Torreda vs. Investment and Capital Corporation of the Philippines

A resignation is not voluntary, and amounts to constructive dismissal, where the employer presents a prepared resignation letter, insists on its signing under threat of termination, and the employee's acts before and after the purported resignation show no intention to relinquish employment. The employer bears the burden of proving the genuineness and due execution of the resignation when the employee denies it.

Jonald O. Torreda was employed by Investment and Capital Corporation of the Philippines as IT Senior Manager, tasked to supervise the IT Department and manage IT-related projects, and he reported to William M. Valtos, Jr., the Officer-in-Charge of the IT Department and Group President of the Financial Service. The dispute concerns whether Torreda's separation from employment was a voluntary resignation or constructive dismissal, a determination governed by the Labor Code's protection of security of tenure and the standards for voluntariness of resignation.

Jonald O. Torreda was hired by Investment and Capital Corporation of the Philippines on May 17, 2010 as an IT Senior Manager with a monthly salary of P93,200.00. He was tasked to supervise his team in the Information Technology Department and manage IT-related projects, and he reported to William M. Valtos, Jr., the Officer-in-Charge of the IT Department and the Group President of the Financial Service of respondent. Torreda claimed that he instituted reforms because the system was outdated and the staff members were unproductive, and that he had a falling out with senior management after the Senior Vice President for the Pueblo De Oro Development Corporation wanted to interfere with the functions of the IT department. In November 2011, respondent decided to create an IT-SAP project without Torreda's approval.

On January 5, 2012, Torreda went to Valtos's office for a closed-door conference meeting supposedly regarding his IT projects. In that meeting, Valtos discussed another matter and told Torreda that if his performance were appraised at that time, Valtos would give him a failing grade because of negative feedback from senior management and the IT staff, even though Torreda's performance appraisal was not due until May 2012. Valtos then gave Torreda a prepared resignation letter and asked him to sign it; otherwise, the company would terminate him. The letter indicated that the resignation would be effective on February 4, 2012. Torreda refused to sign, but Valtos did not accept the refusal and edited the resignation letter. Torreda thought of leaving the room by making an excuse to go to the restroom, but Valtos and respondent's legal counsel followed him. Because of Valtos's insistence, Torreda placed his initials on the resignation letter to show that it was not official. Valtos then accompanied Torreda to his room to gather his belongings and escorted him out of the building. Torreda was not allowed to report for work anymore, and his company e-mail address was deactivated.

Six days after the incident, Torreda filed a complaint for illegal dismissal (constructive), moral and exemplary damages, and attorney's fees before the Labor Arbiter. Respondent countered that Torreda was not illegally dismissed because he voluntarily resigned. It claimed that Torreda was ineffective as an IT manager and that his staff complained about his inefficiencies; that he failed to integrate himself into the company due to his lack of enthusiasm and cooperation at work and did not respond to queries and requests; and that a female employee resigned because she felt uncomfortable with him. Respondent stated that while Valtos admitted giving a resignation letter to Torreda on January 5, 2012, Torreda himself edited the letter to include courteous words and voluntarily signed it. Valtos also admitted that Torreda's performance appraisal was not due until May 2012.

The Labor Arbiter found that Torreda was constructively dismissed. It held that Valtos admitted giving a prepared resignation letter and telling Torreda to resign or else respondent would terminate him. It also found that respondent failed to present substantial evidence that Torreda voluntarily resigned because Torreda had no prior contemplation of resigning, Valtos gave a performance appraisal even though it was not yet due, the resignation letter was effective February 4, 2012 but Torreda was barred from the company as early as January 5, 2012, and Torreda immediately filed the constructive dismissal case after signing the resignation letter. The NLRC affirmed the Labor Arbiter's ruling, finding that Torreda did not voluntarily resign and that it was Valtos who presented a prepared resignation letter for Torreda to sign. The CA, however, found that Torreda voluntarily resigned because he willingly signed the resignation letter, edited it, and added words of courtesy; it also found it improbable that Torreda was intimidated by Valtos due to his managerial position and high educational attainment, and that Torreda failed to prove that his consent to the resignation was vitiated.

• Grave Abuse of Discretion: Petitioner argued that the CA gravely erred when it granted respondent's petition for certiorari and denied petitioner's motion for reconsideration without any categorical findings of grave abuse of discretion.
• Factual Findings and Substantial Evidence: Petitioner maintained that the CA committed reversible error in reversing the factual findings of the Labor Arbiter and the NLRC considering that their decisions and resolution were supported by clear and substantial evidence.
• Voluntariness of Resignation: Petitioner insisted that the CA erred in finding that his resignation was voluntary because the undisputed facts and circumstances of his alleged resignation clearly showed that he did not resign nor intend to resign from his job.
• Money Claims: Petitioner argued that the CA erred in ruling that his money claims have no legal foundation.
• Forced Resignation Circumstances: Petitioner contended that he was forced to resign; that respondent had no legal or factual basis to terminate his employment; that Valtos gave him a performance appraisal even though it was not yet due; that Valtos forced him to sign the resignation letter; that he attempted to escape but was accompanied to the comfort room by Valtos and respondent's legal counsel; that he placed his initials on the resignation letter so that Valtos would let him go; that on the same night of January 5, 2012, he was instructed to get his belongings and was barred from the premises even though the resignation was effective only on February 4, 2012; and that he immediately filed the complaint before the Labor Arbiter to show that he did not resign.
• Exceptional Circumstances and No Benefit: In reply, petitioner argued that there are exceptional circumstances when the Court may entertain questions of fact, such as when there are conflicting findings of fact; and that there was no benefit to him in resigning because he was not even offered separation benefits, making it illogical for him to voluntarily sign the resignation letter.

• Factual Issues Under Rule 45: Respondent countered that the issues raised by petitioner are factual in nature and cannot be tackled in a petition for review on certiorari under Rule 45 of the Rules of Court.
• Voluntary Resignation: Respondent argued that petitioner voluntarily signed the resignation letter because he substantially edited it and even placed words of courtesy in favor of respondent.
• No Coercion: Respondent maintained that petitioner's exhaustion when he signed the resignation letter is not tantamount to coercion, and that petitioner himself admitted that he signed the resignation letter.
• No Illegal Dismissal: Respondent countered that petitioner was not illegally dismissed because he voluntarily resigned; it claimed petitioner was ineffective as an IT manager, his staff complained about his inefficiencies, he failed to integrate himself due to lack of enthusiasm and cooperation, he did not respond to queries and requests, and a female employee resigned because she felt uncomfortable with him.
• Improbability of Coercion: Citing St. Michael Academy vs. NLRC, respondent argued that since petitioner edited the resignation letter and added words of courtesy, it was improbable for him to involuntarily sign it; it further asserted that it was impossible to coerce petitioner because he had a managerial position and high educational status.
• Separation Pay as Indicium: Respondent cited Habana vs. NLRC, where significant separation pay received by the employee was considered an indicium of voluntary resignation.

• Grave Abuse of Discretion: Whether the CA erred in granting respondent's petition for certiorari and denying petitioner's motion for reconsideration without categorical findings of grave abuse of discretion.
• Factual Findings and Substantial Evidence: Whether the CA erred in reversing the factual findings of the Labor Arbiter and the NLRC despite their being supported by clear and substantial evidence.
• Constructive Dismissal and Voluntariness of Resignation: Whether petitioner was constructively dismissed or voluntarily resigned.
• Money Claims and Damages: Whether petitioner's money claims have legal foundation, including the awards of backwages, separation pay, moral damages, and exemplary damages.

• Grave Abuse of Discretion: Yes, insofar as the CA decision was reversed and set aside. The CA's factual conclusion of voluntary resignation was contrary to the LA and NLRC and contradicted by evidence on record, bringing the case within recognized exceptions to the rule against factual review.
• Factual Findings and Substantial Evidence: Yes. The CA erred in reversing the LA and NLRC findings because the circumstances before and after the purported resignation established forced resignation, not voluntariness.
• Constructive Dismissal and Voluntariness of Resignation: Yes. Petitioner was constructively dismissed; his resignation was involuntary and not genuine because he was given no viable option but to sign the prepared resignation letter or be terminated.
• Money Claims and Damages: Partly. Backwages and separation pay in lieu of reinstatement were reinstated, but moral and exemplary damages were deleted for lack of proof of bad faith or wanton, oppressive, or malevolent conduct.

• Grave Abuse of Discretion: The general rule limits the Court in a petition for review on certiorari to errors of law, but exceptions exist, including when the findings of absence of facts are contradicted by the presence of evidence on record and when the CA's findings are contrary to those of the LA and NLRC. Both exceptions existed because the CA, LA, and NLRC had different appreciations of the evidence on constructive dismissal. The Court therefore resolved the factual dispute. On the merits, the CA's reversal could not stand because the evidence showed forced resignation.
• Factual Findings and Substantial Evidence: The LA and NLRC found that Valtos admitted giving a prepared resignation letter and telling petitioner to resign or be terminated; that petitioner had no prior contemplation of resigning; that the appraisal was prematurely raised; that petitioner was barred from the company on January 5, 2012 despite the letter's February 4, 2012 effectivity; and that petitioner immediately filed the complaint. These findings were supported by the record and contradicted the CA's conclusion that petitioner voluntarily resigned. The CA's reliance on petitioner's editing of the letter and his managerial and educational status did not overcome the surrounding circumstances showing lack of voluntariness.
• Constructive Dismissal and Voluntariness of Resignation: Constructive dismissal is an involuntary resignation resorted to when continued employment is rendered impossible, unreasonable, or unlikely, or when there is demotion in rank or diminution in pay; it exists when a clear act of discrimination, insensibility, or disdain by the employer makes continued employment unbearable. The core is the gratuitous, unjustified, or unwarranted nature of the employer's action. Under Fortuny Garments/Johnny Co vs. Castro, the intention to relinquish office must concur with the overt act of relinquishment, and the employee's acts before and after the alleged resignation must be considered. If the employer presents a resignation document and the employee denies its authenticity and due execution, the employer bears the burden of proving due execution and genuineness. Here, before the resignation, petitioner had no plan to resign, had a satisfactory prior rating, was not due for appraisal until May 2012, was given only the options of resignation or termination, refused to sign, was followed when he tried to leave, and placed only his initials. After the resignation, he was immediately barred from the premises despite the February 4, 2012 effectivity date, was given no separation pay or benefit, had his e-mail deactivated, was not allowed to report for work, and filed a complaint six days later. These circumstances showed that any reasonable person in his position would have felt compelled to give up his position. His editing of the letter and educational attainment were immaterial; St. Michael Academy vs. NLRC was not applicable because of the numerous circumstances showing coercion. Respondent failed to prove the genuineness and due execution of the resignation.
• Money Claims and Damages: Respondent failed to prove any just cause for dismissal under Article 282 of the Labor Code (now Article 285). Its allegations of ineffectiveness, staff complaints, lack of integration, lack of enthusiasm and cooperation, failure to respond to queries, and the female employee's discomfort were unsupported by substantial evidence. Even loss of trust and confidence, available for managerial employees, was not invoked through termination proceedings, reinforcing that respondent had no genuine ground to dismiss petitioner. Because respondent had no legitimate basis to terminate him, it could not force him to resign; the resignation letter was struck down as involuntary. The NLRC's award of backwages and separation pay in lieu of reinstatement was therefore reinstated. However, moral damages are recoverable only when dismissal is attended by bad faith or fraud, is oppressive to labor, or is contrary to good morals, customs, or public policy, and exemplary damages are recoverable only when dismissal is wanton, oppressive, or malevolent. The LA and NLRC reasons—deterrence and petitioner's anxiety—did not show bad faith, fraud, or wanton, oppressive, or malevolent conduct. The moral and exemplary damages were thus deleted.

• Constructive Dismissal — Constructive dismissal is an involuntary resignation resorted to when continued employment is rendered impossible, unreasonable, or unlikely, or when there is a demotion in rank and/or diminution in pay. It exists when there is a clear act of discrimination, insensibility, or disdain by an employer that makes continued employment unbearable. The core is the gratuitous, unjustified, or unwarranted nature of the employer's action. The Court applied this doctrine because petitioner was forced to sign a prepared resignation letter under threat of termination and was immediately barred from work.
• Forced Resignation as Dismissal in Disguise — A resignation is not voluntary when the employer presents a prepared resignation letter and insists on its signing under threat of termination, leaving the employee no viable option. Such a resignation is a dismissal in disguise. The Court struck down petitioner's resignation because he was given only the choice to resign or be terminated.
• Voluntariness of Resignation — The intention to relinquish an office must concur with the overt act of relinquishment. The employee's acts before and after the alleged resignation must be considered. If the employer introduces a resignation document purportedly executed by the employee and the employee specifically denies its authenticity and due execution, the employer bears the burden of proving due execution and genuineness. The Court found the resignation involuntary based on the circumstances before and after signing.
• Reasonable Person Test — 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. The Court applied this test and concluded that petitioner had no choice but to sign the prepared resignation letter.
• Filing Complaint for Illegal Dismissal Negates Abandonment — The filing of a complaint for illegal dismissal is inconsistent with abandonment of employment; an employee who takes steps to protest dismissal cannot logically be said to have abandoned his work. The Court relied on this doctrine because petitioner filed his complaint six days after the purported resignation.
• Just Causes for Dismissal — Under Article 282 of the Labor Code (now Article 285), an employer must prove a just cause for dismissal. Loss of trust and confidence is a valid ground for managerial employees, but it must be invoked through proper termination proceedings. Respondent failed to prove any just cause and did not initiate termination on loss of trust and confidence.
• Moral and Exemplary Damages in Dismissal — Moral damages are recoverable when dismissal is attended by bad faith or fraud, constitutes an act oppressive to labor, or is done contrary to good morals, good customs, or public policy. Exemplary damages are recoverable when dismissal is done in a wanton, oppressive, or malevolent manner. The Court deleted both awards because the reasons given did not establish these requisites.
• Exceptions to Factual Review in Rule 45 — Although a petition for review on certiorari is generally limited to errors of law, the Court may resolve factual questions in recognized exceptions, including when findings of absence of facts are contradicted by evidence on record and when the CA's findings are contrary to those of the LA and NLRC. The Court applied these exceptions to resolve the constructive dismissal dispute.

• "Constructive dismissal is an involuntary resignation resorted to when continued employment is rendered impossible, unreasonable or unlikely; or when there is a demotion in rank and/or a diminution in pay." — This is the Court's canonical definition of constructive dismissal, applied to find that petitioner was forced to resign.
• "the intention to relinquish an office must concur with the overt act of relinquishment. The act of the employee before and after the alleged resignation must be considered to determine whether in fact, he or she intended to relinquish such employment. If the employer introduces evidence purportedly executed by an employee as proof of voluntary resignation and the employee specifically denies the authenticity and due execution of said document, the employer is burdened to prove the due execution and genuineness of such document." — This passage from Fortuny Garments/Johnny Co vs. Castro supplies the controlling procedure for determining voluntariness and the employer's burden of proof.
• "Any reasonable person in the petitioner's position would have felt compelled to give up his position." — This states the reasonable-person test applied to the circumstances surrounding petitioner's signing of the prepared resignation letter.
• "Under the law, there are no shortcuts in terminating the security of tenure of an employee." — This encapsulates the Court's holding that respondent could not use a forced resignation to circumvent the requirement of a just cause for dismissal.

• SHS Perforated Materials, Inc. vs. Diaz, 647 Phil. 580 (2010) — Relied on for the rule that constructive dismissal exists when an act of clear discrimination, insensibility, or disdain by the employer becomes so unbearable that the employee has no choice but to forego continued employment.
• Tuason vs. Bank of Commerce, 699 Phil. 171 (2012) — Cited for the principle that the law resolves constructive dismissal in favor of employees to protect their rights from coercive acts of the employer.
• Fortuny Garments/Johnny Co vs. Castro, 514 Phil. 317 (2005) — Controlling precedent on the procedure for determining voluntariness of resignation and the employer's burden to prove due execution and genuineness of a resignation document.
• St. Michael Academy vs. NLRC, 354 Phil. 491 (1998) — Cited by respondent but distinguished; the Court found it inapplicable because the present case had numerous circumstances before and after the signing showing forced resignation.
• Habana vs. NLRC, 359 Phil. 65 (1998) — Cited by respondent but distinguished; the Court found no financial consideration or separation pay given to petitioner, unlike the significant separation pay in Habana that indicated voluntary resignation.
• GSP Manufacturing Corp. vs. Cabanban, 527 Phil. 452 (2006) — Cited for the doctrine that filing a complaint for illegal dismissal is inconsistent with abandonment of employment.
• Philippine Wireless Inc. (Pocketbell) vs. NLRC, 369 Phil. 907 (1999) — Cited for the definition of constructive dismissal as involuntary resignation due to impossible, unreasonable, or unlikely continued employment, or demotion/diminution in pay.
• Montederamos vs. Tri-Union International Corporation, 614 Phil. 546 (2009) — Cited for constructive dismissal arising from a clear act of discrimination, insensibility, or disdain by the employer.
• St. Paul College, Pasig vs. Mancol, G.R. No. 222317, January 24, 2018 — Cited for the core of constructive dismissal as the gratuitous, unjustified, or unwarranted nature of the employer's action.
• Casco vs. NLRC, G.R. No. 200571, February 19, 2018 — Cited for the rule that loss of trust and confidence as a ground for dismissal is premised on the employee holding a position whose functions may only be performed by someone enjoying the trust and confidence of management.
• Symex Security Services, Inc. vs. Rivera, Jr., G.R. No. 202613, November 8, 2017 — Cited for the requisites of moral and exemplary damages in cases of dismissal.
• Gepulle-Garbo vs. Spouses Garabato, 750 Phil. 846 (2015) — Cited for the general rule that the Court is not a trier of facts in a petition for review on certiorari.
• Carbonell vs. Carbonell-Mendes, 762 Phil. 529 (2015) — Cited for the exceptions to the rule against factual review.

• Article 282, Labor Code (now Article 285) — Provides the just causes for dismissing an employee. The Court held that respondent failed to prove any just cause for petitioner's dismissal; its allegations of ineffectiveness and staff complaints were unsupported by substantial evidence, and it did not initiate termination on loss of trust and confidence despite petitioner being a managerial employee.
• Rule 45, Rules of Court — Governs petitions for review on certiorari, which are generally limited to errors of law. The Court recognized exceptions and resolved the factual issue of constructive dismissal because the findings of the CA were contrary to those of the LA and NLRC and were contradicted by evidence on record.

Peralta (Chairperson), Leonen, A. Reyes, Jr., and J. Reyes, Jr.