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Unreasonable delay in acting on sexual harassment may result in constructive dismissal

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  • An employee is considered constructively dismissed if he or she was sexually harassed by her superior and her employer failed to act on his or her complaint with prompt and sensitivity.


May an employer be held liable for a sexual harassment committed by an employee?

In the following case, the Supreme Court held that: An employee is considered constructively dismissed if he or she was sexually harassed by her superior and her employer failed to act on his or her complaint with prompt and sensitivity.

Case Digest

LBC Express-VIS, Inc. v. Palco | G.R. No. 217101, 12 February 2020


On January 16, 2009, Monica C. Palco (Palco) started working for LBC Express-Vis Inc. (LBC) as a customer associate in its Gaisano Danao Branch (LBC Danao). The Branch’s Team Leader and Officer-in-Charge, Arturo A. Batucan (Batucan), endorsed her application for the: post and actecl as her · immediate superior.

While employed at LBC, Palco had initially noticed that Batucan would often flirt with her, which made her uncomfortable. Later, Batucan started sexually harassing her. Batucan’s undisputed acts are detailed as follows:

1. As weeks passed, she noticed something in the way respondent- Arturo A. Batucan stared and smiled at her. She also sensed some meaning in the way he talked to her, though she initially ignored these and just tried to focus on her job.

2. At one time he offered to lend her money, which she refused, not wanting to be indebted to him.

3. There was likewise an instance when he secretly gave her chocolate, which she felt uncomfortable about, there being no special occasion then.

4. Respondent-Arturo A. Batucan’s actions grew bolder everyday[sic]. Whenever he approached her while working, he found ways to hold her hand or put his hand on her lap, if not, on her shoulder.

5. Then, the time came when he started to kiss her on the cheek in a joking manner.

6. On certain occasions, he pulled the strap of her bra, which made her feel really uncomfortable. When she tried to rebuke him on such, he would just tell her that it was a joke.

7. There was also a time when he joked about making a baby with her. He told her that if she will get married someday, he wants to join with her husband in making the baby. She just laughed it off, but she knew there was something wrong with the joke.5

The final straw happened at around 8:00 a.m. on May 1, 2010. That morning, Batucan sneaked in on Palco while she was in a comer counting money. Palco was caught by surprise and exclaimed, “Kuyawa nako nimo sir, oy!” (You scared me, sir!). Batucan then held her on her hips and attempted to kiss her lips. However, Palco was able to shield herself.

Batucan then tried a second time and was able to kiss Palco’s lips before she could react. Batucan told Palco that he was just happy that day and then proceeded to wipe her lips. Palco, however, could not stop him. Thereafter, Batucan asked her if it was okay for him to go to the LBC Camotes Branch on Monday, as though asking for her permission and treating her like a girlfriend. She told him not to repeat what he had done and threatened to tell his wife about it. Palco felt angry and afraid.

On the evening of the following day, a Sunday, Batucan texted Palco asking her to report early for work the next day to prepare for the an-ival of a certain Ms. Ponce. Afraid of what Batucan might do next, Palco excused herself and suggested that her co-employee take her place, explaining that she might not come in for work.

The next day, despite being repulsed by Batucan, Palco still forced herself to go to work. She was relieved when Batucan left with Ms. Ponce at 11:00 a.m. to visit the LBC Camotes Branch. However, on May 4, 2010, she did not come in for work because she was sick, and was still bothered by the incident.

On May 5, 2010, she reported the incident to the LBC Head Office in Lapu Lapu City. She had a resignation letter prepared in case management would not act on her complaint. Acting on her complaint, management advised her to request for a transfer to another team while they investigated the matter.

On May 8, 2010, Palco returned to the LBC Head Office with her mother and submitted her formal complaint against Batucan. Later, they proceeded to the police station to report the incident.

On May 14, 2010, sensing that management did not immediately act on her complaint, Palco resigned. She asserted that she was forced to quit since she no longer felt safe at work.

On June 15, 2010, Batucan was served a copy of a Notice to Explain.

On July 20, 2010, LBC held the administrative hearing for the incident.13 On the same day, Palco filed a Complaint for Illegal Dismissal against the company.

On September 27, 2010, the area head of LBC Cebu sent a letter addressed to Batucan containing a suspension with last warning:

This administrative action is taken on the account of the complaint on immoral act with you [sic] teammate, Ms. Monica Palco of which you were required to submit a valid explanation why sanction should not be imposed against you. This aggravated the company by facing a case charged with illegal dismissal at NLRC Cebu.

After thorough consideration and evaluation of the case, the company finds it adequate cause to render you answerable for the aforementioned conduct. This Office hereby sites you for the following infraction categorized under our Code of Conduct as Major Offense to wit:

Against Persons:

a. Immoral act or any form of indecency within company premises or work assignment.

b. Any form of sexual harassment.

Accordingly, your attention·is hereby called to this instance; you are directed to serve a SUSPENSION for a period of sixty (60) days without pay with LAST WARNING effective immediately.

You are further admonished against a repetition of this omission. For your information and strict compliance.


On October 18, 2010, Palco filed a Complaint for sexual harassment before the Danao City Prosecutor’s Office.

The Labor Arbiter, in its Decision dated June 29, 2011, ruled in favor of Palco:

WHEREFORE, co-respondents LBC Express-VIS, Inc. and Arturo Batucan are hereby ORDERED solidarily to immediately pay complainant Monica C. Palco the following:

Backwages…………………………. Php 91,000.00

Separation pay……………………..14,000.00

Moral Damages…………………… 200,000.00

Exemplary Damages…………….50,000.00

Total…………………………………… Php 355,000.00

Attorney’s fees (10%) …………. 35,000.00

Grand Total………………………….390,500.00


The National Labor Relations Comrnission, in its May 31, 2012 Decision 17 affirmed with modification the Labor Arbiter’s decision  but reduced the amount of moral damages to PS0,000.00.

The Court of Appeals, in its March 13, 2014 Decision affirmed the National Labor Relations Commission. It denied LBC’s Motion for Reconsideration.


This Court rules that LBC is liable for constructive dismissal.

Constructive dismissal occurs when an employer makes an employee’s continued employment impossible, unreasonable or unlikely, or has made an employee’s working conditions or environment harsh, hostile, and unfavorable, such that the employee feels obliged to resign from his or her employment. Common examples are when the employee is demoted, or when his or her pay or benefits are reduced. However, constructive dismissal is not limited to these instances. The gauge to determine whether there is constructive dismissal, is whether a reasonable person would feel constrained to resign from his or her employment because of the circumstances, conditions, and environment created by the employer for the employee.

x x x

One of the ways by which a hostile or offensive work environment is created is through the sexual harassment of an employee.

x x x

Workplace sexual harassment occurs when a supervisor, or agent of an employer, or any other person who has authority over another in a work environment, imposes sexual favors on another, which creates in an intimidating, hostile, or offensive environment for the latter. Section 3 of Republic Act No. 7877, otherwise known as the Anti-Sexual Harassment Act…

x x x

This Court has held that “[t]he gravamen of the offense in sexual harassment is not the violation of the employee’s sexuality  but the abuse of power by the employer.”

In this case, Batucan’s acts are undisputed. He filed no pleading in the labor tribunals to deny respondent’s allegations.55 During the administrative hearing, he simply explained that his acts were misinterpreted and did not constitute sexual harassment.

However, it is clear that Batucan’s acts were sexually suggestive. He held respondent’s hand, put his hand on her lap and shoulder, pulled her bra strap, joked about making a baby with her, attempted to kiss her, and eventually scored one. These acts are not only inappropriate, but are offensive and invasive enough to result in an unsafe work environment for respondent.

Petitioner emphasizes that it was not the company, but Batucan, that created the hostile work environment. It argues that Batucan is a mere co­ employee, not part of its management who may dismiss other employees.

This argument, however, fails to persuade. Batucan cannot be deemed a mere co-employee of respondent. The determination of whether an employee is part of the managerial staff depends on the employee’s duties and responsibilities…

x x x

At the very least, Batucan held a supervisory position, which made him part of the managerial staff. Batucan was petitioner’s team leader and officer­ in-charge in LBC Danao. He was tasked to: (1) “manage and oversee the day to day operation[s] of the branch[;]” (2) keep in custody LBC Danao’s daily cash sales; and (3) to deposit it in the company account. Furthermore, respondent was hired under Batucan’s endorsement of. He acted as her immediate superior. Respondent had also referred to him as “Sir.” 65 There is also no showing that Batucan answered to anyone in LBC Danao. Respondent had to travel to the LBC Head Office to submit her complaint as she had no other superior within LBC Danao to whom she could report Batucan’s acts. Thus, Batucan cannot be deemed to be respondent’s mere co­ employee.

Nonetheless, although Batucan holds a supervisory position, he cannot be deemed to have acted on petitioner’s behalf in committing the acts of sexual harassment. It cannot be assumed that all the illegal acts of managerial staff are authorized or sanctioned by the company, especially when it is committed in the manager’s personal capacity.

In Verdadero v. Barney Autolines Group of Companies Transport, Inc., this Court ruled that constructive dismissal cannot be assumed if an officer of the company wronged an employee, but the employer did not authorize the act…

x x x

[Section 5, R.A. 7877] illustrates that the employer must first be informed of the acts of the erring managerial officer before it can be held liable for the latter’s acts. Conversely, if the employer has been informed of the acts of its managerial staff, and does not contest or question it, it is deemed to have authorized or be complicit to the acts of its erring employee.

In this case, Batucan cannot be considered to have been acting on petitioner’s behalf when he sexually harassed respondent. Thus, respondent cannot base her illegal dismissal complaint against petitioner solely on Batucan’s acts. However, even if petitioner had no participation in the sexual harassment, it had been informed of the incident. Despite this, it failed to take immediate action on respondent’s complaint. Its lack of prompt action reinforced the hostile work environment created by Batucan.

The delay on petitioner’s part is clear. The following are the undisputed sequence of events:

(1) On May  1, 2010, the kissing  incident occurred.

(2) On May 5, 2010, respondent reported the incident to management in the LBC Head Office. Management suggested that instead of resigning, perhaps she could transfer to another branch. Respondent conceded.

(3) On May 8, 2010, she went back to the LBC Head Office with her mother, Araceli Palco, to submit her formal complaint. She also reported the incident to the police.

(4) While respondent was waiting to be transferred to another branch, Araceli Palco noted that Batucan resumed his duties as usual.

(5) On May 14, 2010, Palco tendered her resignation after sensing that management did not act on her complaint. In her resignation letter, she stated that she wanted to look for a more secure workplace. In her exit interview, she ranked the following factors as having caused a strong influence for her to leave: (1) relations with co-workers; (2) job security; (3) how her supervisor relates to her; and (4) her overall perception of the company’s ability to deal fairly with its associates.

(6) On June 18, 2010, Batucan received a Notice to Explain–41 days after respondent reported the incident, and one (1) month after she felt constrained to leave her employment.

(7) On June 19, 2010, Batucan submitted his written explanation. It took another month before the administrative hearing for the complaint was conducted. They heard Batucan only on July 20, 2010, the same date respondent filed her illegal dismissal complaint.

(8) On September 27, 2010, Batucan was suspended for 60 days with last warning-two (2) months after his administrative hearing, and over four (4) months from the time the complaint was filed.80 During the span of the investigation, there was no showing that Batucan was preventively suspended.

Clearly, there was unreasonable delay on petitioner’s part in acting on respondent’s complaint. Despite its allegations, there is no showing that petitioner acted on respondent’s report before they issued Batucan a Notice to Explain. Thus, the formal investigation is deemed to have commenced only 41 days after the incident was reported. Petitioner likewise offered no explanation as to why it took another month before it held an administrative hearing for the case.

Worse, it took petitioner another two (2) months to resolve the matter, even if Batucan’s answers in his administrative hearing did not substantially differ from respondent’s allegations. In his administrative hearing, Batucan had reasoned that he was simply trying to give respondent a “beso[,]” yet he likewise admitted that he does not usually do that with his team or in the office:

Q: Sabi mo sa inyong written explanation noong June 19, 2010, na kayo po ay masaya lamang kaya mo siya hinawakan ang kanyang pisngi [sic] at sabay halik, tama po ba ito?

A: Tama po, kasi sa unang pagkakataon nakapunta ako ng opisina ngmaaga.

Q: Bakit mo naman hinawakan ang kanyang pisngi at halikan mo sana [sic] iyon noong May O1, 201O?

A: Gusto ko lang sana batiin si Ms. Monica sa pamamagitan ng biso


Q: Kagawian na ba sa team ninyo or sa office na mag biso biso?

A: Hindi, pero sa bahay namin, kaming mag asawa at mga anak ko kahit malaki na sila, mag biso biso pa rin sa pag-alis at pag dating.

Q: Ibig sabihin nito hindi rin kagawian ninyo ni Ms. Monica Palco na magbiso biso?

A: Hindi talaga, pero malambing ako sa kanila, sa lahat ng mga associates.

Q: Ganun ka ba talaga pag masaya ka, hahalikan mo ang inyong mga kasamahan sa trabaho kahit walang pahintulot sa kanila, lalo na ang mga babae?

A: Hindi naman, isa lang akong masayahing tao at malambing.

Q: Hindi mo ba naisip na ang inyong ginawa ay isang uri ng sexual harassment?

A: Hindi kasi wala akong intention na halikan ang kanyang labi, at alam ko naman na hindi kami magkasintahan at may tao din. (Emphasis supplied) [/end]

Given these circumstances, the delay in acting on respondent’s case showed petitioner’s insensibility, indifference, and disregard for its employees’ security and welfare. In failing to act on respondent’s complaint with prompt and in choosing to let the resolution of the complaint hang in the air for a long period of time, it had shown that it did not accord her claims the necessary degree of importance, and at best considered it a minor infraction that could wait. Petitioner, it appears, belittled her allegations.

Furthermore, during the investigation, Batucan resumed his duties as usual. In the meantime, respondent consumed her vacation leaves just trying to avoid him while waiting for her transfer to another branch. Petitioner’s acts showed that it was respondent who had to change and adjust, and even transfer from her place of work, instead of Batucan. Petitioner thus cannot claim that it did not create a hostile, unfavorable, unreasonable work atmosphere for respondent.

This Court also notes respondent’s assertion that petitioner had stated how difficult her allegations were to prove because there were no witnesses or evidence of bruises. Respondent’s mother, Araceli, stated in her August 5, 2010 Affidavit:

12. So again, I accompanied her to the main office to submit her resignation letter. At first I told the HR and the legal staff that we arrived to this decision because we have not found any development in our complaint against Mr. Batucan. I told them why I said so, because after the scheduled day of investigation of Mr. Batucan, still he reported for work. “Isnt it that if somebody is under investigation, he or she will no longer report for work?” That if there is a complaint on that employee, there should be preventive suspension? I said to the legal staff and he nod his head, which means yes. And I added, “Did you know how much money we spend for our transportation every time we come here? We will spend P400.00 for two persons and if only one will come, P300.00.” At least the HR and the legal staff know the reasons why Monica file a resignation;

13. Then I proceeded to the office of the Area Head and listen to his opinion about the resignation of Monica. At first, I told him the things I said to the HR and Legal staff. He said to me that it’s not easy to decide about the case of Monica and lvfr. Batucan because there is no evidence such as bruises. So I answered, “Ngano man diay, kon gakson ka ug hagkan, manlagom diay ka? Ngano man gikulata diay ka?” (Translation: “Why would that matter, if you are kissed, would you have bruises?”) No answer from him and he proceeded to another statement, “We have no witness so it[‘]s hard to prove the case.” Again I answered him, “kon magbuhat ka ug binastos sa usa ka babaye, nagkinahanglan diay nga naay magtan-aw? Kanang mga buhata himoon na nimo sa tumang ka pribado nga kanarang kamong duha. Unya mangita ka ug witness? [“] (Translation: “If you are doing lascivious acts to a woman, would you need somebody to see you do it? If you are going to do those acts, you will do it where it is secluded as possible, where there are only two of you. And now, you are looking for a witness?” [)] He will not answer me. He said that even though Monica resigned, he will pursue the case but it will take time. He will investigate the co-workers of Monica if it is true that they have beso-beso. I told him “Unsay beso-beso? (Translation: ‘What [sic] beso-beso’) between man and woman while they are alone? Beso-beso is only acceptable when there is an occasion, for example birthdays, Christmas and New Year, not when no one is around and not in the lips.” [/end]

While petitioner did not admit to making these statements, in its Reply filed with the Labor Arbiter, it stated:

Complainant alleged that according to Mrs. Palco, individual respondent Libradilla told Mrs. Palco that he cannot immediately act on the case because there was no evidence such as bruises and no witnesses. Based on Mrs. Palco’s affidavit however, individual respondent Libradilla never said he cannot immediately act on the case. Without admitting the truth hereof, what individual respondent Libradilla was quoted as saying was that it was not easy to decide the case because there is no evidence such as bruises and furthermore, even with the resignation of complainant, he will pursue the case, but it will take time…

Moreover, complainant accused individual respondent Libradilla as dismissing respondent’s act of kissing complainant on the lips as a mere beso-beso. Based on the abovequoted statement of Mrs. Palco, and without admitting the truth thereof, individual respondent Libradilla assured Mrs. Palco of an investigation. He was never quoted as concluding that respondent Batucan’s acts were mere beso-beso. [/end]

Petitioner was explicit enough in denying the statement that it would not immediately act on the case. Yet it did not expressly deny stating that the case was difficult to decide because there are no bruises or witnesses.

This Court emphasizes that statements suggesting that a case is weak because there are no witnesses or bruises are highly insensitive to victims of sexual harassment. In stating that a sexual harassment case is hard to prove without witnesses or physical manifestations of force, employers discourage their employees from coming forward with sexual harassment incidents. They foster an environment in which employees feel that their word cannot be taken against the word of the perpetrator. In making these statements, the employer lends more credence to the perpetrator, even without the latter having been questioned or having submitted a written explanation. It allows the employee to feel that the sexual harassment complaint’s resolution had already been pre­ determined against him or her.

Indifference to complaints of sexual harassment victims may no longer be tolerated. Recent social movements have raised awareness on the continued prevalence of sexual harassment, especially in the workplace, and has revealed that one of the causes of its pervasiveness is the lack of concern, empathy, and responsiveness to the situation. Many times, victims are

blamed, hushed, and compelled to accept that it is just the way things are, and that they should either just leave or move on.

x x x

Petitioner’s insensibility to respondent’s sexual harassment case is a ground for constructive dismissal. In this instance, it cannot be denied that respondent was compelled to leave her employment because of the hostile and offensive work environment created and reinforced by Batucan and petitioner. She was thus clearly constructively dismissed.

(Citations omitted.)


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