Voluntary Resignation

ARTICLE 285. Termination by employee. -

(a) An employee may terminate without just cause the employee-employer relationship by serving a written notice on the employer at least one (1) month in advance. The employer upon whom no such notice was served may hold the employee liable for damages.

(b) An employee may put an end to the relationship without serving any notice on the employer for any of the following just causes:

    

1.  Serious insult by the employer or his representative on the honor and person of the employee;

2.  Inhuman and unbearable treatment accorded the employee by the employer or his representative;

3. Commission of a crime or offense by the employer or his representative against the person of the employee or any of the immediate members of his family; and

4.  Other causes analogous to any of the foregoing.

What are the two kinds of termination by an employee?

     1.  termination by employee without just cause (voluntary resignation)

     2.  termination by employee with just cause

What is voluntary resignation?

Resignation is defined as the voluntary act of an employee who 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. (Virgen Shipping Corp. vs. Barraquio, G.R. No. 178127, April 16, 2009 citing Valdez vs. NLRC)

Resignation is a formal pronouncement of relinquishment of an office.  It must be made with the intention of relinquishing the office accompanied by an act of relinquishment. (Valdez vs. NLRC, G.R. No. 125028.  February 9, 1998)

What are the requisites for termination of employment by employee without just cause?

In case of termination without just cause, the following requisites must be complied with by the employee:

1. Written notice of the termination (commonly known as resignation letter);

2. Service of such notice to the employer at least one (1) month in advance.

The Labor Code requires the employee to give an advance notice to the employer of his intention to resign. The notice of resignation must be in writing and must be served to the employer at least one month prior to the effective date of his resignation. Resignation notice usually takes the form of a letter (commonly called “resignation letter”) addressed to the employer, expressing the employee’s intention to terminate his employment. It must state the date when resignation is to take effect because of the 30-day notice requirement under the law. It may also contain the reason or justification of the employee for filing his resignation, although legally, this is not important. The employee may resign for whatever reason, or even for no reason at all.

May an employer refuse to accept a resignation?

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. (Phimco Industries vs NLRC, G.R. No. 118041, June 11, 1997)

May an employee be allowed a shorter period to tender a resignation notice?

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. (Phimco Industries vs NLRC)

What is the effect of an employee’s failure to tender resignation notice?

If the employee fails to give the employer one month advance notice of his intention to resign, he may be held liable for damages. (Art. 285, Labor Code)

What are the instances when notice of resignation is not required?

The employee may resign even without serving any notice on the employer for any of the following reasons:

1. Serious insult by the employer or his representative on the honor and person of the employee;
2. Inhuman and unbearable treatment accorded the employee by the employer or his representative;
3. Commission of a crime or offense by the employer or his representative against the person of the employee or any of the immediate members of his family; and
4. Other causes analogous to any of the foregoing.

Resignation under any of the instance enumerated above is also called “termination by employee with just cause.”

Is an employee who voluntarily resigns from his work entitled to separation pay?

The general rule is that an employee who voluntarily resigns from his work is not entitled to separation pay. There is no provision in the Labor Code which grants separation pay to employees who voluntarily resign.

Separation pay as a rule is paid only in those instances where the severance of employment is due to factors beyond the control of the employee. Thus, in case of retrenchment to prevent losses where the employee is forced to depart from the company due to no fault on his part, separation pay is required by law to be paid to the dismissed employee. The case is totally different in case of voluntary resignation where severance of employment is due to employee’s own initiative. The law does not oblige the employer to give separation pay if the initiative to terminate employment comes from employee himself.

Under the Code, separation pay may be awarded only in cases when the termination of employment is due to: (a) installation of labor saving devices, (b) redundancy, (c) retrenchment, (d) closing or cessation of business operations, (e) disease of an employee and his continued employment is prejudicial to himself or his co-employees, or (f) when an employee is illegally dismissed but reinstatement is no longer feasible. (Hinatuan Mining Corporation, et al. vs. NLRC, et al., G.R. No. 117394, February 21, 1997)

What are the exceptions?

By way of exceptions, there are at least two instances where an employee who voluntarily resign is entitled to receive separation pay, as follows:

1. When payment of separation pay is stipulated in the employment contract or Collective Bargaining Agreement (CBA);

2. When it is sanctioned by established employer practice or policy. (Hanford Philippines vs. Shirley Joseph, G.R. No. 158251, March 31, 2005; Hinatuan Mining Corporation, et al. vs. NLRC, et al.)

Special case

   3.  When an employer who agrees to expend such benefit as an incident of the     resignation.

● In Alfaro vs. CA, G.R. No. 140812, August 28, 2001 and J Marketing Corp. vs. Taran, G.R. No. 163924, June 28, 2009, the Court ordered the payment of separation pay despite holding that the employee voluntarily resign from service, and although such payment was not mandated under the CBA or employment contract. In both of cases, the employer agreed to give separation pay to the employee as an incident of the latter’s resignation, but later on renege in the performance of such commitment. The Court held that such practice should not be countenanced:

“Generally, separation pay need not be paid to an employee who voluntarily resigns. However, an employer who agrees to expend such benefit as an incident of the resignation should not be allowed to renege in the performance of such commitment.”

Acceptance of resignation, necessary.

Acceptance of the resignation tendered by an employee is necessary to make the resignation effective. (Shie Jie Corp. vs. National Federation of Labor, G. R. No. 153148, July 15, 2005).

Does the acceptance of a resignation require the conformity of the resigning employee?

No. The acceptance of a resignation does not require the conformity of the resigning employee. Such conformity only indicates that the employee was forced to resign for which reason her “conformity” was obtained to make it appear as voluntary or legal. (Rase vs. NLRC, G. R. No. 110637, Oct. 07, 1994)

What is the effect of resignation?

Once resignation is accepted, the employee no longer has any right to the job. It goes without saying, therefore, that resignation terminates the employer-employee relationship. (Philippine National Construction Corporation vs. NLRC, G. R. No. 120961, Oct. 2, 1997, 280 SCRA 116).

May an employee withdraw his resignation?

A resignation tendered by an employee, irrespective of whether it was made revocable or irrevocable, may still be withdrawn anytime before its acceptance by the employer. Once accepted, however, withdrawal thereof can no longer be made by the resigning employee, except with the consent or agreement of the employer. (Custodio vs. Ministry of Labor and Employment, G. R. No. 643174, July 19, 1990).

The acceptance of the withdrawal of resignation is the employer’s sole prerogative. The employee who resigned cannot unilaterally withdraw his resignation. Once accepted, the employee no longer has any right to the job. If the employee later changes his mind, he must ask for approval of the withdrawal of his resignation from his employer, as if he were re-applying for the job. It will then be up to the employer to determine whether or not his services would be continued. If the employer accepts said withdrawal, the employee retains the job. If the employer does not, the employee cannot claim illegal dismissal for the employer has the right to determine who his employees will be. To say that the employee who has resigned is illegally dismissed is to encroach upon the right of the employers to hire persons who will be of service to them. (Intertrod Maritime, Inc. vs. NLRC, G. R. No. 81087, June 19, 1991, 198 SCRA 318).

Re-employment after acceptance of resignation.

A resigned employee who desires to take his job back has to reapply therefor, and he shall have the status of a stranger who cannot unilaterally demand an appointment. He cannot arrogate unto himself the same position which he earlier decided to leave. To allow him to do so would be to deprive the employer of his basic right to choose whom to employ. It has been held that an employer is free to regulate, according to his own discretion and judgment, all aspects of employment including hiring. The law, in protecting the rights of the laborer, impels neither the oppression nor self-destruction of the employer. (Philippines Today, Inc. vs. NLRC, supra).

Assumption of new job by employee prior to employer’s acceptance of resignation, effect.

The assumption of a new job by an employee prior to receiving his employer’s acceptance of his resignation is clearly inconsistent with any desire to remain in employment. His resignation is, therefore, deemed effective. (Philippines Today, Inc. vs. NLRC, G. R. No. 112965, Jan. 30, 1997, 267 SCRA 202).

Employment elsewhere during the pendency of case, effect.

In the 2005 case of Great Southern Maritime Services Corporation vs. Acuña, (G. R. No. 140189, Feb. 28, 2005), the employer’s submission that respondent-employees voluntarily resigned because of their desire to seek employment elsewhere, as accentuated by the concurrent fact that two of the respondents already have jobs in Singapore, was held as an unreasonable inference. The fact that these two have already found employment elsewhere should not be weighed against their favor. It should be expected that they would seek other means of income to tide them over during the time that the legality of their termination is under litigation. They should not be faulted for seeking employment elsewhere for their economic survival.

Resignation and execution of quitclaim, effect.

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 remuneration or benefits upon his or her resignation. (Philippine National Construction Corporation vs. NLRC, G. R. No. 120961, Oct. 2, 1997).

Resignation letter written and prepared by employer; effect.

According to the 2000 case of A’ Prime Security Services, Inc. vs. NLRC, [G. R. No. 107320, January 19, 2000], no weight should be given to the employee’s resignation letter which appears to have been written and submitted at the instance of the petitioner-employer. Its form is of the company’s and its wordings are more of a waiver and quitclaim. More so when the supposed resignation was not acknowledged before a notary public.

In the 2005 case of Mobile Protective & Detective Agency vs. Ompad, [G. R. No. 159195, May 9, 2005], the High Court agreed with the NLRC and the CA that the two resignation letters at issue are dubious, to say the least. A bare reading of their content would reveal that they are in the nature of a quitclaim, waiver or release. They were written in a language obviously not of respondent's and “lopsidedly worded” to free the employer from liabilities. The CA’s ruling was upheld thus: “[w]hen the first resignation letter was a pro forma one, entirely drafted by the petitioner Agency for the private respondent to merely affix his signature, and the second one entirely copied by the private respondent with his own hand from the first resignation letter, voluntariness is not attendant.”

Resignation letters similarly worded and of same tenor, effect.

In the 2005 case of Great Southern Maritime Services Corporation vs. Acuña, [G. R. No. 140189, Feb. 28, 2005], it was held that resignation letters which were all prepared by the employer and were substantially similarly worded and of the same tenor would reveal the true nature of these documents - they are waivers or quitclaims which are not sufficient to show valid separation from work or bar the employees from assailing their termination. They also constitute evidence of forced resignation or that they were summarily dismissed without just cause.

Voluntariness of resignation may be inferred from the language thereof.

● In the 2005 case of Willi Hahn Enterprises, vs. Maghuyop, [G. R. No. 160348, December 17, 2004], the employee’s resignation letter reads:

“July 22, 1998

“Dear Mr. and Mrs. Hahn

“I am respectfully submitting my resignation from Willi Hahn Enterprises effective today, July 22, 1998. I hope that in some way, I was of some help to you and your family.

“Thank you for your assistance during the past.

“Very truly yours,

“LILIA MAGHUYOP”

In holding that the afore-quoted letter was voluntarily tendered by the employee, the Supreme Court declared:

“The letter is simple, candid and direct to the point. We find no merit in respondent’s claim that being a mere clerk, she did not realize the consequences of her resignation. Although she started as nanny to the son of petitioner Willi Hahn, she has risen to being the manager and officer-in-charge of the Willi Hahn Enterprises in SM Cebu branch.

● In Callanta vs. National Labor Relations Commission, [G.R. No. 105083, 20 August 1993, 225 SCRA 526], a national-promoter salesman of Distilleria Limtuaco Co., Inc., assigned in Iligan City, Lanao del Sur and Lanao Del Norte, resigned after he was found to have a shortage of P49,005.49 in a ‘spot audit’ conducted by the company. He later filed an illegal dismissal case claiming that his consent to the resignation was vitiated as he signed the company’s ready-made resignation letter because the latter threatened to file an estafa case against him. In rejecting his contention, the Court ruled that a salesman-promoter could not have been confused, coerced or intimidated into signing the resignation letter. Instead of defending himself against the adverse audit report, he voluntarily signed the resignation letter though there is no urgency in signing the same. The Court concluded that he affixed his signature in the said letter of his own free will with full knowledge of the consequences thereof.”

Act of employer in giving the employee the choice between resignation or investigation, not illegal.

In a case where the employer asked the employee to submit her resignation letter or, if not, to submit her written explanation to the complaints against her, and consequently, the employee immediately filed a complaint for illegal dismissal thereby pre-empting an investigation by the employer on the matter, the Supreme Court ruled that the employer did not violate any law when it gave the employee the option to resign because there is nothing illegal with the practice of allowing an employee to resign instead of being separated for just cause, so as not to smear her employment record. (Belaunzaran vs. NLRC, G. R. No. 120038, Dec. 23, 1996).

Failure of employer to criminally prosecute employee who resigned, effect.

In Willi Hahn Enterprises, vs. Maghuyop, [G. R. No. 160348, Dec. 17, 2004)], it was held that the failure of the employer to pursue the termination proceedings against an employee who resigned and to make her pay for the shortage incurred did not cast doubt on the voluntary nature of her resignation. A decision to give a graceful exit to an employee rather than to file an action for redress is perfectly within the discretion of an employer. It is not uncommon that an employee is permitted to resign to save face after the exposure of her malfeasance. Under the circumstances, the failure of petitioner to file action against the employee should be considered as an act of compassion for one who used to be a trusted employee and a close member of the household.

Employee who alleges that she was coerced into resigning should prove such claim.

In the same case of Willi Hahn [supra], the resigning employee’s unsubstantiated and self-serving claim that she was coerced into signing the resignation letter was not given any credence. It is a basic rule in evidence that the burden of proof is on the part of the party who makes the allegations. She failed to discharge this burden. Moreover, the Court of Appeals’ finding that respondent had no motive to resign because the charges of dishonesty were not fully substantiated has no basis. Had the separation of respondent been for dismissal due to loss of trust and confidence, substantial evidence of the shortages and non-remittances would have been indispensable. Such, is not the case here considering her voluntary resignation.

Filing of complaint negates resignation; exception.

● The general rule is that the filing of a complaint for illegal dismissal is inconsistent with resignation. (Cheniver Deco Print Technics Corporation vs. NLRC, G. R. No. 122876, Feb. 17, 2000).

Citing Molave Tours Corporation vs. NLRC, [G.R. No. 112909, November 24, 1995, 250 SCRA 325, 330], the Supreme Court in Shie Jie Corp. vs. National Federation of Labor, [G. R. No. 153148, July 15, 2005], held:

“By vigorously pursuing the litigation of his action against petitioner, private respondent clearly manifested that he has no intention of relinquishing his employment, which act is wholly incompatible to petitioner’s assertion that he voluntarily resigned.”

●  In Great Southern Maritime Services Corporation vs. Acuña, [G. R. No. 140189, Feb. 28, 2005], it was ruled that the execution of the alleged “resignation letters cum release and quitclaim” to support the employer’s claim that respondents voluntarily resigned is unavailing as the filing of the complaint for illegal dismissal is inconsistent with resignation.

It would have been illogical for the employee to resign and then file a complaint for illegal dismissal. (Emco Plywood Corporation vs. Abelgas, G. R. No. 148532, April 14, 2004).

Hence, the finding that the employee's resignation is involuntary is further strengthened by the fact that he filed an illegal dismissal case the day after the alleged tender of resignation. (Mobile Protective & Detective Agency vs. Ompad, G. R. No. 159195, May 9, 2005).

However, this rule does not apply to a case where the filing of an illegal dismissal case by the employee who resigned was evidently a mere afterthought. It was filed not because she wanted to return to work but to claim separation pay and backwages. (Willi Hahn Enterprises, vs. Maghuyop, supra).

Expression of gratitude to employer, effect.

A resignation letter which contains words of gratitude and appreciation to the employer can hardly come from employees who are forced to resign. (St. Michael Academy vs. NLRC, G. R. No. 119512, July 13, 1998, 292 SCRA 478).