Constructive dismissal occurs when there is cessation of work because continued employment is rendered impossible, unreasonable, or unlikely as when there is a demotion in rank or diminution in pay or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee leaving the latter with no other option but to quit.

Complainant Raul C. Cosare instituted a labor complaint primarily for constructive dismissal against his employer defendant Broadcom Asia, Inc., and its president defendant Dante Arevalo.

Complainant “claimed that sometime in April 1993, he was employed as a salesman by Arevalo, who was then in the business of selling broadcast equipment needed by television networks and production houses. In December 2000, Arevalo set up the company Broadcom, still to continue the business of trading communication and broadcast equipment. Cosare was named an incorporator of Broadcom… In October 2001, Cosare was promoted to the position of Assistant Vice President for Sales (AVP for Sales) and Head of the Technical Coordination, having a monthly basic net salary and average commissions of P18,000.00 and P37,000.00, respectively.” 

Thereafter, sometime in 2003, “Alex F. Abiog (Abiog) was appointed as Broadcom’s Vice President for Sales and thus, became Cosare’s immediate superior. On March 23, 2009, Cosare sent a confidential memo to Arevalo to inform him of the following anomalies which were allegedly being committed by Abiog against the company: (a) he failed to report to work on time, and would immediately leave the office on the pretext of client visits; (b) he advised the clients of Broadcom to purchase camera units from its competitors, and received commissions therefor; (c) he shared in the ‘under the-table dealings’ or ‘confidential commissions’ which Broadcom extended to its clients’ personnel and engineers; and (d) he expressed his complaints and disgust over Broadcom’s uncompetitive salaries and wages and delay in the payment of other benefits, even in the presence of office staff. Cosare ended his memo by clarifying that he was not interested in Abiog’s position, but only wanted Arevalo to know of the irregularities for the corporation’s sake.”

There appears to be no response from Defendant Arevalo regarding the above accusations. “Cosare claimed that he was instead called for a meeting by Arevalo on March 25, 2009, wherein he was asked to tender his resignation in exchange for ‘financial assistance’ in the amount of P300,000.00. Cosare refused to comply with the directive, as signified in a letter dated March 26, 2009 which he sent to Arevalo.”

Thereafter, on 30 March 2009, Complainant received a memo charging him with serious misconduct and willful breach of trust and required him to respond within forty-eight (48) hours. The memo was signed by Defendant Arevalo. Complainant was also  “suspended from having access to any and all company files/records and use of company assets effective immediately.” Thus, on the following day, he was refused entry. On the 4th day from receipt of the memo, Complainant furnished his employer his reply but it was refused to be received on the ground of late filing. Thus, Complainant sent it via registered mail. As a result, Complainant instituted this labor complaint for constructive dismissal.

HELD: Defendant Corporation and Individual Arevalo are jointly and solidarily liable. Constructive and illegal dismissal were present. Constructive dismissal “occurs when there is cessation of work because continued employment is rendered impossible, unreasonable, or unlikely as when there is a demotion in rank or diminution in pay or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee leaving the latter with no other option but to quit.”

Citing jurisprudence, the test of constructive dismissal is “whether a reasonable person in the employee’s position would have felt compelled to give up his position under the circumstances. It is an act amounting to dismissal but is made to appear as if it were not. Constructive dismissal is therefore a dismissal in disguise. The law recognizes and resolves this situation in favor of employees in order to protect their rights and interests from the coercive acts of the employer.”

Based on the records, “[defendants] already rejected Cosare’s continued involvement with the company. Even their refusal to accept the explanation which Cosare tried to tender on April 2, 2009 further evidenced the resolve to deny Cosare of the opportunity to be heard prior to any decision on the termination of his employment. The [defendants] allegedly refused acceptance of the explanation as it was filed beyond the mere 48-hour period which they granted to Cosare under the memo dated March 30, 2009. However, even this limitation was a flaw in the memo or notice to explain which only further signified the [defendants’] discrimination, disdain and insensibility towards Cosare, apparently resorted to by the [defendants] in order to deny their employee of the opportunity to fully explain his defenses and ultimately, retain his employment.”

Evidently, defendants “were already resolute on a severance of their working relationship with Cosare, notwithstanding the facts which could have been established by his explanations and the respondents’ full investigation on the matter. In addition to this, the fact that no further investigation and final disposition appeared to have been made by the respondents on Cosare’s case only negated the claim that they actually intended to first look into the matter before making a final determination as to the guilt or innocence of their employee. This also manifested from the fact that even before Cosare was required to present his side on the charges of serious misconduct and willful breach of trust, he was summoned to Arevalo’s office and was asked to tender his immediate resignation in exchange for financial assistance.”

As for abandonment, there is no merit to the claim. “Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. To constitute abandonment of work, two elements must concur: ‘(1) the employee must have failed to report for work or must have been absent without valid or justifiable reason; and (2) there must have been a clear intention on the part of the employee to sever the employer-employee relationship manifested by some overt act.’”

Here, complainant’s “failure to report to work beginning April 1, 2009 was neither voluntary nor indicative of an intention to sever his employment with Broadcom. It was illogical to be requiring him to report for work, and imputing fault when he failed to do so after he was specifically denied access to all of the company’s assets.”

As there is constructive dismissal in this case, an illegally or constructively dismissed employee is entitled to: (1) either reinstatement, if viable, or separation pay, if reinstatement is no longer viable; and (2) backwages. The award of exemplary damages was also justified given the NLRC’s finding that the respondents acted in bad faith and in a wanton, oppressive and malevolent manner when they dismissed Cosare. It is also by reason of such bad faith that Arevalo was correctly declared solidarily liable for the monetary awards.”

Citation: G.R. No. 201298, 05 February 2014