness in employer directives, particularly regarding employee transfers. Employers must provide adequate notice and consider the personal circumstances of their employees. Failure to do so may result in a finding of illegal dismissal, with significant financial repercussions.

For businesses, this case serves as a reminder to document the necessity and urgency of transfers and to engage in open communication with employees about such decisions. Employees, on the other hand, should document their requests and communications with their employer, especially when seeking delays or adjustments to work orders.

Key Lessons:

• Employers must exercise their right to transfer employees reasonably and with due consideration of employees’ personal circumstances.
• Employees have the right to request reasonable adjustments to work orders, such as delays for family obligations.
• Documentation is crucial for both parties in disputes over transfers and dismissals.

Frequently Asked Questions

Can an employer transfer an employee to another location without their consent?

Yes, but the transfer must be reasonable and not result in demotion or diminution of benefits. The employee’s refusal must be justified to avoid being considered insubordinate.

What constitutes a reasonable period for an employee to prepare for a transfer?

Reasonableness depends on the circumstances, but generally, a few days’ notice is insufficient for significant relocations, especially when family considerations are involved.

Can an employee be dismissed for refusing a transfer?

Yes, but only if the refusal is willful and the transfer order is lawful and reasonable. Personal circumstances, like family obligations, may justify a refusal.

What should an employee do if they believe their dismissal is illegal?

File a complaint with the NLRC as soon as possible and gather evidence of communications and requests made to the employer.

How can employers ensure their transfer policies are legally compliant?

Employers should document the necessity of transfers, provide adequate notice, and consider employees’ personal circumstances. Open communication and flexibility can prevent legal disputes.

ASG Law specializes in labor and employment law. Contact us or email hello@asglawpartners.com to schedule a consultation.