Cases: Resignation

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What is a Labor Law Case or Labor Jurisprudence? A Labor Law Case or Labor Jurisprudence is a decision/resolution on a labor dispute by the Supreme Court of the Philippines. Per Article 8 of the Civil Code, judicial decisions applying or interpreting the laws or the Constitution shall form part of the legal system of the Philippines. 

1. Concept and effects of tendering a resignation letter

Philippine National Construction Corporation v. NLRC, PNCC Toll Operations Employees and Workers Union (PNCC-TOEWU)

G.R. No. 117240, 02 October 1997

[The employer] and [the Company Union] entered into a Collective Bargaining Agreement far a period of five (5) years from February 1, 1990 to January 30, 1995. It is provided in the collective bargaining agreement (CBA) that a mid-year bonus shall be granted to the employees who are covered by the bargaining unit as of June 1 of the covered year, viz.:

Sec. 2. Mid-Year Bonus — The COMPANY agrees to grant to all the employees covered by the bargaining unit a mid-year bonus of one (1) month basic salary to be given on or before June 1, each year. The mid-year bonus for 1990 shall be granted to employees who are covered by the bargaining unit including those employees who already attained the status of a regular employee as of June 1, 1990.

Due to financial difficulties, however, between April and May, 1991, [the employer] implemented a Voluntary Separation Program. The individual complainants took advantage of the offer and, after signing individual quitclaims, were paid an equivalent of one-and-a-half month’s pay for every year of credited service as well as a 30-day advance salary. Consequently, they were not given any mid-year bonus because as of June 1, 1991, [the employer] no longer considered them as its employees.

[The Labor Arbiter ruled in favor of the employees. On appeal, the National Labor Relations Commission ruled in favor the employees.]

The pivotal question determinative of this controversy is whether the complainants are entitled to the mid-year bonus provided in the CBA.

[The employer] contends that since complainants voluntarily separated themselves from [the employer] before June 1, 1991, they are no longer entitled to the mid-year bonus.

[SC RESOLUTION]

We [the Supreme Court] find merit in [the employer’s] contention.

There is no dispute that the complainants freely applied for the benefits under [the employer’s] voluntary separation program. As such, they effectively resigned from their respective positions.

Resignation is defined in Section II, Rule XIV, Book V of the Revised Rules Implementing the Labor Code, as a formal pronouncement or relinquishment of an office, and once accepted the employee no longer has any right to the job. It therefore goes without saying that resignation terminates the employer-employee relationship. From the foregoing discussion, it is clear that the employer-employee relationship between the complainants and [the employer] ceased as of May 1991, a fact which was admitted by the complainants in their comment. As such they were no longer employees of the [the employer] as of June 1, 1991, the cut-off period necessary for entitlement to the mid-year bonus.

We have held that once an employee resigns and executes a quitclaim in favor of the employer, he is thereby estopped from filing any further money claims against the employer arising from his employment. Such money claims may be given due course only when the voluntariness of the execution of the quitclaim or release is put in issue, or when it is established that there is an unwritten agreement between the employer and employee which would entitle the employee to other renumeration or benefits upon his or her resignation. In this case, the voluntariness of the execution of the quitclaim was never put in issue and, as such, must be treated as a valid and binding agreement between the complainants and [the employer].

Complainants further argue that when they executed the quitclaim they had no intention of waiving their mid-year bonus. In signing the quitclaim, however, the necessary implication is that the release would cover any and all claims arising out of the employment relationship.

From the foregoing, there is no doubt that the complainants voluntarily resigned from [the employer] for a valuable consideration. The quitclaim they executed in favor of [the employer] amounts to a legitimate compromise agreement. We, therefore, sustain the validity of said agreement.

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2. When a resignation is unconditional

Pascua v. Bank Wise, Inc.

G.R. No. 191460, 31 January 2018

There is constructive dismissal when an employee is compelled by the employer to resign or is placed in a situation where there would be no other choice but to resign. An unconditional and categorical letter of resignation cannot be considered indicative of constructive dismissal if it is submitted by an employee fully aware of its effects and implications.

Pascua [the “employee”] was employed by Bankwise as its Executive Vice President for Marketing on July 1, 2002.

On September 29, 2004, Philippine Veterans Bank and Bankwise entered into a Memorandum of Agreement for the purchase of Bankwise’s entire outstanding capital stock. On January 12, 2005, Philippine Veterans Bank allegedly assumed full control and management of Bankwise. Philippine Veterans Bank allegedly elected new members of the Board of Directors and appointed a new set of officers, including the President and Chief Operating Officer.

Pascua was reassigned to a Special Accounts Unit but his duties, functions, and responsibilities were not clearly delineated or defined.

On February 3, 2005, Pascua was informed by Roberto A. Buhain (Buhain), President of Bankwise, that as part of the merger or trade-off agreement with Philippine Veterans Bank, he should tender his resignation. Buhain assured Pascua that he would be paid all his money claims during this transition. Instead of tendering his resignation, Pascua wrote a letter dated February 7, 2005, wherein he pleaded, among others, that he stay in office until the end of the year.

Seeing as Pascua had yet to submit his resignation, Vicente Campa (Campa), a director of Bankwise, told him that it was imperative that he submit his resignation and assured his continued service with Philippine Veterans Bank. Based on Campa’s assurance, Pascua tendered his resignation on February 22, 2005. His letter of resignation read:

SIR:
IN ACCORDANCE WITH THE INSTRUCTIONS OF THE PREVIOUS OWNERS OF THE BANK, I HEREBY TENDER MY RESIGNATION FROM THE BANK.

On March 6, 2005, Pascua wrote a letter to Campa reminding him of his money claims due to his resignation. Because of “the urgency of [his] financial needs,” he proposed the initial payment of his midyear bonus of ₱150,000.00 or the transfer of his Bankwise loan amounting to ₱1,000,000.00 to offset his claim. Pascua alleged that he was summoned by Buhain to his office on March 8, 2005 and handed a letter of acceptance of his resignation effective March 31, 2005.17

In a letter dated March 12, 2005, Pascua informed Buhain that per Buhain’s suggestion, he asked Campa to request Bankwise’s Board of Directors for the extension of his service until August 30, 2005. Both Philippine Veterans Bank and Bankwise, however, denied the request. Pascua allegedly inquired from Buhain how his money claims would be paid in view of “the passive attitude” of the banks. Buhain allegedly assured him that he already sought a meeting with Campa on the matter. During the meeting Campa also assured him that all his money claims would be paid by the previous owners of Bankwise.

Due to the inaction of Philippine Veterans Bank and Bankwise, Pascua sent Buhain a letter dated April 13, 2005, demanding the early settlement of his money claims. The demand was not heeded. Thus, Pascua filed a Complaint for illegal dismissal, non-payment of salary, overtime pay, holiday pay, premium pay for holiday, service incentive leave, 13th month pay, separation pay, retirement benefits, actual damages, moral damages, exemplary damages, and attorney’s fees against Bankwise and Philippine Veterans Bank.

[The Labor Arbiter ruled in favor of the employer. On appeal, the National Labor Relations Commission ruled in favor of the employee. On further appeal, the Court of Appeals ruled in favor of the employee.]

Pascua argues that the Court of Appeals erroneously absolved Philippine Veterans Bank of its liability since it had already taken over the management and business operations of Bankwise by the time he was constructively dismissed. He insists that since Bankwise was already declared insolvent, Philippine Veterans Bank should be held solidarily liable as Bankwise’s assets are already exempt from execution.

Bankwise, on the other hand, claims that the Court of Appeals erred in finding it liable since the National Labor Relations Commission never resolved its Motion for Reconsideration. Considering that its Motion for Reconsideration was still pending, the decision of the National Labor Relations Commission against it has not yet become final.

Bankwise also contends that assuming Pascua was enticed to resign in exchange for severance pay, it should not be held liable for the actions of Buhain and Campa, who acted beyond their authority. It insists that paragraph 8 of Pascua’s Contract of Employment states that no verbal agreement can alter or vary the terms of the contract unless it is reduced in writing. It alleged that even assuming it was liable to Pascua, the liability could not be enforced since it was undergoing liquidation by the Philippine Deposit Insurance Corporation. It also points out that legal compensation should be an applicable defense since Pascua had three (3) outstanding loan obligations to it in the amount of ₱4,902,364.88.51

For its part, Philippine Veterans Bank asserts that it is a distinct and separate entity from Bankwise since the Memorandum of Agreement between them was not consummated.  Even assuming that their Memorandum of Agreement was consummated, Bankwise expressly freed Philippine Veterans Bank from liability arising from money claims of its employees. It also points out that even if Pascua was found to have been constructively dismissed, only Bankwise’s corporate officers should be held liable for their unauthorized acts.

Philippine Veterans Bank likewise posits that Pascua was not constructively dismissed since he had voluntarily resigned. It points out three (3) letters of resignation that Pascua drafted demanding payment of his severance pay according to the terms he had specified. It argues that Pascua voluntarily resigned knowing that it was acquiring Bankwise and it is not obliged to absorb Bankwise’s employees.

This Court is asked to resolve the sole issue of whether or not Pascua was constructively dismissed. Assuming that Pascua is found to have been constructively dismissed, this Court must also resolve the issue of whether or not Philippine Veterans Bank should be solidarily liable with Bankwise, Inc. for his money claims.

At the outset, however, this Court must first address the issue of whether or not the

[SC RESOLUTION]

The employer has the burden of proving, in illegal dismissal cases, that the employee was dismissed for a just or authorized cause. Even if the employer claims that the employee resigned, the employer still has the burden of proving that the resignation was voluntary. It is constructive dismissal when resignation “was made under compulsion or under circumstances approximating compulsion, such as when an employee’s act of handing in his [or her] resignation was a reaction to circumstances leaving him [or her] no alternative but to resign.”

“Resignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and one has no other choice but to dissociate oneself from employment.” In order to prove that resignation is voluntary, “the acts of the Employee before and after the alleged resignation must be considered in determining whether he or she, in fact, intended to sever his or her employment.”

Pascua wrote three (3) letters addressed to Bankwise’s officers. The first letter dated February 7, 2005, was not a letter of resignation, but a plea from Pascua to remain in service until the end of the year:

... I beg to request that I be allowed to stay up to the end of the year and wind up my banking career with the institution that has given me the most daunting challenge ever. Given the opportunity[,] I would have preferred to be with the Marketing Group. Alternatively, I could supervise a Management Services Group (HRD, GSD, Asset Mgt and the like) a position previously held in another institution or any assignment which you feel I could do best as well under a new financial package under your best judgment. In any position, I commit to generate as much business as I can to the bank, both in terms of deposits and earning portfolios.
With all humility, I must admit that I am not prepared to lose my job for reasons already stated in our meeting. Being the sole breadwinner and having a graduating student denied by CAP support, and some financial obligations, losing my job will really spell some disaster in my life.

However, this is the only evidence that shows Pascua was unwilling to resign. Pascua admitted that he voluntarily sent a resignation letter on the condition that his money claims would be made. 75 Thus, his second letter was a reluctant acceptance of his fate containing only one (1) line:

IN ACCORDANCE WITH THE INSTRUCTIONS OF THE PREVIOUS OWNERS OF THE BANK, I HEREBY TENDER MY RESIGNATION FROM THE BANK.

Consistent with his intention to tender his resignation upon the payment of his money claims, his third letter was a proposal for a payment plan to cover his severance pay:

You will recall from our meeting with Mr. Buhain on March 31, 2005 that I presented an estimate of severance and other claims due to my attrition from a trade off agreement you have purportedly agreed with the new bank owners, represented by Philippine Veterans Bank, as part of the overall deal. The total amount of my claim approximates one million pesos. While you readily admitted and agreed in that meeting that my claim will be shouldered by the old owners, which you represent, you requested that we wait for Atty. Madara for his return by the end of the month.
Considering the urgency of my financial needs which I have confided to you on many occasion[s], may I respectfully propose the following:
1. Initial payment of my midyear bonus amounting to ₱150,000, immediately, or
2. Transfer of my bank loan with Bankwise for your account or assumption with a balance amounting to one million pesos as an offset to my claim[.]
For the record, and following my lawyer's advice[,] may I respectfully request for a copy of any document embodying the terms and conditions where old owners are liable to assume my severance and other benefits due to the trade off agreement.

Labor is a Constitutionally protected social class due to the perceived inequality between capital and labor. Article 1700 of the Civil Code states:

Article 1700. The relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. Therefore, such contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects.

The presumption is that the employer and the employee are on unequal footing so the State has the responsibility to protect the employee. This presumption, however, must be taken on a case-to-case basis.

In situations where special qualifications are required for employment, such as a Master’s degree or experience as a corporate executive, prospective employees are at a better position to bargain or make demands from the employer. Employees with special qualifications would be on equal footing with their employers, and thus, would need a lesser degree of protection from the State than an ordinary rank-and-file worker.

Pascua, as the Head of Marketing with annual salary of ₱2,250,000.00,82 would have been in possession of the special qualifications needed for his post. He would have supervised several employees in his long years in service and might have even processed their resignation letters. He would have been completely aware of the implications of signing a categorically worded resignation letter. If he did not intend to resign, he would not have submitted a resignation letter. He would have continued writing letters to Bankwise signifying his continued refusal to resign.

Pascua’s resignation letter, however, was unconditional. It contained no reservations that it was premised on his subsequent claim for severance pay and other benefits. His resignation was also accepted by his employers. In this instance, Pascua is not considered to have been constructively dismissed.

Pascua’s third letter likewise indicates that he has already accepted the consequences of his voluntary resignation but that it would be subject to the payment of severance pay. However, his claim for severance pay cannot be granted. An employee who voluntarily resigns is not entitled to separation pay unless it was previously stipulated in the employment contract or has become established company policy or practice.  There is nothing in Pascua’s Contract of Employment that states that he would be receiving any monetary compensation if he resigns. He has also not shown that the payment of separation pay upon resignation is an established policy or practice of Bankwise since his third letter indicated that he was unaware of any such policy:

For the record, and following my lawyer's advice[,] may I respectfully request for a copy of any document embodying the terms and conditions where old owners are liable to assume my severance and other benefits due to the trade off agreement…

Pascua cannot also rely on the verbal assurances of Buhain and Campa that he would be paid his severance pay if he resigns. Number 8 of his Contract of Employment states that verbal agreements between him and the Bankwise’s officers on the terms of his employment are not binding on either party:

8. VERBAL AGREEMENT 
It is understood that there are no verbal agreement or understanding between you and the Bank or any of its agents and representatives affecting this Agreement.1âwphi1 And that no alterations or variations of its terms shall be binding upon either party unless the same are reduced in writing and signed by the parties herein.

It was incumbent on Pascua to ensure that his severance pay in the event of his resignation be embodied on a written agreement before submitting his resignation letter. He should have, at the very least, indicated his conditions in his resignation letter. His third letter cannot be considered the written statement of his money claims contemplated in his Contract of Employment since it was unilateral and was not signed by Bankwise’s officers.

Considering that Pascua was not considered to have been constructively dismissed, there is no need to discuss the issue of Philippine Veterans Bank and Bankwise’s solidary liability for money claims.

3. Gratitude in resignation letter invalidates forced resignation

Panasonic Manufacturing Philippines Corporation (formerly Matsushita Electric Philippines Corp.) v. Peckson

G.R. No. 206316, 20 March 2019

[The employee] was formerly employed as a Sales Supervisor for the Battery Department of [the employer]. The legal controversy started when, in a letter dated September 16, 2003, [the employee] expressed his intention to resign effective on October 30, 2003. The contents of said letter read, thus:

TO: PERSONNEL DEPARTMENT 
FROM: J. PECKSON
RE: RESIGNATION
DATE: SEPTEMBER 16, 2003
I am tendering my resignation effective October 30, 2003. I would like to thank this company for giving me the opportunity to work here.
I would like to thank also the few people who tried to support me namely Mr. Tiongson and some of my friends in NBP.
Sincerely yours,
(Sgd.)
J. PECKSON

In a subsequent letter dated September 25, 2003, [the employee] informed [the employer] that he wished to change the effectivity of his resignation instead to October 15, 2003:

TO: PERSONNEL DEPARTMENT 
FROM: JOHN...
RE: RESIGNATION
DATE: SEPTEMBER 25, 2003
I would like to change the date of my resignation from MEPCO to October 15, 2003, my earlier resignation letter stated October 30, 2003. I am doing this so that I could attend to some personal matters. Again, I would like to thank MEPCO for all the support it has given and also the people who became my friends in the company.
Good luck to the battery business and I wish you all the best in your future endeavors.
Sincerely yours,
(Sgd.) JOHN...

On April 11, 2005, [the employee] filed a complaint for constructive dismissal with the NLRC, with claims for payment of separation pay in lieu of reinstatement with full backwages, non-payment of 13th month pay and other benefits, moral and exemplary damages and attorney’s fees against [the employer] and Jose De Jesus (De Jesus) in the latter’s personal capacity as Manager of [the employee]’s former Battery Sales Department. In the complaint, [the employee] alleged that he was forced to resign by De Jesus after the latter accused him of falsifying De Jesus’ signature in an “Authority to Travel” form dated August 20, 2003. In an effort to disprove De Jesus’ accusations, [the employee] had proceeded to the Philippine National Police (PNP) to have the controversial “Authority to Travel” form examined, and also submitted several other documents signed by De Jesus as a way to compare the signatures and prove that it was De Jesus who had indeed signed the form.

Based on its findings, the PNP Crime Laboratory reported that the signature of De Jesus appearing on the “Authority to Travel” form and on the other submitted documents was written by one and the same person. [The employee] alleged that he submitted the report findings alongside two Affidavit-Complaints informing the Personnel Department of the lack of merit in De Jesus’ claim of falsification, and that he, [the employee], was placed on “floating status” solely to be the subject of ridicule. However, De Jesus allegedly told [the employee] that he was disregarding the PNP report and threatened to terminate [the employee]’s employment the very next day, prompting [the employee] to end his employment with the company and subsequently file the complaint.

To these allegations, [the employer] maintained that [the employee] voluntarily resigned from work, as seen in the tenor of his two resignation letters, his willing completion of the exit interview and the clearance procedure, as well as his signing of a quitclaim and release.

[The Labor Arbiter ruled in favor of the employer. On appeal, the National Labor Relations Commission ruled in favor of the employer. On further appeal, the Court of Appeals ruled in favor of the employee.]

[SC RESOLUTION]

[The employee’s] resignation was voluntary and, thus, [the employer] is not guilty of constructive dismissal.

The Court is behooved to take a look at the records of the case to determine whether or not [the employee] resignation was through the latter’s own volition or was necessarily effected by [the employer]’s allegedly hostile treatment…

… the Court disagrees with the finding of the CA that [the employer] failed to prove that [the employee] resigned out of his own volition and without any outside influence from the company. As such, since [the employee] resigned willingly, [the employer] and De Jesus are not guilty of constructive dismissal.

Constructive dismissal vis-a-vis its relation to forced or voluntary resignation, was discussed in Gan v. Galderma Philippines, Inc., et al. to wit:

Constructive dismissal is defined as quitting or cessation of work because continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution of pay and other benefits. It exists if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued employment. There is involuntary resignation due to the harsh, hostile, and unfavorable conditions set by the employer. The test of constructive dismissal is whether a reasonable person in the employee's position would have felt compelled to give up his employment/position under the circumstances.
On the other hand, "[r]esignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and one has no other choice but to dissociate oneself from employment. It is a formal pronouncement or relinquishment of an office, with the intention of relinquishing the office accompanied by the act of relinquishment. As the intent to relinquish must concur with the overt act of relinquishment, the acts of the employee before and after the alleged resignation must be considered in determining whether lie or she, in fact, intended to sever his or her employment."

To note, the intent to relinquish must concur with the overt act of relinquishment; hence, the acts of the employee before and after the alleged resignation must be considered in determining whether he, in fact, intended to terminate his employment. In illegal dismissal cases, it is a fundamental rule that when an employer interposes the defense of resignation, on him necessarily rests the burden to prove that the employee indeed voluntarily resigned.

Guided by these legal precepts, a judicious review of the facts on record will show that [the employer] was able to show [the employee] voluntary resignation.

First, the company aptly proved that [the employee] resignation letters showed the voluntariness of his separation from [the employer]. While the fact of filing a resignation letter alone does not shift the burden of proof, and it is still incumbent upon the employer to prove that the employee voluntarily resigned, in this case, the facts show that the resignation letters are grounded in [the employee’s] desire to leave the company as opposed to any deceitful machination or coercion on the part of [the employer].

The very contents of the letters show not only any lack of reluctance or tension on the part of [the employee], but in fact express gratitude and well wishes, without qualification, nor do they show any sign of aggression, bitterness, or hostility towards his former employer. In Bilbao v. Saudi Arabian Airlines, the Court found as voluntary the resignation of the complainant, whose clear use of words of appreciation and gratitude negated the notion that she was forced and coerced to resign. Likewise, the Court held in Rodriguez v. Park N Ride Inc., et al., that the petitioner-employee voluntarily resigned as evidenced in part by her submission of two resignation letters containing words of gratitude.

Second, the Court finds that [the employee] subsequent and contemporaneous actions belie his claim that he was subjected to harassment on the part of [the employer]. [The employee] neglected to show any sign that he had reached out to company management regarding his alleged complaints with De Jesus or any other employee of [the employer], and if he did, he failed to show the same. It would stand to reason that if [the employee] had legitimate grievances, he would have raised them up with management. While [the employee] alleges that he sent two complaint-affidavits detailing the acts of abuse heaped on him, as well as his being put on floating status, the Court notes that [the employee] was unable to proffer any proof that he sent these to [the employer]. The lack of any proof that he did, without any evidence of intimidation or coercion, should highlight the intangibility of these accusations.

Even when given the opportunity to alert management regarding his grievances during the last days of his employment with [the employer], [the employee] conspicuously failed to do so. As seen in the Exit Interview Form filled up by [the employee], to wit:

Q: Why are you leaving the Company? (Ask employee to fill up form B and probe on reasons cited. Draw out critical incidents, comments or suggestions.) Please rank reason(s) in order of priority. 
A: To work for another FMCG company.
Q: What did you like most/least about working in this Company? (Draw out comments about job management, peers, compensation, advancement, etc.)
A: A very structured/layered organization. Human Resource Dept. was very supportive of me.

While [the employee] later on ticked a box in the form stating “Personality conflict with manager” as one of the factors influencing his decision to leave [the employer] in page 2 of the Exit Interview Form, he did not expound on the same. In fact, he ticked several other boxes, such as “Dissatisfied with pay and compensation scheme,” “Desire for more responsibilities/higher status,” as well as even reiterating his reason to “Consider working for another FMCG company.”

Thus, [the employee] assertion that he was instructed to express gratitude in his letter cannot be used as proof of the company’s alleged transgressions, as the same is self-serving and uncorroborated by any substantial evidence. Also, [the employee] claim that he was put on floating status after he was allegedly instructed to file a resignation letter does not hold water. It makes no sense for an employee to file a resignation letter solely based on an alleged promise that said employee would be later reinstated by the company. This, especially as [the employee] only proof of said arrangement is the conversation he had with management, which, again, is supported by nothing but his bare testimony.

Likewise does the Court find untenable [the employee] claim that he was merely coerced into signing the quitclaim and release. The Court has previously held that voluntary agreements, which include quitclaims, entered into and represented by a reasonable settlement are binding on the parties which may not be later disowned simply because of a change of mind. It is only where there is clear and substantial proof that “the waiver was wangled from an unsuspecting or gullible person, or the terms of the settlement are unconscionable, that the law will step in to bail out the employee.”

In Iladan v. La Suerte Intl. Manpower Agency, Inc., et al., the Court struck down an employee’s assertion that she did not resign voluntarily and there was an irregularity in her Release, Waiver, and Quitclaim form, using as basis the lack of evidence of such, as well as her actions indicating otherwise. To wit:

In the instant case, Iladan executed a resignation letter in her own handwriting. She also accepted the amount of P35,000.00 as financial assistance and executed an Affidavit of Release, Waiver and Quitclaim and an Agreement, as settlement and waiver of any cause of action against respondents. The affidavit of waiver and the settlement were acknowledged/subscribed before Labor Attache Romulo on August 6, 2009, and duly authenticated by the Philippine Consulate. An affidavit of waiver duly acknowledged before a notary public is a public document which cannot be impugned by mere self-serving allegations. Proof of an irregularity in its execution is absolutely essential. The Agreement likewise bears the signature of Conciliator-Mediator Diaz. Thus, the signatures of these officials sufficiently prove that Iladan was duly assisted when she signed the waiver and settlement. Concededly, the presumption of regularity of official acts may be rebutted by affirmative evidence of irregularity or failure to perform a duty. In this case, no such evidence was presented. Besides, "[T]he Court has ruled that a waiver or quitclaim is a valid and binding agreement between the parties, provided that it constitutes a credible and reasonable settlement, and that the one accomplishing it has done so voluntarily and with a full understanding of its import." Absent any extant and clear proof of the alleged coercion and threats Iladan allegedly received from respondents that led her to terminate her employment relations with respondents, it can be concluded that Iladan resigned voluntarily…

As [the employee] failed to present any relevant evidence aside from his own self-serving declarations, the Court cannot countenance his claims especially considering the legal dictum that he who asserts, not he who denies, must prove. In the absence of such, the Court must rely on the actual proof presented as evidence, i.e., the resignation letters of [the employee] showing his voluntary separation from the company, and not the mere allegations of fraud and deception that have characterized [the employee] grievances as the latter tried to explain his apparent involuntary resignation.

In BMG Records (Phils.), Inc. v. Aparecio, the Court found that based on the evidence presented, therein respondent’s claims of machinations on the part, of the petitioner company to induce him to resign were completely unsupported by proof:

Based on the pleadings, this Court finds nothing to support Aparecio's allegation that fraud was employed on her to resign. Fraud exists only when, through insidious words or machinations, the other party is induced to act and without which, the latter would not have agreed to. This Court has held that the circumstances evidencing fraud and misrepresentation are as varied as the people who perpetrate it, each assuming different shapes and forms and may be committed in as many different ways. Fraud and misrepresentation are, therefore, never presumed; it must be proved by clear and convincing evidence and not mere preponderance of evidence. Hence, this Court does not sustain findings of fraud upon circumstances which, at most, create only suspicion; otherwise, it would be indulging in speculations and surmises.

In summation, [the employee] failed to show any substantial evidence that he was treated unfairly and, thus, he was forced to resign. As supposed proof, [the employee] only produced his affidavits and the PNP Crime Laboratory Report. He failed to show any tangible acts of harassment, insults, and any abuse that would warrant a possible finding of constructive dismissal. Even [the employee] belated filing of a complaint highlight the lack of merit to his accusations, especially as he was unable to give any valid reason why he hesitated in filing the same.

This sort of delay has already been held to be supportive proof that the resignation leaned more towards being voluntary a mere afterthought. In Vicente v. CA:

Subsequently, petitioner stopped reporting for work although she met with the officers of the corporation to settle her accountabilities but never raised the alleged intimidation employed on her. Also, though the complaint was filed within the 4-year prescriptive period, its belated filing supports the contention of respondent that it was a mere afterthought. Taken together, these circumstances are substantial proof that petitioners resignation was voluntary.
Hence, petitioner cannot take refuge in the argument that it is the employer who bears the burden of proof that the resignation is voluntary and not the product of coercion or intimidation. Having submitted a resignation letter, it is then incumbent upon her to prove that the resignation was not voluntary but was actually a case of constructive dismissal with clear, positive, and convincing evidence. Petitioner failed to substantiate her claim of constructive dismissal.

While the rights of the workers, as with all human rights, must be protected, the law does not authorize the oppression or self-destruction of the employer. The constitutional commitment to the policy of social justice cannot be understood to mean that every labor dispute shall automatically be decided in favor of labor, especially when the antecedent facts indicate the lack of malfeasance on the part of the management. In this case, [the employee] was not able to overcome his burden to prove that his resignation was involuntary. Nor was he able to properly assail with his own evidence [the employer]’s proof that he left of his own accord. Thus, the CA erred in deviating from the findings of both the LA and the NLRC, findings, which, upon our own independent review, show without a shadow of the doubt the voluntariness of [the employee] actions and separation from work.

4. Shortening of 30-day at the prerogative of the employer

PHIMCO Industries, Inc. v. NLRC, Carpio

G.R. No. 118041, 11 June 1997

[The employee] was hired by [the employer], on 1 April 1983 as a log and lumber grader. In 1987 he was promoted to the position of documentation assistant. In 1990 he further advanced in rank to handle the company’s export of selective lumber until he filed his letter of resignation on 14 August 1991 addressed to Mr. Lut Lopez, Assistant General Manager, Export Trading Division, [of the employer] to take effect fifteen (15) days later or on 30 August 1991.

The records show that during his years of service, [the employee] had an excellent employment record. He was a hardworking, efficient and effective worker. He was awarded various recognitions, e.g., a certificate of recognition for perfect attendance in 1988 and service awards for dedicated and valued services to the company from 1983 to 1988.

[The employee] still reported for work even after tendering his letter of resignation up to the time the same was to take effect; in the meantime however no action was taken by [the employer] with respect to his letter of resignation. It was only on 4 September 1991, 4 in a letter dated 3 September 1991 from Francis Ferdinand C. Cinco, Human Resource Manager, that [the employee] was required to explain within seven (7) days the reason for his neglect to serve an advance written notice and his failure to seek approval from his department head for a shorter notification period. At that time, he had already left for the United States. As such, he petitioned through his wife for additional time to prepare his answer. In a letter dated 12 September 1991, which was received by [the employer] on 26 October 1991, [the employee] clarified the reason for his resignation, stating that he had mentioned to Mr. Lut Lopez his plans of resigning to seek better opportunities in the United States. He also requested that he be granted his separation pay.

On 4 November 1991 Cinco informed [the employee] that he was being terminated by the company for failure to abide with the company’s rules, particularly Rules 7, 7.1 and 7.2 of the company’s Handbook, which provide thus:

Rule 7 — The resignation of any employee shall be effected only upon its proper acceptance by Management. 
Rule 7.1 — Failure of resigning employee to serve advance written notice to the company at least thirty (30) days before the date he intends to leave the service except in cases where a shorter notification period is accepted by the department head concerned.
Rule 7.2 — Failure of resigning employee to continue to work or render actual service during the 30-day period covered by the advance written notice, except where the employee has secured authority to go on leave of absence.

As a result of his dismissal, his claim for separation pay was denied in consonance with the company’s Handbook providing for forfeiture of separation pay in case of termination from employment.

[The Labor Arbiter ruled in favor of the employee. On appeal, the National Labor Relations Commission ruled in favor of the employee.]

[The employer] contends that [the employee] was terminated for just cause; therefore he was not entitled to separation pay. Moreover, [the employer] maintains that even on the assumption that [the employee] validly resigned, still his resignation would not entitle him to separation pay of one month for every year of service since under the company’s health, welfare and retirement plan, [the employee] would only be entitled to 40% of one (1) month pay for every year of service in case of voluntary resignation.

As regards the validity of the dismissal of [the employee], [the employee] claims that [the employee] received a copy of the company’s Handbook on 26 October 1990 which clearly states that if an employee resigns from work he has to serve an advance written notice at least thirty (30) days before he leaves the service with a proviso that a shorter notification would be acceptable only if authorized by the department head concerned and that he should continue to render service during the interim unless he has secured authority to go on leave. Moreover, any resignation shall be effected only upon its proper acceptance by management. The penalty prescribed for the violation thereof is dismissal. Accordingly, [the employer] maintains that since [the employee] violated the rules and regulations of the company with respect to his leaving the company which resulted in the disruption of its operations, then his termination was for a just cause based particularly on willful disobedience under the law. Corollarily, [the employer] was not obligated to give separation pay to [the employee].

[SUPREME COURT DECISION/RESOLUTION] ——————–

We [the Supreme Court] find the penalty of dismissal imposed on [the employee] for non-observance of the rules and regulations provided in the Handbook of [the employer], particularly Rules 7, 7.1 and 7.2 concerning the resignation of the employee, too harsh. There is no dispute that [the employee] failed to comply with company rules and regulations regarding his resignation. Nonetheless, it has to be noted and emphasized that he did not outrightly disregard the same. Looking back at the antecedents, it was on 14 August 1991 that he tendered his resignation to take effect fifteen (15) days later or on 30 August 1991. Before that period expired he still reported for work. Significantly, the fact that his letter of resignation was only acted upon after he had left for United States opens the avenues for speculations and suspicions. While he continued to work to await the acceptance of his resignation, he was not even informed of the status thereof or that he had to stay for fifteen (15) more days, The rule could have been easily pointed out or relayed to him by Mr. Lopez to whom he handed his letter of resignation and who was staying with him in the same office. But management waited until after he had left for the United States. Evidently, there was bad faith in the manner his resignation was resolved.

[The employer] also avers that [the employee]’s termination was for a just cause under the laws grounded on his willful disobedience to comply with the company’s rules and regulation. But to constitute willful disobedience the employee’s conduct must be willful or intentional, the willfulness being characterized by a wrongful and perverse attitude and the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he has been engaged to discharge. In the instant case, we find absent any intentional or willful conduct on the part of [the employee] to disregard the rules regarding voluntary resignation. On the contrary, there was earnest and sincere effort on the part of [the employee] to comply.

In cases of voluntary resignation, the employee finds himself in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service and he has no other choice but to disassociate himself from his employment; hence, the law affords the employee the right to resign regardless of whether the company has found an able and competent replacement and whether the operation of the company would be affected provided he serves a written notice on the employer at least one (1) month in advance. The rule of requiring an employee to stay or complete the 30-day period prior to the effectivity of his resignation becomes discretionary on the part of management as an employee who intends to resign may be allowed a shorter period before his resignation becomes effective. In the instant case, the noncompliance with the period should not be used by management as a subterfuge to avoid the payment of separation pay.

Finally, we recognize the prerogative of an employer company to prescribe reasonable rules and regulations necessary or proper for the conduct of its business and to provide certain disciplinary measures in order to implement said rules, and to assure that the same would be complied with. That notwithstanding, from the wholistic perspective, we view the resignation of [the employee] as having sufficiently and substantially complied with the company’s requirement. This is not to say that we are condoning the failure of [the employee] to abide by the rules. But considering his length of service and his dedicated and faithful employment in the company, the totality of his infraction simply does not justify the extreme penalty of dismissal.

As regards the claim of [the employee] for separation pay, inasmuch as we find his dismissal unjustified, necessarily some form of separation benefits is forthcoming. In affirming the award of separation pay to [the employee], no doubt the NLRC invoked Art. 283 of the Labor Code which provides that separation pay shall be equivalent to one (1) month pay, or at least one-half (1/2) month pay for every year of service, whichever is higher, and a fraction of at least six (6) months considered as one (1) whole year. But severance pay under Art. 283 only refers to termination of employment due to retrenchment and cessation of operation not due to serious business losses or financial reverses. It does not refer to separation by reason of voluntary resignation. In fact, the rule is that an employee who voluntarily resigns from employment is not entitled to separation pay, except when it is stipulated in the employment contract or CBA, or it is sanctioned by established practice or policy of the employer. Hence, in granting separation benefits to [the employee], we follow the established company policy which provides for forty percent (40%) of one (1) month basic compensation for every year of service. Under the circumstances, the award of separation pay to [the employee] must be reduced.

5. Employee has burden of proof to prove the fact of dismissal – particularly if there is a resignation letter

Italkarat 18, Inc. v. Gerasmio

G.R. No. 221411, 28 September 2020

[The complainant-employee] alleged that the Company hired him on June 1, 1990. In 1993, he was designated as the Maintenance Head and Tool and Die Maker until his dismissal on November 20, 2008 on the ground of serious business losses. He claimed that during and prior to the last quarter of 2008, the Company had repeatedly informed its employees of its proposed retrenchment program because it was suffering from serious business losses. In particular, [the employee] claimed that Noel San Pedro (San Pedro), the then Officer-In-Charge (OIC)/Manager of the Company, informed him sometime in November 2008 that the Company was planning to retrench a substantial number of workers in the Maintenance and Tool and Die Section; and that if he opts to retire early, he will be given a sum of P170,000.00. San Pedro then allegedly cautioned [the employee] that if he will not accept the offer to retire early, the Company would eventually retrench or terminate him from his employment, in which case, he might not even receive anything.

In light of the foregoing, [the employee] executed and signed a resignation letter and quitclaim on November 20, 2008. He was then informed to return on November 25, 2008 to get his check worth P170,000.00.10 However, to his dismay, [the employee] was later informed by San Pedro that he would be receiving only the amount of P26,901.34. Thus, [the employee], through his lawyer, sent a letter dated November 25, 2008, essentially demanding the amount of P170,000.00 he was allegedly promised earlier. Since the Company did not respond, [the employee] filed the instant complaint for illegal dismissal.

On the other hand, the Company essentially alleged that [the employee] voluntarily resigned from his job, thus, his claims are baseless. The Company admitted that it hired [the employee] as maintenance personnel on December 1, 1989. It further alleged that during the last year of his employment, [the employee] took leaves of absence in order to process his papers for a possible seaman’s job.

Moreover, the Company stated that on October 20, 2008, [the employee] tendered his resignation and demanded from the Company the payment of his separation pay on account of his long years of service. On November 6, 2008 and on November 20, 2008 respectively, he executed and signed a waiver and quitclaim which shows, inter alia, the computation of his receivables. He then signed the voucher for this purpose and thereafter received the check issued to him representing his last pay. Surprisingly, he send a demand letter, through his lawyer, on November 28, 2008, for the payment of P170,000.00 in addition to the amount already received by him. The Company refused to pay him the additional amount for lack of basis in law and in fact.

[The Labor Arbiter ruled in favor of the employee. On appeal, the National Labor Relations Commission ruled in favor of the employer.]

[SC RESOLUTION: The employer is not liable. The employee’s complaint was dismissed.]

The fact of dismissal must first be proven by [the employee], especially considering the existence of a resignation letter signed by him.

Indeed, in illegal dismissal cases, the burden of proof is on the employer in proving the validity of dismissal. However, the fact of dismissal, if disputed, must be duly proven by the complainant.

We have held in Machica v. Roosevelt Services Center, Inc.:

The rule is that one who alleges a fact has the burden of proving it; thus, petitioners were burdened to prove their allegation that respondents dismissed them from their employment. It must be stressed that the evidence to prove this fact must be clear, positive and convincing. The rule that the employer bears the burden of proof in illegal dismissal cases finds no application here because the respondents deny having dismissed the petitioners…

We have also clarified that there can be no question as to the legality or illegality of a dismissal if the employee has not discharged his burden to prove the fact of dismissal by substantial evidence, to wit:

It is true that in constructive dismissal cases, the employer is charged with the burden of proving that its conduct and action or the transfer of an employee are for valid and legitimate grounds such as genuine business necessity. However, it is likewise true that in constructive dismissal cases, the employee has the burden to prove first the fact of dismissal by substantial evidence. Only then when the dismissal is established that the burden shifts to the employer to prove that the dismissal was for just and/or authorized cause. The logic is simple — if there is no dismissal, there can be no question as to its legality or illegality…

Applying the abovementioned principles in the present case, [the employee] clearly has the burden of proving that he was dismissed by the Company, in light of the Company’s allegation that he resigned voluntarily and was not dismissed. Hence, [the employee] must first prove that he was actually dismissed by the Company before the legality of such dismissal can even be raised as an issue.

However, even a cursory perusal of the evidence on record would show that [the employee] failed to prove the fact of dismissal. He relied primarily on his allegations that he was misled by the Company into resigning and that he was actually retrenched. These uncorroborated and self-serving allegations, especially considering the existence of a resignation letter and a quitclaim (both bearing [the employee’s] signature), fall short of the evidence required under the law to discharge [the employee’s] burden to prove that he was dismissed by the Company.

To illustrate the aforementioned point, in Gemina, Jr. v. Bankwise, Inc., we ruled that the employee had indeed failed to state circumstances substantiating his claim of constructive dismissal as the employee therein had not claimed to have suffered a demotion in rank or diminution in pay or other benefits. Instead, the said employee only claimed to have been subjected to several acts of harassment by several officers of the employer-company, including being asked to take a forced leave of absence, demanding back the employee’s service vehicle, and delaying the release of employee’s salaries and allowances in order to compel him to quit employment. Citing Philippine Rural Reconstruction Movement (PRRM) v. Pulgar, we held:

It is a well-settled rule, however, that before the employer must bear the burden of proving that the dismissal was legal, the employee must first establish by substantial evidence the fact of his dismissal from service. Bare allegations of constructive dismissal, when uncorroborated by the evidence on record, cannot be given credence. 
In the instant case, the records are bereft of substantial evidence that will unmistakably establish a case of constructive dismissal. An act, to be considered as amounting to constructive dismissal, must be a display of utter discrimination or insensibility on the part of the employer so intense that it becomes unbearable for the employee to continue with his employment. Here, the circumstances relayed by Gemina were not clear-cut indications of bad faith or some malicious design on the part of Bankwise to make his working environment insufferable.
Moreover, Bankwise was able to address the allegation of harassment hurled against its officers and offered a plausible justification for its actions, x x x.
Finally, as regards Gemina's allegation that he was verbally being compelled to go on leave, enough it is to say that there was no evidence presented to prove the same. There was not a single letter or document that would corroborate his claim that he was being forced to quit employment. He even went on leave in January 2003 and never claimed that it was prompted by the management's prodding but did so out of his own volition.
Without substantial evidence to support his claim, Gemina's claim of constructive dismissal must fail. It is an inflexible rule that a party alleging a critical fact must support his allegation with substantial evidence, for any decision based on unsubstantiated allegation cannot stand without offending due process…

[The employee] failed to prove that his resignation was involuntary and that he was constructively dismissed.

In Gan v. Galderma Philippines, Inc., we held that where the employee alleges that he involuntarily resigned due to circumstances in his employment that are tantamount to constructive dismissal, the employee must prove his allegations with particularity, to wit:

Since Gan submitted a resignation letter, it is incumbent upon him to prove with clear, positive, and convincing evidence that his resignation was not voluntary but was actually a case of constructive dismissal; that it is a product of coercion or intimidation. He has to prove his allegations with particularity. Gan could not have been coerced. Coercion exists when there is a reasonable or well-grounded fear of an imminent evil upon a person or his property or upon the person or property of his spouse, descendants or ascendants. Neither do the facts of this case disclose that Gan was intimidated. x x x 
x x x x
The instances of 'harassment' alleged by Gan are more apparent than real. Aside from the need to treat his accusations with caution for being self-serving due to lack of substantial documentary or testimonial evidence to corroborate the same, the acts of 'harassment,' if true, do not suffice to be considered as 'peculiar circumstances' material to the execution of the subject resignation letter…

Based on the foregoing discussion, it is therefore not enough for [the employee] to allege that he was threatened and thereafter misled to resign in order for the tribunals and courts to rule that he was constructively dismissed. [The employee] must prove with particularity the alleged acts of coercion and intimidation which led him to resign. This, [the employee] failed to do.

Furthermore, we observe that the evidence on record show that [the employee] had already intended to resign in 2008, even earlier than October. The evidence presented by the Company would show that [the employee] in fact requested for multiple leaves on various occassions, usually for processing of his papers for work abroad. [the employee]’s allegation that the Company was already considering retrenching its employees during the last quarter of 2008 or earlier, which [the employee] would want to impress upon this Court to be the catalyst that prompted San Pedro to make the alleged offer of resignation to [the employee], would not have made any difference in view of the fact that [the employee] was already in the process of applying for a job overseas or at the very least, intending to go abroad.

To summarize, if the fact of dismissal is disputed, it is the complainant who should substantiate his claim for dismissal and the one burdened with the responsibility of proving that he was dismissed from employment, whether actually or constructively. Unless the fact of dismissal is proven, the validity or legality thereof cannot even be an issue. In the present case, the fact of the matter is that it was [the employee] himself who resigned from his work, as shown by the resignation letter he submitted and the quitclaim that he acknowledged, and thus, he was never dismissed by the Company.

[The employee] is not entitled to separation pay.

As a general rule, the law does not require employers to pay employees that have resigned any separation pay, unless there is a contract that provides otherwise or there exists a company practice of giving separation pay to resignees.

[The employee] failed to prove that a contract exists between him and the Company.

In our jurisdiction, a contract is defined in Article 1305 of the Civil Code as a meeting of the minds.46 This means that a contract may exist in any mode, whether written or not. In this case, however, [the employee] utterly failed to show that he has a perfected contract with the Company regarding his separation pay.

To prove that the Company owed him separation pay, [the employee] primarily relied on his resignation letter and the subsequent demand letter written by his lawyer. The CA incorrectly appreciated the resignation letter as one demanding for separation pay. The contents of the said resignation letter would reveal that [the employee] merely believed that he was entitled to separation pay and was not even demanding for a certain amount. In short, his resignation was irrevocable and is patently unconditional.

[The employee], while he believed to be entitled to separation pay, never intended to revoke his resignation. In fact, as already mentioned, the supposed separation pay does not appear to be the primary reason why [The employee] tendered his resignation as the totality of circumstances would show that he was already intending to resign and work abroad even before San Pedro allegedly talked with him and even before the Company’s supposed announcement made sometime in the last quarter of the year 2008 to retrench some workers.

Likewise, the subsequent demand letter appears to be the result of [the employee]’s disappointment when the amount reflected in the check he received did not match his expectations, which were purely based on his own belief to what he was entitled to, and is a mere afterthought. It must be reiterated that he who asserts a fact must prove such fact through evidence. In this case, [the employee] merely presented his bare and self-serving allegations, which were actually belied by the totality of evidence on record. He did not even present anything that would evince that there was a contract between him and the Company regarding his separation pay.

[The employee] did not prove that there exists a Company practice wherein resignees were given separation pay.

Aside from contract, [the employee] alternatively argued that it was a company practice to give resignees separation pay. To prove his allegations, [the employee] relied on affidavits of two former employees of the Company. The Company, on the other hand, also presented affidavits of its own, accompanied with the final payslips of former employees who have resigned.

We have ruled that a company’s practice of paying separation pay to resignees must be proven to exist as this is an exception to the general rule that employees who voluntarily resign are not entitled to separation pay.

In this case, we agree with the NLRC’s findings that there was no company practice. The evidence would show that the affidavits presented by [the employee] were made by former employees who were not in the same department or job position as him. While we cannot hastily conclude that the affiants are perjuring themselves (it may be possible that they were indeed given separation pay), these affidavits are not sufficient in proving that the Company gives separation pay as a matter of practice especially given the evidence presented by the Company, which paints a different picture.

We are inclined to give more weight to the Company’s affidavits as these were accompanied by the final payslips of former employees who have resigned, especially considering that at the time of resignation of one of these former employees, Gaylord Nebril, occupied the same job position as [the employee] when the latter resigned, which is maintenance director. This is compared to the job positions of Accountant and worker at the Lacquering and Wax Department held by Ms. Clarita A. Pangandayon and Ms. Evelyn A. Abella, respectively.

In conclusion, considering that there was no dismissal involved in this case as [the employee] voluntarily resigned from work, his claims arising from his complaint for illegal dismissal must be denied. This includes his claim for separation pay as he failed to prove his entitlement thereto, either via contract or company practice.

Disclaimer: All information is for educational and general information only. These should not be taken as professional legal advice or opinion. Please consult a competent lawyer to address your specific concerns. Any statements or opinions of the author are solely his own and do not reflect that of any organization he may be connected.

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