What is constructive dismissal? – [C]onstructive 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. 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.[1] (Emphases and underscoring supplied)
When constructive dismissal is present. – “There is constructive dismissal when an employer’s act of clear discrimination, insensibility or disdain becomes so unbearable on the part of the employee so as to foreclose any choice on his part except to resign from such employment. It exists where there is involuntary resignation because of the harsh, hostile and unfavorable conditions set by the employer. We have held that the standard for constructive dismissal is “whether a reasonable person in the employee’s position would have felt compelled to give up his employment under the circumstances.”
The unreasonably harsh conditions that compel resignation on the part of an employee must be way beyond the occasional discomforts brought about by the misunderstandings between the employer and employee. Strong words may sometimes be exchanged as the employer describes her expectations or as the employee narrates the conditions of her work environment and the obstacles she encounters as she accomplishes her assigned tasks. As in every human relationship, there are bound to be disagreements.
However, when these strong words from the employer happen without palpable reason or are expressed only for the purpose of degrading the dignity of the employee, then a hostile work environment will be created. In a sense, the doctrine of constructive dismissal has been a consistent vehicle by this Court to assert the dignity of labor.”[2]
“Acts of disdain and hostile behavior such as demotion, uttering insulting words, asking for resignation, and apathetic conduct towards an employee constitute constructive illegal dismissal.”[3]
Constructive dismissal exists as an involuntary resignation on the part of the employee due to the harsh, hostile and unfavorable conditions set by the employer. An act, to be considered as amounting to constructive dismissal, must be a display of utter discrimination or insensibility on the part of the employer so intense that it becomes unbearable for the employee to continue with his [or her] employment.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. Constructive dismissal is therefore a dismissal in disguise,79 or also known as constructive discharge.
The nature of constructive dismissal as a dismissal in disguise enables the employers to do away with their obligation to prove just cause and comply with the twin requirements of notice and hearing before terminating their employees. Consequently, in the recent case of Jacob v. First Step Manpower Int’l. Services, Inc.,the Court held that constructive dismissal is a form of illegal dismissal. Simply put, constructive dismissal results in the employers’ circumvention of the due process requirements of the law in terminating an employee, which effectively undermines their security of tenure. [4](Citations omitted)
Existence of just cause under Art. 297 of the Labor Code precludes constrictive dismissal. “Contemplating on these ruminations, the Court declares that the existence of just cause for termination presupposes that the employer actually terminates the erring employee under the grounds enumerated in Article 297 (formerly Article 282) of the Labor Code. Consequently, there is no just cause for constructive dismissal. If the employer proves that a legitimate ground exists for the termination of employment of an employee such as genuine business necessity in the conduct of its affairs, then its act will amount to a valid exercise of its management prerogatives. There is no illegal dismissal in such a case. If no valid ground exists for the termination of employment of an employee, then said employee would be illegally dismissed. An employee who is constructively dismissed is an illegally dismissed employee. This presupposes a finding that no just cause exists to justify his dismissal.”[5]
Burden of employee to prove constructive dismissal. “It is true that in constructive dismissal cases, the employer is charged with the burden of proving that its conduct and action or the transfer of an employee are for valid and legitimate grounds such as genuine business necessity. However, it is likewise true that in constructive dismissal cases, the employee has the burden to prove first the fact of dismissal by substantial evidence. Only then when the dismissal is established that the burden shifts to the employer to prove that the dismissal was for just and/or authorized cause. The logic is simple — if there is no dismissal, there can be no question as to its legality or illegality.[6]40 (Emphasis and underscoring supplied)
Management prerogative vs. constructive dismissal. – “Management prerogative is the right of an employer to regulate all aspects of employment, including work assignment, working methods, processes to be followed, working regulations, work supervision, lay-off of workers and the discipline, dismissal and recall of workers.37 This also includes the prerogative to transfer an employee from one office to another within the business establishment. This is, after all, a privilege inherent in the employer’s right to control and manage its enterprise effectively.
Like all rights, however, management prerogative has certain limits; it cannot be exercised with unbridled discretion. For instance, the managerial prerogative to transfer personnel must not result in the demotion in rank or diminution of the salary, benefits, and other privileges of said personnel. Too, it must be exercised without grave abuse of discretion and with due observance of the basic elements of justice and fair play. It cannot be over-emphasized that the right to transfer should not be confused with the manner in which that right must be exercised. Surely, it cannot be used as a subterfuge by the employer to rid itself of an undesirable worker. Philippine Industrial Security Agency Corporation v. Aguinaldo elucidates:
While it is true that an employer is free to regulate, according to his own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place, and manner of work, tools to be used, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, layoff of workers and the discipline, dismissal and recall of workers, and this right to transfer employees forms part of management prerogatives, the employee’s transfer should not be unreasonable, nor inconvenient, nor prejudicial to him. It should not involve a demotion in rank, or diminution of his salaries, benefits, and other privileges, as to constitute constructive dismissal. (emphasis added)
Rural Bank of Cantilan v. Julve also instructs:
Concerning the transfer of employees, these are the following jurisprudential guidelines: (a) a transfer is a movement from one position to another of equivalent rank, level or salary without break in the service or a lateral movement from one position to another of equivalent rank or salary; (b) the employer has the inherent right to transfer or reassign an employee for legitimate business purposes; (c) a transfer becomes unlawful where it is motivated by discrimination or bad faith or is effected as a form of punishment or is a demotion without sufficient cause; (d) the employer must be able to show that the transfer is not unreasonable inconvenient or prejudicial to the employee. (emphasis added)[7](Citations omitted)
[1] Gan v. Galderma Philippines, Inc., 701 Phil. 612 (2013), cited in Roxas v. Baliwag Transit, Inc and/or Tengco, G,R., No. 231859, February 19, 2020
[2] Rodriguez v. Park N Ride, Inc., 807 Phil. 747 (2017) cited in Bayview Management Consultants, Inc., et al. v. Pre, G.R. No. 220170, August 19, 2020
[3] Bayview Management Consultants, Inc., et al. v. Pre, G.R. No. 220170, August 19, 2020
[4] Lagamayo v. Cullinan Group and Florencio, G.R. No. 227718, November 11, 2021
[5] Lagamayo v. Cullinan Group and Florencio, G.R. No. 227718, November 11, 2021
[6] Galang v. Boie Takeda Chemicals Inc., 790 Phil. 582, cited in Italkarat v. Gerasmio, G.R. No. 221411, September 28, 2020
[7] Reliable Industrial and Commercial Security Agency Inc., v. CA , Canete and Auguis,m G.R. No. 190924, September 14, 2021