Pharmacia and Upjohn, Inc. v. Albayda, Jr.

GR No. 172174, August 23, 2010

Facts: Respondent Albayda is a District Sales Manager of Petitioner Pharmacia and Upjohn,
Inc. assigned in District XI in the Western Visayas. Pursuant to a district territorial configuration
for the new marketing and sales direction for the year 2000, respondent was informed in a
memorandum that he will be reassigned as a District Sales Manager in Cagayan De Oro, which
respondent adamantly refused for reasons of personal inconvenience and dislocation from his
family.
Pharmacia’s National Sales and External Business Manager tried to convince him because
being one of the top performing sales managers of the company, the District office in Northern
Mindanao, which has been dismally performing in the past, however, needs his skills and
expertise, respondent still refused the transfer. The Human Resource Manager also met with
respondent telling him that he will be entitled to Relocation Benefits and Allowance and
reiterated in a series of memorandum that his services were badly needed in Cagayan de Oro
City due to the latter’s poor performance and also for his personal growth. Respondent was
even given the option to transfer in Metro Manila with the same position as the District Manager
was transferred to a different position, which he again refused. He viewed the transfer as the
company’s scheme to terminate his employment. Respondent stopped answering these
memoranda, thus, the company sent him another memo dated 26 June 2000 directing him to
report for work within 5 days from receipt, otherwise, he will be terminated on the basis of being
absent without official leave (AWOL) and on July 13, 2000, the company sent him a memo
notifying him of their decision to terminate his services on the ground of being AWOL and
insubordination after he had repeatedly refused to report for work despite due notice, hence this
complaint for constructive dismissal.

Issue: Whether or not the transfer of respondent from Western Visayas to Cagayan De Oro City
was a valid exercise of the company’s management prerogative.

Ruling: YES. Jurisprudence recognizes the exercise of management prerogative to transfer or

assign employees from one office or area to another, provided there is no demotion in rank,
diminution of salary, benefits and other privileges, and the action is not motivated by
discrimination, made in bad faith, or effected as a form of punishment or demotion without
sufficient cause.
The transfer in this case was a valid exercise of a legitimate management prerogative to
maximize business opportunities, growth and development of personnel and the expertise of
respondent was needed to build the company’s business in CDO, which dismally performed in
1999. There was no demotion as he will also be holding the same position and the transfer did
not indicate that his emoluments will be reduced. He was even informed that he would be
entitled to Relocation benefits and allowance.
Furthermore, in his employment contract, he agreed that he was willing to be assigned to any
work or workplace during the period of his employment as may be determined by the company
whenever the operations require such assignment. There was no evidence showing that the
restructuring of the company was done with ill motives or with malice and bad faith purposely to
constructively terminate respondent. The CA failed to recognize the very nature of a salesman
that it is mobile and ambulant.