In the Philippine legal landscape, the burden of proof lies with the employer to demonstrate that an employee’s resignation was voluntary, especially when the employee claims illegal dismissal. The Supreme Court, in this case, underscores the importance of examining the circumstances surrounding an employee’s resignation, particularly when a quitclaim is involved. This ruling reinforces the protection afforded to employees against involuntary termination masked as resignation, ensuring that employers adhere to fair labor practices and respect the security of tenure guaranteed by law. The court emphasized that mere presentation of a resignation letter or quitclaim is insufficient; the totality of the circumstances must demonstrate genuine voluntariness.

Resignation Under Duress? Examining the Line Between Choice and Coercion in Employment Termination

The case of Carolina’s Lace Shoppe vs. Maquilan revolves around Gloria and Joy Maquilan, who alleged they were illegally dismissed after working as sales clerk and beader, respectively. They claimed they were forced to sign quitclaims to receive separation pay, despite their tenure. Carolina’s Lace Shoppe (CLS) argued that the Maquilans voluntarily resigned, evidenced by their resignation letters. The Labor Arbiter initially ruled in favor of the Maquilans, finding they were illegally dismissed. However, the NLRC reversed this decision, giving credence to the resignation letters. The Court of Appeals (CA) then reversed the NLRC’s decision, reinstating the Labor Arbiter’s ruling. The central legal question is whether the Maquilans’ resignations were truly voluntary or a result of coercion, thus constituting illegal dismissal.

The Supreme Court, in resolving the issue, reiterated the principle that in illegal dismissal cases where the employer claims resignation, the onus is on the employer to prove the resignation was voluntary. This means CLS had to demonstrate that Gloria and Joy Maquilan willingly and knowingly relinquished their employment. The court emphasized that simply presenting resignation letters is not enough; the circumstances surrounding the resignation must be examined to determine its validity. In determining the voluntariness of a resignation, the court relied on the principle articulated in Torreda v. Investment and Capital Corporation of the Philippines, quoting Fortuny Garments/Johnny Co v. Castro:

xxx. The act of the employee before and after the alleged resignation must be considered to determine whether in fact, he or she intended to relinquish such employment. If the employer introduces evidence purportedly executed by an employee as proof of voluntary resignation and the employee specifically denies the authenticity and due execution of said document, the employer is burdened to prove the due execution and genuineness of such document.

The court scrutinized Gloria’s resignation, noting that it occurred shortly after a Department of Labor and Employment (DOLE) inspection revealed potential labor violations by CLS. This timing raised suspicion about the voluntariness of her resignation. Moreover, Gloria’s prompt filing of an illegal dismissal complaint, just twelve days after her alleged resignation, was deemed inconsistent with a voluntary decision to leave her job. The Court also examined the resignation letter itself, which contained a quitclaim releasing CLS from all liabilities. The Supreme Court examined the contents of Gloria’s resignation letter:

May 31, 2008

CAROLINA’S LACE SHOPPE
Quad Branch

To whom it may concern:

This is to tender my resignation effective at the close of office hours of May 31, 2008.

I would like to thank the management for the opportunity that you have given me during my stay with the company.

This resignation will serve as notice that I have received all the benefits, salaries, 13^th month and service leave. I have no more claims of whatsoever against the company its owner or officers. This will serve as my clearance and quit claim.

Truly yours,

(Sgd.) GLORIA MAQUILAN
Sales clerk

The Court highlighted that such resignation letters, which function as quitclaims that disproportionately favor the employer, indicate a lack of voluntariness. The court, in Flight Attendants and Stewards Association of the Philippines (FASAP) v. Philippine Airlines, Inc., reiterated the ruling in EDI-Staffbuilders International, Inc. v. National Labor Relations Commission which laid down the basic contents of a valid and effective quitclaim:

In order to prevent disputes on the validity and enforceability of quitclaims and waivers of employees under Philippine laws, said agreements should contain the following:

1. A fixed amount as full and final compromise settlement;
2. The benefits of the employees if possible with the corresponding amounts, which the employees are giving up in consideration of the fixed compromise amount;
3. A statement that the employer has clearly explained to the employee in English, Filipino, or in the dialect known to the employees – that by signing the waiver or quitclaim, they are forfeiting or relinquishing their right to receive the benefits which are due them under the law; and
4. A statement that the employees signed and executed the document voluntarily, and had fully understood the contents of the document and that their consent was freely given without any threat, violence, duress, intimidation, or undue influence exerted on their person.

The Court noted that the quitclaim lacked essential elements for validity. It did not specify that the P15,000 received by Gloria was a full and final settlement, nor did it detail which benefits she was relinquishing in exchange for that amount. The court considered that Gloria was eight months pregnant and financially vulnerable, which further cast doubt on the voluntariness of her acceptance of the quitclaim.

Regarding Joy Maquilan, the court observed that she did not even execute a resignation letter, only a quitclaim. This quitclaim also lacked the necessary stipulations for validity and appeared to be a standard form filled out by CLS employees, with Joy merely signing it. Her immediate filing of an illegal dismissal complaint further supported the claim that her termination was involuntary. The fact that both Gloria and Joy’s documents were notarized did not guarantee their validity, as the presumption of regularity can be rebutted by clear and convincing evidence.

The Supreme Court emphasized that employers cannot circumvent the law to terminate employees without due process. Because the circumstances surrounding Gloria and Joy’s resignations were dubious and indicated involuntariness, the Court concluded that they were illegally dismissed. This case serves as a reminder to employers to ensure that resignations are genuinely voluntary and not the result of coercion or unfair labor practices. The ruling underscores the importance of protecting employees’ security of tenure and upholding their rights under Philippine labor law.

FAQs

What was the key issue in this case?	The central issue was whether the employees, Gloria and Joy Maquilan, voluntarily resigned from their employment at Carolina’s Lace Shoppe, or if they were illegally dismissed. The Supreme Court focused on determining whether their resignations were truly voluntary or coerced.
What is the employer’s burden of proof in resignation cases?	When an employer claims an employee resigned, the employer bears the burden of proving that the resignation was voluntary. This requires showing that the employee willingly and knowingly relinquished their position, free from coercion or undue influence.
What factors does the court consider when determining if a resignation is voluntary?	The court considers the circumstances surrounding the resignation, including the employee’s actions before and after the resignation, the timing of the resignation in relation to any labor disputes or investigations, and the content and validity of any quitclaims signed. Financial vulnerability and any potential pressure exerted on the employee are also considered.
What makes a quitclaim valid and enforceable?	For a quitclaim to be valid, it must contain a fixed amount as full and final settlement, specify the benefits being given up by the employee, include a statement that the employer explained the implications of the quitclaim to the employee, and state that the employee signed the document voluntarily and understood its contents.
What is the effect of notarization on a resignation letter or quitclaim?	While notarization creates a presumption of regularity, this presumption can be rebutted by clear and convincing evidence that the document was not executed voluntarily or that the employee did not understand its contents. Notarization alone does not guarantee the validity of the document.
What happens if an employee is found to be illegally dismissed?	If an employee is found to be illegally dismissed, the employer may be ordered to reinstate the employee to their former position, pay backwages, separation pay, and other monetary claims, as determined by the Labor Arbiter and affirmed or modified by higher courts.
How does a DOLE inspection affect a resignation claim?	If a resignation occurs shortly after a DOLE inspection that reveals labor violations, it raises suspicion about the voluntariness of the resignation. The court will scrutinize the circumstances more closely to ensure the resignation was not a way for the employer to avoid addressing the violations.
Why was the timing of Gloria’s resignation important in this case?	Gloria’s resignation occurred shortly after a DOLE inspection revealed potential labor violations by CLS. This timing raised suspicion about the voluntariness of her resignation, as it suggested a possible attempt by the employer to avoid addressing the violations.
What was the significance of Gloria’s immediate filing of a complaint?	Gloria’s prompt filing of an illegal dismissal complaint, just twelve days after her alleged resignation, was deemed inconsistent with a voluntary decision to leave her job. This action suggested that she did not intend to resign and that her termination was involuntary.

In conclusion, the Supreme Court’s decision in Carolina’s Lace Shoppe vs. Maquilan serves as a crucial reminder of the importance of upholding employee rights and ensuring fairness in labor practices. Employers must exercise caution and transparency in termination processes, respecting the law. This ruling underscores the judiciary’s commitment to protecting vulnerable workers from exploitation and illegal 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: CAROLINA’S LACE SHOPPE vs. GLORIA MAQUILAN, G.R. No. 219419, April 10, 2019