2025 Bar Chair's Cases Bar Q and A Labor Law - Q1

 

Isabela-I Electric Cooperative, Inc. (Isabela) employed Vicente Del Rosario, Jr. (Del Rosario) as a financial assistant, later promoting him to Management Internal Auditor. Isabela then implemented a reorganization plan, declaring all positions vacant despite opposition from Del Rosario and other employees. As part of the reorganization, Del Rosario was required to fill out a prescribed application form and was subsequently appointed as a probationary Area Operations Manager.

Months later, Del Rosario raised concerns with management, arguing that his appointment was a demotion and requested reinstatement to his former position. However, Isabela did not act on his request.

Feeling aggrieved, Del Rosario filed a complaint for illegal dismissal and damages. The Labor Arbiter (LA) ruled against him, finding that Isabela's reorganization was justified. On appeal, the National Labor Relations Commission (NLRC) reversed the LA’s ruling, holding that Isabela failed to justify why Del Rosario was not reinstated to his previous position. The Court of Appeals (CA) affirmed the NLRC’s decision.

Was Del Rosario constructively dismissed by Isabela?

Ans:

Yes, Del Rosario was constructively dismissed by Isabela because the promotion is a demotion that reduced his responsibility.

In one of the cases decided by the Supreme Court, the court emphasized  that while it is true that an employer has the right to transfer employees forms part of management prerogatives, the employee's transfer should not be unreasonable, nor inconvenient, nor prejudicial to him. It should not involve a demotion in rank or diminution of his salaries, benefits and other privileges, as to constitute constructive dismissal.

Here, Del Rosario was promoted as Area Operations Manager which for his is a demotion because of the reduced responsibility which is unreasonable, nor convenient and it is prejudicial to his former status as Management Internal Auditor. Hence, he was constructively dismissed because of palpable diminution of responsibilities.