Employee Rights During Company Relocation in the Philippines

Relocating a business—whether moving a head office across cities or consolidating plants in a different region—affects jobs, pay, commute, family life, and union relationships. This article distills Philippine law and standard doctrine on what employers may do, what employees can refuse, and what remedies exist when a move goes too far.

Key statutes & sources: Labor Code of the Philippines (as amended), especially Articles 297–301 (authorized causes; notice; separation pay), Articles 82–100 (hours of work; wages; benefits), Article 306 (prescriptive periods for money claims); constitutional protection to labor; jurisprudence on management prerogative to transfer and constructive dismissal; Republic Act No. 11058 (OSH Law); RA 11165 (Telecommuting Act); Data Privacy Act; relevant DOLE Advisories and Wage Orders.

1) Management’s Right to Relocate vs. Employees’ Rights

A. Management prerogative to transfer & relocate

Employers generally have the right to reorganize operations, which includes moving the worksite and reassigning employees to different offices/branches.
This prerogative is not absolute. It must be exercised:
- In good faith (legitimate business reason, not to punish or target an employee/union);
- Without demotion in rank or status;
- Without unlawful diminution of salary and established benefits;
- In a reasonable manner that does not impose conditions so harsh they effectively force resignation.

B. When a relocation becomes constructive dismissal

A transfer tied to relocation may amount to constructive dismissal if it:

Causes a material reduction in pay, rank, or benefits;
Is unreasonable or unduly inconvenient, e.g., a move that makes reporting to work practically impossible (extremely long commute without support; health/safety risks);
Is motivated by bad faith, discrimination, retaliation, or union-busting.

Effect: An employee who proves constructive dismissal is entitled to reinstatement (or separation pay in lieu) plus backwages and other appropriate damages.

2) Must Employees Follow a Relocation Order?

A. With a valid relocation order

If the order is lawful, reasonable, and made in good faith, refusal can be treated as insubordination.
Employers should issue clear, written directives specifying the new worksite, reporting date, and any offered assistance (e.g., relocation allowance, temporary housing, flexible schedules).

B. If the order is defective

If the move diminishes pay/benefits, imposes unreasonable hardship, or is retaliatory, employees may contest it.
Employees should put objections in writing (cite facts: distance, costs, medical constraints, caregiving duties, safety risks) and request accommodations.

C. Mobility/transfer clauses

Employment contracts and CBAs often include a mobility clause (“may be assigned anywhere”). Such clauses are enforceable but still constrained by good faith and reasonableness. They don’t authorize demotions, wage cuts, or transfers made to harass.

3) Pay, Benefits, and Working Conditions After Relocation

A. No diminution of benefits

Employers may not unilaterally reduce salary or established, long-granted benefits (transport allowance, meal allowance, COLA, housing support) absent a lawful basis (e.g., CBA renegotiation).
A benefit becomes “established” when it is consistent, deliberate, and long-continued—not a one-off gratuity.

B. Regional wage compliance

If the new site is in another wage region, wages must meet that region’s minimum wage.
Upward adjustments to meet a higher regional minimum are mandatory.
Downward adjustments below the employee’s current rate are generally barred by the non-diminution rule, even if the new region’s minimum is lower.

C. Allowances & assistance

Philippine law does not mandate relocation or commuting allowances, but many employers offer:
- Relocation grants (lump sum for moving costs);
- Temporary housing (time-bound);
- Travel/commute subsidies or flexible work hours;
- Per diems for temporary (not permanent) assignments.
Where a CBA or policy grants such support, it must be respected.

D. Hours of work & shifts

The standard rules on hours of work, overtime, rest days, night shift differential, and holiday pay continue to apply at the new location.
Commute time is generally not compensable work time.

E. Health & safety in the new site

Under RA 11058 and its IRR, employers must ensure OSH compliance at the new site—e.g., hazard identification, safety training, medical facilities, PPE, and reporting mechanisms.
Employees may refuse unsafe work under recognized OSH protocols.

F. Telecommuting & hybrid options

RA 11165 (Telecommuting Act) supports voluntary telework arrangements with equal treatment in pay and benefits.
During or after relocation, telework/hybrid can be used as a reasonable accommodation (subject to mutual consent and operational feasibility).

G. Data privacy

Transferring personnel files and systems must comply with the Data Privacy Act: data minimization, secure transfer, and proper notices where applicable.

4) Termination, Separation Pay, and Notices in a Relocation Scenario

Relocation plays out in different ways. Rights depend on what the employer actually does:

Scenario 1: Business simply moves and offers continued employment

If the job continues at the new site and the transfer is lawful and reasonable, separation pay is not due merely because the location changed.
An employee who refuses a valid transfer and resigns typically is not entitled to separation pay.

Scenario 2: Partial closure of a site; some positions eliminated

If relocation involves closing a plant/branch and abolishing roles, affected employees may be terminated for authorized causes (e.g., closure/cessation or redundancy).
Separation pay is due as follows:
- Closure/cessation not due to serious business losses: ½ month pay per year of service, minimum (a fraction of at least six months counts as a whole year).
- Redundancy: 1 month pay per year of service, minimum (per prevailing jurisprudence and DOLE practice).
Notices: Employer must give written notice to the employee and DOLE at least 30 days before the effectivity date (Article 298). Failure to comply can entail nominal damages, even if the authorized cause is valid.

Scenario 3: Total closure of Philippine operations

If the enterprise ceases operations in the Philippines, separation pay depends on whether the closure is due to serious losses (which can excuse separation pay if duly proven) or not (then ½ month per year of service applies at minimum).

Scenario 4: Constructive dismissal via unreasonable relocation

If the relocation is a pretext or unreasonably onerous, and the employee is forced to quit or is terminated for non-compliance, this can be illegal dismissal.
Remedies: reinstatement (or separation pay in lieu), full backwages, differentials, damages, and attorney’s fees where warranted.

5) Union & CBA Dimensions

Relocation is a management decision, but where it has substantial effects on workers, there is a duty to bargain the effects with the union (e.g., timing, allowances, retraining, bumping rights, placement preferences).
CBA provisions on transfer/assignment, seniority, separation benefits, or plant closure control where they grant more favorable terms than the Labor Code.
Unilateral changes that override a CBA can amount to unfair labor practice. ULP complaints must be filed within one year.

6) Special Groups & Accommodations

Pregnant workers / workers with disabilities: Employers should consider reasonable accommodations (temporary transfers closer to home, flexible schedules, telework) where feasible.
Employees with documented health issues: Medical certifications can support requests to avoid harmful or excessively strenuous transfers.
Single parents (RA 11861, Expanded Solo Parents’ Welfare Act): While the law doesn’t grant a per se veto on relocation, employers should assess practical accommodations given caregiving burdens.

7) Practical Playbooks

For Employees

Review your contract/CBA for mobility and transfer clauses.
Ask for the relocation order in writing: address, effective date, reporting arrangements, and any offered support.
Document hardships: distance, costs, commute time, safety issues, medical or caregiving constraints.
Propose solutions: telework/hybrid, flex-time, staggered reporting, shuttle, relocation allowance, temporary housing.
If terms remain unreasonable, lodge a written objection (keep proof of receipt).
Seek conciliation-mediation (DOLE Single Entry Approach – SEnA) or file a case for illegal/constructive dismissal or money claims if necessary.
Mind prescriptive periods:
- Illegal dismissal: 4 years from dismissal (injury to rights).
- Money claims (unpaid wages/benefits): 3 years from accrual.
- ULP: 1 year.

For Employers

Plan and justify the move (business rationale; alternatives assessed).
Communicate early and in writing; provide a transition timeline and FAQs.
Avoid diminution: keep salaries/established benefits intact; adjust to higher regional minimums if applicable.
Offer support packages proportional to impact (relocation aid, housing, shuttle, flexible schedules).
OSH readiness at the new site; conduct orientation and risk assessments.
For authorized-cause terminations (redundancy/closure), give 30-day DOLE & employee notice and pay proper separation.
Engage unions on effects bargaining; honor CBAs.
Keep a paper trail showing good faith and reasonableness.

8) Frequently Asked Questions

Q1: The new site is much farther and costs me more. Can I demand a higher salary? You can insist on no diminution of your existing salary and benefits. A higher base isn’t automatic, but you can negotiate allowances or accommodations. If the transfer effectively reduces your compensation (e.g., removal of established transport allowance) or is unreasonably harsh, you may contest it.

Q2: The company is closing our branch and offering transfers elsewhere. What if I decline? If the transfer is reasonable and your role continues, declining may be treated as voluntary separation (no separation pay). If the offer is illusory or unreasonable, you may claim constructive dismissal or seek separation pay depending on the real cause (e.g., closure/redundancy).

Q3: Do we get paid for travel time to the farther site? Ordinary commute time is not compensable. For temporary assignments requiring business travel, the employer’s policy/CBA usually governs per diems and travel time.

Q4: The company relocated and didn’t notify DOLE. Is that illegal? Relocation itself doesn’t require DOLE notice. But if relocation results in authorized-cause terminations (closure/redundancy), the employer must give 30-day prior written notice to both DOLE and affected employees and pay proper separation.

Q5: The company moved to a lower-wage region and wants to align our pay downward. Can they? Generally no. The non-diminution rule prevents cutting an employee’s established wage/benefits even if the regional minimum at the new site is lower.

Q6: What if the new site poses safety risks? Employers must comply with OSH standards. Employees may raise hazards via the safety committee, request corrective measures, or refuse unsafe work under recognized OSH procedures.

9) Evidence & Proof Tips

Keep copies of memos, emails, and notices.
Track commute time and costs before/after the move.
Secure medical certificates if health conditions are implicated.
For unionized shops, document bargaining meetings and proposals on relocation effects.

10) Quick Checklist (Employees)

Written relocation order received
No diminution of salary/benefits
Regional minimum wage at new site checked
OSH orientation completed
Support (allowance/shuttle/flex-time) requested if needed
Objections/accommodations formally filed (if any)
Timelines & legal remedies noted (3/4/1-year clocks)

11) Bottom Line

Employers can relocate and require transfers, but only within the bounds of good faith, reasonableness, and non-diminution.
When relocation eliminates jobs or closes a site, authorized-cause rules on 30-day notices and separation pay apply.
If a relocation crosses the line into constructive dismissal, employees may claim reinstatement or separation pay, backwages, and damages.
Early, transparent communication and fair accommodations often prevent disputes.

This article provides general information on Philippine labor law. For specific cases, consult a labor law practitioner or DOLE conciliation officer (SEnA) to assess facts, documents, and remedies.