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It goes without saying that the main purpose of venturing into a business is to make a profit and to sustain that profitability. Thus, this becomes the basis for the concept of Management Prerogatives, which is founded on the right of the management to reasonable returns on investment, and to expansion and growth of the enterprise. In the Philippine scenario, much emphasis is given to the basic rights of the workers. I admit that even I am completely new to this concept.
During my first employment in Cebu, my notion of labor unions is just the protection of the laborers from the management policies that may affect their employment. It is often associated with strikes and collective bargaining agreement (CBA). In my 8 years of employment, I have never been part of an employees’ union which I blame for my ignorance. While reading the paper of Juris Bernadette M. Tomboc, CPA, J. D. , MSIRM, it opened a whole new perspective of my views regarding the labor relations issue. It showed me the B-side of the story. After discussing the basic rights of the worker, now come the rights of the management.
These two work together to achieve industrial peace as each balances the other. As mentioned above, Management prerogatives are anchored on the rights of the management to reasonable returns on investment, and to expansion and growth of the enterprise. Also, m_anagement prerogatives refers to the rights of an employer to regulate all aspects of employment such as the freedom to prescribe work assignments, working methods, processes to be followed, regulation regarding transfer of employees, supervision of their work, lay-off and discipline, and dismissal and recall of workers__ (Tomboc, 2004)_.
In the succeeding sections I will give my opinions on its scope as enumerated and defined by JBM Tomboc in her paper. The following concepts are considered within the scope of MANAGEMENT PREROGATIVES. Transfer of Employees. This is indeed a management decision being the one who employs and pays the worker. So many times we hear the famous line “… I serve at the pleasure of the president. ” among government leaders. Precisely because the president, who plays the role of manager, sees where his subordinates are fit to serve to the benefit of his administration.
Any movements, however, must be without grave abuse of discretion or must not be used to rid an undesirable worker. Retrenchment. This is quite a sensitive issue especially that it involves or touches the basic right of a worker to a security of tenure. Still, it is deemed lawful if only to save the company/business from incurring continuous losses. Management has the prerogative to retrench or not to retrench employees in any event that its business operations incur losses. Redundancy.
This is quite common as many workers who have redundant position are kept on a floating status. Redundancy exists when the services of the employee are in excess of what is required by the enterprise. Because management can exercise whether to terminate redundant employees or not, the floating status of employees has been used to keep workers on the roster. In the absence of any malicious intention, management can terminate employees with redundant positions. Closure or cessation of business operations.
Indeed management has this prerogative because it knows when the business can sustain its profitability. In the event that a business becomes unprofitable for its owners and investors the management can use this option on the basis/argument that it has the basic right to reasonable returns on investment, and to expansion and growth of the enterprise. Installation of labor saving devices. The main reason for terminating employment using this prerogative is based on economics.
Management can decide to terminate employment if new technology becomes available that makes labor costly. The law, however, stipulates that there should be at least a month’s notice before the implementation of the termination. Dismissal. Dismissal is an authorized method of severing the employer-employee relationship but undergoes the tedious due process as stipulated in the labor law. There should be proof beyond reasonable doubt that an employee committed a grave offense that may have cost the company or business a great deal. Demotion.
This idea, I thought did not existed in the Philippine setting. Regardless of whether it does or not in the Philippine setting, it is still a prerogative of the management. The labor law, however, protects the worker by giving him the chance to contest and explain his side of the demotion case. Granting of a bonus. Many might misinterpret this idea. The word “bonus” is like music to a lot of people’s ears. Yet, it is a management prerogative. Only management can decide if it is to give out bonuses to its employees regardless of the business’ financial position.
I personally experienced this when I still received a gratuity pay despite our plant operating with a loss. The reason being, that nationwide the whole business had experienced considerable gains. Since management can view things from a macro level, it follows that only management can decide whether to give bonuses or not. Retirement. This management prerogative is often offered by management rather than imposed to an employee usually to employees who served a long tenure with the company. However, nowadays its not unusual for management to offer early retirement packages to employees.
In my previous employment, I availed of such offer after having been employed for four (4) years with my employer. Re-assignment pending investigation. I find this prerogative to be part of the due process for other prerogatives like dismissal and the like. Management can use this prerogative especially if the employee holds a critical position in the organization. The employee can still remain employed until such time when the investigation has concluded and finally come to a decision. Reference: Management Prerogatives and Employee Participation by Juris Bernadete M. Tomboc, CPA, J. D. , MSIRM