In the Philippine legal system, the case of Divine Word College of Laoag v. Shirley B. Mina underscores the concept of constructive dismissal, where an employer’s actions make continued employment unbearable for the employee. The Supreme Court affirmed that Delfin Mina was constructively dismissed when his employer, Divine Word College of Laoag (DWCL), reassigned him from an associate professor to a college laboratory custodian while stripping him of his teaching duties. This ruling highlights the employer’s duty to ensure that employee transfers are based on valid grounds and do not result in a demotion or prejudice to the employee. The decision reinforces the protection afforded to employees against actions that effectively force them to resign.

From Professor to Custodian: When Does a Transfer Become Constructive Dismissal?

Delfin A. Mina, initially a high school teacher at the Academy of St. Joseph (ASJ), transferred to Divine Word College of Laoag (DWCL) in 1979, securing a permanent position after a probationary year. Over two decades, he served in the high school department before being appointed as an Associate Professor III in DWCL’s college department in 2002. However, in June 2003, Mina’s career took an unexpected turn when he was reassigned as the College Laboratory Custodian for the School of Nursing, accompanied by the removal of his teaching load. This change was set to last from June 1, 2003, to May 31, 2004, with a clause for automatic termination without further notice.

Mina’s situation differed significantly from his colleagues who had also been transferred to the college department but retained their teaching responsibilities. In early June 2004, Mina was offered early retirement, which he initially declined due to his family’s financial dependence on his income. Shortly after, he received a memorandum outlining allegations of gross negligence, insubordination, and reporting to work under the influence of alcohol. Feeling that his continued employment was untenable, Mina requested that his retirement date be adjusted to September 2004 to qualify for 25-year benefits. He also sought to include his eight years of service at ASJ, which DWCL denied, leading to a retirement pay of P275,513.10 and the signing of a waiver relinquishing further claims against DWCL.

The core legal question in this case revolved around whether DWCL’s actions constituted constructive dismissal, thereby entitling Mina to remedies under Philippine labor laws. The legal framework for this issue is rooted in the Constitution and the Labor Code, both of which ensure security of tenure for employees. The right to security of tenure, however, is not absolute; employers retain the prerogative to transfer or reassign employees based on legitimate business needs. However, this prerogative is limited by the requirement that such transfers must not be unreasonable, inconvenient, or prejudicial to the employee.

The Supreme Court, in evaluating Mina’s case, considered whether the transfer to the position of College Laboratory Custodian constituted a demotion. This determination involved assessing the nature of Mina’s previous role as an associate professor against the duties and responsibilities of the custodian position. The Court underscored that constructive dismissal occurs when continued employment becomes impossible, unreasonable, or unlikely, often involving a demotion in rank or a diminution in pay and other benefits. To qualify as constructive dismissal, the employer’s actions must demonstrate a level of discrimination or insensitivity that makes continued employment unbearable for the employee.

The Court found that Mina’s transfer met the criteria for constructive dismissal. Over nearly 22 years, he had held a permanent position as a high school teacher. His subsequent appointment as a college laboratory custodian was deemed a clear demotion, especially considering the removal of his teaching load and the contractual nature of his new position. Furthermore, DWCL did not provide any justifiable reason for Mina’s transfer, nor did it demonstrate that the transfer was not unreasonable or prejudicial to him. These circumstances led the Court to conclude that DWCL’s actions were tantamount to constructive dismissal.

Building on this principle, the Court addressed the remedies available to Mina as a result of his constructive dismissal. According to the Labor Code, an employee who is illegally dismissed is entitled to reinstatement without loss of seniority rights, as well as backwages from the time compensation was withheld until the date of actual reinstatement. However, given that Mina passed away in 2005, reinstatement was no longer a viable option. Consequently, the Court considered alternative remedies such as separation pay and retirement benefits.

The Court clarified the distinction between backwages, separation pay, and retirement benefits, emphasizing that each serves a different purpose. “The basis for computing separation pay is usually the length of the employee’s past service, while that for backwages is the actual period when the employee was unlawfully prevented from working.” Separation pay is designed to provide an employee with financial support during the transition to new employment, while retirement benefits reward loyalty and service to the employer.

Applying these principles to Mina’s case, the Court determined that he was entitled to backwages from the date of his constructive dismissal on June 1, 2003, until his death on June 18, 2005. Additionally, he was awarded separation pay for the period from June 1, 1979, when he joined DWCL, until his death. The Court also upheld the award of moral and exemplary damages, finding that DWCL acted in bad faith by unceremoniously demoting Mina and citing him for numerous violations after he rejected the school’s offer to voluntarily retire. The intention of the school to push him out of employment was evident.

This approach contrasts with the lower courts’ rulings, which had varied in their assessments of Mina’s entitlements. The Labor Arbiter (LA) initially found that Mina was underpaid in his retirement benefits but did not consider the actions as constructive dismissal. The National Labor Relations Commission (NLRC) later ruled that Mina was constructively dismissed but disregarded his eight years of service at ASJ in calculating his retirement pay due to non-compliance with the portability provision of the DWEA Retirement Plan. The Court of Appeals (CA) affirmed the NLRC’s finding of constructive dismissal but miscalculated the backwages by computing them from the date of Mina’s hiring rather than the date of his constructive dismissal.

In conclusion, the Supreme Court’s decision in Divine Word College of Laoag v. Shirley B. Mina provides valuable guidance on the concept of constructive dismissal and the rights of employees in such situations. The Court’s analysis underscores the importance of ensuring that employee transfers are based on valid grounds and do not result in a demotion or prejudice to the employee. The ruling also clarifies the distinctions between backwages, separation pay, and retirement benefits, providing a framework for calculating the appropriate remedies in cases of illegal dismissal.

FAQs

What is constructive dismissal?	Constructive dismissal occurs when an employer makes working conditions so intolerable that a reasonable person would feel compelled to resign. It’s essentially a forced resignation due to the employer’s actions.
What was the main issue in this case?	The main issue was whether the transfer of Delfin Mina from an associate professor to a college laboratory custodian, coupled with the removal of his teaching load, constituted constructive dismissal. The Supreme Court ruled that it did.
What is security of tenure?	Security of tenure is an employee’s right not to be dismissed without just cause and due process. This right is protected by the Constitution and the Labor Code of the Philippines.
What are backwages?	Backwages are the compensation an employee is entitled to receive from the time they were illegally dismissed until the date of reinstatement. In this case, since reinstatement was not possible, backwages were awarded until Mina’s death.
What is separation pay?	Separation pay is a monetary benefit given to an employee upon severance from employment, typically when dismissal is due to authorized causes like redundancy or when reinstatement is not feasible. It is designed to help the employee transition to new employment.
How is separation pay calculated?	Separation pay is generally calculated as one month’s salary for every year of service. In this case, Mina’s separation pay was computed based on his monthly salary multiplied by his years of service at DWCL.
What are moral and exemplary damages?	Moral damages are awarded to compensate for mental anguish, anxiety, and wounded feelings, while exemplary damages are imposed as a punishment and to set an example for others. These were awarded due to DWCL’s bad faith.
What is the significance of the portability clause?	The portability clause in the DWEA Retirement Plan allows an employee to transfer their earned credits from one participating employer to another. However, Mina failed to comply with the requirements of this clause, so his service at ASJ was not included in the retirement calculation.
What factors did the court consider to conclude that there was constructive dismissal?	The court considered the demotion in rank (from professor to custodian), the removal of teaching duties, the lack of justification for the transfer, and the overall negative impact on Mina’s professional standing.

The Supreme Court’s decision in the Divine Word College of Laoag v. Mina case serves as a crucial reminder for employers to exercise caution and fairness when transferring or reassigning employees. It highlights the importance of ensuring that such actions are based on legitimate business reasons and do not result in a demotion or prejudice to the employee. For employees, this case underscores the protection afforded to them against actions that effectively force them to resign, and the remedies available when constructive dismissal occurs.

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: Divine Word College of Laoag vs. Shirley B. Mina, G.R. No. 195155, April 13, 2016