Resignation Notice: Legal Issues Surrounding the Shortening of the 30-day Advance Notice; With Sample Liquidated Damage Clause

Resignation is the voluntary act of an employee who finds herself in a situation where she believes that personal reasons cannot be sacrificed in favor of the exigency of the service and that she has no other choice but to disassociate herself from employment. The resignation must be unconditional and with a clear intention to relinquish the position. Consequently, the circumstances surrounding the alleged resignation must be consistent with the employee’s intent to give up the employment. In this connection, the acts of the employee before and after the resignation are considered to determine whether or not she intended, in fact, to relinquish the employment. (See page 293, re-numbered Labor Code of the Philippines 2018 Edition by Atty. Elvin B. Villanueva citing Lagahit vs. Pacific Concord Container Lines, G.R. No. 177680, January 13, 2016.)

Art. 300 (formerly Art. 285) of the Labor Code provides, that:

“Article 300 [Formerly Article 285]. Termination by Employee.—(a) An employee may terminate without just cause the employee-employer relationship by serving a written notice on the employer at least one (1) month in advance. The employer upon whom no such notice was served may hold the employee liable for damages.

(b) An employee may put an end to the relationship without serving any notice on the employer for any of the following just causes:

1. Serious insult by the employer or his representative on the honor and person of the employee;
2. Inhuman and unbearable treatment accorded the employee by the employer or his representative;
3. Commission of a crime or offense by the employer or his representative against the person of the employee or any of the immediate members of his family; and
4. Other causes analogous to any of the foregoing.” [Emphasis and underscoring supplied]

The 30-day notice requirement for an employee’s resignation is actually for the benefit of the employer who has the discretion to waive such period. Its purpose is to afford the employer enough time to hire another employee if needed and to see to it that there is proper turnover of the tasks which the resigning employee may be handling. (Page 295, re-numbered Labor Code of the Philippines 2018 Edition by Atty. Elvin B. Villanueva citing Hechanova Bugay Vilchez Lawyers vs. Atty. Matorre, G.R. No. 198261, October 16, 2013.)

The question is, can this period be shortened? Can this period be likewise extended?

It depends. The 30-day period can be shortened by the employer unilaterally considering that it is for its benefit that the period was established in the Labor Code.

The rule requiring an employee to stay or complete the 30-day period prior to the effectivity of his resignation becomes discretionary on the part of management as an employee who intends to resign may be allowed a shorter period before his resignation becomes effective. (Page 295, re-numbered Labor Code of the Philippines 2018 Edition by Atty. Elvin B. Villanueva with citation; See also PHIMCO Industries, Inc. vs. NLRC, G.R. No. 118041, June 11, 1997)

Hence, the employee cannot demand that the 30 days be shortened. This is the reason why immediate resignation or resignation with immediate effect by the worker is usually disapproved by the employer.

It is the employer who can decide whether to make it less than 30 days. For instance, there are cases where companies would accept resignation and make it effective within 15 days. In certain situation, companies make it effective immediately when the employee is under investigation for irregularity.

What is the effect if the employee resigns without observing the 30-day advance notice? The employer can hold the employee liable for damages.

Does that mean the employee cannot be compelled to stay with the company? Yes. The employee who disregarded the 30-day prior notice rule cannot be chained to his desk as this would amount to involuntary servitude which is prohibited by the constitution and the law.

In essence, the moment the employee is held against his will and forced to work for the employer there is involuntary servitude. Even in employment arrangement where the employee is absolutely deprived of the choice not work there can be involuntary servitude.

Hence, in a case where employees are deprived of the option to allow themselves to be absorbed or not in a merger of corporations there can be involuntary servitude. (See BPI vs. BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank, G.R. No. 164301, August 10, 2010)

If the employer cannot stop the employee from leaving and is left with the remedy of imposing damages, how much should the company charge the worker? The Labor Code is silent about the amount.

However, there is nothing that can stop the parties from stipulating in the employment contract the amount of damages to be paid. There is a proper liquidated damage clause to use so the company can validly enforce the provision in the competent court.

For example: “xxx failure to observe the 30-day prior notice shall render the employee liable for liquidated damages in the amount equivalent to at least three (3) months of monthly salary.”

See sample employment contract templates from HR Forms 1 Soft Copy (Editable in Word File) with Liquidated Damage clause

Now, assuming there is a stipulation on the liquidated damage if the employee fails to make the proper notification, how will the employer enforce it? The company can file a small claims case against the employee.

Further, if there is proper authorization to deduct and as supported by the provisions of the employment contract, the employer can effect legal compensation.

See the Editable Templates of employment contracts in Tagalog/Filipino versions (Word file)