G.R. No. 227718 . November 11, 2021.
PETER ANGELO N. LAGAMAYO, PETITIONER, VS. CULLINAN GROUP, INC., AND RAFAEL M. FLORENCIO, RESPONDENTS.

FACTS

Petitioner Peter Angelo N. Lagamayo was hired as a workshop supervisor by respondent Cullinan Group, Inc. (CGI) on April 2, 2007. In 2011, CGI called his attention to violations in his workshop, including gambling, drinking alcohol, and theft of gold. On February 8, 2011, he was placed under preventive suspension. On February 11, 2011, he received a Notice to Explain charging him with breach of trust and confidence, dishonesty, improper conduct, and negligence. He submitted a written explanation denying the charges on February 18, 2011. In a March 1, 2011 hearing, CGI found him guilty. Petitioner then implored to be allowed to resign to keep his record clean, which CGI agreed to but declined to give separation pay. On March 3, 2011, petitioner requested the lifting of his preventive suspension, which was unheeded. On March 11, 2011, he wrote a letter signifying his intention to resign but requested payment of unpaid wages, fringe benefits, and separation pay. On April 4, 2011, CGI told him to submit his resignation letter immediately. On July 11, 2011, petitioner filed a complaint for illegal dismissal, alleging constructive dismissal as his preventive suspension lasted more than 30 days without reinstatement and the charges were unfounded. Respondents maintained petitioner was terminated for just cause due to loss of trust and confidence, alleging he was negligent or complicit in the workshop irregularities, and they had filed a criminal complaint for Qualified Theft against him (later dismissed as to him). The Labor Arbiter dismissed the complaint. The NLRC affirmed but modified, awarding wages and benefits from March 11 to July 11, 2011. The Court of Appeals held petitioner was constructively dismissed but for a just cause (loss of trust and confidence) and affirmed the NLRC.

ISSUE

Whether the Court of Appeals erred in ruling that petitioner was constructively dismissed yet dismissed for a just cause based on loss of trust and confidence.

RULING

The Supreme Court granted the petition. It clarified that the existence of a just cause for termination under Article 297 of the Labor Code is inherently incompatible with the principle of constructive dismissal. Constructive dismissal occurs when an employee resigns due to the employer’s creation of a hostile or intolerable work environment, rendering continued employment impossible, equivalent to illegal dismissal. A finding of constructive dismissal necessarily implies the absence of a valid cause for termination. Therefore, the CA’s finding that petitioner was constructively dismissed but for a just cause is a legal impossibility. The Court found petitioner was constructively dismissed. His preventive suspension exceeded the 30-day period under the Labor Code without reinstatement, and CGI’s continued inaction and demand for his resignation after he signified his intent to resign but with conditions created an intolerable situation forcing him to quit. Since constructive dismissal is deemed illegal, petitioner is entitled to reinstatement without loss of seniority rights and full backwages, inclusive of allowances and other benefits, from the time of his dismissal until actual reinstatement. If reinstatement is no longer viable, separation pay equivalent to one month salary for every year of service shall be paid in addition to full backwages.