Management prerogative

Ian Alfredo Magno /

ALTHOUGH labor laws are generally construed liberally in favor of the workingman, management is nonetheless given ample elbowroom to exercise its discretion in directing the affairs of its business.  Such is the doctrine of management prerogative.

Management prerogative is that wide freedom of the management to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay off of workers and discipline, dismissal and recall of workers provided that the prerogative is exercised in good faith and with due regard to the rights of the employees.

The concept seems plain and simple.

In actual practice, however, some employers tend to push their management prerogative a little too far. Although the exercise of such prerogative may still be perfectly legal in a technical sense, nevertheless, some affected employees perhaps tend to feel discriminated against, intimidated, humiliated or disdained upon.  Such that to the latter, continued employment might – perceivably – no longer seem bearable.

And the next scenario that takes place goes somewhat like this: The employee grumbles before the manager. The latter differs and defends management’s policy. Then more often than not, unpleasant – if not heated – exchange of words ensues. The next thing you know, the employee ceases reporting for work and files a case of constructive dismissal against the employer. On the other hand, employers usually respond with an allegation of abandonment of work. Guess what, though.  Jurisprudence dictates that neither between the two is automatically or necessarily correct.

Such was the case of Borja vs. Miñoza G.R. No. 218384 dated July 3, 2017.  Separate memoranda were issued to employees, Randy and Alaine, summoning them to explain their recent absence from work. Shortly thereafter, they were subjected to random on-the-spot drug tests. The two employees perceived the situation that they were being discriminated against by the management. Hence, they ceased reporting to work and filed a complaint for constructive dismissal.  In addition, they alleged in their complaint that the presence of the manager’s bodyguard/bouncer (sort of) upon being summoned to the latter’s office was a form of intimidation.

Thus, this was what the Supreme Court had to say: “Constructive dismissal exists when an act of clear discrimination, insensibility, or disdain on the part of the employer has become so unbearable as to leave an employee with no choice but to forego continued employment, or when there is cessation of work because continued employment is rendered impossible, unreasonable, or unlikely, as an offer involving a demotion in rank and a diminution in pay.  The test of constructive dismissal is whether a reasonable person in the employee’s position would have felt compelled to give up his job under the circumstances.

“… respondents claimed to have been constructively dismissed when petitioners called several meetings where they inquired about respondents’ absences, for which the latter were issued separate memoranda; they were subjected to an on-the-spot drug test; they were barred entry into the restaurant; and they were threatened and intimidated by the presence of Opura, a stranger, in the restaurant.  The foregoing circumstances, however, do not constitute grounds amounting to constructive dismissal.”

The Supreme Court went further: “As the NLRC correctly opined, petitioners were validly exercising their management prerogative when they called meetings to investigate respondents’ absences, gave them separate memoranda seeking explanation therefor, and conducted an on-the-spot drug test on its employees, including respondents.  Likewise, respondents failed to substantiate their allegation that they were prohibited from entering the restaurant, or that they were threatened and intimidated by Opura as to keep them away from the premises.  Instead, and as the NLRC aptly observed, respondents failed to prove that Opura’s presence created a hostile work environment, or that the latter threatened and intimidated them so much as to convince them to leave their employment.  As the Court sees it, petitioners found it necessary to enforce the foregoing measures to control and regulate the conduct and behavior of their employees, to maintain order in the work premises, and ultimately, preserve their business.”

As to the issue whether respondent employees abandoned their work when they ceased reporting to duty, the Supreme Court ruled in the negative: “Be that as it may, however, the Court finds that respondents did not go on AWOL, or abandon their employment, as petitioners claimed. To constitute abandonment, two (2) elements must concur: (a) the failure to report for work or absence without valid or justifiable reason, and (b) 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. Mere absence is not sufficient. 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. Abandonment is incompatible with constructive dismissal.

“In this case, records show that respondents wasted no time in filing a complaint against petitioners to protest their purported illegal dismissal from employment. As the filing thereof belies petitioners’ charge of abandonment, the only logical conclusion, therefore, is that respondents had no such intention to abandon their work.”

Significantly, therefore, not every form of perceived discrimination or intimidation necessarily amounts to constructive dismissal.  Meanwhile, noneporting to work, even lacking a valid justification, does not automatically qualify as abandonment of work.  The ultimate lesson, however, boils down to the wise exercise of management prerogative. Pushing it too far may prove to be a budget bleed in terms of litigation expenses, at the end of the day.

(Lawyer Ian Alfredo Magno is a legal officer at Philhealth and actively practices law in Cagayan de Oro. E-mail: ianalfredom@gmail.com)