ALPS THE BUS, INC., PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION AND EDWIN C. AGUBA, RESPONDENTS.

Alps The Bus versus National Labor Relations Commission

The Case

This is a labor case in which Alps The Bus, Incorporated, the employer, sought relief against the National Labor Relations Commission and its employee, Edwin C. Aguba, a bus conductor. The employer had reassigned Aguba from an air-conditioned bus to an ordinary bus, and the question was whether that reassignment amounted to constructive dismissal. The case matters because it fixes where the burden of proof lies when an employer defends a transfer, and because it treats a real drop in an employee's commissions as a diminution of salary.

Procedural History

The labor arbiter and the National Labor Relations Commission both ruled in favor of Aguba, finding that his reassignment amounted to constructive dismissal. The Court of Appeals affirmed. The employer then came to the Supreme Court, and the Court rendered a Decision in Aguba's favor. The employer filed a Motion for Reconsideration of that Decision, and this resolution addresses and denies it.

Facts

Edwin C. Aguba worked as a bus conductor for Alps The Bus, Incorporated. He was originally assigned as a conductor on an air-conditioned bus. He was later transferred or reassigned as a conductor on an ordinary bus.

Because a conductor earns commissions, the change of assignment affected his take-home pay. The pay slips on record showed that his daily commissions while he was assigned to the air-conditioned bus were significantly higher than his daily commissions after he was moved to the ordinary bus.

Aguba treated the reassignment as constructive dismissal. The employer maintained that the transfer was a valid exercise of management prerogative and asked the Supreme Court to reconsider its Decision in Aguba's favor.

Issues

• Whether or not the reassignment of an employee from an air-conditioned bus to an ordinary bus, which reduced his daily commissions, amounted to constructive dismissal.
• Whether or not the employer bears the burden of proving that the transfer is not unreasonable, inconvenient, or prejudicial to the employee, and does not involve a demotion in rank or a diminution of salaries, benefits, and other privileges.

Applicable Provisions

This decision does not quote a specific statutory provision. It applies the settled doctrine on constructive dismissal by transfer, which the Court states in these terms:

To reiterate, transfer amounts to constructive dismissal when the transfer is unreasonable, inconvenient, or prejudicial to the employee, and it involves a demotion in rank or diminution of salaries, benefits and other privileges.

This rule is the test the Court applies to Aguba's reassignment, and the presence of a diminution of salary is what tips the case in his favor.

Ruling

On the first issue, the Court held that the reassignment did amount to constructive dismissal. The transfer of Aguba from conductor on an air-conditioned bus to conductor on an ordinary bus resulted in a diminution of his salary, because the evidence clearly showed that his daily commissions on the air-conditioned bus were significantly diminished after he was moved to the ordinary bus. A transfer that carries a reduction in pay is precisely the kind of prejudicial transfer the doctrine condemns.

On the second issue, the Court placed the burden squarely on the employer. Contrary to the employer's argument, it is the employer who must show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee, and that it does not involve a demotion in rank or a diminution of salaries, privileges, and other benefits. The Court stated the consequence of failure in these words:

Contrary to the argument of petitioner, the burden to show that the 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 fall upon the employer and should it fail to overcome this burden of proof, the employee's transfer shall be tantamount to constructive dismissal.

The employer did not overcome that burden. The Court found the arguments in the Motion for Reconsideration to be mere reiterations of points already raised and already considered in its Decision, and found no valid justification to disturb its rulings.

Doctrine

A transfer is a valid exercise of management prerogative only when it is not unreasonable, inconvenient, or prejudicial to the employee, and does not involve a demotion in rank or a diminution of salaries, benefits, and other privileges. If any of these elements is present, the transfer amounts to constructive dismissal.

The burden of proof rests on the employer. The employer must affirmatively show that the transfer is reasonable, convenient, and not prejudicial, and that it carries no demotion or diminution. If the employer fails to overcome this burden, the employee's transfer is deemed constructive dismissal as a matter of law.

A reduction in commissions counts as a diminution of salary. Where the employee's pay slips show that his daily commissions fell significantly after the reassignment, the employer's claim of a valid transfer cannot stand.

Disposition

The employer lost. The Supreme Court denied the Motion for Reconsideration for lack of merit and upheld its earlier Decision finding constructive dismissal in favor of Edwin C. Aguba.

Remember This

Memorize this line: the burden to prove that a transfer is not unreasonable, inconvenient, or prejudicial, and involves no demotion or diminution, falls on the employer, and failure means constructive dismissal. Examiners use this case to test management prerogative in transfers and the rule that a drop in commissions is a diminution of salary.