[G.R. No. 152057. September 29, 2003.] PHILIPPINE TELEGRAPH & TELEPHONE CORPORATION, petitioner, vs.

COURT OF APPEALS FACTS Petitioner, after conducting a series of studies regarding the profitability of its retail operations, its existing branches and the number of employees, the petitioner came up with a Relocation and Restructuring Program designed to (a) sustain its (PT&T's) retail operations; (b) decongest surplus workforce in some branches, to promote efficiency and productivity; (c) lower expenses incidental to hiring and training new personnel; and (d) avoid retrenchment of employees occupying redundant positions. On August 11, 1997, private respondents received separate letters from the petitioner, giving them the option to choose the branch to which they could be transferred. Thereafter, through HRAG Bulletin No. 97-06-16, the private respondents and other petitioner's employees were directed to "relocate" to their new PT&T Branches. The affected employees were directed to report to their respective relocation assignments in a Letter dated September 16, 1997. Moreover, the employees who would agree to the transfers would be considered promoted. The private respondents rejected the petitioner's offer. Petitioner, then, sent letters to the private respondents requiring them to explain in writing why no disciplinary action should be taken against them for their refusal to be transferred/ relocated. In their respective replies to the petitioner's letters, the private respondents explained that: The transfers imposed by the management would cause enormous difficulties on the individual complainants. For one, their new assignment involves distant places which would require their separation from their respective families. Dissatisfied with this explanation, the petitioner considered the private respondents' refusal as insubordination and willful disobedience to a lawful order; hence, the private respondents were dismissed from work. 8 They forthwith filed their respective complaints against the petitioner before the appropriate sub-regional branches of the NLRC. In their position paper, the complainants (herein private respondents) declared that their refusal to transfer could not possibly give rise to a valid dismissal on the ground of wilful disobedience, as their transfer was prejudicial and inconvenient; thus unreasonable. The private respondents further opined that since their respective transfers

resulted in their promotion, they had the right to refuse or decline the positions being offered to them. Resultantly, the refusal to accept the transfers could not have amounted to insubordination or wilful disobedience to the "lawful orders of the employer." For its part, the company alleged that the private respondents' transfers were made in the lawful exercise of its management prerogative and were done in good faith. The transfers were aimed at decongesting surplus employees and detailing them to a more demanding branch. ISSUE Whether or not the private respondents were illegally dismissed HELD The Supreme Court ruled that an employee cannot be promoted, even if merely as a result of a transfer, without his consent. A transfer that results in promotion or demotion, advancement or reduction or a transfer that aims to 'lure the employee away from his permanent position cannot be done without the employees' consent. 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. Decision of the CA affirmed G.R. No. L-51182 July 5, 1983] HELMUT DOSCH, petitioner, vs. NLRC and NORTHWEST AIRLINES, INC., respondents. FACTS Petitioner is an American citizen and the resident Manager of Northwest Airlines, Inc. in the Philippines. He had been with the respondent company for 11 years, 9 of which was served in the Philippines as Northwest manager in Manila. On August 18, 1975 he received an inter-office communication from R.C. Jenkins, Northwest's Vice President for Orient Region based in Tokyo, promoting him to the position of Director of International Sales and transferring him to Northwest's General Office in Minneapolis, U.S.A., effective the same day. Petitioner, acknowledging receipt of the above memo, expressed appreciation for the promotion and at the same time regretted that for personal reasons and reasons involving his family (living in the

Philippines), he is unable to accept a transfer from the Philippines. On September 9, 1975, the VicePresident for the Orient Region of Northwest advised petitioner that "in view of the foregoing, your status as an employee of the company ceased on the close of business on August 31, 1975" and "the company therefore considers your letter of August 28, 1975, to be a resignation without notice." On September 16, 1975, Northwest filed a Report on Resignation of Managerial Employee i.e., Helmut Dosch before the Department of Labor, copy thereof furnished petitioner. The Report was contested by the petitioner and the parties were conciliated by Regional Office No. IV, Manila but failed to agree on a settlement. The case was thus certified to the Executive Labor Arbiter, National Labor Relations Commission, for compulsory arbitration. ISSUE Whether or not the considered resigned employment. HELD The SC agree with the Labor Arbiter that petitioner did not resign or relinquish his position as ManagerPhilippines, Indeed, the letter sent by petitioner to R.C. Jenkins cannot be considered as a resignation as petitioner indicated therein clearly that he preferred to remain as Manager-Philippines of Northwest. The SC treated the Jenkins letter as directing the promotion of the petitioner from his position as Philippine manager to Director of International Sales in Minneapolis, U.S.A. It is not merely a transfer order alone but as the Solicitor General correctly observes, "it is more in the nature of a promotion that a transfer, the latter being merely incidental to such promotion." The inter-office communication of Vice President Jenkins is captioned "Transfer" but it is basically and essentially a promotion for the nature of an instrument is characterized not by the title given to it but by its body and contents. The communication informed the petitioner that effective August 18, 1975, he was to be promoted to the position of Director of International Sales, and his compensation would be upgraded and the payroll accordingly adjusted. Petitioner was, therefore, advanced to a higher position and rank and his salary was increased and that is a promotion. It has been held that promotion denotes a scalar ascent of an officer or an employee to another petitioner is from his

position, salary.

higher

either

in

rank

or

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. When petitioner refused to accept his promotion to Director of International Sales, he was exercising a right and he cannot be punished for it as qui jure suo utitur neminem laedit. He who uses his own legal right injures no one. Assuming for the sake of argument that the communication or letter of Mr. Jenkins was basically a transfer, under the particular and peculiar facts obtaining in the case at bar, petitioner's inability or his refusal to be transferred was not a valid cause for dismissal. While it may be true that the right to transfer or reassign an employee is an employer's exclusive right and the prerogative of management, such right is not absolute. The right of an employer to freely select or discharge his employee is limited by the paramount police power for the relations between capital and labor are not merely contractual but impressed with public interest. And neither capital nor labor shall act oppressively against each other. There can be no dispute that the constitutional guarantee of security of tenure mandated under the Constitution applies to all employees and laborers, whether in the government service or in the private sector. The fact that petitioner is a managerial employee does not by itself exclude him from the protection of the constitutional guarantee of security of tenure. Even a manager in a private concern has the right to be secure in his position, to decline a promotion where, although the promotion carries an increase in his salary and rank but results in his transfer to a new place of assignment or station and away from his family. Such an order constitutes removal without just cause and is illegal. Nor can the removal be justified on the ground of loss of confidence as now claimed by private respondent Northwest, insisting as it does that by

petitioner's alleged contumacious refusal to obey the transfer order, said petitioner was guilty of insubordination. Philippine Telegraph & Telephone Co vs NLRC (1997) G.R. 118978 Facts: Seeking relief through the extraordinary writ ofcert io ra ri, petitioner Philippine Telegraph and Telephone Company (hereafter,PT&T) invokes the alleged concealment of civil status and defalcation of company funds as grounds to terminate the services of an employee. That employee, herein private respondent Grace de Guzman, contrarily argues that what really motivatedPT&T to terminate her services was her having contracted marriage during her employment, which is prohibited by petitioner in its company policies.She thus claims that she was discriminated against in gross violation of law, such a proscription by an employer being outlawed byArticle 136 of the Labor Code. Issue: WON the policy of not accepting or considering as disqualified from work any woman worker who contracts marriage is valid? Held: Petitioners policy of not accepting or considering as disqualified from work any woman worker who contracts marriage runs afoul of the test of, and the right against, discrimination, afforded all women workers by our labor laws and by no less than the Constitution. The Constitution, cognizant of the disparity in rights between men and women in almost all phases of social and political life, provides a gamut of protective provisions. Acknowledged as paramount in the due process scheme is the constitutional guarantee of protection to labor and security of tenure. Thus, an employer is required, as a condition sine qua non prior to severance of the employment ties of an individual under his employ, to convincingly establish, through substantial evidence, the existence of a valid and just cause in dispensing with the services of such employee, ones labor being regarded as constitutionally protected property. The government, to repeat, abhors any stipulation or policy in the nature of that adopted by petitioner PT&T. The Labor Code states, in no uncertain terms, as follows: ART. 136. Stipulation against marriage.- It shall be unlawful for an employer to require as a condition of

employment or continuation of employment that a woman shall not get married, or to stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of marriage. In the case at bar, it can easily be seen from the memorandum sent to private respondent by the branch supervisor of the company, with the reminder, that youre fully aware that the company is not accepting married women employee (sic), as it was verbally instructed to you. Again, in the termination notice sent to her by the same branch supervisor, private respondent was made to understand that her severance from the service was not only by reason of her concealment of her married status but, over and on top of that, was her violation of the companys policy against marriage (and even told you that married women employees are not applicable [sic] or accepted in our company. Petitioners policy is not only in derogation of the provisions of Article 136 of the Labor Code on the right of a woman to be free from any kind of stipulation against marriage in connection with her employment, but it likewise assaults good morals and public policy, tending as it does to deprive a woman of the freedom to choose her status, a privilege that by all accounts inheres in the individual as an intangible and inalienable right. Hence, while it is true that the parties to a contract may establish any agreements, terms, and conditions that they may deem convenient, the same should not be contrary to law, morals, good customs, public order, or public policy. Carried to its logical consequences, it may even be said that petitioners policy against legitimate marital bonds would encourage illicit or common-law relations and subvert the sacrament of marriage. Duncan Asso. Of DetailmanPTGWO vs Glaxo WellcomePhils., (2004) G.R. 162994 Facts: Petitioner Pedro Tecson was hired by respondent Glaxo as medical representative, after Tecson had undergone training and orientation. Thereafter, Tecson signed a contract of employment which stipulates, among others, that he agrees to study and abide by existing company rules; to disclose to management any existing or future relationship by consanguinity or affinity with coemployees or employees of competing

drug companies and should management find that such relationship poses a possible conflict of interest, to resign from the company. The Employee Code of Conduct of Glaxo similarly provides that an employee is expected to inform management of any existing or future relationship by consanguinity or affinity with co-employees or employees of competing drug companies. Tecson was initially assigned to market Glaxos products in the Camarines Sur-Camarines Norte sales area. Subsequently, Tecson entered into a romantic relationship with Bettsy, an employee of Astra, a competitor of Glaxo. She was Astras Branch Coordinator in Albay and supervised the district managers and medical representatives of her company and prepared marketing strategies for Astra in that area. The two married even with the several reminders given by the District Manager to Tecson. In January 1999, Tecsons superiors informed him that his marriage to Bettsy gave rise to a conflict of interest. Tecsons superiors reminded him that he and Bettsy should decide which one of them would resign from their jobs, although they told him that they wanted to retain him as much as possible because he was performing his job well. This situation eventually led to his constructive dismissal. Issue WON Glaxos policy prohibiting its employees from marrying an employee of a competitor company is valid? Held: Glaxos policy prohibiting an employee from having a relationship with an employee of a competitor company is a valid exercise of management prerogative. Tecsons contract of employment with Glaxo beingquestioned, stipulates that Tescon agrees to abide by the existing company rules of Glaxo, and to study and become acquainted with such policies.In this regard, the Employee Handbook of Glaxo expressly informs its employees of its rules regarding conflict of interest. No reversible error can be ascribed to the Court of Appeals when it ruled that Glaxos policy prohibiting an employee from having a relationship with an employee of a competitor company is a valid exercise of management prerogative. Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential programs and information from competitors,

especially so that it and Astra are rival companies in the highly competitive pharmaceutical industry. The prohibition against personal or marital relationships with employees of competitor companies upon Glaxos employees is reasonable under the circumstances because relationships of that nature might compromise the interests of the company.In laying down the assailed company policy, Glaxo only aims to protect its interests against the possibility that a competitor company will gain access to its secrets and procedures. That Glaxo possesses the right to protect its economic interests cannot be denied. No less than the Constitution recognizes the right of enterprises to adopt and enforce such a policy to protect its right to reasonable returns on investments and to expansion and growth. Indeed, while our laws endeavor to give life to the constitutional policy on social justice and the protection of labor, it does not mean that every labor dispute will be decided in favor of the workers. The law also recognizes that management has rights which are also entitled to respect and enforcement in the interest of fair play. [G.R. No. 155421. July 7, 2004]ELMER M. MENDOZA, petitioner, vs. RURAL BANK OF LUCBAN, respondent. The law protects both the welfare of employees and the prerogatives of management. Courts will not interfere with business judgments of employers, provided they do not violate the law, collective bargaining agreements, and general principles of fair play and justice. 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 Case The Court applies these principles in resolving the instant Petition for Review [1] under Rule 45 of the Rules of Court, assailing the June 14, 2002 Decision [2] and September 25, 2002 Resolution [3] of the Court of Appeals (CA) in CA-GR SP No. 68030. The assailed Decision disposed as follows: WHEREFORE, the petition for certiorari is hereby DISMISSED for lack of merit. [4] The challenged petitioners Reconsideration. The Facts Resolution Motion denied for

On April 25, 1999, the Board of Directors of the Rural Bank of Lucban, Inc., issued Board Resolution Nos. 9952 and 99-53, which read: Board Res. No. 99-52 RESOLVED AS IT IS HEREBY RESOLVED that in line with the policy of the bank to familiarize bank employees with the various phases of bank operations and further strengthen the existing internal control system[,] all officers and employees are subject to reshuffle of assignments. Moreover, this resolution does not preclude the transfer of assignment of bank officers and employees from the branch office to the head office and vice-versa. Board Res. No. 95-53 Pursuant to Resolution No. 99-52, the following branch employees are hereby reshuffled to their new assignments without changes in their compensation and other benefits. In a letter dated April 30, 1999, Alejo B. Daya, the banks board chairman, directed Briccio V. Cada, the manager of the banks Tayabas branch, to implement the reshuffle. [6] The new assignments were to be effective on May 1, 1999 without changes in salary, allowances, and other benefits received by the aforementioned employees. [7] On May 3, 1999, in an undated letter addressed to Daya, Petitioner Elmer Mendoza expressed his opinion on the reshuffle, as follows: RE: The recent reshuffle of employees as per Board Resolution dated April 25, 1999 Dear Sir: This is in connection with the aforementioned subject matter and which the undersigned received on April 25, 1999. Needless to state, the reshuffling of the undersigned from the present position as Appraiser to Clerk-Meralco Collection is deemed to be a demotion without any legal basis. Before this action on your part[,] the undersigned has been besieged by intrigues due to [the] malicious machination of a certain public official who is bruited to be your good friend. These malicious insinuations were baseless and despite the fact that I have been on my job as Appraiser for the past six (6) years in good standing and never involved in any anomalous conduct, my being reshuffled to [C]lerk-[M]eralco [C]ollection is a blatant harassment on your part as a prelude to my termination in due time. This will constitute an unfair labor practice.

Meanwhile, may I beseech your good office that I may remain in my position as Appraiser until the reason [for] my being reshuffled is made clear. Your kind consideration on this request will be highly appreciated. [8] On May 10, 1999, Daya replied: Dear Mr. Mendoza, Anent your undated letter expressing your resentment/comments on the recent managements decision to reshuffle the duties of bank employees, please be informed that it was never the intention (of management) to downgrade your position in the bank considering that your due compensation as Bank Appraiser is maintained and no future reduction was intended. Aside from giving bank employees a wider experience in various banking operations, the reshuffle will also afford management an effective tool in providing the bank a sound internal control system/check and balance and a basis in evaluating the performance of each employee. A continuing bankwide reshuffle of employees shall be made at the discretion of management which may include bank officers, if necessary as expressed in Board Resolution No. 99-53, dated April 25, 1999. Management merely shifted the duties of employees, their position title [may be] retained if requested formally. Being a standard procedure in maintaining an effective internal control system recommended by the Bangko Sentral ng Pilipinas, we believe that the conduct of reshuffle is also a prerogative of bank management. [9] On June 7, 1999, petitioner submitted to the banks Tayabas branch manager a letter in which he applied for a leave of absence from work: Dear Sir: I wish I could continue working but due to the ailment that I always feel every now and then, I have the honor to apply for at least ten (10) days sick leave effective June 7, 1999. Hoping that this request [merits] your favorable and kind consideration and understanding. [10] On June 21, 1999, petitioner again submitted a letter asking for another leave of absence for twenty days effective on the same date. [11] On June 24, 1999, while on his second leave of absence, petitioner filed a Complaint before Arbitration Branch No. IV of the National Labor Relations

Commission (NLRC). The Complaint -for illegal dismissal, underpayment, separation pay and damages -- was filed against the Rural Bank of Lucban and/or its president, Alejo B. Daya; and its Tayabas branch manager, Briccio V. Cada. The case was docketed as NLRC Case SRAB-IV-6-5862-99-Q. [12] The labor arbiters June 14, 2000 Decision upheld petitioners claims as follows: WHEREFORE, premises considered, judgment is hereby rendered as follows: 1. Declaring respondents guilty of illegal dismissal. 2. Ordering respondents to reinstate complainant to his former position without loss of seniority rights with full backwages from date of dismissal to actual reinstatement in the amount of P55,000.00 as of June 30, 2000. 3. Ordering the payment of separation pay if reinstatement is not possible in the amount of P30,000.00 in addition to 13th month pay of P5,000.00 and the usual P10,000.00 annual bonus afforded the employees. 4. Ordering the payment of unpaid salary for the period covering July 1-30, 1999 in the amount of P5,000.00 5. Ordering the payment of moral damages in the amount of P50,000.00. 6. Ordering the payment of exemplary damages in the amount of P25,000.00 7. Ordering the payment of Attorneys fees in the amount of P18,000.00 which is 10% of the monetary award. [13] On appeal, the NLRC reversed the labor arbiter. [14] In its July 18, 2001 Resolution, it held: We can conceive of no reason to ascribe bad faith or malice to the respondent bank for its implementation of its Board Resolution directing the reshuffle of employees at its Tayabas branch to positions other than those they were occupying. While at first the employees thereby affected would experience difficulty in adjusting to their new jobs, it cannot be gainsaid that the objective for the reshuffle is noble, as not only would the employees obtain additional knowledge, they would also be more well-rounded in the operations of the bank and thus help the latter further strengthen its already existing internal control system.

The only inconvenience, as [w]e see it, that the [petitioner] may have experienced is that from an appraiser he was made to perform the work of a clerk in the collection of Meralco payments, which he may have considered as beneath him and his experience, being a pioneer employee. But it cannot be discounted either that other employees at the Tayabas branch were similarly reshuffled. The only logical conclusion therefore is that the Board Resolution was not aimed solely at the [petitioner], but for all the other employees of the x x x bank as well. Besides, the complainant has not shown by clear, competent and convincing evidence that he holds a vested right to the position of Appraiser. x x x. How and by what manner a business concern conducts its affairs is not for this Commission to interfere with, especially so if there is no showing, as in the case at bar, that the reshuffle was motivated by bad faith or ill-will. x x x. [15] After the NLRC denied his Motion for Reconsideration, [16] petitioner brought before the CA a Petition for Certiorari [17] assailing the foregoing Resolution. Ruling of the Court of Appeals Finding that no grave abuse of discretion could be attributed to the NLRC, the CA Decision ruled thus: The so-called harassment which Mendoza allegedly experienced in the aftermath of the reshuffling of employees at the bank is but a figment of his imagination as there is no evidence extant on record which substantiates the same. His alleged demotion, the cold shoulder stance, the things about his chair and table, and the alleged reason for the harassment are but allegations bereft of proof and are perforce inadmissible as self-serving statements and can never be considered repositories of truth nor serve as foundations of court decisions anent the resolution of the litigants rights. When Mendoza was reshuffled to the position of clerk at the bank, he was not demoted as there was no [diminution] of his salary benefits and rank. He could even retain his position title, had he only requested for it pursuant to the reply of the Chairman of the banks board of directors to Mendozas letter protesting the reshuffle. There is, therefore, no cause to doubt the reasons which the bank propounded in support of its move to reshuffle its employees, viz: 1. to familiarize bank employees with the various phases of bank operations, and

2. to further strengthen the existing internal control system of the bank. The reshuffling of its employees was done in good faith and cannot be made the basis of a finding of constructive dismissal. The fact that Mendoza was no longer included in the banks payroll for July 1 to 15, 1999 does not signify that the bank has dismissed the former from its employ. Mendoza separated himself from the banks employ when, on June 24, 1999, while on leave, he filed the illegal dismissal case against his employer for no apparent reason at all. [18] Hence, this Petition. [19] The Issues Petitioner raises the following issues for our consideration: I. Whether or not the petitioner is deemed to have voluntarily separated himself from the service and/or abandoned his job when he filed his Complaint for constructive and consequently illegal dismissal; II. Whether or not the reshuffling of private respondent[s] employees was done in good faith and cannot be made as the basis of a finding of constructive dismissal, even as the [petitioners] demotion in rank is admitted by both parties; III. Whether or not the ruling in the landmark case of Ruben Serrano vs. NLRC [and Isetann Department Store (323 SCRA 445)] is applicable to the case at bar; IV. Whether or not the Court of Appeals erred in dismissing the petitioners money claims, damages, and unpaid salaries for the period July 1-30, 1999, although this was not disputed by the private respondent; and V. Whether or not the entire proceedings before the Honorable Court of Appeals and the NLRC are a nullity since the appeal filed by private respondent before the NLRC on August 5, 2000 was on the 15th day or five (5) days beyond the reglem[e]ntary period of ten (10) days as provided for by law and the NLRC Rules of Procedure. [20] In short, the main issue is whether petitioner was constructively dismissed from his employment. The Courts Ruling The Petition has no merit.

Main Issue: Constructive Dismissal 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. [21] Petitioner argues that he was compelled to file an action for constructive dismissal, because he had been demoted from appraiser to clerk and not given any work to do, while his table had been placed near the toilet and eventually removed. [22] He adds that the reshuffling of employees was done in bad faith, because it was designed primarily to force him to resign. [23] Management Prerogative to Transfer Employees Jurisprudence recognizes the exercise of management prerogatives. For this reason, courts often decline to interfere in legitimate business decisions of employers. [24] Indeed, labor laws discourage interference in employers judgments concerning the conduct of their business. [25] The law must protect not only the welfare of employees, but also the right of employers. 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. [26] This privilege is inherent in the right of employers to control and manage their enterprise effectively. [27] 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. [28] Managerial prerogatives, however, are subject to limitations provided by law, collective bargaining agreements, and general principles of fair play and justice. [29] The test for determining the validity of the transfer of employees was explained in Blue Dairy Corporation v. NLRC [30] as follows: [L]ike other rights, there are limits thereto. 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. Should the employer fail to overcome this burden of proof, the employees transfer shall be tantamount to constructive dismissal, which has been defined as a quitting because continued employment is rendered impossible, unreasonable or unlikely; as an offer involving a demotion in rank and diminution in pay. Likewise, constructive dismissal exists when an act of clear discrimination, insensibility or disdain by an employer has become so unbearable to the employee leaving him with no option but to forego with his continued employment. [31] Petitioners Transfer Lawful The employer bears the burden of proving that the transfer of the employee has complied with the foregoing test. In the instant case, we find no reason to disturb the conclusion of the NLRC and the CA that there was no constructive dismissal. Their finding is supported by substantial evidence -- that amount of relevant evidence that a reasonable mind might accept as justification for a conclusion. [32] Petitioners transfer was made in pursuit of respondents policy to familiarize bank employees with the various phases of bank operations and further strengthen the existing internal control system [33] of all officers and employees. We have previously held that employees may be transferred -based on their qualifications, aptitudes and competencies -- to positions in which they can function with maximum benefit to the company. [34] There appears no justification for denying an employer the right to transfer employees to expand their competence and maximize their full potential for the advancement of the establishment. Petitioner was not singled out; other employees were also reassigned without their express consent. Neither was there any demotion in the rank of petitioner; or any diminution of his salary, privileges and other benefits. This fact is clear in respondents Board Resolutions, the April 30, 1999 letter of Bank President Daya to Branch Manager Cada, and the May 10, 1999 letter of Daya to petitioner. On the other hand, petitioner has offered no sufficient proof to support his allegations. Given no credence by both lower tribunals

was his bare and self-serving statement that he had been positioned near the comfort room, made to work without a table, and given no work assignment. [35] Purely conjectural is his claim that the reshuffle of personnel was a harassment in retaliation for an alleged falsification case filed by his relatives against a public official. [36] While the rules of evidence prevailing in courts of law are not controlling in proceedings before the NLRC, [37] parties must nonetheless submit evidence to support their contentions. Secondary Issues: Serrano v. NLRC Inapplicable Serrano v. NLRC [38] does not apply to the present factual milieu. The Court ruled therein that the lack of notice and hearing made the dismissal of the employee ineffectual, but not necessarily illegal. [39] Thus, the procedural infirmity was remedied by ordering payment of his full back wages from the time of his dismissal. [40] The absence of constructive dismissal in the instant case precludes the application of Serrano. Because herein petitioner was not dismissed, then he is not entitled to his claimed monetary benefits. Alleged Nullity Proceedings of NLRC and CA

control system[,] all officers and employees are subject to reshuffle of assignments. Moreover, this resolution does not preclude the transfer of assignment of bank officers and employees from the branch office to the head office and vice-versa." Petitioner filed a Complaint before Arbitration Branch No. IV of the National Labor Relations Commission (NLRC). The Complaint -- for illegal dismissal, underpayment, separation pay and damages. Petitioner argues that he was compelled to file an action for constructive dismissal, because he had been demoted from appraiser to clerk and not given any work to do, while his table had been placed near the toilet and eventually removed. He adds that the reshuffling of employees was done in bad faith, because it was designed primarily to force him to resign. After the NLRC denied his Motion for Reconsideration, petitioner brought before the CA a Petition for Certiorari assailing the foregoing Resolution. The Court of appeals Find that no grave abuse of discretion could be attributed to the NLRC. Hence, this Petition. Issue: Whether the petitioner was constructively dismissed from his employment? Held: The Petition has no merit. 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. Jurisprudence recognizes the exercise of management prerogatives. For this reason, courts often decline to interfere in legitimate business decisions of employers. Indeed, labor laws discourage interference in employers' judgments concerning the conduct of their business. The law must protect not only the welfare of employees, but also the right of employers. 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. The law protects both the welfare of employees and the prerogatives of management. Courts will not interfere with business judgments of employers, provided they do not violate the law, collective bargaining agreements, and general principles of fair play and justice. 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 reshuffling of its employees was done in good faith and cannot be made the basis of a finding of constructive dismissal. WHEREFORE, this Petition is DENIED, and the June 14, 2002 Decision and the September 25, 2002 Resolution of the Court of Appeals are AFFIRMED. Costs against petitioner.

Petitioner argues that the proceedings before the NLRC and the CA were void, since respondents appeal before the NLRC had allegedly been filed beyond the reglementary period. [41] A careful scrutiny of his Petition for Review [42] with the appellate court shows that this issue was not raised there. Inasmuch as the instant Petition challenges the Decision of the CA, we cannot rule on arguments that were not brought before it. This ruling is consistent with the due-process requirement that no question shall be entertained on appeal, unless it has been raised in the court below. [43] WHEREFORE, this Petition is DENIED Resolution of the Court of Appeals are AFFIRMED. SO ORDERED ELMER M. MENDOZA, petitioner, vs. RURAL BANK OF LUCBAN, respondent G.R. No. 155421 July 7, 2004 Facts: On April 25, 1999, the Board of Directors of the Rural Bank of Lucban, Inc., issued Board Resolution Nos. 9952 and 99-53, that in line with the policy of the bank to familiarize bank employees with the various phases of bank operations and further strengthen the existing internal