FACTS:

Manolo A. Peñaflor was hired as the probationary HRD Manager of Outdoor Clothing Manufacturing Corporation. He had responsibilities such as securing and maintaining the company's workforce, maintaining harmonious employee-management relationships, and representing the company in labor cases.

Peñaflor claimed that his relationship with Outdoor Clothing deteriorated after the departure of the company's Vice President for Operations, as he became a target of the company's anger. He alleged that his department was singled out during a downsizing program, leaving him as the sole member of the HRD and forcing him to handle all personnel-related work.

Furthermore, Peñaflor asserted that the company deducted his salary for six days while he attended to the hospitalization needs of an injured employee, even though he regarded it as official business. Upon returning from field work, he discovered that a new HRD Manager had been appointed. Feeling betrayed and discouraged, Peñaflor resigned and filed a complaint for illegal dismissal.

Outdoor Clothing denied the allegation of constructive dismissal, contending that Peñaflor resigned voluntarily. The labor arbiter ruled in favor of Peñaflor, finding him to be illegally dismissed, and ordered the reinstatement of his employment as well as the payment of his illegally deducted salary and other monetary claims.

Outdoor Clothing appealed the decision to the NLRC, arguing that Peñaflor had resigned and that the new HRD Manager was appointed to handle personnel matters in Peñaflor's unauthorized absence.

In a separate incident, Peñaflor also claimed that he was subjected to degrading and hostile treatment by his superior, Syfu. He eventually resigned, citing inability to bear the working conditions. Outdoor Clothing alleged that Peñaflor had previously received two notices for his unauthorized absences. Peñaflor denied the existence of such notices, labeling them as fabricated. The NLRC considered the evidence provided by Outdoor Clothing as sufficient and characterized Peñaflor's resignation as a response to the company's financial struggles.

The Court of Appeals affirmed the NLRC's decision, stating that Peñaflor failed to present adequate evidence of constructive dismissal. Dissatisfied, Peñaflor filed a petition for review on certiorari with the Supreme Court.

ISSUES:

1. The issue in this case is whether Peñaflor's resignation was voluntary or forced, and if he was constructively dismissed as a result.

2. Whether Peñaflor was forced to resign from the company.

3. Whether there was valid downsizing and legitimate reasons for Peñaflor's dismissal.

4. Whether Peñaflor's resignation was voluntary.

5. Whether Peñaflor was constructively dismissed given the hostile and discriminatory working environment.

6. Whether Peñaflor's complaint against the employer was a convenient afterthought subsequent to an abandonment or a voluntary resignation.

RULING:

1. The court ruled in favor of Peñaflor, finding that he was constructively dismissed.

2. Peñaflor was practically compelled to resign from the company based on the circumstances and evidence surrounding his resignation, such as the late disclosure of Buenaobra's appointment, the downsizing of the HRD department, and the lack of evidence to support legitimate downsizing. The evidence supports Peñaflor's claim that his resignation was a reaction to circumstances that left him no alternative but to resign.

3. The company failed to provide evidence showing a legitimate downsizing and the reasons for it. Peñaflor's claim of discriminatory treatment towards him and employees associated with Lee was not effectively rebutted by the company.

4. Peñaflor's resignation was not voluntary as there was no evidence to support it. The burden of proving voluntary resignation lies with the employer, and the evidence does not support the existence of voluntariness in Peñaflor's resignation.

5. Peñaflor was constructively dismissed given the hostile and discriminatory working environment, particularly evidenced by the escalating acts of unfairness against him that culminated in the appointment of another HRD manager without any prior notice to him. The court ruled in Peñaflor's favor based on the contest of evidence and the provisions of Article 4.

6. The court found that Peñaflor sought almost immediate official recourse to contest his separation from service through a complaint for illegal dismissal. This showed that his complaint was not a convenient afterthought but rather an act of one who deeply felt that he had been wronged.

PRINCIPLES:

• A Rule 45 petition deals only with legal issues but factual issues may be considered in labor law cases when there is a conflict in factual findings among the labor arbiter, NLRC, and CA.

• Constructive dismissal occurs when an employee is forced to resign due to oppressive or hostile working conditions amounting to constructive dismissal, which is equivalent to an illegal dismissal.

• In determining whether an employee was constructively dismissed, the critical fact is whether the resignation letter was submitted before or after the appointment of another person to the position. If the resignation was submitted before the appointment, there is little support for the allegation of constructive dismissal. If submitted after the appointment, it indicates that the employee was constructively dismissed due to the appointment.

• The date of a resignation letter is significant in determining the timeline of events and the intentions of the parties.

• The burden of proof is on the employer to prove that the resignation was voluntary and not forced or constructively dismissed.

• In labor cases, evidence presented at the NLRC level on appeal must be sufficiently explained if not presented before the labor arbiter. Failure to do so may cast doubt on the credibility and weight of such evidence.

• In employee termination disputes, the employer bears the burden of proving that the employee's dismissal was for just and valid cause. There can be no valid resignation if it was made under compulsion or under circumstances approximating compulsion.

• All doubts in the interpretation and implementation of the Labor Code should be interpreted in favor of the workingman. This principle extends to doubts in the evidence presented by the employer and the employee.

• Constructive dismissal can occur when there is a hostile and discriminatory working environment that forces an employee to resign.

• The employee's reaction to the termination of employment is significant in abandonment and constructive dismissal cases.

• Immediate complaints can characterize an employee as one who deeply felt that he had been wronged and supports the claim of constructive dismissal.