In Philippine labor law, a resignation is not always voluntary. Sometimes, an employee is forced out of their job not by a formal termination letter, but by an employer making continued employment impossible, unreasonable, or unbearable. This is known as Constructive Dismissal.

Understanding your rights in this situation is crucial, as a proven case of constructive dismissal entitles you to the same remedies as an employee who was unjustly fired.

What is Constructive Dismissal?

Constructive dismissal occurs when there is a "cessation of work because continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution in pay" (Philippines v. Morales, G.R. No. 212815).

It is often described as a "quit-claim" or a "dismissal in disguise." The test is whether a reasonable person in the employee's position would have felt compelled to give up their employment under the circumstances.

Common Indicators

Demotion: Being moved to a lower position with less responsibility, even if the salary remains the same.
Pay Cuts: Unilateral reduction of wages or benefits.
Hostile Environment: Harassment, singling out an employee for unfair treatment, or making the workplace toxic to force a resignation.
Unreasonable Transfer: Transferring an employee to a distant location with no valid business reason, intended solely to inconvenience them.

Recoverable Claims and Benefits

If you can prove you were constructively dismissed, the law treats it as an illegal dismissal. Consequently, you are entitled to several forms of monetary compensation.

1. Final Pay

Regardless of how you leave a company, you are entitled to your unpaid wages for the actual days worked. Under Labor Advisory No. 06, Series of 2020, final pay must be released within thirty (30) days from the date of separation.

2. Pro-rated 13th Month Pay

The 13th-month pay is mandatory. If you leave mid-year, you are entitled to a pro-rated amount based on the total basic salary you earned during the calendar year.

Formula: (Total Basic Salary Earned within the Calendar Year) / 12 = Pro-rated 13th Month Pay.

3. Separation Pay

In cases of constructive dismissal, separation pay serves as a "substitute" for reinstatement if the relationship between the employer and employee has become too strained (the "Strained Relations Doctrine").

Amount: Usually one (1) month's salary for every year of service, with a fraction of at least six months being considered as one whole year.

4. Backwages

This is perhaps the most significant recovery. Backwages represent the earnings you lost from the time you were forced to leave until the finality of the court's decision. This includes your basic salary, allowances, and other benefits.

5. Damages and Attorney's Fees

If the employer acted with bad faith, fraud, or in a manner oppressive to labor, the Labor Arbiter may award:

Moral Damages: For mental anguish and suffering.
Exemplary Damages: To set a public example against such behavior.
Attorney's Fees: Usually 10% of the total monetary award.

The Burden of Proof

In the Philippines, the legal hierarchy of proof is specific:

The Employee must first prove that they were dismissed or that the conditions of "constructive dismissal" actually existed.
The Employer must then prove that the dismissal (or the changes in employment) was for a just or authorized cause and that due process was followed.

Steps to Take

If you believe you are being constructively dismissed:

Document Everything: Keep copies of emails, memos, or recordings (subject to the Anti-Wiretapping Law) that show the change in your working conditions or the hostility you face.
State the Reason in your Resignation: If you must resign, indicate in your letter that you are doing so "under protest" or "involuntarily" due to the specific actions of the employer.
File a Case via SEnA: The first step is usually filing a Request for Assistance through the Single Entry Approach (SEnA) of the Department of Labor and Employment (DOLE) or the National Labor Relations Commission (NLRC) for mandatory conciliation.

Would you like me to draft a template for a resignation letter "under protest" to help protect your legal standing?