MANAGEMENT PREROGATIVE 1.
Movement from one position to another of equivalent
Courts often decline to interfere in legitimate business
decisions of employers. In fact, labor laws discourage
interference in employers judgment concerning the conduct
of their business. An employer can regulate, generally without
restraint, according to its own discretion and judgment, every
aspect of its business.
Limitations on the exercise of management prerogatives:
1. Those imposed by Law;
2. Those provided under a CBA;
3. Those provided under an employment contract;
4. Those imposed by employer policy;
5. Those imposed by company practice;
6. Those imposed by the general principles of fair play and
justice;
7. Subject to police power;
8. Exercise should be without abuse of discretion; and
9. Should be done in good faith and with due regard to the
rights of labor.
Discipline
Right to Discipline The only criterion to guide the exercise of
its management prerogative is that the policies, rules and
regulations on work-related activities of the employees must
always be fair and reasonable and the corresponding
penalties, when prescribed, commensurate to the offense
involved and to the degree of the infraction.
Right to Dismiss While the constitution is committed to the
policy of social justice and the protection of the working class,
it should not be supposed that every labor dispute will be
automatically decided in favor of labor. Management also has
its own rights which, as such, are entitled to respect and
enforcement in the interest of simple fair play.
Rights of employer in the discipline of an employee:
1. Right to determine who to punish.
2. Right to prescribe company rules and regulations.
3. Right to impose penalty on erring workers pursuant to
company rules and regulations. The penalty must be
commensurate with the act, conduct or omission imputed
to the employee and imposed in connection with the
employers disciplinary authority.
Proportionality rule The penalty imposed should be
commensurate to the gravity of his offense, act, conduct
or omission imputed, and imposed in connection with
employers disciplinary authority.
4. Right to choose which penalty to impose.
5. Right to impose heavier penalty than what the company
rules prescribe if circumstances warrant the imposition
thereof.
The fact that the offense was committed for the first time
or has not resulted in any prejudice to the company was
held not to be valid excuse. No employer may rationally
be expected to continue in employment a person whose
lack of morals, respect and loyalty to his employer has so
plainly and completely bared.
Transfer of Employees
Two Kinds of Transfers:
rank, level or salary, without a break in the service; or
2. Movement from one office to another within the same
business establishment.
Conditions to uphold the prerogative of management to
transfer an employee from one position or office to another:
1. There is no demotion in rank or diminution of salary,
benefits, and other privileges; and
2. The action is not motivated by discrimination, made in bad
faith, or effected as a form of punishment or demotion
without sufficient cause.
Test to determine validity of transfer The employer must be
able to show that the transfer is not unreasonable,
inconvenient or prejudicial to the employee. Should the
employer fail to overcome this burden of proof, the
employees transfer is tantamount to constructive dismissal.
Prerogative to Reorganize
Notes:
The prerogative of management to implement a job
evaluation program or a reorganization is valid for as long
as it is not contrary to law, morals or public policy.
If the purpose of a reorganization is to be achieved,
changes in the positions and rankings of the employees
should be expected. To insist on ones old position and
ranking after a reorganization would render such
endeavor ineffectual.
It is hard to accept the claim that an employer would go
through all the expenditure and effort incidental and
necessary to a reorganization just to dismiss a single
employee whom they no longer deem desirable.
Prerogative to Promote
Promotion the advancement from one position to another
involving increase in duties and responsibilities as authorized
by law, and increase in compensation and benefits.
Apparently, the indispensable element for there to be a
promotion is that there must be an upward vertical movement
of the employees rank or position. Any increase in salary
should only be considered incidental but never determinative
of whether or not a promotion is bestowed upon an employee.
This can be likened to the upgrading of salaries of government
employees without conferring upon them, the concomitant
elevation to the higher positions.
Transfer vs. Promotion Promotion denotes a scalar ascent of
an officer or an employee to another position, higher either in
rank or salary. Transfer, on the other hand, involves lateral
movement from one position to another of equivalent level,
rank or salary.
Notes:
An employee has the right to refuse promotion.
An employee cannot be promoted without his consent
even if merely as a result of a transfer.
An employee cannot be dismissed because of his refusal
to be promoted. It cannot amount to insubordination or
willful disobedience.
Prerogative to Demote
Demotion This involves a situation where there is reduction
in position, rank or salary as a result of a transfer. In addition
to the comparison involving nature of work, another aspect of
comparison to determine the existence of demotion is the
workplaces themselves. Hence, there is also demotion if there
is a change in the workplace.
Productivity Standard
Productivity Standards:
1. Incentive scheme Employees who surpass the
productivity standards or quota are usually given
additional benefits.
2. Disciplinary scheme Employees may be sanctioned or
dismissed for failure to meet the productivity standards or
quota.
Grant of Bonus
Bonus An amount granted and paid ex gratia to the employee
for his industry or loyalty, hence, generally not demandable or
enforceable. It is a grant or act of liberality which the recipient
has no right to demand as a matter of right. Its grant is a
management prerogative.
When bonus is demandable and enforceable:
1. When stipulated in an employment contract of CBA;
2. When the grant is a company policy or practice; or
3. When it is granted as an additional compensation which
the employer agreed to give without any condition such
as success of business or more efficient or more
productive operation, and thus, must be deemed part of
wage or salary.
in competitive employment or activities after termination
of his employment.
4. Garden-Leave Clause An employee who has left his work
either by reason of termination or resignation is bound to
stay at home during the garden-leave period at which
time, he continues to receive all his salaries and benefits
but is prohibited from commencing employment with new
employers until this period has elapsed.
5. Confidentiality and Non-Disclosure Clause Commitment
of the employee that he shall not, during or after
termination of his employment, use of disclose to any
person, firm or corporation any information concerning
the business or affairs of his employment, for his own
benefit or to the detriment of the employer.
6. Non-Solicitation Clause The employee may be barred
from soliciting or approaching, or accept any business
from any person or entity who shall, at any time within a
fixed period after his termination, have been a client of
the employer, a part or prospective party to an agreement
with the employer, or agent of the client.
7. Non-Recruitment or Anti-Piracy Clause Prohibits the
recruitment by the employee of personnel of the
employer for a certain period after his termination.
8. Inventions Assignment Clause Requires the employee,
within a certain period, to disclose in confidence to the
employer, and to assign all inventions, improvements,
design, etc., which the employee may solely or jointly
conceive or develop or reduce to practice, during the
period of his employment with the employer.

Change of Working Hours

Management retains the prerogative to change the working

hours of its employees whenever exigencies of the service so
require.

Rules on Marriage
Between Employees of Competitor-Employers

If the contract of employment expressly prohibits an employee

from having a relationship with an employee of competing
drug companies, this is a valid exercise of management
prerogative as it only aims to protect the companys interests
against possibility that a competitor company will gain access
to its trade secrets, manufacturing formulas, marketing
strategies and other confidential programs and information.

The company policy of not accepting, or considering as

disqualified from work any woman worker who contracts
marriage runs afoul of the test of, and the right against,
discrimination afforded to all women workers.

Post-Employment Ban

Stipulations on Post-employment Ban:

1. Non-Compete or Non-Involvement Clause The employer
and the employee are free to stipulate in the employment
contract prohibiting the latter within a certain period from
and after the termination of his employment from:
a. Starting a similar business, profession or trade; or
b. Working in an entity that is engaged in similar
business that might compete with the employer.
2. Forfeiture-for-Compensation Clause Stipulation where
an employee forfeits certain benefits because of his act of
engaging in competitive employment or activities after
termination of his employment.
3. Compensation-for-Competition Clause (Clawback) A
provision which requires the payment by the employee of
some amount of money to his former employer to engage