The Supreme Court has ruled that demotion, verbal abuse, and indifferent behavior by an employer that forces employees to resign can constitute constructive illegal dismissal.
In a 20-page decision, the SC’s Second Division found that an employee of a car company was constructively dismissed.It said that constructive dismissal occurs when an employee feels compelled to resign due to an employer creating intolerable working conditions.
“The petitioner’s resignation was brought about by respondents’ acts of disdain and hostility toward him, rendering his continued employment with respondents impossible, nay, unbearable,” the SC said in its ruling which was promulgated in April but released only yesterday.
According to the SC, the petitioner was suspended in 2015 for seven days due to frequent absences. He became a regular employee in 2010 and was tasked with selling cars, products, and services.
During a meeting on his suspension, the petitioner was accompanied by his siblings, who acted as his legal counsel.
The company’s president publicly humiliated him for doing this.
He was later transferred to another team, and many of his accounts were taken away without explanation. The SC said that his new boss also asked him if he planned on resigning.
Due to this, he resigned in 2016. He later filed a complaint with the Labor Arbiter against the company and its officials.
Although the Labor Arbiter ruled in the employee’s favor, the Court of Appeals ruled in favor of the company, finding that the employee voluntarily resigned. This prompted the petition before the High Court.
In its ruling, the SC said that the employee had no intention of resigning from the company if not for the company’s hostile and disdainful actions. Due to this, it ruled that the company president and various managers were liable.
“As such, they should be solidarily liable to the petitioner for the money claims, damages, and interest due him,” the SC said.
The court directed them to pay the employee full backwages from April 2016 until the finality of the decision, as well as separation pay equivalent to one month’s pay for every year of service, with a fraction of at least six months considered as one year from 2009 to the finality of the decision.
They were also directed to pay commissions in the amount of P83,000 as well as moral and exemplary damages in the amount of P70,000.
Aside from this, the court also directed them to pay attorney’s fees equivalent to 10% of the total monetary reward, with a legal interest rate of 6% per annum until the finality of the decision.
