In Philippine labor law, the concept of Constructive Dismissal is often described as a "quitting that is actually a firing." It occurs when an employer creates working conditions so unbearable, hostile, or insensitive that an employee is forced to resign.
While the Labor Code primarily addresses direct dismissal, the Supreme Court has consistently protected employees from "disguised" terminations through a robust body of jurisprudence.
I. The Legal Definition of Constructive Dismissal
Constructive dismissal exists when there is a cessation of work because continued employment is rendered impossible, unreasonable, or unlikely. This often involves:
- A demotion in rank or a diminution in pay.
- An agricultural or professional environment that has become so hostile that the employee has no choice but to leave.
- Clear discrimination, insensibility, or disdain by the employer.
The litmus test is whether a reasonable person in the employee's position would have felt compelled to give up their post under the circumstances.
II. Workplace Harassment as a Ground
Harassment and the creation of a "hostile environment" are among the most potent grounds for claiming constructive dismissal. This is not limited to sexual harassment (governed by R.A. 7877 and R.A. 11313), but includes:
- Professional Victimization: Setting impossible deadlines, stripping an employee of their usual functions, or assigning menial tasks to a high-level executive to cause humiliation.
- Verbal Abuse and Public Ridicule: Constant shouting, use of profane language, or berating an employee in front of colleagues.
- Isolation: Deliberately excluding an employee from meetings, communications, and social interactions necessary for their job.
III. The Burden of Proof
In Philippine labor litigation, the burden of proof follows a specific sequence:
- The Employee’s Burden: The employee must first prove, by substantial evidence, that their resignation was not voluntary but was the result of the employer's hostile actions.
- The Employer’s Burden: Once the employee establishes the "hostile environment," the burden shifts to the employer to prove that the resignation was voluntary or that the changes in the workplace (such as a transfer or re-assignment) were a valid exercise of Management Prerogative.
IV. Evidence Needed to Prove the Claim
Because "hostility" can be subjective, the Commission (NLRC) requires objective evidence. Key pieces of evidence include:
| Evidence Type | Examples |
|---|---|
| Documentary | Emails, memos, or chat logs (Viber/Slack) showing aggressive or belittling language. |
| Testimonial | Affidavits from co-workers who witnessed the harassment or the "cold shoulder" treatment. |
| Medical Records | Clinical findings of anxiety, depression, or physical illness linked directly to workplace stress. |
| Grievance Reports | Proof that the employee tried to resolve the issue internally through HR but was ignored or retaliated against. |
V. Management Prerogative vs. Constructive Dismissal
Employers often cite "Management Prerogative" (the right to regulate all aspects of employment) as a defense. However, the Supreme Court has ruled that this right is not absolute.
A transfer or change in duties is not constructive dismissal if it is done in good faith for the benefit of the business. It becomes constructive dismissal if it involves:
- A significant de-skilling of the employee.
- Transfer to a location that is geographically unreasonable (e.g., Manila to Mindanao without a valid business reason).
- A clear intent to "ease out" the employee.
VI. Remedies for the Employee
If the Labor Arbiter finds that constructive dismissal occurred, the employee is entitled to:
- Reinstatement: Returning to their former position without loss of seniority.
- Full Backwages: Payment of all salaries and benefits from the time of the "dismissal" until actual reinstatement.
- Separation Pay: If reinstatement is no longer viable due to "strained relations" (common in harassment cases), the employee receives one month's salary for every year of service.
- Moral and Exemplary Damages: Awarded if the dismissal was attended by bad faith, malice, or oppressive conduct.
- Attorney’s Fees: Generally 10% of the total monetary award.
VII. The "Strained Relations" Doctrine
In cases involving harassment and hostile environments, the Doctrine of Strained Relations is frequently applied. Because the relationship between the employer and employee has been severely damaged by the hostility, the law acknowledges that forcing them to work together again would be counterproductive. In such instances, separation pay is granted in lieu of reinstatement.