11 PLDT v PAGIUO manpower rebalancing, claiming it was unfair to Garnet Exchange

G.R. No. 152689 & 154072 because as the oldest exchange in the East Center, it was
OCTOBER 12, 2005 disallowed to use contractors for new installations and was not made
By: JMG beneficiary of the cut-over bonus.
o After Santos denied his request, Paguio elevated the matter
TOPIC: 3.2.8.2 Limits of MP to respondent Isabelo Ferido, Jr., the First Vice-President-
PETITIONER: Philippine Long-Distance Telephone Company, Inc., GMM Network Services.
Enrique D. Perez, Ricardo R. Zarate, Isabelo A. Ferido, Jr. and Rodolfo R.  On January 17, 1997, Paguio was reassigned as Head for Special
Santos Assignment at the Office of the GMM East Center and asked to turn
RESPONDENTS: Alfredo S. Paguio over his functions as Garnet Exchange Head to Tessie Go.
PONENTE: Quisumbing, J. o Believing that his transfer was a disciplinary action, Paguio
requested Ferido for a formal hearing of the charges against
DOCTRINE: Management prerogative must be exercised always with the him and asked that his reassignment be deferred.
principles of fair play and justice. The employer must be able to show that o He also filed a complaint against Santos for grave abuse of
the transfer is not unreasonable, inconvenient or prejudicial to the authority and manipulation of the East Center performance.
employee; nor does it involve a demotion in rank or a diminution of his o As no action was taken by Ferido, Paguio elevated the
salaries, privileges and other benefits. matter to Enrique D. Perez, the Senior Executive Vice-
President and Chief Operating Officer of PLDT, who advised
FACTS: him to await the resolution of his complaint.
 Consequently, Ferido sent Paguio an inter-office memo stating that
Nature of the Case he found Paguio's reassignment in order as it was based on the
 Case is a petition for review on certiorari, assailing the decision of finding that Paguio was not a team player and cannot accept
the CA. decisions of management, which is short of insubordination.
o Ferido advised Paguio to transfer to any group in the
How the Case Started company that may avail of his services.
 Petitioner Philippine Long Distance Telephone Company, Inc. o Likewise, Perez, thru an inter-office memo, informed Paguio
(PLDT) has 27 Exchanges in its Greater Metro Manila (GMM) that his transfer was not in the nature of a disciplinary action
Network. that required investigation and that he agreed with the
 Alfredo S. Paguio was the Head of the Garnet Exchange. reasons of the transfer.
 In 1994, PLDT assessed the performance of the 27 Exchanges
comprising the GMM Network. Upon receipt of the ratings, Paguio NLRC
sent Rodolfo Santos, his immediate supervisor and the Assistant  LA: Paguio filed, before the Regional Arbitration Branch of the
Vice-President of the GMM East Center, a letter criticizing the PLDT National Labor Relations Commission (NLRC), a complaint for illegal
criteria for performance rating as unfair because they depended on dismissal with prayer for reinstatement and damages.
manpower. o He later amended his complaint to illegal demotion with
o He also suggested that the criteria failed to recognize that prayer for reversion to old position, damages and attorney's
exchanges with new plants could easily meet the objectives fees.
of GMM compared to those with old plants. Despite Paguio's  Decision: upheld the validity of Paguio’s transfer and dismissed the
criticism, Garnet Exchange, the oldest plant in GMM, complaint.
obtained the top rating in the GMM.  Appeal: Reversed the LA’s decision.
o Nevertheless, Paguio reiterated his letter to Santos and o The NLRC found the transfer unlawful, firstly, because
objected to the performance rating as it was based only on Paguio's comments were done in good faith to help his team
the attainment of objectives, without considering other see their strong and weak points.
relevant factors. o According to the NLRC, this showed that he strove to
 In June 1996, PLDT rebalanced the manpower of the East Center. improve his team and was, indeed, a team player.
Paguio wrote Santos and requested reconsideration of the
 o The NLRC noted that the company's manual emphasized the  The employer bears the burden of proving that the transfer of the
importance of communication and what Paguio did was employee has complied with the foregoing test.
merely to ventilate his opinions and observations.
o Secondly, Paguio's transfer involved a diminution of his Analysis and Conclusion
salary, benefits and other privileges.  In the present case, we see no credible reason for Paguio's transfer
 MR: PLDT moved for recon but it was denied. except his criticisms of the company's performance evaluation
methods.
Court of Appeals  Based on the undisputed facts, Garnet Exchange was doing well and
 Decision: Affirmed the decision of the NLRC but deleted the excelled in the performance rating. In the same way, Paguio's
monetary award representing the 16% monthly salary increase. performance was consistently rated as outstanding.
o There was also no proof that Paguio refused to comply with
ISSUE: any management policy.
1. WON Paguio’s transfer was valid and within the management o Patently, his transfer could not be due to poor performance.
prerogative of the petitioner? o Neither was it because he was needed in the new post for
the new assignment was functionless and it was nothing but
HELD/RATIO a title.
1. NO. PAGUIO’S TRANFER WAS ILLEGAL.  Paguio's transfer could only be caused by the management's
negative reception of his comments.
General Rule o It is prejudicial to Paguio because it left him out for a
 An employer is free to regulate, according to his own discretion and possible promotion as he was assigned to a functionless
judgment, all aspects of employment, including the transfer of position with neither office nor staff.
employees.
 It is the employer's prerogative, based on its assessment and DISPOSITION: WHEREFORE, the petition in G.R. No. 152689 is DENIED.
perception of its employees' qualifications, aptitudes, and The Decision dated March 7, 2002 of the Court of Appeals in CA-G.R. SP
competence, to deploy its employees in the various areas of its No. 61528 is AFFIRMED. The motion for reconsideration by Alfredo Paguio
business operations in order to ascertain where they will function of the Decision dated December 3, 2002 in G.R. No. 154072 is DENIED. The
with maximum benefit to the company. motion for reconsideration of Philippine Long Distance Telephone Company,
 An employee's right to security of tenure does not give him such a Inc. is GRANTED IN PART by deleting the award in the Decision dated
vested right in his position as would deprive the company of its December 3, 2002, for moral and exemplary damages and attorney's fees.
prerogative to change his assignment or transfer him where he will
be most useful.

Limits in MP
 While it may be conceded that management is in the best position to
know its operational needs, the exercise of management prerogative
cannot be utilized to circumvent the law and public policy on labor
and social justice.
 That prerogative accorded management should not defeat the very
purpose for which our labor laws exist: to balance the conflicting
interests of labor and management.
 By its very nature, management prerogative must be exercised
always with the principles of fair play and justice.
 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.