When is there constructive dismissal?

● 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." (Sumifru Phils. Corporation vs. Baya, G.R. No. 188269, April 17, 2017)

●It exists where there is involuntary resignation because of the harsh, hostile and unfavorable conditions set by the employer. (Philippine Span Asia Carriers Corporation vs. Pelayo, G.R. No. 212003, February 28, 2018)

Constructive dismissal contemplates any of the following situations:

1. An involuntary resignation because of the harsh, hostile and unfavorable conditions set by the employer;
2. A demotion in rank and/or a diminution in pay; or
3. A clear discrimination, insensibility or disdain by an employer which becomes unbearable to the employee that it could foreclose any choice by him except to forego his continued employment.

What is the test of constructive dismissal?

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. (McMer Corporation, Inc. vs. NLRC, G.R. No. 193421, June 4, 2014)

When does transfer amount 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)

●It is the employer's prerogative, based on its assessment and perception of its employees' qualifications, aptitudes, and competence, to move them around in the various areas of its business operations in order to ascertain where they will function with maximum benefit to the company. An employee's right to security of tenure does not give him such a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. When his transfer is not unreasonable, nor inconvenient, nor prejudicial to him, and it does not involve a demotion in rank or a diminution of his salaries, benefits, and other privileges, the employee may not complain that it amounts to a constructive dismissal. (Manalo vs. Ateneo De Naga University, G.R. No. 185058, November 09, 2015)

●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)

What are examples of constructive dismissal or forced resignation?

• Denying to the workers entry to their work area and placing them on shifts “not by weeks but almost by month” by
• Reducing their workweek to three days.
• Barring the employees from entering the premises whenever they would report for work in the morning without any justifiable reason, and they were made to wait for a certain employee who would arrive in the office at around noon, after they had waited for a long time and had left.
• Sending to an employee a notice of indefinite suspension which is tantamount to dismissal.
• Imposing indefinite preventive suspension without actually conducting any investigation.
• Changing the employee’s status from regular to casual constitutes constructive dismissal.
• Preventing the employee from reporting for work by ordering the guards not to let her in. This is clear notice of dismissal.
• A diminution of pay is prejudicial to the employee and amounts to constructive dismissal.

No constructive dismissal

●Not every inconvenience, disruption, difficulty, or disadvantage that an employee must endure results in a finding of constructive dismissal. In a case where the employee decried her employers' harsh words as supposedly making for a work environment so inhospitable that she was compelled to resign, this Court explained:

The unreasonably harsh conditions that compel resignation on the part of an employee must be way beyond the occasional discomforts brought about by the misunderstandings between the employer and employee. Strong words may sometimes be exchanged as the employer describes her expectations or as the employee narrates the conditions of her work environment and the obstacles she encounters as she accomplishes her assigned tasks. As in every human relationship, there are bound to be disagreements.

However, when these strong words from the employer happen without palpable reason or are expressed only for the purpose of degrading the dignity of the employee, then a hostile work environment will be created. In a sense, the doctrine of constructive dismissal has been a consistent vehicle by this Court to assert the dignity of labor. (Philippine Span Asia Carriers Corporation vs. Pelayo)