Forced resignation

In illegal dismissal cases, the employer who interposes the defense of resignation has the burden to prove that the employee indeed voluntarily resigned. This is the principle applied in this case of Lynn.

Lynn was a licensed civil engineer for ten years already when she was hired by a construction and development company (SMPI) as construction management specialist in 1991. Because of satisfactory performance on the job, she was promoted as technical services manager in 1994 and then as project development manager in 1995. As project development manager she also sat as a member of the company’s management committee (MC).

But on January 27, 1998, the Company CEO informed Lynn that the company was planning to reorganize its manpower in order to cut on costs and that she had to file for resignation otherwise face termination. Initially Lynn refused to sign the blank resignation form handed to her by the company’s human resources department. Since then she had been excluded from the MC meetings and treated sourly that caused her humiliation and alienation. Considering the alternative of being terminated from the service or resigning with an attractive financial package offered her by the company, she opted for resignation instead of suffer termination. So on February 18, 1998, she submitted the signed resignation letter.

Lynn however learned that there was no reorganization plan in place when she resigned or immediately thereafter but only the hiring of new employees and some promotions of high ranking personnel. So on June 26, 1998, Lynn filed a complaint for illegal dismissal alleging that her separation from the service was practically forced upon her by management who tricked her into signing the resignation letter due to an impending reorganization when there was none after all. She thus alleged that she had been dismissed without cause and prayed for reinstatement and damages.

But on March 26, 1999, the Labor Arbiter (LA) dismissed Lynn’s complaint for lack of merit. The LA found no proven force, coercion, intimidation or any other circumstance which could otherwise invalidate Lynn’s resignation. Being a well-educated person, Lynn could not just be inveigled into resigning against her will. He said that being excluded from the management committee meetings would not be so humiliating and alienating as to compel her to resign and that the company indeed made some promotions and new appointments which were measures implementing the reorganization. Was the LA correct?

No. Resignation is the formal pronouncement and voluntary act of relinquishment of a position or office. The intent to relinquish must concur with the overt act of relinquishment. Hence the act of the employee before and after the resignation must be considered in determining whether he/she in fact intended to terminate his/her employment. In illegal dismissal cases, the employer who asserts that there is voluntary resignation and not dismissal has the burden of proving that the employee indeed voluntarily resigned. SMPI was unable to discharge this burden.

In this case the question of whether or not there was such a reorganization plan in place at the time of Lynn’s separation is material to the determination of whether her resignation was voluntary as claimed by SMPI because she could not have filed her resignation had she not been informed that there was such reorganization. And, it is quite clear that there was actually no genuine corporate restructuring plan in place yet at the time the CEO presented to Lynn the seemingly last available alternative options of voluntary resignation and termination by abolition of office. Certainly, inasmuch as the necessity of corporate reorganization generally lies within the exclusive prerogative of management, Lynn at that point had no facility to ascertain the truth behind it, and neither was she in a position to question it right then and there. Indeed she could not have chosen to file for resignation had SMI not broached to her the possibility of her being terminated from the service on account of the supposed reorganization. So it is understandable for Lynn to opt for resignation considering the attractive financial package which SMPI offered to her, instead of suffer termination that management made her believe will happen.

Thus Lynn’s separation from the company was the confluence of fraudulent representation to her that her office would be declared redundant coupled with the subsequent alienation which she suffered from the company by reason of her initial refusal to tender her resignation. The element of voluntariness in her resignation is therefore missing. She has been constructively, and hence illegally dismissed as indeed her continued employment is rendered impossible, unreasonable or unlikely under the circumstances.

But considering that it has been more than a decade since she involuntarily resigned, and with the changes in the corporate structure of SMPI, Lynn’s former position or its equivalent may no longer be existing or is currently occupied. Furthermore there is a possibility that Lynn’s rejoining SMPI’s workforce would only create tension and strained relations and would thus compromise her efficiency and productivity especially because she was holding a key position founded on trust and confidence. Hence in lieu of reinstatement, she should be given separation pay equivalent to one month salary for every year of service plus full backwages and P50,000 moral damages, P25,000 exemplary damages and 10% of the total amount due as Attorney’s fees (San Miguel Properties Inc. vs. Gucaban, G.R. 153982, July 18, 2011). –Jose C. Sison (The Philippine Star)

Note: Books containing compilation of my articles on Labor Law and Criminal Law (Vols. I and II) are now available. Call Tel. 7249445.

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E-mail at: jcson@pldtdsl.net