Retraction letter, suspensive condition

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Is a retraction letter involving an employment contract with suspensive conditions valid?

  • Yes, if the employment contract is clear with the suspensive conditions.

Sagun v. ANZ Global Services and Operations (Manila), Inc., G.R. No. 220399, 22 August 2016

  • An applicant signed an employment contract with suspensive conditions stating that the employment is conditioned on the Company’s satisfaction with the results of his pre-employment requirements, particularly on background checks.
  • On his scheduled first day of work, he tendered a resignation letter to his previous employer and submitted a copy thereof to the Company as part of the pre-employment requirements.
  • On the same day, the Company tendered him a retraction letter after finding inconsistencies with his last two (2) employer.

HELD:

  • The employment contract was perfected; however, it did not become efffective due to suspensive conditions.
  • While there was already a perfected contract of employment when the complainant signed the Company’s employment offer and agreed to the terms and conditions that were embodied therein, it was nonetheless subjected to several conditions before he may be deemed an employee of the Company.
  • Among those conditions for employment was the “satisfactory completion of any checks (e.g. background, bankruptcy, sanctions and reference checks) that may be required by ANZ.” Accordingly, the complainant’s employment with the Company depended on the outcome of his background check, which partakes of the nature of a suspensive condition, and hence, renders the obligation of the would-be employer, conditional.
  • Here, the subject employment contract required a satisfactory completion of the complainant’s background check before he may be deemed an employee of the Company.
  • Considering, however, that the complainant failed to explain the discrepancies in his declared information and documents that were required from him relative to his work experience at Siemens, namely: (a) that he was only a Level 1 and not a Level 2 Technical Support Representative that conducts troubleshooting for both computer hardware and software problems; and (b) that he was found to have been terminated for cause and not merely resigned from his post, that rendered his background check unsatisfactory, the Company’s obligations as a would-be employer were held in suspense and thus, had yet to acquire any obligatory force. To reiterate, in a contract with a suspensive condition, if the condition does not happen, the obligation does not come into effect. Thus, until and unless petitioner complied with the satisfactory background check, there exists no obligation on the part of the Company to recognize and fully accord him the rights under the employment contract. In fact, records also show that petitioner failed to report for work on or before July 11, 2011, which was also a suspensive condition mandated under sub-paragraph 4 of Schedule 1 of the contract.

References:

  • Presidential Decree No. 442, a.k.a. Labor Code
  • Civil Code of the Philippines
  • Jurisprudence or Supreme Court Decisions