Inday was employed by Herrera Home Improvements, Inc. (Herrera Home) as interior decorator.

During the first year of her employment, she did not report for work for one month. Hence, her employer dismissed her from the service. She filed with the Labor Arbiter a complaint for illegal dismissal alleging she did not abandon her work and that in terminating her employment, Herrera Home deprived her of her right to due process. She thus prayed that she be reinstated to her position. Inday hired you as her counsel. In preparing the position paper to be submitted to the Labor Arbiter, explain the standards of due process which should have been observed by Herrera Home in terminating your clients employment. 5% Employee dismissal; due process. The following are the guiding principles in connection with the hearing requirement in dismissal cases: 1. Ample opportunity to be heard means any meaningful opportunity (verbal or written) given to the employee to answer the charges against him and submit evidence in support of his defense, whether in a hearing, conference or some other fair, just and reasonable way. 2. A formal hearing or conference becomes mandatory only when requested by the employee in writing or substantial evidentiary disputes exist or a company rule or practice requires it, or when similar circumstances justify it. 3. The ample opportunity to be heard standard in the Labor Code prevails over the hearing or conference requirement in the implementing rules and regulations. Given that the petitioners expressly requested a conference or a convening of a grievance committee, such formal hearing became mandatory. After PGAI failed to affirmatively respond to such request, it follows that the hearing requirement was not complied with and, therefore, Vallota was denied his right to procedural due process. Prudential Guarantee and Assurance Employee Labor Union and Sandy T. Vallota vs. NLRC, Prudential Guarantee and Assurance Inc., and/or Jocelyn Retizos. G.R. No. 185335, June 13, 2012. Employee dismissal; just cause. Article 282(e) of the Labor Code talks of other analogous causes or those which are susceptible of comparison to another in general or in specific detail as a cause for termination of employment. A cause analogous to serious misconduct is a voluntary and/or willful act or omission attesting to an employees moral depravity. Theft committed by an employee against a person other than his employer, if proven by substantial evidence, is a cause analogous to serious misconduct. Previous infractions may be cited as justification for dismissing an employee only if they are related to the subsequent offense. However, it must be noted that such a discussion was unnecessary since the theft, taken in isolation from Fermins other violations, was in itself a valid cause for the termination of his employment. Cosmos Bottling Corp. vs. Wilson Fermin/Wilson Fermin vs. Cosmos Bottling Corp. and Cecilia Bautista. G.R. No. 193676 & G.R. No. 194303. June 20, 2012. gross Negligence Meaning. Gross negligence is a just cause for termination of employment by employer under Article 282 of the Labor Code of the Philippines.

Gross negligence has been defined as the want or absence of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. Negligence must be Habitual. In order to constitute a just cause for the employees dismissal, the neglect of duties must not only be gross but also habitual. Habitual neglect implies repeated failure to perform ones duties for a period of time, depending upon the circumstances. A single isolated acts of negligence do not constitute a just cause for the dismissal of the employee. However, in a number of cases, the SC upheld the validity of dismissal on the ground of gross negligence even if the act complained of was not habitual. Thus, a bank employee was found grossly negligent when she delivered newly approved credit cards to a person she had not even seen before and she did not even ask for receipts, thereby enabling fictitious persons to use these cards, causing P740,000.00 loss to the bank. (SeeCitibank vs. Gatchalian, G.R. No. 111222, January 18, 1995.) Habitual Absenteeism and Tardiness. Habitual absenteeism and tardiness constitute gross and habitual neglect of duty. Repeated acts of absences without leave and frequent tardiness reflect indifferent attitude to and lack of motivation in his work. (Valiao vs. CA, G.R. No. 146621, July 30, 2004.) Last Edited: Friday, August 19, 2011 Caveat: Subsequent court and administrative rulings, or changes to, or repeal of, laws, rules and regulations may have rendered the whole or part of this article inaccurate or obsolete. Procedural Due Process. For termination of employment based on just causes, procedural due process requires that the employee be given the benefit of the so-called twin-notice and hearing, as follows: 1. First notice: Notice to Explain (NTE) or order to show cause. A written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to explain his side. 2. Hearing or formal investigation. A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him. 3. Second notice: Notice of decision. A written notice of termination served on the employee indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination. (See Art. 277[b] and Sec 2, Rule I, Book VI, IRR) Service of Notices. In case of termination, the employee must be personally served with notices (notice to show cause and notice of termination). Ideally, this should be done by personally handing a copy of the notice to the employee concerned. However, if this is not possible, the notices may be served on the employees last known address either by ordinary or registered mail (from legal viewpoint, registered mail is preferred). The mere posting of the notice on the bulletin board is not sufficient compliance. (Shoppers Gain Supermart, 1996) If the employee refused to receive notice, the employer must serve the same by registered mail at his last known address. (See Nueva Ecija Electric Coop case, 2005)

Opportunity to Respond. The very purpose of requiring the employer to observe proper termination process is to give the employee ample opportunity to respond to the charges against him or to defend himself. What the law require is ample opportunity. Ample opportunity means every kind of assistance that management must accord the employee to enable him to prepare adequately for his defense including legal representation. Requirements for First Notice (NTE). The first notice informing the employee of the charges against him should set out clearly what he is being held liable for. It should neither be pro-forma nor vague. This is consistent with the requirement that the employee should be afforded ample opportunity to be heard and not mere opportunity. Moreover, the dismissal, if necessary, must be based on the same grounds cited in the NTE. If the dismissal is based on grounds other than those specified in the notice, he is deemed to have been deprived of due process. (Glaxo Wellcome vs. NEW-DFA, 2005.) Effect of Refusal of Employee to Participate in Investigation. By the refusal of employee to participate in the investigation, he is deemed to have waived his right to defend himself. (Leonardo vs. NLRC, 2000.) Effects or Consequences of Termination. If dismissal is for just cause and with prior notice and hearing, the dismissal is valid. If the dismissal is for just cause but without prior notice and hearing, the dismissal is valid but the employer may be required to pay nominal damages to the dismissed employee. If there is no just cause for dismissal, whether or not there is prior notice and hearing, the dismissal is illegal. The employee is entitled to reinstatement, backwages and damages. Cases The employee refused to participate in the investigation being conducted by the personnel management. The Court ruled that by refusing to participate, he cannot claim that he was denied due process. (Leonardo vs. NLRC, 2000.) The employment contract contains stipulation that the employment may be terminated by either party after one month notice or one month salary in lieu of notice. The stipulation was held to be illegal. The requirement of prior notice and opportunity to be heard cannot be substituted by mere payment of salary. (PNB vs. Cabansag, 2005.) Last Edited: Sunday, March 20, 2011 Caveat: Subsequent court and administrative rulings, or changes to, or repeal of, laws, rules and regulations may have rendered the whole or part of this article inaccurate or obsolete.

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ECOND DIVISION PHILIPS SEMICONDUCTORS (PHILS.), INC., Petitioner, G.R. No. 141717 April 14, 2004 -versus-

ELOISA FADRIQUELA, Respondent.

DECISION CALLEJO, SR., J.:chanroblesvirtuallawlibrary

Before us is a petition for review of the Decision [1] of the Court of Appeals (CA) in CAG.R. SP No. 52149 and its Resolution dated January 26, 2000 denying the motion for reconsideration therefrom. The Case for the Petitioner The petitioner Philips Semiconductors (Phils.), Inc. is a domestic corporation engaged in the production and assembly of semiconductors such as power devices, RF modules, CATV modules, RF and metal transistors and glass diods. It caters to domestic and foreign corporations that manufacture computers, telecommunications equipment and cars.cralaw Aside from contractual employees, the petitioner employed 1,029 regular workers. The employees were subjected to periodic performance appraisal based on output, quality, attendance and work attitude. [2] One was required to obtain a performance rating of at least 3.0 for the period covered by the performance appraisal to maintain good standing as an employee.cralaw On May 8, 1992, respondent Eloisa Fadriquela executed a Contract of Employment with the petitioner in which she was hired as a production operator with a daily salary of P118. Her initial contract was for a period of three months up to August 8, 1992, [3] but was extended for two months when she garnered a performance rating of 3.15. [4] Her contract was again renewed for two months or up to December 16, 1992, [5] when she received a performance rating of 3.8. [6] After the expiration of her third contract, it was extended anew, for three months, [7] that is, from January 4, 1993 to April 4, 1993.cralaw After garnering a performance rating of 3.4, [8] the respondents contract was extended for another three months, that is, from April 5, 1993 to June 4, 1993. [9] She, however, incurred five absences in the month of April, three absences in the month of May and four absences in the month of June. [10] Line supervisor Shirley F. Velayo asked the respondent why she incurred the said absences, but the latter failed to explain her side. The respondent was warned that if she offered no valid justification for her absences, Velayo would have no other recourse but to recommend the non-renewal of her contract. The respondent still failed to respond, as a consequence of which her performance rating declined to 2.8. Velayo recommended to the petitioner that the respondents employment be terminated due to habitual absenteeism, [11] in accordance with the Company Rules and Regulations. [12] Thus, the respondents contract of employment was no longer renewed. chan robles virtual law library The Complaint of the Respondent The respondent filed a complaint before the National Capital Region Arbitration Branch of the National Labor Relations Commission (NLRC) for illegal dismissal against the petitioner, docketed as NLRC Case No. NCR-07-04263-93. She alleged, inter alia, that she was illegally dismissed, as there was no valid cause for the termination of her employment. She was not notified of any infractions she allegedly committed; neither was she accorded a chance to be heard. According to the

respondent, the petitioner did not conduct any formal investigation before her employment was terminated. Furthermore, considering that she had rendered more than six months of service to the petitioner, she was already a regular employee and could not be terminated without any justifiable cause. Moreover, her absences were covered by the proper authorizations. [13] On the other hand, the petitioner contended that the respondent had not been dismissed, but that her contract of employment for the period of April 4, 1993 to June 4, 1993 merely expired and was no longer renewed because of her low performance rating. Hence, there was no need for a notice or investigation. Furthermore, the respondent had already accumulated five unauthorized absences which led to the deterioration of her performance, and ultimately caused the non-renewal of her contract. [14] The Ruling of the Labor Arbiter and the NLRC On June 26, 1997, the Labor Arbiter rendered a decision dismissing the complaint for lack of merit, thus: IN THE LIGHT OF ALL THE FOREGOING, the complaint is hereby dismissed for lack of merit. The respondent is, however, ordered to extend to the complainant a send off award or financial assistance in the amount equivalent to one-month salary on ground of equity. [15] The Labor Arbiter declared that the respondent, who had rendered less than seventeen months of service to the petitioner, cannot be said to have acquired regular status. The petitioner and the Philips Semiconductor Phils., Inc., Workers Union had agreed in their Collective Bargaining Agreement (CBA) that a contractual employee would acquire a regular employment status only upon completion of seventeen months of service. This was also reflected in the minutes of the meeting of April 6, 1993 between the petitioner and the union. Further, a contractual employee was required to receive a performance rating of at least 3.0, based on output, quality of work, attendance and work attitude, to qualify for contract renewal. In the respondents case, she had worked for the petitioner for only twelve months. In the last extension of her employment contract, she garnered only 2.8 points, below the 3.0 required average, which disqualified her for contract renewal, and regularization of employment. The Labor Arbiter also ruled that the respondent cannot justifiably complain that she was deprived of her right to notice and hearing because her line supervisor had asked her to explain her unauthorized absences. Accordingly, these dialogues between the respondent and her line supervisor can be deemed as substantial compliance of the required notice and investigation. The Labor Arbiter declared, however, that the respondent had rendered satisfactory service for a period of one year, and since her infraction did not involve moral turpitude, she was entitled to one months salary.cralaw Aggrieved, the respondent appealed to the NLRC, which, on September 16, 1998, issued a Resolution affirming the decision of the Labor Arbiter and dismissing the appeal. The NLRC explained that the respondent was a contractual employee whose period of employment was fixed in the successive contracts of employment she had executed with the petitioner. Thus, upon the expiration of her contract, the respondents employment automatically ceased. The respondents employment was not terminated; neither was she dismissed.cralaw The NLRC further ruled that as a contractual employee, the respondent was bound by the stipulations in her contract of employment which, among others, was to maintain a performance rating of at least 3.0 as a condition for her continued employment. Since she failed to meet the said requirement, the petitioner was justified in not renewing her contract.cralaw

The respondent filed a motion for reconsideration of the resolution, but on January 12, 1999, the NLRC resolved to deny the same. The Case Before the Court of Appeals Dissatisfied, the respondent filed a petition for certiorari under Rule 65 before the Court of Appeals, docketed as CA-G.R. SP No. 52149, for the reversal of the resolutions of the NLRC. chan robles virtual law library On October 11, 1999, the appellate court rendered a decision reversing the decisions of the NLRC and the Labor Arbiter and granting the respondents petition. The CA ratiocinated that the bases upon which the NLRC and the Labor Arbiter founded their decisions were inappropriate because the CBA and the Minutes of the Meeting between the union and the management showed that the CBA did not cover contractual employees like the respondent. Thus, the seventeenth-month probationary period under the CBA did not apply to her. The CA ruled that under Article 280 of the Labor Code, regardless of the written and oral agreements between an employee and her employer, an employee shall be deemed to have attained regular status when engaged to perform activities which are necessary and desirable in the usual trade or business of the employer. Even casual employees shall be deemed regular employees if they had rendered at least one year of service to the employer, whether broken or continuous. The CA noted that the respondent had been performing activities that were usually necessary and desirable to the petitioners business, and that she had rendered thirteen months of service. It concluded that the respondent had attained regular status and cannot, thus, be dismissed except for just cause and only after due hearing. The appellate court further declared that the task of the respondent was hardly specific or seasonal. The periods fixed in the contracts of employment executed by the respondent were designed by the petitioner to preclude the respondent from acquiring regular employment status. The strict application of the contract of employment against the respondent placed her at the mercy of the petitioner, whose employees crafted the said contract. According to the appellate court, the petitioners contention that the respondents employment on as the need arises basis was illogical. If such stance were sustained, the court ruled, then no employee would attain regular status even if employed by the petitioner for seventeen months or more. The CA held that the respondents sporadic absences upon which her dismissal was premised did not constitute valid justifiable grounds for the termination of her employment. The tribunal also ruled that a less punitive penalty would suffice for missteps such as absenteeism, especially considering that the respondent had performed satisfactorily for the past twelve months. The CA further held that, contrary to the ruling of the Labor Arbiter, the dialogues between the respondent and the line supervisor cannot be considered substantial compliance with the requirement of notice and investigation. Thus, the respondent was not only dismissed without justifiable cause; she was also deprived of her right to due process. The petitioner filed a motion for reconsideration of the decision but on January 26, 2000, the CA issued a resolution denying the same. The Case Before the Court The petitioner filed the instant petition and raised the following issues for the courts resolution: (a) whether or not the respondent was still a contractual employee of the petitioner as of June 4, 1993; (b) whether or not the petitioner dismissed the respondent from her employment; (c) if so, whether or not she was accorded the requisite notice

and investigation prior to her dismissal; and (d) whether or not the respondent is entitled to reinstatement and full payment of backwages as well as attorneys fees. On the first issue, the petitioner contends that the policy of hiring workers for a specific and limited period on an as needed basis, as adopted by the petitioner, is not new; neither is it prohibited. In fact, according to the petitioner, the hiring of workers for a specific and limited period is a valid exercise of management prerogative. It does not necessarily follow that where the duties of the employee consist of activities usually necessary or desirable in the usual course of business of the employer, the parties are forbidden from agreeing on a period of time for the performance of such activities. Hence, there is nothing essentially contradictory between a definite period of employment and the nature of the employees duties. According to the petitioner, it had to resort to hiring contractual employees for definite periods because it is a semiconductor company and its business is cyclical in nature. Its operation, production rate and manpower requirements are dictated by the volume of business from its clients and the availability of the basic materials. It produces the products upon order of its clients and does not allow such products to be stockpiled. Peak loads due to cyclical demands increase the need for additional manpower for short duration. Thus, the petitioner often experiences short-term surges in labor requirements. The hiring of workers for a definite period to supplement the regular work force during the unpredictable peak loads was the most efficient, just and practical solution to the petitioners operating needs. The petitioner contends that the CA misapplied the law when it insisted that the respondent should be deemed a regular employee for having been employed for more than one year. The CA ignored the exception to this rule, that the parties to an employment contract may agree otherwise, particularly when the same is established by company policy or required by the nature of work to be performed. The employer has the prerogative to set reasonable standards to qualify for regular employment, as well as to set a reasonable period within which to determine such fitness for the job. According to the petitioner, the conclusion of the CA that the policy adopted by it was intended to circumvent the respondents security of tenure is without basis. The petitioner merely exercised a right granted to it by law and, in the absence of any evidence of a wrongful act or omission, no wrongful intent may be attributed to it. Neither may the petitioner be penalized for agreeing to consider workers who have rendered more than seventeen months of service as regular employees, notwithstanding the fact that by the nature of its business, the petitioner may enter into specific limited contracts only for the duration of its clients peak demands. After all, the petitioner asserts, the union recognized the need to establish such training and probationary period for at least six months for a worker to qualify as a regular employee. Thus, under their CBA, the petitioner and the union agreed that contractual workers be hired as of December 31, 1992. The petitioner stresses that the operation of its business as a semiconductor company requires the use of highly technical equipment which, in turn, calls for certain special skills for their use. Consequently, the petitioner, in the exercise of its best technical and business judgment, has set a standard of performance for workers as well as the level of skill, efficiency, competence and production which the workers must pass to qualify as a regular employee. In rating the performance of the worker, the following appraisal factors are considered by the respondent company as essential: (1) output (40%), (2) quality (30%), (3) attendance (15%), and (4) work attitude (15%). The rate of 3.0 was set as the passing grade. As testified to by the petitioners Head of Personnel Services, Ms. Cecilia C. Mallari:

A workers efficiency and productivity can be established only after he has rendered service using Philips equipment over a period of time. A worker has to undergo training, during which time the worker is taught the manufacturing process and quality control. After instructions, the worker is subjected to written and oral examinations to determine his fitness to continue with the training. The orientation and initial training lasts from three to four weeks before the worker is assigned to a specific work station. Thereafter, the workers efficiency and skill are monitored. chan robles virtual law library Among the factors considered (before a contractual employee becomes a regular employee) are output, quality, attendance, and work attitude, which includes cooperation, discipline, housekeeping and inter-office employee relationship. These factors determine the workers efficiency and productivity.[16] The Courts Ruling In ruling for the respondent, the appellate court applied Article 280 of the Labor Code of the Philippines, as amended, which reads: Art. 280. Regular and Casual Employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral argument of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph; Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.cralaw The appellate court held that, in light of the factual milieu, the respondent was already a regular employee on June 4, 1993. Thus: It is apparent from the factual circumstances of this case that the period of employment has been imposed to preclude acquisition of tenurial security by petitioner. It bears stressing that petitioners original contract of employment, dated May 8, 1992 to August 8, 1992, had been extended through several contracts one from October 13, 1992 to December 16, 1992, another from January 7, 1993 to April 4, 1993, and, lastly, from April 5, 1993 to June 4, 1993.cralaw The fact that the petitioner had rendered more than one year of service at the time of his (sic) dismissal only shows that she is performing an activity which is usually necessary and desirable in private respondents business or trade. The work of petitioner is hardly specific or seasonal. The petitioner is, therefore, a regular employee of private respondent, the provisions of their contract of employment notwithstanding. The private respondents prepared employment contracts placed petitioner at the mercy of those who crafted the said contract. [17] chan robles virtual law library We agree with the appellate court.cralaw Article 280 of the Labor Code of the Philippines was emplaced in our statute books to prevent the circumvention by unscrupulous employers of the employees right to be secure in his tenure by indiscriminately and completely ruling out all written and oral agreements inconsistent with the concept of regular employment defined therein. The language of the law manifests the intent to

protect the tenurial interest of the worker who may be denied the rights and benefits due a regular employee because of lopsided agreements with the economically powerful employer who can maneuver to keep an employee on a casual or temporary status for as long as it is convenient to it.[18] In tandem with Article 281 of the Labor Code, Article 280 was designed to put an end to the pernicious practice of making permanent casuals of our lowly employees by the simple expedient of extending to them temporary or probationary appointments, ad infinitum. [19] The two kinds of regular employees under the law are (1) those engaged to perform activities which are necessary or desirable in the usual business or trade of the employer; and (2) those casual employees who have rendered at least one year of service, whether continuous or broken, with respect to the activities in which they are employed. [20] The primary standard to determine a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the business or trade of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. [21] If the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability of that activity to the business of the employer. Hence, the employment is also considered regular, but only with respect to such activity and while such activity exists. [22] The law does not provide the qualification that the employee must first be issued a regular appointment or must be declared as such before he can acquire a regular employee status. [23] In this case, the respondent was employed by the petitioner on May 8, 1992 as production operator. She was assigned to wirebuilding at the transistor division. There is no dispute that the work of the respondent was necessary or desirable in the business or trade of the petitioner. [24] She remained under the employ of the petitioner without any interruption since May 8, 1992 to June 4, 1993 or for one (1) year and twenty-eight (28) days. The original contract of employment had been extended or renewed for four times, to the same position, with the same chores. Such a continuing need for the services of the respondent is sufficient evidence of the necessity and indispensability of her services to the petitioners business. [25] By operation of law, then, the respondent had attained the regular status of her employment with the petitioner, and is thus entitled to security of tenure as provided for in Article 279 of the Labor Code which reads: Art. 279. Security of Tenure. In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.cralaw The respondents re-employment under contracts ranging from two to three months over a period of one year and twenty-eight days, with an express statement that she may be reassigned at the discretion of the petitioner and that her employment may be terminated at any time upon notice, was but a catch-all excuse to prevent her regularization. Such statement is contrary to the letter and spirit of Articles 279 and 280 of the Labor Code. We reiterate our ruling in Romares v. NLRC: [26] Succinctly put, in rehiring petitioner, employment contracts ranging from two (2) to three (3) months with an express statement that his temporary job/service as mason shall be

terminated at the end of the said period or upon completion of the project was obtrusively a convenient subterfuge utilized to prevent his regularization. It was a clear circumvention of the employees right to security of tenure and to other benefits. It, likewise, evidenced bad faith on the part of PILMICO. chan robles virtual law library The limited period specified in petitioners employment contract having been imposed precisely to circumvent the constitutional guarantee on security of tenure should, therefore, be struck down or disregarded as contrary to public policy or morals. To uphold the contractual arrangement between PILMICO and petitioner would, in effect, permit the former to avoid hiring permanent or regular employees by simply hiring them on a temporary or casual basis, thereby violating the employees security of tenure in their jobs. [27] Under Section 3, Article XVI of the Constitution, it is the policy of the State to assure the workers to security of tenure and free them from the bondage of uncertainty of tenure woven by some employers into their contracts of employment. The guarantee is an act of social justice. When a person has no property, his job may possibly be his only possession or means of livelihood and those of his dependents. When a person loses his/her job, his dependents suffer as well. The worker should therefor be protected and insulated against any arbitrary deprivation of his job. [28] We reject the petitioners general and catch-all submission that its policy for a specific and limited period on an as the need arises basis is not prohibited by law or abhorred by the Constitution; and that there is nothing essentially contradictory between a definite period of employment and the nature of the employees duties.cralaw The petitioners reliance on our ruling in Brent School, Inc. v. Zamora [29] and reaffirmed in subsequent rulings is misplaced, precisely in light of the factual milieu of this case. In the Brent School, Inc. case, we ruled that the Labor Code does not outlaw employment contracts on fixed terms or for specific period. We also ruled that the decisive determinant in term employment should not be the activity that the employee is called upon to perform but the day certain agreed upon by the parties for the commencement and termination of their employment relationship. But we also emphasized in the same case that where from the circumstances it is apparent that the periods have been imposed to preclude acquisition of tenurial security by the employee, they should be struck down or disregarded as contrary to public policy and morals. In Romares v. NLRC case, we cited the criteria under which term employment cannot be said to be in circumvention of the law on security of tenure, namely: 1) The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or chan robles virtual law library 2) It satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter. [30] None of these criteria has been met in this case. Indeed, in Pure Foods Corporation v. NLRC, [31] we sustained the private respondents averments therein, thus: [I]t could not be supposed that private respondents and all other so-called casual workers of [the petitioner] KNOWINGLY and VOLUNTARILY agreed to the 5-month employment contract. Cannery workers are never on equal terms with their employers. Almost always, they agree to any terms of an employment contract just to get employed considering that it is difficult to find work given their ordinary qualifications. Their freedom to contract is empty and hollow because theirs is the freedom to starve if they refuse to work as casual or contractual workers. Indeed, to the unemployed, security of tenure has no value. It could not then be said that petitioner

and private respondents dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over the latter. [32] We reject the petitioners submission that it resorted to hiring employees for fixed terms to augment or supplement its regular employment for the duration of peak loads during short-term surges to respond to cyclical demands; hence, it may hire and retire workers on fixed terms, ad infinitum, depending upon the needs of its customers, domestic and international. Under the petitioners submission, any worker hired by it for fixed terms of months or years can never attain regular employment status. But then, the petitioner, through Ms. Cecilia C. Mallari, the Head of Personnel Services of the petitioner, deposed that as agreed upon by the Philips Semiconductor (Phils.), Inc. Workers Union and the petitioner in their CBA, contractual employees hired before December 12, 1993 shall acquire regular employment status after seventeen (17) months of satisfactory service, continuous or broken: 5. Q: What was the response of Philips regular employees to your h iring of contractual workers in the event of peak loads? chan robles virtual law library A: Philips regular rank-and-file employees, through their exclusive bargaining agent, the Philips Semiconductors (Phils.), Inc. Workers Union (Union), duly reco gnized the right of Philips, in its best business judgment, to hire contractual workers, and excluded these workers from the bargaining unit of regular rank-and-file employees.cralaw Thus, it is provided under the Collective Bargaining Agreement, dated May 16, 1993, between Philips and the Union that: ARTICLE I UNION RECOGNITION Section 1. Employees Covered: The Company hereby recognizes the Union as the exclusive bargaining representative of the following regular employees in the Factory at Las Pias, Metro Manila: Janitors, Material Handlers, Store helpers, Packers, Operators, QA Inspectors, Technicians, Storekeepers, Production Controllers, Inventory Controllers, Draftsmen, Machinists, Sr. Technician, Sr. QA Inspectors, Controllers, Sr. Draftsmen, and Servicemen, except probationary and Casual/Contractual Employees, all of whom do not belong to the bargaining unit. A copy of the CBA, dated May 16, 1993, was attached as Annex 1 to Philips Position Paper, dated August 30, 1993.cralaw 6. Q: May a contractual employee become a regular employee of the Philips? A: Yes. Under the agreement, dated April 6, 1993, between the Union and Philips, contractual workers hired before 12 December 1993, who have rendered seventeen months of satisfactory service, whether continuous or broken, shall be given regular status. The service rendered by a contractual employee may be broken depending on production needs of Philips as explained earlier.cralaw A copy of the Minutes of the Meeting (Minutes, for brevity), dated April 6, 1993, evidencing the agreement between Philips and the Union has been submitted as Annex 2 of Philips Position Paper. [33] chan robles virtual law library In fine, under the CBA, the regularization of a contractual or even a casual employee is based solely on a satisfactory service of the employee/worker for seventeen (17) months and not on an as needed basis on the fluctuation of the customers demands for its products. The illogic of the petitioners incongruent submissions was exposed by the appellate court in its assailed decision, thus: The contention of private respondent that petitioner was employed on as needed basis because its operations and manpower requirements are dictated by the volume of business from its client and the availability of the basic materials, such that when the need ceases, private respondent, at its option, may terminate the contract, is certainly untenable. If such is the case, then we see no reason for private respondent to allow

the contractual employees to attain their regular status after they rendered service for seventeen months. Indubitably, even after the lapse of seventeen months, the operation of private respondent would still be dependent on the volume of business from its client and the availability of basic materials. The point is, the operation of every business establishment naturally depends on the law of supply and demand. It cannot be invoked as a reason why a person performing an activity, which is usually desirable and necessary in the usual business, should be placed in a wobbly status. In reiteration, the relation between capital and labor is not merely contractual. It is so impressed with public interest that labor contracts must yield to the common good.cralaw While at the start, petitioner was just a mere contractual employee, she became a regular employee as soon as she had completed one year of service. It is not difficult to see that to uphold the contractual arrangement between private respondent and petitioner would, in effect, be to permit employers to avoid the necessity of hiring regular or permanent employees. By hiring employees indefinitely on a temporary or casual status, employers deny their right to security of tenure. This is not sanctioned by law. [34] Even then, the petitioners reliance on the CBA is misplaced. For, as ratiocinated by the appellate court in its assailed decision: Obviously, it is the express mandate of the CBA not to include contractual employees within its coverage. Such being the case, we see no reason why an agreement between the representative union and private respondent, delaying the regularization of contractual employees, should bind petitioner as well as other contractual employees. Indeed, nothing could be more unjust than to exclude contractual employees from the benefits of the CBA on the premise that the same contains an exclusionary clause while at the same time invoke a collateral agreement entered into between the parties to the CBA to prevent a contractual employee from attaining the status of a regular employee.cralaw This cannot be allowed.cralaw The CBA, during its lifetime, constitutes the law between the parties. Such being the rule, the aforementioned CBA should be binding only upon private respondent and its regular employees who were duly represented by the bargaining union. The agreement embodied in the Minutes of Meeting between the representative union and private respondent, providing that contractual employees shall become regular employees only after seventeen months of employment, cannot bind petitioner. Such a provision runs contrary to law not only because contractual employees do not form part of the collective bargaining unit which entered into the CBA with private respondent but also because of the Labor Code provision on regularization. The law explicitly states that an employee who had rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee. The period set by law is one year. The seventeen months provided by the Minutes of Meeting is ob viously much longer. The principle is well settled that the law forms part of and is read into every contract without the need for the parties expressly making reference to it. [35] On the second and third issues, we agree with the appellate court that the respondent was dismissed by the petitioner without the requisite notice and without any formal investigation. Given the factual milieu in this case, the respondent s dismissal from employment for incurring five (5) absences in April 1993, three (3) absences in May 1993 and four (4) absences in June 1993, even if true, is too harsh a penalty. We do agree that an employee may be dismissed for violation of reasonable regulations/rules promulgated by the employer. However, we emphasized in PLDT v. NLRC [36] that: chan robles virtual law library

Dismissal is the ultimate penalty that can be meted to an employee. Where a penalty less punitive would suffice, whatever missteps may have been committed by the worker ought not to be visited with a consequence so severe such as dismissal from employment. For, the Constitution guarantees the right of workers to security of tenure. The misery and pain attendant to the loss of jobs then could be avoided if there be acceptance of the view that under certain circumstances of the case the workers should not be deprived of their means of livelihood. [37] Neither can the conferences purportedly held between the respondent and the line supervisor be deemed substantial compliance with the requirements of notice and investigation. We are in full accord with the following ratiocinations of the appellate court in its assailed decision: As to the alleged absences, we are convinced that the same do not constitute sufficient ground for dismissal. Dismissal is just too stern a penalty. No less than the Supreme Court mandates that where a penalty less punitive would suffice, whatever missteps may be committed by labor ought not to be visited with a consequence so severe. (Meracap v. International Ceramics Manufacturing Co., Inc., 92 SCRA 412 [1979]). Besides, the fact that petitioner was repeatedly given a contract shows that she was an efficient worker and, therefore, should be retained despite occasional lapses in attendance. Perfection cannot, after all, be demanded. (Azucena, The Labor Code, Vol. II, 1996 ed., [p.] 680) Finally, we are convinced that it is erroneous for the Commission to uphold the following findings of the Labor Arbiter, thus: Those dialogues of the complainant with the Line Supervisor, sub stantially, stand for the notice and investigation required to comply with due process. The complainant did not avail of the opportunity to explain her side to justify her shortcomings, especially, on absences. She cannot now complain about deprivation of due process. Of course, the power to dismiss is a formal prerogative of the employer. However, this is not without limitations. The employer is bound to exercise caution in terminating the services of his employees. Dismissals must not be arbitrary and capricious. Due process must be observed in dismissing an employee because it affects not only his position but also his means of livelihood. Employers should respect and protect the rights of their employees which include the right to labor. (Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., 90 SCRA 391 [1979]) chan robles virtual law library To rule that the mere dialogue between private respondent and petitioner sufficiently complied with the demands of due process is to disregard the strict mandate of the law. A conference is not a substitute for the actual observance of notice and hearing. (Pepsi Cola Bottling Co., Inc. v. National Labor Relations Commission, 210 SCRA 277 [1992]) The failure of private respondent to give petitioner the benefit of a hearing before she was dismissed constitutes an infringement on her constitutional right to due process of law and not to be denied the equal protection of the laws. The right of a person to his labor is deemed to be his property within the meaning of the constitutional guarantee. This is his means of livelihood. He cannot be deprived of his labor or work without due process of law. (Batangas Laguna Tayabas Bus Co. v. Court of Appeals, 71 SCRA 470 [1976]) All told, the court concludes that petitioners dismissal is illegal because, first, she was dismissed in the absence of a just cause, and second, she was not afforded procedural due process. In pursuance of Article 279 of the Labor Code, we deem it proper to order the reinstatement of petitioner to her former job and the payment of her full

backwages. Also, having been compelled to come to court to protect her rights, we grant petitioners prayer for attorneys fees. [38] IN LIGHT OF ALL THE FOREGOING, the assailed decision of the appellate court in CA-G.R. SP No. 52149 is AFFIRMED. The petition at bar is DENIED. Costs against the petitioner.cralaw SO ORDERED.cralaw Puno, J., (Chairman), Quisumbing, Austria-Martinez, and Tinga, JJ., concur.cralaw

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 160863 September 27, 2006

NELSON ZAGALA and FELICIANO M. ANGELES, petitioners, vs. MIKADO PHILIPPINES CORPORATION, YOSHINARI KONO and TAKEHIKO OGURA, respondents. DECISION AUSTRIA-MARTINEZ, J.: Before this Court is a petition for review seeking the reversal of the Decision 1 dated August 27, 2003 of the Court of Appeals (CA) in CA-G.R. SP No. 70416 and its Resolution2 dated November 17, 2003, denying petitioners' Motion for Reconsideration. The facts are as follows: Petitioners Feliciano Angeles (Angeles) and Nelson Zagala (Zagala) were hired as laborers by Mikado Philippines Corporation (Mikado) on February 1, 1991 and February 19, 1990, respectively.3 In January of 1998, the management of Mikado reviewed the employees' attendance records for the years 1995, 1996, and 1997 and found that Angeles and Zagala were among those who exceeded the 30 absences allowed per year.4 Zagala incurred a total of 40 absences in 1995, 34.5 in 1996, and 59.5 in 1997; while Angeles incurred a total of 32.5 absences in 1995, 35 in 1996 and 40 in 1997. 5 Even before they received a formal memo asking for their explanations, petitioners submitted letters to the executive committee of Mikado giving reasons for their absences.6 Angeles, in his letter dated January 17, 1998 stated that he incurred absences in 1997 due to viral influenza, confinement of his daughter in the hospital, mental illness of their maid and other family problems.7 Zagala, meanwhile, averred in his January 19, 1998 letter that he and his family incurred ailments and problems that needed his attention.8

Finding said explanations to be unsatisfactory, Mikado terminated the services of petitioners on March 1, 1998.9 The following day, Angeles and Zagala filed a complaint for illegal dismissal against Mikado and its President, Yoshinaro10 Kono, and Executive Vice-President, Takehiko Ogura.11 On October 28, 1999, the Labor Arbiter (LA) rendered a decision ordering respondents to reinstate herein petitioners to their former positions and to pay them full backwages thus: WHEREFORE, premises considered, judgment is hereby rendered ordering respondent to reinstate complainant to their former position and to pay them full backwages computed as follows: FELICIANO M. ANGELES Backwages: From March 3 to Oct. 29, 1999 = 7 mos. & 28 days of 7.93 x P6,283.00 13th Month Pay: 1998 = P49,824.10/12 Service Incentive Lave: 1998 = P241.65 x 5 = P1,208.25 1999 = P241.65 x 5 = P1,208.25 TOTAL NELSON A. ZAGALA Backwages: From March 1, 1998 to Oct. 29, 1999 = 7.93 x P6,948.00 13th Month Pay: 1998 = P55,097.64/12 Service Incentive Lave: 1998 = P267.23 x 5 = P1,336.15 1999 = P267.23 x 5 = P1,336.15 TOTAL GRAND TOTAL SO ORDERED.12 The LA found that petitioners already received sanction for their absences in 1995 and 1996, through a memorandum with warning, thus petitioners may no longer be dismissed for the same cause.13 He also issued a writ of execution dated December 9, 1999 which respondents, however, did not heed.14 = = = = = P55,097.64 P 4,591.71 P 2,672.30 P62,361.41 P118,754.12

= = = =

P49, 824.19 P 4,152.02 P 2,416.50 P56,392.71

Respondents appealed to the National Labor Relations Commission (NLRC) which rendered a Resolution15 on February 26, 2002 affirming in toto the decision of the Labor Arbiter.16 It held that "warning" may be considered as penalty just like a reprimand; the subject absences were all properly brought to the attention of and was approved by the management; the termination of petitioners on the ground of absenteeism is not morally sound considering the rigorous stamina needed and the risk involved in the manufacture of marine propellers, and in view of petitioners' exemplary performance in their work.17 Respondents brought a petition to the CA under Rule 65 of the Rules of Court alleging that the NLRC committed grave abuse of discretion: in finding that the termination of petitioners due to absenteeism is not morally sound nor a valid cause for dismissal; in committing serious mistake in applying the laws and jurisprudence; and in not finding absenteeism as a just and lawful cause for the termination of petitioners. 18 Meanwhile, petitioners filed before the LA a Motion for Recomputation and Issuance of Alias Writ of Execution19which was granted by the LA on November 15, 2002.20 On November 25, 2002, the LA issued an Alias Writ of Execution ordering the sheriffs of the NLRC to effect the reinstatement of petitioners with Mikado and to collect from respondents the total amount of P659,426.07, representing petitioners' monetary award of P118,754.12 as embodied in the LA Decision of October 28, 1999, petitioners' accrued salaries of P534,638.03 for the period of October 30, 1999 to October 30, 2002, and execution fees of P6,033.92.21 Thus, the NLRC Sheriff issued a Notice of Garnishment dated December 9, 2002 on the Manager of the Rizal Commercial Banking Corporation EPZA, Rosario Cavite Branch anent the account of Mikado up to the amount ofP659, 426.07.22 On August 27, 2003, the CA rendered its Decision reversing the NLRC, the dispositive portion of which reads: WHEREFORE, the instant petition is hereby GRANTED. Accordingly, the assailed Resolution is hereby REVERSED and SET ASIDE. Also, the Writ of Garnishment dated December 9, 2002 on the account of petitioners with RCBC, Rosario Branch is hereby lifted. No pronouncement as to cost. 23 The CA held that Mikado was correct in contending that absenteeism is a valid cause for termination following Art. 282(c) of the Labor Code which provides that gross and habitual neglect by the employee of his duties is a just cause for termination; that both petitioners knew that the company policy was to allow only 30 absences; that although petitioners were previously warned for their absences in 1995 and 1996, still petitioners incurred absences in 1997 in violation of the company rules; and that previous offenses may be used as valid justification for dismissal from work where the infractions are related to the subsequent offense upon which the termination of employment is decreed.24 The CA denied petitioners' Motion for Reconsideration.25 Thus, the present petition where it is alleged that the CA erred: A. x x x IN HOLDING THAT PETITIONERS' INCURRED ABSENCES IS A JUST CAUSE FOR THEIR DISMISSAL DESPITE THE UNDISPUTED FINDING OF THE NATIONAL LABOR RELATIONS COMMISSION THAT PETITIONERS' ABSENCES WERE AUTHORIZED AND CONDONED BY THE RESPONDENTS. THIS RULING OF [SIC] NOT IN ACCORD WITH THE DECISIONS OF THIS MOST HONORABLE COURT.

B. x x x IN REVERSING THE FINDING OF THE NATIONAL LABOR RELATIONS COMMISSION THAT THE PENALTY LESSER THAN TERMINATION IS THE PROPER PENALTY DESPITE UNDISPUTED EVIDENCE TO THAT EFFECT. THIS RULING IS CONTRARY TO EXISTING JURISPRUDENCE. C. x x x IN FINDING THAT THERE IS VALID CAUSE FOR DISMISSAL SINCE THE RESPONDENTS NEVER OVERCAME THEIR BURDEN OF PROOF. D. x x x IN LIFTING THE WRIT OF GARNISHMENT CONTRARY TO EXISTING LAWS AND DECISIONS OF THE SUPREME COURT.26 Petitioners claim that: their absences were authorized or at the very least condoned, as such absences were all properly brought to the attention of respondents through phone calls, doctor's certificates and signed leave forms; absences, once authorized or with prior approval of the employer, may not be used as ground for termination of employment; granting, without admitting, that the absences in this case were unauthorized, still a lesser penalty than termination would be proper; the company's Working Regulations, Section 6, Art. II thereof states that "unexcused absences are subject to progressive disciplinary actions"; the memorandum on Attendance Guidelines further enumerates the disciplinary actions for unexcused leave without pay, to wit: verbal warning for the first offense, written warning for the second offense, 3-day suspension for the third offense; 6-day suspension for the fourth offense and termination for the fifth offense; respondents did not follow the progressive disciplinary actions, for if the CA's conclusions were to be followed, i.e., petitioners' absences in 1997 constitute a second violation, then a written warning should be the appropriate penalty or a 3-day suspension at the most since this is the next level penalty; employers cannot apply penalties other than those provided in the company rules; respondents, as employers, have the burden of proving that the dismissal of petitioners was for a just cause and their failure to discharge such burden would result in a finding that the dismissal of the employees is wrongful; the petitioners are entitled to the salaries that they should have received had they been reinstated to their employment; granting that the CA were justified in its decision, they should not have lifted the order of garnishment issued by the Labor Arbiter, at least up to the amount equivalent to what the petitioners should have received from the date of the Labor Arbiter's decision up to the date that the CA reversed and set aside such finding since petitioners are entitled to said amount.27 Petitioners pray that the Decision and Resolution of the CA be set aside and that the Resolution of the NLRC and the Decision of the Labor Arbiter be affirmed. 28 Respondents filed their Comment contending that: petitioners violated company rules and regulations for the years 1995, 1996, and 1997; the absences allegedly condoned or authorized pertains to the years 1995 and 1996; the reasons put forth by petitioners for their absences were personal problems; in Meralco v. National Labor Relations Commission, 263 SCRA 531, an employee who had a penchant to incur unauthorized absences and/or violation of the employer's sick leave policy was deemed properly dismissed considering that it is the totality, not the compartmentalization of company infractions that the employee has consistently committed, which justified his dismissal; the contention of petitioners that respondents failed to discharge the burden of proof is baseless; there is also no merit to petitioners' claim that they are entitled to salaries which they should have received had they been reinstated since they are terminated for a just cause.29 Petitioners filed a Reply30 and a Memorandum31 reiterating their arguments in the petition.

Respondents likewise filed a Memorandum where they further argued that Mikado actually showed remarkable tolerance for the absenteeism of petitioners for instead of immediate termination or suspension, Mikado sent petitioners memoranda with warning; that it is a fundamental rule that an employer cannot be compelled to continue with the employment of an individual who admittedly was guilty of misfeasance or malfeasance towards his employer and whose continuance in the service is inimical to the employer's interest; and that the employees' right to security of tenure cannot defeat the fact that petitioners were extremely negligent in the performance of their duties. 32 At the center of the present petition is the issue of whether petitioners were illegally dismissed. We find in the affirmative and therefore hereby grant the petition. The Constitution looks with compassion on the workingman and its intent in protecting his rights.33 A worker's employment is property in a constitutional sense34 and while the Court recognizes the right of an employer to terminate the services of an employee for a just or authorized cause, the dismissal of an employee must be made within the parameters of law and pursuant to the tenets of equity and fair play.35 An employer's power to discipline his employees must not be exercised in an arbitrary manner as to erode the constitutional guarantee of security of tenure.36 As correctly pointed out by petitioners, the burden of proving just cause for dismissing an employee rests upon the employer, and the employer's failure to discharge such burden results in a finding that the dismissal is unjustified and therefore illegal.37 It is the employer who must prove the validity of the termination and not the employee who must prove the reverse.38 The employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause.39 In this case, respondents claim that the excessive absences of petitioners justify their termination. We disagree. There must be a reasonable proportionality between the offense and the penalty.40 Dismissal, without doubt, is the ultimate penalty that can be meted to an employee.41 Thus, where a penalty less punitive would suffice, whatever missteps may be committed by labor ought not to be visited with a consequence so severe.42 As well stated in Philippine Long Distance Telecommunication v. National Labor Relations Commission:43 The misery and pain attendant to the loss of jobs x x x could be avoided if there be acceptance of the view that under certain circumstances of the case the workers should not be deprived of their means of livelihood. 44 While the power to dismiss is a formal prerogative of the employer, this is without limitations.45 The employer is bound to exercise caution in terminating the services of his employees and dismissals must not be arbitrary and capricious.46 Due process must be observed and employers should respect and protect the rights of their employees which include the right to labor.47 Indeed, to effect a valid dismissal, the law requires not only that there be just and valid cause; it must also be supported by clear and convincing evidence.48

In this case, the only basis of respondents in terminating the services of petitioners is that they incurred absences in 1997, in excess of the allowed number, despite a previous warning for their absences in 1996 and 1995. We find that in this case, termination is not a commensurate penalty. Even assuming that petitioners' absenteeism constitutes willful disobedience, such offense does not warrant their dismissal.49 In the case of Meralco v. National Labor Relations Commission50 which is being invoked by respondents, the employee was previously suspended seven times in a span of twelve years before the employer, which is a public utility, eventually terminated his services.51 In said case, the Court found such termination to be justified. The same cannot be said in the present case as petitioners worked with respondents for seven to eight years and apart from their absences in 1995, 1996 and 1997, no other infraction was imputed on them. The Court notes the rules of the company itself which provide for a progression of disciplinary measures to be meted out on erring employees. Pertinent portions of the Attendance Guidelines dated February 8, 1994 state: xxxx C. Leave without Pay As a general rule, a leave without pay may be excused or unexcused, the latter covered by penalties, subject to management approval, as follows: 1. LOP with excused reason for leave LOP(E) LOP (Excused) 2. LOP with unexcused reason for leave LOP(U) LOP(Unexcused) 3. LOP without leave application LOP(U) LOP(Unexcused) An LOP(U) is subject to the following table of penalties, as stated in our Working Regulations: 1st Offense Verbal Warning (VW) 2nd Written Warning (WW) 3rd Three Days Suspension (3DS) 4th Six Days Suspension (6DS) 5th Termination (T)52 Respondent company failed to show that it imposed on petitioners the lesser penalties first, before imposing on them the extreme penalty of termination. As admitted by petitioners in their Reply filed before the LA and which became the basis of the LA in its Decision, petitioners received a memorandum with warning for their absences in 1995 and 1996.53 A close scrutiny of the records reveals that petitioner Zagala served a 3-day suspension from November 3 to 5, 1997 for his unexcused absences.54 Taking each year, where petitioners failed to observe the allowed absences, as one offense each, respondent should have imposed on petitioners a verbal warning for their absences in 1995, a written warning in 1996, and 3-day suspension for their absences

in 1997. As Zagala already served a 3-day suspension in 1997 for his excessive absences, only Angeles is left to answer for such penalty. Considering the entirety of the case, the Court finds that petitioners have been illegally dismissed from employment. They are entitled to reinstatement without loss of seniority rights and the payment of back wages computed from the time of their termination55 minus the amount equivalent to a 3-day suspension which Angeles should have served for his absences in 1997 and which amount shall be deducted from the backwages to be awarded to him. If petitioners however no longer desire to be reinstated, they should be awarded separation pay at the rate of one (1) month for every year of service as an alternative. 56 Consequently, the Court likewise reverses the portion of the CA Decision lifting the Writ of Garnishment dated December 9, 2002 on the account of Mikado with RCBC, Rosario Branch. WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CAG.R. SP No. 70416 dated August 27, 2003 and its Resolution dated November 17, 2003 are hereby REVERSED and SET ASIDE. Respondents Mikado Philippines Corporation and its President and Executive Vice-President Yoshinari Kono and Takehiko Ogura are directed to reinstate petitioners Nelson A. Zagala and Feliciano M. Angeles without loss of seniority rights, and to pay them backwages from the date of their termination. Should Angeles and Zagala opt not to be reinstated, respondents are ordered to pay them separation pay in the amount equivalent to one (1) month pay for every year of service, plus backwages from the date of their termination. In either case, the equivalent amount for 3-day suspension shall be deducted from the backwages awarded in favor of Angeles. No costs. SO ORDERED. Panganiban, C.J., Chairperson, Chairperson, Ynares-Santiago, Callejo, Sr., ChicoNazario, J.J., concur.

Public office; casual employees. Respondent was a casual teller who was dismissed from service by petitioner without being formally charged. On appeal, the Civil Service Commission (CSC) upheld the dismissal and reasoned that respondent was a casual employee, and therefore her services may be terminated at any time, without need of a just cause. Upon review, both the Court of Appeals and the Supreme Court found that respondent was illegally terminated. The Supreme Court recognized its pronouncement in a recent case that Even a casual or temporary employee enjoys security of tenure and cannot be dismissed except for cause enumerated in Sec. 22, Rule XIV of the Omnibus Civil Service Rules and Regulations and other pertinent laws. However, the Court also went on to state that, despite this new ruling on casual employees, it is not the intention of the Court to make the status of a casual employee at par with that of a regular employee, who enjoys permanence of employment. The rule is still that casual employment will cease automatically at the end of the period unless renewed. Casual employees may also be terminated anytime though subject to certain conditions or

qualifications with reference to the CSC Form No. 001. Thus, they may be laidoff anytime before the expiration of the employment period provided any of the following occurs: (1) when their services are no longer needed; (2) funds are no longer available; (3) the project has already been completed/finished; or (4) their performance are below par. Philippine Charity Sweepstakes Office Board of Directors and Reynaldo P. Martin v. Marie Jean C. Lapid,G.R. No. 191940. April 12, 2011. Public office; security of tenure. Respondent was a casual teller who, having been found guilty of Discourtesy in the Course of Official Duties and of Grave Misconduct, was dismissed from service by petitioner. On appeal, the Civil Service Commission (CSC) ruled that despite lapses in procedural due process committed by petitioner employer, the dismissal was proper since respondent belonged to the category of a casual employee which does not enjoy security of tenure. Hence, she may be separated from service at any time, there being no need to show cause. The Court of Appeals disagreed and declared the dismissal illegal. The Supreme Court affirmed the findings of the Court of Appeals. In doing so, the Court relied on Section 3(2), Article XIII of the Constitution which guarantees the rights of all workers to security of tenure. The Court also recognized its pronouncement in a recent case that Even a casual or temporary employee enjoys security of tenure and cannot be dismissed except for cause enumerated in Sec. 22, Rule XIV of the Omnibus Civil Service Rules and Regulations and other pertinent laws.Philippine Charity Sweepstakes Office Board of Directors and Reynaldo P. Martin v. Marie Jean C. Lapid, G.R. No. 191940. April 12, 2011. Dismissal; due process. Respondent was dismissed from her post as casual teller. When respondent appealed her dismissal to the Civil Service Commission (CSC), the latter found that respondent was never formally charged for the administrative offenses for which she was dismissed. However, despite finding that procedural due process was not complied with, the CSC nevertheless upheld the dismissal on the ground that being a casual employee, respondent enjoyed no security of tenure and can be dismissed anytime. The Court found that respondent was illegally terminated and ordered her reinstatement. Casual employees are entitled to due process especially if they are to be removed for more serious causes or for causes other than the reasons mentioned in CSC Form No. 001. This is pursuant to Section 2, Article IX(B) of the Constitution. Furthermore, Section 46 of the Civil Service Law provides that no officer or employee in the Civil Service shall be suspended or dismissed except for cause as provided by law after due process. The reason for this is that their termination from the service could carry a penalty affecting their rights and future employment in the government. Philippine Charity Sweepstakes Office Board of Directors and Reynaldo P. Martin v. Marie Jean C. Lapid,G.R. No. 191940. April 12, 2011. Dismissal; substantive and procedural due process. For a workers dismissal to be considered valid, it must comply with both procedural and substantive due process. The legality of the manner of dismissal constitutes procedural due process, while the legality of the act of dismissal constitutes substantive due process. Procedural due process in dismissal cases consists of the twin requirements of notice and hearing. The employer must furnish the employee

with two written notices before the termination of employment can be effected: (1) the first notice apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the second notice informs the employee of the employers decision to dismiss him. Before the issuance of the second notice, the requirement of a hearing must be complied with by giving the worker an opportunity to be heard. It is not necessary that an actual hearing be conducted. Substantive due process, on the other hand, requires that dismissal by the employer be made based on a just or authorized cause under Articles 282 to 284 of the Labor Code. In this case, there was no written notice furnished to De Gracia, et al. regarding the cause of their dismissal. Cosmoship furnished a telex to Skippers, the local manning agency, claiming that De Gracia, et al. were repatriated because they voluntarily pre-terminated their contracts. This telex was given credibility and weight by the Labor Arbiter and NLRC in deciding that there was pre-termination of the employment contract akin to resignation and no illegal dismissal. However, as correctly ruled by the CA, the telex message is a biased and self-serving document that does not satisfy the requirement of substantial evidence. If, indeed, De Gracia, et al. voluntarily pre-terminated their contracts, then De Gracia, et al. should have submitted their written resignations. Skippers United Pacific, Inc. and Skippers Maritime Services, Inc. Ltd. vs. Nathaniel Doza, et al., G.R. No. 175558. February 8, 2012. Employee dismissal; due process. With respect to due process requirement, the employer is bound to furnish the employee concerned with two (2) written notices before termination of employment can be legally effected. One is the notice apprising the employee of the particular acts or omissions for which his dismissal is sought and this may loosely be considered as the proper charge. The other is the notice informing the employee of the managements decision to sever his employment. This decision, however, must come only after the employee is given a reasonable period from receipt of the first notice within which to answer the charge, thereby giving him ample opportunity to be heard and defend himself with the assistance of his representative should he so desire. The requirement of notice, it has been stressed, is not a mere technicality but a requirement of due process to which every employee is entitled. Here, Palacio Del Gobernador Condominium Corporation complied with the two-notice rule stated above.Sebastian F. Oasay, Jr. vs. Palacio del Gobernador Condominium Corporation and Omar T. Cruz,G.R. No. 194306, February 6, 2012.

Abandonment; elements. Respondent employee was dismissed by petitioners on the ground of alleged habitual absenteeism and abandonment of work. Jurisprudence provides for two essential requirements for abandonment of work to exist: (1) the failure to report for work or absence without valid or justifiable reason, and (2) clear intention to sever the employer-employee relationship manifested by some overt acts should both concur. Further, the employees deliberate and unjustified refusal to resume his employment without any intention of returning should be established and proven by the employer. The Court held that petitioners failed to prove that it was respondent employee who voluntarily refused to report back for work by his defiance and refusal to accept the memoranda and the notices of absences sent to him. Petitioners failed to present evidence that they sent these notices to respondent employees last known

address for the purpose of warning him that his continued failure to report would be construed as abandonment of work. Moreover, the fact that respondent employee never prayed for reinstatement and has sought employment in another company which is a competitor of petitioners cannot be construed as his overt acts of abandoning employment. Neither can the delay of four months be taken as an indication that the respondent employees filing of a complaint for illegal dismissal is a mere afterthought. Records show that respondent employee attempted to get his separation pay and alleged commissions from the company, but it was only after his requests went unheeded that he resorted to judicial recourse. Harpoon Marine Services, Inc., et al. v. Fernan H. Francisco, GR No. 167751, March 2, 2011.

Inday was employed by Herrera Home Improvements, 'Inc. (Herrera Home) as interior decorator. During the first year of her employment, she did not report for work fur one month. Hence, her employer dismissed her from the service. She filed with the Labor Arbiter a complaint for illegal dismissal alleging she did not abandon her work and that in terminating her employment, Herrera Home deprived her of her right to due process. She thus prayed that she be reinstated to her position. Inday hired you as her counsel. In preparing the position paper to be submitted to the Labor Arbiter, explain the standards of due 52006 Bar Examinations in Labor Law Guianan Chan Suggested Answers Prof. Joselito

process which should have been observed by Herrera Home in terminating your client's employment. 5% Suggested Answer: As Indays counsel, I will cite the fact that she was not afforded due process. Settled is the rule that mere absence or failure to report for work is not tantamount to abandonment of work. (New Ever Marketing, Inc. vs. CA, G. R. No. 140555, July 14, 2005). For the ground of abandonment to be validly invoked, two (2) notices are required to be served on Inday, viz.: 1. first notice asking her to explain why she should not be declared as having abandoned her job; and

2. second notice to inform her of the employers decision to dismiss her on the ground of abandonment. In the instant case, there is no showing that Indays employer ever complied with the foregoing procedural due process requisites. The said notices should have been sent to her last known address. It must be noted that this notice requirement is not a mere technicality but a requirement of due process to which every employee is entitled to insure that the employers prerogative to dismiss or lay-off is not abused or exercised in an arbitrary manner. (Kingsize Manufacturing Corporation vs. NLRC, G. R. Nos. 110452-54, Nov. 24, 1994; Cebu Royal Plant [SMC] vs. Deputy Minister of Labor, Aug. 12, 1987). Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

G.R. Nos. 110452-54 November 24, 1994 KINGSIZE MANUFACTURING CORP., and CHARLIE CO, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, ANACORITA VALDE, CELSA DIZON, TERESITA ORIBIANA, ET AL., respondents. Delos Reyes, Bonifacio, Delos Reyes for petitioners. Venida & Associates SOCDEM for private respondents.

MENDOZA, J.: This is a petition for certiorari to annul the decision and two resolutions of the National Labor Relations Commission (First Division) in NLRC NCR Case Nos. 00-09-03984-88, 06-11-04716-88, and 00-09-04030-88, reversing the Labor Arbiter's decision and ordering petitioners to reinstate private respondents and pay them backwages equivalent to their salaries for three years. The facts are as follows: Petitioner is a garment factory. Private respondents were its employees. Most of private respondents were hired as early as 1978, the rest in 1987, as sewers on piece work basis, with the exception of respondent Juancho Bognot who was an assistant cutter and later supervisor.

At various times between June 1987 and January 1988, private respondents were dismissed by petitioners for abandonment of work allegedly because private respondents had not reported for work. When private respondents presented themselves, they were prevented from entering the work place by petitioners' agent, Charlie Co. Within a few days of their dismissal, private respondents were able to secure employment at another garment factory, the First General Marketing Corporation (FGMC). Two of the respondents, Anacorita Valde and Celsa Dizon, were in fact employed at the FGMC on the same day they were dismissed by petitioners. On September 21 and 26, 1988 and November 17, 1988, private respondents filed complaints against petitioners for illegal dismissal, underpayment of minimum wage, Emergency Cost of Living Allowance (ECOLA) and overtime pay, and for non-payment of legal holiday pay and service incentive leave pay, as well as 13th Month pay and attorney's fees. Their complaints were filed with the Department of Labor where they were later consolidated. Petitioners submitted a paper in which they denied the charges against them and claimed that respondents had abandoned their jobs by "not reporting for work for quite sometime." With respect to respondent Juancho Bognot, it was alleged that he had been dismissed for "irresponsibility on the job during the latter part of his employment" and for absenting himself from work without leave from petitioners. 1 The Labor Arbiter 2 found that, with the exception of respondent Juancho Bognot, the complainants had quit their jobs in order to work for the FGMC. Hence, in his decision rendered on May 31, 1989, the Labor Arbiter dismissed their claim for reinstatement. With respect to Juancho Bognot, the Labor Arbiter found that he had been illegally dismissed and so ordered him paid backwages for six months. On the other hand, the Labor Arbiter granted the claims of Teresita Oribiana, Petra Calim, and Yolanda Parungo for Emergency Cost of Living Allowance (ECOLA), legal holiday pay, 13th month pay and service incentive leave with pay and the claims of Teresita Olajo and Agnes Enano for COLA, legal holiday pay and 13th month pay. No service incentive leave with pay was granted to Enano and Olajo for the reason that they had less than one year of service in the factory. The dispositive portion of the Labor Arbiter's decision reads: ACCORDINGLY, respondents Kingsize Mfg. Corporation and/or Charlie Co are hereby ordered to reinstate within ten (10) days from receipt hereof, herein complainant Juancho Bognot to his former or any substantially equivalent position without loss of seniority right and privileges with six (6) months backwages including his money award herein in the amounts of One Thousand Nine Hundred One Pesos (P1,901.00) in the concept of differentials in emergency cost of living allowance; One Thousand Two Hundred Twenty-Nine and Twenty-Five Centavos (P1,229.25), as salary differentials; Ninety-Seven (sic) Pesos and Seventy-Seven Centavos (P99.77) and Fourty-Two Pesos (P42.00), as differentials in 13th month pay and legal holiday pay, respectively. Further, the same respondents are also ordered within the same period to pay complainants Parungo, Calim, Enano, Olajo, and Oribiano, their respective underpayment of emergency cost of living allowance in the amount of 7.00 daily, legal holiday pay, 13th month pay differentials, and service incentive leave with pay except Enano and Olajo who had

rendered less than one year service with respondents, to be based on their respective length of service. For this purpose, the Office of the Information and Research Unit of this Region is hereby directed to make the remaining computation in accordance with the discussion herein within a reasonable period of time after the finality of this decision. All other claims are hereby denied for lack of merit. SO ORDERED. 3 On June 30, 1989, five of the complainants, Anacorita Valde, Judy Dreu, Lydia Llobit, Marlene Bognot, and Celsa Dizon, appealed the Labor Arbiter's decision finding them guilty of abandoning their jobs. These complainants, who were granted no monetary awards, prayed that they be granted separation pay. The other complainants, Teresita Oribiana, Teresita Olajo, Agnes Enano, Petra Calim and Yolanda Parungo, whose money claims had been granted, did not appeal, although as will presently be discussed, a claim is now made in their behalf that they should be deemed to have appealed insofar as they were found to have abandoned their jobs. On the other hand, petitioners appealed with respect to the Labor Arbiter's decision ordering them to reinstate Juancho Bognot and pay backwages to him. On October 30, 1992 the NLRC rendered a decision, reversing the Labor Arbiter and finding petitioners guilty of illegally dismissing the "herein complainants," meaning all the herein respondents. The NLRC ordered the reinstatement of these employees to their former positions without loss of seniority rights but without backwages. The decision with respect to Juancho Bognot was affirmed. The dispositive portion of the decision reads: WHEREFORE, premises considered, the appealed decision is hereby REVERSED insofar as the Order dismissing the complaint for dismissal is concerned. Respondents are ordered to REINSTATE the herein complainants to their former position[s] without loss of seniority rights. Except for complainant Juancho Bognot to whom the award of backwages and other monetary benefits is being AFFIRMED, reinstatement of the rest of complainants shall be without backwages. Respondents' appeal, on the other hand, is hereby DISMISSED for lack of merit. SO ORDERED. On November 27, 1992, the five complainants, namely, Anacorita Valde, Judy Dreu, Lydia Llobit, Marlene Bognot, and Celsa Dizon, moved for a reconsideration of the decision insofar as their reinstatement was ordered to be without backpay. In its resolution of February 17, 1993, the NLRC granted their motion and ordered them paid backwages equal to three years of their salaries at the time of their dismissal. In other respects, the decision of October 30, 1992 was affirmed. Petitioners filed a "Motion for Leave to Reconsider Resolution dated February 17, 1993" in which they sought to set aside the order to reinstate the complainants, but their motion was denied by the NLRC in its resolution dated April 22, 1993. 4 Hence, this petition. Petitioners allege that the NLRC gravely abused its discretion in:

1. Holding that abandonment of employment can only be proved by a written notice to the employees to return to work with warning of dismissal in case of his failure to report for work. 2. In giving credence to the claim of private respondents that they could not have abandoned their jobs because they were receiving more benefits from petitioners than from their new employer. 3. In disregarding the fact that respondents did not file a complaint immediately upon their dismissal because they did not allegedly know their rights. 4. In ordering the reinstatement of all the respondents despite the fact that in their bill of particulars, position paper and notice of partial appeal, the respondents merely asked for separation pay and only five of them appealed from the decision of the Labor Arbiter, finding them guilty of abandonment. The first question here is whether the NLRC gravely abused its discretion in finding that petitioners were guilty of illegal dismissal of their employees. Findings of facts of the NLRC are entitled to great respect and will not be disturbed in the absence of any showing that they are not supported by substantial evidence. 5 Petitioners' defense below was that private respondents had abandoned their jobs. Petitioners thus had the burden of proving "a clear and deliberate intent" on the part of the private respondents to discontinue employment without any intention of returning. 6 They had to prove a deliberate and unjustified refusal on the part of the employee to resume his employment and such refusal must be clearly shown. Mere absence is not sufficient. It must be accompanied by overt acts unerringly pointing to the fact that the employee simply does not want to work anymore. 7 Petitioners contend that complainants abandoned their jobs as shown by the fact that shortly after they had been dismissed by petitioners they were able to find employment at the FGMC. Indeed the following appears: 1. Anacorita Valde, who was dismissed on June 15, 1987, was employed by First General Marketing Corporation on the same day, June 15, 1987. 2. Celsa Dizon, who was dismissed on June 15, 1987, was also employed at First General Marketing Corporation on June 15, 1987, on the same day. 3. Yolanda Parungo, who was dismissed on January 6, 1988, started work at First General Marketing Corporation on January 7, 1988. 4. Petra Calim, who was dismissed on January 7, 1988, was employed at First General Marketing Corporation on January 8, 1988. 5. Agnes Enano, who was dismissed on December 14, 1987, was employed by First General Marketing Corporation on January 7, 1988. 6. Erlinda Aguirre, who was dismissed on December 14, 1987, was employed by First General Marketing Corporation on December 17, 1987. 7. Teresita Oribiana, who was dismissed on December 14, 1987, was hired by First General Marketing Corporation on December 28, 1987.

8. Marlene Bognot, who was allegedly dismissed on December 15, 1987, started work at First General Marketing Corporation on December 22, 1987. 9. Judy Dreu, who was also allegedly dismissed on December 15, 1987, was employed by First General Marketing Corporation on December 28, 1987. 10. Lydia Llobit, who was dismissed on December 15, 1987, was employed by First General Marketing Corporation on December 27, 1987. 8 We do not think, however, that this circumstance alone is proof of a "clear and deliberate intent" on the part of the private respondents not to continue work with petitioners. As the NLRC held, this was due to the fact that in the work place the demand for experienced, high-speed sewers was quite great. On the other hand, the countervailing evidence found by the NLRC tend to negate any inference of abandonment. These are: (1) the unrebutted allegation that petitioners' representative, Edward Co, barred private respondents from entering the premises of the company when they reported for work; (2) the equally uncontested claim of private respondents that they were earning more from petitioners' factory and (3) the fact that private respondents had already attained security of tenure in petitioners' company compared to their probationary status at the FGMC. Indeed, it is noteworthy that aside from these circumstances negating petitioners' allegation, private respondents' employment at the FGMC took place after, not before, their dismissal by petitioners. It would have been a different matter if it was shown that, at the time of their dismissals, private respondents had been employed at the FGMC. That it took private respondents nine months before filing their complaints for illegal dismissal could be due in part to the fact that, having found ready employment, they did not feel the urgent need to file their complaints earlier and partly to the fact that, as found by the NLRC, private respondents only became aware of their rights under the law after they were employed at the FGMC where there is a union. In addition, petitioners' failure to give notice with warning to the private respondents before their services were terminated puts in grave doubt petitioners' claim that the dismissal was for a just cause. Sec. 2, Rule XIV of the Rules Implementing the Labor Code provides: Any employer who seeks to dismiss a worker shall furnish him a written notice stating the particular acts or omission constituting the grounds for dismissal. In case of abandonment of work, the notice shall be served at the worker's last known address. The notice required, as elaborated upon in our decision in Pepsi-Cola Bottling Co., v. NLRC, 9 actually consists of two parts to be separately served on the employee, to wit: (1) notice to apprise the employee of the particular acts or omissions for which his dismissal is sought; and (2) subsequent notice to inform him of the employer's decision to dismiss him. This requirement is not a mere technicality but a requirement of due process to which every employee is entitled to insure that the employer's prerogative to dismiss or lay-off is not abused or exercised in an arbitrary manner. 10This rule is clear and unequivocal and in applying it to this case the NLRC, far from acting in excess of its jurisdiction, acted according to law.

Having determined that private respondents were illegally dismissed, the next question is whether the NLRC gravely abused its discretion in ordering their reinstatement considering that, in appealing the Labor Arbiter's decision, they only asked for separation pay. In general, the remedy for illegal dismissal is the reinstatement of the employee to his former position without loss of seniority rights and the payment to him of backwages. 11 But there may be instances where reinstatement is not a viable remedy as where in the meantime the business of the employer has closed 12 or where the relations between the employer and employee have been so severely strained that it is not advisable to order reinstatement, 13 or where the employee decides not to be reinstated. 14In such events the employer will instead be ordered to pay separation pay. Considering the fact that private respondents, in appealing the decision of the Labor Arbiter, reduced their original demand for reinstatement to a prayer for separation pay, there is merit in petitioners' contention that the NLRC exceeded its jurisdiction in ordering their reinstatement. The Solicitor General agrees with this contention. Indeed, it could be that after staying in the new jobs these complainants had had a change of mind about reinstatement. Moreover, as the Solicitor General points out, the NLRC should have limited its decision to five of the complainants since they were the only ones who had appealed from the decision of the Labor Arbiter. These complainants were Marlene Bognot, Lydia Llobit, Anacorita Valde, Celsa Dizon and Judy Dreu. As to the other six (6) respondents who did not appeal, namely Teresita Oribiana, Teresita Olajo, Agnes Enano, Petra Calim, Yolanda Parungo and Erlinda Aguirre, the Labor Arbiter's decision became final and executory 15upon the expiration of the reglementary period of 10 days as prescribed in Art. 223 of the Labor Code. The NLRC acted in excess of its jurisdiction in including these complainants in its decision. The case of Juancho Bognot should be considered separately. The Labor Arbiter found that he had been illegally dismissed and ordered him to be reinstated with backwages. The order of reinstatement is affirmed because this respondent was not one of those who appealed to the NLRC and asked for separation pay. WHEREFORE, the decision of the NLRC is AFFIRMED, with the modification that instead of ordering petitioners to reinstate respondents Anacorita Valde, Judy Dreu, Lydia Llobit, Marlene Bognot, and Celsa Dizon, they should only be granted separation pay at the rate of one month for every year of service. SO ORDERED. Narvasa, C.J., Regalado and Puno, JJ., concur.

#Footnotes 1 Rollo, p. 80. 2 Hon. Felipe T. Garduque II. 3 Rollo, pp. 97-98. 4 Rollo, p. 54. 5 Manila Mandarin Employees Union v. NLRC, 154 SCRA 368 (1987).

6 Century Textile Mills, Inc. v. NLRC, 167 SCRA 528 (1988); Mangagawa ng Komunikasyon sa Pilipinas v. NLRC, 194 SCRA 573 (1991). 7 Flexo Manufacturing Corp. v. NLRC, 135 SCRA 145 (1985). 8 Solicitor General's Comment in behalf of Public Respondent, pp. 3-4. 9 210 SCRA 277 (1992). 10 Cebu Royal Plant (SMC) v. Deputy Minister of Labor, August 12, 1987, 153 SCRA 38 (1987); NLU v. NLRC, 153 SCRA 228 (1987); Piedad v. Lanao del Norte Electric Cooperative, Inc., 153 SCRA 500 (1987). 11 Santos v. NLRC, 154 SCRA 166 (1987). 12 Callanta v. Carnation Philippines, 145 SCRA 268 (1986); Pizza Inn v. NLRC, 162 SCRA 773 (1988). 13 Asiaworld Publishing House, Inc. v. Ople, 152 SCRA 219 (1987). 14 Starlite Plastic Industrial Corp. v. NLRC, 171 SCRA 315, 326 (1989). 15 Encilla v. Magsaysay, 17 SCRA 125 (1966). Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. L-58639 August 12, 1987 CEBU ROYAL PLANT (SAN MIGUEL CORPORATION), petitioner, vs. THE HONORABLE DEPUTY MINISTER OF LABOR and RAMON PILONES, respondents.

CRUZ, J.: The private respondent was removed by the petitioner and complained to the Ministry of Labor. His complaint was dismissed by the regional director, who was, however, reversed by the public respondent. Required to reinstate the separated employee and pay him back wages, the petitioner has come to us, faulting the Deputy Minister with grave abuse of discretion. We have issued in the meantime a temporary restraining order. 1 The public respondent held that Ramon Pilones, the private respondent, was already a permanent employee at the time of his dismissal and so was entitled to security of tenure. The alleged ground for his removal, to wit, "pulmonary tuberculosis minimal," was not certified as incurable within six months as to justify his separation. 2Additionally, the private respondent insists that the petitioner should have first obtained a clearance, as required by the regulations then in force, for the termination of his employment. The petitioner for its part claims that the private respondent was still on probation at the time of his dismissal and so had no security of tenure. His dismissal was not only in

conformity with company policy but also necessary for the protection of the public health, as he was handling ingredients in the processing of soft drinks which were being sold to the public. It is also argued that the findings of the regional director, who had direct access to the facts, should not have been disturbed on appeal. For these same reasons, it contends, the employee's reinstatement as ordered by the public respondent should not be allowed. The original findings were contained in a one-page order 3 reciting simply that "complainant was employed on a probationary period of employment for six (6) months. After said period, he underwent medical examination for qualification as regular employee but the results showed that he is suffering from PTB minimal. Consequently, he was informed of the termination of his employment by respondent." The order then concluded that the termination was "justified." That was all. As there is no mention of the basis of the above order, we may assume it was the temporary payroll authority 4submitted by the petitioner showing that the private respondent was employed on probation on February 16, 1978. Even supposing that it is not self- serving, we find nevertheless that it is self-defeating. The six-month period of probation started from the said date of appointment and so ended on August 17, 1978, but it is not shown that the private respondent's employment also ended then; on the contrary, he continued working as usual. Under Article 282 of the Labor Code, "an employee who is allowed to work after a probationary period shall be considered a regular employee." Hence, Pilones was already on permanent status when he was dismissed on August 21, 1978, or four days after he ceased to be a probationer. The petitioner claims it could not have dismissed the private respondent earlier because the x-ray examination was made only on August 17, 1978, and the results were not immediately available. That excuse is untenable. We note that when the petitioner had all of six months during which to conduct such examination, it chose to wait until exactly the last day of the probation period. In the light of such delay, its protestations now that reinstatement of Pilones would prejudice public health cannot but sound hollow and hypocritical. By its own implied admission, the petitioner had exposed its customers to the employee's disease because of its failure to examine him before entrusting him with the functions of a "syrup man." Its belated concern for the consuming public is hardly persuasive, if not clearly insincere and self-righteous. There is proof in fact that the private respondent was first hired not on February 16, 1978, but earlier in 1977. This is the 1977 withholding tax statement 5 issued for him by the petitioner itself which it does not and cannot deny. The petitioner stresses that this is the only evidence of the private respondent's earlier service and notes that he has not presented any co-worker to substantiate his claim. This is perfectly understandable. Given the natural reluctance of many workers to antagonize their employers, we need not wonder why none of them testified against the petitioner. We are satisfied that whether his employment began on February 16, 1978, or even earlier as he claims, the private respondent was already a regular employee when he was dismissed on August 21, 1978. As such, he could validly claim the security of tenure guaranteed to him by the Constitution and the Labor Code. The applicable rule on the ground for dismissal invoked against him is Section 8, Rule I, Book VI, of the Rules and Regulations Implementing the Labor Code reading as follows: Sec. 8. Disease as a ground for dismissal. Where the employee suffers from a disease and his continued employment is prohibited by law or prejudicial to his health or to the health of his co-employees, the employer shall not terminate his employment unless there is a certification by a competent public health authority that the disease is of such nature or at

such a stage that it cannot be cured within a period of six (6) months even with proper medical treatment. If the disease or ailment can be cured within the period, the employer shall not terminate the employee but shall ask the employee to take a leave. The employer shall reinstate such employee to his former position immediately upon the restoration of his normal health. The record does not contain the certification required by the above rule. The medical certificate offered by the petitioner came from its own physician, who was not a "competent public health authority," and merely stated the employee's disease, without more. We may surmise that if the required certification was not presented, it was because the disease was not of such a nature or seriousness that it could not be cured within a period of six months even with proper medical treatment. If so, dismissal was unquestionably a severe and unlawful sanction. It is also worth noting that the petitioner's application for clearance to terminate the employment of the private respondent was filed with the Ministry of Labor only on August 28, 1978, or seven days after his dismissal. 6 As the NLRC has repeatedly and correctly said, the prior clearance rule (which was in force at that time) was not a "trivial technicality." It required "not just the mere filing of a petition or the mere attempt to procure a clearance" but that "the said clearance be obtained prior to the operative act of termination. 7 We agree that there was here an attempt to circumvent the law by separating the employee after five months' service to prevent him from becoming a regular employee, and then rehiring him on probation, again without security of tenure. We cannot permit this subterfuge if we are to be true to the spirit and mandate of social justice. On the other hand, we have also the health of the public and of the dismissed employee himself to consider. Hence, although we must rule in favor of his reinstatement, this must be conditioned on his fitness to resume his work, as certified by competent authority. We take this opportunity to reaffirm our concern for the lowly worker who, often at the mercy of his employers, must look up to the law for his protection. Fittingly, that law regards him with tenderness and even favor and always with faith and hope in his capacity to help in shaping the nation's future. It is error to take him for granted. He deserves our abiding respect. How society treats him will determine whether the knife in his hands shall be a caring tool for beauty and progress or an angry weapon of defiance and revenge. The choice is obvious, of course. If we cherish him as we should, we must resolve to lighten "the weight of centuries" of exploitation and disdain that bends his back but does not bow his head. WHEREFORE, the petition is DISMISSED and the temporary restraining order of November 18, 1981, is LIFTED. The Order of the public respondent dated July 14, 1981, is AFFIRMED, but with the modification that the backwages shall be limited to three years only and the private respondent shall be reinstated only upon certification by a competent public health authority that he is fit to return to work. Costs against the petitioner. SO ORDERED. Teehankee (Chairman), C.J., Narvasa, Paras and Gancayco, JJ., concur.

Footnotes

1 Rollo, pp. 37-39. 2 Ibid, p. 36. 3 Id, p. 28. 4 Annex B, p. 21. 5 Rollo, pp. 7-8. 6 Annex D, p. 22. 7 Victor Pacularang et al. vs. Emelio Teves, et al., NLRC Case No. 71722. epublic of the Philippines SUPREME COURT FIRST DIVISION G.R. No. 140555 July 14, 2005 NEW EVER MARKETING, INC., Petitioners, vs. HON. COURT OF APPEALS, ESPIRITU YLANAN, CESAR FULO, and WILFREDO BILASA, Respondents. DECISION AZCUNA, J.: Petitioner New Ever Marketing, Inc. hired respondents Espiritu Ylanan and Cesar Fulo as drivers and Wilfredo Bilasa as delivery man (pahinante) commencing in February 1987, November 1988, and June 1989, respectively. Respondents filed against petitioner and Marcelo Calacday, its General Manager, a complaint for illegal dismissal and sought the payment of overtime pay, premium pay for services rendered during holidays, service incentive leave, and 13th month pay for the year 1994. They also filed a separate case against petitioner with the Social Security System for alleged nonremittance of SSS premiums. In their complaints, respondents alleged, as follows: Respondent Ylanan: That a fine of P500.00 for a traffic violation he committed on September 12, 1994, supposedly for the account of the petitioner, was deducted from his salary for September 17, 1994; that for his October 15, 1994 salary, deductions were made for SSS premiums corresponding to the months of January and February 1993, but apparently, the same were not accordingly remitted; that from October 17-22, 1994, he did not report for work because he attended to an errand; that when he reported back for work on October 24, 1994 and October 25, 1994 (with respondents Fulo and Bilasa), he was barred from entering the premises and instructed to wait for a certain Ding who later arrived at noon time, after he had left the premises; that when he called the office the next day, October 26, 1994, Sally, the office secretary, told him to report for work on October 31, 1994; that when he reported for work on October 31, 1994, petitioner company was closed and the company guard told him to come back on November 2, 1994; that when he arrived on November 2, 1994, the company guard again told him to wait for Ding who arrived at noon time after he had left; and that on

November 3, 1994, Calacday informed him and respondent Fulo that they were considered as "AWOL [absent without official leave]." Respondent Fulo: That on October 15, 1994, petitioner asked him to secure a new Community Tax Certificate; that as October 16, 1994 was a Sunday, he did not report for work the following day, October 17, 1994, to be able to secure one; that when he reported for work on October 18, 1994, he was prevented by the company guard from entering the company premises and asked to wait for Ding who did not arrive until noon that day, so he went home; that from October 19 to November 2, 1994, he reported for work daily, but was made to wait for Ding; and that because of the foregoing, he and the two other respondents were constrained to file a complaint for illegal dismissal against the petitioner and Calacday. Respondent Bilasa: That on October 17, 1994, he was sent home due to his allergies; that because of his condition, he informed Calacday that he may not be able to report for work the following day; that the next day, October 18, 1994, he was absent as his allergy had not subsided; that after seeking medical attention, the doctor advised him to take a leave of absence for one week; that when he reported for work on October 24, 1994, he was denied entry to the premises until Ding arrived; and that he never received any letter from the petitioner informing him that he had abandoned his work. For its part, as to respondents Fulo and Ylanan, petitioner countered: That starting October 17, 1994, they failed to report for work without filing a leave of absence; that on October 21, 1994, Calacday sent a letter requiring them to explain why no disciplinary action should be taken against them for violating company rules on absences and tardiness; that despite receipt of the said letter, respondents did not submit any written explanation; and that on November 4, 1994, petitioner sent another letter informing them that they were deemed to have abandoned their jobs. As to respondent Bilasa, petitioner averred: That on October 19, 1994, respondent Bilasa was absent from work without filing a leave of absence; that on October 23, 1994, petitioner sent him a memorandum, directing him to explain why no disciplinary action should be taken against him for being absent, but he failed to do so; and that on November 4, 1994, petitioner gave another memorandum informing Bilasa that he was deemed to have abandoned his job for failure to explain his unexcused absences. Petitioner also asserted that it validly terminated the services of respondents due to abandonment of work and that the matter had been reported to the Department of Labor and Employment. Calacday pointed out that he should be excluded from being a party to the case as petitioner has a separate and distinct personality. On May 3, 1996, the Labor Arbiter (LA) rendered a decision dismissing the complaint for illegal dismissal on the ground that petitioner had a just cause to dismiss respondents, i.e., for abandonment of work, and that petitioner had complied with the notice requirement prior to terminating their employment. However, the labor arbiter ordered petitioner to pay the monetary claims of respondents for unpaid wages, 13th month pay, and service incentive leave pay for the year 1994 since there was no proof that the same had been paid. Respondents interposed a partial appeal to the National Labor Relations Commission (NLRC) on the dismissal of the complaint for illegal dismissal and the other monetary claims against petitioner. On June 16, 1997, the NLRC modified the decision of the LA. It found petitioner guilty of constructively dismissing respondents. The NLRC ordered petitioner to reinstate respondents to their positions without loss of seniority rights and other privileges appurtenant thereto, with the payment of full backwages from the time they were

illegally dismissed until actual reinstatement. The pertinent portions of the NLRCs decision state: In his Decision, however, the Labor Arbiter a quo gave undue credence to respondents claims that complainants herein abandoned their jobs after memoranda were allegedly sent to them directing them to explain why no disciplinary action should be taken against them for having been absent without the necessary leave application (Annexes "1," "3" and "7," Respondents Position Paper). A close examination of the aforesaid memos, however, readily reveals the absence of proof that they were indeed sent to, much less received by, the herein complainants. Certainly, such absence is fatal, more so under complainants vehement denial that they ever received such memos. Clearly, under this fact, such memos cannot take the place of notice to comply with the requisite of a valid notice in administrative due process. Moreover, in cases of abandonment, the absence of "animus revertendi" must be clearly proven. Respondent, We find, failed to discharge this burden. It failed to show that complainants indeed no longer intended to return to their jobs inspite of due notice afforded to them to do so. On the contrary, We are convinced that the proximity of the filing of their complaint with what they perceive to be the unreasonable arrival of "Ding" as they were instructed to wait for, is concrete proof sufficient to show that they have the least intention to give up their job, much less abandon the same. It is not amiss to state at this juncture that during the period they were waiting for the said "Ding" to arrive, they were not allowed to work and their daily time records would show no attendance, but such cannot be taken against them. Suffice it to state that We are far from convinced of respondents claims that complainants[] services were terminated for cause. Conversely, we are convinced that complainants were indeed instructed to wait for a certain "Ding" as a condition precedent for their resumption of work. The waiting for the said "Ding" for an unreasonable length of time certainly cannot prevent[,] much less preclude[,] herein complainants from filing the instant case. They were undoubtedly constructively dismissed at the time of the filing of their complaint. WHEREFORE, the decision appealed from is hereby MODIFIED in that Respondents are hereby declared guilty of illegally and constructively terminating the services of complainants Espiritu Ylanan, Cesar Fulo and Wilfredo Bilasa. Further, respondents are ordered to reinstate them to their former position[s] without loss of seniority rights and other privileges appurtenant thereto with full backwages from the time of their dismissal until actually reinstated. The other dispositions in the appealed decision are deemed final and executory. SO ORDERED.1 On petition for review, the Court of Appeals (CA) dismissed petitioners action and later denied its motions for reconsideration. Petitioner seeks to annul the Resolution of the Court of Appeals dismissing its petition, dated March 16, 1999, and the Resolutions denying reconsiderations, dated September 24, 1999 and October 27, 1999, by "invok[ing] the power of the Court under Rule 65 of the 1997 Rules of Civil Procedure because there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law" and stating that "this petition is not in any way intended to delay the decision of

the [NLRC] dated June [16], 1997, but the undersigned new counsel for the petitioner is exhausting all legal remedies available to the petitioner." A perusal of the antecedents shows that petitioners petition for certiorari (with prayer for the issuance of a writ of preliminary injunction) filed with the CA was dismissed outright in a Resolution dated March 16, 1999 on two grounds, namely, failure to attach an affidavit of service as proof that a copy of its petition had been duly served upon the NLRC and the respondents, and lack of allegations as to material dates to show the timeliness of the filing of the petition pursuant to Section 3, Rule 46 in relation to Section 4, Rule 65 of the Rules of Civil Procedure. After receiving a copy of the Resolution dated March 16, 1999 on March 26, 1999, petitioner, on April 7, 1999 (through its former counsel), filed a motion for reconsideration and supplement to the motion for reconsideration. Petitioners motion alleged that its failure to furnish the NLRC and the respondents with copies of the petition was due to "an honest but excusable mistake in the interpretation and application of Section 6, Rule 65 of the Rules of Court." It insisted that its interpretation of the provision was that the copies of the petition would be furnished to the NLRC and the respondents only after the Court of Appeals finds its petition to be sufficient in form and substance. On September 24, 1999, the appeals court denied petitioners motion for reconsideration for lack of merit, stating that it was bound by the negligence and mistake of its counsel and, likewise, denied its prayer for the issuance of a temporary restraining order for being moot and academic. Petitioner received a copy of the said Resolution on October 13, 1999. On October 21, 1999, petitioners former cou nsel filed a notice of withdrawal of appearance. On the same day, October 21, 1999, petitioners new counsel filed an entry of appearance and sought another reconsideration invoking substantial justice and its subsequent compliance with the procedural rules. On October 27, 1999, the CA denied the second motion for reconsideration for being a prohibited pleading under Section 2, Rule 52 of the Rules of Court. Petitioner received a copy of the Resolution on November 8, 1999. On November 17, 1999, petitioner filed with this Court its petition for certiorari under Rule 65 of the Rules of Court. The petition is based on a misapprehension of procedural rules. It bears stressing that when petitioner, on October 13, 1999, received a copy of the CA Resolution dated September 24, 1999 denying its motion for reconsideration, it had fifteen (15) days from receipt thereof within which to file a petition for review on certiorariunder Sections 1 and 2, Rule 45 of the Rules of Court. Section 2 thereof also allows petitioner to file, within the 15-day period, a motion for extension of time of thirty (30) days within which to file such petition. This is because the CA Resolution dated March 16, 1999 which outrightly dismissed its petition for non-compliance with the procedural rules, and the Resolution dated September 24, 1999, which denied its motion for reconsideration, partake of the nature of a final disposition of the case. Hence, the appropriate remedy to this Court is a petition for review oncertiorari under Rule 45, not a petition for certiorari under Rule 65. In this case, petitioner filed a second motion for reconsideration which the CA correctly denied for being a prohibited motion. The filing of a prohibited motion did not interrupt the running of the 15-day reglementary period2 within which petitioner should have filed the petition under Rule 45. This petition for certiorari under Rule 65 should, therefore, be dismissed for being the wrong remedy. The rule is that the special civil action of certiorari under Rule 65 is not, and cannot be, a substitute for a lost remedy of appeal, especially if the loss is occasioned by the petitioners own neglect or error in the choice of remedi es.3 Petitioner, however, invokes substantial justice on the reasoning that the failure of its former counsel to furnish copies of the petition to the NLRC and the private respondents

was not due to an error of law, but to an error in the interpretation of the provision of Section 6, Rule 65 of the Rules of Court which should be considered as an excusable mistake. The submission is untenable. Section 1, Rule 65 in relation to Section 3, Rule 46 of the Rules of Court, clearly states that in a petition filed originally in the Court of Appeals, the petitioner is required to serve copies of the petition, together with the annexes thereto, on the lower court or tribunal concerned, in this case, the NLRC, and on the adverse parties, the herein respondents, before the filing of said petition. The clear import of the provisions does not reasonably admit of any other interpretation. Finally, even if this Court were to treat the present petition as a petition for review on certiorari under Rule 45 and overlook its procedural infirmity, the same would still be denied for lack of merit. First. Petitioner asserts that through its General Manager, Marcelo Calacday, it had sent a letter requiring the respondents to explain why it should not take disciplinary actions against them for violation of company rules on absences and tardiness; that despite receipt of the said letter, respondents did not submit any written explanation thereto; and that, thereafter, it sent another letter informing them that they were deemed to have abandoned their jobs. These allegations have not been sufficiently proven. Under the Labor Code, there are twin requirements to justify a valid dismissal from employment: (a) the dismissal must be for any of the causes provided in Article 282 of the Labor Code (substantive aspect) and (b) the employee must be given an opportunity to be heard and defend himself (procedural aspect).4 As to procedural aspect, two notices are required: (a) written notice containing a statement of the cause for termination, to afford the employee an opportunity to be heard and defend himself with the assistance of his representative, if he desires; and (b) if the employer decides to terminate the services of the employee, written notice must be given to the employee stating clearly the reason therefor.5 The records reveal that petitioner did not adduce evidence that it had served the respondents with copies of the memoranda (re explanation for their unauthorized absences) and the subsequent memoranda (re its decision to terminate their employment due to abandonment) and that the same were actually received by each of the respondents. Petitioners bare assertion failed to overcome the declarations of the respondents that they never received copies of the memoranda. Second. Petitioner maintains that it had validly dismissed the respondents for incurring absences without filing the application for leave which was tantamount to an abandonment of work and that the respondents did not report for work after the two memoranda had been sent to them individually. This contention has no merit. The substantive aspect for a valid dismissal provides that to constitute abandonment of work, two (2) requisites must concur: (a) the employee must have failed to report for work or must have been absent without justifiable reason; and (b) there must have been a clear intention on the part of the employee to sever the employer-employee relationship as manifested by overt acts. Abandonment as a just ground for dismissal requires deliberate, unjustified refusal of the employee to resume his employment. Mere absence or failure to report for work, after notice to return, is not enough to amount to abandonment. Moreover, abandonment is a matter of intention; it cannot be inferred or presumed from equivocal acts.6 In this case, respondents had sought permission and had informed petitioner of their reasons for being absent and had reported

back to petitioner's office the following day. It cannot be said that respondents had abandoned their work during the period the absences in question were incurred. It became a strange scenario for them to be reporting for work early in the morning only to be told to wait for Ding who would arrive at noon time. In the meantime, they were not even allowed to enter the premises or do their assigned tasks. This being so, respondents sought recourse by filing an illegal dismissal case against petitioner. Clearly, respondents never intended to sever the employer-employee relation and abandon their work. On the contrary, they clearly showed their desire to continue their employment with petitioner and to be reinstated to their former positions. Indeed, an employee who loses no time in protesting his layoff cannot by any reasoning be said to have abandoned his work, for it is well-settled that the filing by an employee of a complaint for illegal dismissal with a prayer for reinstatement is proof enough of his desire to return to work, thus, negating the employers charge of abandonment. 7 All the antecedents show that petitioner had constructively dismissed the respondents. Constructive dismissal is defined as quitting when continued employment is rendered impossible, unreasonable or unlikely as the offer of employment involves a demotion in rank and diminution of pay. 8 In this case, respondents were deemed constructively dismissed because whenever they would report for work in the morning, they were barred, without any justifiable reason, by petitioners guard from entering the premises and were made to wait for Ding who would arrive in the office at around noon, after they had waited for a long time and had left. Petitioner, therefore, failed to prove by clear and convincing evidence that there was just cause for terminating the employment of respondents and that there was compliance with the two-notice rule. Article 277(b) of the Labor Code places the burden of proving that the termination of employment was for a valid or authorized cause on the employer. The employers failure to discharge this burden means that the dismissal is not justified and the employee is entitled to reinstatement. In this case, petitioner failed to establish that respondents deliberately and unjustifiably refused to resume their employment without any intention of returning thereto. Under Article 279 of the Labor Code, an employee who is unjustly dismissed is entitled to reinstatement, without loss of seniority rights and other privileges, and to the payment of his full backwages, inclusive of allowances, and other benefits or their monetary equivalent, computed from the time his compensation was withheld up to the time of his actual reinstatement.9 Thus, respondents are entitled to reinstatement with the payment of full backwages from the time their compensations were withheld, i.e., from the time of their illegal dismissal, up to the time of their actual reinstatement. WHEREFORE, the petition is DISMISSED, without costs. SO ORDERED. ADOLFO S. AZCUNA Associate Justice WE CONCUR: HILARIO G. DAVIDE, JR. Chief Justice

Chairman LEONARDO A. QUISUMBING CONSUELO YNARES-SANTIAGO Associate Justice Associate Justice ANTONIO T. CARPIO Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. HILARIO G. DAVIDE, JR. Chief Justice

Footnotes
1

Rollo, pp. 26-29.

See Hongria v. Hongria-Juarde, G.R. No. 155086, March 15, 2004, 425 SCRA 504.
3

Land Bank of the Philippines v. Court of Appeals, G.R. No. 129368, August 25, 2003, 409 SCRA 455; Fajardo v. Baustista, G.R. Nos. 102193-97, May 10, 1994, 232 SCRA 291.
4

Colegio de San Juan de Letran-Calamba v. Villas, G.R. No. 137795, March 26, 2003, 399 SCRA 550.
5

Id.; Rodriguez, Jr. v. National Labor Relations Commission, G.R. No. 153947, December 5, 2002, 393 SCRA 511; C & A Construction Co., Inc. v. NLRC, G.R. No. 122279, November 22, 1999, 318 SCRA 784.
6

R.P. Dinglasan Construction, Inc. v. Atienza, G.R. No. 156104, June 29, 2004, 433 SCRA 263; Hantex Trading Co. v. CA, G.R. No. 148241, September 27, 2002, 390 SCRA 181; Lambo v. National Labor Relations Commission, G.R. No. 111042, October 26, 1999, 317 SCRA 420; Metro Transit Organization, Inc. v. NLRC, G.R. No. 119724, May 31, 1999, 307 SCRA 747.
7

Samarca v. Arc-Men Industries, Inc., G.R. No. 146118, October 8, 2003, 413 SCRA 162; Lambo v. National Labor Relations Commission, supra, note 6.
8

R.P. Dinglasan Construction, Inc. v. Atienza, supra, note 6.

Bustamante v. National Labor Relations Commission, G.R. No. 111651, November 28, 1996, 265 SCRA 61cited in the cases of Rodriguez, Jr. v. National Labor Relations Commission, supra, note 5; Metro Transit Organization, Inc. v. NLRC, supra, note 6.

SUGGESTED ANSWER: The Labor Code provides the following procedure to be observed in terminating the services of an employee based on just causes as defined in Art.283 of the Code: a. A written notice must be served on the employee specifying grounds for termination and giving him opportunity to answer; The employee shall be given ample opportunity to defend himself, with or without the assistance of counsel; and c) A written notice of termination indicating the grounds to justify his termination(Agabon v. NLRC, G.R. No. 158693, 17 November2004). Dismissal; Just Cause; Immoral Conduct(1996) Marimar is a teacher in Santibanez High School,She is the class adviser of the senior batch whereSergio is enrolled. Since it is the policy of theschool to extend remedial instructions to itsstudents, Sergio is imparted such instructions inschool by Marimar after regular class hours. In thecourse thereof, Marimar and Sergio fell in love witheach other and shortly after got married. Marimaris 31 years old while Sergio is only 16.Santibanez High School thereafter seeks toterminate the employment of Marimar for abusiveand unethical conduct unbecoming of a dignifiedschool teacher and that her continued employmentis inimical to the best interest and woulddowngrade the high moral values of the school.Marimar, according to the school, recklessly tookadvantage of her position as a teacher by luring agraduating student under her advisory section and15 years her junior into an amorous relationship, inviolation of the Code of Ethics for teachers whichstates, among others, that a "school official orteacher should never take advantage of his/herposition to court a pupil or student." While no onedirectly saw Marimar and Sergio doing any intimateacts inside the classroom, the school nonethelessmaintains that the marriage between the two is thebest proof which confirms the suspicion thatMarimar and Sergio indulged in amorous relationsinside the classroom after class hours.Marimar, on the other hand, contends that there isnothing wrong with a teacher falling in love with herpupil and consequently, contracting marriage withhim. How would you decide the case. Explain. SUGGESTED ANSWER: The fact that Marimar and Sergio got married is notby itself sufficient proof that Marimar as a 31 yearold teacher, took advantage of her position to courtSergio, a 16-year old student, whom she wastutoring after regular class hours. Thus, Marimarcould not be considered as violating the school'sCode of Ethics which could have been a validcause for her termination. Marimar's falling in lovewith her student cannot be considered seriousmisconduct which is a Just cause for termination ofemployment.Of course, if it is proven that Marimar and Sergioindulged in amorous relations inside the classroomafter class hours, this would constitute seriousmisconduct on the part of Marimar as a teacherand could be just cause for the termination of heremployment. ALTERNATIVE ANSWER: The case should be decided in favor of Marimar,the school teacher. The school failed to adduceevidence in support of its claim of immoral conducton the part of Marimar; hence, its claim "that themarriage between the two (teacher and student) isbest proof which confirm the suspicion thatMarimar and Sergio indulged in amorous relationsinside the classroom after office hours" is agratuitous statement. Furthermore, marriagebetween two parties of disparate ages, even asbetween an older teacher and a younger student isnot an immoral act.In Chua Qua v Clave, 189 SCRA 117 (1990) acase which is exac tly similar to the problem, theSupreme Court ruled:Where there is no substantial evidence of theimputed immoral acts, it follows that the allegedviolation of the Code of Ethics would have nobasis. If the two eventually fell in love, despitethe disparity on their ages and academic levels,this only lends substance, to the truism that theheart has

reasons of its own which reason doesnot know. But, definitely, yielding to this gentleand universal emotion is not to be casuallyequated with immorality. The deviation of thecircumstances of their marriage from the usualsocietal pattern cannot be considered as adefiance of contemporary social norms. Dismissal; Just Cause; IndependentContractor (2005) Antonio Antuquin, a security guard, was caughtsleeping on the job while on duty at the YosiCigarette Factory. As a result, he was dismissedfrom employment by the Wagan Security Agency,an independent contractor. At the time of hisdismissal, Antonio had been serving as awatchman in the factory for many years, often atstretches of up to 12 hours, even on Sundays andholidays, without overtime, nighttime and rest daybenefits. He thereafter filed a complaint for illegaldismissal and non-payment of benefits againstYosi Cigarette Factory, which he claimed was hisactual and direct employer.As the Labor Arbiter assigned to hear the case,how would you correctly resolve the following: (6%) (a) Antonio's charge of illegal dismissal; SUGGESTED ANSWER: This is a case involving permissible job contracting.Antonio's charge of illegal dismissal against YosiCigarette Factory will not prosper. Wagan SecurityAgency, an independent contractor, is Antonio'sdirect employer. Yosi is only Antonio's indirectemployer. By force of law, there is in reality noemployer-employee relationship between Yosi and

LABOR LAW Bar Q & A (as arranged by Topics) 1994-2006 Page 85 of 108 Antonio. (Baguio v. NLRC, G.R. Nos. 79004-08,October 4, 1991) (b) Antonio's claim for overtime and other benefits. SUGGESTED ANSWER: I will dismiss Antonio's claim for overtime and otherbenefits for lack of merit as against Yosi. Inlegitimate job contracting, the principal employer(Yosi) becomes jointly and severally liable with the job contractor (Wagan) only for the payment of theemployee's (Antonio) wages whenever thecontractor fails to pay the same. Other than that,the principal employer (Yosi) is not responsible forany other claim made by the employee (Antonio).(San Miguel Corp. v. MAERC Integrated Services,Inc., G.R. No. 144672, July 10, 2003) Dismissal; Just Cause; Misconduct (1996) Sergio, an employee of Encantado Philippines, Inc.(EPI), was at the company canteen when Corazon,a canteen helper, questioned him for his use ofsomebody else's identification card (ID). Sergioflared up and shouted at Corazon "Wala kangpakialam! Kung gusto mo, itapon ko itong mgapagkain ninyo!". When Sergio noticed that somepeople where staring at him rather menacingly, heleft the canteen but returned a few minutes later toremark challengingly "Sino ba ang nagagalit"Sergio then began smashing some food items thatwere on display for sale in the canteen, after whichhe slapped Corazon which caused her to fall andsuffer contusions. The incident prompted Corazonto file a written complaint with Gustavo, thepersonnel manager of EPI, against Sergio.Gustavo required Sergio to explain in writing whyno disciplinary action should be taken against him.In his written explanation. Sergio admitted hismisconduct but tried to explain it away by sayingthat he was under the influence of liquor at thetime of the incident. Gustavo thereafter issued aletter of termination from the employment of

Sergiofor serious misconduct.Sergio now flies a complaint for illegal dismissal,arguing that his acts did not constitute seriousmisconduct that would justify his dismissal. Decide. SUGGESTED ANSWER: The acts of Sergio constituted serious misconduct.Thus, there was just cause for his termination. Thefact that he was under the influence of liquor at thetime that he did what he did does not mitigate,instead it aggravates, his misconduct. Being underthe influence of liquor while at work is by itselfserious misconduct. ALTERNATIVE ANSWER: The dismissal is not justified because the seriousmisconduct committed by the employee is not inconnection with his work. Art. 282(g) of the LaborCode was interpreted by the Supreme Court in ArisPhilippines, Inc. v. NLRC, as follows:"It is not disputed that private respondent hasdone, indeed he admitted to have committed, aserious misconduct. In order to constitute a "justcause" for dismissal, however, the actcomplained of must be related to theperformance of the duties of the employee suchas would show him to be thereby unfit tocontinue working for the employer." Dismissal; Just Cause; ProbationaryEmployees; Rights (2006) During their probationary employment, eight (8)employees were berated and insulted by theirsupervisor. In protest, they walked out. Thesupervisor shouted at them to go home and neverto report back to work. Later, the personnel man-ager required them to explain why they should notbe dismissed from employment for abandonmentand failure to qualify for the positions applied for.They filed a complaint for illegal dismissal againsttheir employer.As a Labor Arbiter, how will you resolve the case?(10%) SUGGESTED ANSWER: As a Labor Arbiter I will resolve the case in favor ofthe eight (8) probationary employees due to thefollowing considerations:1. Probationary employees also enjoy security oftenure (Biboso v. Victoria Milling, G.R. No. L-44360, March 31, 1977).2. In all cases involving employees onprobationary status, the employer shall makeknown to the employee at the time he is hired,the standards by which he will qualify for thepositions applied for.3. The filing of the complaint for illegal dismissaleffectively negates the employer's theory ofabandonment (Rizada v. NLRC, G.R. No.96982, September 21, 1999).4. The order to go home and not to return to workconstitutes dismissal from employment.5. The eight (8) probationary employees wereterminated without just cause and without dueprocessIn view of the foregoing, I will order reinstatementto their former positions without loss of seniorityrights with full backwages, plus damages andattorney fees. Dismissal; Just Cause; Requirements (1999) FACTS: Joseph Vitriolo (JV), a cashier of SeasideSunshine Supermart (SSS), was found after anaudit, to have cash shortages on his monetaryaccountability covering a period of about fivemonths in the total amount of P48,000.00. SSSserved upon JV the written charge against him viaa memorandum order of preventive suspension, giving JV 24 hours to submit his explanation. Assoon as JV submitted his written explanation withinthe given period, the same was deemedunsatisfactory by the company and JV wasperemptorily dismissed without any hearing.The day following his termination fromemployment. JV filed a case of illegal dismissalagainst SSS. During the hearing before the LaborArbiter. SSS proved by substantial evidence JV'smisappropriation of company funds and variousinfractions detrimental to the business of thecompany. JV, however, contended that hisdismissal was illegal because the company did notcomply with the requirements of due process.I. Did SSS comply with the requirements ofprocedural due process in the dismissal fromemployment of JV? Explain briefly (2%) SUGGESTED ANSWER: In connection with the right to due process in thetermination of an employee, the Labor Code (inArticle 277[b]) requires that the employer furnishthe worker whose employment is sought to beterminated a written notice containing a statementof the causes for

termination and shall affordample opportunity to be heard and to defendhimself with the assistance of his representative ifhe so desires.SSS did not comply with the above describedrequirements for due process. The memorandumorder was for the preventive suspension of JV, nota notice for his termination and the causes of histermination.2. If you were the Labor Arbiter, how would youdecide the case? Explain briefly (3%) SUGGESTED ANSWER: I will decide that the termination of JV was legal. Itwas for just cause. JV's misappropriation ofcompany funds and various infractions detrimentalto the business of the company duly proven bysubstantial evidence constitute a willful breach byJV of the trust reposed in him by his employerwhich is a just cause for termination. (See Article282)But I will award him indemnity of, say Pl,000, forthe failure of the employer to give him due process.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 158693 November 17, 2004

JENNY M. AGABON and VIRGILIO C. AGABON, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION (NLRC), RIVIERA HOME IMPROVEMENTS, INC. and VICENTE ANGELES, respondents.

DECISION

YNARES-SANTIAGO, J.: This petition for review seeks to reverse the decision1 of the Court of Appeals dated January 23, 2003, in CA-G.R. SP No. 63017, modifying the decision of National Labor Relations Commission (NLRC) in NLRC-NCR Case No. 023442-00. Private respondent Riviera Home Improvements, Inc. is engaged in the business of selling and installing ornamental and construction materials. It employed petitioners Virgilio Agabon and Jenny Agabon as gypsum board and cornice installers on January 2, 19922 until February 23, 1999 when they were dismissed for abandonment of work. Petitioners then filed a complaint for illegal dismissal and payment of money claims3 and on December 28, 1999, the Labor Arbiter rendered a decision declaring the dismissals illegal and ordered private respondent to pay the monetary claims. The dispositive portion of the decision states: WHEREFORE, premises considered, We find the termination of the complainants illegal. Accordingly, respondent is hereby ordered to pay them their backwages up to November 29, 1999 in the sum of: 1. Jenny M. Agabon - P56, 231.93 2. Virgilio C. Agabon - 56, 231.93

and, in lieu of reinstatement to pay them their separation pay of one (1) month for every year of service from date of hiring up to November 29, 1999. Respondent is further ordered to pay the complainants their holiday pay and service incentive leave pay for the years 1996, 1997 and 1998 as well as their premium pay for holidays and rest days and Virgilio Agabon's 13th month pay differential amounting to TWO THOUSAND ONE HUNDRED FIFTY (P2,150.00) Pesos, or the aggregate amount of ONE HUNDRED TWENTY ONE THOUSAND SIX HUNDRED SEVENTY EIGHT & 93/100 (P121,678.93) Pesos for Jenny Agabon, and ONE HUNDRED TWENTY THREE THOUSAND EIGHT HUNDRED TWENTY EIGHT & 93/100 (P123,828.93) Pesos for Virgilio Agabon, as per attached computation of Julieta C. Nicolas, OIC, Research and Computation Unit, NCR. SO ORDERED.4 On appeal, the NLRC reversed the Labor Arbiter because it found that the petitioners had abandoned their work, and were not entitled to backwages and separation pay. The other money claims awarded by the Labor Arbiter were also denied for lack of evidence.5 Upon denial of their motion for reconsideration, petitioners filed a petition for certiorari with the Court of Appeals. The Court of Appeals in turn ruled that the dismissal of the petitioners was not illegal because they had abandoned their employment but ordered the payment of money claims. The dispositive portion of the decision reads: WHEREFORE, the decision of the National Labor Relations Commission is REVERSED only insofar as it dismissed petitioner's money claims. Private respondents are ordered to pay petitioners holiday pay for four (4) regular holidays in 1996, 1997, and 1998, as well as their service incentive leave pay for said years, and to pay the balance of petitioner Virgilio Agabon's 13th month pay for 1998 in the amount of P2,150.00. SO ORDERED.6 Hence, this petition for review on the sole issue of whether petitioners were illegally dismissed.7 Petitioners assert that they were dismissed because the private respondent refused to give them assignments unless they agreed to work on a "pakyaw" basis when they reported for duty on February 23, 1999. They did not agree on this arrangement because it would mean losing benefits as Social Security System (SSS) members. Petitioners also claim that private respondent did not comply with the twin requirements of notice and hearing.8 Private respondent, on the other hand, maintained that petitioners were not dismissed but had abandoned their work.9 In fact, private respondent sent two letters to the last known addresses of the petitioners advising them to report for work. Private respondent's manager even talked to petitioner Virgilio Agabon by telephone sometime in June 1999 to tell him about the new assignment at Pacific Plaza Towers involving 40,000 square meters of cornice installation work. However, petitioners did not report for work because they had subcontracted to perform installation work for another company. Petitioners also demanded for an increase in their wage to P280.00 per day. When this was not granted, petitioners stopped reporting for work and filed the illegal dismissal case.10 It is well-settled that findings of fact of quasi-judicial agencies like the NLRC are accorded not only respect but even finality if the findings are supported by substantial evidence. This is especially so when such findings were affirmed by the Court of Appeals.11 However, if the factual findings of the NLRC and the Labor Arbiter are conflicting, as in this case, the reviewing court may delve into the records and examine for itself the questioned findings.12 Accordingly, the Court of Appeals, after a careful review of the facts, ruled that petitioners' dismissal was for a just cause. They had abandoned their employment and were already working for another employer. To dismiss an employee, the law requires not only the existence of a just and valid cause but also enjoins the employer to give the employee the opportunity to be heard and to defend

himself.13 Article 282 of the Labor Code enumerates the just causes for termination by the employer: (a) serious misconduct or willful disobedience by the employee of the lawful orders of his employer or the latter's representative in connection with the employee's work; (b) gross and habitual neglect by the employee of his duties; (c) fraud or willful breach by the employee of the trust reposed in him by his employer or his duly authorized representative; (d) commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and (e) other causes analogous to the foregoing. Abandonment is the deliberate and unjustified refusal of an employee to resume his employment.14 It is a form of neglect of duty, hence, a just cause for termination of employment by the employer.15 For a valid finding of abandonment, these two factors should be present: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intention to sever employer-employee relationship, with the second as the more determinative factor which is manifested by overt acts from which it may be deduced that the employees has no more intention to work. The intent to discontinue the employment must be shown by clear proof that it was deliberate and unjustified.16 In February 1999, petitioners were frequently absent having subcontracted for an installation work for another company. Subcontracting for another company clearly showed the intention to sever the employer-employee relationship with private respondent. This was not the first time they did this. In January 1996, they did not report for work because they were working for another company. Private respondent at that time warned petitioners that they would be dismissed if this happened again. Petitioners disregarded the warning and exhibited a clear intention to sever their employer-employee relationship. The record of an employee is a relevant consideration in determining the penalty that should be meted out to him.17 In Sandoval Shipyard v. Clave,18 we held that an employee who deliberately absented from work without leave or permission from his employer, for the purpose of looking for a job elsewhere, is considered to have abandoned his job. We should apply that rule with more reason here where petitioners were absent because they were already working in another company. The law imposes many obligations on the employer such as providing just compensation to workers, observance of the procedural requirements of notice and hearing in the termination of employment. On the other hand, the law also recognizes the right of the employer to expect from its workers not only good performance, adequate work and diligence, but also good conduct19 and loyalty. The employer may not be compelled to continue to employ such persons whose continuance in the service will patently be inimical to his interests.20 After establishing that the terminations were for a just and valid cause, we now determine if the procedures for dismissal were observed. The procedure for terminating an employee is found in Book VI, Rule I, Section 2(d) of the Omnibus Rules Implementing the Labor Code: Standards of due process: requirements of notice. In all cases of termination of employment, the following standards of due process shall be substantially observed: I. For termination of employment based on just causes as defined in Article 282 of the Code: (a) A written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to explain his side; (b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him; and (c) A written notice of termination served on the employee indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination. In case of termination, the foregoing notices shall be served on the employee's last known address.

Dismissals based on just causes contemplate acts or omissions attributable to the employee while dismissals based on authorized causes involve grounds under the Labor Code which allow the employer to terminate employees. A termination for an authorized cause requires payment of separation pay. When the termination of employment is declared illegal, reinstatement and full backwages are mandated under Article 279. If reinstatement is no longer possible where the dismissal was unjust, separation pay may be granted. Procedurally, (1) if the dismissal is based on a just cause under Article 282, the employer must give the employee two written notices and a hearing or opportunity to be heard if requested by the employee before terminating the employment: a notice specifying the grounds for which dismissal is sought a hearing or an opportunity to be heard and after hearing or opportunity to be heard, a notice of the decision to dismiss; and (2) if the dismissal is based on authorized causes under Articles 283 and 284, the employer must give the employee and the Department of Labor and Employment written notices 30 days prior to the effectivity of his separation. From the foregoing rules four possible situations may be derived: (1) the dismissal is for a just cause under Article 282 of the Labor Code, for an authorized cause under Article 283, or for health reasons under Article 284, and due process was observed; (2) the dismissal is without just or authorized cause but due process was observed; (3) the dismissal is without just or authorized cause and there was no due process; and (4) the dismissal is for just or authorized cause but due process was not observed. In the first situation, the dismissal is undoubtedly valid and the employer will not suffer any liability. In the second and third situations where the dismissals are illegal, Article 279 mandates that the employee is entitled to reinstatement without loss of seniority rights and other privileges and full backwages, inclusive of allowances, and other benefits or their monetary equivalent computed from the time the compensation was not paid up to the time of actual reinstatement. In the fourth situation, the dismissal should be upheld. While the procedural infirmity cannot be cured, it should not invalidate the dismissal. However, the employer should be held liable for noncompliance with the procedural requirements of due process. The present case squarely falls under the fourth situation. The dismissal should be upheld because it was established that the petitioners abandoned their jobs to work for another company. Private respondent, however, did not follow the notice requirements and instead argued that sending notices to the last known addresses would have been useless because they did not reside there anymore. Unfortunately for the private respondent, this is not a valid excuse because the law mandates the twin notice requirements to the employee's last known address.21 Thus, it should be held liable for non-compliance with the procedural requirements of due process. A review and re-examination of the relevant legal principles is appropriate and timely to clarify the various rulings on employment termination in the light of Serrano v. National Labor Relations Commission.22 Prior to 1989, the rule was that a dismissal or termination is illegal if the employee was not given any notice. In the 1989 case of Wenphil Corp. v. National Labor Relations Commission,23 we reversed this long-standing rule and held that the dismissed employee, although not given any notice and hearing, was not entitled to reinstatement and backwages because the dismissal was for grave misconduct and insubordination, a just ground for termination under Article 282. The employee had a violent temper and caused trouble during office hours, defying superiors who tried to pacify him. We concluded that reinstating the employee and awarding backwages "may encourage him to do even worse and will render a mockery of the rules of discipline that employees are required to observe."24 We further held that: Under the circumstances, the dismissal of the private respondent for just cause should be maintained. He has no right to return to his former employment. However, the petitioner must nevertheless be held to account for failure to extend to private respondent his right to an investigation before causing his dismissal. The rule is explicit as above discussed. The dismissal of an employee must be for just or authorized cause and after due process. Petitioner committed an infraction of the second requirement. Thus, it must be imposed a sanction for its failure to give a formal notice and conduct an investigation as required by law before dismissing petitioner from employment. Considering

the circumstances of this case petitioner must indemnify the private respondent the amount of P1,000.00. The measure of this award depends on the facts of each case and the gravity of the omission committed by the employer.25 The rule thus evolved: where the employer had a valid reason to dismiss an employee but did not follow the due process requirement, the dismissal may be upheld but the employer will be penalized to pay an indemnity to the employee. This became known as the Wenphil or Belated Due Process Rule. On January 27, 2000, in Serrano, the rule on the extent of the sanction was changed. We held that the violation by the employer of the notice requirement in termination for just or authorized causes was not a denial of due process that will nullify the termination. However, the dismissal is ineffectual and the employer must pay full backwages from the time of termination until it is judicially declared that the dismissal was for a just or authorized cause. The rationale for the re-examination of the Wenphil doctrine in Serrano was the significant number of cases involving dismissals without requisite notices. We concluded that the imposition of penalty by way of damages for violation of the notice requirement was not serving as a deterrent. Hence, we now required payment of full backwages from the time of dismissal until the time the Court finds the dismissal was for a just or authorized cause. Serrano was confronting the practice of employers to "dismiss now and pay later" by imposing full backwages. We believe, however, that the ruling in Serrano did not consider the full meaning of Article 279 of the Labor Code which states: ART. 279. Security of Tenure. In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. This means that the termination is illegal only if it is not for any of the justified or authorized causes provided by law. Payment of backwages and other benefits, including reinstatement, is justified only if the employee was unjustly dismissed. The fact that the Serrano ruling can cause unfairness and injustice which elicited strong dissent has prompted us to revisit the doctrine. To be sure, the Due Process Clause in Article III, Section 1 of the Constitution embodies a system of rights based on moral principles so deeply imbedded in the traditions and feelings of our people as to be deemed fundamental to a civilized society as conceived by our entire history. Due process is that which comports with the deepest notions of what is fair and right and just.26 It is a constitutional restraint on the legislative as well as on the executive and judicial powers of the government provided by the Bill of Rights. Due process under the Labor Code, like Constitutional due process, has two aspects: substantive, i.e., the valid and authorized causes of employment termination under the Labor Code; and procedural, i.e., the manner of dismissal. Procedural due process requirements for dismissal are found in the Implementing Rules of P.D. 442, as amended, otherwise known as the Labor Code of the Philippines in Book VI, Rule I, Sec. 2, as amended by Department Order Nos. 9 and 10.27 Breaches of these due process requirements violate the Labor Code. Therefore statutory due process should be differentiated from failure to comply with constitutional due process. Constitutional due process protects the individual from the government and assures him of his rights in criminal, civil or administrative proceedings; while statutory due process found in the Labor Code and Implementing Rules protects employees from being unjustly terminated without just cause after notice and hearing. In Sebuguero v. National Labor Relations Commission,28 the dismissal was for a just and valid cause but the employee was not accorded due process. The dismissal was upheld by the Court but the

employer was sanctioned. The sanction should be in the nature of indemnification or penalty, and depends on the facts of each case and the gravity of the omission committed by the employer. In Nath v. National Labor Relations Commission,29 it was ruled that even if the employee was not given due process, the failure did not operate to eradicate the just causes for dismissal. The dismissal being for just cause,albeit without due process, did not entitle the employee to reinstatement, backwages, damages and attorney's fees. Mr. Justice Jose C. Vitug, in his separate opinion in MGG Marine Services, Inc. v. National Labor Relations Commission,30 which opinion he reiterated in Serrano, stated: C. Where there is just cause for dismissal but due process has not been properly observed by an employer, it would not be right to order either the reinstatement of the dismissed employee or the payment of backwages to him. In failing, however, to comply with the procedure prescribed by law in terminating the services of the employee, the employer must be deemed to have opted or, in any case, should be made liable, for the payment of separation pay. It might be pointed out that the notice to be given and the hearing to be conducted generally constitute the two-part due process requirement of law to be accorded to the employee by the employer. Nevertheless, peculiar circumstances might obtain in certain situations where to undertake the above steps would be no more than a useless formality and where, accordingly, it would not be imprudent to apply the res ipsa loquitur rule and award, in lieu of separation pay, nominal damages to the employee. x x x.31 After carefully analyzing the consequences of the divergent doctrines in the law on employment termination, we believe that in cases involving dismissals for cause but without observance of the twin requirements of notice and hearing, the better rule is to abandon the Serrano doctrine and to follow Wenphil by holding that the dismissal was for just cause but imposing sanctions on the employer. Such sanctions, however, must be stiffer than that imposed in Wenphil. By doing so, this Court would be able to achieve a fair result by dispensing justice not just to employees, but to employers as well. The unfairness of declaring illegal or ineffectual dismissals for valid or authorized causes but not complying with statutory due process may have far-reaching consequences. This would encourage frivolous suits, where even the most notorious violators of company policy are rewarded by invoking due process. This also creates absurd situations where there is a just or authorized cause for dismissal but a procedural infirmity invalidates the termination. Let us take for example a case where the employee is caught stealing or threatens the lives of his co-employees or has become a criminal, who has fled and cannot be found, or where serious business losses demand that operations be ceased in less than a month. Invalidating the dismissal would not serve public interest. It could also discourage investments that can generate employment in the local economy. The constitutional policy to provide full protection to labor is not meant to be a sword to oppress employers. The commitment of this Court to the cause of labor does not prevent us from sustaining the employer when it is in the right, as in this case.32 Certainly, an employer should not be compelled to pay employees for work not actually performed and in fact abandoned. The employer should not be compelled to continue employing a person who is admittedly guilty of misfeasance or malfeasance and whose continued employment is patently inimical to the employer. The law protecting the rights of the laborer authorizes neither oppression nor self-destruction of the employer.33 It must be stressed that in the present case, the petitioners committed a grave offense, i.e., abandonment, which, if the requirements of due process were complied with, would undoubtedly result in a valid dismissal. An employee who is clearly guilty of conduct violative of Article 282 should not be protected by the Social Justice Clause of the Constitution. Social justice, as the term suggests, should be used only to correct an injustice. As the eminent Justice Jose P. Laurel observed, social justice must be founded on the recognition of the necessity of interdependence among diverse units of a society and of the protection that should be equally and evenly extended to all groups as a combined force in our social and economic life, consistent with the fundamental and paramount objective of the state of

promoting the health, comfort, and quiet of all persons, and of bringing about "the greatest good to the greatest number."34 This is not to say that the Court was wrong when it ruled the way it did in Wenphil, Serrano and related cases. Social justice is not based on rigid formulas set in stone. It has to allow for changing times and circumstances. Justice Isagani Cruz strongly asserts the need to apply a balanced approach to labor-management relations and dispense justice with an even hand in every case: We have repeatedly stressed that social justice or any justice for that matter is for the deserving, whether he be a millionaire in his mansion or a pauper in his hovel. It is true that, in case of reasonable doubt, we are to tilt the balance in favor of the poor to whom the Constitution fittingly extends its sympathy and compassion. But never is it justified to give preference to the poor simply because they are poor, or reject the rich simply because they are rich, for justice must always be served for the poor and the rich alike, according to the mandate of the law.35 Justice in every case should only be for the deserving party. It should not be presumed that every case of illegal dismissal would automatically be decided in favor of labor, as management has rights that should be fully respected and enforced by this Court. As interdependent and indispensable partners in nation-building, labor and management need each other to foster productivity and economic growth; hence, the need to weigh and balance the rights and welfare of both the employee and employer. Where the dismissal is for a just cause, as in the instant case, the lack of statutory due process should not nullify the dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the employee for the violation of his statutory rights, as ruled in Reta v. National Labor Relations Commission.36 The indemnity to be imposed should be stiffer to discourage the abhorrent practice of "dismiss now, pay later," which we sought to deter in the Serrano ruling. The sanction should be in the nature of indemnification or penalty and should depend on the facts of each case, taking into special consideration the gravity of the due process violation of the employer. Under the Civil Code, nominal damages is adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him.37 As enunciated by this Court in Viernes v. National Labor Relations Commissions,38 an employer is liable to pay indemnity in the form of nominal damages to an employee who has been dismissed if, in effecting such dismissal, the employer fails to comply with the requirements of due process. The Court, after considering the circumstances therein, fixed the indemnity at P2,590.50, which was equivalent to the employee's one month salary. This indemnity is intended not to penalize the employer but to vindicate or recognize the employee's right to statutory due process which was violated by the employer.39 The violation of the petitioners' right to statutory due process by the private respondent warrants the payment of indemnity in the form of nominal damages. The amount of such damages is addressed to the sound discretion of the court, taking into account the relevant circumstances.40 Considering the prevailing circumstances in the case at bar, we deem it proper to fix it at P30,000.00. We believe this form of damages would serve to deter employers from future violations of the statutory due process rights of employees. At the very least, it provides a vindication or recognition of this fundamental right granted to the latter under the Labor Code and its Implementing Rules. Private respondent claims that the Court of Appeals erred in holding that it failed to pay petitioners' holiday pay, service incentive leave pay and 13th month pay. We are not persuaded. We affirm the ruling of the appellate court on petitioners' money claims. Private respondent is liable for petitioners' holiday pay, service incentive leave pay and 13th month pay without deductions. As a general rule, one who pleads payment has the burden of proving it. Even where the employee must allege non-payment, the general rule is that the burden rests on the employer to prove

payment, rather than on the employee to prove non-payment. The reason for the rule is that the pertinent personnel files, payrolls, records, remittances and other similar documents which will show that overtime, differentials, service incentive leave and other claims of workers have been paid are not in the possession of the worker but in the custody and absolute control of the employer.41 In the case at bar, if private respondent indeed paid petitioners' holiday pay and service incentive leave pay, it could have easily presented documentary proofs of such monetary benefits to disprove the claims of the petitioners. But it did not, except with respect to the 13th month pay wherein it presented cash vouchers showing payments of the benefit in the years disputed.42 Allegations by private respondent that it does not operate during holidays and that it allows its employees 10 days leave with pay, other than being self-serving, do not constitute proof of payment. Consequently, it failed to discharge the onus probandi thereby making it liable for such claims to the petitioners. Anent the deduction of SSS loan and the value of the shoes from petitioner Virgilio Agabon's 13th month pay, we find the same to be unauthorized. The evident intention of Presidential Decree No. 851 is to grant an additional income in the form of the 13th month pay to employees not already receiving the same43 so as "to further protect the level of real wages from the ravages of world-wide inflation."44 Clearly, as additional income, the 13th month pay is included in the definition of wage under Article 97(f) of the Labor Code, to wit: (f) "Wage" paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money whether fixed or ascertained on a time, task, piece , or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to the employee" from which an employer is prohibited under Article 11345 of the same Code from making any deductions without the employee's knowledge and consent. In the instant case, private respondent failed to show that the deduction of the SSS loan and the value of the shoes from petitioner Virgilio Agabon's 13th month pay was authorized by the latter. The lack of authority to deduct is further bolstered by the fact that petitioner Virgilio Agabon included the same as one of his money claims against private respondent. The Court of Appeals properly reinstated the monetary claims awarded by the Labor Arbiter ordering the private respondent to pay each of the petitioners holiday pay for four regular holidays from 1996 to 1998, in the amount of P6,520.00, service incentive leave pay for the same period in the amount of P3,255.00 and the balance of Virgilio Agabon's thirteenth month pay for 1998 in the amount of P2,150.00. WHEREFORE, in view of the foregoing, the petition is DENIED. The decision of the Court of Appeals dated January 23, 2003, in CA-G.R. SP No. 63017, finding that petitioners' Jenny and Virgilio Agabon abandoned their work, and ordering private respondent to pay each of the petitioners holiday pay for four regular holidays from 1996 to 1998, in the amount of P6,520.00, service incentive leave pay for the same period in the amount of P3,255.00 and the balance of Virgilio Agabon's thirteenth month pay for 1998 in the amount of P2,150.00 isAFFIRMED with the MODIFICATION that private respondent Riviera Home Improvements, Inc. is furtherORDERED to pay each of the petitioners the amount of P30,000.00 as nominal damages for non-compliance with statutory due process. No costs. SO ORDERED. Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr., Azcuna, Tinga, Chico-Nazario, and Garcia, JJ., concur.

SEPARATE OPINION

TINGA, J: I concur in the result, the final disposition of the petition being correct. There is no denying the importance of the Court's ruling today, which should be considered as definitive as to the effect of the failure to render the notice and hearing required under the Labor Code when an employee is being dismissed for just causes, as defined under the same law. The Court emphatically reaffirms the rule that dismissals for just cause are not invalidated due to the failure of the employer to observe the proper notice and hearing requirements under the Labor Code. At the same time, The Decision likewise establishes that the Civil Code provisions on damages serve as the proper framework for the appropriate relief to the employee dismissed for just cause if the notice-hearing requirement is not met. Serrano v. NLRC,1 insofar as it is controlling in dismissals for unauthorized causes, is no longer the controlling precedent. Any and all previous rulings and statements of the Court inconsistent with these determinations are now deemed inoperative. My views on the questions raised in this petition are comprehensive, if I may so in all modesty. I offer this opinion to discuss the reasoning behind my conclusions, pertaining as they do to questions of fundamental importance. Prologue The factual backdrop of the present Petition for Review is not novel. Petitioners claim that they were illegally dismissed by the respondents, who allege in turn that petitioners had actually abandoned their employment. There is little difficulty in upholding the findings of the NRLC and the Court of Appeals that petitioners are guilty of abandonment, one of the just causes for termination under the Labor Code. Yet, the records also show that the employer was remiss in not giving the notice required by the Labor Code; hence, the resultant controversy as to the legal effect of such failure vis-vis the warranted dismissal. Ostensibly, the matter has been settled by our decision in Serrano2, wherein the Court ruled that the failure to properly observe the notice requirement did not render the dismissal, whether for just or authorized causes, null and void, for such violation was not a denial of the constitutional right to due process, and that the measure of appropriate damages in such cases ought to be the amount of wages the employee should have received were it not for the termination of his employment without prior notice.3 Still, the Court has, for good reason, opted to reexamine the so-called Serrano doctrine through the present petition Antecedent Facts Respondent Riviera Home Improvements, Inc (Riviera Home) is engaged in the manufacture and installation of gypsum board and cornice. In January of 1992, the Agabons were hired in January of 1992 as cornice installers by Riviera Home. According to their personnel file with Riviera Home, the Agabon given address was 3RDS Tailoring, E. Rodriguez Ave., Moonwalk Subdivision, P-II Paraaque City, Metro Manila.4 It is not disputed that sometime around February 1999, the Agabons stopped rendering services for Riviera Home. The Agabons allege that beginning on 23 February 1999, they stopped receiving assignments from Riviera Home.5 When they demanded an explanation, the manager of Riviera Homes, Marivic Ventura, informed them that they would be hired again, but on a "pakyaw" (piecework) basis. When the Agabons spurned this proposal, Riviera Homes refused to continue their employment under the original terms and agreement.6 Taking affront, the Agabons filed a complaint for illegal dismissal with the National Labor Relations Commission ("NLRC"). Riviera Homes adverts to a different version of events leading to the filing of the complaint for illegal dismissal. It alleged that in the early quarter of 1999, the Agabons stopped reporting for work with Riviera. Two separate letters dated 10 March 1999, were sent to the Agabons at the address indicated in their personnel file. In these notices, the Agabons were directed to report for work immediately.7 However, these notices were returned unserved with the notation "RTS Moved." Then, in June of 1999, Virgilio Agabon informed Riviera Homes by telephone that he and Jenny Agabon were ready to return to work for Riviera Homes, on the condition that their wages be first adjusted. On 18 June 1999, the Agabons went to Riviera Homes, and in a meeting with management, requested a wage increase of up to Two Hundred Eighty Pesos (P280.00) a day. When no affirmative response was offered by Riviera Homes, the Agabons initiated the complaint before the NLRC.8

In their Position Paper, the Agabons likewise alleged that they were required to work even on holidays and rest days, but were never paid the legal holiday pay or the premium pay for holiday or rest day. They also asserted that they were denied Service Incentive Leave pay, and that Virgilio Agabon was not given his thirteenth (13th) month pay for the year 1998.9 After due deliberation, Labor Arbiter Daisy G. Cauton-Barcelona rendered a Decision dated 28 December 1999, finding the termination of the Agabons illegal, and ordering Riviera Homes to pay backwages in the sum of Fifty Six Thousand Two Hundred Thirty One Pesos and Ninety Three Centavos (P56,231.93) each. The Labor Arbiter likewise ordered, in lieu of reinstatement, the payment of separation pay of one (1) month pay for every year of service from date of hiring up to 29 November 1999, as well as the payment of holiday pay, service incentive leave pay, and premium pay for holiday and restday, plus thirteenth (13th) month differential to Virgilio Agabon.10 In so ruling, the Labor Arbiter declared that Riviera Homes was unable to satisfactorily refute the Agabons' claim that they were no longer given work to do after 23 February 1999 and that their rehiring was only on "pakyaw" basis. The Labor Arbiter also held that Riviera Homes failed to comply with the notice requirement, noting that Riviera Homes well knew of the change of address of the Agabons, considering that the identification cards it issued stated a different address from that on the personnel file.11 The Labor Arbiter asserted the principle that in all termination cases, strict compliance by the employer with the demands of procedural and substantive due process is a condition sine qua non for the same to be declared valid.12 On appeal, the NLRC Second Division set aside the Labor Arbiter's Decision and ordered the dismissal of the complaint for lack of merit.13 The NLRC held that the Agabons were not able to refute the assertion that for the payroll period ending on 15 February 1999, Virgilio and Jenny Agabon worked for only two and one-half (2) and three (3) days, respectively. It disputed the earlier finding that Riviera Homes had known of the change in address, noting that the address indicated in the identification cards was not the Agabons, but that of the persons who should be notified in case of emergency concerning the employee.14 Thus, proper service of the notice was deemed to have been accomplished. Further, the notices evinced good reason to believe that the Agabons had not been dismissed, but had instead abandoned their jobs by refusing to report for work. In support of its conclusion that the Agabons had abandoned their work, the NLRC also observed that the Agabons did not seek reinstatement, but only separation pay. While the choice of relief was premised by the Agabons on their purported strained relations with Riviera Homes, the NLRC pointed out that such claim was amply belied by the fact that the Agabons had actually sought a conference with Riviera Homes in June of 1999. The NLRC likewise found that the failure of the Labor Arbiter to justify the award of extraneous money claims, such as holiday and service incentive leave pay, confirmed that there was no proof to justify such claims. A Petition for Certiorari was promptly filed with the Court of Appeals by the Agabons, imputing grave abuse of discretion on the part of the NLRC in dismissing their complaint for illegal dismissal. In a Decision15 dated 23 January 2003, the Court of Appeals affirmed the finding that the Agabons had abandoned their employment. It noted that the two elements constituting abandonment had been established, to wit: the failure to report for work or absence without valid justifiable reason, and; a clear intention to sever the employer-employee relationship. The intent to sever the employeremployee relationship was buttressed by the Agabon's choice to seek not reinstatement, but separation pay. The Court of Appeals likewise found that the service of the notices were valid, as the Agabons did not notify Riviera Homes of their change of address, and thus the failure to return to work despite notice amounted to abandonment of work. However, the Court of Appeals reversed the NLRC as regards the denial of the claims for holiday pay, service incentive leave pay, and the balance of Virgilio Agabon's thirteenth (13th) month pay. It ruled that the failure to adduce proof in support thereof was not fatal and that the burden of proving that such benefits had already been paid rested on Riviera Homes.16 Given that Riviera Homes failed to present proof of payment to the Agabons of their holiday pay and service incentive leave pay for the years 1996, 1997 and 1998, the Court of Appeals chose to believe that such benefits had not actually been received by the employees. It also ruled that the apparent deductions made by Riviera Homes on the thirteenth (13th) month pay of Virgilio Agabon violated Section 10 of the Rules and Regulations Implementing Presidential Decree No. 851.17 Accordingly, Riviera Homes was ordered to pay the Agabons holiday for four (4) regular holidays in 1996, 1997 and 1998, as well as their

service incentive leave pay for said years, and the balance of Virgilio Agabon's thirteenth (13th) month pay for 1998 in the amount of Two Thousand One Hundred Fifty Pesos (P2,150.00).18 In their Petition for Review, the Agabons claim that they had been illegally dismissed, reasserting their version of events, thus: (1) that they had not been given new assignments since 23 February 1999; (2) that they were told that they would only be re-hired on a "pakyaw" basis, and; (3) that Riviera Homes had knowingly sent the notices to their old address despite its knowledge of their change of address as indicated in the identification cards.19Further, the Agabons note that only one notice was sent to each of them, in violation of the rule that the employer must furnish two written notices before termination the first to apprise the employee of the cause for which dismissal is sought, and the second to notify the employee of the decision of dismissal.20 The Agabons likewise maintain that they did not seek reinstatement owing to the strained relations between them and Riviera Homes. The Agabons present to this Court only one issue, i.e.: whether or not they were illegally dismissed from their employment.21 There are several dimensions though to this issue which warrant full consideration. The Abandonment Dimension Review of Factual Finding of Abandonment As the Decision points out, abandonment is characterized by the failure to report for work or absence without valid or justifiable reason, and a clear intention to sever the employer-employee relationship. The question of whether or not an employee has abandoned employment is essentially a factual issue.22 The NLRC and the Court of Appeals, both appropriate triers of fact, concluded that the Agabons had actually abandoned their employment, thus there is little need for deep inquiry into the correctness of this factual finding. There is no doubt that the Agabons stopped reporting for work sometime in February of 1999. And there is no evidence to support their assertion that such absence was due to the deliberate failure of Riviera Homes to give them work. There is also the fact, as noted by the NLRC and the Court of Appeals, that the Agabons did not pray for reinstatement, but only for separation pay and money claims.23 This failure indicates their disinterest in maintaining the employer-employee relationship and their unabated avowed intent to sever it. Their excuse that strained relations between them and Riviera Homes rendered reinstatement no longer feasible was hardly given credence by the NLRC and the Court of Appeals.24 The contrary conclusion arrived at by the Labor Arbiter as regards abandonment is of little bearing to the case. All that the Labor Arbiter said on that point was that Riviera Homes was not able to refute the Agabons' claim that they were terminated on 23 February 1999.25 The Labor Arbiter did not explain why or how such finding was reachhy or how such finding was reachhe Agabons was more credible than that of Riviera Homes'. Being bereft of reasoning, the conclusion deserves scant consideration. Compliance with Notice Requirement At the same time, both the NLRC and the Court of Appeals failed to consider the apparent fact that the rules governing notice of termination were not complied with by Riviera Homes. Section 2, Book V, Rule XXIII of the Omnibus Rules Implementing the Labor Code (Implementing Rules) specifically provides that for termination of employment based on just causes as defined in Article 282, there must be: (1) written notice served on the employee specifying the grounds for termination and giving employee reasonable opportunity to explain his/her side; (2) a hearing or conference wherein the employee, with the assistance of counsel if so desired, is given opportunity to respond to the charge, present his evidence or rebut evidence presented against him/her; and (3) written notice of termination served on the employee indicating that upon due consideration of all the circumstances, grounds have been established to justify termination. At the same time, Section 2, Book V, Rule XXIII of the Implementing Rules does not require strict compliance with the above procedure, but only that the same be "substantially observed." Riviera Homes maintains that the letters it sent on 10 March 1999 to the Agabons sufficiently complied with the notice rule. These identically worded letters noted that the Agabons had stopped

working without permission that they failed to return for work despite having been repeatedly told to report to the office and resume their employment.26 The letters ended with an invitation to the Agabons to report back to the office and return to work.27 The apparent purpose of these letters was to advise the Agabons that they were welcome to return back to work, and not to notify them of the grounds of termination. Still, considering that only substantial compliance with the notice requirement is required, I am prepared to say that the letters sufficiently conform to the first notice required under the Implementing Rules. The purpose of the first notice is to duly inform the employee that a particular transgression is being considered against him or her, and that an opportunity is being offered for him or her to respond to the charges. The letters served the purpose of informing the Agabons of the pending matters beclouding their employment, and extending them the opportunity to clear the air. Contrary to the Agabons' claim, the letter-notice was correctly sent to the employee's last known address, in compliance with the Implementing Rules. There is no dispute that these letters were not actually received by the Agabons, as they had apparently moved out of the address indicated therein. Still, the letters were sent to what Riviera Homes knew to be the Agabons' last known address, as indicated in their personnel file. The Agabons insist that Riviera Homes had known of the change of address, offering as proof their company IDs which purportedly print out their correct new address. Yet, as pointed out by the NLRC and the Court of Appeals, the addresses indicated in the IDs are not the Agabons, but that of the person who is to be notified in case on emergency involve either or both of the Agabons. The actual violation of the notice requirement by Riviera Homes lies in its failure to serve on the Agabons the second notice which should inform them of termination. As the Decision notes, Riviera Homes' argument that sending the second notice was useless due to the change of address is inutile, since the Implementing Rules plainly require that the notice of termination should be served at the employee's last known address. The importance of sending the notice of termination should not be trivialized. The termination letter serves as indubitable proof of loss of employment, and its receipt compels the employee to evaluate his or her next options. Without such notice, the employee may be left uncertain of his fate; thus, its service is mandated by the Implementing Rules. Non-compliance with the notice rule, as evident in this case, contravenes the Implementing Rules. But does the violation serve to invalidate the Agabons' dismissal for just cause? The So-Called Constitutional Law Dimension Justices Puno and Panganiban opine that the Agabons should be reinstated as a consequence of the violation of the notice requirement. I respectfully disagree, for the reasons expounded below. Constitutional Considerations Of Due Process and the Notice-Hearing Requirement in Labor Termination Cases Justice Puno proposes that the failure to render due notice and hearing prior to dismissal for just cause constitutes a violation of the constitutional right to due process. This view, as acknowledged by Justice Puno himself, runs contrary to the Court's pronouncement in Serrano v. NLRC28 that the absence of due notice and hearing prior to dismissal, if for just cause, violates statutory due process. The ponencia of Justice Vicente V. Mendoza in Serrano provides this cogent overview of the history of the doctrine: Indeed, to contend that the notice requirement in the Labor Code is an aspect of due process is to overlook the fact that Art. 283 had its origin in Art. 302 of the Spanish Code of Commerce of 1882 which gave either party to the employer-employee relationship the right to terminate their relationship by giving notice to the other one month in advance. In lieu of notice, an employee could be laid off by paying him a mesadaequivalent to his salary for one month. This provision was repealed by Art. 2270 of the Civil Code, which took effect on August 30, 1950. But on June 12, 1954, R.A. No. 1052, otherwise known as the Termination Pay Law, was enacted reviving the mesada. On June 21, 1957, the law was amended by R.A. No. 1787 providing for the giving of advance notice for every year of service.29

Under Section 1 of the Termination Pay Law, an employer could dismiss an employee without just cause by serving written notice on the employee at least one month in advance or one-half month for every year of service of the employee, whichever was longer.30 Failure to serve such written notice entitled the employee to compensation equivalent to his salaries or wages corresponding to the required period of notice from the date of termination of his employment. However, there was no similar written notice requirement under the Termination Pay Law if the dismissal of the employee was for just cause. The Court, speaking through Justice JBL Reyes, ruled in Phil. Refining Co. v. Garcia:31 [Republic] Act 1052, as amended by Republic Act 1787, impliedly recognizes the right of the employer to dismiss his employees (hired without definite period) whether for just case, as therein defined or enumerated, or without it. If there be just cause, the employer is not required to serve any notice of discharge nor to disburse termination pay to the employee. xxx32 Clearly, the Court, prior to the enactment of the Labor Code, was ill-receptive to the notion that termination for just cause without notice or hearing violated the constitutional right to due process. Nonetheless, the Court recognized an award of damages as the appropriate remedy. In Galsim v. PNB,33 the Court held: Of course, the employer's prerogative to dismiss employees hired without a definite period may be with or without cause. But if the manner in which such right is exercised is abusive, the employer stands to answer to the dismissed employee for damages.34 The Termination Pay Law was among the repealed laws with the enactment of the Labor Code in 1974. Significantly, the Labor Code, in its inception, did not require notice or hearing before an employer could terminate an employee for just cause. As Justice Mendoza explained: Where the termination of employment was for a just cause, no notice was required to be given to the employee. It was only on September 4, 1981 that notice was required to be given even where the dismissal or termination of an employee was for cause. This was made in the rules issued by the then Minister of Labor and Employment to implement B.P. Blg. 130 which amended the Labor Code. And it was still much later when the notice requirement was embodied in the law with the amendment of Art. 277(b) by R.A. No. 6715 on March 2, 1989.35 It cannot be denied though that the thinking that absence of notice or hearing prior to termination constituted a constitutional violation has gained a jurisprudential foothold with the Court. Justice Puno, in his Dissenting Opinion, cites several cases in support of this theory, beginning with Batangas Laguna Tayabas Bus Co. v. Court of Appeals36 wherein we held that "the failure of petitioner to give the private respondent the benefit of a hearing before he was dismissed constitutes an infringement on his constitutional right to due process of law.37 Still, this theory has been refuted, pellucidly and effectively to my mind, by Justice Mendoza's disquisition inSerrano, thus: xxx There are three reasons why, on the other hand, violation by the employer of the notice requirement cannot be considered a denial of due process resulting in the nullity of the employee's dismissal or layoff. The first is that the Due Process Clause of the Constitution is a limitation on governmental powers. It does not apply to the exercise of private power, such as the termination of employment under the Labor Code. This is plain from the text of Art. III, 1 of the Constitution, viz.: "No person shall be deprived of life, liberty, or property without due process of law. . . ." The reason is simple: Only the State has authority to take the life, liberty, or property of the individual. The purpose of the Due Process Clause is to ensure that the exercise of this power is consistent with what are considered civilized methods. The second reason is that notice and hearing are required under the Due Process Clause before the power of organized society are brought to bear upon the individual. This is obviously not the case of termination of employment under Art. 283. Here the employee is not faced with an aspect of the adversary system. The purpose for requiring a 30-day written

notice before an employee is laid off is not to afford him an opportunity to be heard on any charge against him, for there is none. The purpose rather is to give him time to prepare for the eventual loss of his job and the DOLE an opportunity to determine whether economic causes do exist justifying the termination of his employment. xxx The third reason why the notice requirement under Art. 283 can not be considered a requirement of the Due Process Clause is that the employer cannot really be expected to be entirely an impartial judge of his own cause. This is also the case in termination of employment for a just cause under Art. 282 (i.e., serious misconduct or willful disobedience by the employee of the lawful orders of the employer, gross and habitual neglect of duties, fraud or willful breach of trust of the employer, commission of crime against the employer or the latter's immediate family or duly authorized representatives, or other analogous cases).38 The Court in the landmark case of People v. Marti39 clarified the proper dimensions of the Bill of Rights. That the Bill of Rights embodied in the Constitution is not meant to be invoked against acts of private individuals finds support in the deliberations of the Constitutional Commission. True, the liberties guaranteed by the fundamental law of the land must always be subject to protection. But protection against whom? Commissioner Bernas in his sponsorship speech in the Bill of Rights answers the query which he himself posed, as follows: "First, the general reflections. The protection of fundamental liberties in the essence of constitutional democracy. Protection against whom? Protection against the state. The Bill of Rights governs the relationship between the individual and the state. Its concern is not the relation between individuals, between a private individual and other individuals. What the Bill of Rights does is to declare some forbidden zones in the private sphere inaccessible to any power holder." (Sponsorship Speech of Commissioner Bernas; Record of the Constitutional Commission, Vol. 1, p. 674; July 17,1986; Italics supplied)40 I do not doubt that requiring notice and hearing prior to termination for just cause is an admirable sentiment borne out of basic equity and fairness. Still, it is not a constitutional requirement that can impose itself on the relations of private persons and entities. Simply put, the Bill of Rights affords protection against possible State oppression against its citizens, but not against an unjust or repressive conduct by a private party towards another. Justice Puno characterizes the notion that constitutional due process limits government action alone as "pass,"and adverts to nouvelle vague theories which assert that private conduct may be restrained by constitutional due process. His dissent alludes to the American experience making references to the post-Civil War/pre-World War II era when the US Supreme Court seemed overly solicitous to the rights of big business over those of the workers. Theories, no matter how entrancing, remain theoretical unless adopted by legislation, or more controversially, by judicial opinion. There were a few decisions of the US Supreme Court that, ostensibly, imposed on private persons the values of the constitutional guarantees. However, in deciding the cases, the American High Court found it necessary to link the actors to adequate elements of the "State" since the Fourteenth Amendment plainly begins with the words "No State shall"41 More crucially to the American experience, it had become necessary to pass legislation in order to compel private persons to observe constitutional values. While the equal protection clause was deemed sufficient by the Warren Court to bar racial segregation in public facilities, it necessitated enactment of the Civil Rights Acts of 1964 to prohibit segregation as enforced by private persons within their property. In this jurisdiction, I have trust in the statutory regime that governs the correction of private wrongs. There are thousands of statutes, some penal or regulatory in nature, that are the source of actionable claims against private persons. There is even no stopping the State, through the legislative cauldron, from compelling private individuals, under pain of legal sanction, into observing the norms ordained in the Bill of Rights. Justice Panganiban's Separate Opinion asserts that corporate behemoths and even individuals may now be sources of abuses and threats to human rights and liberties.42 The concern is not unfounded,

but appropriate remedies exist within our statutes, and so resort to the constitutional trump card is not necessary. Even if we were to engage the premise, the proper juristic exercise should be to examine whether an employer has taken the attributes of the State so that it could be compelled by the Constitution to observe the proscriptions of the Bill of Rights. But the strained analogy simply does not square since the attributes of an employer are starkly incongruous with those of the State. Employers plainly do not possess the awesome powers and the tremendous resources which the State has at its command. The differences between the State and employers are not merely literal, but extend to their very essences. Unlike the State, the raison d'etre of employers in business is to accumulate profits. Perhaps the State and the employer are similarly capacitated to inflict injury or discomfort on persons under their control, but the same power is also possessed by a school principal, hospital administrator, or a religious leader, among many others. Indeed, the scope and reach of authority of an employer pales in comparison with that of the State. There is no basis to conclude that an employer, or even the employer class, may be deemed a de facto state and on that premise, compelled to observe the Bill of Rights. There is simply no nexus in their functions, distaff as they are, that renders it necessary to accord the same jurisprudential treatment. It may be so, as alluded in the dissent of Justice Puno, that a conservative court system overly solicitous to the concerns of business may consciously gut away at rights or privileges owing to the labor sector. This certainly happened before in the United States in the early part of the twentieth century, when the progressive labor legislation such as that enacted during President Roosevelt's New Deal regime most of them addressing problems of labor were struck down by an archconservative Court.43 The preferred rationale then was to enshrine within the constitutional order business prerogatives, rendering them superior to the express legislative intent. Curiously, following its judicial philosophy at the time the U. S. Supreme Court made due process guarantee towards employers prevail over the police power to defeat the cause of labor.44 Of course, this Court should not be insensate to the means and methods by which the entrenched powerful class may maneuver the socio-political system to ensure self-preservation. However, the remedy to rightward judicial bias is not leftward judicial bias. The more proper judicial attitude is to give due respect to legislative prerogatives, regardless of the ideological sauce they are dipped in. While the Bill of Rights maintains a position of primacy in the constitutional hierarchy,45 it has scope and limitations that must be respected and asserted by the Court, even though they may at times serve somewhat bitter ends. The dissenting opinions are palpably distressed at the effect of the Decision, which will undoubtedly provoke those reflexively sympathetic to the labor class. But haphazard legal theory cannot be used to justify the obverse result. The adoption of the dissenting views would give rise to all sorts of absurd constitutional claims. An excommunicated Catholic might demand his/her reinstatement into the good graces of the Church and into communion on the ground that excommunication was violative of the constitutional right to due process. A celebrity contracted to endorse Pepsi Cola might sue in court to void a stipulation that prevents him/her from singing the praises of Coca Cola once in a while, on the ground that such stipulation violates the constitutional right to free speech. An employee might sue to prevent the employer from reading outgoing e-mail sent through the company server using the company e-mail address, on the ground that the constitutional right to privacy of communication would be breached. The above concerns do not in anyway serve to trivialize the interests of labor. But we must avoid overarching declarations in order to justify an end result beneficial to labor. I dread the doctrinal acceptance of the notion that the Bill of Rights, on its own, affords protection and sanctuary not just from the acts of State but also from the conduct of private persons. Natural and juridical persons would hesitate to interact for fear that a misstep could lead to their being charged in court as a constitutional violator. Private institutions that thrive on their exclusivity, such as churches or cliquish groups, could be forced to renege on their traditional tenets, including vows of secrecy and the like, if deemed by the Court as inconsistent with the Bill of Rights. Indeed, that fundamental right of all private persons to be let alone would be forever diminished because of a questionable notion that contravenes with centuries of political thought. It is not difficult to be enraptured by novel legal ideas. Their characterization is susceptible to the same marketing traps that hook consumers to new products. With the help of unique wrapping, a catchy label, and testimonials from professed experts from exotic lands, a malodorous idea may gain wide acceptance, even among those self-possessed with their own heightened senses of perception. Yet before we join the mad rush in order to proclaim a theory as "brilliant," a rigorous test must first be employed to determine whether it complements or contradicts our own system of laws

and juristic thought. Without such analysis, we run the risk of abnegating the doctrines we have fostered for decades and the protections they may have implanted into our way of life. Should the Court adopt the view that the Bill of Rights may be invoked to invalidate actions by private entities against private individuals, the Court would open the floodgates to, and the docket would be swamped with, litigations of the scurrilous sort. Just as patriotism is the last refuge of scoundrels, the broad constitutional claim is the final resort of the desperate litigant. Constitutional Protection of Labor The provisions of the 1987 Constitution affirm the primacy of labor and advocate a multifaceted state policy that affords, among others, full protection to labor. Section 18, Article II thereof provides: The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare. Further, Section 3, Article XIII states: The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equal employment opportunities for all. It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security to tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace. The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns on investments, and to expansion and growth. The constitutional enshrinement of the guarantee of full protection of labor is not novel to the 1987 Constitution. Section 6, Article XIV of the 1935 Constitution reads: The State shall afford protection to labor, especially to working women, and minors, and shall regulate the relations between the landowner and tenant, and between labor and capital in industry and in agriculture. The State may provide for compulsory arbitration. Similarly, among the principles and state policies declared in the 1973 Constitution, is that provided in Section 9, Article II thereof: The State shall afford full protection to labor, promote full employment and equality in employment, ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between workers and employers. The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work. The State may provide for compulsory arbitration. On the other hand, prior to the 1973 Constitution, the right to security of tenure could only be found in legislative enactments and their respective implementing rules and regulations. It was only in the 1973 Constitution that security of tenure was elevated as a constitutional right. The development of the concept of security of tenure as a constitutionally recognized right was discussed by this Court in BPI Credit Corporation v. NLRC,46 to wit: The enthronement of the worker's right to security or tenure in our fundamental law was not achieved overnight. For all its liberality towards labor, our 1935 Constitution did not elevate the right as a constitutional right. For a long time, the worker's security of tenure had only the

protective mantle of statutes and their interpretative rules and regulations. It was as uncertain protection that sometimes yielded to the political permutations of the times. It took labor nearly four decades of sweat and tears to persuade our people thru their leaders, to exalt the worker's right to security of tenure as a sacrosanct constitutional right. It was Article II, section 2 [9] of our 1973 Constitution that declared as a policy that the State shall assure the right of worker's to security tenure. The 1987 Constitution is even more solicitous of the welfare of labor. Section 3 of its Article XIII mandates that the State shall afford full protection to labor and declares that all workers shall be entitled to security of tenure. Among the enunciated State policies are the promotion of social justice and a just and dynamic social order. In contrast, the prerogative of management to dismiss a worker, as an aspect of property right, has never been endowed with a constitutional status. The unequivocal constitutional declaration that all workers shall be entitled to security of tenure spurred our lawmakers to strengthen the protective walls around this hard earned right. The right was protected from undue infringement both by our substantive and procedural laws. Thus, the causes for dismissing employees were more defined and restricted; on the other hand, the procedure of termination was also more clearly delineated. These substantive and procedural laws must be strictly complied with before a worker can be dismissed from his employment.47 It is quite apparent that the constitutional protection of labor was entrenched more than eight decades ago, yet such did not prevent this Court in the past from affirming dismissals for just cause without valid notice. Nor was there any pretense made that this constitutional maxim afforded a laborer a positive right against dismissal for just cause on the ground of lack of valid prior notice. As demonstrated earlier, it was only after the enactment of the Labor Code that the doctrine relied upon by the dissenting opinions became en vogue. This point highlights my position that the violation of the notice requirement has statutory moorings, not constitutional. It should be also noted that the 1987 Constitution also recognizes the principle of shared responsibility between workers and employers, and the right of enterprise to reasonable returns, expansion, and growth. Whatever perceived imbalance there might have been under previous incarnations of the provision have been obviated by Section 3, Article XIII. In the case of Manila Prince Hotel v. GSIS,48 we affirmed the presumption that all constitutional provisions are self-executing. We reasoned that to declare otherwise would result in the pernicious situation wherein by mere inaction and disregard by the legislature, constitutional mandates would be rendered ineffectual. Thus, we held: As against constitutions of the past, modern constitutions have been generally ed upon a different principle and have often become in effect extensive codes of laws intended to operate directly upon the people in a manner similar to that of statutory enactments, and the function of constitutional conventions has evolved into one more like that of a legislative body. Hence, unless it is expressly provided that a legislative act is necessary to enforce a constitutional mandate, the presumption now is that all provisions of the constitution are selfexecuting. If the constitutional provisions are treated as requiring legislation instead of selfexecuting, the legislature would have the power to ignore and practically nullify the mandate of the fundamental law. This can be cataclysmic. That is why the prevailing view is, as it has always been, that . . . in case of doubt, the Constitution should be considered self-executing rather than non-self-executing. . . . Unless the contrary is clearly intended, the provisions of the Constitution should be considered self-executing, as a contrary rule would give the legislature discretion to determine when, or whether, they shall be effective. These provisions would be subordinated to the will of the lawmaking body, which could make them entirely meaningless by simply refusing to pass the needed implementing statute.49 In further discussing self-executing provisions, this Court stated that: In self-executing constitutional provisions, the legislature may still enact legislation to facilitate the exercise of powers directly granted by the constitution, further the operation of such a provision, prescribe a practice to be used for its enforcement, provide a convenient

remedy for the protection of the rights secured or the determination thereof, or place reasonable safeguards around the exercise of the right. The mere fact that legislation may supplement and add to or prescribe a penalty for the violation of a self-executing constitutional provision does not render such a provision ineffective in the absence of such legislation. The omission from a constitution of any express provision for a remedy for enforcing a right or liability is not necessarily an indication that it was not intended to be selfexecuting. The rule is that a self-executing provision of the constitution does not necessarily exhaust legislative power on the subject, but any legislation must be in harmony with the constitution, further the exercise of constitutional right and make it more available. Subsequent legislation however does not necessarily mean that the subject constitutional provision is not, by itself, fully enforceable.50 Thus, the constitutional mandates of protection to labor and security of tenure may be deemed as self-executing in the sense that these are automatically acknowledged and observed without need for any enabling legislation. However, to declare that the constitutional provisions are enough to guarantee the full exercise of the rights embodied therein, and the realization of ideals therein expressed, would be impractical, if not unrealistic. The espousal of such view presents the dangerous tendency of being overbroad and exaggerated. The guarantees of "full protection to labor" and "security of tenure", when examined in isolation, are facially unqualified, and the broadest interpretation possible suggests a blanket shield in favor of labor against any form of removal regardless of circumstance. This interpretation implies an unimpeachable right to continued employment-a utopian notion, doubtless-but still hardly within the contemplation of the framers. Subsequent legislation is still needed to define the parameters of these guaranteed rights to ensure the protection and promotion, not only the rights of the labor sector, but of the employers' as well. Without specific and pertinent legislation, judicial bodies will be at a loss, formulating their own conclusion to approximate at least the aims of the Constitution. Ultimately, therefore, Section 3 of Article XIII cannot, on its own, be a source of a positive enforceable right to stave off the dismissal of an employee for just cause owing to the failure to serve proper notice or hearing. As manifested by several framers of the 1987 Constitution, the provisions on social justice require legislative enactments for their enforceability. This is reflected in the record of debates on the social justice provisions of the Constitution: MS. [FELICITAS S.] AQUINO: We appreciate the concern of the Commissioner. But this Committee [on Social Justice] has actually become the forum already of a lot of specific grievances and specific demands, such that understandably, we may have been, at one time or another, dangerously treading into the functions of legislation. Our only plea to the Commission is to focus our perspective on the matter of social justice and its rightful place in the Constitution. What we envision here is a mandate specific enough that would give impetus for statutory implementation. We would caution ourselves in terms of the judicious exercise of self-censorship against treading into the functions of legislation. (emphasis supplied)51 xxx [FLORENZ D.] REGALADO: I notice that the 1935 Constitution had only one section on social justice; the same is true with the 1973 Constitution. But they seem to have stood us in good stead; and I am a little surprised why, despite that attempt at self-censorship, there are certain provisions here which are properly for legislation.52 xxx BISHOP [TEODORO S.] BACANI: [I] think the distinction that was given during the presentation of the provisions on the Bill of Rights by Commissioner Bernas is very apropos here. He spoke of self-executing rights which belong properly to the Bill of Rights, and then he spoke of a new body of rights which are more of claims and that these have come about largely through the works of social philosophers and then the teaching of the Popes. They focus on the common good and hence, it is not as easy to pinpoint precisely these rights nor the situs of the rights. And yet, they exist in relation to the common good.53 xxx

MS. [MINDA LUZ M.] QUESADA: I think the nitty-gritty of this kind of collaboration will be left to legislation but the important thing now is the conservation, utilization or maximization of the very limited resources. xxx [RICARDO J.] ROMULO: The other problem is that, by and large, government services are inefficient. So, this is a problem all by itself. On Section 19, where the report says that people's organizations as a principal means of empowering the people to pursue and protect through peaceful means, I do not suppose that the Committee would like to either preempt or exclude the legislature, because the concept of a representative and democratic system really is that the legislature is normally the principal means. [EDMUNDO G.] GARCIA: That is correct. In fact, people cannot even dream of influencing the composition or the membership of the legislature, if they do not get organized. It is, in fact, a recognition of the principle that unless a citizenry is organized and mobilized to pursue its ends peacefully, then it cannot really participate effectively.54 There is no pretense on the part of the framers that the provisions on Social Justice, particularly Section 3 of Article XIII, are self-executory. Still, considering the rule that provisions should be deemed self-executing if enforceable without further legislative action, an examination of Section 3 of Article XIII is warranted to determine whether it is complete in itself as a definitive law, or if it needs future legislation for completion and enforcement.55Particularly, we should inquire whether or not the provision voids the dismissal of a laborer for just cause if no valid notice or hearing is attendant. Constitutional Commissioner Fr. Joaquin G. Bernas makes a significant comment on Section 3, Article XIII of the 1987 Constitution: The [cluster] of rights guaranteed in the second paragraph are the right "to security of tenure, humane conditions of work, and a living wage." Again, although these have been set apart by a period (.) from the next sentence and are therefore not modified by the final phrase "as may be provided by law," it is not the intention to place these beyond the reach of valid laws. xxx (emphasis supplied)56 At present, the Labor Code is the primary mechanism to carry out the Constitution's directives. This is clear from Article 357 under Chapter 1 thereof which essentially restates the policy on the protection of labor as worded in the 1973 Constitution, which was in force at the time of enactment of the Labor Code. It crystallizes the fundamental law's policies on labor, defines the parameters of the rights granted to labor such as the right to security of tenure, and prescribes the standards for the enforcement of such rights in concrete terms. While not infallible, the measures provided therein tend to ensure the achievement of the constitutional aims. The necessity for laws concretizing the constitutional principles on the protection of labor is evident in the reliance placed upon such laws by the Court in resolving the issue of the validity of a worker's dismissal. In cases where that was the issue confronting the Court, it consistently recognized the constitutional right to security of tenure and employed the standards laid down by prevailing laws in determining whether such right was violated.58 The Court's reference to laws other than the Constitution in resolving the issue of dismissal is an implicit acknowledgment that the right to security of tenure, while recognized in the Constitution, cannot be implemented uniformly absent a law prescribing concrete standards for its enforcement. As discussed earlier, the validity of an employee's dismissal in previous cases was examined by the Court in accordance with the standards laid down by Congress in the Termination Pay Law, and subsequently, the Labor Code and the amendments thereto. At present, the validity of an employee's dismissal is weighed against the standards laid down in Article 279, as well as Article 282 in relation to Article 277(b) of the Labor Code, for a dismissal for just cause, and Article 283 for a dismissal for an authorized cause. The Effect of Statutory Violation Of Notice and Hearing There is no doubt that the dismissal of an employee even for just cause, without prior notice or hearing, violates the Labor Code. However, does such violation necessarily void the dismissal?

Before I proceed with my discussion on dismissals for just causes, a brief comment regarding dismissals for authorized cause under Article 283 of the Labor Code. While the justiciable question in Serrano pertained to a dismissal for unauthorized cause, the ruling therein was crafted as definitive to dismissals for just cause. Happily, the Decision today does not adopt the same unwise tack. It should be recognized that dismissals for just cause and dismissals for authorized cause are governed by different provisions, entail divergent requisites, and animated by distinct rationales. The language of Article 283 expressly effects the termination for authorized cause to the service of written notice on the workers and the Ministry of Labor at least one (1) month before the intended date of termination. This constitutes an eminent difference than dismissals for just cause, wherein the causal relation between the notice and the dismissal is not expressly stipulated. The circumstances distinguishing just and authorized causes are too markedly different to be subjected to the same rules and reasoning in interpretation. Since the present petition is limited to a question arising from a dismissal for just cause, there is no reason for making any pronouncement regarding authorized causes. Such declaration would be merely obiter, since they are neither the law of the case nor dispositive of the present petition. When the question becomes justiciable before this Court, we will be confronted with an appropriate factual milieu on which we can render a more judicious disposition of this admittedly important question. B. Dismissal for Just Cause There is no express provision in the Labor Code that voids a dismissal for just cause on the ground that there was no notice or hearing. Under Section 279, the employer is precluded from dismissing an employee except for a just cause as provided in Section 282, or an authorized cause under Sections 283 and 284. Based on reading Section 279 alone, the existence of just cause by itself is sufficient to validate the termination. Just cause is defined by Article 282, which unlike Article 283, does not condition the termination on the service of written notices. Still, the dissenting opinions propound that even if there is just cause, a termination may be invalidated due to the absence of notice or hearing. This view is anchored mainly on constitutional moorings, the basis of which I had argued against earlier. For determination now is whether there is statutory basis under the Labor Code to void a dismissal for just cause due to the absence of notice or hearing. As pointed out by Justice Mendoza in Serrano, it was only in 1989 that the Labor Code was amended to enshrine into statute the twin requirements of notice and hearing.59 Such requirements are found in Article 277 of the Labor Code, under the heading "Miscellaneous Provisions." Prior to the amendment, the notice-hearing requirement was found under the implementing rules issued by the then Minister of Labor in 1981. The present-day implementing rules likewise mandate that the standards of due process, including the requirement of written notice and hearing, "be substantially observed."60 Indubitably, the failure to substantially comply with the standards of due process, including the notice and hearing requirement, may give rise to an actionable claim against the employer. Under Article 288, penalties may arise from violations of any provision of the Labor Code. The Secretary of Labor likewise enjoys broad powers to inquire into existing relations between employers and employees. Systematic violations by management of the statutory right to due process would fall under the broad grant of power to the Secretary of Labor to investigate under Article 273. However, the remedy of reinstatement despite termination for just cause is simply not authorized by the Labor Code. Neither the Labor Code nor its implementing rules states that a termination for just cause is voided because the requirement of notice and hearing was not observed. This is not simply an inadvertent semantic failure, but a conscious effort to protect the prerogatives of the employer to dismiss an employee for just cause. Notably, despite the several pronouncements by this Court in the past equating the notice-hearing requirement in labor cases to a constitutional maxim, neither the legislature nor the executive has adopted the same tack, even gutting the protection to provide that substantial compliance with due process suffices. The Labor Code significantly eroded management prerogatives in the hiring and firing of employees. Whereas employees could be dismissed even without just cause under the Termination Pay Law61, the Labor Code affords workers broad security of tenure. Still, the law recognizes the right of the employer to terminate for just cause. The just causes enumerated under the Labor Code serious misconduct or willful disobedience, gross and habitual neglect, fraud or willful breach of trust, commission of a crime by the employee against the employer, and other analogous causes are

characterized by the harmful behavior of an employee against the business or the person of the employer. These just causes for termination are not negated by the absence of notice or hearing. An employee who tries to kill the employer cannot be magically absolved of trespasses just because the employer forgot to serve due notice. Or a less extreme example, the gross and habitual neglect of an employee will not be improved upon just because the employer failed to conduct a hearing prior to termination. In fact, the practical purpose of requiring notice and hearing is to afford the employee the opportunity to dispute the contention that there was just cause in the dismissal. Yet it must be understood if a dismissed employee is deprived of the right to notice and hearing, and thus denied the opportunity to present countervailing evidence that disputes the finding of just cause, reinstatement will be valid not because the notice and hearing requirement was not observed, but because there was no just cause in the dismissal. The opportunity to dispute the finding of the just cause is readily available before the Labor Arbiter, and the subsequent levels of appellate review. Again, as held in Serrano: Even in cases of dismissal under Art. 282, the purpose for the requirement of notice and hearing is not to comply with the Due Process Clause of the Constitution. The time for notice and hearing is at the trial stage. Then that is the time we speak of notice and hearing as the essence of procedural due process. Thus, compliance by the employer with the notice requirement before he dismisses an employee does not foreclose the right of the latter to question the legality of his dismissal. As Art. 277(b) provides, "Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission.62 The Labor Code presents no textually demonstrable commitment to invalidate a dismissal for just cause due to the absence of notice or hearing. This is not surprising, as such remedy will not restore the employer or employee into equity. Absent a showing of integral causation, the mutual infliction of wrongs does not negate either injury, but instead enforces two independent rights of relief. The Damages' Dimensions Award for Damages Must Have Statutory Basis The Court has grappled with the problem of what should be the proper remedial relief of an employee dismissed with just cause, but not afforded either notice or hearing. In a long line of cases, beginning with Wenphil Corp. v. NLRC63 and up until Serrano in 2000, the Court had deemed an indemnification award as sufficient to answer for the violation by the employer against the employee. However, the doctrine was modified in Serrano. I disagree with Serrano insofar as it held that employees terminated for just cause are to be paid backwages from the time employment was terminated "until it is determined that the termination is for just cause because the failure to hear him before he is dismissed renders the termination of his employment without legal effect."64 Article 279 of the Labor Code clearly authorizes the payment of backwages only if an employee is unjustly dismissed. A dismissal for just cause is obviously antithetical to an unjust dismissal. An award for backwages is not clearly warranted by the law. The Impropriety of Award for Separation Pay The formula of one month's pay for every year served does have statutory basis. It is found though in the Labor Code though, not the Civil Code. Even then, such computation is made for separation pay under the Labor Code. But separation pay is not an appropriate as a remedy in this case, or in any case wherein an employee is terminated for just cause. As Justice Vitug noted in his separate opinion in Serrano, an employee whose employment is terminated for a just cause is not entitled to the payment of separation benefits.65 Separation pay is traditionally a monetary award paid as an alternative to reinstatement which can no longer be effected in view of the long passage of time or because of the realities of the situation.66 However, under Section 7, Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code, "[t]he separation from work of an employee for a just cause does not entitle him to the termination pay provided in the Code."67 Neither does the Labor Code itself provide instances wherein separation pay is warranted for dismissals with just cause. Separation pay is warranted only for dismissals for authorized causes, as enumerated in Article 283 and 284 of the Labor Code.

The Impropriety of Equity Awards Admittedly, the Court has in the past authorized the award of separation pay for duly terminated employees as a measure of social justice, provided that the employee is not guilty of serious misconduct reflecting on moral character.68 This doctrine is inapplicable in this case, as the Agabons are guilty of abandonment, which is the deliberate and unjustified refusal of an employee to resume his employment. Abandonment is tantamount to serious misconduct, as it constitutes a willful breach of the employer-employee relationship without cause. The award of separation pay as a measure of social justice has no statutory basis, but clearly emanates from the Court's so-called "equity jurisdiction." The Court's equity jurisdiction as a basis for award, no matter what form it may take, is likewise unwarranted in this case. Easy resort to equity should be avoided, as it should yield to positive rules which pre-empt and prevail over such persuasions.69 Abstract as the concept is, it does not admit to definite and objective standards. I consider the pronouncement regarding the proper monetary awards in such cases as Wenphil Corp. v. NLRC,70Reta,71 and to a degree, even Serrano as premised in part on equity. This decision is premised in part due to the absence of cited statutory basis for these awards. In these cases, the Court deemed an indemnity award proper without exactly saying where in statute could such award be derived at. Perhaps, equity or social justice can be invoked as basis for the award. However, this sort of arbitrariness, indeterminacy and judicial usurpation of legislative prerogatives is precisely the source of my discontent. Social justice should be the aspiration of all that we do, yet I think it the more mature attitude to consider that it ebbs and flows within our statutes, rather than view it as an independent source of funding. Article 288 of the Labor Code as a Source of Liability Another putative source of liability for failure to render the notice requirement is Article 288 of the Labor Code, which states: Article 288 states: Penalties. Except as otherwise provided in this Code, or unless the acts complained of hinges on a question of interpretation or implementation of ambiguous provisions of an existing collective bargaining agreement, any violation of the provisions of this Code declared to be unlawful or penal in nature shall be punished with a fine of not less than One Thousand Pesos (P1,000.00) nor more than Ten Thousand Pesos (P10,000.00), or imprisonment of not less than three months nor more than three years, or both such fine and imprisonment at the discretion of the court. It is apparent from the provision that the penalty arises due to contraventions of the provisions of the Labor Code. It is also clear that the provision comes into play regardless of who the violator may be. Either the employer or the employee may be penalized, or perhaps even officials tasked with implementing the Labor Code. However, it is apparent that Article 288 is a penal provision; hence, the prescription for penalties such as fine and imprisonment. The Article is also explicit that the imposition of fine or imprisonment is at the "discretion of the court." Thus, the proceedings under the provision is penal in character. The criminal case has to be instituted before the proper courts, and the Labor Code violation subject thereof duly proven in an adversarial proceeding. Hence, Article 288 cannot apply in this case and serve as basis to impose a penalty on Riviera Homes. I also maintain that under Article 288 the penalty should be paid to the State, and not to the person or persons who may have suffered injury as a result of the violation. A penalty is a sum of money which the law requires to be paid by way of punishment for doing some act which is prohibited or for not doing some act which is required to be done.72 A penalty should be distinguished from damages which is the pecuniary compensation or indemnity to a person who has suffered loss, detriment, or injury, whether to his person, property, or rights, on account of the unlawful act or omission or negligence of another. Article 288 clearly serves as a punitive fine, rather than a compensatory measure, since the provision penalizes an act that violates the Labor Code even if such act does not cause actual injury to any private person.

Independent of the employee's interests protected by the Labor Code is the interest of the State in seeing to it that its regulatory laws are complied with. Article 288 is intended to satiate the latter interest. Nothing in the language of Article 288 indicates an intention to compensate or remunerate a private person for injury he may have sustained. It should be noted though that in Serrano, the Court observed that since the promulgation of Wenphil Corp. v. NLRC73 in 1989, "fines imposed for violations of the notice requirement have varied from P1,000.00 to P2,000.00 to P5,000.00 to P10,000.00."74 Interestingly, this range is the same range of the penalties imposed by Article 288. These "fines" adverted to in Serrano were paid to the dismissed employee. The use of the term "fines," as well as the terminology employed a few other cases,75 may have left an erroneous impression that the award implemented beginning with Wenphil was based on Article 288 of the Labor Code. Yet, an examination of Wenphilreveals that what the Court actually awarded to the employee was an "indemnity", dependent on the facts of each case and the gravity of the omission committed by the employer. There is no mention in Wenphil of Article 288 of the Labor Code, or indeed, of any statutory basis for the award. The Proper Basis: Employer's Liability under the Civil Code As earlier stated, Wenphil allowed the payment of indemnity to the employee dismissed for just cause is dependent on the facts of each case and the gravity of the omission committed by the employer. However, I considered Wenphil flawed insofar as it is silent as to the statutory basis for the indemnity award. This failure, to my mind, renders it unwise for to reinstate the Wenphil rule, and foster the impression that it is the judicial business to invent awards for damages without clear statutory basis. The proper legal basis for holding the employer liable for monetary damages to the employee dismissed for just cause is the Civil Code. The award of damages should be measured against the loss or injury suffered by the employee by reason of the employer's violation or, in case of nominal damages, the right vindicated by the award. This is the proper paradigm authorized by our law, and designed to obtain the fairest possible relief. Under Section 217(4) of the Labor Code, the Labor Arbiter has jurisdiction over claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations. It is thus the duty of Labor Arbiters to adjudicate claims for damages, and they should disabuse themselves of any inhibitions if it does appear that an award for damages is warranted. As triers of facts in a specialized field, they should attune themselves to the particular conditions or problems attendant to employer-employee relationships, and thus be in the best possible position as to the nature and amount of damages that may be warranted in this case. The damages referred under Section 217(4) of the Labor Code are those available under the Civil Code. It is but proper that the Civil Code serve as the basis for the indemnity, it being the law that regulates the private relations of the members of civil society, determining their respective rights and obligations with reference to persons, things, and civil acts.76 No matter how impressed with the public interest the relationship between a private employer and employee is, it still is ultimately a relationship between private individuals. Notably, even though the Labor Code could very well have provided set rules for damages arising from the employer-employee relationship, referral was instead made to the concept of damages as enumerated and defined under the Civil Code. Given the long controversy that has dogged this present issue regarding dismissals for just cause, it is wise to lay down standards that would guide the proper award of damages under the Civil Code in cases wherein the employer failed to comply with statutory due process in dismissals for just cause. First. I believe that it can be maintained as a general rule, that failure to comply with the statutory requirement of notice automatically gives rise to nominal damages, at the very least, even if the dismissal was sustained for just cause. Nominal damages are adjudicated in order that a right of a plaintiff which has been violated or invaded by another may be vindicated or recognized without having to indemnify the plaintiff for any loss suffered by him.77 Nominal damages may likewise be awarded in every obligation arising from law, contracts, quasi-contracts, acts or omissions punished by law, and quasi-delicts, or where any property right has been invaded. Clearly, the bare act of failing to observe the notice requirement gives rise to nominal damages assessable against the employer and due the employee. The Labor Code indubitably entitles the

employee to notice even if dismissal is for just cause, even if there is no apparent intent to void such dismissals deficiently implemented. It has also been held that one's employment, profession, trade, or calling is a "property right" and the wrongful interference therewith gives rise to an actionable wrong.78 In Better Buildings, Inc. v. NLRC,79 the Court ruled that the while the termination therein was for just and valid cause, the manner of termination was done in complete disregard of the necessary procedural safeguards.80 The Court found nominal damages as the proper form of award, as it was purposed to vindicate the right to procedural due process violated by the employer.81 A similar holding was maintained in Iran v. NLRC82 and Malaya Shipping v. NLRC.83 The doctrine has express statutory basis, duly recognizes the existence of the right to notice, and vindicates the violation of such right. It is sound, logical, and should be adopted as a general rule. The assessment of nominal damages is left to the discretion of the court,84 or in labor cases, of the Labor Arbiter and the successive appellate levels. The authority to nominate standards governing the award of nominal damages has clearly been delegated to the judicial branch, and it will serve good purpose for this Court to provide such guidelines. Considering that the affected right is a property right, there is justification in basing the amount of nominal damages on the particular characteristics attaching to the claimant's employment. Factors such as length of service, positions held, and received salary may be considered to obtain the proper measure of nominal damages. After all, the degree by which a property right should be vindicated is affected by the estimable value of such right. At the same time, it should be recognized that nominal damages are not meant to be compensatory, and should not be computed through a formula based on actual losses. Consequently, nominal damages usually limited in pecuniary value.85 This fact should be impressed upon the prospective claimant, especially one who is contemplating seeking actual/compensatory damages. Second. Actual or compensatory damages are not available as a matter of right to an employee dismissed for just cause but denied statutory due process. They must be based on clear factual and legal bases,86 and correspond to such pecuniary loss suffered by the employee as duly proven.87 Evidently, there is less degree of discretion to award actual or compensatory damages. I recognize some inherent difficulties in establishing actual damages in cases for terminations validated for just cause. The dismissed employee retains no right to continued employment from the moment just cause for termination exists, and such time most likely would have arrived even before the employer is liable to send the first notice. As a result, an award of backwages disguised as actual damages would almost never be justified if the employee was dismissed for just cause. The possible exception would be if it can be proven the ground for just cause came into being only after the dismissed employee had stopped receiving wages from the employer. Yet it is not impossible to establish a case for actual damages if dismissal was for just cause. Particularly actionable, for example, is if the notices are not served on the employee, thus hampering his/her opportunities to obtain new employment. For as long as it can be demonstrated that the failure of the employer to observe procedural due process mandated by the Labor Code is the proximate cause of pecuniary loss or injury to the dismissed employee, then actual or compensatory damages may be awarded. Third. If there is a finding of pecuniary loss arising from the employer violation, but the amount cannot be proved with certainty, then temperate or moderate damages are available under Article 2224 of the Civil Code. Again, sufficient discretion is afforded to the adjudicator as regards the proper award, and the award must be reasonable under the circumstances.88 Temperate or nominal damages may yet prove to be a plausible remedy, especially when common sense dictates that pecuniary loss was suffered, but incapable of precise definition. Fourth. Moral and exemplary damages may also be awarded in the appropriate circumstances. As pointed out by the Decision, moral damages are recoverable where the dismissal of the employee was attended by bad faith, fraud, or was done in a manner contrary to morals, good customs or public policy, or the employer committed an act oppressive to labor.89 Exemplary damages may avail if the dismissal was effected in a wanton, oppressive or malevolent manner. Appropriate Award of Damages to the Agabons

The records indicate no proof exists to justify the award of actual or compensatory damages, as it has not been established that the failure to serve the second notice on the Agabons was the proximate cause to any loss or injury. In fact, there is not even any showing that such violation caused any sort of injury or discomfort to the Agabons. Nor do they assert such causal relation. Thus, the only appropriate award of damages is nominal damages. Considering the circumstances, I agree that an award of Fifteen Thousand Pesos (P15,000.00) each for the Agabons is sufficient. All premises considered, I VOTE to: (1) DENY the PETITION for lack of merit, and AFFIRM the Decision of the Court of Appeals dated 23 January 2003, with the MODIFICATION that in addition, Riviera Homes be ORDERED to pay the petitioners the sum of Fifteen Thousand Pesos (P15,000.00) each, as nominal damages. (2) HOLD that henceforth, dismissals for just cause may not be invalidated due to the failure to observe the due process requirements under the Labor Code, and that the only indemnity award available to the employee dismissed for just cause are damages under the Civil Code as duly proven. Any and all previous rulings and statements of the Court inconsistent with this holding are now deemed INOPERATIVE. DANTE O. TINGA Associate Justice

Footnotes
1

Penned by Associate Justice Marina L. Buzon and concurred in by Associate Justices Josefina Guevara-Salonga and Danilo B. Pine.
2

Rollo, p. 41. Id., pp. 13-14. Id., p. 92. Id., p. 131. Id., p. 173. Id., p. 20. Id., pp. 21-23. Id., p. 45. Id., pp. 42-43. Rosario v. Victory Ricemill, G.R. No. 147572, 19 February 2003, 397 SCRA 760, 767. Reyes v. Maxim's Tea House, G.R. No. 140853, 27 February 2003, 398 SCRA 288, 298. Santos v. San Miguel Corporation, G.R. No. 149416, 14 March 2003, 399 SCRA 172, 182. Columbus Philippine Bus Corporation v. NLRC, 417 Phil. 81, 100 (2001). De Paul/King Philip Customs Tailor v. NLRC, 364 Phil. 91, 102 (1999). Sta. Catalina College v. NLRC, G.R. No. 144483, 19 November 2003.

10

11

12

13

14

15

16

17

Cosmos Bottling Corporation v. NLRC, G.R. No. 111155, 23 October 1997, 281 SCRA 146, 153-154.
18

G.R. No. L-49875, 21 November 1979, 94 SCRA 472, 478. Judy Philippines, Inc. v. NLRC, 352 Phil. 593, 606 (1998). Philippine-Singapore Transport Services, Inc. v. NLRC, 343 Phil. 284, 291 (1997).

19

20

21

See Stolt-Nielsen Marine Services, Inc. v. NLRC, G.R. No. 128395, 29 December 1998, 300 SCRA 713, 720.
22

G.R. No. 117040, 27 January 2000, 323 SCRA 445. G.R. No. 80587, 8 February 1989, 170 SCRA 69. Id. at 76. Id.

23

24

25

26

Solesbee v. Balkcom, 339 U.S. 9, 16 (1950) (Frankfurter, J., dissenting). Due process is violated if a practice or rule "offends some principle of justice so rooted in the traditions and conscience of our people as to be ranked as fundamental;" Snyder v. Massachusetts, 291 U.S. 97, 105 (1934).
27

Department Order No. 9 took effect on 21 June 1997. Department Order No. 10 took effect on 22 June 1997.
28

G.R. No. 115394, 27 September 1995, 248 SCRA 535. G.R. No. 122666, 19 June 1997, 274 SCRA 386. G.R. No. 114313, 29 July 1996, 259 SCRA 699, 700.

29

30

31

Serrano, supra, Vitug, J., Separate (Concurring and Dissenting) Opinion, 323 SCRA 524, 529-530 (2000).
32

Capili v. NLRC, G.R. No. 117378, 26 March 1997, 270 SCRA 488, 495. Filipro, Inc. v. NLRC, G.R. No. L-70546, 16 October 1986, 145 SCRA 123. Calalang v. Williams, 70 Phil. 726, 735 (1940). Gelos v. Court of Appeals, G.R. No. 86186, 8 May 1992, 208 SCRA 608, 616. G.R. No. 112100, 27 May 1994, 232 SCRA 613, 618. Art. 2221, Civil Code.

33

34

35

36

37

38

G.R. No. 108405. April 4, 2003 citing Kwikway Engineering Works v. NLRC, G.R. No. 85014, 22 March 1991, 195 SCRA 526, 532; Aurelio v. NLRC, G.R. No. 99034, 12 April 1993, 221 SCRA 432, 443; andSampaguita Garments Corporation v. NLRC, G.R. No. 102406, 17 June 1994, 233 SCRA 260, 265.
39

Id. citing Better Buildings, Inc. v. NLRC, G.R. No. 109714, 15 December 1997, 283 SCRA 242, 251; Iran v. NLRC, G.R. No. 121927, 22 April 1998, 289 SCRA 433, 442.
40

Savellano v. Northwest Airlines, G.R. No. 151783, 8 July 2003. Villar v. NLRC, G.R. No. 130935, 11 May 2000.

41

42

Rollo, pp. 60-71. UST Faculty Union v. NLRC, G.R. No. 90445, 2 October 1990. "Whereas" clauses, P.D. No. 851.

43

44

45

"Art. 113. Wage deduction. - No employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees except: (a) In cases where the worker is insured with his consent by the employer, and the deduction is to recompense the employer for the amount paid by him as premium on the insurance; (b) For union dues, in cases where the right of the worker or his union to check off has been recognized by the employer or authorized in writing by the individual worker concerned; and (c) In cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment. TINGA, J:
1

380 Phil. 416 (2000). Id. Id. at 443, 445, 448. Rollo, p. 42. Id. at 32. Ibid. Id. at 59-60. Id. at 15. Id. at 34. Id. at 92.

10

11

Id. at 91. The address indicated in the identification cards was "V 6 Cruz Iron Works, E. Rodriguez Paraaque City."
12

Ibid citing PAL v. NLRC, 279 SCRA 533.

13

In a Decision dated 21 August 2000, penned by Commissioner V.R. Calaycay, and concurred in by Presiding Commissioner R. Aquino and Commissioner A. Gacutan.
14

Rollo, p. 127.

15

Penned by Associate Justice M. Buzon, concurred in by Associate Justices J. GuevaraSalonga and D. Pine.
16

In their Petition for Certiorari before the Court of Appeals, the Agabons particularly claimed that they were required to work on four holidays, namely, Araw Ng Kagitingan, National Heroes Day, Bonifacio Day, and Rizal Day. See Rollo, p. 154.
17

Deducted from Virgilio Agabon's thirteenth (13th) month pay were his SSS loan and expenses for shoes. Rollo, pp. 171-172.

18

Rollo, p. 173. Id. at 22. Id. at 23 citing Kingsize Manufacturing Corporation v. NLRC, 238 SCRA 349. Rollo, p. 20.

19

20

21

22

Palencia v. NLRC, G.R. No. L-75763, 21 August 1987; Pure Blue Industries v. NLRC, G.R. No. 115879, 16 April 1997.
23

Rollo, pp. 129, 170.

24

Both the NLRC and the Court of Appeals noted that the 10 June 1999 conference between the Agabons and Riviera Homes was at the behest of the Agabons, thus countering the claim of strained relations. Rollo, pp. 130, 170-171.
25

Rollo, p. 91. Supra note 6. Id. Supra note 1. Supra note 1 at 446. See Section 1, Republic Act No. 1052, which states: Sec. 1. In cases of employment, without a definite period, in a commercial, industrial, or agricultural establishment or enterprise, the employer or the employee may terminate at any time the employment with just cause; or without just cause in the case of an employee by serving written notice on the employer at least one month in advance, or in the case of an employer, by serving such notice to the employee at least one month in advance or one-half month for every year of service of the employee, whichever is longer, a fraction of at least six months being considered as one whole year. The employee, upon whom no such notice was served in case of termination of employment without just cause shall be entitled to compensation from the date of termination of his employment in an amount equivalent to his salaries or wages corresponding to the required period of notice.

26

27

28

29

30

31

124 Phil. 698 (1966). Id. at 703. 139 Phil. 747 (1969). Id. at 754. Serrano v. NLRC, supra note 1 at 447. G.R. No. L-38482, 18 June 1976, 71 SCRA 470. Serrano v. NLRC, supra note 1 at 480. Serrano, supra note 1 at 445-446. G.R. No. 81561, 18 January 1991, 193 SCRA 57.

32

33

34

35

36

37

38

39

40

Id. at 67. See G. Gunther and K. Sullivan, Constitutional Law (14th ed.) at 867. Separate Opinion of Justice Panganiban, p. 12.

41

42

43

See e.g., Morehead v. State of New York, 298 U.S. 587 (1936), which affirmed the invalidity of minimum wage laws as previously declared in Adkins v. Children's Hospital, 261 U.S. 525 (1923).
44

Famously justified by the Supreme Court as an assertion of the "liberty of contract", or "the right to contract about one's affairs", as contained in the Fourteenth Amendment. Adkins v. Children's Hospital, 261 U.S. 525, 545. (1923). But as Justice Holmes famously critiqued: "Contract is not specially mentioned in the text (of the Fourteenth Amendment) that we have to construe. It is merely an example of doing what you want to do, embodied in the word liberty. But pretty much all law consists in forbidding men to do some things that they want to do, and contract is no more exempt from law than other acts." Adkins v. Children's Hospital. Id. at 568.
45

See People v. Tudtud, G.R. No. 144037, 26 September 2003. G.R. No. 106027, 234 SCRA 441, 25 July 1994. Id. at 451-452.

46

47

48

335 Phil. 82 (1997). The Court therein was divided, with twelve voting for, and three against the decision. Interestingly, both Justices Puno and Panganiban adopted the dissenting position that the provisions of Article XII of the Constitution alone were insufficient to accord the Filipino bidder a preferential right to obtain the winning bid for Manila Hotel. Their concession as to the enforceability of paragraph 2, Section 10, Article XII of the Constitution without enabling legislation was in a situation wherein if the bids of the Filipino and the foreign entity were tied. Id. at 154 (J. Puno, dissenting) and 154 (J. Panganiban, dissenting).
49

Id. at 102 citing 16 Am Jur. 2d 281. Id. at 103-104 citing 16 Am Jur 2d 283-284. II Record of the Constitutional Commission: Proceedings and Debates 613. Id. at 617. Id. at 626. Id. at 644.

50

51

52

53

54

55

The test suggested by Justice Puno in the Manila Hotel case, supra note 47, is as definitive as any proposed method of analysis could ever be. "A searching inquiry should be made to find out if the provision is intended as a present enactment, complete in itself as a definitive law, or if it needs future legislation for completion and enforcement. The inquiry demands a micro-analysis and the context of the provision in question." J. Puno, dissenting, id. at 141-142. See also Rev. Pamatong v. COMELEC, G.R. No. 161872, 13 April 2004.
56

J. Bernas, The 1987 Constitution of the Republic of the Philippines: A Commentary (1996), at 1064.
57

Article 3, Chapter I of the Labor Code declares: Declaration of basic policy.The State shall afford full protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between workers and employers. The State shall assure

the rights of workers to self-organization, collective bargaining, security of tenure and just and humane conditions of work.
58

See Phil. Aeolus Automotive United Corp. v. NLRC, 387 Phil 250 (2000); Gonzales v. National Labor Relations Commission, 372 Phil 39 (1999); Jardine Davies v. National Labor Relations Commission, 370 Phil 310 (1999); Pearl S. Buck Foundation v. National Labor Relations Commission, G.R. No. 80728, February 21, 1990, 182 SCRA 446; Bagong Bayan Corporation, Realty Investors & Developers v. National Labor Relations Commission, G.R. No. 61272, September 29, 1989, 178 SCRA 107; Labajo v. Alejandro, et al., G.R. No/ L80383, September 26, 1988, 165 SCRA 747; D.M. Consunji, Inc. v. Pucan, et al., G.R. No. L71413, March 21, 1988; 159 SCRA 107; Santos v. National Labor Relations Commission, G.R. No. L-76271,September 21, 1987, 154 SCRA 166; People's Bank & Trust Co. v. People's Bank & Trust Co. Employees Union, 161 Phil 15 (1976); Philippine Movie Pictures Association v. Premiere Productions, 92 Phil. 843 (1953); Phil. Refining Co. v. Garcia, supra.
59

Serrano v. NLRC, supra note 1. Section 2, Rule XXIII, Book V, Omnibus Rules Implementing the Labor Code. Supra note 2. Serrano v. NLRC, supra note 1 at 445. G.R. No. 80587, 8 February 1989, 170 SCRA 69. Serrano, supra note 1 at 453. Serrano, supra note 1 at 485; J. Vitug, separate concurring and dissenting. Balaquezon EWTU v. Zamora, G.R. No. L-46766-7, 1 April 1980, 97 SCRA 5, 8.

60

61

62

63

64

65

66

67

"xxx without prejudice, however, to whatever rights, benefits, and privileges he may have under the applicable individual or collective bargaining agreement with the employer or voluntary employer policy or practice". Section 7, Rule 1, Book VI, Omnibus Rules Implementing the Labor Code.
68

See Philippine Rabbit Bus Lines, Inc. v. NLRC, G.R. No. 98137, 15 September 1997, 279 SCRA 106, 115, citing cases.
69

Aguila v. CFI, G.R. No. L-48335, 15 April 1988, 160 SCRA 352, 360. "For all its conceded merits, equity is available only in the absence of law and not as its replacement. Equity is described as justice outside legality, which simply means that it cannot supplant although it may, as often happens, supplement the law."Id.
70

170 SCRA 69 (1989). G.R. No. 112100, May 27, 1994, 232 SCRA 613.

71

72

Black's Law Dictionary, 1990 ed., p. 1133; citing Hidden Hollow Ranch v. Collins, 146 Mont. 321, 406 P.2d 365, 368.
73

170 SCRA 69 (1989). Serrano v. NLRC, supra note 1 at 442.

74

75

See e.g., Reta v. NLRC, G.R. No. 112100, 27 May 1994, 232 SCRA 613, wherein the Court held that "private respondents should pay petitioner P10,000.00 as penalty for failure to comply with the due process requirement." Id. at 618.
76

A. Tolentino, Civil Code of the Philippines (1990 ed.), at 11; citing 9 Fabres 10. Article 2221, Civil Code.

77

78

Ferrer v. NLRC, G.R. No. 100898, 5 July 1993; citing Callanta vs. Carnation Philippines, Inc., 145 SCRA 268.
79

347 Phil. 521, 531 (1997). Id. at 531. Id. G.R. No. 121927, 22 April 1998.

80

81

82

83

G.R. No. 121698, 26 March 1998. The ponente in all three cases was Justice Flerida Ruth Romero.
84

See Article 2216, Civil Code. See also Saludo v. Court of Appeals, G.R. No. 95536, 23 March 1992.
85

In relation to Article 2224 of the Civil Code, nominal damages are less than temperate/moderate damages or compensatory damages.
86

See De la Paz, Jr. v. IAC, 154 SCRA 65; Chavez v. Gonzales, 32 SCRA 547. See Art. 2199, Civil Code. Art. 2225, Civil Code. Page 16, Decision, citing jurisprudence.

87

88

89