Management Prerogative: Discretionary Power of the Employer

“Jurisprudence recognizes the exercise of management prerogatives. Labor laws also discourage interference with an employer’s judgment in the conduct of its business. For this reason, the Court often declines to interfere in legitimate business decisions of employers. The law must protect not only the welfare of employees, but also the right of employers.

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Company Policies

The management’s prerogative on all aspects of employment are ordinarily reflected in the company or workplace policies. The company or workplace policies consist of the rules and regulations to be followed and observed in the workplace, as well as additional and more detailed terms and conditions of the employee’s employment.

The company policies are required to have provisions concerning: (a) sexual harassment; (b) drug free workplace; (c) HIV/AIDS; and (d) Hepatitis B.

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Management prerogative


The law recognizes the employer’s highly discretionary right to manage all aspects of employment. Management prerogative is that wide freedom of the management “to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay off of workers and discipline, dismissal and recall of workers.”[1]

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