Supreme Court: Forcing an Employee to Resign Under Threat of Criminal Charges Is Illegal Dismissal

When an employer suspects an employee of wrongdoing, it can be tempting to hand them a resignation letter and avoid a formal termination process. The Supreme Court has made clear that this shortcut can be very costly.

In a decision dated August 26, 2026, the Court’s First Division ruled that threatening an employee with criminal prosecution to force them to resign is constructive illegal dismissal, even if no formal termination notice was ever issued.

What happened

Niño Rio Gabrillo was a long-time employee of Tri-J Marketing Inc. After an audit found inventory discrepancies, Gabrillo was reportedly pressured repeatedly to resign. According to reports, the company gave him a prepared resignation letter and threatened him with criminal charges if he refused to sign.

The company later argued that Gabrillo had abandoned his job and that it had lost trust and confidence in him. The Court of Appeals sided with the company and found that Gabrillo had abandoned his work.

The Supreme Court’s ruling

The Supreme Court reversed the Court of Appeals. It held that:

Resignation must be voluntary. Employers cannot use intimidation, including threats of criminal prosecution, to push employees out of their jobs. A resignation obtained this way is not a true resignation. It is a dismissal in disguise.
Abandonment was not proven. The employer bears the burden of proving abandonment, and Tri-J did not have enough evidence to establish it.
Loss of trust and confidence was not established. The company’s claims were not supported by sufficient evidence to justify dismissal.

Reliefs awarded: The Court ordered Tri-J Marketing to pay Gabrillo:

full backwages;
separation pay of one month’s salary for every year of service;
₱30,000 in moral damages;
₱30,000 in exemplary damages; and
attorney’s fees.

What is constructive dismissal?

Constructive dismissal happens when an employer makes continued employment impossible, unreasonable, or unlikely, or when an employee is pressured into leaving, so that the “resignation” is not really voluntary. The law treats it as an illegal dismissal, with the same remedies.

Key takeaways for employers

Never use a resignation letter as a substitute for due process. If you believe an employee committed misconduct, follow the proper procedure: written notice, an opportunity to explain, and a written decision.
Threats of criminal charges to force a resignation can expose you to damages. Moral and exemplary damages may be awarded on top of backwages and separation pay.
Audit findings need proper documentation. Discrepancies alone may not prove that a particular employee committed misconduct. Investigate fairly and keep records.
Abandonment is hard to prove. You must show both an unjustified absence and a clear intention by the employee to cut ties with the company. Filing an illegal dismissal complaint generally contradicts any claim of abandonment.

Key takeaways for employees

You do not have to sign a resignation letter you did not write or do not agree with.
If you were pressured or threatened into resigning, write down what happened, including the dates, the people involved, and what was said. Keep any messages or documents.
You may file a complaint for illegal (constructive) dismissal. Consult a lawyer promptly.

How Recososa Law Firm can help

Our Labor and Employment Law practice helps employers design lawful disciplinary and termination procedures, and represents employees and employers in illegal dismissal cases. Talk to us before taking, or responding to, any termination action.

This article is a simplified summary of a reported Supreme Court decision for general information only. It is not legal advice. Read the full text of the decision and consult a lawyer about your specific case.