I.

Management Prerogative
The employers right to conduct the affairs of its business, according to its own discretion and
judgment, is well-recognized. An employer has a free reign and enjoys wide latitude of discretion
to regulate all aspects of employment, including the prerogative to instill discipline in its
employees and to impose penalties, including dismissal, upon erring employees. This is a
management prerogative, where the free will of management to conduct its own affairs to achieve
its purpose takes form. The only criterion to guide the eercise 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 !"#"A-"#$A %&'#(T "#('#(AT)#*, v.
"$A()TA '. +A"A,A*, +.(. *o. -./.00 ,1ecember -2, 34-45

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<A1 7A)T=. > ?e have recognized the prerogative of management to transfer employees as the
eigency of the business may re@uire. This prerogative cannot, however, be eercised if the result
is the demotion in rank or the diminution in salary, benefits and other prerogatives of the
employee. And this prerogative must not be eercised in bad faith. ?hile transfer may occasion
hardship or inconvenience to an employee, yet unnecessary or inconvenient and prejudicial
transfers cannot be justified. 8uch less can management eercise this prerogative as a pretet
for disciplining its employees without due processAAA (Asis v. NLRC, G.R. No. 107378, January 25,
1996)
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AT <A(. > The eercise of management prerogative is not unlimited. )t is subject to the
limitations found in law, a collective bargaining agreement or the general principles of fair play
and justice. This situation constitutes one of the limitations. The "<A is the norm of conduct
between petitioner and private respondent and compliance therewith is mandated by the epress
policy of the law.AAA (DL! "#i$. in%. v. "a&is n' (a)a*ayan' *r+ro, G.R. No. 1,6650, January
13, 2003)
II. Termination of Employment
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T=% %8'$#,8%*T "#*T(A"T =A6 A T%(8 #7 AT $%A6T #*% ,%A( #( 8#(%9 *#T
'(%6%*T )* "A6% AT <A(> 6ection -4 of (A C4.3 partly providesD E E-n
%as+ o. /+r0ina/ion o. ov+rs+as +01$oy0+n/ &i/#ou/ 2us/, va$i3 or au/#ori4+3 %aus+ as 3+.in+3 *y
$a& or %on/ra%/, /#+ &or)+r s#a$$ *+ +n/i/$+3 /o /#+ .u$$ r+i0*urs+0+n/ o. #is 1$a%+0+n/ .++ &i/#
in/+r+s/ a/ /&+$v+ 1+r%+n/ (125) 1+r annu0, 1$us #is sa$ari+s .or /#+ un+61ir+3
1or/ion o. #is +01$oy0+n/ %on/ra%/ or .or /#r++ (3) 0on/#s .or +v+ry y+ar o. /#+ un+61ir+3 /+r0,
&#i%#+v+r is $+ss. E .E A plain reading of the above provision clearly reveals that the
choice of which amount to award an illegally dismissed overseas contract worker comes into play
when the employment contract has a term of at least one !-5 year or more. ?e are not in accord
with the ruling of the labor tribunals and the "ourt of Appeals that respondent should be paid her
salaries for the unepired portion of her employment contract. (ecords show that her
actual employment was only for twenty-one !3-5 days. 7ollowing the above provision, we hold
that she is entitled only to an amount corresponding to her three !05 months salary, which is
obviously less than her salaries for the unepired portion of her one-
year employment contractAAA ($ar/+ v. Nayona, G.R. No. 1,8,07, Nov+0*+r 12, 2003)
:#$;*TA(, A(<)T(AT)#*9 B;()61)"T)#* #:%( T%(8)*AT)#* 1)6';T%69 %$;")1AT%1.
> The original and eclusive jurisdiction of $aborArbiters are provided in Art. 3-F of
the $abor "ode. =owever, any or all of the cases therein provided may, by agreement of the
parties, be submitted to a :oluntary Arbitrator or 'anel of :oluntary Arbitrators for adjudication Gas
provided in Art. 3H3I. )n 7an (i'u+$ Cor1. v. Na/iona$ La*or R+$a/ions Co00ission this "ourt held
that the phrase Eall other labordisputesE may include termination disputes provided that the
agreement between the ;nion and the "ompany states Ein une@uivocal language that Gthe
partiesI conform to the submission of termination disputes and unfair labor practices to voluntary
arbitration.E %rgo, it is not sufficient to merely say that parties to the "<A agree on the principle
that Ea$$ 3is1u/+sE should first be submitted to a :oluntary Arbitrator. There is a need for an
epress stipulation in the "<A that illegal termination disputes should be resolved by a :oluntary
Arbitrator or 'anel of :oluntary Arbitrators, since the same fall within a special class of disputes
that are generally within the eclusive original jurisdiction of $aborArbiters by epress provision of
law. Absent such epress stipulation, the phrase Ea$$ 3is1u/+sE should be construed as limited to
the areas of conflict traditionally within the jurisdiction of :oluntary Arbitrators, i.+., disputes
relating to contract-interpretation, contract implementation, or interpretation or enforcement of
company personnel policies. )llegal termination disputes > not falling within any of these
categories > should then be considered as a special area of interest governed by a specific
provision of law. )n this case, however, while the parties did agree to make termination disputes
the proper subject of voluntary arbitration, such submission remains discretionary upon the
parties. . . GandI petitioner validly eercised his option to submit his case to a $abor Arbiter when
he filed his Co01$ain/ before the proper government agencyAAA (8iv+ro v. Cour/ o. A11+a$s, G.R.
No. 138938, %/o*+r 2,, 2000)