Dreamland Hotel vs Johnson, March 12, 2014

Facts;
Sometime on June 21, 2007, Prentice (President of Dreamland) and Johnson (Australian Investor) entered into an Employment Agreement, which stipulates among others, that Johnson shall serve as Operations Manager of Dreamland from August 1, 2007 and shall serve as such for a period of three (3) years.
 
From August 2007, respondent Johnson already reported for work and  found out, to his dismay, that the resort was far from finished. He was tasked to supervise the construction and undertook the overall preparation of the guestrooms and staff for the opening of the hotel, even performing menial tasks.
 
As Johnson remained unpaid since August 2007 and he has loaned all his money to petitioners, he asked for his salary after the resort was opened in October 2007 but the same was not given to him by petitioners. Johnson became very alarmed with the situation as it appears that there was no intention to pay him his salary.
 
On November 3, 2007, after another embarrassment was handed out by petitioner Prentice in front of the staff, which highlighted his lack of real authority in the hotel and the disdain for him by petitioners, respondent Johnson was forced to submit his resignation. Johnson filed a case for illegal dismissal and non-payment of salaries against petitioners.
 
LA dismissed the complaint, holding that Johnson voluntarily resigned from his employment. On appeal, the NLRC reversed the LAs decision and ordered petitioners to pay. CA dismissed the appeal on the ground of technicalities.
 
Issue:
Whether or not Johnson voluntarily resigned.

​Held:
No. Although the resort did not open until approximately 8th October 2007, Johnson's employment began, as per Employment Agreement, on 1st August 2007. During the interim period, Johnson was frequently instructed by Prentice to supervise the construction staff and speak with potential future guests who visited the site out of curiosity.
 
The petitioners maintain that they have paid the amount of P7,200.00 to Johnson for his three weeks of service from October 8, 2007 until November 3, 2007, the date of Johnson's resignation, which Johnson did not controvert. Even so, the amount the petitioners paid to Johnson as his three-week salary is significantly deficient as Johnson's monthly salary as stipulated in their contract isP60,000.00. Thus, the amount which Johnson should have been paid is P45,000.00 and not P7,200.00. In light of this deficiency, there is more reason to believe that the petitioners withheld the salary of Johnson without a valid reason.
 
It only goes to show that while it was Johnson who tendered his resignation, it was due to the petitioner's acts that he was constrained to resign. The petitioners cannot expect Johnson to tolerate working for them without any compensation.
 
Since Johnson was constructively dismissed, he was illegally dismissed. Thus, an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. The two reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and backwages.