Facts
Lugawe was hired by PCRl as an Accounting Clerk on March 9, 2000, and was later promoted to Human Resource (HR) Officer/Manager on January 1, 2007.
Sometime in October 2013, PCRI underwent a takeover when Filipinas Systems, Inc. (FILSYSTEMS) bought out the shares of the Japanese Owners. Regardless, the PCRI and FILSYSTEMS agreed in a MOA to maintain the continuity of the service records and regular employment status of the 104 regular employees of PCRI.
After the new management took over, Lugawe claimed that PCRI removed the Compensation and Benefits function from her office and transferred these to the Finance Department.
She claimed that there were other functions that were removed from her office, including the administration of Security Services, which was transferred to the Engineering Department, and supervision over the company drivers, which was transferred to the Finance Department and the General Manager. Lugawe asked her employers to reconsider the transfer of these functions, because their removal rendered her a mere office clerk, if not a “lame duck” HR Officer/Manager.
Lugawe alleged several other instances of supposedly disdainful and discriminatory treatment she suffered at the hands of PCRl.
On December 10, 2013, Lugawe fell ill and took a sick leave which lasted until December 12, 2013, but instead of returning to work on December 13, 2013, she filed a Complaint for constructive dismissal with RAB VII.
In its defense, PCRI contended that Lugawe was not constructively dismissed from employment as she abandoned her work when she went on Absence Without Leave (AWOL) after her approved sick leave expired on December 12, 2013. As PCRI was unaware that Lugawe had filed a Complaint for constructive dismissal, it sent Lugawe a letter dated January 7, 2014, directing her to submit a written explanation regarding her unauthorized absences and her text message to Cheung within two days from receipt thereof. Lugawe did not respond to the letter, so PCRI deemed her to have abandoned her job.
In connection with the removal and transfer of functions from Lugawe as HR Officer/Manager, PCRI claimed that Lugawe suffered neither a demotion in rank nor a diminution in pay, as she retained both her position as HR Officer/Manager and the salary and benefits pertaining to that position. PCRI alleged that Lugawe was overloaded with a variety of overlapping functions that she virtually controlled all aspects of the business.
The LA ruled that Lugawe was constructively dismissed, which the NLRC affirmed. However, the CA reversed the rulings of the NLRC. The CA found that Lugawe voluntarily resigned from her employment.
ISSUE: Whether or not Lugawe was constructively dismissed from employment.
Ruling
NO. In constructive dismissal cases, before the legality or illegality of the dismissal can be determined, the employee must first discharge the burden to prove the fact of dismissal by substantial evidence.
In the instant case, the evidence on record would show that Lugawe failed to prove the fact of her dismissal.
Lugawe’s primary evidence to support her claim for constructive dismissal is the transfer of certain functions from her office to other departments.
As a rule, management has the prerogative to transfer its employees based on its assessment and perception of its employees’ qualifications, aptitudes, and competence, and to reorganize various areas of its business operations and organizational structure to the maximum benefit of the company. “An employee’s right to security of tenure does not give him such a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful.”
However, the transfer must not be used as a subterfuge by the employer to rid itself of an undesirable worker, such that the employer can demonstrate that the transfer is not unreasonable, inconvenient, or prejudicial to the employee, nor does it involve a demotion in rank or diminution of salaries, privileges, and other benefits. Failure on the part of the employer to discharge this burden of proof would result in a finding of the existence of constructive dismissal.
While Lugawe retained her title as HR Officer/Manager, the transfer of functions from her office may be treated as an employee transfer, as it resulted in changes to the business operations and organizational structure of PCRI and also changed the nature of Lugawe’s work. Further, the removal of payroll preparation, security guard supervision, and van driver’s supervision from Lugawe may also be characterized as a demotion, as the scope of her authority, duties, and responsibilities was diminished. Demotion occurs when “an employee is relegated to a subordinate or less important position constituting a reduction to a lower grade or rank, with a corresponding decrease in duties and responsibilities, and usually accompanied by a decrease in salary.” However, the Court in Jarcia Machine Shop and Auto Supply v. National Labor Relations Commission recognized that management has the prerogative to effect demotions pursuant to legitimate business interests.
In the instant case, PCRI has consistently maintained that the transfer of functions from the HR Department to other departments was done in good faith and to correct and streamline the previous management’s organizational deficiencies. Having discovered that Lugawe’s office handled several overlapping functions, such as preparation of payroll and payment of salaries, PCRI transferred these duties to more appropriate departments to improve performance, introduce an internal checks and balances system, and increase transparency in business operations. This explanation, coupled with the fact that Lugawe retained her rank as HR Officer/Manager and did not suffer any diminution in salaries, privileges, and other benefits, would show that the transfer of functions was not done in bad faith, but in the pursuit of legitimate business objectives. Accordingly, the transfer was a valid exercise of management prerogative.
Lugawe voluntarily abandoned her employment when she failed to report to work without any sufficient justification.
As established by the Court in a long line of jurisprudence, abandonment, as a just and valid cause for termination of employment, is defined as follows:
As defined under established jurisprudence, abandonment is the deliberate and unjustified refusal of an employee to resume his [or her] employment. It constitutes neglect of duty and is a just cause for termination of employment under paragraph (b) of Article 282 of the Labor Code. To constitute abandonment, however, there must be a clear and deliberate intent to discontinue one’s employment without any intention of returning. In this regard, two elements must concur: (1) failure to report for work or absence without valid or justifiable reason, and (2) a clear intention to sever the employer-employee relationship, with the second element as the more determinative factor and being manifested by some overt acts. Otherwise stated, absence must be accompanied by overt acts unerringly pointing to the fact that the employee simply does not rant to work anymore. It has been ruled that the employer has the burden of proof to show a deliberate and unjustified refusal of the employee to resume his employment without any intention of returning.
Although the filing of a complaint for illegal or constructive dismissal has repeatedly been held to be: inconsistent with a charge of abandonment, especially when such a complaint is accompanied by a prayer for reinstatement act of filing does not foreclose the possibility of abandonment, as this is not the sole indicator in determining the employee’s intent. All circumstances surrounding the termination of employment should be taken into account.
Here, absent any proof that the letter was an afterthought in response to Lugawe’s complaint, the Court presumes that PCRI sent the letter in good faith to allow Lugawe to explain her absences. Lugawe’s failure to respond to PCRI’s directive, taken together with her absence from work and notices to her co-workers that she would no longer report to work, all point to the conclusion that Lugawe abandoned her employment.