19 March 2021
Promotion is something an employee looks forward to. It is the culmination of the employee’s efforts and loyalty; more importantly, it commonly comes with a rise in rank and pay increase. However, it is little known that an employee may refuse a promotion, for any reason s/he deems proper. It may also come as a surprise to some that promotion does not always come with an increased paycheck.
Promotion is the advancement from one position to another with an increase in duties and responsibilities as authorized by law, and usually accompanied by an increase in salary. On the other hand, there is demotion where an employee is relegated to a subordinate or less important position constituting a reduction to a lower grade or rank, with a corresponding decrease in duties and responsibilities, and usually accompanied by a decrease in salary. Another form of personnel movement, transfer, is a movement from one position to another which is of equivalent rank, level or salary, without break in service (Coca-Cola Bottlers Philippines, Inc. v. Del Villar, G.R. No. 163091, October 6, 2010).
In the 2016 case of Echo 2000 Commercial Corporation vs. Obrero Filipino – Echo 2000 Chapter – CLO (G.R. No. 214092, January 11, 2016), the employees were warehouse personnel who were transferred to the Delivery Section as “Delivery Supervisor”. The employees deemed the transfer as a promotion due to additional responsibilities given to them, hence they indicated their refusal to be promoted, citing their lack of readiness, expertise and experience for the supervisory position. Despite their refusal to be promoted, management assigned them tasks under their new position. They refused to perform their function and were eventually terminated for insubordination.
In challenging the validity of their termination, the employees argued that the transfer was in reality a promotion, which they could validly refuse without being subjected to disciplinary proceedings. The Supreme Court agreed. It observed that the employees, as Warehouse Checker and Forklift Operator, are rank-and-file employees. On the other hand, the job of a Delivery Supervisor/Coordinator requires the exercise of discretion and judgment from time to time. Hence, despite the fact that no salary increases were effected, the assumption of the post of a Delivery Supervisor/Coordinator should be considered a promotion.
An employee is not bound to accept a promotion because it is in the nature of a gift or reward. It is a valid exercise of a right, and refusal to accept promotion cannot be considered in law as insubordination, or willful disobedience of a lawful order of the employer. Clearly, it cannot be the basis for a legal termination and the employees’ refusal to accept the same was therefore valid.
As mentioned earlier, in a promotion, increase in salary is merely incidental but it is not determining factor. The key indicator in promotion is an advancement from one position to another or an upward vertical movement of the employee’s rank or position. Salary increase may be involved, but it is not a requirement. This is further illustrated in the earlier case of NAFLU vs. NLRC (G.R. No. 90739, October 3, 1991).
In that case, petitioner employee was appointed as Energy Manager from Staff Engineer without salary increase, since the change in designation supposedly did not entail additional responsibilities aside from preparing reports which he already did even as Staff Engineer. He eventually filed a labor complaint for underpayment of salary, claiming that his promotion to the rank of Energy Manager entitled him to a corresponding salary increase.
The Court observed that petitioner was not promoted for was no showing that he has ceased from performing his duties as Staff Engineer and the nature of his functions did not substantially change. Even assuming that petitioner was promoted in terms of rank, it does not necessarily follow that he is entitled to a corresponding salary increase. It is usually an accompaniment in promotion, but is not required.
Labor laws do not authorize interference with the employer’s judgment in the conduct of his business involving the issues of hiring and firing, promotion or reassignment, except in cases of unlawful discrimination or those which may be provided for by law. Like promotion, salary increase is likewise part of management prerogative. Unless there is a legal violation including grave abuse of discretion, the court will not normally step in and allows management to exercise its prerogative on these matters.
First published on The Daily Tribune.
For further information, please contact:
Nilo T. Divina, Managing Partner, DivinaLaw
nilo.divina@divinalaw.com
