Title
Saudi Arabian Airlines vs. Maria Lourdes D. Castells and Shalimar Centi-Mandanas
Case
G.R. No. 245269
Decision Date
Jul 28, 2025
Flight attendants voluntarily resigned; quitclaims valid absent coercion. No illegal dismissal by Saudia.
labor law
illegal dismissal
constructive dismissal

Case Summary (G.R. No. 245269)

Factual Background: Transfer, Resignations, and Quitclaims

Saudia received an inter-office memorandum dated August 18, 2004 directing the transfer of the three crew members—Castells, centering on the group that included Bilbao, and Centi-Mandanas—from Manila to Jeddah effective September 1, 2004, with the transfer stated to be “due to operational requirements.” Castells testified that she was informed in late August 2004 that she was on the list for transfer starting the first week of September 2004. She also alleged that it was widely known among Saudia employees that, when flight attendants of other nationalities were transferred to Jeddah under the same stated rationale, they were essentially compelled to resign. She stated that she reluctantly wrote her resignation letter to avoid the public embarrassment and stigma of being terminated, and she also claimed that her termination was due to her age of thirty-nine years.

In the sequence of events, Castells submitted her resignation letter on September 1, 2004. Saudia, through its Manila-based manager, accepted her resignation effective September 30, 2004. Bilbao and Centi-Mandanas followed, tendering their resignations on September 7, 2004. The respondents then executed quitclaims and acknowledgments on October 28, 2004 stating that they had received the full and complete end-of-service award and final settlement and that they had no further claims against Saudia. In Castells’ case, Bilbao signed the quitclaim on her behalf.

The Complaints for Illegal Constructive Dismissal

Castells and Bilbao filed a complaint on July 20, 2005 for illegal constructive dismissal, alleging that they were forced to resign. On August 3, 2005, Centi-Mandanas filed a separate complaint raising the same core theory—that she was forced to resign. In their sworn statements, both respondents asserted that the resignation was not a genuine choice. Castells emphasized her long service, claimed knowledge of a pattern of forced resignations tied to Jeddah transfers, and suggested that age discrimination motivated the separation. Centi-Mandanas likewise recounted that, after arriving in Jeddah on September 2, 2004, she observed that many Jeddah-based flight attendants aged forty and above had already submitted resignation letters. She stated that on September 6, 2004 she was informed that her employment contract would not be renewed, and that she was asked to sign a document acknowledging the contract’s expiration and to sign a pro forma resignation letter drafted by Saudia to avoid humiliation of abrupt termination.

Saudia’s Defense and the Labor Arbiter’s Ruling

Saudia denied the allegations and relied on the resignation letters and exit interview forms, which it claimed contained expressions of gratitude for the opportunity to work as flight attendants. It further took the position that the quitclaims evidenced that the respondents knowingly received separation benefits and that they were not coerced.

The Labor Arbiter ruled that Castells and Centi-Mandanas were illegally dismissed. The Labor Arbiter ordered Saudia to pay full backwages from the time of illegal dismissal until finality, separation pay at one month for every year of service less amounts already received, and ten percent attorney’s fees on the amounts due. The Labor Arbiter also directed computation through the appropriate unit and awarded the respondents relief consistent with illegal dismissal.

Proceedings Before the NLRC and Its Reversal

On appeal, the respondents and Bilbao sought moral and exemplary damages, contending that the Labor Arbiter erred in not awarding those damages. Saudia also appealed, maintaining that the resignation letters and exit interview forms showed voluntary resignation. It argued that no notice of dismissal was required because the facts showed that the employees resigned before Saudia could exercise any rights under a termination scenario. It also argued that the quitclaims reflected that the employees read and understood their terms. Saudia further maintained that allowing repudiation of the quitclaims would lead to unjust enrichment.

The NLRC reversed the Labor Arbiter. It found that the respondents and Bilbao failed to provide substantial evidence proving coercion in signing resignation letters. The NLRC considered that Castells’ resignation letter explicitly stated, “It is time to move to another career.” The NLRC also noted that the respondents had received separation benefits, as indicated by the quitclaims they executed. Accordingly, the NLRC dismissed the complaint and found Saudia not guilty of illegal dismissal.

The CA’s First Review and the Court’s Earlier Final Ruling in Bilbao’s Case

Respondents sought recourse before the CA through a Petition for Certiorari in CA-G.R. SP No. 101971. In that petition, respondents argued that their resignation and quitclaim forms were pre-drafted by Saudia and left them with no viable choice to avoid having a termination record. They maintained that absence of physical coercion did not establish voluntary consent. They also reiterated that transfers framed as “operational requirements” were a scheme to remove “aging” employees, and they again sought moral and exemplary damages based on alleged fraud and bad faith.

A parallel petition involving Bilbao, docketed as CA-G.R. SP No. 102319, proceeded from the same core labor dispute. The CA, in a May 30, 2008 Decision, upheld the NLRC’s finding of no constructive dismissal. The CA characterized Saudia’s action as a valid management prerogative exercised in a termination-for-just-cause framework in the employment contract. It further stated that Saudia gave Bilbao the option to resign or face termination, and that Bilbao chose resignation due to the generous separation pay. It likewise treated the resignation letters as revealing gratitude and appreciation, concluding that there was no basis to find coercion.

Bilbao sought reconsideration, which the CA denied on July 22, 2008. Bilbao then filed a petition for review on certiorari to this Court, docketed as G.R. No. 183915. On December 14, 2011, this Court denied the petition and affirmed the CA’s rulings, holding that Bilbao voluntarily resigned. The Court held that Bilbao’s resignation letter, together with her educational background and the circumstances surrounding the filing of the illegal dismissal complaint, constituted substantial evidence of voluntary resignation.

The CA’s Assailed Decision in CA-G.R. SP No. 101971: Constructive Dismissal and Damages

In the CA decision now assailed, the Court reversed the NLRC and reinstated the Labor Arbiter’s ruling. The CA concluded that respondents were constructively dismissed, reasoning from several circumstances: first, that respondents and Bilbao were nearly forty years old when they ended their employment; second, that they were senior flight attendants with close to two decades of service; third, that Saudia gave them only one week to prepare for transfer from Manila to Jeddah; and fourth, that they were required to sign pre-drafted and pre-printed quitclaims that did not specify the amount of settlement.

The CA further reasoned that it was unnatural for persons of sound mind to abandon a decent-paying job held for almost two decades without compelling reason, especially if separation pay was substantial. The CA treated the simultaneous resignation of employees around forty years old as establishing a pattern that Saudia “laid-off” the flight attendants on the basis of age, which the CA equated with discrimination.

On that basis, the CA set aside the NLRC resolutions for grave abuse of discretion and reinstated the Labor Arbiter’s decision with modifications. It ordered Saudia to pay both respondents a combined amount of PHP 100,000.00 per person as moral and exemplary damages, consistent with prevailing jurisprudence, and awarded costs to Saudia.

Issues Framed by the Petition

Saudia argued before this Court that respondents’ resignations were voluntary. It added that the issue had already been resolved in this Court’s December 14, 2011 Decision in G.R. No. 183915 involving Bilbao, which arose from the same factual set. The core issue thus required this Court to determine whether the CA erred in reversing the NLRC and reinstating illegal dismissal based on its inference of constructive dismissal.

Legal Basis: Limited Review Under Rule 45 and Exceptions

The Court held that, under Rule 45 of the Rules of Court, it is not a trier of facts and does not re-examine evidence all over again. The Court emphasized that a petition under Rule 45 should raise only questions of law. It recognized exceptions that allow the Court to review factual matters, including where the conclusion is grounded on conjecture, where the inference is manifestly mistaken, where there is grave abuse of discretion, where the judgment is based on misapprehension of facts, where findings are conflicting, where there is no citation of specific evidence for factual findings, where findings are contradicted by evidence on record, where the CA’s findings are contrary to the trial court, where the CA overlooked relevant undisputed facts that would justify a different conclusion, where CA findings are beyond the issues, and where CA findings are contrary to admissions of both parties.

The Court found that the Labor Arbiter’s, the NLRC’s, and the CA’s factual conclusions were inconsistent, and that the CA’s treatment across two intertwined cases yielded conflicting approaches. In view of these inconsistencies, the Court found it necessary to entertain the petition even if it involved questions of fact.

Doctrinal Framework: Voluntary Resignation Versus Constructive Dismissal

The Court applied the doctrinal articulation in Panasonic Manufacturing Philippines Corporation v. Peckson on the distinction between constructive dismissal and voluntary resignation. Constructive dismissal was defined as quitting or cessation of work because continued empl

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