C. Termination by employee

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1. Resignation versus constructive dismissal

a. Voluntary resignation

Resignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and one has no other choice but to dissociate oneself from employment. (Pascua v. Bank Wise, Inc., G.R. No. 191460, 31 January 2018)

It is a formal pronouncement or relinquishment of an office, with the intention of relinquishing the office accompanied by the act of relinquishment. As the intent to relinquish must concur with the overt act of relinquishment, the acts of the employee before and after the alleged resignation must be considered in determining whether lie or she, in fact, intended to sever his or her employment. (Panasonic Manufacturing Philippines Corporation v. Peckson, G.R. No. 206316, 20 March 2019)

In order to prove that resignation is voluntary, “the acts of the Employee before and after the alleged resignation must be considered in determining whether he or she, in fact, intended to sever his or her employment.” (Pascua v. Bank Wise, Inc., supra.)

The employer has the burden of proving, in illegal dismissal cases, that the employee was dismissed for a just or authorized cause. Even if the employer claims that the employee resigned, the employer still has the burden of proving that the resignation was voluntary. (Ibid.)

1) Graceful exit

Graceful exit is a voluntary resignation, not a constructive dismissal.

Central Azucarera de Bais, Inc. v. Siason, G.R. No. 215555, 29 July 2015

A judicious review of the records reveals that CABI’s accounting department indeed made an audit of the purchases made by the company through its Purchasing Officer, Siason. This resulted in the discovery of a number of questionable discrepancies in several purchasing transactions undertaken by Siason, consisting in different price quotations for identical items contained in various purchase documents prepared by Siason herself.

Taking into consideration Siason’s long tenure at CABI, as well as her close relationship with Chan, the latter sent her the October 3, 2011 letter asking her to resign “rather than [to] force [his] hand” – which should be construed as Chan telling Siason to resign or be faced with an administrative complaint. On October 4, 2011, Atty. Ner-Tiangco sent Siason another letter, essentially confirming if the latter was going to resign or if she is subjecting herself to an administrative investigation. Ultimately, Siason chose to tender her resignation to save herself from the trouble of besmirching her employment record.

The foregoing facts belie Siason’s argument that petitioners constructively dismissed her. These circumstances show that she was given the option to voluntarily resign from CABI, instead of dealing with an investigation which might result in her dismissal. Verily, Chan’s decision to give Siason a graceful exit rather than to file an action for redress is perfectly within the discretion of the former; as it is not uncommon that an employee is permitted to resign to avoid the humiliation and embarrassment of being terminated for just cause after the exposure of her malfeasance. It is settled that there is nothing reprehensible or illegal when the employer grants the employee a chance to resign and save face rather than smear the latter’s employment record, as in this case.

In sum, petitioners did not constructively dismiss Siason; but rather, the latter voluntarily resigned from her job in order to avoid a full-blown administrative trial regarding her misdeeds which could potentially result in her termination for just cause. While it may be said that she did not tender her resignation wholeheartedly, circumstances of her own making did not give her any other option but to voluntarily do so. Therefore, in view of her voluntary resignation from CABI, she is not entitled to any separation pay in the absence of any agreement with petitioners providing for such. /end

b. Constructive dismissal

Constructive dismissal is defined as quitting or cessation of work because continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution of pay and other benefits. It exists if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued employment. There is involuntary resignation due to the harsh, hostile, and unfavorable conditions set by the employer.

Constructive dismissal arises “when continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank and/or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee.” In such cases, the impossibility, unreasonableness, or unlikelihood of continued employment leaves an employee with no other viable recourse but to terminate his or her employment. (St. Paul College, Pasig v. Mancol, G.R. No. 222317, 24 January 2018)

By definition, constructive dismissal can happen in any number of ways. At its core, however, is the gratuitous, unjustified, or unwarranted nature of the employer’s action. As it is a question of whether an employer acted fairly, it is inexorable that any allegation of constructive dismissal be contrasted with the validity of exercising management prerogative. (Ibid.)

There is constructive dismissal when an employee is compelled by the employer to resign or is placed in a situation where there would be no other choice but to resign. (Pascua v. Bank Wise Inc., G.R. No. 191460, 31 January 2018)

1) The test of constructive dismissal

The test of constructive dismissal is whether a reasonable person in the employee’s position would have felt compelled to give up his position under the circumstances. It is an act amounting to dismissal but made to appear as if it were not. Constructive dismissal is, therefore, a dismissal in disguise. As such, the law recognizes and resolves this situation in favor of employees in order to protect their rights and interests from the coercive acts of the employer. In fact, the employee who is constructively dismissed may be allowed to keep on coming to work. (MCMER Corporation, Inc. v. NLRC, Libunao, Jr., G.R. No. 193421)

b) Not every inconvenience

“Not every inconvenience, disruption, difficulty, or disadvantage that an employee must endure sustains a finding of constructive dismissal.” It is an employer’s right to investigate acts of wrongdoing by employees. Employees involved in such investigations cannot ipso facto claim that employers are out to get them. Their involvement in investigations will naturally entail some inconvenience, stress, and difficulty. However, even if they might be burdened – and, in some cases, rather heavily so – it does not necessarily mean that an employer has embarked on their constructive dismissal. (Philippine Span Asia Carriers Corporation v. Pelayo, G.R. No. 212003, 28 February 2018)

c) Unconditional and categorical letter of resignation

An unconditional and categorical letter of resignation cannot be considered indicative of constructive dismissal if it is submitted by an employee fully aware of its effects and implications. (Pascua v. Bank Wise Inc., supra.)

•••••

BAR EXAM QUESTION

(Question A.8, Part I, Labor Law, 2019 Bar Exam)

Ms. T was caught in the act of stealing the company property of her employer. When Ms. T admitted to the commission of the said act to her manager, the latter advised her to just tender her resignation; otherwise, she would face an investigation which would likely lead to the termination of her employment and the filing of criminal charges in court.

Acting on her manager’s advice, Ms. T submitted a letter of resignation. Later on, Ms. T filed a case for constructive dismissal against her employer. While Ms. T conceded that her manager spoke to her in a calm and unforceful manner, she claimed that her resignation was not completely voluntary because she was told that should she not resign, she could be terminated from work for just cause and worse criminal charges could be file against her.

(a) What is the difference between resignation and constructive dismissal? (2%)

(b) Will Ms. T’s claim for constructive dismissal prosper? Explain. (3%)

SUGGESTED ANSWER:

(a) Resignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and one has no other choice but to dissociate oneself from employment.

On the other hand, constructive dismissal is the quitting or cessation of work because continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution of pay and other benefits. It exists if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued employment. There is involuntary resignation due to the harsh, hostile, and unfavorable conditions set by the employer. The test of constructive dismissal is whether a reasonable person in the employee’s position would have felt compelled to give up his employment/position under the circumstances.

(b) No.

Under labor law jurisprudence, graceful exit is a form of voluntary resignation, and not a constructive dismissal. Graceful exit is perfectly within the discretion of the employer; as it is not uncommon that an employee is permitted to resign to avoid the humiliation and embarrassment of being terminated for just cause after the exposure of her malfeasance. It is settled that there is nothing reprehensible or illegal when the employer grants the employee a chance to resign and save face rather than smear the latter’s employment record.

In the case at bar, Ms. T was caught in the act of stealing company property. This is a serious misconduct which is a just cause for her dismissal. However, the employer extended to her the option of graceful exit to save face rather than smear Ms. T’s employment record, as well as avoid criminal charges. To avoid these, she voluntarily resigned.

Thus, Ms. T’s claim for constructive dismissal will not prosper.

•••••

2. Abandonment

Abandonment of work has been construed as “a clear and deliberate intent to discontinue one’s employment without any intention of returning back.” (Demex Rattancraft, Inc. v. Leron, G.R. No. 204288, 08 November 2017)

2 elements of abandonment:
1) The failure to report for work or absence without valid or justifiable reason; and
2) A clear intention to sever the employer-employee relationship. (Ibid.)

Although abandonment of work is not expressly enumerated as a just cause under Article 297 of the Labor Code, jurisprudence has recognized it as a form of or akin to neglect of duty. (Ibid.)

Intent to sever the employer-employee relationship can be proven through the overt acts of an employee. However, this intent “cannot be lightly inferred or legally presumed from certain ambivalent acts.” The overt acts, after being considered as a whole, must clearly show the employee’s objective of discontinuing his or her employment. (Ibid.)

Abandonment is a matter of intention and cannot, for said reason, be lightly inferred, much less legally presumed from certain equivocal acts. (Tan Brothers Corporation of Basilan City v. Escudero, G.R. No. 188711, 08 July 2013)

Mere failure to report to work is insufficient to support a charge of abandonment. The employer must adduce clear evidence of the employee’s “deliberate, unjustified refusal… to resume his [or her] employment,” which is manifested through the employee’s overt acts. (Demex Rattancraft, Inc. v. Leron, supra.)

Demex Rattancraft, Inc. v. Leron (November 2017)
Petitioners point to respondent’s absences, non-compliance with the return-to-work notices, and his alleged act of crumpling the first return-to-work notice as indicators of abandonment. These acts still fail to convincingly show respondent’s clear and unequivocal intention to sever his employment.
Respondent filed an illegal dismissal case against petitioners on June 29, 2006, the day after he was unceremoniously dismissed by his superiors on June 28, 2006. Petitioners deny respondent’s arbitrary dismissal and claim that respondent abandoned his work starting June 28, 2006.
Petitioners’ narrative would mean that respondent instituted an illegal dismissal complaint right after his first day of absence. This is illogical. There was no unequivocal intent to abandon. Respondent even pursued the illegal dismissal case after it was dismissed without prejudice on the ground of improper venue.
Respondent’s non-compliance with the return-to-work notices and his alleged act of cn1mpling the first return-to-work notice are equivocal acts that fail to show a clear intention to sever his employment. Strained relations caused by being legitimately disappointed after being unfairly treated could explain the employee’s hesitation to report back immediately. If any, his actuations only explain that he has a grievance, not that he wanted to abandon his work entirely.
Petitioners also failed to comply with procedural due process, particularly the twin-notice rule. They admitted that after sending two (2) return-to-work notices, they sent a notice to respondent informing him of his dismissal.
Valid termination requires the employer to send an initial notice to the employee, stating the specific grounds or causes for dismissal and directing the submission of a written explanation answering the charges. After considering the employee’s answer, the employer must give another notice informing the employee of the employer’s findings and reason for termination. These are the operative acts that terminate an employer-employee relationship. In Kams International, Inc. v. National Labor Relations Commission, this Court explained:
Furthermore, it must be stressed that abandonment of work does not per se sever the employer-employee relationship. It is merely a form of neglect of duty, which is in turn a just cause for termination of employment. The operative act that will ultimately put an end to this relationship is the dismissal of the employee after complying with the procedure prescribed by law.
The employer has the burden of proving that an employee’s dismissal from service was for a just or authorized cause. Having failed to clearly establish that respondent abandoned his work, this Court denies the petition and affirms the Court of Appeals’ finding that respondent was illegally dismissed from employment.

The burden to prove whether the employee abandoned his or her work rests on the employer. Thus, it is incumbent upon [the employer] to prove the two (2) elements of abandonment. First, [the employer] must provide evidence that respondent failed to report to work for an unjustifiable reason. Second, [the employer] must prove [the employee’s] overt acts showing a clear intention to sever his ties with [the employer] as his employer. (Protective Maximum Security Agency, Inc. v. Fuentes, G.R. No. 169303, 11 February 2015)

Protective Maximum Security Agency, Inc. v. Fuentes (February 2015)
There is no abandonment in this case.
The first element of abandonment is the failure of the employee to report to work without a valid and justifiable reason. Petitioner asserts that respondent failed to report for work immediately after his release from prison.  He also failed to abide by company procedure and report to his immediate superior. According to petitioner, respondent’s actions constitute a failure to report to work without a valid and justifiable reason.
The National Labor Relations Commission and the Court of Appeals found that respondent’s failure to return to work was justified because of his detention and its adverse effects. The Court of Appeals found that petitioner did not refute the allegation that respondent, while in the custody of the police, suffered physical violence in the hands of its employees. Thus, the Court of Appeals gave credence to the report submitted by Inspector Escartin, which stated that respondent was “so traumatized that he actually asked to remain in the custody of the police because he feared for his life.” The Court of Appeals further found that respondent experienced intense fear, “manifest[ed] by the fact that he left the custody of the police only when his mother accompanied him.”
Thus, the intervening period when respondent failed to report for work, from respondent’s prison release to the time he actually reported for work, was justified. Since there was a justifiable reason for respondent’s absence, the first element of abandonment was not established.
The second element is the existence of overt acts which show that the employee has no intention to return to work. Petitioner alleges that since respondent “vanished” and failed to report immediately to work, he clearly intended to sever ties with petitioner.
However, respondent reported for work after August 15, 2001, when the criminal Complaint against him was dropped. Further, petitioner refused to allow respondent to resume his employment because petitioner believed that respondent was a member of the New People’s Army and had already hired a replacement.
Respondent’s act of reporting for work after being cleared of the charges against him showed that he had no intention to sever ties with his employer. He attempted to return to work after the dismissal of the Complaint so that petitioner would not have any justifiable reason to deny his request to resume his employment.
Thus, respondent’s actions showed that he intended to resume working for petitioner. The second element of abandonment was not proven, as well.

Disclaimer: All information herein is for educational and general information only intended for those preparing for the bar exam. These should not be taken as professional legal advice or opinion. Please consult a competent lawyer to address your specific concerns. Any statements or opinions of the author are solely his own and do not reflect that of any organization he may be connected.

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