Sexual Harassment at Work: Employer Liability and Constructive Dismissal in the Philippines

The Supreme Court recently affirmed that employers can be held solidarily liable for sexual harassment committed in the workplace when they fail to act promptly on complaints. In Buban v. Dela Peña (G.R. No. 268399, January 24, 2024), the Court also clarified when an employee who continues working despite a hostile environment may be considered constructively dismissed, and what damages are appropriate.

The case involved Francheska Aleen Balaba Buban, a Customer Care Senior Specialist at Xerox Business Services Philippines Inc., who was sexually harassed by her team leader, Nilo Dela Peña. The incident occurred in March 2015 when Dela Peña followed Buban into a storage room, made lewd remarks, grabbed her by the waist, tried to kiss her, and groped her breasts. He repeated these acts when she returned to the room.

The Employer's Duty Under RA 7877

Republic Act No. 7877, the Anti-Sexual Harassment Act of 1995, imposes clear obligations on employers. Under Section 4, employers must prevent or deter sexual harassment and provide procedures for resolution, settlement, or prosecution of such acts. This includes creating a committee on decorum and investigation.

Under Section 5, the employer is solidarily liable for damages arising from sexual harassment if the employer is informed of the acts and takes no immediate action.

In this case, Xerox Business failed to create the required committee and did not promptly act on Buban's complaint. The Court found this failure demonstrated "insensibility, indifference, and utter disregard" for the employee's security and welfare.

Constructive Dismissal Explained

The Court ruled that Buban was constructively dismissed even though she continued working. Constructive dismissal occurs when continued employment becomes so intolerable that a reasonable person would feel compelled to resign.

The Court cited LBC Express-Vis, Inc. v. Palco: "An employee is considered constructively dismissed if he or she was sexually harassed by her superior and her employer failed to act on his or her complaint with prompt and sensitivity."

Significantly, the Court held that continuing to report for work does not waive the right to claim constructive dismissal. As the Court noted, "necessitous men are not free men" — employees may have no choice but to keep working despite abuses.

Damages Awarded

The Court affirmed the Court of Appeals' award of:

• PHP 100,000.00 in moral damages
• PHP 50,000.00 in exemplary damages
• PHP 2,630.58 for three days of unpaid salary
• 6% legal interest per annum from finality of the decision

The Court rejected the NLRC's higher award of PHP 500,000.00, noting that damages are "not meant to enrich" the employee but to compensate for suffering and serve as correction for the public good.

No Separation Pay or Backwages

The Court clarified that separation pay and full backwages are not automatically awarded in constructive dismissal cases. These twin benefits require either actual resignation or economic loss such as demotion or diminution of pay. Since Buban did not resign and suffered no economic loss beyond the three-day unpaid salary, she was not entitled to these benefits.

Practical Takeaways

• Employers must create a Committee on Decorum and Investigation and act promptly on sexual harassment complaints. Failure to do so creates solidary liability with the harasser.
• A single incident can constitute sexual harassment. The law does not require a "demand, request, or requirement" of sexual favor when the offender's actions create an intimidating, hostile, or offensive environment.
• Employees who continue working despite harassment are not barred from claiming constructive dismissal. Economic necessity should not be held against the victim.
• Damages are compensatory, not punitive. Courts will award amounts consistent with the employee's prayer for relief and prevailing jurisprudence.
• Sexual harassment can result in three distinct liabilities: criminal, civil, and administrative, which may proceed independently of each other.

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