GR 226369; (July, 2019) (Digest)
G.R. No. 226369. July 17, 2019
ISABELA-I ELECTRIC COOP., INC., REPRESENTED BY ITS GENERAL MANAGER, ENGR. VIRGILIO L. MONTANO, Petitioner, vs. VICENTE B. DEL ROSARIO, JR., Respondent.
FACTS
Petitioner Isabela-I Electric Cooperative implemented a reorganization in 2011, declaring all positions vacant. Respondent Vicente Del Rosario, Jr., a CPA and the Management Internal Auditor, applied for his current position as his first preference. In October 2012, while on leave, he received an appointment as a probationary Area Operations Manager, a position with a lower salary rank and reduced geographic scope of responsibility. His former position was given to a subordinate who was not a CPA. Respondent accepted under protest and formally requested reinstatement in January 2013, citing demotion. Petitioner ignored his request.
Respondent filed a complaint for illegal dismissal, claiming constructive dismissal due to demotion. He argued the reassignment resulted in diminished rank, responsibilities, and pay, violating the cooperative’s own reorganization guidelines which prohibited salary diminution. Petitioner defended the reorganization as a valid exercise of management prerogative under the EPIRA law and NEA guidelines, asserting the new appointment was based on its assessment of respondent’s qualifications and caused no loss in pay.
ISSUE
Whether respondent was illegally constructively dismissed through demotion.
RULING
Yes, respondent was illegally constructively dismissed. The Supreme Court affirmed the findings of the Court of Appeals and the NLRC. While management has the prerogative to conduct a bona fide reorganization, this right is not absolute and must be exercised in good faith, without constituting constructive dismissal. Demotion exists when there is a movement to a position with lower rank, salary, or responsibilities, and it is tantamount to constructive dismissal if done without valid cause or due process.
Here, the reassignment constituted demotion. Respondent was moved from a managerial audit position covering the entire province to a lower-ranked operations role limited to a sector, with a lower salary grade. The fact that his former position was not abolished and was given to a less-qualified non-CPA incumbent confirmed the demotion was not justified by the reorganization’s needs but was punitive, likely due to his earlier opposition to the plan. Petitioner’s claim of no salary diminution was contradicted by the documented lower salary rank. Consequently, the demotion was unlawful, amounting to constructive dismissal. The Court ordered respondent’s reinstatement to his former position with payment of salary differentials, moral and exemplary damages, attorney’s fees, and legal interest.