Respondent Melvin Gnilo was initially hired by Norkis Trading Co. as a collector, and later promoted to Credit and Collection Manager of a sister company.
An audit found Gnilo had submitted inflated collection reports without verifying accuracy. He was suspended for 15 days and demoted to Marketing Assistant.
Gnilo filed a complaint claiming constructive dismissal. The labor arbitrator dismissed it but the NLRC and CA ruled the demotion amounted to constructive dismissal as it reduced his duties, responsibilities and rank.
The Supreme Court affirmed, finding Gnilo was constructively dismissed as his demotion from Manager to rank-and-file employee made continued employment
Respondent Melvin Gnilo was initially hired by Norkis Trading Co. as a collector, and later promoted to Credit and Collection Manager of a sister company.
An audit found Gnilo had submitted inflated collection reports without verifying accuracy. He was suspended for 15 days and demoted to Marketing Assistant.
Gnilo filed a complaint claiming constructive dismissal. The labor arbitrator dismissed it but the NLRC and CA ruled the demotion amounted to constructive dismissal as it reduced his duties, responsibilities and rank.
The Supreme Court affirmed, finding Gnilo was constructively dismissed as his demotion from Manager to rank-and-file employee made continued employment
Respondent Melvin Gnilo was initially hired by Norkis Trading Co. as a collector, and later promoted to Credit and Collection Manager of a sister company.
An audit found Gnilo had submitted inflated collection reports without verifying accuracy. He was suspended for 15 days and demoted to Marketing Assistant.
Gnilo filed a complaint claiming constructive dismissal. The labor arbitrator dismissed it but the NLRC and CA ruled the demotion amounted to constructive dismissal as it reduced his duties, responsibilities and rank.
The Supreme Court affirmed, finding Gnilo was constructively dismissed as his demotion from Manager to rank-and-file employee made continued employment
Norkis Trading Co., Inc. and/or Manuel Gaspar E. Albos, effective upon receipt thereof.
ipt thereof. He was then assigned to the
Jr. v. Melvin Gnilo Marketing Division directly reporting to petitioner Albos. G.R. No. 159730 Feb. 11, 2008 In a letter dated July 27, 2000, respondent requested petitioner Albos that he be assigned as Sales Engineer or to any position Doctrine: There is constructive dismissal when an employee's commensurate with his qualifications. However, respondent functions, which were originally supervisory in nature, were was formally appointed as Marketing Assistant to Albos. reduced; and such reduction is not grounded on valid grounds such Respondent filed with the LA a complaint for illegal suspension, as genuine business necessity. constructive dismissal, non-payment of allowance, vacation/sick leave, damages and attorney’s fees against petitioners. Recit-ready: Respondent was initially hired by Norkis as Norkis Installment Collector (NIC) in April 1988. Albos is the LA ruled that there was no constructive dismissal as the Senior VP of petitioner Norkis. Respondent held various petitioners exercised their inherent prerogative as an employer positions in the company until he was appointed as Credit and when they appointed respondent as a Marketing Assistant. Collection Manager of Magna Financial Services Group, Inc.- Legaspi Branch, Norkis’s sister company, in charge of the areas The NLRC reversed the LA’s decision. It held that the transfer of Albay and Catanduanes with travel and transportation of respondent from the position of Credit and Collection allowances and a service car. A special audit team was Manager to Marketing Assistant resulted in his demotion in rank conducted in respondent’s office and it was found out that from Manager to a mere rank and file employee, which was respondent forwarded the monthly collection reports of the NICs tantamount to constructive dismissal and therefore illegal. The under his supervision without checking its veracity. The monthly CA affirmed. collection highlights for the months of April to September 1999 submitted by respondent to the top management were all The SC ruled that respondent was constructively dismissed. overstated particularly the account handled by NIC Dennis Constructive dismissal is defined as a quitting because continued Cadag. Respondent was then charged by petitioners’ Inquiry employment is rendered impossible, unreasonable or unlikely; Assistance Panel with negligence of basic duties and when there is a demotion in rank or a diminution of pay. responsibilities resulting in loss of trust and confidence and Likewise, constructive dismissal exists when an act of clear laxity in directing and supervising his own subordinates. discrimination, insensibility or disdain by an employer becomes unbearable to the employee, leaving him with no option but to Norkis issued a memorandum placing respondent under 15-day forego his continued employment. suspension without pay, travel and transportation allowance, In this case, while the transfer of respondent from Credit and resulting in loss of trust and confidence and laxity in directing Collection Manager to Marketing Assistant did not result in the and supervising his own subordinates. reduction of his salary, there was a reduction in his duties and Norkis issued a memorandum placing respondent under 15- responsibilities which amounted to a demotion tantamount to a day suspension without pay, travel and transportation constructive dismissal. allowance, effective upon receipt thereof. He was then assigned to the Marketing Division directly Facts: reporting to petitioner Albos. Respondent Melvin R. Gnilo was initially hired by Petitioner In a letter dated July 27, 2000, respondent requested petitioner Norkis Trading Co., Inc. (Norkis) as Norkis Installment Albos that he be assigned as Sales Engineer or to any position Collector (NIC). commensurate with his qualifications. Petitoner Manuel Gaspar E. Albos, Jr. (Albos) is the Senior However, respondent was formally appointed as Marketing Vice-President of Norkis. Assistant to petitioner Albos, which position Respondent held various positions in the company until he was respondent subsequently assumed appointed as Credit and Collection Manager of Magna Financial Respondent filed with the LA a complaint for illegal suspension, Services Group, Inc.-Legaspi Branch, Norkis’s sister company, constructive dismissal, non-payment of allowance, vacation/sick in charge of the areas of Albay and Catanduanes with travel and leave, damages and attorney's fees against petitioners. transportation allowances and a service car. The LA dismissed the complaint for lack of merit. A special audit team was conducted in respondent's office o It found that the position of Credit and Collection when it was found out that respondent forwarded the monthly Manager held by respondent involved a high degree of collection reports of the NICs under his supervision without responsibility requiring trust and confidence, and that checking the veracity of the same. petitioners exercised their inherent prerogative as an The monthly collection highlights for the months of April to employer when they appointed respondent as a September 1999 submitted by respondent to the top Marketing Assistant. management were all overstated particularly the account The NLRC reversed the LA, and held that Norkis handled by NIC Dennis Cadag, who made it appear that the constructively dismissed respondent. collection efficiency was higher than it actually was; and that the o It ordered Norkis to pay Gnilo the amount top management was misled into believing that respondents area of P411,796.00 as backwages and separation pay, of responsibility obtained a favorable collection efficiency. plus ten percent (10%) thereof as attorney's fees Respondent was then charged by petitioners' Inquiry Assistance o It found that the 15-day suspension cannot be Panel with negligence of basic duties and responsibilities considered harsh and unconscionable as petitioners exercised their management prerogative to impose Constructive dismissal is defined as a quitting because discipline on an erring employee for negligence. continued employment is rendered impossible, unreasonable o However, it held that the transfer of respondent from or unlikely; when there is a demotion in rank or a diminution the position of Credit and Collection Manager to of pay. Likewise, constructive dismissal exists when an act Marketing Assistant resulted in his demotion in of clear discrimination, insensibility or disdain by an rank from Manager to a mere rank and file employer becomes unbearable to the employee, leaving him employee, which was tantamount to constructive with no option but to forego his continued employment. dismissal and therefore illegal. A transfer is defined as a movement from one position to o It ruled that respondent was constructively another which is of equivalent rank, level or salary, without dismissed and therefore he was entitled to break in service. Promotion is the advancement from one reinstatement and payment of full backwages position to another with an increase in duties and from the time he quit working due to his demotion responsibilities as authorized by law, and usually up to the time of his actual reinstatement. accompanied by an increase in salary. Conversely, demotion The CA affirmed the NLRC. involves a situation in which an employee is relegated to a subordinate or less important position constituting a Issue: W/N respondent was constructively dismissed (i.e. reduction to a lower grade or rank, with a corresponding W/N respondent's transfer from the position of Credit and decrease in duties and responsibilities, and usually Collection Manager to that of a Marketing Assistant amounts to a accompanied by a decrease in salary. constructive dismissal) In this case, while the transfer of respondent from Credit and Collection Manager to Marketing Assistant did not result in Held: YES. the reduction of his salary, there was a reduction in his Well-settled is the rule that it is the prerogative of the duties and responsibilities which amounted to a employer to transfer and reassign employees for valid demotion tantamount to a constructive dismissal as reasons and according to the requirement of its business. correctly held by the NLRC and the CA. The employer bears the burden of showing that the transfer A comparison in the nature of work of these two positions is not unreasonable, inconvenient or prejudicial to the shows a great difference. employee; and does not involve a demotion in rank or a o As Credit and Collection Manager, respondent was diminution of his salaries, privileges and other benefits. clothed with all the duties and responsibilities of a Should the employer fail to overcome this burden of proof, managerial employee. He could devise and the employees transfer shall be tantamount to constructive implement action plans to meet his dismissal. objectives and exercise independent judgment in resolving problem accounts. He had power and Marketing Assistant; thus, such was a reduction in his control over NICs, Branch Control Officers and benefit. Cashiers under his supervision, and he provided There is also constructive dismissal when an act of clear them training in the performance of their respective discrimination, insensibility, or disdain by an employer works. Further, he had the authority to ensure becomes so unbearable on the part of the employee as to reserves in the NICs, BCOs and Cashiers in case of foreclose any choice on his part except to resign from such expansion, reassignment and/or termination. There employment. is no doubt that said position of Credit and The barbaric treatment suffered by the respondent in the Collection Manager entails great duties and hands of his bosses is unjustifiable. Not only was respondent responsibilities and involves discretionary powers. made to look like an idiot when he was not given work in his o On the other hand, the work of a Marketing Assistant new assignment, but he was humiliated and debased when is clerical in nature, which does not involve the Albos, in a very uncouth manner, hurled expletives at the exercise of any discretion. Such job entails mere private respondent, calling him bobo, gago and data gathering on vital marketing informations screaming putang ina mo in front of him, at the same time relevant to petitioners' motorcycles and making crumpling his report and throwing it into his face. Such reports to his direct supervisor. He is a mere undignified and boorish deeds perpetrated against staff member in the office of the Senior VP for respondent directly caused him to leave the employ of Marketing. petitioner corporation, which he served loyally for 12years. o These two positions are not of the same level of Respondent’s demotion in the nature of his functions authority as the position of Credit and Collection coupled with petitioner Albos’s act of insensibility no Manager is reposed with managerial duties while as doubt amounts to his constructive dismissal. a Marketing Assistant, respondent merely collates Respondent could not be faulted for accepting the position raw data. of a Marketing Assistant, since he did so and stayed put in There is constructive dismissal when an employee's order to compare and evaluate his position. functions, which were originally supervisory in nature, were Furthermore, the alleged overstated collection reports reduced; and such reduction is not grounded on valid of three NICs under respondent's supervision submitted in grounds such as genuine business necessity. 1997 were already mentioned in the IAP report of the 1999 Moreover, petitioners failed to refute respondents claim that incident for which respondent was meted the penalty of as Credit and Collection Manager, he was provided with a 15- day suspension without salary, travel and transportation service car which was no longer available to him as allowance; thus, the same could no longer be used to justify his transfer. Respondent’s demotion, which was a punitive action, was in effect a second penalty for the same negligent act of respondent.