G.R. No. 129843 September 14, 1999
BLUE DAIRY CORPORATION and/or EDISON T. AVIGUETERO and PEDRO G. MIGUEL, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and ELVIRA R. RECALDE, respondents.

FACTS

Private respondent Elvira R. Recalde was hired on 14 May 1994 by petitioner Blue Dairy Corporation as a food technologist in its laboratory, with specific functions including microanalysis, physical and chemical analysis, supervision, and product development. On 22 May 1994, a Sunday, she reported for work but claimed she was not given her premium pay. On 21 October 1994, while accompanying the Production Manager back to the office from a work-related sensory evaluation, a post fell on their company vehicle due to a typhoon. Petitioners later contended that an investigation revealed Recalde used the company vehicle during this trip to scout for a new residence without permission, an act of dishonesty violating company rules. On 3 December 1994, Recalde was transferred from the laboratory to the vegetable processing section, where she performed tasks like coring lettuce and mincing garlic. She considered this new work humiliating and menial. On 14 December 1994, she stopped reporting for work and sent a letter stating she would no longer report due to “drastic and oppressive action” and that she had already filed a case. On 16 December 1994, she filed a complaint for constructive dismissal and non-payment of premium pay, among other claims. Petitioners justified the transfer as a management prerogative due to loss of trust and confidence from her dishonesty. The Labor Arbiter ruled in favor of Recalde, finding constructive dismissal and ordering reinstatement with back wages and premium pay. The NLRC affirmed the decision.

ISSUE

Whether the transfer of Recalde from the laboratory to the vegetable processing section constituted constructive dismissal.

RULING

Yes, the transfer constituted constructive dismissal. The Supreme Court affirmed the NLRC decision. While management has the prerogative to transfer employees, this must be exercised without grave abuse of discretion and with justice and fair play. The transfer must not be unreasonable, inconvenient, prejudicial, or involve a demotion in rank or diminution of benefits. Petitioners failed to justify Recalde’s transfer. The alleged act of dishonesty (unauthorized use of a company vehicle) was not related to her duties as a food technologist in the laboratory, and thus could not be a valid basis for loss of trust and confidence warranting reassignment. Furthermore, Recalde was not given an opportunity to contest the transfer, which was a demotion in rank. The company’s own rules prescribed specific penalties (warning or suspension) for the alleged infractions, not transfer or dismissal, and petitioners did not follow these sanctions. The transfer rendered continued employment unreasonable, amounting to constructive dismissal. Petitioners were ordered to reinstate Recalde as food technologist without loss of seniority rights and with full back wages, and to grant her premium pay for work on 22 May 1994.