The Supreme Court in McMer Corporation, Inc. vs. National Labor Relations Commission, G.R. No. 193421, ruled that Feliciano Libunao, Jr. was constructively dismissed due to the hostile work environment created by the employer. This decision underscores that employees do not have to endure unbearable working conditions and are entitled to legal remedies when such conditions force them to resign. It serves as a reminder to employers to maintain a respectful and professional workplace.

When Intimidation Leads to Resignation: Analyzing Constructive Dismissal

This case revolves around Feliciano C. Libunao, Jr.’s complaint against McMer Corporation, Inc., Macario D. Roque, Jr., and Cecilia R. Alvestir, alleging unfair labor practices and constructive illegal dismissal. Libunao claimed that due to a hostile work environment and strained relationships with his superiors, he was effectively forced to resign. The central legal question is whether the actions of the employer created working conditions so intolerable that a reasonable person in the employee’s position would feel compelled to resign.

Initially, Libunao was employed by McMer Corporation, Inc. as a Legal Assistant and later promoted to Head of the Legal Department. Over time, disagreements arose between Libunao and the management, particularly Roque and Alvestir, leading to a deteriorating work environment. The conflict escalated when Libunao witnessed what he perceived as malicious actions against other employees. On one occasion, Roque angrily summoned Libunao to his office, creating a threatening situation. Fearing for his safety, Libunao reported the incident to the police and subsequently did not report to work.

McMer Corporation issued a memorandum to Libunao, requiring him to explain his absence. In response, Libunao filed a complaint for unfair labor practices, constructive illegal dismissal, and damages. The Labor Arbiter initially ruled that there was no constructive dismissal but granted Libunao a proportionate 13th-month pay. However, the NLRC reversed this decision, finding constructive dismissal and awarding backwages, separation pay, and damages. The Court of Appeals affirmed the NLRC’s ruling, leading McMer Corporation to appeal to the Supreme Court.

The Supreme Court emphasized that constructive dismissal occurs when continued employment becomes impossible, unreasonable, or unlikely due to demotion, reduction in pay, or unbearable discrimination. The Court referenced the case of Uniwide Sales Warehouse Club v. NLRC, stating that it may scrutinize evidence if there is a conflict of factual perceptions between the Labor Arbiter and the Court of Appeals. It was noted that the critical test for constructive dismissal is whether a reasonable person in the employee’s position would have felt compelled to give up their position.

The Supreme Court upheld the Court of Appeals’ finding that constructive dismissal had occurred. The Court cited several factors contributing to this finding, including Roque’s threatening behavior towards Libunao, sarcastic treatment in front of other employees, and the compromise of Libunao’s professional ethics due to certain business practices of McMer. The Court noted the Affidavit executed by Ginalita Guiao, which corroborated the hostile working environment. Guiao’s statement provided firsthand details of Roque’s behavior and its impact on Libunao.

The Court also addressed the evidentiary value of police blotters. While police blotters have limited probative value, they are admissible in the absence of competent evidence to refute the stated facts. The Court also cited Macalinao v. Ong, emphasizing that a police report’s prima facie nature means it is sufficient to establish the facts if it remains unexplained or uncontradicted. The Supreme Court found that, in conjunction with other evidence, the police blotter supported Libunao’s claim of a threatening work environment. Ultimately, the totality of evidence painted a picture of an intolerable workplace, justifying Libunao’s decision to leave.

The Court underscored that the circumstances of July 20, 2007, were not isolated incidents but part of a pattern of behavior that rendered Libunao’s working conditions unbearable. Citing Siemens Philippines, Inc. v. Domingo, the Court reiterated that an employee forced to surrender their position due to unfair or unreasonable acts is deemed illegally terminated. In cases of constructive dismissal, the employee is entitled to remedies under Section 279 of the Labor Code, including backwages, separation pay, and damages.

Given the strained relations between the parties, the Supreme Court deemed reinstatement infeasible and, therefore, awarded separation pay as an alternative. Citing Santos v. NLRC, the Court highlighted the importance of these remedies in making the dismissed employee whole. Furthermore, the Court upheld the grant of moral, exemplary, and nominal damages due to the unjust treatment Libunao endured, in line with Philippine Aeolus Automotive United Corporation v. National Labor Relations Commission. The Court found that McMer’s actions warranted compensation for the emotional distress and mental anguish suffered by Libunao. Constructive dismissal serves as a protective measure for employees against coercive employer tactics.

FAQs

What is constructive dismissal?	Constructive dismissal occurs when an employer creates working conditions so intolerable that a reasonable person would feel compelled to resign. It is treated as an illegal termination because the employee’s resignation is not truly voluntary.
What evidence is considered in constructive dismissal cases?	Evidence includes testimonies, affidavits, police blotters, and any documentation that demonstrates the hostile or unbearable nature of the working conditions. The totality of circumstances is considered.
What remedies are available to an employee who is constructively dismissed?	Remedies include backwages (lost earnings), separation pay (in lieu of reinstatement), and damages (moral, exemplary, and nominal) to compensate for the suffering caused by the dismissal.
What is the significance of a police blotter in these cases?	While not conclusive, a police blotter can corroborate the employee’s claim that they feared for their safety or well-being at the workplace. Its value increases when supported by other evidence.
What does an employee need to prove to claim constructive dismissal?	An employee must demonstrate that the employer’s actions or inactions created working conditions so difficult or unpleasant that a reasonable person would feel forced to resign.
Why was separation pay awarded instead of reinstatement in this case?	Reinstatement was deemed impractical due to the strained relationship between Libunao and McMer Corporation. Separation pay serves as a substitute to compensate for the loss of employment.
Can an employer’s intent excuse actions that lead to constructive dismissal?	No, the focus is on the impact of the employer’s actions on the employee, not the employer’s intent. Even without malicious intent, creating unbearable conditions can lead to constructive dismissal.
Are verbal threats or intimidation enough to constitute constructive dismissal?	Verbal threats and intimidation, especially when part of a pattern of harassment, can contribute to a finding of constructive dismissal. The key is whether these actions created an intolerable work environment.
How do courts determine if working conditions are truly “intolerable”?	Courts use a “reasonable person” standard, asking whether a reasonable person in the employee’s situation would have felt compelled to resign. This is a highly fact-dependent inquiry.

This ruling reinforces the importance of fostering a positive and respectful work environment. Employers must be mindful of their actions and their impact on employees, as creating a hostile or unbearable workplace can have significant legal consequences.

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: MCMER CORPORATION, INC. vs. NLRC, G.R. No. 193421, June 04, 2014