Constructive dismissal happens when an employer’s acts make continued employment impossible, unreasonable, or unlikely—forcing the employee to resign. It is legally treated as an illegal dismissal. Aside from the usual reliefs (reinstatement or separation pay in lieu, full backwages, 13th-month pay, and proportionate benefits), a successful claimant may also recover moral and exemplary damages—but only when the facts justify them.

This article lays out the legal bases, when these damages are available, how courts decide how much, the evidence that convinces tribunals, and practical pleading tips.

1) Legal Bases and Thresholds

Moral damages (Civil Code arts. 2217–2219) compensate for mental anguish, serious anxiety, wounded feelings, social humiliation, and similar injury. In employment disputes, they may be recovered when the employer acts in bad faith—i.e., with malice, fraud, or oppressive conduct—or when the manner of dismissal is particularly abusive (e.g., public shaming, harassment, or clear intimidation).

Exemplary (punitive) damages (Civil Code arts. 2229–2234) penalize wanton, fraudulent, reckless, or malevolent behavior and deter similar conduct. They are not automatic: they are awarded in addition to moral or compensatory damages when the employer’s behavior warrants an example or correction.

Key takeaways

Constructive dismissal alone does not guarantee moral or exemplary damages. You must show bad faith/oppression in the employer’s acts.
Substantial evidence is the standard in labor cases—enough relevant evidence that a reasonable mind might accept as adequate.

2) What Employer Conduct Justifies Damages?

Tribunals look at the totality of circumstances. Examples that have supported moral/exemplary damages include:

Coerced resignation: threats of termination, blacklisting, or fabricated charges unless the employee resigns.
Demotion/diminution in bad faith: drastic pay cuts, removal of core duties, or humiliating reassignment to menial tasks without valid business reason.
Harassment or humiliation: public scolding, shaming memos, or isolation meant to force resignation.
Retaliation: adverse moves after the employee asserts statutory rights (e.g., filing a complaint, union activity, maternity rights).
Procedural heavy-handedness: sham investigations, denial of basic due-process steps, or deliberate withholding of documents to corner the employee.
Malicious accusations: baseless criminal or administrative complaints used as leverage.

By contrast, legitimate restructuring, measured performance management, or good-faith reassignments do not justify moral/exemplary damages—even if the employee ultimately proves constructive dismissal—unless accompanied by bad faith.

3) How Much Can You Claim? (No Statutory Cap, Guided by Reasonableness)

There is no fixed schedule or statutory cap for moral and exemplary damages in employment cases. Courts exercise sound discretion considering:

Severity and duration of the employer’s misconduct
Degree of humiliation or distress and whether it was public or targeted
Employee’s position, length of service, and vulnerability (e.g., breadwinner, pregnant employee)
Presence of aggravating elements (retaliation, threats, blacklisting)
Whether the employer showed remorse or persisted in bad faith (including conduct during litigation)

Typical ballpark figures seen in labor decisions

(For orientation only; actual awards vary widely case-to-case)

Moral damages: commonly ₱30,000 to ₱200,000, sometimes higher when facts are egregious (e.g., orchestrated harassment, public vilification, or malicious prosecution).
Exemplary damages: often ₱30,000 to ₱200,000 when the employer’s conduct is clearly oppressive or wanton; higher awards are possible when misconduct is flagrant and prolonged.

Courts may award moral without exemplary (bad faith proved but not egregious), or both (wanton/oppressive). If no bad faith is proven, the employee may still win illegal dismissal (with backwages and separation pay) without moral/exemplary damages.

4) Relationship to Other Monetary Awards

Backwages: full backwages from the date of constructive dismissal up to actual reinstatement or, if separation pay is granted in lieu of reinstatement, until finality of the decision.
Separation pay in lieu of reinstatement (equitable): commonly one (1) month per year of service, computed from first day of employment up to finality, when reinstatement is no longer feasible due to strained relations or employer closure.
Attorney’s fees: often 10% of the total monetary award when the employee is compelled to litigate or has been unlawfully withheld wages/benefits.
Legal interest: generally 6% per annum on the total monetary award from finality of the decision until full satisfaction. Pre-judgment interest is exceptional and depends on whether the claim was liquidated or certain.

Moral and exemplary damages are separate from backwages/separation pay and are assessed in addition when bad faith or oppression is shown.

5) Evidence That Moves the Needle

Because moral damages compensate intangible injury, courts look for credible, concrete proof that anguish and humiliation truly occurred and that the employer’s bad faith caused it:

Documents & records

Emails, chat messages, and memos revealing pressure to resign, threats, or humiliating language.
Organizational charts, new job descriptions, or pay slips showing demotion or diminution.
Notice and investigation records showing sham due process (e.g., impossible deadlines, denial of access to evidence).

Testimonial proof

Employee’s detailed narrative of events (dates, persons, specific words/actions).
Corroboration from co-workers, clients, or family members who witnessed humiliation or observed emotional distress.

Medical/psychological proof

Clinic notes, counseling records, or medical certificates showing anxiety, depression, insomnia, or similar conditions contemporaneous with the events.

Behavioral & circumstantial proof

Sudden transfers to remote or unsafe locations without justification.
Removal of tools or access essential to perform one’s job.
Persistent exclusion from meetings or communications necessary for the role.

Tip: Build a timeline. Consistency across documents, testimony, and medical notes enhances credibility.

6) Pleading and Litigation Strategy

A. Allegations

Plead illegal (constructive) dismissal, narrate the specific acts constituting bad faith/oppression, and pray for moral and exemplary damages with particulars (not just boilerplate).
Include a prayer for attorney’s fees and legal interest.

B. Quantification

State proposed amounts for moral and exemplary damages that are reasonable in light of the facts (e.g., ₱100,000 moral; ₱100,000 exemplary), explaining the aggravating factors and impact on the employee.

C. Burden shifting

Show that resignation was not voluntary (e.g., resignation letter language “forced to resign,” contemporaneous protest, immediate complaint). Once constructive dismissal is made out, the burden shifts to the employer to prove voluntariness and valid cause.

D. Prayer structure (sample)

Declare that complainant was constructively and illegally dismissed;

Order reinstatement without loss of seniority and with full backwages, or separation pay in lieu (1 month per year of service) if reinstatement is no longer feasible;

Award moral damages of ₱____ due to bad faith and oppressive conduct described;

Award exemplary damages of ₱____ to deter similar conduct;

Award attorney’s fees equivalent to 10% of the total monetary award;

Impose 6% legal interest per annum from finality until full payment;

Other just and equitable reliefs.

7) Common Pitfalls (and How to Avoid Them)

Generic allegations of “mental anguish” without facts: provide a concrete chronology, direct quotes, and documents.
Overclaiming astronomical amounts with minimal proof: can be trimmed sharply and may hurt credibility. Anchor figures to the gravity of the misconduct.
No link between distress and employer acts: tie medical notes and family observations to specific incidents (dates, meetings, messages).
Ignoring due process angles**:** even if the employer had performance concerns, oppressive processes (ambush hearings, denial of counsel, one-day notices) support damages.
Delays: act promptly; while illegal dismissal actions generally have a four-year prescriptive period, wage or money claims can have shorter limits. Filing early preserves evidence and witness memory.

8) Practical Benchmarks for “How Much”

While each case is unique, these practical benchmarks can help calibrate claims:

Mild to moderate oppression (private humiliation, single coercive incident, quick resolution):
- Moral: around ₱30k–₱80k
- Exemplary: ₱30k–₱60k (if conduct shows wantonness)
Sustained harassment or targeted demotion (months-long campaign, repeated shaming, clear diminution without cause):
- Moral: ₱80k–₱150k
- Exemplary: ₱60k–₱120k
Egregious conduct (fabricated charges, public vilification, blacklisting, retaliatory criminal complaints):
- Moral: ₱150k–₱300k+
- Exemplary: ₱120k–₱300k+

Use these ranges as starting points. Justify upward or downward adjustments by pointing to specific aggravating or mitigating facts.

9) Checklist Before You File

Timeline of events with dates, participants, and what was said/done
Copies/screenshots of emails, chats, memos, performance plans, and notices
Pay slips/HR records showing demotion or diminution
Medical/psych records (if any) and family/coworker affidavits
Draft resignation letter or protest showing coercion (if you resigned)
Computation sheet for backwages, benefits, and proposed damages
Clear, reasonable amounts in the prayer for moral and exemplary damages, with brief justifications

10) Bottom Line

You can claim moral and exemplary damages in constructive dismissal—but they’re not automatic. The quality of your evidence and the specificity of your narrative determine both entitlement and amount. Build the record of bad faith (for moral) and oppression/wantonness (for exemplary), tie it to your actual distress, and propose reasonable, defensible figures anchored in the gravity and duration of the misconduct.