Constructive dismissal

How it works

Cutting a remote EA to zero hours and saying they ‘still have a job’ is a classic pattern. So is a sudden unpaid graveyard flip. So is public humiliation in Slack. The worker who resigns under that pressure can still sue as if dismissed. For a U.S. company hiring one Filipino teammate, write this into the brief, the employment contract, and the peso payroll file before the start date. Slack habits do not override the Labor Code, BIR, or NPC. If the local employer of record holds the paper, they run the statutory step; you still owe a clean operating definition so the seat does not fail in week three. Put a number on the example when you budget loaded cost, because a nameless allowance always returns as a December surprise or a missed SLA.

Example: rate cut ₱70,000 to ₱35,000 overnight ‘because FX.’ Resignation next week. Expect a constructive-dismissal theory.

How it differs

Illegal dismissal is the broader case. Floating status has limits before it becomes this.

Common errors

Calling any resignation constructive to scare a founder, or calling none constructive to scare a worker. Facts decide.

In practice

Treat Constructive dismissal as a week-one operating object. Ask who signs the notice, who remits, and who would answer DOLE. If three vendors each point at the other, you have a story rather than a file. Write an owner - founder, local employer, or worker - and a date you will look at it again: first cutoff, first holiday, or first miss. If nobody can show a contract clause, a payslip line, a calendar block, or a checklist box, you do not have constructive dismissal yet. You have a conversation. Convert the conversation before the person starts, while changing the deal still costs a paragraph rather than a resignation. Re-read the worked example above against the actual hire in front of you. If the numbers in that example cannot be swapped for this seat’s pesos, hours, and start date, the brief is still unfinished.