Dear Attorney,

I hope this letter finds you well. I am writing to seek your advice on a situation I am currently facing concerning my employment. On the same day I was informed that I failed my Performance Improvement Plan (PIP), I was also asked to submit a resignation letter effective immediately. It felt like I was being forced to resign under duress, and I am unsure if this constitutes illegal dismissal under Philippine labor law.

Could you kindly shed light on whether such actions by my employer can be considered an illegal dismissal? Additionally, I would like to understand what rights and remedies I may have under the law. Thank you for your guidance.

Sincerely,
A Concerned Employee

Understanding Illegal Dismissal Under Philippine Labor Law: Forced Resignation Following a Failed PIP

Legal Framework on Dismissals and Resignations

Under Philippine labor law, termination of employment must be in accordance with the standards and due process outlined in the Labor Code of the Philippines, as amended. Dismissals that fail to meet these standards are deemed illegal dismissal.

Resignation, on the other hand, is a voluntary act initiated by the employee. However, if an employee is coerced into resigning, such a resignation may be considered a constructive dismissal, which is tantamount to illegal dismissal.

Performance Improvement Plans (PIPs): Legal and Procedural Requirements

A Performance Improvement Plan (PIP) is often implemented by employers to address an employee’s underperformance. While not expressly governed by the Labor Code, it falls within the realm of management prerogative. However, the implementation of a PIP must still comply with the principles of substantive and procedural due process:

Substantive Due Process: The employer must have a valid reason related to the employee’s performance to initiate the PIP.
Procedural Due Process: The PIP must be conducted in good faith and provide the employee with a clear opportunity to improve.

The termination of an employee following the failure of a PIP requires adherence to lawful grounds for dismissal, as stated in Article 297 of the Labor Code. Grounds such as serious misconduct, habitual neglect of duties, or gross inefficiency must be clearly proven.

Forced Resignation and Constructive Dismissal

The resignation in question appears to be involuntary, as it was made under duress or coercion on the same day you were informed of your PIP failure. This aligns with the doctrine of constructive dismissal, which occurs when an employee is compelled to resign due to intolerable working conditions or coercive actions by the employer.

Key indicators of constructive dismissal include:

Coercion or Threats: The resignation is obtained through intimidation or pressure.
Absence of Voluntariness: The resignation was not initiated by the employee but was instead imposed by the employer.
Disregard for Due Process: The employer skips the procedural requirements for a valid dismissal and instead opts for forced resignation.

Under these circumstances, forced resignation may be declared as illegal dismissal.

Legal Consequences of Illegal Dismissal

If the resignation is deemed a constructive dismissal, the employer may be held liable for illegal dismissal. The employee is entitled to the following remedies under the Labor Code and related jurisprudence:

Reinstatement: The employee has the right to be reinstated to their former position without loss of seniority rights.
Back Wages: The employer is obligated to pay the employee back wages from the time of dismissal until actual reinstatement.
Separation Pay (In Lieu of Reinstatement): If reinstatement is not feasible, the employee may be awarded separation pay.
Damages: Depending on the circumstances, the employee may also claim moral and exemplary damages, as well as attorney's fees.

Jurisprudence on Forced Resignation and PIPs

The Supreme Court of the Philippines has consistently ruled in favor of employees in cases where forced resignation was evident. In Globe Telecom, Inc. v. Florendo (G.R. No. 190597, March 5, 2014), the Court held that resignation must be voluntary and that coercion invalidates the act. Similarly, in BPI Express Card Corporation v. Noe V. Olbes (G.R. No. 190210, March 7, 2012), the Court affirmed that any forced resignation under threat or duress constitutes constructive dismissal.

Concerning PIPs, the Court has emphasized that dismissal following a PIP failure must be supported by a valid cause and proper observance of procedural due process. Employers are required to provide evidence of the employee’s failure to meet reasonable and attainable performance goals.

Steps You Can Take

Document Evidence: Gather all documentation related to your PIP, including performance evaluations, communications with your employer, and the resignation letter you were compelled to submit.
File a Complaint: You may file a complaint for illegal dismissal with the National Labor Relations Commission (NLRC).
Seek Legal Assistance: Consult with a labor lawyer to ensure that your rights are protected and that you can effectively pursue remedies under the law.

Employer’s Potential Defenses

Employers accused of constructive dismissal may argue that:

The resignation was voluntary and not coerced.
The PIP failure was properly documented, and dismissal was based on just or authorized causes.
Due process was observed prior to the dismissal.

However, these defenses must be supported by concrete evidence. The burden of proof lies with the employer to demonstrate that the dismissal was lawful and that the resignation was voluntary.

Conclusion

The scenario you described strongly suggests a case of constructive dismissal, which is tantamount to illegal dismissal under Philippine labor law. Forced resignation, especially when done in conjunction with a failed PIP, undermines the principles of voluntariness and due process. As an employee, you are entitled to seek redress through the proper legal channels to protect your rights and recover any entitlements due to you.

It is crucial to act promptly and seek professional legal assistance to address this matter effectively. Philippine labor law is protective of employees’ rights, and you have strong grounds to pursue a complaint if your resignation was indeed forced.