A Prejudicial Transfer

The employer, a business process outsourcing (BPO) company, hired Mario as one of its technical support representatives and assigned him to handle a client account.

On October 30, 2009, the employer informed Mario that he would be transferred to a different client account upon successfully passing the training, assessment and examination and that his refusal to take the examinations would result in the termination of his services on the ground of redundancy.

Mario refused to undergo training and take the examinations under the belief that he was entitled to security of tenure.

Thereafter, Mario received a memorandum informing him that those who declined to comply with the transfer directive were no longer required to log in their system since their respective team leaders will take care of their attendance instead until the redundancy offer is finalized.

On November 17, 2009, Mario received a notice dated November 16, 2009 informing him of his dismissal due to redundancy effective December 16, 2009.

Through his counsel, Mario sent a demand letter to his employer asserting that no redundancy in the company occurred considering that it was continuously hiring other technical support representatives. Mario further asserted that as a regular employee, he should no longer be required to take another examination to prove his qualifications.

On January 7, 2010, Mario filed a complaint for illegal dismissal against the employer before the arbitration branch of the National Labor Relations Commission in Bacolod City.

The employer argued that the decrease in volume of calls for the account to which Mario was originally assigned led to an excess number of technical support representatives working on the same. It stated that instead of immediately dismissing its employees, it offered to transfer Mario and other technical support representatives to another account, using the following criteria:

  • first call resolution scores for the last three preceding months; and
  • existence of remediation cases.

The employer pointed out that using the foregoing criteria, Mario was one of the “bottom performers.” It then explained that transferring the said employees to another client account was without any demotion in rank or diminution in pay as long as they successfully passed the standard product training and assessment. It added that undergoing training and assessment were necessary due to the differences between the two client accounts. It posited that it was forced to dismiss Mario on the ground of redundancy since he refused to transfer and go through the training and examination. Finally, it claimed it sent a notice of termination to the Department of Labor and Employment (DOLE).

The Office of the Labor and the National Labor Relations Commission ruled that the dismissal of Mario from employment on the ground of redundancy was valid.

The Court of Appeals ruled that Mario was illegally dismissed from employment in view of the employer’s failure to show that his position was redundant.

The employer went to the Supreme Court.

Was Mario validly dismissed on the ground of redundancy?

The Supreme Court ruled in the negative.

The Court stated that in termination cases, the employer bears the burden of proving that the employee’s dismissal was for a valid and authorized cause. Consequently, an employer’s failure to prove that the dismissal was valid renders the dismissal illegal.

Here, the Court ruled that Mario was illegally dismissed from employment since the employer’s evidence was found to be insufficient to support a claim of valid redundancy.

The Court reiterated established principles by stating that redundancy exists when an employee’s services are in excess of what is reasonably demanded by the actual requirements of the business. To successfully invoke a valid dismissal due to redundancy, there must be:

  • a written notice served on both the employees and the DOLE at least one month prior to the intended date of termination of employment;
  • payment of separation pay equivalent to at least one month pay for every year of service;
  • good faith in abolishing the redundant positions; and
  • fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished.

Moreover, the company must provide substantial proof that the services of the employees are in excess of what is required of the company.

The Court noted the employer’s assertion that its business was slowing down and that it would require fewer representatives beginning November 2009. The Court also looked into the following documents submitted by the employer to support its claim of redundancy:

  • Affidavit of the human capital delivery site manager;
  • Mario’s Employment Contract;
  • FCR scores of the technical support representatives considered to be bottom performers;
  • FAQs for Transition Plans;
  • Attendance sheet for meeting with representatives dated October 30, 2009;
  • Transfer Agreement;
  • Recruitment Flowchart;
  • Comparison of the duties of representatives assigned to the different clients;
  • Notice of Termination addressed to Mario; and
  • Termination Report to DOLE.

However, the Court was not convinced of the alleged decline in the employer’s business and the expected decrease in volume of calls. This was because other than the bare assertions of the human capital delivery site manager, the Court found no other evidence proving the business slow down or the alleged low volume of calls. According to the Court, the affidavit of the human capital delivery site manager did not substantiate the claim of slow down or decreased call volume and is mainly self-serving. The Court explained that the employer should have presented any document proving the decline in volume of calls for the past months, or affidavits of client officers who determined that business was slowing down and the basis thereof. Although other documents were submitted, the Court found that these hardly proved the fact of redundancy.

The Court was also not convinced of the employer’s claim of good faith when Mario was offered a transfer. Under jurisprudence, for a transfer not to be considered a constructive dismissal, the employer must be able to show that such transfer is not unreasonable, inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Failure of the employer to overcome this burden of proof, the employee’s demotion shall no doubt be tantamount to unlawful constructive dismissal.

In the present case, the Transfer Agreement was found to be prejudicial to him. According to the Court, by requiring Mario to pass additional trainings and examination as a condition to retain his employment under the pain of dismissal, the employer disregarded his right to security of tenure. For the Court, the employer’s failure to prove redundancy, coupled with the imposition of a prejudicial condition to retain employment, rendered the offer of transfer invalid.

Having been illegally dismissed from employment, Mario was awarded separation pay and backwages.

Further reading:

  • Teletech Customer Care Management Philippines, Inc. v. Gerona, Jr., G.R. No. 219166, November 10, 2021.