Mendoza v.

Rural Bank of Lucban

Facts:
The Board of Directors of the Rural Bank of Lucban, Inc. issued a Board Resolution regarding the
regular/periodic reshuffle of assignments for its employees, so as to familiarize the employees with the
various phases of bank operations & to strengthen the existing internal control system. The new
assignments did not involve any change in salary, allowances, or benefits.
Elmer Mendoza deemed the reshuffle to be a demotion without legal basis. After a series of exchanges
between Mendoza & management (wherein his request to be excluded from the reshuffle was denied),
he went on a leave of absence, which he later extended. It was during this second leave of absence that
Mendoza filed a Complaint for illegal damages & money claims.
Issue:
Did the Rural Bank of Lucbans reshuffle program constitute constructive dismissal of Mendoza?
Ruling:
The transfer of personnel from one area of operation to another is inherently a managerial prerogative
that shall be upheld if exercised in good faith for the purpose of advancing business interests, not of
defeating or circumventing the rights of employees.
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.
Constructive dismissal is defined as an involuntary resignation resorted to when continued employment
is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution of pay;
or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the
employee.
The so-called harassment which Mendoza allegedly experience in the aftermath of the reshuffling of
employees is but a figment of his imagination. In being reshuffled to the position of clerk, Mendoza was
not demoted as there was no diminution of salary benefits & rank. Thus there was no constructive
dismissal.