The Supreme Court ruled that Jonald O. Torreda was constructively dismissed by Investment and Capital Corporation of the Philippines (ICCP), despite his initialed resignation letter. The Court found that the circumstances surrounding Torreda’s resignation indicated it was involuntary, driven by pressure from his superior rather than a genuine desire to leave the company. This decision underscores the importance of examining the context surrounding an employee’s resignation to determine its true voluntariness, protecting employees from forced resignations disguised as voluntary departures.

Forced Out or Stepping Down? The Case of a Resignation Under Duress

Jonald O. Torreda, an IT Senior Manager at Investment and Capital Corporation of the Philippines (ICCP), found himself in a precarious situation when his superior, William M. Valtos, presented him with a prepared resignation letter. Valtos, the Officer-in-Charge of the IT Department and the Group President of the Financial Service of respondent, allegedly pressured Torreda to sign the letter, implying termination as the alternative. Torreda refused initially but eventually initialed the letter under what he claimed was duress. The core legal question revolves around whether Torreda’s resignation was voluntary or a case of constructive dismissal, where the employer creates intolerable working conditions that force an employee to resign.

The Labor Arbiter (LA) and the National Labor Relations Commission (NLRC) both sided with Torreda, finding that he was constructively dismissed. The LA emphasized that Valtos admitted to providing the resignation letter and pressuring Torreda to sign, while the NLRC highlighted the fact that a reasonable person in Torreda’s position would have felt compelled to resign. However, the Court of Appeals (CA) reversed these rulings, reasoning that Torreda’s act of editing the letter and adding courteous words indicated a voluntary resignation. The Supreme Court, in this case, disagreed with the CA, emphasizing the importance of considering the totality of circumstances surrounding the resignation.

The Supreme Court’s analysis centered on the concept of constructive dismissal, which it defined as an involuntary resignation occurring when continued employment becomes impossible, unreasonable, or unlikely. This can manifest as a demotion, a reduction in pay, or, as in Torreda’s case, a hostile work environment created by the employer. The Court emphasized that constructive dismissal involves a clear act of discrimination, insensibility, or disdain by the employer, making it unbearable for the employee to continue working. The Court distinguished between illegal dismissal, which is an overt act of termination by the employer, and constructive dismissal, a “dismissal in disguise” where the employer’s intent to terminate is not immediately apparent.

To determine the voluntariness of a resignation, the Supreme Court cited the case of Fortuny Garments/Johnny Co v. Castro, clarifying that both the intention to relinquish the position and the overt act of relinquishment must concur. The Court emphasized that the employee’s actions before and after the alleged resignation are crucial in determining their true intent. In this case, the Court highlighted several circumstances that indicated Torreda’s resignation was not voluntary. Firstly, Torreda had no prior intention of resigning, as evidenced by his return from holiday vacation to present IT project reports. Secondly, Valtos initiated a performance appraisal prematurely, signaling an intent to create grounds for dismissal. Thirdly, Valtos presented Torreda with the ultimatum of either resigning or facing termination, effectively eliminating any genuine choice.

Building on these points, the Supreme Court noted that Torreda initially refused to sign the resignation letter, further indicating his lack of intent to leave. When he excused himself to go to the washroom, Valtos and the company’s legal counsel followed him, demonstrating the relentless pressure he faced. The Court also highlighted that Torreda merely initialed the letter, rather than providing his full signature, suggesting that he did not fully endorse the document. After initialing the letter, Torreda was immediately barred from the company premises, even though the resignation was supposed to take effect later. He received no compensation or separation pay, and he promptly filed a complaint for illegal dismissal, further demonstrating his lack of intent to voluntarily resign.

The Court dismissed the CA’s argument that Torreda’s act of editing the resignation letter indicated voluntariness, stating that the circumstances surrounding the resignation far outweighed the significance of the edits. The Court noted that “Any reasonable person in the petitioner’s position would have felt compelled to give up his position.” Further, the company did not prove a just cause for termination, nor did they give him an opportunity to address the stated concerns with his performance. This reinforces that the ‘resignation’ was a dismissal in disguise.

While the Supreme Court found that Torreda was constructively dismissed and ordered his reinstatement with backwages and separation pay, it reversed the award of moral and exemplary damages. The Court reasoned that the reasons cited by the NLRC and LA were insufficient to prove bad faith, fraud, or wanton oppression on the part of ICCP. Thus, while the company acted wrongly, the Court did not deem the actions worthy of the additional punitive damages. The absence of evidence demonstrating malicious intent or a pattern of oppressive behavior towards Torreda led the Court to this conclusion.

FAQs

What is constructive dismissal?	Constructive dismissal is when an employer makes working conditions so intolerable that an employee is forced to resign. It’s treated as an illegal termination, entitling the employee to legal remedies.
What was the main issue in this case?	The central issue was whether Jonald O. Torreda voluntarily resigned or was constructively dismissed by his employer, ICCP, based on the circumstances surrounding his resignation letter.
Why did the Supreme Court rule in favor of Torreda?	The Supreme Court found that the circumstances before and after Torreda signed the resignation letter indicated he was pressured and had no real choice, thus, he was constructively dismissed.
What factors did the Court consider in determining constructive dismissal?	The Court considered the lack of prior intent to resign, the ultimatum presented by Valtos, the initial refusal to sign, the immediate barring from the premises, and the prompt filing of a complaint.
What is the significance of editing the resignation letter?	While the CA saw it as evidence of voluntariness, the Supreme Court deemed it insignificant compared to the totality of circumstances indicating Torreda was forced to resign.
What remedies are available to employees who are constructively dismissed?	Employees constructively dismissed may be entitled to reinstatement, backwages, separation pay, and in some cases, moral and exemplary damages, depending on the circumstances.
Can an employer force an employee to resign?	No, an employer cannot force an employee to resign. Resignation must be a voluntary act by the employee. If an employer creates intolerable conditions, it constitutes constructive dismissal.
How does this case affect employers?	This case reminds employers to ensure that resignations are genuinely voluntary and not the result of coercion or creating intolerable working conditions, or face potential legal consequences.
Why were moral and exemplary damages not awarded in this case?	The Court found insufficient evidence of bad faith, fraud, or wanton oppression by the employer, which are necessary to justify awarding moral and exemplary damages.

This case serves as a crucial reminder that the voluntariness of a resignation is not determined solely by the existence of a signed resignation letter. Courts will scrutinize the circumstances surrounding the resignation to ensure it was a genuine act of the employee’s free will. Employers must act in good faith and ensure that employees are not coerced into resigning, or they risk facing legal repercussions for constructive dismissal.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Jonald O. Torreda v. Investment and Capital Corporation of the Philippines, G.R. No. 229881, September 05, 2018