Sumifru (Philippines) Corporation v. Baya, April 17, 2017

Facts:
Baya is employed by AMSFC and worked his way to become a supervisor. Baya joined the union of supervisors, and eventually, formed AMS Kapalong Agrarian Reform Beneficiaries Multipurpose Cooperative (AMSKARBEMCO). Later on and upon AMSKARBEMCO's petition before the Department of Agrarian Reform (DAR), some 220 hectares of AMSFC's 513-hectare banana plantation were covered by the Comprehensive Agrarian Reform Law. Eventually, said portion was transferred to AMSFC's regular employees as Agrarian Reform Beneficiaries (ARBs), including Baya. The ARBs explored a possible agribusiness venture agreement with AMSFC, but the talks broke down. When AMSFC learned that AMSKARBEMCO entered into an export agreement with another company, it summoned AMSKARBEMCO officers, including Baya, to lash out at them and even threatened them that the ARBs' takeover of the lands would not push through. Thereafter, Baya was again summoned, this time by a DFC manager, who told the former that he would be putting himself in a "difficult situation" if he will not shift his loyalty to SAFFPAI; this notwithstanding, Baya politely refused to betray his cooperative. A few days later, Baya received a letter stating that his secondment with DFC had ended, thus ordering his return to AMSFC. However, upon Baya's return to AMSFC on August 30, 2002, he was informed that there were no supervisory positions available; thus, he was assigned to different rank-and-file positions instead. On September 20, 2002, Baya's written request to be restored to a supervisory position was denied, prompting him to file the instant complaint. AMSFC and DFC maintained that they did not illegally/constructively dismiss Baya, considering that his termination from employment was the direct result of the ARBs' takeover of AMSFC's banana plantation through the government's agrarian reform program.
 
 Issue:
Whether or not AMSFC and DFC constructively dismissed Baya.

​Held:
Yes. "Constructive dismissal exists where there is cessation of work, because 'continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in pay' and other benefits. Aptly called a dismissal in disguise or an act amounting to dismissal but made to appear as if it were not, constructive dismissal may, likewise, exist if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued employment."
In Peckson v. Robinsons Supermarket Corp., the Court held that the burden is on the employer to prove that the transfer or demotion of an employee was a valid exercise of management prerogative and was not a mere subterfuge to get rid of an employee; failing in which, the employer will be found liable for constructive dismissal, viz.:
In case of a constructive dismissal, the employer has the burden of proving that the transfer and demotion of an employee are for valid and legitimate grounds such as genuine business necessity. Particularly, for a transfer not to be considered a constructive dismissal, the employer must be able to show that such transfer is not unreasonable, inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Failure of the employer to overcome this burden of proof, the employee's demotion shall no doubt be tantamount to unlawful constructive dismissal.
 
In this case, a judicious review of the records reveals that the top management of both AMSFC and DFC, which were sister companies at the time, were well-aware of the lack of supervisory positions in AMSFC. This notwithstanding, they still proceeded to order Baya's return therein, thus, forcing him to accept rank-and-file positions. Notably, AMSFC and DFC failed to refute the allegation that Baya's "end of secondment with DFC" only occurred after: (a) he and the rest of AMSKARBEMGO officials and members were subjected to harassment and cooperative busting tactics employed by AMSFC and DFC; and (b) he refused to switch loyalties from AMSKARBEMCO to SAFFPAI, the pro-company cooperative. In this relation, the Court cannot lend credence to the contention that Baya's termination was due to the ARBs' takeover of the banana plantation, because the said takeover only occurred on September 20, 2002, while the acts constitutive of constructive dismissal were performed as early as August 30, 2002, when Baya returned to AMSFC. Thus, AMSFC and DFC are guilty of constructively dismissing Baya.