* The Supreme Court’s First Division reversed a Court of Appeals ruling and found Cebu-based company Tri-J Marketing Inc. guilty of constructively dismissing employee Niño Rio Gabrillo.
* The High Court rejected Tri-J’s defense of job abandonment and loss of trust, ruling that repeated threats of criminal prosecution and general, unsubstantiated allegations deprived Gabrillo of voluntary resignation choices.
* Tri-J was ordered to pay Gabrillo full back wages, separation pay (one month per year of service), ₱30,000 moral damages, ₱30,000 exemplary damages, and 10% attorney's fees with 6% annual legal interest.
THE Supreme Court (SC) has ruled that an employee of a Cebu-based company was constructively dismissed, finding that the circumstances surrounding his separation effectively forced him out even without a formal dismissal notice.
Constructive dismissal is a form of illegal dismissal in which an employee is not formally fired but is put in a situation where continued employment becomes impossible, unreasonable or unlikely.
The High Court’s First Division described it as a “dismissal in disguise.”
“It exists when an employer’s acts render continued employment impossible, unreasonable, or unlikely, leaving the employee with no real option except to resign,” it said.
The ruling involved Niño Rio Gabrillo, an employee of Tri-J Marketing Inc. In its decision promulgated on Aug. 26, 2026, the SC First Division reversed Court of Appeals’ (CA) ruling and found Gabrillo
illegally dismissed.
Gabrillo filed a petition with the SC asking it to review the CA ruling that had set aside the National Labor Relations Commission’s decision finding him illegally dismissed and reinstated the labor arbiter’s earlier decision dismissing his complaint.
Pressure to resign led
to constructive dismissal
Gabrillo had worked for Tri-J since 1997 before the company investigated alleged discrepancies involving camelback materials (strips of uncured rubber tread material used in tire recapping) in January 2019.
He denied the accusations and refused repeated efforts by management to make him resign. He was not allowed to enter his workplace in
February 2019.
In its decision, the SC said an employer may offer resignation during an administrative investigation, but the choice must be “genuinely voluntary, free from coercion and completely open to refusal.”
“The repeated threats of criminal prosecution transformed what appeared to be an option into an ultimatum incompatible with the voluntariness required of a valid resignation,” it said.
The First Division found that the circumstances surrounding Gabrillo’s case deprived him of a meaningful choice to remain employed.
Absence doesn’t automatically mean abandonment
The company, in its defense, argued that Gabrillo had abandoned his job. The SC rejected this, saying abandonment requires both failure to report for work without valid justification and a clear intention to sever the employment relationship shown through overt acts. The employer must prove both.
Gabrillo’s conduct did not show such an intention and he had consistently denied the accusations and refused to resign, according to the SC.
Evidence and due
process matter
Tri-J also invoked loss of trust and confidence, but the SC said, “Neither could respondent validly invoke loss of trust and confidence.” It found that the allegations were not sufficiently supported by evidence and that the notice to explain did not adequately identify the specific acts involved.
“To sustain a dismissal on this ground under Article 297 of the Labor Code, the employer must establish by substantial evidence that the employee committed a willful breach of the trust reposed in him. Mere suspicion, speculation, or unsubstantiated accusations are insufficient,” the SC said.
Article 297 of the Labor Code allows employers to dismiss workers for serious misconduct, disobedience, fraud or breach of trust, gross neglect of duty, crimes against the employer and similar serious offenses, provided the employer can prove the charge and follows due process.
The High Court also found procedural lapses in the administrative investigation. Although Gabrillo was served a notice to explain, the accusations were stated in general terms, while the company repeatedly sought his resignation instead of completing the disciplinary process.
Separation pay awarded
instead of reinstatement
The SC ruled that reinstatement was no longer feasible and ordered Tri-J to pay separation pay equivalent to one month’s salary for every year of service, with at least six months counted as a full year. It also ordered full back wages, including applicable allowances and benefits.
Gabrillo was awarded P30,000 in moral damages, P30,000 in exemplary damages and attorney’s fees equivalent to 10 percent of the total monetary award.
The awards will earn six percent annual legal interest from the finality of the decision until fully paid. The case was remanded to the Labor Arbitration Branch for computation. / KAL