1) Jomar Verdadero v.

Barney Autolines Group of Companies Transport,

Inc. and Barney D. Chito, Rosela F. Chito and Gerardo Gimenez
G.R. No. 195428 – August 29, 2012

DOCTRINE: The unlawful acts should have been committed by the employer
and not by a co-employee so as to bring the matter within the ambit of
constructive dismissal.

FACTS:
- Barney Autolines hired petitioner Verdadero as a bus conductor where he
was a paid a salary on commission basis at the rate of 12% of the gross
sales of tickets per day, while respondent Atty. Gimenez is Busline’s
Disciplinary Officer.
- On January 27, 2008, an altercation took place between Verdadero and
respondent Atty. Gimenez.
- Gimenez was on board BALGCO Bus with his wife and four other
companions, travelling from Mulanay to Macalelon Quezon, where
Verdadero was the assigned conductor.
- Barney Autolines has a policy of granting free rides to company
employees and their wives/spouse.
- The altercation started when Verdadero began issuing tickets to the wife
of Gimenez despite the wife saying who she was.
- On January 28, 2008, Gimenez filed an unverified complaint for serious
misconduct against Verdadero.
- He requested the spouses Chito, owners of BALGCO, to preside over the
conciliation proceedings.
- On February 8, 2008, Verdadero accompanied by his father appeared to
the BALGCO office.
- Verdadero was said to have shown willingness to be penalized for his
misconduct provided no record of the proceedings would be made.
- Gimenez, was willing to waive the imposition of any penalty if Verdadero
would give a letter of apology where the latter agreed which was
guaranteed by his father.
- On February 16, 2008, instead of submitting a letter of apology, he
submitted a counter-affidavit refuting all the allegations written against
him.
- Rosela told Verdadero that she was not expecting that piece of paper,
where the latter replied, “Sabi mo papel,yan papel yan!”
- Verdadero secretly reported to work for fear of having another
confrontation with Gimenez.
- Rosela sent Verdadero a letter, requiring him to immediately report for
work and finish the pending disciplinary proceedings against him.
- Verdadero replied explaining that he had been receiving threats and
believed that he was illegally dismissed, as he was not given any work
assignment.
- Verdadero filed a complaint for illegal dismissal before the LA, with claims
of non-payment of holiday pay, premium on holiday, 13th month pay,
separation pay, retirement benefits, moral and exemplary damages, and
reinstatement plus backwages.
- LA dismissed Verdadero’s complaint declaring that there is no illegal
dismissal took place but merely an administrative investigation.
Verdadero made it impossible for him to be given assignment as he
reported to work only when Gimenez was not around.
- LA also dismissed the monetary claims explaining that he belonged to the
category of field personnel who were excepted from the enjoyment of the
benefits claimed.
- Verdadero filed an appeal before the NLRC, where it partially granted the
appeal due to the sworn statement of an Electrician working in BAGCO,
Marvin Mascarina, who witnessed the incident.
- NLRC ruled that Verdadero was illegally dismissed, but affirmed the
LA insofar as the holiday and overtime pays were concerned.
- BALGCO moved for reconsideration but was denied,
- BALGCO filed a petitioner for certiorari before the CA.
- CA ruled that there was no constructive dismissal despite Mascarina’s
testimony. CA reiterated the definition of constructive dismissal, “an
involuntary resignation by the employee due to the harsh, hostile, and
unfavorable conditions set by the employer and which arises when a clear
discrimination, insensibility, or disdain by an employer exists and has
become unbearable to the employee.
- Neither was there abandonment of work on the part of Verdadero, filing a
complaint for illegal dismissal is inconsistent with a charge of
abandonment.
- The repulsive behavior of the DO against another employee cannot be
imputed against the employer in the absence of any evidence that it
promotes such ill treatment of its lowly employees.
- What petitioners have shown was indecisiveness, in the handling of the
case but there was clearly no vicious and malicious intention on their part
to force private respondent to resign from his employment, which would
tantamount to constructive dismissal.
- There was neither dismissal nor abandonment and reversed and set aside
the resolution of the NLRC.

VERSION OF GIMENEZ
- The wife related that when Verdadero was about to issue her a ticket, she
informed him that she was the wife of Gimenez.
- Verdadero replied “Hindi ko kilala yon”
- During a stop over on General Luna Quezon, the wife told Gimenez that
“hindi ka pala kilala ng konduktor”.
- Gimenez then confronted Verdadero, where the latter arrogantly replied,
“Marami namang Gerry at disciplinary officers.”
 - Verdadero’s comment and other loud words where heard by a certain Rey
Formaran, another BALGCO bus driver.
- As Gimenez and his group were getting off the bus, Verdadero pulled out
a baggage compartment opener and shouted, “Putang ina mo attorney,
papatayin kita.”

VERSION OF VERDADERO
- He started to collect fares, and approached GImenez’s wife to issue her a
bus ticket.
- She said, “Asawa ako ng officer.”
- Verdadero wasn’t able to clearly hear what the woman said due to the
surrounding noises, so she asked again as to whom she was referring.
- The woman replied, “Asawa ako ni Gerry na Disciplinary Officer.”
- He then turned away and did not issue a ticket.
- During a stop over, Verdadero was surprised when Gimenez shouted at
him, saying, “Hindi mo ba ako kilala?”
- Verdadero replied, “Kilala ko nga po kayo, ang problema lang po ay hindi
kayo katabi ng misis niyo nang tinanong ko kaya pasensya na”.
- Verdadero further claimed that he moved away to avoid Gimenez as the
latter continued to berate and threaten him.
- Upon disembarking, Gimenez shouted at him, “Verdadero! Hindi mo ako
ginagalang!” and grabbed his feet in an attempt to pull him down from the
bus.
- He struggled to hold tight until Gimenez lost his grip.
- Formaran tried to return to the bus to confront him, but was intercepted by
the driver. Verdadero further denied having agreed to write GImenez a
letter of apology and be penalized for his alleged misconduct.

ISSUE: WON Verdadero was constructively dismissed (NO)

RULING:
- Constructive dismissal exists where there is cessation of work, because “
continued employment is rendered impossible, unreasonable, or unlikely,
as an offer involving a demotion in rank or a diminution in pay” and other
benefits.
- Aptly called a dismissal in disguise or an act amounting to dismissal but
made to appear as if it were not, constructive dismissal may, likewise,
exist if an act of clear discrimination, insensibility, or disdain by an
employer becomes so unbearable on the part of the employee that it could
foreclose any choice by him except to forgo his continued employment.
- Verdadero cannot be deemed constructively dismissed. Records do not
show any demotion in rank or diminution in pay made against him. Neither
there was clear acts of discrimination, insensibility, or disdain committed
by the employer which would justify or force Verdadero to terminate his
employment.
- The acts committed by Gimenez such as; verbal abuse, and alleged
threats, does not merit Verdadero’s contention of constructive dismissal,
the abovementioned acts should have been committed by the employer
against the employee. Unlawful acts committed by a co-employee will
not bring the matter within the ambit of constructive dismissal.
- Gimenez’s functions do not involve the power or authority to dismiss or
even suspend an employee. Such power is exclusively lodged in the
BALGCO management. GImenez is a mere employee of BAGLCO, and,
thus, cannot cause the dismissal or even the constructive dismissal of
Verdadero.
- Records are bereft of any showing that BALGCO forced Verdadero to
resign from his employment and was no longer allowed to report for work,
and in fact they were urging him to return to work.
- Verdadero’s employment was never terminated and he is still part of the
workforce as provided in BALGCO’s memorandum.
 - 2) Candido Alfaro v. CA, NLRC, and Star Paper Corporation
G.R. No. 140812 - August 28, 2001

DOCTRINE:
- General Rule: Employee who resigns is not entitle to separation pay.
- This case is an exception where the employee who resigned was entitled
to separation pay because the employer agreed that the former would
receive separation pay despite having resigned voluntarily.
- An employer who agrees to expend such benefit (Separation Pay) as an
incident of the resignation should not be allowed to renege in the
performance of such commitment.

FACTS:

- Petitioner was employed as a helper/ or machine tape operator of

respondent Star Paper Corporation since November 8, 1990.
- He took a sick leave from November 23, 1993 to December 5, 1993.
- When he reported back to work on December 6, 1993, another employee
was already recruited to take his place.
- He was transferred to the wrapping section where he was required to work
with overtime despite having recovered from an illness.
- On December 7, 1993, he was given a new assignment where he was
asked to do a more difficult work having the feeling of being rudely treated
and being punished since he was exposed to hard labor despite his
predicament of just coming from sickness.
- Petitioner was dismissed after having been told to look for another job.
- Petitioner sought for his 13th month pay and 15-day sick leave pay but was
ignored when he refused to sign documents, which indicates the
renouncement of claims against Respondent Corporation.
- He again sought for the payment of his claims before Christmas of 1993
but was asked to come back next year.
- On January 12, 1994, Petitioner Alfaro came to the company asking for
his money claims.
- Respondent Corporation still insisted that they would only release to
petitioner a check worth 3k if he agreed to sign the documents. Desperate
for the money to support his subsistence, he was forced to sign the
document, which contained no amount of money released in to him.
- The said document forced upon the petitioner to sign were a resignation
letter, and a Release and Quit Claim’.
- Private respondent contended that petitioner voluntarily resigned and
tendered said resignation and that petitioner was not illegally dismissed,
and that he was paid his separation pay amounting to 8,455.50.
- Petitioner Alfaro, filed a case against respondent corporation for non-
payment of separation pay, and was later amended by claiming illegal
dismissal and damages in lieu of separation pay, with prayer for
reinstatement with backwages and attorney’s fees.
 - On the other hand, Respondent Corporation maintains that petitioner
submitted a resignation letter and was given separation benefits in the
amount of 8,452.50 and that upon receipt of said benefits, executed a
Release and Quit claim in favor of respondent.
- LA denied petitioner’s claims as shown in its report to the NLRC where
petitioner resigned voluntarily. LA’s report likewise mentioned the
Quitclaim and Release, which further strengthened the fact that petitioner
resigned due to his ailment. If petitioner’s contention is true that he was
forced to sign the resignation letter against his better judgment, then why
should he also sign the quitclaim and release?
- NLRC affirmed LA’s decision.
- Upon appeal to the CA, the court decided that there is no reason to
reverse and set aside the findings and recommendation of the LA, which
was affirmed by the NLRC.
- Hence, this recourse.

ISSUE(s):
(1) Whether or not petitioner is entitled for separation pay. (YES)
(2) Whether or not petitioner is illegally dismissed. (NO)
(3) Whether or not petitioner voluntarily resigned. (YES)

RULING:

The factual findings of the labor arbiter and the NLRC, as affirmed by the CA,
reveal that petitioner resigned from his work due to his illness, with the
understanding that private respondent would give him separation pay.
Unfortunately, it seems that private respondent did not keep its promise to grant
the separation pay, prompting petitioner to institute the present action for illegal
dismissal. It was only for this reason that the Court gave due course to this
Petition.

Generally, an employee who voluntarily resigns from employment is not entitled

to separation pay. In the present case, however, upon the request of petitioner,
private respondent agreed to a scheme whereby the former would receive
separation pay despite having resigned voluntarily. Thus, the terms and
conditions they both agreed upon constituted a contract freely entered into, which
should be performed in good faith, as it constituted the law between the parties.

The SC also ruled that not all waivers and quitclaims are invalid as against public
policy. If the agreement was voluntarily entered into and represented a
reasonable settlement, it is binding on the parties and may not be disowned,
simply because of a change of mind. As correctly found by the LA:

The position taken by the corporation is more credible than that of the
complainant. Complainant filed a case for separation pay on June 14,
1996, which is more than 2 years from his alleged dismissal on December
 7, 1993, and it was only on August 1, 1996 when complainant amended
his complaint and claimed that he was illegally dismissed. There is also no
evidence on record, which shows that complainant was pressured and
made to sign a resignation letter and Release and Quitclaim against his
will. Moreover, if indeed complainant was illegally dismissed, he should
have immediately filed a complaint for illegal dismissal.

The SC further ruled that, Voluntary resignation is defined as the act of an

employee, who finds himself in a situation in which he believes that personal
reasons cannot be sacrificed in favor of the exigency of service; thus he has no
other choice but to disassociate himself from his employment. As discussed
above, petitioner negotiated for a resignation with separation pay as the manner
in which his employment relations with private respondent would end. He was
already suffering from lingering illness at the time he tendered his resignation.
His continued employment would have been detrimental not only to his health,
but also to his performance as an employee of private respondent.

Resignation with separation pay was the best option for him under the
circumstances and this was the mode adopted and agreed upon by the parties,
as evidenced by the Release and Quitclaim petitioner executed in connection
with his resignation.

Clearly then petitioner’s claim that he was illegally dismissed cannot be

sustained, considering that his voluntary resignation has been established as fact
by three tribunals. Illegal dismissal and voluntary resignation are adversely
opposed modes of terminating employment relations, in that the presence of one
negates that of the other. An employee who resigns and executes a quitclaim in
favor of the employer is generally estopped from filing any further money claims
against the employer arising from the employment.
However, private respondent has not complied with its obligation to give
petitioner’s separation pay in the amount of 8,542.50. It was this deliberate
withholding of monetary benefits that necessitated the long, litigious and lethargic
proceedings in this case. Had respondent simply paid the amount as separation
pay to petitioner, this legal controversy could have been avoided.

Wherefore, the petition is hereby denied and the assailed decision of the CA was
affirmed with modification that respondent is directed to pay petitioner 8,542.50
plus legal interest computed from December 7, 1993 until fully paid representing
the unpaid separation pay benefit agreed upon by the parties.
3) Ludo & Luym Corporation v. Ferdinand Saornido as voluntary arbitrator
and Ludo Employees Union (LEU)
G.R. No. 140960 – January 20, 2003

DOCTRINE: Exception to 3-year prescriptive period. Employee’s cause of action

had not accrued yet because the employer had not refused or denied the
employer’s claims but just wanted proofs from the employees.

FACTS:
- Petitioner LUDO & LUYM Corp, LUDO for short, is a domestic corporation
engaged in the manufacture of coconut oil, cornstarch, glucose and
related products.
- LUDO operates a manufacturing plant located at Cebu and a wharf where
raw materials and finished products are shipped out.
- LUDO engaged the Arrastre services of Cresencio Lu Arrastre Services
(CLAS) for the loading and unloading of its finished product at the wharf.
- Several arrastre workers were deployed by CLAS to perform the services
needed by LUDO.
- These arrastre workers were subsequently hired on different dates as
regular rank-and-file employees of LUDO every time the latter needed
manpower services.
- Employees thereafter joined respondent union, LUDO Employees Union
(LEU), which acted as the bargaining agent of the rank-and-file
employees.
- On April 13, 1992, respondent union entered into a collective bargaining
agreement with LUDO which provides certain benefits to the employees
the amount of which vary according to the length of service rendered by
the availing employee.
- The union requested LUDO to include in its members’ period of services
the time during which they rendered arrastre services to LUDO through
the CLAS so that they could get higher benefits.
- LUDO failed to act on the request. Thus, the matter was submitted for
voluntary arbitration.
- On April 18, 1997, the Voluntary Arbitrator ruled that:
(1) The respondent employees were engaged in the activities necessary
and desirable to the business of petitioner, and
(2) CLAS is a labor-only contractor of petitioner.
- The VA find the claims of the complainants meritorious
(1) Complainants shall be considered regular employees of LUDO 6
months from the first day of service at CLAS;
(2) Complainants, are entitled to the CBA benefits during the regular
employment and should be awarded;
(a) Sick leave, (b) vacation leave, & (c) annual wage and salary
increase during such period.
(3) The respondents shall pay attorney’s fees of 10 percent of the total
award;
 (4) Interest of 12% per annum or 1% per month shall be imposed to the
award from the date of promulgation until fully paid if only to speed up
the payment of these long over due CBA benefits deprived of the
complaining workers.
- All separation and/ or retirement benefits shall be construed from the date
of regularization aforementioned subject only to the appropriate
government laws and other social legislation.
- LUDO filed a motion for reconsideration, which was denied.
- On appeal, CA affirmed the decision of the VA.
- Hence this petition.

ISSUE/s:
(1) WON respondents’ claim for benefits consisting of Salary increases,
vacation leave and sick leave benefits are already barred by prescription.
(NO)
(2) WON Voluntary Arbitrator can award benefits not claimed in the
submission agreement (YES)

RULING:

- Petitioner contends that the appellate court gravely erred when it upheld
the award of benefits, which were beyond the terms of submission
agreement.
- Petitioner asserts that the arbitrator must confine its adjudication to those
issues submitted by the parties for arbitration, which in this case is the
sole issue of the date of regularization of the workers. Hence, the award of
benefits by the arbitrator was done in excess of jurisdiction.
- Respondents, for their part, aver that the three-year prescriptive period is
reckoned only from the time the obligor declares his refusal to comply with
his obligation in clear and unequivocal terms.
- In this case, respondents maintain that LUDO merely promised to review
the company records in response to respondents’ demand for adjustment
in the date of their regularization without making a categorical statement of
refusal.
- On the matter of the benefits, respondents argue that the arbitrator is
empowered to award the assailed benefits because notwithstanding the
sole issue of the date of regularization, standard companion issues on
reliefs and remedies are deemed incorporated. Otherwise, the whole
arbitration process would be rendered purely academic and the law
creating it inutile.]

POWER OF VA TO RENDER AWARD OR ASSAILED BENEFITS

- The jurisdiction of Voluntary Arbitrator or Panel of Voluntary Arbitrators

and Labor Arbiters is clearly defined and specifically delineated in the
Labor Code. The pertinent provisions of the Labor Code, read:
Art. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. —
The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and
exclusive jurisdiction to hear and decide all unresolved grievances arising from
the interpretation or implementation of the Collective Bargaining Agreement and
those arising from the interpretation or enforcement of company personnel
policies referred to in the immediately preceding article. Accordingly, violations of
a Collective Bargaining Agreement, except those, which are gross in character,
shall no longer be treated as unfair labor practice and shall be resolved as
grievances under the Collective Bargaining Agreement. For purposes of this
article, gross violations of Collective Bargaining Agreement shall mean flagrant
and/or malicious refusal to comply with the economic provisions of such
agreement.

The Commission, its Regional Offices and the Regional Directors of the
Department of Labor and Employment shall not entertain disputes, grievances or
matters under the exclusive and original jurisdiction of the Voluntary Arbitrator or
panel of Voluntary Arbitrators and shall immediately dispose and refer the same
to the Grievance Machinery or Voluntary Arbitration provided in the Collective
Bargaining Agreement.

Art. 262. Jurisdiction over other labor disputes. — The Voluntary Arbitrator or
panel of Voluntary Arbitrators, upon agreement of the parties, shall also hear and
decide all other labor disputes including unfair labor practices and bargaining
deadlocks."

- In construing the above provisions, we held in San Jose vs. NLRC,

that the jurisdiction of the Labor Arbiter and the Voluntary Arbitrator
or Panel of Voluntary Arbitrators over the cases enumerated in the
Labor Code, Articles 217, 261 and 262, can possibly include money
claims in one form or another.
- Comparatively, in Reformist Union of R.B. Liner, Inc. vs. NLRC,
compulsory arbitration has been defined both as "the process of
settlement of labor disputes by a government agency which has the
authority to investigate and to make an award which is binding on all the
parties, and as a mode of arbitration where the parties are compelled to
accept the resolution of their dispute through arbitration by a third party
(emphasis supplied)." While a voluntary arbitrator is not part of the
governmental unit or labor department’s personnel, said arbitrator renders
arbitration services provided for under labor laws.
- Generally, the arbitrator is expected to decide only those questions
expressly delineated by the submission agreement. Nevertheless, the
arbitrator can assume that he has the necessary power to make a
final settlement since arbitration is the final resort for the
adjudication of disputes.
 - The succinct reasoning enunciated by the CA in support of its
holding, that the Voluntary Arbitrator in a labor controversy has
jurisdiction to render the questioned arbitral awards, deserves our
concurrence, thus: In general, the arbitrator is expected to decide
those questions expressly stated and limited in the submission
agreement. However, since arbitration is the final resort for the
adjudication of disputes, the arbitrator can assume that he has the
power to make a final settlement.
- Thus, assuming that the submission empowers the arbitrator to decide
whether an employee was discharged for just cause, the arbitrator in this
instance can reasonably assume that his powers extended beyond giving
a yes-or-no answer and included the power to reinstate him with or without
back pay.
- In one case, the Supreme Court stressed "xxx the Voluntary Arbitrator had
plenary jurisdiction and authority to interpret the agreement to arbitrate
and to determine the scope of his own authority subject only, in a proper
case, to the certiorari jurisdiction of this Court. The Arbitrator, as already
indicated, viewed his authority as embracing not merely the determination
of the abstract question of whether or not a performance bonus was to be
granted but also, in the affirmative case, the amount thereof.
- By the same token, the issue of regularization should be viewed as
two-tiered issue. While the submission agreement mentioned only
the determination of the date or regularization, law and jurisprudence
give the voluntary arbitrator enough leeway of authority as well as
adequate prerogative to accomplish the reason for which the law on
voluntary arbitration was created – speedy labor justice.
- It bears stressing that the underlying reason why this case arose is to
settle, once and for all, the ultimate question of whether respondent
employees are entitled to higher benefits. To require them to file another
action for payment of such benefits would certainly undermine labor
proceedings and contravene the constitutional mandate providing full
protection to labor.

ISSUE ON PRESCRIPTION OF MONEY CLAIMS:

- As regards petitioner’s contention that the money claim in this case

is barred by prescription, we hold that this contention is without
merit.
- So is petitioner’s stance that the benefits claimed by the respondents, i.e.,
sick leave, vacation leave and 13th-month pay, had already prescribed,
considering the three-year period for the institution of monetary claims.
- In this case, the Voluntary Arbitrator found that prescription has not as yet
set in to bar the respondents’ claims for the monetary benefits awarded to
them.
- No compelling reason has been shown for us to diverge from the findings
of the Voluntary Arbitrator, especially since the appellate court affirmed his
 findings, that it took some time for respondent employees to ventilate
their claims because of the repeated assurances made by the
petitioner that it would review the company records and determine
therefrom the validity of the claims, without expressing a categorical
denial of their claims. As elucidated by the Voluntary Arbitrator:
- The respondents had raised prescription as defense. The controlling law,
as ruled by the High Court, is: "The cause of action accrues until the
party obligated refuses xxx to comply with his duty. Being warded off
by promises, the workers not having decided to assert [their] right[s],
[their] causes of action had not accrued…" (Citation omitted.)
- Since the parties had continued their negotiations even after the
matter was raised before the Grievance Procedure and the voluntary
arbitration, the respondents had not refused to comply with their
duty. They just wanted the complainants to present some proofs.
The complainant’s cause of action had not therefore accrued yet.
- In the earlier voluntary arbitration case aforementioned involving exactly
the same issue and employees similarly situated as the complainants’, the
same defense was raised and dismissed by Honorable Thelma Jordan,
Voluntary Arbitrator.
- In fact, the respondents’ promised to correct their length of service and
grant them the back CBA benefits if the complainants can prove they are
entitled rendered the former in estoppel, barring them from raising the
defense of laches or prescription. To hold otherwise amounts to rewarding
the respondents for their duplicitous representation and abet them in a
dishonest scheme against their workers.
- Indeed, as the Court of Appeals concluded, under the equitable principle
of estoppel, it will be the height of injustice if we will brush aside the
employees’ claims on a mere technicality, especially when it is
petitioner’s own action that prevented them from interposing the
claims within the prescribed period.
- WHEREFORE, the petition is denied. The appealed decision of the Court
of Appeals in CA-G.R. SP No. 44341 and the resolution denying
petitioner’s motion for reconsideration, are AFFIRMED. Costs against
petitioner.
4) Orchard Golf and Country Club v. Amelia Francisco
G.R. No. 178125 – March 18, 2013

DOCTRINE: Constructive dismissal occurs not when the employee ceases to

report for work, but when the unwarranted acts of the employer are
committed to the end that the employee's continued employment shall become
so intolerable. In these difficult times, an employee may be left with no choice but
to continue with his employment despite abuses committed against him by the
employer, and even during the pendency of a labor dispute between them. This
should not be taken against the employee. Instead, we must share the burden of
his plight, ever aware of the precept that necessitous men are not free men.

PARTIES:
Amelia Francisco – Petitioner, Club Accountant, Head of General Accounting
Division.
Mr. Famy – Club’s Financial Comptroller, where Petitioner Francisco reports
directly.
Mr. Clemente – Club’s General Manager
Ms. Ma. Nuevo – Club’s General and Administrative Manager

FACTS:
- Petitioner, the Club, operates and maintains two golf courses in Dasma,
Cavite for club members and their guests.
- It has different amenities, such as swimming pool, bowling alley, cinema,
fitness center, courts, restaurants, and function rooms.
- On March 17, 1997, Respondent Francisco was employed as Club
Accountant and headed the Club’s General Accounting Division
along with the 4 divisions under it. (Revenue and Audit, Billing/Accounts
Receivable, Accounts Payable, and Fixed Assets)
- Each of the 4 divisions has its own Supervisor and Assistant Supervisor,
and Respondent being the division head, reports directly to the
Club’s Financial Comptroller, Famy.
- On May 18, 200, Famy directed Francisco to draft a letter to SGV &
Co. the Club’s external auditor to inquire about the accounting
treatment that should be accorded for property that will be sold or
donated to the Club.
- Francisco failed to prepare the letter despite repeated verbal and
written reminders.
- On June 27, 2000, Famy Issued a memorandum requiring Francisco
to write an explanation, under the pain of a charge for
insubordination, for his failure to prepare the letter.
- Instead of writing an explanation, Francisco went to the Club’s General
Manager, Clemente, and personally explained to the latter that due to
heavy workload she was unable to draft the letter.
- Clemente assured that he would discuss the matter with Famy.
- On June 29, 2000, Famy issued a memorandum suspending
Francisco without pay for a period of 15 days.
- On July 1, 2000 another memorandum informing Francisco that her
suspension shall be effective from July 3 – 19 was issued. (Another
memo for the effectivity and period of suspension).
- Francisco wrote to the Club’s General and Administrative Manager,
Maria Nuevo, questioning Famy’s act of charging, investigating, and
suspending her without coursing the same through the Club’s Personnel
Department.
- In a Memorandum, Francisco, questioned the authority of Famy in
issuing such memorandum and for conducting an investigation along with
charging her for an offense. She also claimed that Famy abused her
authority as superior with full disregard of the Personnel
Department, because he acted as the complainant, investigator, and he
judge.
- Francisco further claimed that she made sure that Famy is aware about
the lined-up priorities that need to be given attention and that if he really
feels the importance of the letter and is cognizant with her present
workload, then why did he went on leave from June 23 -26.
- She further added that whenever there were disagreements or
dissatisfaction, Famy is creating a feeling of job insecurity telling her
to resign and that he could transfer her to a lower position like the
position of the cashier, cost controller, and the like and that he had
done it to the former Club Accountant.
- Nuevo, in his reply, exonerated Famy justifying his actions as within his
power and authority as department head. He claimed that Francisco was
accorded due process and was given the opportunity to explain her side
but deliberately ignored his directives, which constitutes an act of
insubordination.
- On July 5, 2000, Francisco wrote a letter to Clemente requesting an
investigation into Famy’s possible involvement in the commission of
alleged fraudulent and negligent acts relative to the questionable
approval and release of Club checks in payment of BIR taxes, in
which her counter-signature though required was not obtained.
- Famy replied that such charges were baseless and intended to malign
him.
- After Francisco’s period of suspension expired on July 20, 2000,
Famy issued separate memoranda to Francisco and Clemente informing
them of Francisco’s transfer, without diminution of salary and
benefits, to the Club’s Cost Accounting Section while the
investigation on Famy’s alleged illegal activities is pending.
- Another memorandum addressed to Nuevo, was issued by Famy for
another investigation for an alleged insubordination, for Francisco’s
unauthorized change of day-off from July 30 to August 4, and for
being absent on August 4 despite disapproval of her leave/offset
application thereof.
- Francisco was asked to submit her explanation on the foregoing charges
of insubordination, negligence, inefficiency and violation of work standards
relative to the unauthorized change of day-off and disapproved
offset/leave.
- Francisco claimed that her presence on July 30, 2000 which was a
Sunday and supposedly her day-off, was necessary because it was the
Club’s scheduled month-end inventory, and she was assigned as one of
the OIC.
- She added that her actions were in accord with past experience and Famy
very well knew about this.
- She accused Famy of waging a personal vendetta against her for her
seeking an inquiry into claimed anomalies in her letter dated July 5,
2000.
- She also claimed that her transfer to Cost Accounting Section was
humiliating and demeaning and that it constituted constructive
dismissal, and threatened to take legal action or seek assistance from
Club members to insure that Famy’s impropriety is investigated.
- On August 11, 2000, Francisco filed a complaint for illegal dismissal
against the Club, impleading Famy, Clemente, and Nuevo as
additional respondents where she prayed for damages and Attorney’s
fees.
- Francisco then received another memo, requiring her to explain why she
should not be charged with betrayal of company trust, allegedly for the
act of one Ernie Yu, a Club member, who was seen distributing
copies of Francisco’s letter to the Club’s Chairman of Board of
Directors.
- Francisco gave an explanation but the Club did not find any merit in her
explanation.
- Clemente, handed her a Notice of Disciplinary Action relative to her
unauthorized change of Day-off and leave/absence.
- She was suspended for another 15 days from August 21 to September
6, 2000.
- Francisco amended her illegal dismissal complaint to one for illegal
suspension. Meanwhile she continued to report for work.
- After serving her suspension, Francisco received a memo from Nuevo,
approved by Clemente, placing her on forced leave with pay for 30
days for the reason that the case filed against her has strained her
relationship with her superiors.
- When she reported back for work, she was informed about her
permanent transfer, without diminution of benefits, to the Club’s
Cost Accounting Section due to the strained relations and the
pending evaluation of her betrayal of company trust charge.
- Famy will still supervise Francisco at the Cost Accounting section.
- Francisco, protested her permanent transfer where she claimed bad
faith along with Clemente’s inaction on her letter charging Famy with
irregularities relative to BIR tax payments.
- Francisco once again amended her complaint where she includes
illegal/constructive dismissal with prayer for reinstatement to her former
position as Club Accountant.
- Clemente denied that her transfer was done in bad faith and claimed that
Francisco’s letter for investigation about Famy’s irregularities was already
acted upon and the result is a matter only between the board and Mr.
Famy.
- LA dismissed Francisco’s complaint for lack of merit. The LA noted
belligerence and animosity between Francisco and Famy, making short
shrift of Francisco’s accusations against her superior and dismissing them
as nothing more than attempts to get back at Famy for his reproach at her
failure to draft the SGV letter.
- LA reminded Francisco that a workplace is not a “bed of roses”.
Words and actions are expectedly tended to get somewhat disrespectful, if
not outright insulting, when work remains undone. Trash talks bites harder
as one climbs higher in the organization ladder commensurate to the
additional responsibility attached to the position.
- LA further upheld that Francisco’s two accounts of suspension are
valid exercise of the Club’s management prerogative for Francisco’s
failure to draft the SGV letter and her taking a leave with full
awareness yet in disregard of her superior Famy’s disapproval of her
leave application.
- LA likewise found that the claim of constructive dismissal to be
baseless since her transfer is necessary and in furtherance of the Club’s
interest. The transfer was lateral, or to a position of the same rank
and pay scale based on the Club’s organizational chart.
- Finally, LA held that the fact that Francisco continued to report for
work belies her claim of constructive dismissal,
- Francisco appealed to the NLRC, which took a contrary view.
- Although Francisco’s suspension were valid, her subsequent permanent
transfer on the ground of strained relations to the Club’s Cost
Accounting Section was without just cause and resulted to demotion
because the position of Cost Controller was merely of a supervisory
character, while the position of as Club Accountant was of
managerial rank. The unwarranted demotion is equivalent to
constructive dismissal.
- Strained relationship is not a valid ground for termination of
employment under the Labor Code. NLRC ordered Francisco’s
reinstatement to her former position and awarder her attorney’s fees.
- Petitioner moved for reconsideration but was denied.
- Francisco moved for partial reconsideration regarding the decision on her
suspension and claim or damages but her motion was denied as well.
- Petitioner appealed to the CA, which sustained the ruling of the NLRC.
The right or prerogative to transfer the respondent to another office should
have not been used arbitrarily to rid the employer of an undesirable
worker.
 - Petitioner filed an MR but was denied.
- Hence this petition.

ISSUE: WON respondent was constructively dismissed. (YES)

RULING:

- There was constructive dismissal when Francisco was transferred to

the Cost Accounting Section.
- Francisco’s transfer to the position of Cost Controller was without valid
basis and that it amounted to a demotion in rank. Hence, there was
constructive dismissal.
- Records show that when Francisco returned to work on July 20, 2000
fresh from her first suspension, she was unceremoniously transferred
by Famy, via his July 20, 2000 memorandum, to the Club’s Cost
Accounting Section.
- The cause of Francisco’s temporary transfer on July 20, 2000 was
because of Francisco’s pending complaint against Famy.
- And then again another memorandum was issued against Francisco,
which forced her to take a 30-day leave with pay for the reason that the
case filed against her has strained her relationship with her superior.
- After expiration of her forced leave, she was once more handed a
memorandum informing her that her transfer to Cost Accounting Section
became permanent due to the strained relation and a charge for betrayal
of company trust against her.
- The Court shares the CA’s observation that when Francisco was placed
on forced leave and transferred to the Cost Accounting Section, not once
was Francisco given the opportunity to contest these company actions
taken against her. It has also not escaped our attention that just when one
penalty has been served by Francisco, another would instantaneously
take its place. And all these happened even while the supposed case
against her, the alleged charge of "betrayal of company trust", was still
pending and remained unresolved. In fact, one of the memoranda was
served even at Francisco’s residence.
- Not even the claim that her relations with her superiors have been strained
could justify Francisco’s transfer to Cost Accounting Section. Indeed, it
appears that her charge was never resolved. And if Famy, Nuevo and
Clemente truly believed that their relations with Francisco have been
strained, then it puzzles the Court why, despite her transfer, she
continues to remain under Famy’s direct supervision. Such is the
tenor of the memoranda relative to her temporary and subsequently,
permanent, transfer to the Cost Accounting Section.
- For this reason, Francisco’s July 20, 2000 temporary transfer and her
October 12, 2000 permanent transfer to Cost Accounting Section must be
invalidated. For one, there was no valid reason to temporarily transfer
Francisco to Cost Accounting Section on July 20, 2000. She had
 already served her penalty for her failure to draft the SGV letter, through
the 15-day suspension period which she just completed on July 20, 2000.
Secondly, the transfer was not even rooted in any new infraction she is
accused of committing. There was thus an absolute lack of basis for her
July 20, 2000 temporary transfer.
- As for her October 12, 2000 permanent transfer, the same is null and void
for lack of just cause. Also, the transfer is a penalty imposed on a
charge that has not yet been resolved. Definitely, to punish one for an
offense that has not been proved is truly unfair; this is deprivation without
due process. Finally, the Court sees no necessity for Francisco’s transfer;
on the contrary, such transfer is outweighed by the need to secure her
office and documents from Famy’s possible intervention on account of the
complaint she filed against him.
- We also agree with the findings of the NLRC, as affirmed by the CA, that
Francisco’s transfer constituted a demotion, viz:
- x x x We however, hold that Complainant’s transfer resulted to a demotion
in her level/rank. The level of Club Accountant is not "Supervisor V" but
"Managerial-3" as indicated in the Notice of Personnel Action issued to
Complainant on July 20, 2000, signed by her immediate superior Jose
Ernilo P. Famy, Department Head of Respondent company on July 10,
2000, and approved by Tomas B. Clemente III, Acting GM & COOO on
July 11, 2000 x x x. Obviously, the alleged August 15, 1998 Company’s
Organizational Chart showing the Club Accountant and the Cost Controller
occupying the same job grade level, which was attached to Respondent’s
February 21, 2001 Reply x x x was never implemented, otherwise, the
Department Head and the Acting GM & COO would not have specifically
indicated "Managerial-3" for Complainant’s position of Club Accountant in
the Notice of Personnel Action issued to Complainant on July 10, 2000 or
two (2) years after the date of the alleged Organizational Chart. Clearly,
Complainant was a manager when she occupied the position of Club
Accountant. However, when management transferred her to the position
of Cost Controller/Accountant, she was demoted to a mere supervisor.
- Moreover, in Complainant’s December 3, 1997 Job Description as Club
Accountant prepared by Jose Ernilo P. Famy and approved by Ian Paul
Gardner and Atty. Stellamar C. Flores of HR, it is specifically indicated
therein that as Club Accountant, Complainant directly supervises the Cost
Controller x x x. Notably, Complainant was never issued any amendment
to her December 3, 1997 Job Description, which would have removed
from her supervision the Cost Controller. In fact, Respondents do not
refute Complainant’s allegation that as Club Accountant, she was
responsible for the rating of the Cost Controller’s performance for the
years 1998 to 2000. It becomes clearer now that the alleged August 15,
1998 Company’s Organizational Chart showing the Club Accountant and
the Cost Controller occupying the same job grade level, which was
attached to Respondent’s February 22, 2001 Reply x x x was, indeed,
never implemented, otherwise, management would have issued
 Complainannt an amendment to her December 3, 1997 Job Description
effectively removing from her supervision the position of Cost
Controller/Accountant and management would not have let Complainant
rate the performance of the Cost Controller/Accountant for the years 1998
to 2000. It is obvious, therefore, that Complainant’s position of Club
Accountant is higher in level/rank than that of Cost Controller/Accountant.
Patently, Complainant’s transfer from the position of Club Accountant to
the position of Cost Accountant resulted to her demotion in level/rank.
Complainant’s transfer resulting to her demotion is, therefore, tantamount
to constructive dismissal. x x x
- The fact that Francisco continued to report for work does not
necessarily suggest that constructive dismissal has not occurred,
nor does it operate as a waiver. Constructive dismissal occurs not
when the employee ceases to report for work, but when the
unwarranted acts of the employer are committed to the end that the
employee’s continued employment shall become so intolerable. In
these difficult times, an employee may be left with no choice but to
continue with his employment despite abuses committed against him by
the employer, and even during the pendency of a labor dispute between
them. This should not be taken against the employee. Instead, we must
share the burden of his plight, ever aware of the precept that necessitous
men are not free men.
- "An employer is free to manage and regulate, according to his own
discretion and judgment, all phases of employment, which includes hiring,
work assignments, working methods, time, place and manner of work,
supervision of workers, working regulations, transfer of employees, lay-off
of workers, and the discipline, dismissal and recall of work. While the law
recognizes and safeguards this right of an employer to exercise what are
clearly management prerogatives, such right should not be abused and
used as a tool of oppression against labor. The company’s prerogatives
must be exercised in good faith and with due regard to the rights of labor.
A priori, they are not absolute prerogatives but are subject to legal limits,
collective bargaining agreements and the general principles of fair play
and justice. The power to dismiss an employee is a recognized
prerogative that is inherent in the employer’s right to freely manage and
regulate his business. x x x. Such right, however, is subject to regulation
by the State, basically in the exercise of its paramount police power. Thus,
the dismissal of employees must be made within the parameters of the
law and pursuant to the basic tenets of equity, justice and fair play. It must
not be done arbitrarily and without just cause."