Introduction

In the Philippines, labor relations are primarily governed by the Labor Code of the Philippines (Presidential Decree No. 442, as amended), along with relevant Department of Labor and Employment (DOLE) issuances, jurisprudence from the Supreme Court, and other related laws. A common misconception is that the absence of a signed employment contract invalidates the employment relationship or alters fundamental rights and obligations, including those related to resignation. However, Philippine law recognizes that an employment contract need not be in writing to be enforceable. This article explores the legal framework surrounding resignation when no formal signed contract exists, covering the establishment of employment, resignation procedures, notice requirements, potential liabilities, and remedies available to both employees and employers.

Establishing the Employment Relationship Without a Signed Contract

Under Article 280 of the Labor Code (now renumbered as Article 295 in the updated codification), an employment relationship is established when an employer hires an employee to perform services under the employer's control and supervision, in exchange for wages. The Supreme Court has consistently held in cases like Atienza v. Saluta (G.R. No. 233220, 2018) that the four-fold test determines the existence of an employer-employee relationship: (1) selection and engagement of the employee; (2) payment of wages; (3) power of dismissal; and (4) power of control over the means and methods of work. The power of control is the most crucial element.

Even without a signed written contract, oral agreements or implied contracts based on conduct can create a valid employment relationship. For instance, if an individual reports to work, performs tasks as directed, and receives compensation, employment is deemed to exist. DOLE Department Order No. 174-17 reinforces this by mandating that employers provide written contracts, but failure to do so does not negate the relationship—it may, however, expose the employer to administrative penalties for non-compliance with labor standards.

In the context of resignation, the lack of a signed contract means that default provisions of the Labor Code apply, without any customized terms that might otherwise modify resignation procedures (e.g., longer notice periods or non-compete clauses, which would require explicit agreement).

The Right to Resign: Voluntary Termination

Article 285 of the Labor Code (now Article 300) explicitly recognizes an employee's right to terminate employment voluntarily, with or without just cause. This right stems from the constitutional protection against involuntary servitude under Article III, Section 18(2) of the 1987 Philippine Constitution. Resignation is defined as the voluntary act of an employee who finds themselves in a situation where they wish to sever the employment relationship (Saudi Arabian Airlines v. Rebesencio, G.R. No. 198587, 2015).

Without a signed contract, there are no contractual stipulations that could restrict this right, such as liquidated damages for early resignation (which must be reasonable and consensual to be enforceable). However, resignation must be clear, unequivocal, and not coerced. Ambiguous actions, like temporary absences, do not automatically constitute resignation; the Supreme Court requires positive acts indicating intent to resign (BMG Records v. Aparecio, G.R. No. 153290, 2005).

Types of Resignation

With Just Cause: Under Article 285(a), an employee may resign immediately without notice if there is just cause, such as serious insult by the employer, inhumane treatment, commission of a crime by the employer against the employee or their family, or other analogous causes. In these cases, the employee may also claim separation pay if eligible.
Without Just Cause: If no just cause exists, the employee must provide at least one month's (30 days') advance notice to the employer to minimize disruption to operations.

The absence of a signed contract does not alter these categories; the Labor Code's defaults prevail.

Notice Period Requirements

The 30-day notice rule for resignation without just cause is a statutory requirement under Article 285(b). This period allows the employer to find a replacement or transition duties. Failure to provide notice can lead to liability for damages, as it may be considered a breach of good faith in labor relations (Jo Cinema Corporation v. Abellana, G.R. No. 132837, 2001).

Without a signed contract, no extended notice periods (e.g., 60 or 90 days) can be imposed unless proven through consistent practice or implied agreement. However, certain professions or industries may have specific rules; for example, seafarers under the POEA Standard Employment Contract must adhere to maritime labor conventions, but these are exceptions requiring documentation.

Employers cannot force an employee to serve the notice period if the employee insists on immediate resignation, but they can seek damages. Conversely, employees can request to waive the notice period, but this is at the employer's discretion.

Exceptions to Notice Requirement

Probationary employees: During the probationary period (up to six months under Article 281, now Article 296), either party can terminate with shorter notice or none, but resignation still requires intent.
Casual or project-based employees: Resignation aligns with project completion, but abrupt departure without notice may affect final pay or clearances.
Managerial or confidential employees: While they enjoy the same resignation rights, their roles may involve fiduciary duties, potentially leading to claims for breach if resignation causes undue harm.

Consequences of Resignation Without Proper Notice

If an employee resigns without the required 30-day notice and without just cause, the employer may:

Withhold final pay until clearance is obtained (e.g., return of company property).
Claim actual damages, such as recruitment costs for a replacement or lost productivity, but these must be proven in court or before the National Labor Relations Commission (NLRC).
File a complaint for breach, though this is rare unless significant harm is demonstrated.

The Supreme Court in University of Santo Tomas v. Samahan ng Manggagawa (G.R. No. 183092, 2010) emphasized that damages for improper resignation must be based on evidence, not presumption. Without a signed contract specifying penalties, employers cannot impose arbitrary fines or forfeitures.

For the employee, improper resignation might result in:

Negative references or difficulty in future employment.
Forfeiture of benefits like unused vacation leave credits if not converted to cash.
Potential counterclaims if the employer alleges abandonment (which is distinct from resignation and treated as illegal dismissal if contested).

Abandonment requires (1) absence without valid reason and (2) clear intent not to return (Tan Brothers Corporation v. Escudero, G.R. No. 188711, 2013). Mere failure to give notice does not equate to abandonment if resignation intent is communicated.

Acceptance of Resignation

Employers are not required to accept a resignation formally, but once tendered, it becomes effective after the notice period unless withdrawn with consent. In Intertrod Maritime v. NLRC (G.R. No. 81087, 1990), the Court ruled that forced acceptance is unnecessary; the act of resignation is unilateral.

Without a signed contract, there are no provisions for "irrevocable" resignations or buy-out clauses. However, if an employee resigns and later claims constructive dismissal (forced resignation due to unbearable conditions), the burden is on the employee to prove it (Uniwide Sales v. NLRC, G.R. No. 154054, 2002).

Benefits and Clearances Upon Resignation

Regardless of the absence of a signed contract, resigning employees are entitled to:

Final pay, including prorated 13th-month pay (Presidential Decree No. 851).
Certificate of Employment (under DOLE Department Order No. 18-02).
Tax clearances and contributions to SSS, PhilHealth, and Pag-IBIG.

Service Incentive Leave (five days' paid leave per year under Article 95, now Article 110) must be paid if unused, unless forfeited due to misconduct.

Employers must issue a quitclaim only if voluntary; coerced quitclaims are void (More Maritime Agencies v. NLRC, G.R. No. 107165, 1996).

Dispute Resolution and Remedies

Disputes arising from resignation without a signed contract fall under the jurisdiction of the NLRC for money claims or illegal dismissal allegations. The process involves mandatory conciliation-mediation at the DOLE or Single Entry Approach (SEnA) under Republic Act No. 10396.

Employees can file for constructive dismissal if resignation was involuntary, potentially entitling them to backwages, separation pay, and damages. Employers can counter with claims for breach.

Jurisprudence evolves; recent cases like Ditan v. DOLE (G.R. No. 234299, 2020) highlight the need for fairness in interpreting resignations amid economic pressures.

Special Considerations in the Philippine Context

Informal Sector: Many workers in agriculture, domestic service, or small enterprises lack signed contracts. Republic Act No. 10361 (Kasambahay Law) provides specific resignation rules for domestic workers, requiring 5 days' notice.
Overseas Filipino Workers (OFWs): Governed by POEA rules, resignation abroad without contract compliance may lead to repatriation issues.
COVID-19 and Economic Impacts: DOLE advisories during the pandemic allowed flexible resignation terms, but defaults revert post-crisis.
Unionized Workplaces: Collective Bargaining Agreements (CBAs) may impose additional rules, but without a signed individual contract, CBA provisions apply if the employee is covered.

Conclusion

The absence of a signed employment contract does not diminish the protections or obligations under Philippine labor law regarding resignation. The Labor Code ensures that employees can resign freely, subject to notice requirements, while safeguarding employers from abrupt disruptions. Both parties must act in good faith to avoid litigation. For specific cases, consulting a labor lawyer or DOLE is advisable, as interpretations can vary based on facts. This framework promotes a balanced labor environment, reflecting the Philippines' commitment to social justice in employment relations.