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Promissory estoppel is an exception to the general rule that a promise of future conduct does not constitute an estoppel.

Thus, the SC held in the following case:

Philippine National Bank vs. Manuel C. Bulatao
G.R. No. 200972, December 11, 2019

Retirement; Resignation; Abandonment of work; Promissory estoppel; intra-corporate controversy


Respondent Manuel C. Bulatao (Bulatao) was formerly the Senior Vice President (SVP) of the Information Technology (IT) Group of petitioner Philippine National Bank (PNB). Bulatao’s appointment as SVP was evidenced by a letter which indicated that the Board of Directors (Board) of PNB approved his appointment.

Bulatao alleged that on October 1, 1999, Mr. Benjamin Palma Gil (Gil), then PNB’s President, and a certain MR. Samit Roy (Roy), an Indian national, hosted a dinner meeting for PNB’s IT staff to announce the conclusion of a Joint Venture Agreement (JVA) between PNB and Roy. During dinner, Roy announced that not all of the IT staff would be retained since everyone had to undergo an International Competitive Test as a prerequisite for absorption. Those who would not be absorbed would be offered retirement packages instead. Bulatao alleged that the conduct of the International Competitive Test was a ploy to force IT personnel not supportive of the project to leave the bank. Notably, Bulatao was one of those who objected to the JVA because of the supposed huge capital exposure on PNB’s end. Eventually, Bulatao manifested his intent to retire in a letter dated November 10, 1999 addressed to Gil.

PNB alleged that Bulatao felt pessimistic about its plan to outsource the services of the IT Group to an “Indian” group. Given that the deal with the “Indian” group did not materialize, Bulatao made a sudden turnaround. Meanwhile, Bulatao alleged that on December 26, 199, he had a meeting with Mr. Lucio Tan (Tan), then a member of the Board, who asked him to reconsider his decision to retire and join Tan’s management team.

Because of this, Bulatao alleged that he went back to to work on January 1, 2000. Around that time, aware that the Board had not yet acted on his application for retirement, Bulatao withdrew the said application in a Memorandum addressed to Feliciano L. Miranda, Jr., then Officer-in-Charge/Chief Executive Officer of PNB.

Four days from the date of his Memorandum, Bulatao received a call from the SVP of Human Resource Division who informed him not to report for work in February 2000 as the Board already accepted his “resignation” For this reason, Bulatao stopped reporting for work. Subsequently, he filed a Complaint for illegal dismissal on February 27, 2000 with the National Labor Relations Commission (NLRC).

Thereafter, Bulatao received a letter from Manuel C. Mendoza, the Executive Vice-President of PNB, informing him that the Board approved and confirmed the acceptance of his resignation. Meanwhile, the Complaint filed by Bulatao with the NLRC was dismissed for lack of jurisdiction. The NLRC held that sinceBulatao was an appointed officer of a corporation, it is the Regional Trial Court (RTC) which has jurisdiction over the case in accordance with Republic Act (RA) No. 8799 or the Securities Regulation Code. In view of this, Bulatao filed a suit for Illegal Termination of Appointment and Damages before the RTC of Parañaque City.

In his testimony, Bulatao averred that PNB erroneously considered his application for retirement as a resignation. He explained that he applied for retirement because he objected to a deal with the “Indian” group which he claimed will drain the bank. He asserted that after he talked to Tan, he went back to work so that he would not be declared to be on Absence Without Official Leave (AWOL). Afterwards, he withdrew his application for retirement. However, he received a call from the SVP of Human Resource Division informing him not to report for work starting February 2000 because the Board has already accepted his “resignation.”

PNB’s previous Records Custodian, Claro Bernardino (Bernardino) testified that PNB offered a Special Separation Incentive Plan (SSIP) from July 13, 1998 until September 13, 1998 wherein employees have to apply by submitting forms to the Human Resource Division. There was no other offer for retirement plans in between the periods covered by the SSIP and the SSP.

On cross-examination, Bernardino stated that his office did not receive Bulatao’s application for retirement dated November 10, 1999 but posited that it received a resignation letter. He said that the letter was treated as one for resignation even if its introductory sentence indicated that it was an application for retirement. Nonetheless, he admitted that if an employee’s application for retirement is denied, he or she would accordingly be informed of the said denial and would not be terminated. However, he clarified that if the retiring/resigning employees held that rank of Vice President or Senior Vice President, the Board was tasked to approve their respective resignations or retirement applications.

RTC Ruling:

The RTC dismissed the complaint for lack of merit.

The RTC found no proof that Bulatao returned to work. Additionally, there was no document showing that his absence was with prior leave, leading the trial court to conclude that Bulatao abandoned his employment when he went on voluntary leave for 81 days from November 11, 1999 to January 31, 2000 upon submission of a request to avail of an early retirement scheme. His intention to sever his employment with PNB was clearly reflected in his letter when he stated that he cannot stay in the employ of the bank and that PNB should find a replacement.

The RTC found that when Bulatao immediately went on leave and did not report without justifiable reason, this signified his intention to sever his relations with the bank which constituted as abandonment of work. Accordingly, the trial court held that Bulatao’s application to retire was belied by his actions which actually demonstrated an intention to abandon work, much like a resignation letter which is effective immediately.

Moreover, the trial court found that PNB cannot be faulted for considering that Bulatao has resigned from employment given that he has already manifested his intention to leave the bank and in fact immediately left without any valid explanation. PNB was not precluded from accepting Bulatao’s resignation as it was the only thing left to be done considering that his acts of abandonment were tantamount to a voluntary resignation. It interpreted Bulatao’s memorandum withdrawing his application for retirement as an afterthought given his actuations before the filing thereof, especially when he did not return to work after filing a notice of retirement.

Bulatao asked for a reconsideration but it was denied by the RTC. Dismayed, Bulatao appealed to the Court of Appeals (CA).

CA Ruling:

The CA granted the appeal and held that Bulatao was illegally dismissed and entitled to reinstatement and backwages as well as damages.

The CA held that PNB failed to present evidence to show that there was no announcement regarding the availability of a retirement scheme which encouraged Bulatao to apply for one. It ruled that the announcement made by the President of PNB is akin to the principle of promissory estoppel. It declared that Bulatao properly relied on the announcement made by Samit and Gil.

However, since there was no actual retirement plan or scheme which Bulatao could have availed of, he correctly withdrew his application for retirement, although it was done for a different reason (which was the supposed prodding of Tan for him to continue working for PNB).

In any case, the appellate court held that Bulatao’s withdrawal of his application for retirement left PNB without any application to accept or deny. Thus, the issuance of Board Resolution No. 38, approving and confirming the acceptance of his resignation, was flawed because the matter of Bulatao’s application was already out of the Board’s purview after Bulatao withdrew the same.

The CA noted that even if Bulatao’s application for retirement is treated as resignation letter, the circumstances under which he manifested his desire to leave work rendered the same involuntary. It ruled that Bulatao was prompted to apply for retirement due to unbearable conditions brought about by the employer and not due to his desire to sever his working relationship with PNB.

The CA found that Bulatao went on official leave immediately after filing his application for retirement but returned to work on January 1, 200 until he was verbally informed on January 29, 2000 not to report for work starting February 2000. Bulatao went back to work even without any notice from PNB for him to return; hence, there was no basis for the charge of abandonment. The Resolution No. 38 is silent on this point not did it mention anything about the lack of a valid leave form to cover the period that Bulatao was supposed to be on leave. Worse, said resolution came three (3) days after Bulatao withdrew his application for retirement. To hold Bulatao guilty of abandonment when PNB had the opportunity to charge him for the same will be violative of Bulatao’s right to due process and an evasion of PNB’s duty to observe the two (2) notice rule.

PNB filed a motion for reconsideration which was denied by the CA. Discontented, PNB elevated the case before the Supreme Court (SC) via petition for review.


Whether or not the claim of existence of a verbal announcement of an option for early retirement in a letter of retirement stands in the absence of proof countering the positive assertion

Whether or not when the employee was constrained to apply for early retirement due to the announcement of its availability the doctrine of promissory estoppel applies

Whether or not an employee who declared that he would go on leave but did not file a leave form can be deemed to have abandoned his work

Whether or not a Board Resolution accepting the supposed resignation has basis when the employee already withdrew his application

Whether or not an application for early retirement can be treated as resignation

Whether or not an employee’s application for early retirement without an offer of retirement coming from the company can be treated as resignation

SC Ruling:

The SC denied the Petition finding it unmeritorious.

The SC held that PNB did not present any proof to counter Bulatao’s positive assertion that there was a verbal announcement about an option for early retirement for those who attended the meeting. In fact, PNB admitted that there was a meeting at that time. Believing in good faith that there was a valid offer as the same came from a top official of the bank, Bulatao deemed it best to avail of it since he also believed that the future working conditions would not be comfortable for him due to the entry of the “Indian” group. The circumstances in which the bank expected Bulatao to work impelled him to apply for retirement, and not because he actually wished to sever his employment ties with PNB.

The situation calls for the application of the doctrine of promissory estoppel, which is an exception to the general rule that a promise of future conduct does not constitute an estoppel. In some jurisdictions, in order to make out a claim of promissory estoppel, a party bears the burden of establishing the following elements: (1) a promise reasonably expected to induce action or forbearance; (2) such promise did in fact induce such action or forbearance; and (3) the party suffered detriment as a result.

Bulatao was constrained to apply for early retirement due to the announcement of its availability and because of the unfavorable future working conditions he would face after the supposed JVA with the “Indian” group and the conduct of the International Competitive Test. Consequently, Bulatao suffered detriment as his application for early retirement was unexpectedly interpreted as a resignation by the Board and he was subsequently advised not to report for work anymore notwithstanding the withdrawal of his application for early retirement.

Bulatao withdrew his application for early retirement since Tan purportedly asked him to work in a different capacity in the bank. Hence, he manifested such withdrawal through a Memorandum three days before PNB’s Board released Resolution No. 38 accepting his supposed resignation. In effect, the Board did not have any basis for its resolution since Bulatao already withdrew his application.

In his letter dated November 10, 1999, Bulatao also mentioned that he was taking an official leave of absence immediately after filing the said letter. Notably, he failed to submit proof that he filled out an official leave form and filed the same with PNB’s Human Resource Division. Even with the receipt of his letter, the bank did not require him to file the corresponding leave form. Additionally, PNB did not order him to return to work lest he be deemed to be on AWOL given that his official leave was supposedly not approved. In fact, PNB did not charge him with abandonment in spite of its allegation that he did not report for work for around 81 days. PNB failed to issue any notice to explain or a notice of hearing, or even to conduct a clarificatory meeting to shed light on Bulatao’s supposed case of abandonment. There was a significant inaction on the part of PNB which suggested that although not the norm, Bulatao’s acts, as a senior official, were not considered as highly irregular especially with regard to his taking an official leave of absence. PNB’s inaction could be deemed that it has accepted his application for leave, even though it was not in the standard form or strictly in accordance with the bank’s practices.

In view of the attendant circumstances, Bulatao could not be considered as having abandoned his employment. To establish abandonment, the employer must prove that first, the employee must have failed to report for work or must have been absent without valid or justifiable reason; and second, that there must have been a clear intention on the part of the employee to sever the employer-employee relationship manifested by some overt act.

In this case, it was clear in Bulatao’s letter that he was taking an official leave of absence following his statement that he was taking the bank’s offer to retire. Thus, there was reason for his absence at the time. While he intended to take up the offer to retire which would have led to the severance of the employer-employee relationship, it should be considered that the circumstances surrounding such decision was influenced by the JVA with the “Indian” group which Bulatao did not agree with. Such instance did not stem from his desire to willingly and unconditionally cut ties with PNB but because of the JVA which he believed to be disadvantageous to the bank.

In addition, Bulatao categorically withdrew his application to retire as mentioned in his memorandum. Indeed there must be a positive and overt act signifying an employee’s deliberate intent to sever his or her employment which is wanting in this case. There are doubts surrounding his intent to retire coupled with the fact that he specifically desisted from doing so. Mere absence from work, even after a notice to return, is insufficient to prove abandonment. In Bulatao’s case, there was not even any notice to return to work. Simply put, the totality of his acts, coupled with PNB’s inaction, led to the conclusion that he did not intend to summarily cut his ties with PNB.

PNB failed to prove by convincing evidence that there was just or authorized cause for terminating Bulatao from employment. Jurisprudence states that when the evidence of the employer and the employee are in equipoise, doubts are resolved in favor of labor. This is in line with the policy of the State to afford greater protection to labor.

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