Directing Employee to Resign than to Face Termination

Directing Employee to Resign than to Face Termination

An employee may have committed serious offense within the company thus, the employer decides to save the employee from incurring bad record and asks the employee to resign instead of being terminated.

As a rule, resignation should be voluntary pursuant to paragraph a, Article 300 of the Labor Code, as amended. However, there are instances when different circumstances arise surrounding resignation.

These are the resignation due to severe abuses, inhumane treatment, etc. as set forth in paragraph b of Article 300. Also, when the employee is being asked to resign to save face or the so-called graceful exit.

In the case of Central Azucarera de Bais vs. Siason (G.R. No. 215555, July 29, 2015) the Supreme Court (SC) held that the decision to give the employee a graceful exit rather than to file an action for redress is perfectly within the discretion of the employee.

Furtheras it is not uncommon that an employee is permitted to resign to avoid the humiliation and embarrassment of being terminated for just cause after the exposure of her malfeasance.

It is settled that there is nothing reprehensible or illegal when the employer grants the employee a chance to resign and save face rather than smear the latter’s employment record.

How may the employer execute this action?

Obviously, this decision stems from an investigation that has already been conducted by the employer.

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First, the employer has to inform the employee of the inquiry being conducted, set a meeting, or issue the Notice to Explain (NTE) indicating the infraction of the rules and regulations. Allow the employee to respond by explaining his side.

Provide the employee ample opportunity to be heard. Properly document the basis of the initial findings that the employee has been committing various policy violations over a certain period of time which is unfavorable to the company, and that the management could no longer tum a blind eye on such violations.

Where the company policy or handbook requires the management to conduct a hearing / conference for employee to be dismissed, then hold this proceeding. If found at this stage that the violation is serious and the employee is due for termination, the employer may ask the employee if he is willing to resign and if so, should tender the immediate resignation rather than to force the company’s hand and issue termination that could tarnish his employment record.

Make sure that the employee signs the resignation letter using his customary signature as shown by the signature in his other documents such as ID, and other government transactions. This ensures that the employee is not just setting a trap for the filing of whatever case.

Direct the employee to comply with the exit process of the company as well.

This article is just based on theoretical scenario following the ruling of the SC in the case of Central Azucarera de Bais. This is not a blanket advice that can be used in any situation, so caveat must be taken by the reader and proper legal consultation should be made.

Learn how to Validly Terminate Employee in the Philippines with this Tutorial Video of Atty. Elvin

Read more on procedural due process discussion by Atty. Elvin:

Read more on procedural due process by Atty. Villanueva:

Twin Requirements of Notice and Hearing

Procedural Due Process for Other Types of Employment

Notice to Explain: Contents and Requirements

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