Labor Law Article

The August 2006 issue of the IBP Newsletter (Negros Occ. chapter) is out, and I have an article in it on labor law, which I’m posting here:




Some people have the gift of making simple things complicated. I do not claim to possess such a gift but I’d like to try my hand at doing precisely that (i.e., making simple things complicated) in relation to labor law. I Intend to explore the possible implications of the concept of “the burden of proof” in the context of labor law. The test case I have in mind is Westmont Pharmaceuticals, Inc., et al. vs. Ricardo C. Samaniego (G.R. Nos. 146653-54/G.R. Nos. 147407-08. February 20, 2006) – a case dealing with the issue: When does transfer of an employee amount to constructive dismissal? Here’s the Supreme Court’s answer:

“In constructive dismissal, the employer has the burden of proving that the transfer of an employee is for just and valid grounds, such as genuine business necessity. The employer must be able to show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee. It must not involve a demotion in rank or a diminution of salary and other benefits. If the employer cannot overcome this burden of proof, the employee’s transfer shall be tantamount to unlawful constructive dismissal.

“Westmont and Unilab failed to discharge this burden. Samaniego was unceremoniously transferred from Isabela to Metro Manila. We hold that such transfer is economically and emotionally burdensome on his part. He was constrained to maintain two residences – one for himself in Metro Manila, and the other for his family in Tuguegarao City, Cagayan. Worse, immediately after his transfer to Metro Manila, he was placed “on floating status” and was demoted in rank, performing functions no longer supervisory in nature.

“There may also be constructive dismissal if an act of clear insensibility or disdain by an employer becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued employment. This was what happened to Samaniego. Thus, he is entitled to reinstatement without loss of seniority rights, full backwages, inclusive of allowances, and other benefits or their monetary equivalent, computed from the time his compensation was withheld from him up to the time of his actual reinstatement.

“However, the circumstances obtaining in this case do not warrant the reinstatement of Samaniego. Antagonism caused a severe strain in the relationship between him and his employer. A more equitable disposition would be an award of separation pay equivalent to at least one month pay, or one month pay for every year of service, whichever is higher (with a fraction of at least six [6] months being considered as one [1] whole year), in addition to his full backwages, allowances and other benefits.”

The main thing to note in this case is that it is the employer who has the burden of proving that the transfer of his employee is for just and valid grounds, such as business necessity. This implies, I think – although the decision doesn’t explicitly say so – that every transfer of an employee is presumed to be unreasonable and prejudicial to the employee, until and unless the employer subsequently proves otherwise. I think this is what the decision implies for the simple reason that until the employer actually proves that the transfer is reasonable, how else should we deem it? If the transfer is presumed to be reasonable from the start, I don’t see why the employer should have the burden of proving the transfer’s reasonableness in the first place. But if I am correct in inferring such a “presumption of unreasonableness” from this burden of proof, this creates a problem for management. Does not the “presumption of unreasonableness” attaching to a transfer entail a “presumption of good faith” attaching to an employee’s disobedience to an order of transfer? Does not the one imply the other? But if so, does this not put management in a quandary? If an automatic presumption of unreasonableness attaches to an order of transfer, is not the employee concerned entitled to rely on this presumption and to act accordingly? If he disobeys the order of transfer can he not justify such disobedience on the ground that the order is presumed unreasonable until actually proven otherwise? Again, if an employee is entitled to rely on this presumption of unreasonableness would not his dismissal by management, prior to the latter’s actual overcoming of such a presumption, be deemed premature and therefore illegal?

Someone might object: “These presumptions, assuming arguendo that they are valid inferences from the above-mentioned burden of proof, are rebuttable and not conclusive. The employer can later on prove to the labor arbiter’s satisfaction that the transfer was reasonable.” That however is beside the point. Actually, my concern is not really with unreasonable transfer as a form of constructive dismissal, but actual dismissal for disobeying an order of transfer. This distinction should be borne in mind. At any rate, one still has to reckon with the question: Is the employee legally entitled to assume from the start that the transfer is unreasonable? If he is, isn’t he also entitled to disobey such an order, especially if the pertinent tribunal has not yet made a finding that the employer has discharged the burden of proving that the order is reasonable? Incidentally, isn’t he all the more entitled to this presumption of good faith, given the principle in labor law that in case of doubt, the same should be resolved in favor of labor?

The foregoing analysis might seem to be stretching logic beyond legitimate limits, resulting in seeing things that might not really be there. One can well argue, as a matter of common sense, that If an employer can overcome the “presumption of unreasonableness” attaching to a transfer, he can also overcome the “presumption of good faith” attaching to an employee’s disobedience of an order of transfer. Actually, I prefer to think this way myself. However, it is not that simple. One can say that the transfer is so patently reasonable that the “presumption of unreasonableness” is immediately dissolved upon receipt by the employee concerned of the notice of transfer, leaving him with no basis for claiming a “presumption of good faith” in his favor. But this is actually the tricky part. When precisely do we consider the “presumption of unreasonableness” to have been overcome and therefore dissolved? It’s important that we pinpoint precisely when the dissolution of the “presumption of unreasonableness” takes place, because prior to such dissolution it would seem that the “disobedient” employee has a rational basis for claiming the protection of the “presumption of good faith”, viz., the existence of the still-to-be-dissolved “presumption of unreasonableness”, from which the “presumption of good faith” flows.

To conclude: this is just a sample of how complicated things can get on the theoretical level, if you put your mind to it. To assert so sweepingly that the employer has the burden of proving that a transfer is reasonable, is easy to do; but as I’ve tried to show, there are some unexpected ramifications. I would feel more comfortable had the Supreme Court inserted a qualification, such as “unless the transfer is so patently reasonable that to assume otherwise would be plainly absurd.” But maybe the qualification is there all along – in the form of an implication. One needs only to draw it out.

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