Law on Constructive Dismissal of Employees

Clearly, constructive dismissal had already set in when the suspension went beyond the maximum period allowed by law. Section 4, Rule XIV, Book V of the Omnibus Rules provides that preventive suspension cannot be more than the maximum period of 30 days. Hence, we have ruled that after the 30-day period of suspension, the employee must be reinstated to his former position because suspension beyond this maximum period amounts to constructive dismissal. (G.R. No. 143204)

Constructive dismissal exists when an act of clear discrimination, insensibility or disdain, on the part of an employer has become so unbearable as to leave an employee with no choice but to forego continued employment. The temporary "off-detail" of respondent Valenzuela is not such a case. (G.R. No. 143215)

Constructive dismissal exists where there is cessation of work because "continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a diminution in pay. (G.R. No. 150092)

Case law defines constructive dismissal as a cessation of work because continued employment has been rendered impossible, unreasonable, or unlikely, as when there is a demotion in rank or diminution in pay or both or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee. The test of constructive dismissal is whether a reasonable person in the employee's position would have felt compelled to give up his position under the circumstances. It is an act amounting to dismissal but is made to appear as if it were not. In fact, the employee who is constructively dismissed might have been allowed to keep coming to work. Constructive dismissal is therefore a dismissal in disguise. The law recognizes and resolves this situation in favor of employees in order to protect their rights and interests from the coercive acts of the employer. (G.R. No. 177664)
Loss of confidence as a just cause for termination of employment is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence. In order to constitute a just cause for dismissal, the act complained of must be so related to the performance of the duties of the dismissed employee as would show that he or she is unfit to continue working for the employer.

The position of project controller of a construction company required trust and confidence, for it related to the handling of business expenditures or finances. However, his act allegedly constituting breach of trust and confidence was not in any way related to his official functions and responsibilities as controller. In fact, the questioned act, disposing of property belonging to the company but placed in his name to avoid the effects of agrarian reform laws pertained to an unlawful scheme deliberately engaged in by the company in order to evade a constitutional and legal mandate.

A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds and not on the employer's arbitrariness, whims, caprices or suspicion; otherwise, the employee would eternally remain at the mercy of the employer. It should be genuine and not simulated; nor should it appear as a mere afterthought to justify an earlier action taken in bad faith or a subterfuge for causes which are improper, illegal or unjustified. It has never been intended to afford an occasion for abuse because of its subjective nature. There must, therefore, be an actual breach of duty committed by the employee which must be established by substantial evidence. In this case, Aboitiz utterly failed to establish the requirements prescribed by law and jurisprudence for a valid dismissal on the ground of breach of trust and confidence. (G.R. No. 178236)