SECOND DIVISION

G.R. No. 177114

January 21, 2010

MANOLO A. PEAFLOR, Petitioner,

vs. OUTDOOR CLOTHING MANUFACTURING CORPORATION,
NATHANIEL T. SYFU, President, MEDYLENE M. DEMOGENA, Finance
Manager, and PAUL U. LEE, Chairman, Respondents.
BRION, J.;
Petitioner Manolo A. Peaflor (Peaflor) seeks the reversal of the Court of Appeals
(CA) decision1 dated December 29, 2006 and its resolution2 dated March 14, 2007,
through the present petition for review on certiorari filed under Rule 45 of the Rules
of Court. The assailed CA decision affirmed the September 24, 2002 decision3 of the
National Labor Relations Commission (NLRC) that in turn reversed the August 15,
2001 decision4 of the Labor Arbiter.5
THE FACTUAL ANTECEDENTS
Peaflor was hired on September 2, 1999 as probationary Human Resource
Department (HRD) Manager of respondent Outdoor Clothing Manufacturing
Corporation (Outdoor Clothing or the company). As HRD head, Peaflor was
expected to (1) secure and maintain the right quality and quantity of people needed by
the company; (2) maintain the harmonious relationship between the employees and
management in a role that supports organizational goals and individual aspirations;
and (3) represent the company in labor cases or proceedings. Two staff members were
assigned to work with him to assist him in undertaking these functions.
Peaflor claimed that his relationship with Outdoor Clothing went well during the
first few months of his employment; he designed and created the companys Policy
Manual, Personnel Handbook, Job Expectations, and Organizational Set-Up during
this period. His woes began when the companys Vice President for Operations,
Edgar Lee (Lee), left the company after a big fight between Lee and Chief Corporate
Officer Nathaniel Syfu (Syfu). Because of his close association with Lee, Peaflor
claimed that he was among those who bore Syfus ire.
When Outdoor Clothing began undertaking its alleged downsizing program due to
negative business returns, Peaflor alleged that his department had been singled out.
On the pretext of retrenchment, Peaflors two staff members were dismissed, leaving
him as the only member of Outdoor Clothings HRD and compelling him to perform
all personnel-related work. He worked as a one-man department, carrying out all
clerical, administrative and liaison work; he personally went to various government
offices to process the companys papers.
When an Outdoor Clothing employee, Lynn Padilla (Padilla), suffered injuries in a
bombing incident, the company required Peaflor to attend to her hospitalization
needs; he had to work outside office premises to undertake this task. As he was acting
on the companys orders, Peaflor considered himself to be on official business, but
was surprised when the company deducted six days salary corresponding to the time
he assisted Padilla. According to Finance Manager Medylene Demogena
(Demogena), he failed to submit his trip ticket, but Peaflor belied this claim as a trip
ticket was required only when a company vehicle was used and he did not use any
company vehicle when he attended to his off-premises work.6
After Peaflor returned from his field work on March 13, 2000, his officemates
informed him that while he was away, Syfu had appointed Nathaniel Buenaobra
(Buenaobra) as the new HRD Manager. This information was confirmed by Syfus
memorandum of March 10, 2000 to the entire office stating that Buenaobra was the
concurrent HRD and Accounting Manager.7 Peaflor was surprised by the news; he
also felt betrayed and discouraged. He tried to talk to Syfu to clarify the matter, but
was unable to do so. Peaflor claimed that under these circumstances, he had no
option but to resign. He submitted a letter to Syfu declaring his irrevocable
resignation from his employment with Outdoor Clothing effective at the close of
office hours on March 15, 2000.8
Peaflor then filed a complaint for illegal dismissal with the labor arbiter, claiming
that he had been constructively dismissed. He included in his complaint a prayer for
reinstatement and payment of backwages, illegally deducted salaries, damages,
attorneys fees, and other monetary claims.

Outdoor Clothing appealed the labor arbiters decision with the NLRC. It insisted that
Peaflor had not been constructively dismissed, claiming that Peaflor tendered his
resignation on March 1, 2000 because he saw no future with the corporation due to its
dire financial standing. Syfu alleged that he was compelled to appoint Buenaobra as
concurrent HRD Manager through a memorandum dated March 1, 2000 to cover the
position that Peaflor would soon vacate.11 The appointment was also made to
address the personnel matters that had to be taken cared of while Peaflor was on
unauthorized leave. Incidentally, Outdoor Clothing alleged that Peaflor had already
been given two notices, on March 6 and 11, 2000 (absence without official leave
memoranda or the AWOL memoranda), for his unauthorized absences. In a
memorandum dated March 3, 2000 addressed to Syfu, Buenaobra accepted the
appointment.12
Peaflor contested Syfus March 1, 2000 memorandum, Buenaobras March 3, 2000
memorandum, and the AWOL memoranda, claiming these pieces of evidence were
fabricated and were never presented before the labor arbiter. He pointed out that
nothing in this resignation letter indicated that it was submitted to and received by
Syfu on March 1, 2000. He claimed that it was submitted on March 15, 2000, the
same date he made his resignation effective. The AWOL memoranda could not be
relied on, as he was never furnished copies of these. Moreover, he could not be on
prolonged absence without official leave, as his residence was just a few meters away
from the office.
The NLRC apparently found Outdoor Clothings submitted memoranda sufficient to
overturn the labor arbiters decision.13 It characterized Peaflors resignation as a
response, not to the allegedly degrading and hostile treatment that he was subjected to
by Syfu, but to Outdoor Clothings downward financial spiral. Buenaobras
appointment was made only after Peaflor had submitted his resignation letter, and
this was made to cover the vacancy Peaflors resignation would create. Thus,
Peaflor was not eased out from his position as HRD manager. No malice likewise
was present in the companys decision to dismiss Peaflors two staff members; the
company simply exercised its management prerogative to address the financial
problems it faced. Peaflor, in fact, drafted the dismissal letters of his staff members.
In the absence of any illegal dismissal, no basis existed for the monetary awards the
labor arbiter granted.
Peaflor anchored his certiorari petition with the CA on the claim that the NLRC
decision was tainted with grave abuse of discretion, although he essentially adopted
the same arguments he presented before the labor arbiter and the NLRC.
In a decision dated December 29, 2006,14 the CA affirmed the NLRCs decision,
stating that Peaflor failed to present sufficient evidence supporting his claim that he
had been constructively dismissed. The CA ruled that Peaflors resignation was
knowingly and voluntarily made. Accordingly, it dismissed Peaflors certiorari
petition. It likewise denied the motion for reconsideration that Peaflor subsequently
filed.15 Faced with these CA actions, Peaflor filed with us the present petition for
review on certiorari.
THE PARTIES ARGUMENTS
Peaflor insists that, contrary to the findings of the NLRC and the CA, he had been
constructively dismissed from his employment with Outdoor Clothing. He alleges
that the dismissal of his two staff members, the demeaning liaison work he had to
perform as HRD Manager, the salary deduction for his alleged unauthorized
absences, and the appointment of Buenaobra as the new HRD manager even before
he tendered his resignation, were clear acts of discrimination that made his continued
employment with the Outdoor Clothing unbearable. He was thus forced to resign.
Outdoor Clothing claims that Peaflor voluntarily resigned from his work and his
contrary allegations were all unsubstantiated. The HRD was not singled out for
retrenchment, but was simply the first to lose its staff members because the company
had to downsize. Thus, all HRD work had to be performed by Peaflor. Instead of
being grateful that he was not among those immediately dismissed due to the
companys retrenchment program, Peaflor unreasonably felt humiliated in
performing work that logically fell under his department; insisted on having a full
staff complement; absented himself from work without official leave; and demanded
payment for his unauthorized absences.
THE ISSUE and THE COURTS RULING
The Court finds the petition meritorious.

Outdoor Clothing denied Peaflors allegation of constructive dismissal. It posited

instead that Peaflor had voluntarily resigned from his work. Contrary to Peaflors
statement that he had been dismissed from employment upon Syfus appointment of
Buenaobra as the new HRD Manager on March 10, 2000, Peaflor had in fact
continued working for the company until his resignation on March 15, 2000. The
company cited as evidence the security report that Peaflor himself prepared and
signed on March 13, 2000.9
Outdoor Clothing disclaimed liability for any of Peaflors monetary claims. Since
Peaflor had voluntarily resigned, Outdoor Clothing alleged that he was not entitled
to any backwages and damages. The company likewise denied making any illegal
deduction from Peaflors salary; while deductions were made, they were due to
Peaflors failure to report for work during the dates the company questioned. As a
probationary employee, he was not yet entitled to any leave credit that would offset
his absences.
In his August 15, 2001 decision, the labor arbiter found that Peaflor had been
illegally dismissed.10 Outdoor Clothing was consequently ordered to reinstate
Peaflor to his former or to an equivalent position, and to pay him his illegally
deducted salary for six days, proportionate 13th month pay, attorneys fees, moral and
exemplary damages.

A preliminary contentious issue is Outdoor Clothings argument that we should

dismiss the petition outright because it raises questions of facts, not the legal
questions that should be raised in a Rule 45 petition.16
We see no merit in this argument as the rule that a Rule 45 petition deals only with
legal issues is not an absolute rule; it admits of exceptions. In the labor law setting,
we wade into factual issues when conflict of factual findings exists among the labor
arbiter, the NLRC, and the CA. This is the exact situation that obtains in the present
case since the labor arbiter found facts supporting the conclusion that there had been
constructive dismissal, while the NLRCs and the CAs factual findings contradicted
the labor arbiters findings.17 Under this situation, the conflicting factual findings
below are not binding on us, and we retain the authority to pass on the evidence
presented and draw conclusions therefrom.18
The petition turns on the question of whether Peaflors undisputed resignation was a
voluntary or a forced one, in the latter case making it a constructive dismissal
equivalent to an illegal dismissal. A critical fact necessary in resolving this issue is
whether Peaflor filed his letter of resignation before or after the appointment of
Buenaobra as the new/concurrent HRD manager. This question also gives rise to the
side issue of when Buenaobras appointment was made. If the resignation letter was
submitted before Syfus appointment of Buenaobra as new HRD manager, little
support exists for Peaflors allegation that he had been forced to resign due to the

prevailing abusive and hostile working environment. Buenaobras appointment would

then be simply intended to cover the vacancy created by Peaflors resignation. On
the other hand, if the resignation letter was submitted after the appointment of
Buenaobra, then factual basis exists indicating that Peaflor had been constructively
dismissed as his resignation was a response to the unacceptable appointment of
another person to a position he still occupied.
The question of when Peaflor submitted his resignation letter arises because this
letter undisputably made was undated. Despite Peaflors claim of having
impressive intellectual and academic credentials,19 his resignation letter, for some
reason, was undated. Thus, the parties have directly opposing claims on the matter.
Peaflor claims that he wrote and filed the letter on the same date he made his
resignation effective March 15, 2000. Outdoor Clothing, on the other hand,
contends that the letter was submitted on March 1, 2000, for which reason Syfu
issued a memorandum of the same date appointing Buenaobra as the concurrent HRD
manager; Syfus memorandum cited Peaflors intention to resign so he could devote
his time to teaching. The company further cites in support of its case Buenaobras
March 3, 2000 memorandum accepting his appointment. Another piece of evidence is
the Syfu memorandum of March 10, 2000, which informed the office of the
appointment of Buenaobra as the concurrent Head of HRD the position that
Peaflor occupied. Two other memoranda are alleged to exist, namely, the AWOL
memoranda of March 6 and 11, 2000, allegedly sent to Penaflor.
Several reasons arising directly from these pieces of evidence lead us to conclude that
Peaflor did indeed submit his resignation letter on March, 15, 2000, i.e., on the same
day that it was submitted.
First, we regard the Syfu memorandum of March 1, 2000 and the memorandum of
Buenaobra of March 3, 2000 accepting the position of HRD Head to be highly
suspect. In our view, these memoranda, while dated, do not constitute conclusive
evidence of their dates of preparation and communication. Surprisingly, Peaflor was
never informed about these memoranda when they directly concerned him,
particularly the turnover of responsibilities to Buenaobra if indeed Peaflor had
resigned on March 1, 2000 and a smooth turnover to Buenaobra was intended. Even
the recipients of these communications do not appear to have signed for and dated
their receipt. The AWOL memoranda, to be sure, should have been presented with
proof of service if they were to have any binding effect on Peaflor.
Second,we find it surprising that these pieces of evidence pointing to a March 1, 2000
resignation specifically, Syfus March 1, 2000 memorandum to Buenaobra about
Penaflors resignation and Buenaobras own acknowledgment and acceptance were
only presented to the NLRC on appeal, not before the labor arbiter. The matter was
not even mentioned in the companys position paper filed with the labor arbiter.20
While the presentation of evidence at the NLRC level on appeal is not unheard of in
labor cases,21 still sufficient explanation must be adduced to explain why this
irregular practice should be allowed. In the present case, Outdoor Clothing totally
failed to explain the reason for its omission. This failure, to us, is significant, as these
were the clinching pieces of evidence that allowed the NLRC to justify the reversal of
the labor arbiters decision.
Third, the circumstances and other evidence surrounding Peaflors resignation
support his claim that he was practically compelled to resign from the company.
Foremost among these is the memorandum of March 10, 2000 signed by Syfu
informing the whole office ("To: All concerned") about the designation of Buenaobra
as concurrent Accounting and HRD Manager. In contrast with the suspect memoranda
we discussed above, this memorandum properly bore signatures acknowledging
receipt and dates of receipt by at least five company officials, among them the
readable signature of Demogene and one Agbayani; three of them acknowledged
receipt on March 13, 2000, showing that indeed it was only on that day that the
appointment of Buenaobra to the HRD position was disclosed. This evidence is fully
consistent with Peaflors position that it was only in the afternoon of March 13,
2000 that he was told, informally at that, that Buenaobra had taken over his position.
It explains as well why as late as March 13, 2000, Peaflor still prepared and signed a
security report,22 and is fully consistent with his position that on that day he was still
working on the excuse letter of certain sales personnel of the company.23
We note that the company only belatedly questioned the motivation that Peaflor
cited for his discriminatory treatment, i.e., that he was caught in the bitter fight
between Syfu and Lee, then Vice President for Operations, that led the latter to leave
the company.24 After Lee left, Peaflor alleged that those identified with Lee were
singled out for adverse treatment, citing in this regard the downsizing of HRD that
occurred on or about this time and which resulted in his one-man HRD operation. We
say this downsizing was only "alleged" as the company totally failed despite
Penaflors claim of discriminatory practice to adduce evidence showing that there
had indeed been a legitimate downsizing. Other than its bare claim that it was facing
severe financial problems, Outdoor Clothing never presented any evidence to prove
both the reasons for its alleged downsizing and the fact of such downsizing. No
evidence was ever offered to rebut Peaflors claim that his staff members were
dismissed to make his life as HRD Head difficult. To be sure, Peaflors participation

in the termination of his staff members employment cannot be used against him, as
the termination of employment was a management decision that Peaflor, at his level,
could not have effectively contested without putting his own job on the line.
Peaflors own service with the company deserves close scrutiny. He started working
for the company on September 2, 1999 so that by March 1, 2000, his probationary
period would have ended and he would have become a regular employee. We find it
highly unlikely that Peaflor would resign on March 1, 2000 and would then simply
leave given his undisputed record of having successfully worked within his
probationary period on the companys Policy Manual, Personnel Handbook, Job
Expectations, and Organizational Set-up. It does not appear sound and logical to us
that an employee would tender his resignation on the very same day he was entitled
by law to be considered a regular employee, especially when a downsizing was taking
place and he could have availed of its benefits if he would be separated from the
service as a regular employee. It was strange, too, that he would submit his
resignation on March 1, 2000 and keep completely quiet about this development until
its effective date on March 15, 2000. In the usual course, the turnover alone of
responsibilities and work loads to the successor in a small company would have
prevented the matter from being completely under wraps for 10 days before any
announcement was ever made. That Peaflor was caught by surprise by the turnover
of his post to Buenaobra is in fact indicated by the companys own evidence that
Peaflor still submitted a security report on March 13, 2000. On the whole, Peaflors
record with the company is not that of a company official who would simply and
voluntarily tender a precipitate resignation on the excuse that he would devote his
time to teaching a lame excuse at best considering that March is the month the
semester usually ends and is two or three months away from the start of another
school year.
In our view, it is more consistent with human experience that Peaflor indeed learned
of the appointment of Buenaobra only on March 13, 2000 and reacted to this
development through his resignation letter after realizing that he would only face
hostility and frustration in his working environment. Three very basic labor law
principles support this conclusion and militate against the companys case.
The first is the settled rule that in employee termination disputes, the employer bears
the burden of proving that the employees dismissal was for just and valid cause.25
That Peaflor did indeed file a letter of resignation does not help the companys case
as, other than the fact of resignation, the company must still prove that the employee
voluntarily resigned.26 There can be no valid resignation where the act was made
under compulsion or under circumstances approximating compulsion, such as when
an employees act of handing in his resignation was a reaction to circumstances
leaving him no alternative but to resign.27 In sum, the evidence does not support the
existence of voluntariness in Peaflors resignation.1 a vv p h i 1
Another basic principle is that expressed in Article 4 of the Labor Code that all
doubts in the interpretation and implementation of the Labor Code should be
interpreted in favor of the workingman. This principle has been extended by
jurisprudence to cover doubts in the evidence presented by the employer and the
employee.28 As shown above, Peaflor has, at very least, shown serious doubts about
the merits of the companys case, particularly in the appreciation of the clinching
evidence on which the NLRC and CA decisions were based. In such contest of
evidence, the cited Article 4 compels us to rule in Peaflors favor. Thus, we find that
Peaflor was constructively dismissed given the hostile and discriminatory working
environment he found himself in, particularly evidenced by the escalating acts of
unfairness against him that culminated in the appointment of another HRD manager
without any prior notice to him. Where no less than the companys chief corporate
officer was against him, Peaflor had no alternative but to resign from his
employment.29
Last but not the least, we have repeatedly given significance in abandonment and
constructive dismissal cases to the employees reaction to the termination of his
employment and have asked the question: is the complaint against the employer
merely a convenient afterthought subsequent to an abandonment or a voluntary
resignation? We find from the records that Peaflor sought almost immediate official
recourse to contest his separation from service through a complaint for illegal
dismissal.30 This is not the act of one who voluntarily resigned; his immediate
complaints characterize him as one who deeply felt that he had been wronged.
WHEREFORE, we GRANT the petitioners petition for review on certiorari, and
REVERSE the decision and resolution of the Court of Appeals in CA-G.R. SP No.
87865 promulgated on December 29, 2006 and March 14, 2007, respectively. We
REINSTATE the decision of the labor arbiter dated August 15, 2001, with the
MODIFICATION that, due to the strained relations between the parties, respondents
are additionally ordered to pay separation pay equivalent to the petitioners one
months salary.
Costs against the respondents.
SO ORDERED.