G.R. No. 78997 August 31, 1989
VERONICA B. REYES, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and KONG HUA SCHOOL, respondents.

FACTS

Petitioner Veronica Reyes, a teacher at Kong Hua School since 1972, went on maternity leave in August 1982. Due to post-delivery complications, she requested an indefinite leave extension, which the school disapproved. On September 13, 1983, she submitted a letter tendering her resignation, explicitly stating it was “as advised and wished by the administration” on the condition she would be given re-employment priority when ready to return to service. She also urgently requested her accrued vacation pay, noting she needed it badly. Two weeks later, her husband, claiming her illness had relapsed, signed another resignation letter on her behalf, backdated to October 15, 1982, and collected her vacation pay.
In June 1985, having recovered, Reyes sought reinstatement per the school’s alleged promise, but was refused. She filed a complaint for reinstatement, backwages, and benefits. The Labor Arbiter and the NLRC dismissed her claim, ruling her resignation was voluntary, thus severing the employer-employee relationship and negating any entitlement to separation pay.

ISSUE

Whether the National Labor Relations Commission committed grave abuse of discretion in ruling that Reyes voluntarily resigned and was thus not entitled to separation pay or reinstatement.

RULING

Yes, the NLRC committed grave abuse of discretion. The Supreme Court found the resignation was involuntary, procured by the school under coercive circumstances. Reyes’s initial letter clearly indicated the resignation was submitted as “advised and wished by the administration” and was conditional upon re-employment priority, coupled with a desperate need for her withheld vacation pay. This context proves the school exploited her medical and financial vulnerability to avoid its legal obligations.
The school could not lawfully dismiss Reyes under Article 284 of the Labor Code for illness, as her condition was not shown to be prejudicial to herself or others, and such dismissal would have required payment of separation pay for her ten years of service. By inveigling her to resign, the school sought to evade this liability. The subsequent letter signed by her husband was not binding, as there was no proof she authorized him to waive her conditional terms or her rights. The school’s subsequent refusal to re-hire her, despite its promise, constituted illegal dismissal.
Consequently, Reyes is entitled to reinstatement without loss of seniority and three years’ backwages from her 1985 re-application. If reinstatement is not feasible, the school must pay separation pay equivalent to one month’s salary per year of service from 1972 to 1982, in addition to backwages. The resolutions of the NLRC and Labor Arbiter were reversed and set aside.