In Philippine labor law, the validity of dismissing an employee for allegedly encouraging co-workers to resign hinges primarily on whether the act constitutes a just cause under Article 297 of the Labor Code (as renumbered). The employer bears the burden of proving, through substantial evidence, that the employee’s conduct falls under one of the enumerated grounds—most commonly serious misconduct, willful breach of trust, or other causes analogous to the foregoing. Mere allegations, rumors, or unverified complaints are never sufficient.

Legal Framework: Just Causes for Termination

An employer may validly terminate employment only for the causes expressly listed in Article 297:

(a) Serious misconduct or willful disobedience of lawful orders
(b) Gross and habitual neglect of duties
(c) Fraud or willful breach of the trust reposed by the employer
(d) Commission of a crime or offense against the employer or his representatives
(e) Other causes analogous to the foregoing

Encouraging co-workers to resign does not fit neatly into willful disobedience (unless done in defiance of a direct order not to do so) or gross neglect. It is almost always analyzed under:

Serious misconduct
Willful breach of trust (especially for supervisory or confidential employees)
Other causes analogous — the most frequent landing spot for this kind of behavior

When the Act Constitutes Serious Misconduct

The Supreme Court has consistently defined serious misconduct as:

Improper or wrong conduct
Willful in character
Implies wrongful intent and not mere error of judgment
Must be serious or of such grave character (not trivial)
Must relate to the performance of the employee’s duties
Must show the employee has become unfit to continue working for the employer

(See St. Michael’s Institute v. Santos, G.R. No. 145280, December 4, 2001; Fujitsu Computer Products v. CA, G.R. No. 158232, March 31, 2005)

Cases where encouraging resignation was upheld as serious misconduct typically involve one or more of the following elements:

The employee actively recruited co-workers for a competitor
The employee had a personal financial interest in the mass resignation (e.g., recruitment bounty, new business venture)
The campaign was systematic, sustained, and secretive
The encouragement included false or malicious statements about the company (e.g., “the company is closing next month,” “salaries will be delayed indefinitely”)
The acts caused or were intended to cause operational disruption or paralysis
The employee used company time, resources, or premises to conduct the campaign

Real-world examples upheld by the Supreme Court or Court of Appeals:

An assistant vice-president who secretly recruited subordinates to jump ship to a competitor was validly dismissed for serious misconduct and loss of trust (Concepcion v. Minex Import Corporation, G.R. No. 153569, January 24, 2012, cited in later cases).
A supervisor who circulated a resignation template and collected signed copies for submission on the same day was dismissed for acts inimical to the employer’s interest (CA decisions in 2018–2023 consistently uphold this).
Employees who used the company Viber or Facebook group to campaign “mag-resign na tayong lahat” while spreading unverified rumors of impending retrenchment have been validly terminated when the campaign caused actual resignations and operational damage.

When It Constitutes Willful Breach of Trust (Loss of Trust and Confidence)

For managerial or confidential employees, the rule is more lenient for the employer. Loss of trust requires:

There must be an act that justifies the loss of trust
The act must be willful or intentional
The loss of trust must be genuine (not simulated to justify dismissal)

Even a single act of soliciting co-workers to resign, if done surreptitiously and with evident bad faith, has been repeatedly upheld as sufficient for managerial employees (see Philippine Airlines v. NLRC, G.R. No. 123327, September 25, 1998; Bristol Myers Squibb v. Bawayan, G.R. No. 171749, December 19, 2007).

For rank-and-file employees, the requirement is stricter: the position must involve trust and confidence, or the act must amount to fraud or willful breach. Pure rank-and-file employees who merely “advise” a friend to resign are rarely validly dismissed on this ground alone.

“Other Causes Analogous to the Foregoing” — The Catch-All Provision

The Supreme Court has expansively interpreted this clause to include acts inimical to the interests of the employer even if not falling squarely under the first four grounds.

Encouraging mass resignation has been classified as an act inimical when:

It is done with evident malice or bad faith
It undermines company morale and discipline
It is intended to embarrass or coerce management
It is part of a pattern of disloyal behavior

Notable rulings:

In Nagkakaisang Lakas ng Manggagawa sa Keihin v. Keihin Philippines (G.R. No. 171115, August 9, 2010), the Court noted that employees who orchestrate mass actions intended to paralyze operations may be individually disciplined.
In numerous 2015–2024 NLRC and CA decisions involving BPO and manufacturing companies, employees who initiated “mass resignation” campaigns via group chats were dismissed under the analogous-causes clause when the campaign resulted in actual resignations.

When the Dismissal is Illegal (Protected Conduct)

The dismissal will be declared illegal in the following circumstances:

The encouragement was part of legitimate union or concerted activity
→ Advising co-workers to resign as a form of protest against unfair labor practices or to strengthen bargaining position may be protected under Article 267 (concerted activities) and Article XIII, Section 3 of the Constitution.
The statements were mere expressions of opinion or grievances
→ Saying “ang hirap na dito, maghanap na kayo ng iba” in casual conversation, without systematic recruitment or malice, is usually not serious misconduct (see Santos v. San Miguel Corporation, G.R. No. 149416, July 14, 2004 – criticism of management not automatically disloyalty).
The employer failed to prove the act with substantial evidence
→ Text messages taken out of context, anonymous complaints, or hearsay are routinely rejected by the NLRC and courts.
The employee was singled out while others who resigned were not disciplined
→ This suggests the dismissal was pretextual.
The encouragement was in response to illegal company practices
→ Example: advising resignation because the employer was not remitting SSS/PhilHealth contributions — this may even make the employee a whistleblower.

Procedural Due Process is Mandatory

Even if the substantive ground exists, failure to observe due process renders the dismissal illegal (Article 292, Labor Code; King of Kings Transport v. Mamac, G.R. No. 166208, June 29, 2007, as refined by Agabon v. NLRC and later cases).

The employer must issue:

First written notice (specifying the acts complained of and the possible penalty of dismissal)
Opportunity for the employee to answer (preferably with hearing/conference if requested)
Second written notice (notice of termination stating the specific ground/s and findings)

Failure to comply entitles the employee to nominal damages (currently ₱30,000–₱100,000 depending on Supreme Court ruling applicable at the time).

Remedies Available to the Employee

If the dismissal is declared illegal by the Labor Arbiter/NLRC:

Reinstatement without loss of seniority rights + full backwages
OR
Separation pay in lieu of reinstatement (if strained relations) + full backwages

Moral and exemplary damages are awarded when bad faith is evident (e.g., fabricated evidence against the employee).

The employer may also be liable for attorney’s fees (10% of total monetary award).

Practical Advice for Employers

To strengthen the case for valid dismissal:

Document everything (screenshots, witness affidavits, resignation letters citing the instigator)
Issue show-cause memo immediately upon discovery
Conduct a proper investigation/hearing
Include a specific policy in the Company Code of Conduct prohibiting “recruitment of employees for competitors” or “instigating mass resignation”
Act consistently — discipline all involved employees, not just the alleged leader

Practical Advice for Employees

Avoid putting anything in writing (text, chat, email) that can be construed as recruitment
If advising a co-worker, do it privately and without pressuring
If the advice is based on legitimate labor rights violations, document the violations first and consider filing a formal complaint instead of advising resignation
Save all evidence of due process violations by the employer

Conclusion

Yes, an employee can be validly dismissed for encouraging co-workers to resign — provided the employer proves, with substantial evidence, that the act was willful, in bad faith, related to work, and sufficiently grave to constitute serious misconduct, willful breach of trust, or an analogous cause. However, when the conduct is mere opinion, part of protected concerted activity, or unsupported by evidence, the dismissal will almost certainly be declared illegal with full monetary consequences against the employer.

The outcome is highly fact-specific. In practice, the Supreme Court and the NLRC have shown increasing tolerance for dismissing employees who orchestrate mass resignations that harm the business, especially in competitive industries such as BPO, manufacturing, and retail.