Constructive Dismissal

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Should I Resign?
What is constructive dismissal?
If you resign from your job due to your employers behaviour/conduct, it may amount to [constructive
dismissal]. In order to make a claim for 'constructive dismissal' in the Employment Tribunal, you
would have to demonstarte the following:
1.Your employer has committed a serious or [fundamental breach] of your contract of employment,
2.You felt forced to leave due to that breach,
3. You did not accept your employers breach, or a change in your employment conditions.
In order to claim [constructive dismissal] the employee has to have two years service with the
employer. According to the Employment Tribunals website, the average award for ubfair dismissal in
2011 & 2012 was 9,133.00
However, the employee does not need one years service to bring a claim in an Employment Tribunal
for (i) discrimination (ii) harassment (iii) or any breach of the employer's statutory "health and safety"
obligations. Employees' can bring a claim from day one.

What is unfair dismissal?

If your employer ended your employment due to a reason, which you believe to be unfair, due to
either the reason why you were dismissed, or the process your employer used, then you may have
been unfairly dismissed. This may make it possible to lodge a claim with an Employment Tribunal.
Should you be considering resigning, or lodging a letter of grievance to enter the grievance
procedure, it is likely due to something that your employer has done (act), or failed to do (omission).
A [breach of the employment contract] may lead to an employee resigning and claiming "constructive
dismissal" in an Employment Tribunal.
Lodging a letter of grievance and then resigning obviates the very purpose of the grievance
procedure. It does not provide the employer an opportunity to put things right had you invoked the
grievance procedure. You need to look at your situation from the Employment Tribunals prospective.
The Judge will likely take a 'dim view' if you lodge a grievance letter and then just resign. The
employer would draw inference against you, due to the fact you had failed to provide it an
opportunity to remedy any [breach] it potentially may have made.
Unless you earn mega bucks, you are better off NOT to resign. It is far better to exhaust the
grievance procedure whilst remaining on as an employee. You can always resign later; keep in mind
as the average award is only 9,133 for unfair dismissal, which is hardly rich pickings, given the fact
you will find yourself jobless.

Employment Tribunals receive about five thousand claims a week, perhaps less now with
ACAS providing pre-claim conciliation as of April 6th 2014. Therefore, the Employment Tribunal does
not want to be burdened with needless claims, which could otherwise have been resolved had the
grievance procedure been allowed to run its course. So, unless you have exhausted every avenue
[prior] to lodging your Employment Tribunal claim, it would be far better to be seen to be "acting
reasonably," and either (i) wait twenty-eight days from the date you lodge your letter of grievance, or
(ii) allow the grievance procedure to exhaust itself.
This accomplishes two things:
1) It demonstrates to the Employment Tribunal that you, the employee, were diplomatic in your
efforts to seek an amicable outcome. The Employment Tribunal will take the view that the employee
provided the employer every opportunity to put things right. This firmly puts the onus on the
employer, as to what steps it could and should have undertaken to remedy any alleged breach.
2) You want to allow the employer every opportunity to hang itself. The employer's involvement in the
grievance procedure and subsequent appeal process will likely result in it making multiple mistakes.
From my own experiences, the employer's "acts and omissions" or "omissions to act" will start a
'domino effect' whereas the more it attempts to conceal its torts, the deeper the pit it digs itself. This
is exactly what you want the employer to do. You can always add appendages to your initial
grievance letter due to your employer's torts.

When Should I Resign?

When your employer has fundamentally breached the contract of employment. A fundamental
breach would be one so serious that the employment contract has to be terminated. See:
[fundamental breach].
Otherwise:
Should things be so bad that you cannot continue to attend work, then consult your doctor and
explain what is happening at work. You want to make it very clear that your working environment is
oppressive, and having a "detrimental impact" upon [both] your mental and physical health. Your
doctor will likely sign you off from work due to "work related stress" due to the fact the working
environment is [prejudicial] to your health.
Provide the "fit note" to your employer's Human Resources Department, NOTyour line manager
(see fitnotes). This will buy you sometime away from your working environment, to think things
through. The grievance procedure and your employer's investigation can continue in your absence.
You will likely find that your employer has a Grievance Handling Policy, which may be contractually
binding. This policy should allow the aggrieved employee to correspond with the employer by writing
during the interim period the employee is absent from work due to his/her "fitness" to attend work.
You want your employer to put as much in writing as possible. These [transcripts] can always be
exhibited to the Employment Tribunal should your employer's statements contain any informations
from which you can draw inference against it. The employer is legally obliged to make "reasonable
adjustments" for it employees' who are disabled, or who fall under the definition of having a disability
pursuant to s.21 and s.39(5) of the Equality Act 2010. Fitness to attend the grievance hearing will
depend on the mental or physical health of the employee at the material time. However, you want to
bring to your employer's attention the need to observe the Statutory Code of Practice on
Employment 2010 germane to reasonable adjustments to both the grievance and disciplinary
procedures, with express particular Chapter 17 paragraph 6.93.

It's always good to let your employer fall into its own traps. The more strings you can add to your
bow, the better it will be for you in the Employment Tribunal. The more the employer writes, the more
evidence you will gather against it.

Lodging a Tribunal Claim [ET1]

You must lodge an Employment Tribunal claim within three months less one day from the [last act] of
discrimination or harassment. The three months less one day does not run from the time you lodge
your letter of grievance. Should your employer not have concluded its investigation during this
timeframe, you need to get ACAS involved in the pre-claim conciliation. Don't leave it until the last
minute. Once ACAS are involved the rule of three months less one day is 'stayed' in order to give
ACAS a reasonable opportunity to settle the matter to obviate the litigative route.
To lodge a claim in the Employment Tribunal, you do not have to resign. You can make a claim in the
Employment Tribunal and still remain on as an employee should you wish. You can state in your
Employment Tribunal claim that you want to remain as an employee with the company. The EHRC
has a comprehensive website which is invaluable source of information to employees.
Should you want to make a claim to the Employment Tribunal for "breach of contract" then you
would need to resign at some point in time. I strongly suggest that you consult an advisor at
the EHRC / Employment Solicitor to obtain further information on this matter should your claim
involve any aspect of discrimination, harassment, less favourable treatment, victimisation or a
violation of your human rights.
If you want to have a look at the law, to see what your employer may be in breach of, then see the
segment on Breach of Contract.
Disclaimer: The author of this web site and sub-domains accepts no liability arising from the use of,
or any part of, or reliance on the information contained within this web site, and or its respective
pages or downloads. The content is not intended to be legal advice, and you should not rely upon it
in any respect to any specific situation you may be facing. Therefore, the content of this web site will
serve as a good springboard to get professional legal advice from a solicitor. .
http://www.letterofgrievance.com/index.php/constructive-dismissal

Constructive dismissal letter template

[Your Address]
[Name of the person to whom resignation is addressed]
[Their position]
[Organisation name]
[Address]
[Date]

Dear Mr/Mrs/Ms/Miss [Surname],

I am writing to inform you that I am resigning from my position

of [insert the name of your post within the organisation]
with immediate effect. Please accept this as my formal letter of resignation
and a termination of our contract. I feel that I am left with no choice but to
resign in light of my recent experiences regarding [Insert the title of one
or more of the following scenarios]

a.
a fundamental breach of contract; this can be a breach of an
express term or breach of an implied term (e.g. your employer changed your
job significantly or subjected you to undue/disproportionate/harsh treatment.
This can also entail not carrying out grievance procedures in line with your
contract and/or discriminating against you because of your
age/race/sex/disability/caste/religion/belief/gender
reassignment/marriage/civil partnership/pregnancy/maternity/sexual
orientation);

b.
anticipated breach of contract; this is when your employer has
informed you of an action in definite terms (e.g. you will be subjected to a
grievance procedure that is not part of your contract or agreed working
condition effective from a certain date);

c.
breach of trust and confidence (e.g. your employer has acted in a
manner that damages your reputation and/or career prospects);

d.
last straw doctrine (e.g. your employer has subjected you to
abusive treatment and/or acted in breach of contract on numerous occasions
in the past, thus resulting in your employer acting in breach of contract and
although you waived your employers breach in the past, you are no longer
willing to do so. The final act of your employer need not be significant but
should have some connection with the past treatment/breach of contract by
your employer).

I consider this to be a fundamental/unreasonable breach of the contract on

your part. I appreciate the time and energy which you have invested in
training me and I believe that the skills I have gained will serve me well in
the future. I will do my very best to ensure a smooth transition upon my
departure and make sure that all the details/information is left available to
the person who takes up my position following my departure.

I would be grateful if you could acknowledge this letter at the earliest

available opportunity.

[Optional: if you would like me to attend an exit interview then please let
me know so that I can make arrangements to do so]

I look forward to hearing from you.

Yours sincerely,
[Your signature]
[Your full name]
https://natemplaw.co.uk/portfolio/constructive-dismissal-letter-template/

An Example Constructive Dismissal

Resignation Letter

Most employers in the UK are caring towards their staff and want to do their best for
them. There is however a small minority of employers who dont play by the rules,
openly discriminate, dont pay their employees on time, allow workplace bullying to
continue unchecked and ignore disciplinary procedures and policies.
Sometimes when things get so bad, an employee feels they have no other alternative
but to hand in their notice and go. In these sort of cases though constructive

dismissal laws may come into force, and its a good idea to draft a resignation letter with
this in mind.

When can you claim constructive

dismissal?
You can claim for constructive dismissal if you can prove your employer has been in a
serious breach of contract and you were forced to leave as a consequence. There are
some limitations though. In order to claim for constructive dismissal, you have to have
been working for your employer for two years. In other circumstances such as gender,
age or race discrimination you may also have a case, but this will be brought under
equality legislation rather than constructive dismissal laws. In most cases, you will also
need evidence to prove that you have gone through the companys own grievance
process, so keep all emails and copies of letters to back up your case.

Example construction dismissal

resignation letter
If you are in the situation where you feel you have no alternative but to resign from your
position, it is important to write a letter outlining the facts of the case and stating your
reasons for going. Use the example construction dismissal resignation below, tailoring it
to your individual needs and circumstances.
Always print your address in full at the top of the letter, along with the company name.
Address it to a named person (your line manager, HR manager or company director)
rather than just writing to whom it may concern. The body of your constructive
dismissal resignation letter should read as follows:
I am writing to inform you that I am resigning from my position as (insert your job title
here) with immediate effect.
Please accept this letter as my formal notice and termination of my employment
contract with the company.

I feel I have been left with no option but to leave because of:
(insert reasons for leaving, sticking to the facts such as you have not paid me for the
last two months or you have completely changed my job role and responsibilities
rather than making personal insults or emotive statements about colleagues or
managers).
Please acknowledge receipt of this letter as soon as possible and I will ensure a smooth
transition period until my leaving date.

General points when adapting the

example constructive dismissal letter
Use the example above to adapt to your individual reasons for leaving and
circumstances, but bear the following points in mind.

Stick to the facts

Gather evidence to back up your reasons for leaving

Keep it short and sweet rather than writing an essay

Print off two copies, sign both, and keep one copy for yourself

Always state in which way or ways the employer is in breach of your contract with them

What Happens Next?

A good starting point for cases in which constructive dismissal is expected is ACAS.
This is a free service designed to help employers and employees with issues just like
this. ACAS run a free telephone helpline where you can speak to someone regarding
your case in confidence, and get an independent opinion on what the best course of
action may be. There is also lots of information to read through on the ACAS website.

If ACAS feel that you may have a case against your former employer, then the next step
is to contact an employment lawyer to take the case forward for you. Most lawyers will
work on a no win, no fee basis for these sorts of cases, so search around a few different
firms to find the one which suits you best.
Your lawyer will then contact your employer to put your case forward. They may agree
that they have been in the wrong and agree to make an out of court settlement, which
saves everyone the inconvenience and expense of going to court. Alternatively, they
may refuse to settle and the next step is to go to an Employment Tribunal, where all of
the evidence will be put to a judge who will decide who is at fault, and how much
compensation for loss of earnings should be paid to the person forced into resignation.

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Successful
http://compensationhq.com/an-example-constructive-dismissal-resignation-letter/
hursday, October 03, 2013

Can an employee file a case of constructive dismissal and yet continue

reporting for work?
Plain Language
summary:
Case title: The Orchard
Golf and Country Club vs.
Amelia R Francisco, G.R.
No. 178125, March 2013
Issue: How can an
employee file a labor
case for constructive
dismissal and at the
same time continue
reporting for work?
Ruling: Constructive
dismissal does not occur
when the employee stops
reporting for work, but
when the employer
commits acts that make
continued employment
intolerable.
In difficult times, an
employee may have no
choice but to continue
working despite the
employers abuses and
even while a labor case is
pending between them.
This should not be taken
against the employee.
Definition: Constructive
dismissal is quitting or
cessation of work

because continued
employment is
rendered

impossible,
unreasonable or
unlikely;

when there is a
demotion in rank
or a diminution of
pay and other
benefits;

if an act of clear
discrimination,
insensibility, or
disdain by an
employer becomes
so unbearable on
the part of the
employee that it
could foreclose any
choice by him
except to forego
his continued
employment;

when the
employee
involuntary resigns
due to the harsh,
hostile, and
unfavorable
conditions set by
the employer.

The test of constructive

dismissal is whether a
reasonable person in the
employee's position
would have felt
compelled to give up his
employment/position
under the circumstances.
(Gan vs. Galderma
Philippines, G.R. No.
177167, January 17,
2013)

Background facts
[1] The Orchard Golf and Country Club (Orchard), operates two golf courses in Dasmarias, Cavite
for its members and their guests. Orchard also has a swimming pool, bowling alley, cinema, fitness
center, courts for tennis, badminton and basketball, restaurants, and function rooms.
Amelia R. Francisco (Francisco) was employed as Club Accountant to head Orchards General
Accounting Division and the four divisions under it. Each of these four divisions has its own
Supervisor and Assistant Supervisor. As General Accounting Division head, Francisco reported
directly to Orchards Financial Comptroller, Jose Ernilo P. Famy (Famy).
Tomas B. Clemente III (Clemente) is Orchards General Manager while Ma. Irma Corazon A. Nuevo
(Nuevo) is the General and Administrative Manager.
[2] Famys actions against Francisco:
(a) suspended Francisco without pay for a period of 15 days for her alleged failure to prepare a letter
to SGV, Orchards internal auditor, despite repeated verbal and written reminders;
(b) temporarily transferred Francisco to the Cost Accounting Section, without diminution in salary
and benefits, while Franciscos charges against him for fraudulent and negligent acts were being
investigated;
(c) asked for investigation into Franciscos insubordination, for her alleged unauthorized change of
day-off from July 30 to August 4, 2000, and for being absent on that date despite disapproval of her
leave/offset application;
(d) asked Francisco in a memorandum dated August 5, 2000 to explain the charges of
insubordination, negligence, inefficiency and violation of work standards relative to the unauthorized
change of day-off and disapproved offset/ leave.
[3] Franciscos reactions:
(a) She accused Famy of waging a personal vendetta against her because she sought Orchards
inquiry into Famys fraudulent and negligent acts. She also said that her transfer to the Cost
Accounting Section was humiliating and demeaning, and that it constituted constructive dismissal.
Francisco also threatened to take legal action or seek assistance from Orchard members to insure
that Famys impropriety was investigated.
(c) On August 11, 2000, Francisco filed a Complaint for illegal dismissal against Orchard, impleading

Famy, Clemente and Nuevo as additional respondents. The case was docketed as NLRC Case No.
RAB-IV-812780-00-C. She asked, among others, for damages and attorneys fees.
[4] Events after Francisco filed her illegal dismissal case with the NLRC:
(a) On August 16, 2000, Francisco received another memorandum requiring her to explain why she
should not be charged with betrayal of company trust. The memorandum alleged that a club member
was seen distributing copies of Franciscos letter to Orchards Chairman of the Board of Directors.
(b) On August 18, 2000, Francisco submitted her written explanation to the charges.
(c) On August 19, 2000, Clemente handed Francisco a Notice of Disciplinary Action dated August
16, 2000 relative to her July 30, 2000 unauthorized change of day-off and her August 4, 2000
unauthorized leave/absence. Francisco was suspended for another fifteen days, or from August 21
to September 6, 2000.
[5] Events after Franciscos suspension:
(a) Francisco amended her illegal dismissal Complaint to one for illegal suspension. Meanwhile, she
continued to report for work.
(b) On September 7, 2000, or a day after serving her suspension, Francisco received a September
6, 2000 memorandum from Nuevo and approved by Clemente. She was placed on forced leave with
pay for 30 days, or from September 7, 2000 up to October 11, 2000, allegedly because the case filed
against her has strained her relationship with her superiors.
(c) Francisco wrote a letter to Nuevo seeking clarification as to what case was filed against her.
Nuevo immediately sent a reply memorandum stating that the case referred to her alleged betrayal
of company trust.
(d) After the expiration of her forced leave, or on October 12, 2000, Francisco reported back to
work.
This time Francisco was handed an October 11, 2000 memorandum from Clemente informing her
that she has been permanently transferred, without diminution of benefits, to Orchards Cost
Accounting Section effective October 12, 2000. The transfer was due to strained relations between
her and Famy and the pending evaluation of her betrayal of company trust charge. Franciscos
position at the Cost Accounting Section was to remain under Famys direct supervision.
(e) In an October 13, 2000 memorandum to Clemente, Francisco protested her permanent transfer,
claiming that it was made in bad faith. She also bewailed Clementes inaction on her July 5, 2000

letter charging Famy with irregularities relative to BIR tax payments.

Because of her transfer, Francisco once more amended her Complaint to include illegal/constructive
dismissal. In her prayer, she sought to be reinstated to her former position as Club Accountant.
[6] Labor Arbiter rules against Francisco
Labor Arbiter Enrico Angelo C. Portillo issued a Decision dated August 23, 2001 dismissing
Franciscos Complaint for lack of merit. The Arbiter noted the belligerence and animosity between
Francisco and Famy. He dismissed Franciscos charges as nothing more than attempts to get back
at Famy for his reproach at her failure to draft the SGV letter.
The Arbiter further upheld Franciscos two suspensions as valid exercises of Orchards management
prerogative. He also found Franciscos claim of constructive dismissal to be baseless. On the
contrary, he found Franciscos transfer as necessary and in furtherance of Orchards interests. He
also noted that the transfer was lateral, or to a position of the same rank and pay scale based on
Orchards Organizational Chart.
[7] NLRC overrules the Labor Arbiter
While Franciscos suspensions were valid, her subsequent permanent transfer on the ground of
strained relations to the Cost Accounting Section on October 12, 2000 had no just cause. It resulted
in Franciscos demotion, since the position of Cost Controller was merely of a supervisory character
while the position of Club Accountant was of managerial rank. Francisco held the rank of Manager
3 as Club Accountant, while the Cost Controller is only a Supervisor position and is precisely under
the direct supervision and control of the Club Accountant. This unwarranted demotion is equivalent
to constructive dismissal.
The NLRC added that strained relationship is not a valid ground for termination of employment
under the Labor Code. It ordered Franciscos reinstatement to her former position as Club
Accountant and awarded her attorneys fees in the amount of P50,000.00. But the NLRC absolved
Famy, Nuevo and Clemente of wrongdoing.
Francisco moved for partial reconsideration of the NLRCs Resolution with respect to its ruling
declaring her suspensions as valid and the denial of her claim for damages. The NLRC denied her
motion.
[8] The Court of Appeals affirms NLRC ruling
Orchard went up to the CA through a Petition for Certiorari while Francisco no longer took issue with
the denial of her motion.

In its January 25, 2007 Decision, the CA sustained the NLRC ruling. It held that while Orchard had
the right to transfer Francisco from one office to another within the club, there should be no demotion
in rank, salary, benefits, and other privileges. The CA added that the right may not be used arbitrarily
to rid the employer of an undesirable worker. Proper notification and an opportunity to be heard or
contest the transfer must be given to the employee whose transfer is sought.
Francisco was notified only of Orchards decision to permanently transfer her, without giving her the
opportunity to contest the transfer. The CA characterized Franciscos permanent transfer as a
demotion in the guise of a lateral transfer.
Orchard filed a Petition for Review with the Supreme Court questioning the CAs decision.

Supreme Court ruling: Francisco was constructively dismissed

Franciscos transfer to the position of Cost Controller was without valid basis and that it amounted to
a demotion in rank. Hence, there was constructive dismissal.
The cause of Franciscos temporary transfer on July 20, 2000 was her pending complaint against
Famy.
When Francisco was placed on forced leave and transferred to the Cost Accounting Section, not
once was Francisco given the opportunity to contest these company actions taken against her.
Just when one penalty has been served by Francisco, another would instantaneously take its place.
And all these happened even while the supposed case against her, the alleged charge of betrayal of
company trust, was still pending and remained unresolved.
Not even the claim that her relations with her superiors have been strained could justify Franciscos
transfer to Cost Accounting Section. Indeed, it appears that her charge was never resolved. And if
Famy, Nuevo and Clemente truly believed that their relations with Francisco have been strained,
then it puzzles the Court why, despite her transfer, she continues to remain under Famys direct
supervision.
For this reason, Franciscos July 20, 2000 temporary transfer and her October 12, 2000 permanent
transfer to Cost Accounting Section must be invalidated. For one, there was no valid reason to
temporarily transfer Francisco to Cost Accounting Section on July 20, 2000. She had already served
her penalty for her failure to draft the SGV letter, through the 15-day suspension period which she
just completed on July 20, 2000. Secondly, the transfer was not even rooted in any new infraction
she is accused of committing. There was thus an absolute lack of basis for her July 20, 2000
temporary transfer.

As for her October 12, 2000 permanent transfer, the same is null and void for lack of just cause.
Also, the transfer is a penalty imposed on a charge that has not yet been resolved. Definitely, to
punish one for an offense that has not been proved is truly unfair; this is deprivation without due
process. Finally, the Court sees no necessity for Franciscos transfer; on the contrary, such transfer
is outweighed by the need to secure her office and documents from Famys possible intervention on
account of the complaint she filed against him.
The fact that Francisco continued to report for work does not necessarily suggest that
constructive dismissal has not occurred, nor does it operate as a waiver. Constructive
dismissal occurs not when the employee ceases to report for work, but when the unwarranted acts
of the employer are committed to the end that the employees continued employment shall become
so intolerable. In these difficult times, an employee may be left with no choice but to continue with
his employment despite abuses committed against him by the employer, and even during the
pendency of a labor dispute between them. This should not be taken against the employee. Instead,
we must share the burden of his plight, ever aware of the precept that necessitous men are not free
men.
Posted by Atty. Gerry T. Galacio at Thursday, October 03, 2013

https://famli.blogspot.com/2013/10/constructivedismissalemployeecontinueswork.ht
ml
https://lexoterica.wordpress.com/tag/constructive-dismissal/
Constructive Dismissal concept
Constructive dismissal is an employers act amounting to dismissal but made to appear as if
it were not a dismissal in disguise. In most cases of constructive dismissal, the employee is
allowed to continue to work, but is simply reassigned, or demoted, or his pay diminished
without a valid reason to do so.
Constructive dismissal does not always involve forthright dismissal or diminution in rank,
compensation, benefit and privileges. There may be constructive dismissal if an act of clear
discrimination, insensibility or disdain by an employer becomes so unbearable on the part or
the employee that it could foreclose any choice by him except to forego his continued
employment. (See Hyatt Taxi Services case, G.R. No. 143204, June 26, 2001.)
Constructive Dismissal and Involuntary Resignation
Constructive dismissal is an involuntary resignation resulting in cessation of work resorted to
when continued employment becomes impossible, unreasonable or unlikely; when there is a
demotion in rank or a diminution in pay; or when a clear discrimination, insensibility or
disdain by an employer becomes unbearable to an employee.

In Globe Telecom, Inc. v. Florendo-Flores, it was held that where an employee ceases to work
due to a demotion of rank or a diminution of pay, an unreasonable situation arises which
creates an adverse working environment rendering it impossible for such employee to
continue working for her employer. Hence, her severance from the company was not of her
own making and therefore amounted to an illegal termination of employment. (Cited
in Francisco vs. NLRC, G.R. No. 170087, August 21, 2006.)
Cases
1.

Diminution of pay. A diminution of pay is prejudicial to the employee and amounts to

constructive dismissal. (Francisco vs. NLRC)
2.
Transfer of employee not amounting to constructive dismissal. Transfer of an
employee from one area of operation to another is a management prerogative and is not
constitutive of constructive dismissal, when the transfer is based on sound business
judgment, unattended by a demotion in rank or a diminution of pay or bad faith. (Tan vs.
NLRC, G.R. No. 128290, November 24, 1998.)
3.
Transfer of employee amounting to constructive dismissal. A transfer amounts to
constructive dismissal when the transfer is unreasonable, unlikely, inconvenient, impossible,
or prejudicial to the employee. (Phil. Industrial Security Agency Corp. vs. Aguinaldo, G.R. No.
149974, June 15, 2005.)
Last Edited: Friday, August 19, 2011

http://www.laborlaw.usc-law.org/2010/01/28/constructive-dismissal/

Constructive dismissal
sc.judiciary.gov.ph/jurisprudence/2012/january2012/174208.html

"x x x.

Constructive dismissal exists where there is cessation of work because

"continued employment is rendered impossible, unreasonable or unlikely, as an
offer involving a demotion in rank or a diminution in pay" 30 and other
benefits. Aptly called a dismissal in disguise or an act amounting to dismissal but
made to appear as if it were not, 31 constructive dismissal may, likewise, exist if an
act of clear discrimination, insensibility, or disdain by an employer becomes so
unbearable on the part of the employee that it could foreclose any choice by him
except to forego his continued employment. 32 In cases of a transfer of an employee,

the rule is settled that the employer is charged with the burden of proving that its
conduct and action are for valid and legitimate grounds such as genuine business
necessity33 and that the transfer is not unreasonable, inconvenient or prejudicial to
the employee. If the employer cannot overcome this burden of proof, the
employees transfer shall be tantamount to unlawful constructive dismissal.34

Our perusal of the record shows that HCPTI miserably failed to discharge
the foregoing onus. While there was a lack of showing that the transfer or
reassignment entailed a diminution of salary and benefits, one fact that must not be
lost sight of was that Morales was already occupying the position of Division
Manager at HCPTIs Accounting Department as a consequence of his promotion to
said position on 22 October 2002. Concurrently appointed as member of HCPTIs
Management Committee (MANCOM) on 2 December 2002,35 Morales was
subsequently reassigned by HCPTI from managerial accounting to Operations
Cost Accounting on 27 March 2003, without any mention of the position to which
he was actually being transferred. That the reassignment was a demotion is,
however, evident from Morales new duties which, far from being managerial in
nature, were very simply and vaguely described as inclusive of monitoring and
evaluating all consumables requests, gears and equipments related to [HCPTIs]
operations as well as close interaction with [its] sub-contractor Bulk Fleet
Marine Corporation.36

We have carefully pored over the records of the case but found no
evidentiary basis for the CAs finding that Morales was designated as head of
HCPTIs Operations Department37 which, as indicated in the corporations plantilla,
had the Vice-President for Operations at its helm. 38 On the contrary, Morales
demotion is evident from the fact that his reassignment entailed a transfer from a
managerial position to one which was not even included in the corporations

plantilla. For an employee newly charged with functions which even the CA
recognized as pertaining to the Operations Department, it also struck a discordant
chord that Morales was, just the same, directed by HCPTI to report to Filart, its
Vice- President for Finance39 with whom he already had a problematic working
relationship.40 This matter was pointed out in Morales 31 March 2003 protest but
was notably brushed aside by HCPTI by simply invoking management prerogative
in its inter-office memorandum dated 4 April 2003.41

Admittedly, the right of employees to security of tenure does not give them
vested rights to their positions to the extent of depriving management of its
prerogative to change their assignments or to transfer them. 42 By management
prerogative is meant the right of an employer to regulate all aspects of
employment, such as the freedom to prescribe work assignments, working
methods, processes to be followed, regulation regarding transfer of employees,
supervision of their work, lay-off and discipline, and dismissal and recall of
workers.43 Although jurisprudence recognizes said management prerogative, it has
been ruled that the exercise thereof, while ordinarily not interfered with, 44 is not
absolute and is subject to limitations imposed by law, collective bargaining
agreement, and general principles of fair play and justice. 45 Thus, an employer may
transfer or assign employees from one office or area of operation to another,
provided there is no demotion in rank or diminution of salary, benefits, and other
privileges, and the action is not motivated by discrimination, made in bad faith, or
effected as a form of punishment or demotion without sufficient cause. 46Indeed,
having the right should not be confused with the manner in which that right is
exercised.47

In its comment to the petition, HCPTI argues that Morales transfer was
brought about by the reorganization of its corporate structure in 2003 which was

undertaken in the exercise of its management prerogative to regulate every aspect

of its business.48 This claim is, however, considerably at odds with HCPTIs
assertions before the Labor Arbiter to the effect, among other matters, that Morales
erroneously and negligently authorized the repeated payments of realty taxes from
which the corporation was exempt as a PEZA-registered company; that confronted
by Filart regarding his poor work performance which resulted in losses amounting
to P3,350,000.00, Morales admitted his inability to handle his job at the accounting
department; and, that as a consequence, HCPTI decided to reassign him to the
Operations Cost Accounting.49 Without so much as an affidavit from Filart to prove
the same, this purported reason for the transfer was, moreover, squarely refuted by
Morales 31 March 2003 protest against his reassignment.50

By itself, HCPTIs claim of reorganization is bereft of any supporting

evidence in the record. Having pointed out the matter in his 31 March 2003 written
protest, Morales was able to prove that HCPTIs existing plantilla did not include
an Operations Cost Accounting Department and/or an Operations Cost
Accountant.51 As the party belatedly seeking to justify the reassignment due to the
supposed reorganization of its corporate structure, HCPTI, in contrast, did not even
bother to show that it had implemented a corporate reorganization and/or approved
a new plantilla of positions which included the one to which Morales was being
transferred. Since the burden of evidence lies with the party who asserts the
affirmative of an issue, the respondent has to prove the allegations in his
affirmative defenses in the same manner that the complainant has to prove the
allegations in the complaint.52 In administrative or quasi-judicial proceedings like
those conducted before the NLRC, the standard of proof is substantial evidence
which is understood to be more than just a scintilla or such amount of relevant
evidence which a reasonable mind might accept as adequate to justify a
conclusion.53

Having alleged 27 March 2003 as the date of his constructive dismissal,

Morales was erroneously taken to task by the CA for inconsistently claiming that
he took a leave of absence from 4 April 2003 to 17 April 2003. 54 As the date of his
reassignment, 27 March 2003 was understandably specified by Morales as the date
of his constructive dismissal since it was on said date that he considered himself
demoted. Alongside his reporting for duty subsequent thereto, Morales leave of
absence on the aforesaid dates is, in turn, buttressed by HCPTIs 29 April 2003
Inter-Office Memorandum which, labeled as a First Warning, called attention to
his being either absent or tardy from work on several occasions during the entire
month of April.55 Since Morales could not have been tardy had he outrightly
rejected his reassignment, this Inter-Office Memorandum notably debunks
HCPTIs contention that he altogether stopped reporting for work after receiving
Singsons reply to his 31 March 2003 protest against the demotion that resulted
from his reassignment to Operations Cost Accounting.56

Although much had been made about Morales supposed refusal to heed his
employers repeated directives for him to return to work, our perusal of the record
also shows that HCPTIs theory of abandonment of employment cannot bear close
scrutiny. While ostensibly dated 6 May 2003, the Inter-Office Memorandum
labeled as a Second Warning was sent to Morales thru the JRS Express only on 9
May 200357 or two (2) days after summons were served on HCPTI, Filart and
Singson on 7 May 2003.58 Sent to Morales on 26 May 2003 or after the parties
initial conference before the Labor Arbiter on 19 May 2003, 59 there was obviously
even less reason for HCPTIs 22 May 2003 letter denominated as Notice to Report
for Work and Final Warning. As a just and valid ground for dismissal, at any rate,
abandonment requires the deliberate, unjustified refusal of the employee to resume
his employment,60 without any intention of returning.61 Since an employee like
Morales who takes steps to protest his dismissal cannot logically be said to have

abandoned his work, it is a settled doctrine that the filing of a complaint for illegal
dismissal is inconsistent with abandonment of employment.62
x x x."

http://attylaserna.blogspot.com/2012/02/constructive-dismissal.html

Termination of Employment in the

Philippines
Terminating an employee in the Philippines is taken VERY seriously and can be a
complex process, especially after the employee is regularized. The Philippine
Constitution says, no involuntary servitude in any form shall exist except as punishment
for a crime whereof the party shall have been duly convicted. In view of the prohibition
on involuntary servitude, an employee is given the right to resign under Art. 285 of the
Labor Code. The provision recognizes two kinds of resignation without cause and with
cause. If the resignation is without cause, the employee is required to give a 30-day
advance written notice to the employer, to enable the employer to look for a
replacement to prevent work disruption. If the employee fails to give a written notice,
he or she runs the risk of incurring liability for damages. The same provision also
indicates the just causes for resignation (with cause):

Serious insult to the honor and person of the employee;

Inhuman and unbearable treatment;

Crime committed against the person of the employee or any of the immediate
members of the employees family; and

Other analogous causes.

In this second type of resignation, the employee need not serve a written notice. Forced
resignation is not allowed and is considered constructive dismissal a dismissal in
disguise. Employee retirement is either voluntary or compulsory under Art. 287 of the
Labor Code.

Dismissal of an Employee in the Philippines

An equality of rights exists between employer and employee. While the employer
cannot force the employee to work against his or her will, neither can the employee
compel the employer to continue giving him or her work if there is a lawful reason not to
do so. Thus, the employer may terminate the services of an employee for just or
authorized causes after following the procedure laid down by law, but the employer has
the burden of proving the lawfulness of the employees dismissal in the proper forum.

Just causes are blameworthy acts on the part of the employee such as serious
misconduct, willful disobedience, gross and habitual neglect of duties, fraud or willful
breach of trust, commission of a crime and other analogous causes (Art. 282, Labor
Code).
Authorized causes are of two types business reasons and disease. The business
reasons are installation of labor-saving devices, redundancy, retrenchment and closure
or cessation of operation (Art. 283, Labor Code). Before the employer can terminate
employment on the ground of disease, he must obtain from a competent public health
authority a certification that the employees disease is of such a nature and at such a
stage that it can no longer be cured within a period of six months even with medical
attention (Art. 284, Labor Code; Implementing Rules of Book VI, Labor Code).
Those hired on a temporary basis, that is, for a term or fixed period are not regular
employees, but are contractual employees. Consequently, there is no illegal dismissal
when their services are terminated by reason of the expiration of their contracts. Lack of
notice of termination is of no consequence, because a contract for employment for a
definite period terminates by its own term at the end of such period.

An Illegal Strike can be

Termination of Employment

cause

for

Employment is not deemed terminated when there is a bona fide suspension of the
operations of a business or undertaking for a period not exceeding six months, or when
the employee fulfills a military or civic duty (Art. 286, Labor Code). Under the
Corporation Code (sec. 80), the surviving or consolidated entity in a merger or
consolidation automatically assumes all rights and obligations, assets and liabilities of
the combining entities. This includes obligations or liabilities under valid agreements,
like labour contracts. The surviving or consolidated entity must, therefore, recognize the
security of tenure and length of service of the workers of the merging or consolidating
corporations. By the fact of merger or consolidation, a succession of employment rights
and obligations occurs.

Notice and prior procedural safeguards

As stated above, dismissals based on just causes contemplate acts or omissions
attributable to the employee while dismissals based on authorized causes involve
grounds business or health allowing the employer to terminate. A termination for an
authorized cause requires payment of separation pay. When the termination of
employment is declared illegal, reinstatement and full backwages are mandated under
Art. 279 of the Labor Code. If reinstatement is no longer possible where the dismissal
was unjust, separation pay may be granted.
Procedurally, (1) if the dismissal is based on a just cause under Art. 282 of the Labor
Code, the employer must give the employee two written notices and a hearing or
opportunity to be heard before terminating the employment, that is, a notice specifying
the grounds for which dismissal is sought and, after hearing or opportunity to be heard,
a notice of the decision to dismiss; and (2) if the dismissal is based on authorized
causes under Arts. 283 and 284 of the Labor Code, the employer must give the

employee and the Department of Labour and Employment written notices 30 days prior
to the effectivity of the separation.

Severance pay with Termination

As already noted, separation pay is required to be paid to the employee when there is
termination of employment by the employer for an authorized cause, the amount of
which depends on the cause. If the termination is due to the installation of labour-saving
devices or redundancy, the separation pay is one months pay for every year of service
or one month pay, whichever is higher (Art. 283, Labor Code). If the termination is due
to retrenchment to prevent losses, or closure or cessation of operation of the
establishment not due to serious business losses, or due to disease, the separation pay
is one-half months pay for every year of service or one month pay, whichever is higher
(Arts. 283 and 284, Labor Code). However, there is no requirement for separation pay if
the closure is due to serious business losses.

Avenues for redress

From the foregoing, four possible situations may be derived: (1) the dismissal is for a
just cause under Art. 282 of the Labor Code, or for an authorized cause business
reason under Art. 283 or health reason under Art. 284 and due process was observed;
(2) the dismissal is without just or authorized cause but due process was observed; (3)
and there no process; (4) for a not observed.
In the first situation, the dismissal is undoubtedly valid and the employer will not incur
any liability, save for separation pay when the dismissal is for an authorized cause.
In the second and third situations, where the dismissals are illegal, Art. 279 of the Labor
Code mandates that the employee is entitled to reinstatement without loss of seniority
rights and other privileges and full backwages, inclusive of allowances, and other
benefits or their monetary equivalent computed from the time the compensation was
not paid up to the time of actual reinstatement.
In the fourth situation, the dismissal should be upheld. While the procedural infirmity
cannot be cured, it should not invalidate the dismissal. However, the employer should
be held liable for nominal damages for non-compliance with the procedural
requirements of due process. If the dismissal is for an authorized cause, the employee is
also entitled to separation pay.
Compulsory arbitration of illegal dismissal cases is conducted by the Labour Arbiters of
the National Labour Relations Commission and their decisions are appealable to the
Commission (Arts. 217 and 218, Labor Code).
In view of the stated preference for voluntary modes of settling labour disputes under
Art. 13 (3) of the Constitution and Art. 211of the Labor Code, voluntary arbitration of
illegal dismissals is recognized on the basis of mutual agreement between the parties
(Art. 262, Labor Code).

Compulsory arbitration is both the process of settlement of labour disputes by a

government agency which has the authority to investigate and issue an award binding
on all the parties, as well as a mode of arbitration where the parties are compelled to
accept the resolution of their dispute through arbitration by a third party.
While a voluntary arbitrator is not part of the labour department, he or she renders
arbitration services provided for under labour laws. Generally, the voluntary arbitrator is
expected to decide only questions that are expressly delineated by the submission
agreement. However, since arbitration is the final resort for the adjudication of disputes,
the arbitrator can assume that he or she has the power to make a final settlement.
Thus, assuming that the submission agreement empowers the arbitrator to decide
whether an employee was discharged for just cause, the arbitrator can reasonably
assume that his or her powers extend beyond giving a mere yes-or-no answer and
include the authority to reinstate with or without back pay.

Difference between a Just and Authorized

Cause of Termination
Just cause refers to a wrong doing committed by the employer or employee on the basis
of which the aggrieved party may terminate the employer-employee relationship.
Authorized cause refers to a cause brought about by changing economic or business
conditions of the employer.

Causes for Termination by the Employer

1. Serious misconduct;
2. Willful disobedience of employers lawful orders connected with work;
3. Gross and habitual neglect of duty;
4. Fraud or breach of trust;
5. Commission of a crime or offense against the employer, employers family, or
representative; and
6. Other analogous causes.

Just Causes
Employee

for

Termination

by

the

1. Serious insult by the employer or his or her representative on the honor and
person of the employee;
2. Inhuman and unbearable treatment accorded the employee by the employer or
his or her representative;

3. Commission of a crime by the employer or his or her representative against the

person of the employee or any of the immediate members of his or her family;
and
4. Other analogous causes.

Authorized Causes for Termination

1. Installation of labor-saving devices;
2. Redundancy;
3. Retrenchment to prevent losses;
4. Closure or cessation of business; and
5. Disease not curable within six months as certified by competent public authority,
and continued employment of the employee is prejudicial to his or her health or
to the health of his or her co-employees.

Due Process in the Context of Termination

of Employment
Due process means the right of an employee to be notified of the reason for his or her
dismissal and, in case of just causes, to be provided the opportunity to defend himself
or herself.

Components of Due Process in Termination

Cases
In a termination for a just cause, due process involves the two-notice rule:
1. A notice of intent to dismiss specifying the ground for termination, and giving to
said employee reasonable opportunity within which to explain his or her side;
2. A hearing or conference where the employee is given opportunity to respond to
the charge, present evidence, or rebut the evidence presented against him or
her;
3. A notice of dismissal indicating that upon due consideration of all the
circumstances, grounds have been established to justify the termination.
In a termination for an authorized cause, due process means a written notice of
dismissal to the employee specifying the grounds given, at least 30 days before the
date of termination. A copy of the notice shall be furnished by the Regional Office of the
Department of Labor and Employment of the Philippines (DOLE).

An Employee may Question the Legality of

his or her Dismissal
The legality of the dismissal may be questioned before the Labor Arbiter of the National
Labor Relations Commission (NLRC) of the Philippines, through a complaint for illegal
dismissal. In establishments with a collective bargaining agreement (CBA), the dismissal
may be questioned through the grievance machinery established under the CBA. If the
issue is not resolved at this level, it will be submitted to voluntary arbitration.

Proving the Dismissal is Legal

In a case of illegal dismissal, the employer has the burden of proving that the dismissal
is legal.

Grounds for an Employee to Question his or

her Dismissal
An employee may question his or her dismissal based on substantive or procedural
grounds. The Substantive aspect pertains to the absence of a just or authorized cause
supporting the dismissal. The Procedural aspect refers to the notice of termination or
the opportunity to present an explanation.

What are the rights afforded to an unjustly

dismissed employee?
An employee who is dismissed without just cause is entitled to any or all of the
following:
1. Reinstatement without loss of seniority rights, or separation pay if reinstatement
is not possible;
2. Full backwages, inclusive of allowances and other benefits or their monetary
equivalent from the time compensation was withheld from him or her up to the
time of reinstatement;
3. Damages and attorneys fees if the dismissal was done in bad faith.

Reinstatement
Reinstatement means restoration of the employee to the position from which he or she
has been unjustly removed.
Reinstatement without loss of seniority rights means that the employee, upon
reinstatement, should be treated in matters involving seniority and continuity of
employment as though he or she had not been dismissed from work.

When a Labor Arbiter rules for an illegal dismissal, reinstatement is immediately

executory even pending appeal.
Forms in which reinstatement be effected
Reinstatement may be actual or payroll in nature, at the option of the employer.

Full Backwages
Full backwages refer to all compensations, including allowances and other benefits with
monetary equivalent, that should have been earned by the employee but was not
collected by him or her because of unjust dismissal. It includes all the amounts he or
she could have earned starting from the date of dismissal up to the time of
reinstatement.
In cases of illegal dismissal, a dismissed employee who has found another job may still
be entitled to collect full backwages from his or her former employer. Full backwages is
a form of penalty imposed by law on an employer who illegally dismisses his or her
employee. The fact that the dismissed employee may already be employed and earning
elsewhere does not extinguish the penalty.

The former position of the employee no

longer exists at the time of reinstatement
In that case, the employee shall be given a substantially equivalent position in the same
establishment without loss of seniority rights and to backwages from the time
compensation was withheld up to the time of reinstatement.

Employee Benefits when the Establishment

no longer exists
When an establishment no longer exists at the time an order for reinstatement is made,
the employee can claim benefits. The employee is entitled to a separation pay
equivalent to at least one-month pay or at least one-month pay for every year of service
whichever is higher. A fraction of at least six months shall be considered as one whole
year. The period of service is deemed to have lasted up to the time of closure of the
establishment. He or she may also claim backwages to cover the period between
dismissal from work and the closure of the establishment.

Separation Pay
In authorized cause terminations, separation pay is the amount given to an employee
terminated due to retrenchment, closure, or cessation of business or incurable disease.
The employee is entitled to receive the equivalent of one month pay or one-half month
pay, whichever is higher, for every year service.

In just cause terminations, separation pay is also the amount given to employees who
have been dismissed without just cause and could no longer be reinstated.

Reinstatement is not possible so that

separation pay shall be given to an illegally
dismissed employee
1. When company operations have ceased;
2. When the employees position or an equivalent thereof is no longer available;
3. When the illegal dismissal case has engendered strained relations between the
parties, in cases of just causes and usually when the position involved requires
the trust and confidence of the employer; and
4. When a substantial amount of years have lapsed from the filing of the case to its
finality.

Exception for an employee dismissed for

just cause be entitled to separation pay
As a rule, no. But in instances where the just cause for dismissal is other than serious
misconduct or moral turpitude, the employee may be awarded Financial Assistance in
the amount of one months pay as a form of compassionate justice.

Proof of Financial Losses is Necessary to

Justify Retrenchment
Yes. Proof of actual or imminent financial losses that are substantive in character must
be proven to justify retrenchment.

Proof of Financial losses is NOT necessary to

justify redundancy
In redundancy, the existing manpower of the establishment is in excess of what is
necessary to run its operation in an economical and efficient manner.

Other Conditions before an Employee may

be Dismissed on the Ground of Redundancy
It must be shown that:

Good faith in abolishing redundant position;

There is fair and reasonable criteria in selecting the employees to be dismissed,

such as but not limited to less preferred status (e.g. temporary employee),
efficiency, and seniority; or

A one-month prior notice is given to the employee as prescribed by law.

Failure to Comply with the Due Process

Requirements
Failure to comply with the due process requirements will NOT invalidate a dismissal with
an otherwise established just or authorized cause. The employee, however, will be
entitled to backwages from the time of termination till finality of the decision confirming
the presence of a just or authorized cause.

Difference between Transfer and Promotion

Promotion is the advancement of an employee from one position to another with an
increase in duties and responsibilities, and is usually accompanied by an increase in
salary. Promotion is a privilege and as such may be declined by the employee.
Transfer is a lateral movement that does not amount to a promotion. It constitutes a
valid exercise of management prerogative, unless it is done to defeat an employees
right to self-organization, to get rid of undesirable workers, or to penalize an employee
of his or her union activities. If done in good faith, managements decision to transfer an
employee may not be questioned. An employees refusal to transfer may constitute
willful disobedience, a just cause for his or her dismissal.

An Employer Transferring an Employee to

another place of work without prior notice
Generally, an employer cannot transfer an employee to another place of work without
prior notice. But if the urgency of the service requires a transfer, and such transfer is
exercised in good faith for the advancement of the employers interest and will not
adversely affect the rights of the employee, the transfer may be undertaken even
without the employees consent.

Non-union
member
availing
of
the
grievance machinery in case of termination
If a non-union member belonging to an appropriate bargaining unit of the recognized
bargaining agent and pays agency fees to the union and accepts the benefits under the
collective agreement, said non-union members may avail of the grievance machinery.
On the other hand, if the non-union member is not part of the appropriate bargaining

unit of the recognized bargaining agent and is expressly excluded in the collective
agreements, said employee cannot avail of the grievance machinery.

Reasonable period for an Employee

subjected to Dismissal to answer charges
against him or her by the Employer
A reasonable period should be provided wherein the employee can answer all the
charges against him or her, gather evidence, and confront the witnesses against him or
her. It should include the opportunity to secure the assistance of a representative who
could be a union officer. Reasonableness of the period should be based, among others,
on the gravity of the charges against the employee.

An employee charged with an offense may

be placed under preventive suspension
while he or she is preparing to answer
charges filed against him or her by the
employer
Only on grounds that his or her continued presence inside the company premises poses
a serious imminent threat to the life or property of the employer or his or her coworkers, and only for a period of 30 days may be placed under preventive suspension.
After 30 days, the employee should be reinstated to his or her former position or in a
substantially equivalent position.
The employer, however, may extend the period of suspension provided that the
employee is paid his or her wages and other benefits during the extension. If the
employer decides to dismiss the employee after completion of the investigation, the
employee is not bound to reimburse the amount paid to him or her during the extended
period. The employer is required to immediately notify the employee in writing of a
decision to dismiss him or her stating clearly the reasons for the dismissal.
Preventive suspension is not a disciplinary measure, and should be distinguished from
suspension imposed as a penalty.

Validity of the Employers Decision on

Termination
A dismissed employee may still question the validity or legality of his or her dismissal by
filing a complaint for illegal or unjust dismissal before the Arbitration Branch of NLRC. In
such a case, the burden of proving that the dismissal is for a valid or authorized cause
rests on the employer.

During the pendency of the termination

case, an employee may be be retained in
his or her work
An employee may be retained in his or her work even during the pendency of a
termination case under the following circumstances:
1. Upon serving the preventive suspension period of 30 days; and
2. Upon management prerogative allowing the employee to be retained at work and
his or her continued employment poses no serious nor imminent threat to the life
or property of the employer or his or her co-employees.

The Effects of Termination may be

Suspended Pending Resolution of the Case
The Secretary of Labor of the Philippines may provisionally order a reinstatement in the
event of prima facie finding that the dismissal may cause a serious labor dispute as in a
strike or lock-out, or is in implementation of mass lay-off.

Services of an Employee Terminated due to

Disease
The employer may terminate employment on ground of disease only upon the issuance
of a certification by a competent public health authority that the disease is of such
nature or at such stage that it cannot be cured within a period of six months even with
proper medical treatment.

Suspending Operations of a Business

If the period of suspension of operations do not exceed six months, the workers shall be
reinstated to their respective positions without loss of seniority rights if they indicated
their desire to resume work not later than one month from the resumption of operations
of business.
If the shutdown is for a period of not more than six months such as may occur in
equipment check or repair, stock inventory, or lack of raw materials, the employee is
only temporarily laid off and, therefore, employer-employee relationship is not severed.
If it will last for a period of more than six months and is of an indefinite character, it may
be considered as equivalent to closure of the establishment leading to termination of
employment. In such a case, the requirements of the law and rules on employee
dismissals must be observed.
http://kittelsoncarpo.com/en/labor-employment/termination-of-employment/

http://www.pinoylawyer.org/t15776-constructive-dismissal

Employees can file constructive

dismissal cases vs employer
0

BY THE MANILA TIMES ON JULY 16, 2016DEARPAO

Persida Acosta

Dear PAO,
I was hired as a team leader (supervisory level position) in a BPO
company here in Taguig City. After three months of performing the
duties and responsibilities of a team leader, the HR informed me that
the team I was handling will be dissolved. While I continued to report
for work, I felt that I was demoted, because I started performing a job
which is for an entry level position. I felt that my situation worsened
when I heard that the personnel that I previously handled and I now
have the same entry level positions.
Someone advised me to file a complaint considering that there is
already a constructive dismissal in my present situation. Is there a
ground for me to file the said complaint?
Helen

Dear Helen,
The Supreme Court has explained and enumerated the indices of constructive dismissal in
the case of Morales vs Harbour Center Port Terminal, Inc. (G.R. No. 174208, January 25,
2012), thus:
Constructive dismissal exists where there is cessation of work because continued
employment is rendered impossible, unreasonable or unlikely, as an offer involving a
demotion in rank or a diminution in pay and other benefits. Aptly called a dismissal in
disguise or an act amounting to dismissal but made to appear as if it were not, constructive
dismissal may, likewise, exist if an act of clear discrimination, insensibility, or disdain by an
employer becomes so unbearable on the part of the employee that it could foreclose any
choice by him except to forego his continued employment. In cases of a transfer of an
employee, the rule is settled that the employer is charged with the burden of proving that its
conduct and action are for valid and legitimate grounds such as genuine business necessity
and that the transfer is not unreasonable, inconvenient or prejudicial to the employee. If the

employer cannot overcome this burden of proof, the employees transfer shall be
tantamount to unlawful constructive dismissal.
In your situation, it is clear that there is already a constructive dismissal although there is no
diminution of salary or benefits. You were hired to perform supervisory work; however, the
management assigned you to a position which is supposed to be performed by employees
for entry level positions. Under Republic Act (R.A.) No. 10396, it is required that you file first
your complaint against your employer before the Single Entry Assistance Desk (SEAD), in
order for you to undergo the compulsory conciliation-mediation proceeding.
Again, we find it necessary to mention that this opinion is solely based on the facts you
have narrated and our appreciation of the same. The opinion may vary when the facts are
changed or elaborated.
We hope that we were able to enlighten you on the matter.

Editors note: Dear PAO is a daily column of the Public Attorneys

Office. Questions for Chief Acosta may be sent to
dearpao@manilatimes.net http://www.manilatimes.net/employees-canfile-constructive-dismissal-cases-vs-employer/274130/

Frequently Asked Questions (FAQs)

What is the constitutional provision on protection to labor?

The State shall afford full protection to labor, local and overseas, organized and unorganized, and
promote full employment and equality of employment opportunities for all. It shall guarantee the rights
of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted
activities, including the right to strike in accordance with law. They shall be entitled to security of
tenure, humane conditions of work, and a living wage. They shall also participate in policy and
decision-making processes affecting their rights and benefits as may be provided by law.

The State shall promote the principle of shared responsibility between workers and employers and the
preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their
mutual compliance therewith to foster industrial peace.

The State shall regulate the relations between workers and employers, recognizing the right of labor
to its just share in the fruits of production and the right of enterprises to reasonable returns on
investments, and to expansion and growth.

What rules govern the proceedings before the Labor Arbiters and the NLRC?

The proceedings before the Labor Arbiters and the NLRC are governed by the Labor Code, as amended,
the 2011 NLRC Rules of Procedure, and suppletorily, the Rules of Court.

What is the nature of the proceedings before the Labor Arbiter?

The NLRC Rules describe the proceedings before the Labor Arbiter as non-litigious. Subject to the
requirements of due process, the technicalities of law and procedure in the regular courts do not apply
in the labor arbitration proceedings.

What are the cases falling under the jurisdiction of the Labor Arbiters?

Under Article 217 of the Labor Code, Labor Arbiters have jurisdiction over the following cases:

1. Unfair labor practice (ULP) cases;

2. Termination disputes (or illegal dismissal cases);
3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages,
rates of pay, hours of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from employer-employee
relations;
5. Cases arising from any violation of Article 264 of the Labor Code, including questions involving the
legality of strikes and lockouts;
6. Except claims for employees compensation not included in the next succeeding paragraph, social
security, medicare and maternity benefits, all other claims arising from employer-employee relations,
including those of persons in domestic or household service, involving an amount exceeding Five
Thousand Pesos (P5,000.00), whether or not accompanied with a claim for reinstatement;
7. Wage distortion disputes in unorganized establishments not voluntarily settled by the parties
pursuant to Republic Act No. 6627;
8. Enforcement of compromise agreements when there is non-compliance by any of the parties
pursuant to Article 227 of the Labor Code, as amended;
9. Money claims arising out of employer-employee relationship or by virtue of any law or contract,
involving Filipino workers for overseas employment, including claims for actual, moral, exemplary and
other forms of damages as provided by Section 10 of R.A. No. 8042, as amended by R.A. No. 10022;

10.Contested cases under the exception clause of Article 128(b) of the Labor Code, as amended by
R.A. 7730; and
11.Other cases as may be provided by law.

May a non-lawyer appear in any of the proceedings before the Labor Arbiter or
Commission?

Yes. A non-lawyer may appear in any of the proceedings before the Labor Arbiter or Commission only
under the following conditions:

1. he/she represents himself/herself as party to the case;

2. he/she represents a legitimate labor organization, as defined under Article 212 and 242 of the
Labor Code, as amended, which is a party to the case: Provided, that he/she presents to the
Commission or Labor Arbiter during the mandatory conference or initial hearing: (i) a certification from
the Bureau of Labor Relations (BLR) or Regional Office of the Department of Labor and Employment
attesting that the organization he/she represents is duly registered and listed in the roster of legitimate
labor organizations; (ii) a verified certification issued by the secretary and attested to by the president
of the said organization stating that he/she is authorized to represent the said organization in the said
case; and (iii) a copy of the resolution of the board of directors of the said organization granting him
such authority;
3. he/she represents a member or members of a legitimate labor organization that is existing within
the employers establishment, who are parties to the case: Provided, that he/she presents: (i) a verified
certification attesting that he/she is authorized by such member or members to represent them in the
case; and (ii) a verified certification issued by the secretary and attested to by the president of the said
organization stating that the person or persons he/she is representing are members of their
organization which is existing in the employers establishment;
4. he/she is a duly-accredited member of any legal aid office recognized by the Department of Justice
or Integrated Bar of the Philippines: Provided, that he/she (i) presents proof of his/her accreditation;
and (ii) represents a party to the case;
5. he/she is the owner or president of a corporation or establishment which is a party to the case:
Provided, that he/she presents: (i) a verified certification attesting that he/she is authorized to
represent said corporation or establishment; and (ii) a copy of the resolution of the board of directors
of said corporation, or other similar resolution or instrument issued by said establishment, granting
him/her such authority.

Does the counsel or authorized representatives have the authority to bind their
clients?

Yes. Counsel or other authorized representatives of parties shall have authority to bind their clients in
all matter of procedure. However, they cannot, without a special power of attorney or express consent,
enter into a compromise agreement with the opposing party in full or partial discharge of a clients
claim.

What is the purpose of mandatory conciliation and mediation conference?

The mandatory conciliation and mediation conference shall be called for the purpose of (1) amicably
settling the case upon a fair compromise; (2) determining the real parties in interest; (3) determining
the necessity of amending the complaint and including all causes of action; (4) defining and simplifying
the issues in the case; (5) entering into admissions or stipulations of facts; and (6) threshing out all
other preliminary matters.

What is the effect of non-appearance of the parties in the mandatory conciliation

and mediation conference?

The non-appearance of the complainant or petitioner during the two (2) settings for mandatory
conciliation and mediation conference scheduled in the summons, despite due notice thereof, shall be
a ground for the dismissal of the case without prejudice.

In case of non-appearance by the respondent during the first scheduled conference, the second
conference as scheduled in the summons shall proceed. If the respondent still fails to appear at the
second conference despite being duly served with summons, he/she shall be considered to have
waived his/her right to file position paper. The Labor Arbiter shall immediately terminate the
mandatory conciliation and mediation conference and direct the complainant or petitioner to file a
verified position paper and submit evidence in support of his/her causes of action and thereupon
render his/her decision on the basis of the evidence on record.

What is the role of the Labor Arbiter in hearing and clarificatory conference?

The Labor Arbiter shall take full control and personally conduct the hearing or clarificatory conference
and may ask questions for the purpose of clarifying points of law or facts involved in the case. The
Labor Arbiter may allow the presentation of testimonial evidence with right of cross-examination by
the opposing party and shall limit the presentation of evidence to matters relevant to the issue before
him/her and necessary for a just and speedy disposition of the case.

The Labor Arbiter shall make a written summary of the proceedings, including the substance of the
evidence presented, in consultation with the parties. The written summary shall be signed by the
parties and shall form part of the records.

What is the period within which to conduct clarificatory conference?

The parties and their counsels appearing before the Labor Arbiter shall be prepared for continuous
hearing or clarificatory conference. No postponement or continuance shall be allowed by the Labor
Arbiter, except upon meritorious grounds and subject to the requirement of expeditious disposition of
cases. The hearing or clarificatory conference shall be terminated within thirty (30) calendar days from
the date of the initial clarificatory conference. In cases involving overseas Filipino workers, the
aggregate period for conducting the mandatory conciliation and mediation conference, including
hearing on the merits or clarificatory conference, shall not exceed sixty (60) days, which will be
reckoned from the date of acquisition of jurisdiction by the Labor Arbiter over the person of the
respondents.

What is the effect of non-appearance of the parties during clarificatory conference?

In case of non-appearance of any of the parties during the hearing or clarificatory conference despite
due notice, proceedings shall be conducted ex parte. Thereafter, the case shall be deemed submitted
for decision.

What is the period within which to file a motion for postponement?

No motion for postponement shall be entertained except on meritorious grounds and when filed at
least three (3) days before the scheduled hearing.

1.

What is the period within which to cause an amendment of the complaint or

petition?

No amendment of the complaint or petition shall be allowed after the filing of position papers, unless
with leave of the Labor Arbiter.

What are the prohibited pleadings and motions?

The following pleadings and motions shall not be allowed and acted upon nor elevated to the
Commission: (a) Motion to dismiss the complaint except on the ground of lack of jurisdiction over the
subject matter, improper venue, res judicata, prescription and forum shopping; (b) Motion for a bill of
particulars; (c) Motion for new trial; (d) Petition for Relief from Judgment; (e) Motion to declare
respondent in default; (f) Motion for reconsideration of any decision or any order of the Labor Arbiter;
(g) Appeal from any interlocutory order of the Labor Arbiter, such as but not limited to, an order:
denying a motion to dismiss, denying a motion to inhibit; denying a motion for issuance of writ of
execution, or denying a motion to quash writ of execution; (h) Appeal from the issuance of a certificate
of finality of decision by the Labor Arbiter; (i) Appeal from orders issued by the Labor Arbiter in the
course of execution proceedings; and (j) Such other pleadings, motions and petitions of similar nature
intended to circumvent above provisions.

May the Commission blacklist bonding companies?

Yes. The Commission through the Chairman may on justifiable grounds blacklist a bonding company,
notwithstanding its accreditation by the Supreme Court. Upon verification by the Commission that the
bond is irregular or not genuine, the Commission shall cause the immediate dismissal of the appeal,
and censure the responsible parties and their counsels, or subject them to reasonable fine or penalty,
and the bonding company may be blacklisted.

May a party file a motion to revive and re-open a case dismissed without prejudice?

Yes. A party may file a motion to revive or re-open a case dismissed without prejudice, within ten (10)
calendar days from receipt of notice of the order dismissing the same; otherwise, the only remedy shall
be to re-file the case. A party declared to have waived his/her right to file position paper may, at any
time after notice thereof and before the case is submitted for decision, file a motion under oath to set
aside the order of waiver upon proper showing that his/her failure to appear was due to justifiable and
meritorious grounds.

What is the effect of rehabilitation receivership on monetary claims of workers?

Rehabilitation receivership of a company has the effect of suspending all proceedings at whatever
stage it may be found - in all judicial or quasi-judicial bodies. The NLRC may not proceed with hearing
of monetary claims. If already decided, the monetary awards cannot be executed. If due for execution,
no such execution may be had. Only when there is liquidation that the monetary claims may be
asserted. The suspension of the proceedings is necessary to enable the rehabilitation receiver to
effectively exercise its powers free from any judicial or extra-judicial interference that might unduly
hinder the rescue of the distressed company. Once the receivership proceedings have ceased and the
receiver/liquidator is given the imprimatur to proceed with corporate liquidation, the SEC order

becomes functus officio. Thus, there is no legal impediment for the execution of the decision of the
Labor Arbiter for the payment of separation pay by presenting it with the rehabilitation receiver and
liquidator, subject to the rules on preference of credits.

What are the two kinds of jurisdiction of the NLRC?

The National Labor Relations Commission exercises two (2) kinds of jurisdiction:
(1) Original jurisdiction; and (2) Exclusive appellate jurisdiction.

1. Original jurisdiction:

1.

2.
3.

Injunction in ordinary labor disputes to enjoin or restrain any actual or threatened commission
of any or all prohibited or unlawful acts or to require the performance of a particular act in any
labor dispute which, if not restrained or performed forthwith, may cause grave or irreparable
damage to any party;
Injunction in strikes or lockouts under Article 264 of the Labor Code; and
Certified labor disputes causing or likely to cause a strike or lockout in an industry
indispensable to the national interest, certified to it by the Secretary of Labor and Employment
for compulsory arbitration.

2. Exclusive appellate jurisdiction:

1.
2.

All cases decided by the Labor Arbiters including contempt cases; and
Cases decided by the DOLE Regional Directors or his duly authorized Hearing Officers (under
Article 129) involving recovery of wages, simple money claims and other benefits not exceeding
P5,000 and not accompanied by claim for reinstatement.

What is the power to assume jurisdiction or certify national interest labor

disputes to NLRC?

When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the Secretary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory
arbitration.

In case of conflict, who has jurisdiction over termination disputes, Labor Arbiter or
Voluntary Arbitrator?

Jurisdiction over termination disputes belongs to Labor Arbiters and not with the grievance machinery
or Voluntary Arbitrator. Under Article 262, the Voluntary Arbitrator may assume jurisdiction only when
agreed upon by the parties. Policy Instructions No. 56 issued by DOLE Secretary Confesor clarifying the
jurisdiction of Labor Arbiters and Voluntary Arbitrations does not apply. It reiterated the ruling that
dismissal is not a grievable issue.

What is the mode of appeal from the decision of the Labor Arbiters?

Appeal from the decision of the Labor Arbiter is brought by ordinary appeal to the NLRC within ten (10)
calendar days from receipt by the party of the decision. From the decision of the NLRC, there is no
appeal. The only way to elevate the case to the Court of Appeals is by way of the special civil action of
certiorari under Rule 65 of the Rules of Civil Procedure. From the ruling of the Court of the Appeals, it
may be elevated to the Supreme Court by way of ordinary appeal under Rule 45 of the Rules of Civil
Procedure.

What are the grounds for appeal?

There are four (4) grounds, to wit:

(a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter;
(b) If the decision, order or award was secured through fraud or coercion, including graft and
corruption;
(c) If made purely on questions of law; and
(d) If serious errors in the findings of facts are raised which would cause grave or irreparable damage
or injury to the appellant.

What are the requisites for perfection of appeal?

The appeal shall be: (1) filed within the reglementary period provided in Section 1 of the Rule; (2)
verified by the appellant himself/herself in accordance with Section 4, Rule 7 of the Rules of Court, as
amended; (3) in the form of a memorandum of appeal which shall state the grounds relied upon and
the arguments in support thereof, the relief prayed for, and with a statement of the date the appellant
received the appealed decision, award or order; (4) in three (3) legibly typewritten or printed copies;
and (5) accompanied by proof of payment of the required appeal fee and legal research fee, posting of
a cash or surety bond as provided in Section 6 of this Rule, and proof of service upon the other parties.

What is the reinstatement aspect of the Labor Arbiters decision?

If reinstatement is ordered by the Labor Arbiter in an illegal dismissal case, it is immediately executory
even pending appeal. Such award does not require a writ of execution.

Is posting a bond stay the execution of immediate reinstatement?

No. The posting of a bond by the employer does not have the effect of staying the execution of the
reinstatement aspect of the decision of the Labor Arbiter.

Can the Labor Arbiter issue a partial writ pending appeal?

Yes. In case the decision includes an order of reinstatement and the employer disobeys it or refuses to
reinstate the dismissed employee, the Labor Arbiter should immediately issue a writ of execution, even
pending appeal, directing the employer to immediately reinstate the dismissed employee either
physically or in the payroll, and to pay the accrued salaries as a consequence of such reinstatement at
the rate specified in the decision. The Sheriff should serve the writ of execution upon the employer or
any other person required by law to obey the same. If he disobeys the writ, such employer or person
may be cited for contempt. While the perfection of appeal will stay the execution of the decision of a
Labor Arbiter, the partial execution for reinstatement pending appeal is not affected by such
perfection.

Is the award of reinstatement pending appeal by the Labor Arbiter self-executory?

Yes. An award or order of reinstatement is self-executory and, therefore, does not require a writ of
execution to implement and enforce it. To require the application for and issuance of a writ of
execution as pre-requisite for the execution of a reinstatement award would certainly betray and run
counter to the very object and intent of Article 223, i.e., the immediate execution of a reinstatement
order. The reason is simple. An application for a writ of execution and its issuance could be delayed for
numerous reasons. A mere continuance or postponement of a scheduled hearing, for instance, or an
inaction on the part of the Labor Arbiter or the NLRC, could easily delay the issuance of the writ
thereby setting at naught the strict mandate and noble purpose envisioned by Article 223.

What is the period within which to conduct pre-execution conference?

Within two (2) working days from receipt of a motion for the issuance of a writ of execution which shall
be accompanied by a computation of a judgment award, if necessary, the Commission or the Labor
Arbiter may schedule a pre-execution conference to thresh out matters relevant to execution including
the final computation of monetary award. The pre-execution conference shall not exceed fifteen (15)
calendar days from the initial schedule, unless the parties agreed to an extension. Any order issued by
the Labor Arbiter in the pre-execution conference is not appealable, subject to the remedies available
under Rule XII (Extraordinary Remedies).

Is writ of execution necessary in case reinstatement is ordered by the NLRC on

appeal?

Yes. While it is now well-settled that a writ of execution is not necessary to implement the
reinstatement order issued by a Labor Arbiter upon a finding of illegality of dismissal since it is selfexecutory, however, if the reinstatement order is issued by the NLRC on appeal, there is a need to
secure a writ of execution from the Labor Arbiter a quo to enforce the reinstatement of the employee.

What is the lifetime or effectivity of the writ of execution?

Five (5) years. In case of partial satisfaction of judgment during the lifetime of the writ, the Labor
Arbiter shall motu proprio issue an updated writ reflecting the amount collected and the remaining
balance.

What is the effect of refusal of the bonding company or bank holding the cash
deposit of the losing party to release the garnished amount?

If the bonding company refuses to pay or the bank holding the cash deposit of the losing party refuses
to release the garnished amount despite the order or pertinent processes issued by the Labor Arbiter
or the Commission, the president or the responsible officers or authorized representatives of the said
bonding company or the bank who resisted or caused the non-compliance shall be either cited for
contempt, or held liable for resistance and disobedience to a person in authority or the agents of such
person as provided under the pertinent provision of the Revised Penal Code. This rule shall likewise
apply to any person or party who unlawfully resists or refuses to comply with the break open order
issued by the Labor Arbiter or the Commission.

What is the power of the DOLE Secretary to assume jurisdiction over a labor dispute
or certify it to the NLRC for compulsory arbitration?

The DOLE Secretary may assume jurisdiction over a labor dispute, or certify it to the NLRC for
compulsory arbitration, if, in his opinion, it may cause or likely to cause a strike or lockout in an

industry indispensable to the national interest. The President may also exercise the power to
assume jurisdiction over a labor dispute.

What is the effect of such assumption or certification of labor dispute to the NLRC?

The following are the effects: (a) on intended or impending strike or lockout automatically
enjoined even if a Motion for Reconsideration is filed; (b) on actual strike or lockout strikers or
locked out employees should immediately return to work and employer should readmit them back; and
(c) on cases filed or may be filed all shall be subsumed/absorbed by the assumed or certified
case except when the order specified otherwise. The parties to the case should inform the DOLE
Secretary of pendency thereof.

May an injunction be issued in strike or lockout cases?

As a general rule, strikes and lockouts validly declared, enjoy the protection of law and cannot be
enjoined unless illegal acts are committed or threatened to be committed in the course of such strikes
or lockouts. Ordinarily, the law vests in the NLRC the authority to issue injunctions to restrain the
commission of illegal acts during the strikes and pickets. This policy applies even if the strike appears
to be illegal in nature. The rationale for this policy is the protection extended to the right to strike
under the constitution and the law. It is basically treated as a weapon that the law guarantees to
employees for the advancement of their interest and for their protection.

What is the effect of defiance of assumption or certification order or return-to-work

order?

Non-compliance with the assumption/certification order of the Secretary of Labor and Employment or a
return-to-work order issued pursuant thereto by either the Secretary or the NLRC to which a labor
dispute is certified, is considered an illegal act committed in the course of the strike or lockout.

What is the prescriptive period for offenses penalized under the Labor Code?

As a rule, the prescriptive period of all criminal offenses penalized under the Labor Code and the Rules
to Implement the Labor Codeis three (3) years from the time of commission thereof. However, criminal
cases arising from ULP which prescribe within one (1) year from the time the acts complained of were
committed; otherwise, they shall be forever barred. The running of the 1 year period, however, is
interrupted during the pendency of the labor case.

What is the prescriptive period for money claims?

Prescriptive period is three (3) years from accrual of cause of action.

What is the prescriptive period for claims for allowances and other benefits?

In cases of nonpayment of allowances and other monetary benefits, if it is established that the benefits
being claimed have been withheld from the employee for a period longer than three (3) years, the
amount pertaining to the period beyond the three-year prescriptive period is barred by prescription.
The amount that can only be demanded by the aggrieved employee shall be limited to the amount of
the benefits withheld within three (3) years before the filing of the complaint.

What is the prescriptive period for illegal dismissal?

An action for illegal dismissal prescribes in four (4) years from accrual of cause of action.

What is the remedy of the party aggrieved by an order or resolution of the Labor
Arbiter?

A party aggrieved by any order or resolution of the Labor Arbiter including those issued during
execution proceedings may file a verified petition to annul or modify such order or resolution. The
petition may be accompanied by an application for the issuance of a temporary restraining order
and/or writ of preliminary or permanent injunction to enjoin the Labor Arbiter, or any person acting
under his/her authority, to desist from enforcing said resolution or order.

What are the grounds of the petition for extraordinary remedies?

The petition filed under this Rule may be entertained only on any of the following grounds: (a) if there
is prima facie evidence of abuse of discretion on the part of the Labor Arbiter; (b) if serious errors in
the findings of facts are raised which, if not corrected, would cause grave or irreparable damage or
injury to the petitioner; (c) if a party by fraud, accident, mistake or excusable negligence has been
prevented from taking an appeal; (d) if made purely on questions of law; or (e) if the order or
resolution will cause injustice if not rectified.

What are the requisites of the petition for extraordinary remedies?

The petition for extraordinary remedies shall: (a) be accompanied by a clear original or certified true
copy of the order or resolution assailed, together with clear copies of documents relevant or related to
the said order or resolution for the proper understanding of the issue/s involved; (b) contain the
arbitral docket number and appeal docket number, if any; (c) state the material date showing the
timeliness of the petition; (d) be verified by the petitioner himself/herself in accordance with Section 4,
Rule 7 of the Rules of Court, as amended; (e) be in the form of a memorandum which shall state the
ground/s relied upon, the argument/s in support thereof and the reliefs prayed for; (f) be in three (3)
legibly written or printed copies; and (g) be accompanied by certificate of non-forum shopping, proof of
service upon the other party/ies and the Labor Arbiter who issued the order or resolution being
assailed or questioned; and proof of payment of the required fees.

What is unfair labor practice?

An unfair labor practice act violates the right of workers to self-organization, is inimical to the
legitimate interests of both labor and management, including their right to bargain collectively and
otherwise deal with each other in an atmosphere of freedom and mutual respect, disrupts industrial
peace and hinders the promotion of healthy and stable labor-management relations.

May elimination or diminution of benefits constitute demotion?

Yes. The illegal and unjustified elimination or diminution of certain benefits may result in illegal
demotion. Under established jurisprudence, there is demotion where the act of the employer results in
the lowering in position or rank or reduction in salary of the employee. It involves a situation where an
employee is relegated to a subordinate or less important position constituting a reduction to a lower
grade or rank with a corresponding decrease in duties and responsibilities and usually accompanied by
a decrease in salary.

May elimination or diminution of benefits constitute constructive dismissal?

Yes. Elimination or diminution of certain benefits may result in the constructive dismissal of an
employee. Constructive dismissal is an involuntary resignation resorted to when continued
employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank and/or
a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes
unbearable to the employee that it could foreclose any choice by him except to forego his continued
employment.

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