Letter to a Lawyer

Dear Attorney,

Good evening. I am seeking your legal advice regarding a situation at our workplace. Our employer has informed us that we need to either resign voluntarily or face deductions from our 13th-month pay to cover the cost of benefits they allegedly failed to secure for us from January to December of this year.

We were not provided with these benefits throughout the year, and only now has the company begun processing them. It feels unfair for the company to ask us to shoulder the responsibility for their oversight. I am uncertain about my rights in this situation and would like to know if this practice is lawful. What steps can we take to protect ourselves legally?

Thank you in advance for your assistance.

Sincerely,
A Concerned Employee

Comprehensive Legal Analysis on Forced Resignation and Deduction from 13th Month Pay

The concerns raised touch upon significant labor rights and protections under Philippine law, including illegal forced resignation, 13th-month pay entitlements, and employer liability for non-provision of benefits. Below is a detailed discussion of these topics, with relevant legal principles, jurisprudence, and applicable remedies.

I. Forced Resignation Under Philippine Labor Law

A. Definition and Legal Prohibition

Resignation is a voluntary act by the employee to terminate their employment. As per Article 300 (formerly Article 285) of the Labor Code of the Philippines, resignation must be free from coercion or undue influence. Forced resignation, whether through threats, intimidation, or undue pressure, is deemed equivalent to constructive dismissal.

Constructive Dismissal

Under Philippine law, constructive dismissal occurs when an employer’s actions make continued employment so intolerable or difficult that the employee is forced to resign. Examples include:

Coercion to resign to avoid termination;
Changes to employment terms that are prejudicial to the employee;
Hostile or oppressive treatment.

Jurisprudence

The Supreme Court in Globe Telecom, Inc. v. Florendo (G.R. No. 179095, March 3, 2010) held that resignation letters tendered under duress or threats are not voluntary and amount to illegal dismissal.

B. Remedies for Forced Resignation

Filing a Complaint for Illegal Dismissal:
- Employees may file a case with the National Labor Relations Commission (NLRC).
- Relief includes reinstatement without loss of seniority and full back wages from the time of dismissal to actual reinstatement.
Moral and Exemplary Damages:
- If bad faith or oppressive conduct is proven, the employer may be held liable for damages under Articles 2219 and 2229 of the Civil Code.

II. Deduction from 13th Month Pay: Legal Framework

A. Nature of the 13th Month Pay

Presidential Decree No. 851 mandates that all rank-and-file employees are entitled to a 13th-month pay, equivalent to at least one-twelfth of their total basic salary earned within the calendar year. This is a statutory benefit, and any deduction from it without lawful cause is prohibited.

Non-Deductibility of 13th Month Pay

Section 8 of the Rules Implementing PD 851 explicitly prohibits deductions unless expressly allowed by law, or if the employee provides written consent.
Employers cannot unilaterally impose deductions for costs or liabilities that should be borne by the company.

B. Company’s Liability for Failure to Provide Benefits

Employer Responsibility

Employers are obligated under the Labor Code and other social legislation to provide statutory benefits such as SSS, PhilHealth, and Pag-IBIG contributions. Failure to remit these benefits constitutes a violation and subjects the employer to penalties.

Employees Not Liable for Employer’s Omissions

The Supreme Court in GSIS v. Villaviza (G.R. No. 180291, September 14, 2011) affirmed that employees should not suffer the consequences of an employer’s failure to comply with statutory obligations. Deducting arrears from the employees’ entitlements, such as the 13th-month pay, is illegal.

III. Employee Remedies and Course of Action

A. Filing a Complaint with the DOLE

Employees may file a complaint with the Department of Labor and Employment (DOLE) for violations of labor standards. These include:

Non-provision of benefits;
Unlawful deductions from 13th-month pay;
Coercion to resign.

B. Filing a Complaint for Illegal Dismissal

If forced resignation occurs, affected employees can file a complaint for illegal dismissal before the NLRC, as outlined earlier.

C. Criminal and Administrative Liability of Employers

Under Republic Act No. 11199 (Social Security Act of 2018) and the PhilHealth and Pag-IBIG laws, employers who fail to remit contributions may face criminal sanctions, including fines and imprisonment. Administrative penalties may also be imposed.

IV. Practical Steps for Employees

Document Everything:
- Gather written communication, memos, or any proof of coercion or illegal deductions.
Seek Legal Assistance:
- Consult with a labor lawyer or DOLE representative for guidance.
File a Formal Complaint:
- Report the matter to DOLE or file a case with the NLRC to assert your rights.
Union Support (if applicable):
- If part of a union, seek collective action or grievance mechanisms.

V. Employer Perspective: Legal Compliance

Employers must avoid practices that could lead to liability, including:

Ensuring compliance with statutory benefits and labor standards;
Avoiding coercion or undue pressure on employees;
Providing clear communication and written agreements for any remedial measures regarding unpaid benefits.

Non-compliance not only exposes employers to financial liabilities but also reputational damage and potential criminal penalties.

Conclusion

The actions described—forcing resignation and deducting unpaid benefits from the 13th-month pay—appear to violate multiple provisions of Philippine labor law. Employees should not bear the brunt of their employer’s non-compliance. By understanding their rights and utilizing available legal remedies, affected individuals can protect themselves from unfair labor practices and secure appropriate redress.

If you require further assistance, it is advisable to seek immediate consultation with a labor attorney or the DOLE to address this matter effectively.