VIRGILIO AGABON, et al. v.

NLRC

G.R. No. 158693

November 17, 2004

FACTS:
Virgilio and Jenny Agabon worked for respondent Riviera Home Improvements, Inc. as
gypsum and cornice installers from January 1992 until Feb 1999. Their employment
was terminated when they were dismissed for allegedly abandoning their work.
Petitioners Agabon then filed a case of illegal dismissal.
The LA ruled in favor of the spouses and ordered Riviera to pay them their money
claims. The NLRC reversed the LA, finding that the Agabons were indeed guilty of
abandonment. The CA modified the LA by ruling that there was abandonment but
ordering Riviera to pay the Agabons money claims.
The arguments of both parties are as follows:
The Agabons claim, among others that Riviera violated the requirements of notice and
hearing when the latter did not send written letters of termination to their addresses.
Riviera admitted to not sending the Agabons letters of termination to their last known
addresses because the same would be futile, as the Agabons do not reside there
anymore. However, it also claims that the Agabons abandoned their work. More than
once, they subcontracted installation works for other companies. They already were
warned of termination if the same act was repeated, still, they disregarded the warning.
ISSUES:
1. Whether the Agabons were illegally dismissed
2. Whether Riviera violated the requirements of notice and hearing
3. Is the violation of the procedural requirements of notice and hearing for termination of
employees a violation of the Constitutional due process?
4. What are the consequences of violating the procedural requirements of termination?
HELD:
Valid dismissal but violation of statutory due process = payment of nominal
damages (P30,000) & balance of 13th month pay, etc.
1. No. There was just cause for their dismissal, i.e., abandonment. Art. 282 of the Laboc
Code specifies the grounds for just dismissal, to wit:
a. Serious misconduct or willful disobedience of the lawful orders of the employer or
his duly authorized representative in connection with the employees work
b. Gross and habitual neglect of the by the employee of his duties (includes
abandonment)
c. Fraud or willful breach of the trust reposed by the employer or his duly authorized
representative to the employee

d. Commission of a crime or offense by the employee against the person of the

employer or any member of his immediate family or his duly authorized
representative
e. Any other causes analogous to the foregoing.
To establish abandonment, two elements must be present:
a. The unjustified failure of the employee to report for work
b. A clear intention to sever e-e relationship, manifested by overt acts
Here, the Agabons were frequently absent from work for having performed
installation work for another company, despite prior warning given by Riviera. This
clearly establishes an intention to sever the e-e relationship between them, and
which constitutes abandonment.
2. Yes. While the employer has the right to expect good performance, diligence, good
conduct and loyalty from its employees, it also has the duty to provide just
compensation to his employees and to observe the procedural requirements of notice
and hearing in the termination of his employees.
Procedure of termination (Omnibus Rules Implementing the Labor Code):
a. A written notice to the employee specifying the grounds for termination and giving
the employee reasonable opportunity to be heard
b. A hearing where the employee is given the opportunity to respond to the charges
against him and present evidence or rebut the evidence presented against him (if
he so requests)
c. A written notice of termination indicating that grounds have been established to
justify his termination upon due consideration of all circumstances
In this case, Riviera failed to notify the Agabons of their termination to their last
known addresses. Hence, they violated the procedural requirement laid down by the
law in the termination of employees.
3. No. Constitutional due process is that provided under the Constitution, which involves
the protection of the individual against governmental oppression and the assurance
of his rights In civil, criminal and administrative proceedings; statutory due process is
that found in the Labor Code and its Implementing Rules and protects the individual
from being unjustly terminated without just or authorized cause after notice and
hearing.
The two are similar in that they both have two aspects: substantive due process and
procedural due process. However, they differ in that under the Labor Code, the first
one refers to the valid and authorized causes of employment termination, while the
second one refers to the manner of dismissal. A denial of statutory due process is not
the same as a denial of Constitutional due process for reasons enunciated in
Serrano v. NLRC.

4.

The dismissal is valid, but Riviera should pay nominal damages to the Agabons in
vindication of the latter for violating their right to notice and hearing. The penalty is in
the nature of a penalty or indemnification, the amount dependent on the facts of each
case, including the nature of gravity of offense of the employer.
In this case, the Serrano doctrine was re-examined.
First, in the Serrano case, the dismissal was upheld, but it was held to be ineffectual
(without legal effect). Hence, Serrano was still entitled to the payment of his
backwages from the time of dismissal until the promulgation of the court of the
existence of an authorized cause. Further, he was entitled to his separation pay as
mandated under Art. 283. The ruling is unfair to employers and has the danger of the
following consequences:
a. The encouragement of filing frivolous suits even by notorious employees who
were justly dismissed but were deprived of statutory due process; they are
rewarded by invoking due process
b. It would create absurd situations where there is just or authorized cause but a
procedural infirmity invalidates the termination, ie an employee who became a
criminal and threatened his co-workers lives, who fled and could not be faound
c. It could discourage investments that would generate employment in the economy
Second, the payment of backwages is unjustified as only illegal termination gives the
employee the right to be paid full backwages. When the dismissal is valid or upheld,
the employee has no right to backwages.

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.
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 nonpayment. 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.
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.

petition is DENIED. However, Service incentive leave pay, 13th month pay and
nominal damages must be PAID to petitioners.

ADDITIONAL NOTES:
1. Dismissals based on just causes: acts or omissions attributable to the employee;
no right to claim backwages or to pay separation pay (separation pay is subject
to exception, ie if termination is not based on serious misconduct or a conduct
reflecting the moral depravity of a person, separation pay may be granted by
reason of social justice)
Dismissals based on authorized causes: involve grounds provided under the
Labor Code; employee (and DOLE) is entitled the payment of separation pay
(redundancy and installation of labor-saving devices: 1 month pay or 1 month/yr
of service, whichever is higher; retrenchment and closure or cessation of
business: 1 month pay or month per year of service, whichever is higher)
Illegal termination: employee is entitled to the payment of full backwages as well
as reinstatement without loss of seniority rights and other privileges, inclusive of
allowances and other monetary claims from the time compensation was withheld
until reinstatement; if reinstatement is not possible, separation pay shall be given.