Abandonment vs Constructive Dismissal: When an Employee Is Forced to Quit

The Supreme Court's 2013 ruling in Tan Brothers Corporation of Basilan City v. Escudero (G.R. No. 188711) clarifies a crucial distinction in Philippine labor law: when an employee stops reporting for work, is it abandonment—a valid ground for dismissal—or constructive dismissal, where the employer's actions effectively forced the employee out? The answer determines whether the employer owes backwages and separation pay.

The Facts of the Case

Edna Escudero was hired as a bookkeeper by Tan Brothers Corporation in July 1991. In July 2003, her monthly salary of P2,500.00 began to be paid irregularly. The company then remodeled its office, rented out Escudero's workspace, and stopped giving her assignments. When her May 2004 salary was not paid at all, she stopped reporting for work and filed a complaint for illegal dismissal in September 2004.

The company claimed Escudero abandoned her job, pointing to her absence since July 2003 and alleging she took company property, including a typewriter and corporate records.

The Legal Definition of Abandonment

The Court defined abandonment as the deliberate and unjustified refusal of an employee to resume employment. It constitutes neglect of duty and is a just cause for termination under the Labor Code.

For abandonment to exist, two elements must concur:

1. Failure to report for work or absence without valid or justifiable reason; and
2. A clear intention to sever the employer-employee relationship.

The second element is the more determinative. It must be shown through overt acts that unerringly point to the employee simply not wanting to work anymore. The burden of proof rests on the employer to show a deliberate and unjustified refusal to return to work.

Why the Court Ruled Against Abandonment

The Court found that Tan Brothers failed to prove either element. Escudero persisted in reporting for work despite irregular salary payments. Her eventual absence resulted from the company's non-payment of her salary in May 2004, not from any intent to quit.

Significantly, the company never even issued a notice directing Escudero to return to work. The Court noted that mere absence, even after a notice to return, is not enough to constitute abandonment. The company's claim that Escudero took company property was also rejected—it was reported to barangay authorities only after she filed her complaint, making it appear retaliatory.

Constructive Dismissal Defined

The Court explained that constructive dismissal occurs when continued employment is rendered impossible, unreasonable, or unlikely—for example, through demotion, diminution of pay, or employer conduct that becomes unbearable. The test is objective: whether a reasonable person in the employee's position would have felt compelled to give up the position.

Here, Escudero was deprived of office space, given no assignments, and unpaid her salary. These circumstances combined to make out a clear case of constructive dismissal.

The Two-Notice Rule

The Court also reminded employers that terminating an employee for a just cause requires compliance with the two-notice rule: (1) a written notice stating the cause for termination, giving the employee opportunity to be heard; and (2) a written notice of the decision to dismiss, stating the reason. These notices are not a mere technicality but a requirement of due process.

Practical Takeaways

• Abandonment is hard to prove. Employers must show both unjustified absence and clear intent to sever the employment relationship through overt acts—not just allege it.
• Constructive dismissal happens when work becomes unbearable. If an employer stops giving assignments, withholds pay, or makes continued employment impossible, the employee may be deemed constructively dismissed.
• Filing an illegal dismissal case negates abandonment. An employee who files a complaint—especially one seeking reinstatement—shows an intent to return, contradicting a claim of abandonment.
• Employers must issue notices. The two-notice rule is mandatory before terminating an employee for a just cause, including abandonment.
• Backwages and separation pay follow illegal dismissal. Employees constructively dismissed are entitled to backwages from dismissal up to reinstatement, and separation pay when reinstatement is no longer practical.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.