G.R. No. 236161 . January 25, 2023
ALMA C. LUGAWE, PETITIONER, VS. PACIFIC CEBU RESORT INTERNATIONAL, INC., RESPONDENT.

FACTS

Petitioner Alma C. Lugawe was hired by respondent Pacific Cebu Resort International, Inc. (PCRI) as an Accounting Clerk on March 9, 2000 and was later promoted to Human Resource (HR) Officer/Manager on January 1, 2007. Sometime in October 2013, PCRI underwent a takeover by a new owner. Within three days after the new management took over, Lugawe claimed that PCRI removed core Compensation and Benefits functions from her office and transferred these to the Finance Department. These functions included tracking of employees’ leave credits, time keeping, reviewing and monitoring of employees’ attendance records and schedules, implementation of payroll and attendance policies, payroll processing, distribution of payslips, preparation and processing of government-mandated benefits, and handling of employees’ concerns. Lugawe asked for reconsideration, arguing the removal rendered her a “lame duck” HR Officer/Manager. She also lost one of her two HR assistants to the Finance Department, was deprived of discretion in hiring, was denied access to employees’ records, and was required to report to the Finance Department head instead of the General Manager. Other functions like administration of Security Services and supervision over company drivers were also transferred to other departments.
Lugawe claimed these acts were intended to gradually edge her out of employment. She also cited other instances of disdainful treatment, including inaction on her complaint against a co-employee, being accused of incompetence by the General Manager, and being required to report to the office while on sick leave to attend to a leaking faucet. On December 10, 2013, Lugawe took a sick leave until December 12, 2013. Instead of returning to work on December 13, 2013, she filed a Complaint for constructive dismissal. PCRI contended Lugawe was not dismissed but had abandoned her work after her sick leave expired, and that the realignment of her functions was a valid exercise of management prerogative to achieve effective performance, monitoring, and internal control, correcting previous organizational deficiencies. PCRI emphasized Lugawe retained her title, salary, and benefits, and that it later appointed her former HR Assistant to the same position with its reduced functions.

ISSUE

Whether or not petitioner Alma C. Lugawe was constructively dismissed by respondent PCRI.

RULING

No, the Supreme Court ruled that petitioner Alma C. Lugawe was not constructively dismissed but voluntarily resigned from her employment. The Court affirmed the findings of the Court of Appeals. Constructive dismissal exists when an act of clear discrimination, insensibility, or disdain by an employer has become so unbearable that it could foreclose any choice by the employee except to forego continued employment. The test is whether a reasonable person in the employee’s position would feel compelled to give up their position under the circumstances. The employer’s actions must be proven to be unjustified and motivated by ill will.
In this case, the transfer or removal of certain functions from Lugawe’s HR department was a legitimate exercise of management prerogative. The employer has the right to regulate, according to its own discretion and judgment, all aspects of employment, including work assignment, working methods, processes, and the reassignment of employees. The changes were implemented in good faith by the new management to streamline operations, correct previous organizational deficiencies, and establish proper checks and balances. Lugawe retained her position as HR Officer/Manager, her salary, and her benefits. She was not demoted. The fact that her former assistant was appointed to her vacated position with the same reduced functions confirms the restructuring was genuine and not directed solely at her.
Furthermore, the other incidents cited by Lugawe, such as the altercation with a co-employee or being asked to report while on sick leave for a minor issue, while perhaps inconvenient or unpleasant, were isolated and not of such severity as to constitute unbearable working conditions amounting to constructive dismissal. Her failure to report for work after her sick leave and her subsequent filing of the complaint, without giving the employer an opportunity to address her grievances, indicated she had chosen to sever her employment. Therefore, no constructive dismissal took place.