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E.

CONSTRUCTIVE DISMISSAL
Constructive dismissal is an employers act amounting to dismissal but made to
appear as if it were not a dismissal in disguise. In most cases of constructive
dismissal, the employee is allowed to continue to work, but is simply reassigned, or
demoted, or his pay diminished without a valid reason to do so.
Constructive dismissal does not always involve forthright dismissal or diminution
in rank, compensation, benefit and privileges. There may be constructive dismissal if an
act of clear discrimination, insensibility or disdain by an employer becomes so
unbearable on the part or the employee that it could foreclose any choice by him except
to forego his continued employment

CASES UNDER CONSTRUCTIVE DISMISSAL

University of the Immaculate Concepcion vs. NLRC


G.R. No. 181146, January 26, 2011

FACTS
Teodora C. Axalan is a regular faculty member holding the position of Associate
Professor II in the University of the Immaculate Conception in Davao. She was
dismissed due to 2 instances wherein she was allegedly absent without leave, attending
seminars in Quezon City and Baguio City, respectively.
On the first instance, Axalan claimed that she held online classes. She was
convinced that she cannot be considered absent and opted not to write the letter of
apology requested of her by the University President to avoid any administrative charge.
On the second instance, Axalan claimed that she asked permission from the VP for
Academics who denied giving the same.
After conducting hearings and receiving evidence, the ad hoc grievance
committee found Axalan to have incurred AWOL on both instances and recommended
that Axalan be suspended without pay for six months on each AWOL charge. The
university president approved the committees recommendation and wrote Axalan a
letter informing her of her absences and of her total penalty of one-year suspension
without pay for both AWOL charges effective immediately.

ISSUE
Whether or not there was constructive dismissal.
HELD
NO, there was no constructive dismissal, Axalan having been validly validly
suspended for cause and in accord with procedural due process.
Constructive dismissal occurs when there is cessation of work because
continued employment is rendered impossible, unreasonable, or unlikely as when there
is a demotion in rank or diminution in pay or when a clear discrimination, insensibility, or
disdain by an employer becomes unbearable to the employee leaving the latter with no
other option but to quit.

In this case however, there was no cessation of employment relations between


the parties. It is unrefuted that Axalan promptly resumed teaching at the university right
after the expiration of the suspension period. In other words, Axalan never quit.
Hence, Axalan cannot claim that she was left with no choice but to quit, a crucial
element in a finding of constructive dismissal. Thus, Axalan cannot be deemed to have
been constructively dismissed.
Significantly, at the time the Labor Arbiter rendered his Decision on 11 October
2004, Axalan had already returned to her teaching job at the university on 1 October
2004. The Labor Arbiters Decision ordering the reinstatement of Axalan, who at the
time had already returned to work, is thus absurd.
There being no constructive dismissal, there is no legal basis for the Labor
Arbiters order of reinstatement as well as payment of backwages, salary differentials,
damages, and attorneys fees. Thus, the third issue raised in the petition is now moot.
The Court recognizes the right of employers to discipline its employees for
serious violations of company rules after affording the latter due process and if the
evidence warrants. The university, after affording Axalan due process and finding her
guilty of incurring AWOL on two separate occasions, acted well within the bounds of
labor laws in imposing the penalty of six-month suspension without pay for each
incidence of AWOL.
As a learning institution, the university cannot be expected to take
absences without official leave among its employees, more so among its
members even if they happen to be union officers. To do so would send the
signal to the studentry and the rest of its teaching staff that irresponsibility is
tolerated in the academe.

lightly
faculty
wrong
widely

The law protects both the welfare of employees and the prerogatives of
management. Courts will not interfere with prerogatives of management on the
discipline of employees, as long as they do not violate labor laws, collective bargaining
agreements if any, and general principles of fairness and justice.

Morales vs. Harbour Centre Port Terminal Inc.,


G.R. No. 174208, January 25, 2012
FACTS
Petitioner was hired by respondent Harbour Centre Port Terminal, Inc. (HCPTI)
as an Accountant and Acting Finance Officer, with a monthly salary of P18,000. Morales
was later on promoted to Division Manager of the Accounting Department, for which he
was compensated a monthly salary of P33,700.00, plus allowances . Subsequent to
HCPTIs transfer to its new offices at Vitas, Tondo, Manila Morales received an interoffice memorandum reassigning him to Operations Cost Accounting, tasked with the
duty of monitoring and evaluating all consumables requests, gears and equipment
related to the corporations operations and of interacting with its sub-contractor, Bulk
Fleet Marine Corporation. Morales wrote Singson, protesting that his reassignment was
a clear demotion since the position to which he was transferred was not even included
in HCPTIs plantilla. In response to Morales grievance Singson issued an inter-office
memorandum to the effect that transfer of employees is a management prerogative
and that HCPTI had the right and responsibility to find the perfect balance between the
skills and abilities of employees to the needs of the business. For the whole of the
ensuing month Morales was absent from work and/or tardy. Singson issued to Morales
a memorandum denominated as a First Warning reminding Morales that, as an
employee of HCPTI, he was subject to its rules and regulations and could be
disciplinarily dealt with pursuant to its Code of Conduct. In view of the absences
Morales continued to incur, HCPTI issued a Second Warning and a Notice to Report for
Work and Final Warning. In the meantime, Morales filed a complaint against HCPTI,
Filart and Singson, for constructive dismissal. Respondent filed their position paper,
arguing that Morales abandoned his employment and was not constructively dismissed.

ISSUE
WON petitioner was constructively dismissed.

HELD
Constructive dismissal exists where there is cessation of work because
"continued employment is rendered impossible, unreasonable or unlikely, as an offer
involving a demotion in rank or a diminution in pay and other benefits. In cases of a
transfer of an employee, the rule is settled that the employer is charged with the burden
of proving that its conduct and action are for valid and legitimate grounds such as
genuine business necessity and that the transfer is not unreasonable, inconvenient or
prejudicial to the employee. If the employer cannot overcome this burden of proof, the
employees transfer shall be tantamount to unlawful constructive dismissal.
Petitioner was constructively dismissed. He was already occupying the position
of Division Manager at HCPTIs Accounting Department and as a consequence of his
promotion to said position. That the reassignment was a demotion is evident from
Morales new duties which, far from being managerial in nature, were very simply and
vaguely described as inclusive of monitoring and evaluating all consumables requests,
gears and equipments related to [HCPTIs] operations as well as close interaction with
its sub-contractor Bulk Fleet Marine Corporation. Morales demotion is evident from the
fact that his reassignment entailed a transfer from a managerial position to one which
was not even included in the corporations plantilla.
While ordinarily management prerogative is not interfered with, it is also not
absolute and is subject to limitations imposed by law, collective bargaining agreement,
and general principles of fair play and justice. Thus, an employer may transfer or assign
employees from one office or area of operation to another, provided there is no
demotion in rank or diminution of salary, benefits, and other privileges, and the action is
not motivated by discrimination, made in bad faith, or effected as a form of punishment
or demotion without sufficient cause. Respondent however failed to justify the demotion
of petitioner on the ground that it was reorganizing its business structure, this was
evidenced by the fact that Morales was able to prove that HCPTIs existing plantilla did
not include an Operations Cost Accounting Department and/or an Operations Cost
Accountant. As the party belatedly seeking to justify the reassignment due to the
supposed reorganization of its corporate structure, HCPTI, in contrast, did not even
bother to show that it had implemented a corporate reorganization and/or approved a
new plantilla of positions which included the one to which Morales was being
transferred. On the allegation of abandonment on the part of petitioner As a just and
valid ground for dismissal, at any rate, abandonment requires the deliberate, unjustified
refusal of the employee to resume his employment, without any intention of returning.
Since an employee like Morales who takes steps to protest his dismissal cannot
logically be said to have abandoned his work, it is a settled doctrine that the filing of a
complaint for illegal dismissal is inconsistent with abandonment of employment.

Megaforce Security & Allied Services vs. Lactao


G.R. No. 160940, July 21, 2008

FACTS
On April 28, 1998, Megaforce hired Lactao as a security guard. He was detailed
at Merville Park Subdivision in Paraaque City. On April 4, 2000, he filed with the
Arbitration Branch of the NLRC a complaint against Megaforce for underpayment of
wages, non-payment of overtime pay, service incentive leave pay and 13th month pay.
On May 3, 2000, Lactao was reassigned to ABB Industry, Inc. in Sucat, Paraaque City
but wasa recalled by Megaforce directing him to report to the Headquarters for proper
disposition and new assignment.
When Lactao reported to the Headquarters but he was not given a new
assignment. Believing he was terminated, Lactao amended his complaint on June 7,
2000 to one for illegal dismissal with prayer for reinstatement with the same prayer for
underpayment of wages, non-payment of overtime pay, service incentive leave pay and
13th month pay, plus moral and exemplary damages and attorney's fees.
Lactao
claims that in retaliation to his filing of the complaint Megaforce constructively dismissed
him by relieving him from his post and not giving him a new assignment.
In its Position Paper , Megaforce denied the illegal dismissal charge. The Labor
Arbiter dismissed the complaint for lack of merit. On appeal, the NLRC set aside the
LAs decision, ruling that Lactao was constructively dismissed. Hence, the present
petition.
ISSUE
Whether or not Lactao was constructively dismissed making the dismissal illegal.
HELD
In cases involving security guards, a relief and transfer order in itself does not
sever employment relationship between a security guard and his agency. An employee
has the right to security of tenure, but this does not give him such a vested right in his
position as would deprive the company of its prerogative to change his assignment or
transfer him where his service, as security guard, will be most beneficial to the client.
Temporary "off-detail" or the period of time security guards are made to wait until they
are transferred or assigned to a new post or client does not constitute constructive
dismissal as their assignments primarily depend on the contracts entered into by the
security agencies with third parties. Indeed, the Court has repeatedly recognized that

"off-detailing" is not equivalent to dismissal, so long as such status does not continue
beyond a reasonable time; when such a "floating status" lasts for more than six months,
the employee may be considered to have been constructively dismissed.
However, in the present case, while the charge of illegal dismissal may have
been premature because Lactao has not been given a new assignment or temporary
"off-detail" for a period of seven days only when he amended his complaint, the
continued failure of Megaforce to offer him a new assignment during the proceedings of
the case before the LA and beyond the reasonable six-month period makes it liable for
constructive dismissal.
There is constructive dismissal if an act of clear discrimination, insensibility, or
disdain by an employer becomes so unbearable on the part of the employee that it
would foreclose any choice by him except to forego his continued employment. It exists
where there is cessation of work because continued employment is rendered
impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a
diminution in pay.
The Court cannot accept the contention of Megaforce that Lactao did not report
to work after his recall and had abandoned his job since it failed to present credible
proof of any act on the part of Lactao to abandon his employment. Moreover, it is a
settled doctrine that the filing of a complaint for illegal dismissal is inconsistent with
abandonment of employment. An employee who takes steps to protest his dismissal
cannot logically be said to have abandoned his work. The filing of such complaint is
proof enough of his desire to return to work, thus negating any suggestion of
abandonment.
Under Article 279 of the Labor Code, as amended, an employee who is unjustly
dismissed from work shall be entitled to reinstatement without loss of seniority rights
and other privileges; to his full backwages, inclusive of allowances; and to other benefits
or their monetary equivalent computed from the time his compensation was withheld
from him up to the time of his actual reinstatement. Thus, Lactao is entitled to
reinstatement and backwages as a necessary consequence.

Nippon Housing Phils. vs. Leynes


G.R. No. 177816, August 3, 2011

FACTS
Petitioner, originally engaged in the business of providing building maintenance
From its original ventured into building management and gained Bay Gardens
Condominium Project (the Project) of the Bay Gardens Condominium Corporation
(BGCC) as its first and only building maintenance client. In this regard, petitioner hired
respondent Maiah Angela Leynes on 26 March 2001 for the position of Property
Manager, with a salary of P40,000.00 per month. Her responsibilities include surveying
the requirements of the government and the client for said project, the formulation of
house rules and regulations, the preparation of the annual operating and capital
expenditure budget, hiring and deployment of manpower, salary and position
determination as well as the assignment of the schedules and responsibilities of
employees.
Leynes had a misunderstanding with the building engineer of the project
(Cantuba) and barred the latters entry to the site. The Engr. also accused the former of
conceit, pride and poor managerial skills. Takada, the NHPI's Vice President issued a
memorandum attributing the incident to "simple personal differences" and directing
Leynes to allow Engr. Cantuba to report back for work. Disappointed with this
management decision, she submitted a letter to NHPIs President (Ota) asking for an
emergency leave of absence for the supposed purpose of coordinating with her lawyer
regarding her resignation letter. NHPI offered the Property Manager position to Engr.
Carlos Jose as a consequence Leynes' signification of her intention to resign. However,
she sent another letter expressing her intention to return to work and to call off her
planned resignation. However, she received a letter from the management to report
instead to the main office as one in a floating status because someone already
occupies her post.
Aggrieved, Leynes filed a complaint against petitioner for illegal dismissal, unpaid
salaries, benefits, damages and attorney's fees. The Labor arbiter found that the
petitioners act of putting Leynes on a floating status was equivalent to termination
without just cause. The NLRC ruled that NHPI's placement of Leynes on floating status
was necessitated by the client's contractually guaranteed right to request for her relief.
However, this was later on reversed by the CA, hence, this present petition before the
SC.

ISSUE
WON petitioners' decision to place respondent on floating status is tantamount to
constructive dismissal. (Alternative: what is the effect of withdrawn resignation?)
HELD
No, the placement of Leynes on a floating status due to redundancy is valid.
There is no constructive dismissal. The factual antecedents suggest that NHPI's
immediate hiring of Engr. Jose as the new Property Manager for the Project was
brought about by Leynes' own rash announcement of her intention to resign from her
position. Although she subsequently changed her mind and sent Reyes a letter by
telefax announcing the reconsideration of her planned resignation and her intention to
return to work, Leynes evidently had only herself to blame for precipitately setting in
motion the events which led to NHPI's hiring of her own replacement.
The rule is settled, however, that "off-detailing" is not equivalent to dismissal, so
long as such status does not continue beyond a reasonable time and that it is only when
such a "floating status" lasts for more than six months that the employee may be
considered to have been constructively dismissed. A complaint for illegal dismissal filed
prior to the lapse of said six-month and/or the actual dismissal of the employee is
generally considered as prematurely filed.
Since the petitioner has no other client for the building management side of its
business, it acted within its prerogatives when it eventually terminated Leynes' services
on the ground of redundancy. One of the recognized authorized causes for the
termination of employment, redundancy exists when the service capability of the
workforce is in excess of what is reasonably needed to meet the demands of the
business enterprise. A redundant position is one rendered superfluous by any number
of factors, such as overhiring of workers, decreased volume of business, dropping of a
particular product line previously manufactured by the company or phasing out of
service activity priorly undertaken by the business An employer has no legal obligation
to keep more employees than are necessary for the operation of its business.
Considering that Leynes was terminated from service upon an authorized cause,
we find that the CA likewise erred in faulting NHPI for supposedly failing to notify said
employee of the particular act or omission leveled against her and the ground/s for
which she was dismissed from employment. Where dismissal, however, is for an
authorized cause like redundancy, the employer is, instead, required to serve a written
notice of termination on the worker concerned and the DOLE, at least one month from
the intended date thereof. For its failure to comply strictly with the 30-day minimum
requirement for said notice and effectively violating Leynes' right to due process, NHPI
should be held liable to pay nominal damages in the sum of P50,000.00.

Duldulao vs. Court of Appeals,


G.R. No. 164893, March 1, 2007

FACTS
Petitioner Constancia P. Duldulao was hired by respondent Baguio Colleges
Foundation (BCF) as secretary/clerk-typist and assigned to the College of Law
sometime in June of 1987. In August 1996, a certain law student filed a complaint
against petitioner for alleged irregularities in the performance of her work. Petitioner was
told to submit her answer to the complaint and given several extensions within which to
do so. Despite the extensions, she failed to submit her answer.
On 1 October 1996, Dean Honorato V. Aquino of the College of Law informed
respondents President, Atty. Edilberto B. Tenefrancia, of petitioners failure to file her
answer and recommended the assignment of petitioner outside the College of Law, not
only because of such failure to answer but also her having admitted fraternizing with
students of the College. On the same day, respondents Vice President for
Administration, Leonardo S. dela Cruz, issued a Department Order to Mrs. Duldulao
informing her of her transfer to the Office of the Principals of the High School and
Elementary Departments.
On 21 January 1997, the Administrative Investigating Committee found the
Department Order appropriate since it was intended to prevent the controversy between
petitioner and the complaining student from adversely affecting a harmonious
relationship within the College of Law among all its constituents.
On 17 February 1997, petitioner filed a complaint for constructive dismissal with
prayer for moral and exemplary damages and attorneys fees before the NLRC
Regional Arbitration Branch-Cordillera Administrative Region. She stated that aside from
being tainted with procedural lapses in violation of her right to due process, the transfer
also amounted to her demotion in rank. The NLRC dismissed the complaint for lack of
merit which decision was affirmed by the Court of Appeals.

ISSUE
Whether petitioners transfer as secretary/clerk-typist from the College of Law to
the High School and Elementary Departments amounts to constructive dismissal.

HELD
There was no constructive dismissal. There is constructive dismissal if an act of
clear discrimination, insensibility, or disdain by an employer becomes so unbearable on
the part of the employee that it would foreclose any choice by him except to forego his
continued employment. It exists where there is cessation of work because "continued
employment is rendered impossible, unreasonable or unlikely, as an offer involving a
demotion in rank and a diminution in pay." The factual milieu in this case is different. It is
the employers prerogative, based on its assessment and perception of its employees
qualifications, aptitudes, and competence, to move them around in the various areas of
its business operations in order to ascertain where they will function with maximum
benefit to the company. An employees right to security of tenure does not give him such
a vested right in his position as would deprive the company of its prerogative to change
his assignment or transfer him where he will be most useful. When his transfer is not
unreasonable, nor inconvenient, nor prejudicial to him, and it does not involve a
demotion in rank or a diminution of his salaries, benefits, and other privileges, the
employee may not complain that it amounts to a constructive dismissal. The transfer of
petitioner does not amount to a demotion in rank and status. Petitioner was a
secretary/clerk-typist of the College of Law. As such secretary/clerk-typist, she would
only have to perform the same duties in the Office of the Principals of the High School
and Elementary Departments. Petitioner was not denied due process. Reassignments
made by management pending investigation of irregularities allegedly committed by an
employee fall within the ambit of management prerogative. The transfer, while incidental
to the pending charges against petitioner, was not meant to be a penalty, but rather a
preventive measure to avoid further damage to the College of Law. The purpose of
reassignments is no different from that of preventive suspension which management
could validly impose as a measure of protection of the companys property pending
investigation of any malfeasance or misfeasance committed by the employee.