G.R. No. 153904 ; January 17, 2005
PNOC-EDC, NAZARIO VASQUEZ, President; MARCELINO TONGCO, Acting Manager Project Operations & Manager, Project Development; JESUS QUEVENCO, JR., Resident Manager, SNGP/PIPE; and REMEGIO B. CORNELIO, Human Resource Officer, SNGP-PIPE, petitioners, vs. FREDERICK V. ABELLA, respondent.

FACTS

Frederick Abella was a regular Security Assistant at PNOC-EDC. In 1990, he was terminated due to a company-wide reorganization that allegedly abolished his position. He filed an illegal dismissal case. The Labor Arbiter ruled in his favor, ordering reinstatement with backwages. Pending appeal, the arbiter issued a reinstatement order. PNOC-EDC reinstated Abella “in the payroll” as a General Services Assistant, a position they claimed was equivalent. Abella protested this assignment. He was later laterally transferred to another equivalent position and was eventually detailed to perform security functions. In 1993, the parties settled the original illegal dismissal case, with Abella receiving a monetary sum and both parties filing a Joint Motion to Dismiss.
Subsequently, Abella filed two new complaints for unfair labor practice and illegal dismissal. He alleged that after the settlement, the company subjected him to harassment, including unjustified transfers and the withholding of his salary, which forced him to resign. The Labor Arbiter dismissed these new complaints, finding the transfers to be valid management prerogatives and that Abella had abandoned his job. The NLRC reversed this, finding constructive dismissal. The Court of Appeals affirmed the NLRC’s finding of illegal dismissal but deleted the award of damages.

ISSUE

Whether or not respondent Frederick Abella was constructively dismissed after the settlement of his first illegal dismissal case.

RULING

Yes, the Supreme Court affirmed that Abella was constructively dismissed. The legal logic hinges on the employer’s conduct after the settlement of the first case. While management has the prerogative to transfer employees, this right must be exercised in good faith and without grave abuse of discretion, meaning the transfer should not be unreasonable, inconvenient, or prejudicial to the employee. The Court found that PNOC-EDC’s actions constituted bad faith. After the settlement, Abella was transferred multiple times to distant assignments without clear necessity, and his salaries were unreasonably withheld, forcing him to go on leave without pay. These acts created an intolerable work environment aimed at forcing his resignation.
The settlement of the first case did not give the employer license to harass the employee. The subsequent transfers and withholding of pay were not done in the ordinary course of business but were retaliatory, constituting constructive dismissal. Constructive dismissal exists when an act of clear discrimination, insensibility, or disdain by the employer renders the employee’s continued work impossible, forcing resignation. Here, the employer’s actions demonstrated insensibility and disdain, making Abella’s continued employment unreasonable. Therefore, he was illegally dismissed, entitling him to reinstatement and backwages.