Dreamland Hotel Resort v.

Johnson
G.R. No. 191455
March 12, 2014
Group 3

Petitioners: Dreamland Hotel Resort and Westley J. Prentice, President

Respondent: Stephen B. Johnson
Ponente: Reyes, J.

FACTS
Petitioners’ side
1. Dreamland is a corporation engaged in the hotel, restaurant and allied business.
a. President and CEO: petitioner Westley J. Prentice
2. Respondent Stephen B. Johnson is an Australian citizen who came to the Philippines as a
businessman/investor without the authority to be employed as the employee/officer of any
business as he was not able to secure his Alien Employment Permit
3. As a fellow Australian citizen, Johnson was able to convince Prentice to accept his offer to invest
in Dreamland and at the same time provide his services as Operations Manager of Dreamland
with a promise that he will secure an AEP and Tax Identification Number (TIN) prior to his
assumption of work
4. June 21, 2007: Prentice and Johnson entered into an Employment Agreement
a. Johnson will serve as Operations Manager from August 1, 2007
b. Serve for 3 years
5. Respondent Johnson promised he would provide the AEP and TIN within 1 month from signing
because the application for both were still under process thus agreed that efficacy of agreement
shall begin after 1 month or on August 1, 2007
6. October 8, 2007: Prentice asked for AEP and TIN several times but Johnson gave excuses and
promised to give the requirements
a. Believing Johnson, Dreamland commenced operations
7. Johnson worked as Operations Manager for 3 weeks until he suddenly abandoned his work and
subsequently resigned starting November 3, 2007
a. Never reported back

Respondent Johnson’s side

1. Petitioners actively advertised for a resort manager.
a. No truth that Johnson offered and convinced Prentice to invest and provide services
2. Respondent Johnson contacted petitioners to inquire
3. It was Prentice who offered employment and convinced Johnson to give out a loan, purportedly
so the resort can be completed and operational by August 2007
a. Johnson accepted employment as Resort Manager and loaned his retirements pay of USD
100k to finish construction of resort
4. August 2007: Johnson reported for work and learned that the resort was far from finished.
Nonetheless, he was instructed to:
a. Supervise construction and speak with potential guests
b. Undertook overall preparation of the guestrooms and staff for the opening of the hotel,
even performing menial tasks
5. October 2007: when the resort opened, he asked for his salary since he remained unpaid since
August 2007 and loaned all his money
a. Became alarmed since there was no intention to pay him and denied benefits promised to
him
b. Left penniless
 6. Respondent was also not given authority due to him as resort manager since Prentice
countermanded his orders to the staff at every opportunity and embarrassed and berated him
before the staff
7. It became clear he was only used for the money he loaned and there was no intention to have him
as resort manager
8. November 3, 2007: another embarrassment was handed out in front of the staff, which
highlighted his lack of real authority in the hotel and the disdain for him by petitioners,
respondent Johnson was forced to submit his resignation
9. In deference to the Employment Agreement signed, [Johnson] stated that he was willing to
continue work for the 3-month period stipulated therein.
a. Prentice sent through SMS: “… I consider [yo]ur resignation as immediate.”
10. Despite demand, petitioners refused to pay Johnson the salaries and benefits due him

Complaint
1. January 31, 2008: Johnson filed a Complaint for illegal dismissal and nonpayment of salaries,
among others
2. LA: DISMISSED for lack of merit, finding that respondent voluntarily resigned and wasn’t
illegally dismissed
3. NLRC: REVERSED LA. Respondent was constructively dismissed for nonpayment of salary for
3 months. No proof that petitioners received Php172k from respondents, evidence on record
shows petitioners received only Php7.2k
4. CA: DISMISSED the petition for certiorari and MR
5. Petitioners filed a Petition for Review on Certiorari

PROCEDURAL

W/N the CA committed a reversible error in outrightly dismissing the petition for certiorari. YES

1. CA dismissed the Petition due to the following:

a. The affiant has no proof of authority to file the petition in behalf of petitioner Dreamland.
b. The petition has no appended affidavit of service to show proof of service of filing as
required by Sec. 13 of the 1997 Rules of Civil Procedure
2. Time and again, the Court has emphasized that procedural rules should be treated with utmost
respect and due regard, since they are designed to facilitate the adjudication of cases to remedy
the worsening problem of delay in the resolution of rival claims and in the administration of
justice.
3. From time to time, however, the Court have recognized exceptions to the Rules but only for the
most compelling reasons where stubborn obedience to the Rules would defeat rather than serve
the ends of justice.”
4. “It is true that procedural rules may be waived or dispensed with in the interest of substantial
justice.”

SUBSTANTIVE

I. W/N the employment of Johnson commenced only on October 8, 2007 and not on August 1,
2007. NO

1. Employment contract states August 1, 2007 as start

2. Factual allegations that he worked from August 1 not sufficiently rebutted
3. It was only in the MR of the NLRC decision that petitioners disagreed that Johnson performed
tasks he enumerated and that those tasks were alien to his position and done without consent but
petitioners never denied that Johnson spoke with potential guests
4. Petitioners admitted that Johnson took up residence in the hotel as early as July 2007
5. As it could not be determined with absolute certainty whether or not Johnson rendered the
services he mentioned during the material time, doubt must be construed in his favor for
the reason that “the consistent rule is that if doubt exists between the evidence presented by
the employer and that by the employee, the scales of justice must be tilted in favor of the
latter.”
6. For the petitioners’ failure to disprove that Johnson started working on August 1, 2007, as stated
on the employment contract, payment of his salaries on said date, even prior to the opening of the
hotel is warranted.

II. W/N respondent was already paid his salary. NO

1. Petitioners: paid the amount of Php7.2k to Johnson for 3 weeks of service from October 8, 2007
until Nov. 3, 2007 (date of resignation), which Johnson didn’t controvert
2. Answer of the SC:
a. Amount the petitioners paid to Johnson as his three-week salary is significantly deficient
as Johnson’s monthly salary as stipulated in their contract is P60k
b. Amount paid should’ve been Php45k
3. In light of this deficiency, there is more reason to believe that the petitioners withheld the salary
of Johnson without a valid reason

III. W/N employment contract executed by the parties is inefficacious because the employment
contract is subject to the presentation of Johnson of his Alien Employment Permit (AEP)
and Tax Identification Number (TIN). NO

1. Johnson has adduced proof that as a permanent resident, he is exempted from the requirement of
securing an AEP as expressed under Department Order No. 75-06, Series of 2006 of the DOLE
2. Furthermore, Johnson submitted a Certification from DOLE Regional Office III, stating that he is
exempted from securing an AEP as a holder of Permanent Resident Visa.
3. Consequently, the condition imposed upon Johnson’s employment, if there is any, is in truth
without effect to its validity
4. Records show that Johnson secured his TIN only on Dec 2007 after his resignation but
nevertheless, this does not negate the fact that the contract of employment had already
become effective even prior to such date because there is no stipulation in the employment
contract itself that the same shall only be effective upon the submission of AEP and TIN

IV. W/N Johnson was constructively dismissed. YES (important issue)

1. SC agrees with NLRC that “Even the most reasonable employee would consider quitting his job
after working for three months and receiving only an insignificant fraction of his salaries…”
2. Petitioners: considering that Johnson tendered his resignation and abandoned his work, it is his
burden to prove that his resignation was not voluntary on his part
3. SHS Perforated Materials, Inc. v. Diaz: “There is constructive dismissal if an act of clear
discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the
employee that it would foreclose any choice by him except to forego his continued
employment. It exists where there is cessation of work because continued employment is
rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a
diminution in pay.”
4. It is impossible, unreasonable or unlikely that any employee, such as Johnson would continue
working for an employer who does not pay him his salaries.
5. Applying Duldulao v. CA: the act of the petitioners in not paying Johnson his salaries for three
months has become unbearable on the latter’s part that he had no choice but to cede his
employment with them
6. The pertinent sections of Johnson’s resignation letter which reflects the real reason why he was
resigning as operations manager of the hotel:
a. “I hereby tender my resignation to you, Mr[.] Wes Prentice, Dreamland Resort, Subic,
Zambales, Philippines.

Since joining Dreamland Resort & Hotel over three months ago I have put my heart and
soul into the business. I have donated many hours of my personal time. I have frequently
worked seven days a week and twelve to thirteen hours a day. I am now literally
penniless, due totally to the fact that I have lent you and your resort/hotel well over
$200,000AU (approx 8 million pesos) and your nonpayment of wages to me from
1st August 2007 as per Employment Agreement. x x x.”

7. Letter shows that though Johnson tendered his resignation, it was due to the petitioners’ acts that
he was constrained to resign. The petitioners cannot expect Johnson to tolerate working for them
without any compensation.

8. Since Johnson was constructively dismissed, he was illegally dismissed.

9. Since he was illegally dismissed, he is entitled to 2 reliefs: backwages and reinstatement
10. However, the NLRC found that due to strained relations, separation pay is to be awarded in lieu
of his reinstatement
11. The Court notes that the employment contract states that the term is for 3 years thus award of
backwages should be computed from Nov. 3, 2007 to Aug. 1, 2010
12. Furthermore, separation pay is computed from the commencement of employment up to the time
of termination, including the imputed service for which the employee is entitled to backwages.
a. As one-month salary is awarded as separation pay for every year of service, including
imputed service, Johnson should be paid separation pay equivalent to his three-month
salary for the three-year contract.