G.R. No. 164893 . March 1, 2007.
Constancia Duldulao, Petitioner, vs. The Court of Appeals and Baguio Colleges Foundation, Respondents.

FACTS

Petitioner Constancia Duldulao was employed by respondent Baguio Colleges Foundation (BCF) as a secretary/clerk-typist in the College of Law. In August 1996, a law student filed a complaint against her for alleged work irregularities. Despite being granted extensions, Duldulao failed to submit her answer. Consequently, on October 1, 1996, BCF issued a Department Order transferring her effective the next day to the offices of the High School and Elementary Departments, citing her failure to answer and her admission of fraternizing with students. Duldulao moved for reconsideration and eventually filed her answer, but the order stood. She then filed a grievance, which was referred to an Administrative Committee. The Committee found the transfer appropriate to prevent discord within the College of Law.
Duldulao did not report to her new assignment, taking various leaves instead. On February 17, 1997, she filed a complaint for constructive dismissal before the NLRC, arguing the transfer was arbitrary, amounted to a demotion, incurred additional expenses, and violated due process. The Labor Arbiter ruled in her favor, but the NLRC reversed, finding no constructive dismissal. The Court of Appeals affirmed the NLRC decision.

ISSUE

Whether the transfer of petitioner from the College of Law to the Elementary/High School Departments constitutes constructive dismissal.

RULING

The Supreme Court ruled that there was no constructive dismissal. Constructive dismissal exists when an act of clear discrimination, insensibility, or disdain by an employer renders continued work intolerable, forcing the employee to resign. The employer’s prerogative to transfer employees is generally recognized, provided it is exercised in good faith, does not result in demotion in rank or diminution of pay, and is not motivated by discrimination or other unlawful purposes.
Here, the transfer was a valid exercise of management prerogative. The Court found it was a temporary measure made in good faith to maintain harmony within the College of Law amidst a controversy involving petitioner. Critically, there was no demotion: her salary, benefits, and privileges remained unchanged. The mere fact that the new assignment was less desirable or entailed incidental inconvenience, such as additional commuting, does not constitute constructive dismissal. The employer’s legitimate concern for institutional harmony outweighs the employee’s personal preference against transfer. Since no bad faith, demotion, or substantial prejudice was proven, the reassignment was lawful. Therefore, petitioner was not constructively dismissed.