FACTS:

The case involves petitioner company, engaged in the manufacture/assembly of ice boxes in Tarlac, Tarlac, and private respondents George Halili and Amado Magno, who were employed by the company. In August 1981, the company issued a memorandum directing Halili and Magno to report for work at their new place of work in Manila, with a different salary and additional allowance. Instead of complying with the memorandum, Halili and Magno filed a complaint for illegal dismissal and other labor claims. The company, in turn, filed an application to terminate the employees on the ground of abandonment. The Tarlac labor office ordered the company to give separation pay to the employees, but the Deputy Minister of the Ministry of Labor and Employment (MOLE) reversed the order and directed the company to reinstate the employees with backwages. The company filed a motion for reconsideration, which was denied. Hence, this petition for certiorari.

ISSUES:

1. Whether the transfer of the private respondents to Manila by the petitioner company is valid or not.

RULING:

1. The transfer of the private respondents to Manila is not valid. The Court upheld the prerogative of management to transfer an employee from one office to another, provided that there is no demotion in rank or a decrease in salary, benefits, and other privileges. However, this right must be exercised without grave abuse of discretion and in consideration of justice and fair play. The Court found that the transfer of the private respondents to Manila was grossly inconvenient for them as working students and there was no genuine business urgency that necessitated their transfer. Moreover, the transfer was made at the height of union activities in the company, which indicated discrimination against the private respondents. Hence, the Court affirmed the decision of the Deputy Minister to reinstate the private respondents without loss of seniority rights, privileges, and benefits.

PRINCIPLES:

• The prerogative of management to transfer an employee is recognized and upheld, as long as there is no demotion in rank or decrease in salary, benefits, and other privileges.

• The exercise of the management prerogative to transfer personnel should be without grave abuse of discretion and in line with the principles of justice and fair play.

• The right of management to conduct business operations and achieve its purpose cannot be denied, but there are limits to this right.

• A transfer can be upheld when there is no showing that it is unnecessary, inconvenient, and prejudicial to the affected employee.