Public Office Ethics Improper Firearm Discharge AND Limits OF Misconduct Claims

The Supreme Court recently ruled on a case involving the termination of a school comptroller, clarifying the rules on constructive dismissal, optional retirement, and the limits of employer claims against employees. The case of Ondevilla v. Colegio de San Juan de Letran (Laguna) (G.R. No. 278615, June 29, 2026) provides important guidance for both employers and employees on these matters.

The Facts of the Case

Rodolfo C. Ondevilla was hired by Colegio de San Juan de Letran (CSJL) in Calamba, Laguna in 2004 as Comptroller. He was later promoted to Assistant Vice President (AVP) for Finance and Controller, a position renewed every three years until June 30, 2018.

When a new management took over in June 2018, Ondevilla was appointed as Controller for a fixed period from July 1, 2018 to August 29, 2019. He objected to this appointment, claiming it was a demotion that would substantially reduce his salary and benefits. CSJL, however, insisted that Ondevilla was merely a consultant, not a regular employee.

When his contract as Controller expired on August 29, 2019, Ondevilla filed a complaint for illegal dismissal.

The Issue

The case raised several key questions: Was Ondevilla a regular employee or an independent contractor? Was his demotion a form of constructive dismissal? Did he validly retire when he turned 60 years old? And could the school claim payment of his alleged outstanding loans?

The Ruling

The Supreme Court held that Ondevilla was indeed a regular employee of CSJL. The four-fold test—selection and engagement, payment of wages, power of dismissal, and power of control—was satisfied. The repeated renewal of his contracts for 14 years negated the school's claim that he was an independent contractor.

The Court also found that Ondevilla was constructively dismissed. His demotion from AVP for Finance to Controller, which altered his rank, status, and responsibilities, amounted to a demotion that constituted constructive dismissal.

On the retirement issue, the Court ruled that Ondevilla did not expressly agree to an early retirement. Under Article 302 of the Labor Code, the compulsory retirement age is 65 years, while the minimum age for optional retirement is 60 years. An employee who did not expressly agree to an early retirement cannot be retired from service before reaching 65 years. The Court emphasized that acceptance of an early retirement option must be explicit, voluntary, free, and uncompelled.

The Court also addressed the school's claim for payment of Ondevilla's alleged outstanding loans. The Court rejected this claim because it was not raised as an issue before the labor tribunals. Points of law and arguments not brought to the attention of the lower courts cannot be raised for the first time on appeal.

Practical Takeaways

• Regular employment status is determined by the four-fold test, not by the label given by the employer. Repeated renewal of contracts can establish regular employment.
• Constructive dismissal occurs when an employee is demoted in rank, status, and responsibilities without due process, even if salary remains the same.
• Optional retirement at age 60 requires explicit, voluntary, and uncompelled consent from the employee. A mere response to an employer's demand letter does not constitute such consent.
• Employer counterclaims must be raised before the labor tribunals; they cannot be raised for the first time on appeal.
• Separation pay in lieu of reinstatement is still awarded when reinstatement is no longer feasible due to the employee reaching compulsory retirement age during the pendency of the case.

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