Understanding Constructive Dismissal: Your Rights Explained

Author: Atty. Angeli Andan

Q: How will I know if I am constructively dismissed by my employer?

Definition of Constructive Dismissal

In the case of St. Paul College Pasig vs. Mancol, the Court provided for different scenarios when constructive dismissal arise, such as: 

1. when continued employment is rendered impossible, unreasonable or unlikely; 
2. when there is a demotion in rank and/or a diminution in pay; or 
3. when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee.

The Court also provided that there was constructive dismissal in the following cases:

1. when the employer appointed another person to the position which the employee then still occupied, the latter felt he was being eased out and this perception made him decide to leave the company (Peñaflor v. Outdoor Clothing Manufacturing Corp.);
2. the employee was forced to resign because his salary was abruptly cut, his living conditions were unbearable, he was made to do illegal acts for his employer and he was reported as abscondee when he filed a complaint before the Philippine consulate (International Skill Development, Inc. v. Montealto, Jr); and 
3. when the employer wanted the employee to sign the prepared resignation letter which contained his name and details, so that it could effortlessly get rid of him. (Torreda v. Investment and Capital Corporation of the Philippines)

The core of constructive dismissal is the gratuitous, unjustified, or unwarranted nature of the employer’s action. In sum, constructive dismissal is dismissal in disguise.

Test of Constructive Dismissal

Did the employee feel compelled to give up his position under the circumstances? If yes, then the employee is likely to have been constructively dismissed by the employer. 

Did the employer act fairly in exercising a prerogative to discipline its employee given the circumstances? If no, then the employee is likely to have been constructively dismissed by the employer. 

What happens if the employee has been constructively dismissed

The court in Lagamayo vs. Cullinan Group held that an employee who has been constructively dismissed “is entitled to reinstatement without loss of seniority rights, full backwages, inclusive of allowances, and other benefits or their monetary equivalent, computed from the time his compensation was withheld from him up to the time of his actual reinstatement.” If reinstatement is not possible, then a separation pay in addition to the employee’s full backwages, allowances and other benefits is awarded.

In sum, for there to be constructive dismissal, the employee must first discharge the burden to prove the fact of dismissal by substantial evidence. Only then when the dismissal is established that the burden shifts to the employer to prove that the dismissal was for just and/or authorized cause, as held in Galang v. Boie Takeda Chemicals, Inc. 

Want to know if you are constructively dismissed? Contact us today at info@baisandanlaw.com. You can also reach us via cellphone number at 0915 968 2503 or at our telephone number (045) 281 0164.