26/01/2026
Philippine Labor Laws, after 15 years of employment. Is it violation to transfer the employment of employee to a different corporation?
Wheather or not, it is legal for an employer to transfer an employee to another company, even if it is a different corporation, provided it is done in good faith, for a legitimate business purpose, and does not involve a diminution of pay, benefits, or rank.
However, because the transfer is to a different corporation (a sister company or affiliate), this often constitutes a break in employer-employee relations, making it a sensitive issue that can lead to claims of constructive dismissal if not handled properly.
Here is a breakdown of the legality of this situation:
1. Requirements for a Valid Transfer
The Supreme Court has ruled that a transfer is valid only if it is not "unreasonable, inconvenient, or prejudicial to the employee". If the transfer is done in good faith for business expansion or realignment, it is generally considered a valid management prerogative.
For the transfer to be legal, it must meet these criteria:
- No Reduction in Salary/Benefits: Your salary, allowances, and 15 years of accumulated benefits (like retirement, seniority) must be maintained or carried over.
- No Demotion in Rank: You cannot be transferred to a lower position.
- No Bad Faith: The transfer cannot be a way to force you to resign (constructive dismissal) or a form of punishment.
- No Unreasonable Inconvenience: The new location or work conditions cannot be excessively difficult compared to your current setup.
- The "Different Corporation" Issue
When you move from Company A to Company B (a different corporation), you are technically ending your contract with Company A and starting a new one with Company B.
- Continuity of Service: Your 15 years of service must be recognized by the new company for purposes of seniority, retirement, and other tenure-based benefits. If the new company treats you as a "new" employee with zero tenure, this is illegal.
- Consent: Because it is a new legal entity, your consent is generally required for the transfer of your employment contract, unless your original contract specifically authorized transfer to affiliates.
3. What to Check
- Your Contract: Check if your employment contract includes a clause stating you agree to be assigned to affiliates or sister companies.
- The New Contract: Ensure the new contract explicitly states that your 15 years of tenure are recognized.
- The Reason: The employer company must be able to show a legitimate business reason (e.g., closing the old office, moving operations).
4. What Constitutes Constructive Dismissal
If the transfer is to a different company with lower pay, a lower position, or if it makes your commute impossible, you may have a case for constructive dismissal. In such a case, you may be entitled to separation pay, usually one month's pay or at least one-half month's pay for every year of service, whichever is higher, for 15 years of service.
NOTE: If you are affect of the same situation, Consult with a labor lawyer or the Department of Labor and Employment (DOLE) and National Labor Relation Commission (NLRC) to review the transfer documents, especially to ensure your 15 years of tenure are not wiped out.
