G.R. No. 196548, January 27, 2014


Before this court is a petition for review on certiorari[1] assailing the decision[2] of the Court of Appeals dated November 15, 2010 and resolution[3] dated April 6, 2011.

The pertinent facts are as follows:

On August 9, 1993, respondent Metrobank hired petitioner Encarnacion as a Lead Balance Verifier with a monthly salary of P20,000.00.[4] During petitioner Encarnacion's employment, she "incurred repeated Absences Without Leave (AWOL) for approximately Thirty-[t]hree (33) days"[5] in a span of six (6) months from February to August 2004.

Respondent Metrobank sent her a series of memoranda dated March 16, 2004;[6] May 26, 2004;[7] August 12, 2004;[8] August 19, 2004;[9] and August 23, 2004[10] either directing her to report for work immediately or asking her to explain in writing why she continually refused to report for work, why she violated company policy regarding absences, and why no disciplinary action should be taken against her. Petitioner Encarnacion did not comply with any of the memoranda.

On August 27, 2004, respondent Metrobank sent a letter[11] to petitioner Encarnacion's known address, notifying her that her services would be terminated. This was on account of her "willful disobedience of Management's Instruction"[12] and on account of her "commission of prolonged unauthorized absences."[13]

On September 13, 2004, petitioner Encarnacion sent a letter[14] to respondent Metrobank requesting for the management's reconsideration of her termination from employment. At the same time, she appealed that she be allowed to avail of the optional retirement in lieu of termination so that she could receive her optional retirement benefits. Respondent Metrobank decided to recall her termination and allowed her to tender her resignation.

On October 13, 2004, petitioner Encarnacion submitted her resignation letter[15] which she antedated August 16, 2004. Respondent Metrobank accepted her resignation whose effectivity date was August 27, 2004.Respondent Metrobank then made a computation[16] of petitioner Encarnacion's optional retirement benefits which amounted to P349,217.05.[17] However, upon evaluation of petitioner Encarnacion's employment record, respondent Metrobank discovered that she had applied for and availed of the Provident Fund Housing Loan[18] on March 15, 2002 in an aggregate amount of P610,500.00. Petitioner Encarnacion apparently still had an outstanding balance of P372,474.41. Respondent Metrobank then sent a letter[19] dated November 5, 2004 informing her of her outstanding accountability and advising her to settle her loan.

Petitioner Encarnacion did not coordinate with respondent Metrobank so the latter decided to offset her outstanding loan accountability against her optional retirement benefits.[20] After the offsetting, she still had a remaining accountability in the amount of P23,257.36.[21]

On August 9, 2005 or about a year after her resignation, petitioner Encarnacion filed a complaint against respondent Metrobank for illegal dismissal with a prayer for reinstatement and backwages.[22]

The Labor Arbiter rendered a decision[23] dated December 7, 2007 dismissing the complaint. Respondent Metrobank, however, was to pay petitioner Encarnacion her optional retirement benefits in accordance with the existing company retirement plan in addition to 10% attorney's fees.

Both parties appealed this decision with the National Labor Relations Commission. On September 23, 2008, the National Labor Relations Commission reversed[24] the Labor Arbiter's decision and ordered the reinstatement of petitioner Encarnacion and the payment of backwages.

Respondent Metrobank moved for reconsideration of the decision[25] dated September 23, 2008. On April 3, 2009, the National Labor Relations Commission issued a decision[26] setting aside and reversing its decision[27] dated September 23, 2008. It instead reinstated the decision[28] dated December 7, 2007 of the Labor Arbiter, finding that petitioner Encarnacion was not illegally dismissed.

Petitioner Encarnacion moved for reconsideration which was denied by the National Labor Relations Commission.[29] She then filed a petition for certiorari with the Court of Appeals. On November 15, 2010, the Court of Appeals rendered a decision[30] denying the petition and affirming the decision[31] of the National Labor Relations Commission dated April 3, 2009, with the modification that the outstanding provident housing loan be offset against her retirement benefits.

When her motion for reconsideration was denied,[32] petitioner Encarnacion filed this present petition for review on certiorari.[33]

After a conscientious review of the facts and relevant laws of this case, this court rules that the petition, sadly, must fail.

Petitioner Encarnacion argues that she was coerced by respondent Metrobank into tendering her resignation by threatening her with termination.[34] She further argues that respondent Metrobank had no valid ground to terminate her because her absences, although taken without leave, were made for good reasons.[35]

While it is true that resignation requires a voluntary intent to abandon work, it is also equally true that it must take into account the circumstances that precipitated the resignation.[36]

In this case, petitioner Encarnacion does not dispute that she took several absences without leave. She states that her absences were due to the need to take care of her child who had been hospitalized. While we sympathize with her plight, we cannot condone her act of simply abandoning her work without filing the requisite leaves.

The facts are undisputed. Petitioner Encarnacion was given several chances to explain her position through the numerous memoranda[37] sent to her. She repeatedly did not comply with any of those memoranda and did not even attempt, at that time, to justify her unexplained absences. She did not even try to explain herself at those times when she was present at work. Surely, respondent Metrobank would not be so inhuman as to disallow an employee from filing absences with leave to take care of a sick relative.

Respondent Metrobank's interoffice letter dated January 17, 2005 states that employees must "file in duplicate the Application for Leave of Absence (ALA) x x x for approval of the Department/Branch Head."[38] Petitioner Encarnacion was also informed through the memorandum dated May 26, 2004 that:
As you are aware, the Bank's existing policy on vacation leave availment requires, among others, employees to secure approval from their supervising officer seven (7) days prior to their intended leave. Since you failed to follow this policy requirement, your absences on said dates are, therefore, considered unauthorized.[39]
She was given a letter of termination[40] on August 27, 2004 due to her "willful disobedience x x x and prolonged unauthorized absences."[41]

Considering the circumstances, respondent Metrobank had every reason to terminate her for her willful disregard of company policies. According to Article 282, paragraph (a) of the Labor Code, an employer may terminate an employee upon "willful disobedience by the employee of the lawful orders of the employer or representative in connection with his work."

When petitioner Encarnacion wrote to respondent Metrobank "to give [her] another chance, if not, to lessen [her] burdens by granting [her] the optional retirement,"[42] respondent Metrobank heeded her plea. Instead of terminating her outright, it gave her the option to tender her resignation so she might still be able to claim her optional retirement benefits. She then willingly executed and signed a resignation letter.[43] These circumstances, when taken together, cannot be, as petitioner Encarnacion put it, "an act of coercion."[44]

It cannot also be denied that, at the time of her resignation, she still had an outstanding housing loan. Petitioner Encarnacion argues that her outstanding loan should not be offset against her retirement benefits since it would wipe out her retirement benefits. This, she asserts, directly contradicts the legislative intent of Republic Act No. 7641.[45]

Settled is the rule that obligations arising from a contract have the force of law between the parties and should be complied with in good faith.[46] The parties may also establish contractual provisions they deem necessary "provided they are not contrary to law, morals, good customs, public order, or public policy."[47]

Petitioner Encarnacion voluntarily acquired the Provident Housing Loan. It would be reasonable to presume that when she applied for the loan, she was binding herself to the terms and conditions under it, which included an acceleration clause in case of resignation or termination from employment.

According to the terms of the Non-Negotiable Promissory Note[48] of the Provident Housing Loan:
x x x in case of my/our resignation or termination of employment from METROBANK, the entire obligation then unpaid may also be declared due and demandable by the BANK.

I/We hereby agree that should this note become due under any of the provisions hereof, the BANK shall be authorized to retain or take possession of any and all monies due me/us from my/our employment, either as salaries, bonuses, allowances or otherwise, including benefits due me/us under the PROVIDENT PLAN and apply the same in full or partial payment of the obligation covered by this note.[49]
In providing for the acceleration clause, respondent Metrobank was merely protecting its interests in case of default by the debtor. There was nothing in it that was contrary to law, morals, or public policy. In any case, even with the provision in place, respondent Metrobank still gave petitioner Encarnacion due notice before applying it.

Instead of immediately offsetting the balance due from the loan as per the provisions of the promissory note, respondent Metrobank still sent petitioner Encarnacion a letter,[50] giving her a chance to coordinate with the former for the settlement of her obligations. She did not do so. Respondent Metrobank was, therefore, constrained to apply the terms and conditions of the promissory note and offset her outstanding balance against her retirement benefits. In doing so, respondent Metrobank was merely enforcing a civil obligation arising from a valid contract.

While it is unfortunate that her outstanding loan exceeded her retirement benefits, this matter was the result of an obligation freely and voluntarily undertaken by her. She cannot renege on her liabilities now simply because the offsetting will leave her with nothing.

Petitioner Encarnacion further argues that Republic Act No. 7641 provides "that an employee's retirement benefits under any collective bargaining and other agreements shall not be less than those provided herein."[51] She argues that the offsetting runs counter to this provision since it leaves her with no retirement benefits left; hence, "less than those provided herein."

This argument is bereft of merit.

When petitioner Encarnacion tendered her resignation, respondent Metrobank granted her the full amount of her optional retirement benefits under the collective bargaining agreement[52] and in accordance with the law. It was only after her benefits were released that it was made to apply to her standing liabilities. The fact that the amount of her liabilities turned out to exceed the benefits due her is not the fault of respondent Metrobank. It is simple mathematics.

As a policy of social justice, the law often favors laborers.[53] When laborers, however, display wanton disregard of the sound policies of management and then claim an injustice when they face repercussions, courts cannot just blindly take their side. Those who seek the protective mantle of the law must first prove that the injury was not of their own doing.

WHEREFORE, in view of the foregoing, the petition for review on certiorari is hereby DENIED for lack of merit.


[1] Rollo, pp. 26-36.[2] Id. at 10-21.

[3] Id. at 23-24.

[4] Id. at 26.

[5] Id. at 27.

[6] Id. at 114.

[7] Id. at 115.

[8] Id. at 117.

[9] Id. at 118.

[10] Id. at 119.

[11] Id. at 120.

[12] Id.

[13] Id.

[14] Id. at 121-122.

[15] Id. at 123.

[16] Id. at 124.

[17] Id.

[18] Id. at 125.

[19] Id. at 127.

[20] Id. at 100.

[21] Id.

[22] Id. at 28.

[23] Id. at 38-41.

[24] Id. at 48-65.

[25] Id.

[26] Id. at 42-47.

[27] Id. at 48-65.

[28] Id. at 38-41.

[29] Id. at 74.

[30] Id. at 67-78. This decision was rendered per Special Seventeenth Division, penned by Justice lsaias Dicdican, and concurred in by Justices Stephen C. Cruz and Michael P. Elbinias.

[31] Id. at 42-65.

[32] Id. at 80-81.

[33] Id. at 26-36.

[34] Id. at 32.

[35] Id. at 33.

[36] See Fortuny Garments/Johnny Co v. Castro, 514 Phil. 317, 323 (2005).
This Court stated that:

Resignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and has no other choice but to dissociate from employment. Resignation is a formal pronouncement or relinquishment of an office, and must be made with the intention of relinquishing the office accompanied by the act of relinquishment. A resignation must be unconditional and with the intent to operate as such.

Moreover, the intention to relinquish an office must concur with the overt act of relinquishment. The act of the employee before and after the alleged resignation must be considered to determine whether in fact, he or she intended to relinquish such employment. If the employer introduces evidence purportedly executed by an employee as proof of voluntary resignation and the employee specifically denies the authenticity and due execution of said document, the employer is burdened to prove the due execution and genuineness of such document. (Citations omitted; Emphasis supplied)
[37] Rollo, pp. 114-115, 117-119.

[38] Id. at 113.

[39] Id. at 115.

[40] Id. at 119.

[41] Id. at 120.

[42] Id. at 122.

[43] Id. at 123.

[44] Id. at 32.


[46] CIVIL CODE, Art. 1159.

[47] CIVIL CODE, Art. 1306.

[48] Id. at 125.

[49] Id.

[50] Id. at 127.

[51] Republic Act No. 7641 (1992), Sec. 1.

[52] Rollo, p. 99.

[53] See LABOR CODE, Art. 4.
Art. 4. Construction in favor of labor. All doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor.