ENGRACIO A. GUERZON, JR., LILIAN E. CRUZ and JOSEFINA O. BAUYON, PETITIONERS, VS. PASIG INDUSTRIES, INC., MASAHIRO FUKADA and YOSHIKITSU FUJITA, RESPONDENTS.

Guerzon versus Pasig Industries

The Case

This is a labor case about three long-serving employees of Pasig Industries who accepted a special separation package, resigned, and then sued their employer for illegal dismissal two days later. The Supreme Court had to decide whether employees who voluntarily resign after bargaining for better separation terms can later claim that they were dismissed without just or authorized cause. The case matters because it draws a clean line between a genuine resignation and a forced termination, and it teaches that an employee's deliberate, negotiated acceptance of a separation package forecloses a later claim of illegal dismissal.

Procedural History

The petitioners filed a complaint for illegal dismissal and for payment of separation pay, retirement benefits, leave pay, and thirteenth month pay before the National Labor Relations Commission. The labor arbiter ruled in their favor, finding the respondents guilty of illegal dismissal and awarding backwages, separation pay, and attorney's fees. On appeal, the National Labor Relations Commission reversed, holding that the petitioners had voluntarily accepted the special separation package and had even negotiated to improve its terms. The petitioners then filed a petition for certiorari in the Court of Appeals, asserting grave abuse of discretion, but the Court of Appeals dismissed the petition, and it denied their motion for reconsideration. The petitioners thus elevated the matter to the Supreme Court by petition for review, contending that the Court of Appeals erred in affirming the National Labor Relations Commission.

Facts

The petitioners were employees of Pasig Industries stationed in its Makati office. Engracio Guerzon had been the export and import manager for twenty-one years, Lilian Cruz had been the chief accountant for twenty years, and Josefina Bauyon had been a member of the accounting staff since 1989.

In 1995, the respondent Yoshikitsu Fujita informed the petitioners that the parent company had decided to close the Makati office and transfer its functions to the company's facilities in the Bataan Export Processing Zone. The petitioners were given the option to resign, in which case they would receive a special separation package equivalent to one month's basic salary for each year of service. The petitioners chose to resign but asked that their separation pay be recomputed on the basis of monthly gross pay, that is, basic pay plus all allowances. The company, through Fujita, agreed, and it paid them accordingly on September 25, 1995.

Two days later, on September 27, 1995, the petitioners filed a complaint for illegal dismissal and money claims against the company, its president Masahiro Fukada, and Fujita. The labor arbiter, noting that the complaint was filed two days after the supposed termination, found the respondents guilty of illegal dismissal. The National Labor Relations Commission reversed, finding that the petitioners had voluntarily accepted the package and had negotiated to improve it.

Issues

• Whether or not the petitioners were illegally dismissed, or whether they voluntarily resigned from their employment.
• Whether or not the company's alleged failure to prove losses to justify its reorganization is material to the resolution of the case.

Applicable Provisions

Article 283 of the Labor Code, which the decision discusses in relation to the separation package offered, provides:

Article 283 of the Labor Code requires the employer to serve a written notice on the workers and the Secretary of Labor at least one month before the effective date of termination. Moreover, in cases of closures or cessations of undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one month pay or at least one-half pay for every year of service, whichever is higher.

This provision bears on the case because the company's special separation package, at one month's basic salary for every year of service, was more generous than what the law required, which supports the finding that the petitioners freely accepted a beneficial offer rather than submitted to a dismissal.

Ruling

On the first issue, the Court held that the petitioners voluntarily resigned and were not illegally dismissed. It stressed that the petitioners held responsible positions and that employees of their educational background and professional standing do not easily relinquish their legal rights unless they intend to. The Court noted that the petitioners had in fact bargained to improve the terms of the special separation package and, after succeeding, voluntarily resigned from the company.

On the second issue, the Court held that whether the streamlining of the company's operations constituted an authorized cause for termination had become immaterial in view of the petitioners' voluntary resignation. Since the petitioners resigned of their own accord, the existence of a just or authorized cause for dismissal was no longer the operative question.

Doctrine

A resignation is voluntary when it is the deliberate and informed act of an employee who understands its consequences, and such an employee cannot later claim illegal dismissal. Employees who hold responsible positions and who bargain for and accept improved separation terms are presumed to have acted with full intent to relinquish their employment. Where the employee voluntarily resigns, the question of whether the employer had a just or authorized cause for termination becomes immaterial. The employer's separation package, measured against Article 283 of the Labor Code, may even exceed the statutory minimum, which reinforces the conclusion that the employee accepted a beneficial offer rather than suffered a forced dismissal.

Disposition

The Supreme Court denied the petition and affirmed the dismissal of the complaint, with costs against the petitioners.

Remember This

The single line to memorize is that employees of responsible standing who bargain for and accept an improved separation package are deemed to have voluntarily resigned, making any question of authorized cause immaterial. Examiners like to use this case to test the distinction between voluntary resignation and illegal dismissal, and to probe whether an employee's negotiation of separation terms defeats a later claim of forced termination.