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 :
p

This petition for review seeks to reverse the decision 1 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, 1992 2 until
February 23, 1999 when they were dismissed for abandonment of work.
Petitioners then filed a complaint for illegal dismissal and payment of money claims 3 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.
aIcCTA

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. 9In 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
conduct 19 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;
CaEATI

(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 non-compliance 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.
AcIaST

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 processshould 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. . . . 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.
DTAHEC

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 labormanagement 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 same 43 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 113 45 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.
STCDaI

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 is
AFFIRMED with the MODIFICATION that private respondent Riviera Home Improvements,
Inc. is further ORDERED 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.
Quisumbing, Carpio, Carpio-Morales, Callejo, Sr. and Azcuna, JJ ., concur.
Davide, Jr., C .J ., I join Mr. Justice Puno in his dissenting opinion.
Puno and Panganiban, JJ ., See dissenting opinion.
Sandoval-Gutierrez, J ., I join Justice Puno in his dissent.
Austria-Martinez, J ., I join in the separate opinion of Justice Tinga.
Corona, J ., is on leave.
Tinga, J ., In the result, per separate opinion.
Chico-Nazario, J ., I concur in J. Puno's dissenting opinion.
Garcia, J ., I join J. Puno's dissenting opinion.
PUNO, J., dissenting:
"Strike if you will, but hear me first!" was adjuration of Themistocles, c. 528462 B.C.,
Athenian General and Statesman, to Eurybiades, Admiral of the Spartan fleet, who, in an
argument, raised his staff as though to strike him. 1It was the same plea, centuries later, of
petitioner-employees Jenny M. Agabon and Virgilio C. Agabon to their employer who fired
them from their jobs without hearing them first.
In the last two decades, this Court has wrestled with due process issues in dismissal cases.
In February 1989, Wenphil Corporation v. National Labor Relations Commission 2 put an
abrupt end to the long-standing doctrine nullifying the dismissal of an employee even if based
on a just or authorized cause, if done without prior notice to the employee.Wenphil upheld the
dismissal of a crew of a fast food chain for just cause even if it was effected without the
requisite notice. And in compensation for the deprivation of his prior right to notice and

investigation before dismissal, he was given a measly sum of P1,000.00. Since then, lowly
employees have been cut-off from their bloodline their jobs without due process of law.
A decade later, we re-examined Wenphil in Serrano v. National Labor Relations
Commission 3 but the struggle of our employees for job security turned from bad to worse.
In Serrano, the majority held that "the employer's failure to comply with the notice requirement
does not constitute a denial of due process but a mere failure to observe a procedure for the
termination of employment which makes the termination of employment merely
ineffectual." 4 Thus, the dismissal without prior notice was further legalized and the dismissed
employee was simply awarded some crumbs backwages from the time his employment
was terminated until it was determined that the termination was for an authorized cause. I
dissented and voted for the return of the pre-Wenphil rule to stop the pernicious practice of
dismissals without prior notice.
After four years of the Serrano rule, I see no reason to relent from my Dissenting Opinion as
the situation has even turned from worse to worst. Agabon is doing away with the crumbs and
is leaving the employee with no more than a tiny bit of grain. As such, I feel the strong
urgency to right away revert to the pre-Wenphil era to rectify a grave error and atone for the
wanton, albeit now licensed, violation of the pre-dismissal notice requirement committed by
employers with twisted ethos.
There are enduring reasons for resisting Wenphil, its clone Serrano, and now their
offspring Agabon. As I said inSerrano
Our ten (10) years experience with Wenphil is not a happy one. Unscrupulous
employers have abused the Wenphil ruling. They have dismissed without notice
employees including those who are not as eminently undesirable as the Wenphil
employee. They dismissed employees without notice as a general rule when it should
be the exception. The purpose of the pre-dismissal notice requirement was entirely
defeated by employers who were just too willing to pay an indemnity for its violation.
The result, as the majority concedes, is that the indemnity we imposed has not been
effective to prevent unjust dismissals of employees. To be sure, this is even a
supreme understatement. The ugly truth is that Wenphil is the mother of many unjust
and unauthorized dismissals of employees who are too weak to challenge their
powerful employers.
acCETD

As the Wenphil indemnity doctrine has proved to be highly inimical to the interest of
our employees, I humbly submit a return to the pre-Wenphil rule where a reasonless
violation of the pre-dismissal notice requirement makes the dismissal of an employee
illegal and results in his reinstatement. In fine, we should strike down as illegal the
dismissal of an employee even if it is for a justified end if it is done thru unjustified
means for we cannot be disciples of the Machiavellian doctrine of the end justifies the
means. With due respect, the majority decision comes too near this mischievous
doctrine by giving emphasis on the end and not on the means of dismissal of
employees. What grates is that the majority today espouses a doctrine more
pernicious than Wenphil for now it announces that a violation of the pre-dismissal
notice requirement does not even concern due process. The reasons relied upon by
the majority for this new ruling against the job security of employees cannot inspire
assent.

xxx xxx xxx

The new ruling of the majority erodes the sanctity of the most important right of an
employee, his constitutional right to security of tenure. This right will never be
respected by the employer if we merely honor the right with a price tag. The policy of
"dismiss now and pay later" favors [moneyed] employers and is a mockery of the right
of employees to social justice. There is no way to justify this pro-employer stance
when the 1987 Constitution is undeniably more pro-employee than our previous
fundamental laws. Section 18 of Article II (State Policies) provides that "the State
affirms labor as a primary social economic force. It shall protect the rights of workers
and promote their welfare." Section 1 Article XIII (Social Justice and Human Rights),
calls for the reduction of economic inequalities. Section 3, Article XIII (Labor) directs
the State to accord full protection to labor and to guaranty security of tenure. These
are constitutional polestars and not mere works of cosmetology. Our odes to the poor
will be meaningless mouthfuls if we cannot protect the employee's right to due
process against the power of the peso of the employers.
To an employee, a job is everything. Its loss involves terrible repercussions
stoppage of the schooling of children, ejectment from leased premises, hunger to the
family, a life without any safety net. Indeed, to many employees, dismissal is their
lethal injection. Mere payment of money by way of separation pay and backwages will
not secure food on the mouths of employees who do not even have the right to
choose what they will chew. 5

The instant case is a perfect portrait of this reversal of fortune. On January 2, 1992,
petitioners Jenny Agabon and Virgilio Agabon were hired as gypsum board and cornice
installers by respondent Riviera Home Improvements, Inc., a corporation engaged in the
business of selling and installing ornamental and construction materials. Seven (7) years
later, on February 23, 1999, their services were terminated on the ground of abandonment of
work. Apparently, petitioners were subcontracting installation jobs for another company and
were frequently absent from work. Thus, when petitioners reported for work on February 23,
1999, respondent company simply refused to reemploy them unless they agree to work on a
"pakyaw" basis. Petitioners demurred since this would mean losing their benefits. They were
given their walking papers without according them the twin requirements of notice and
hearing. Respondent company stated that they abandoned their jobs. Hence, petitioners filed
a complaint for illegal dismissal and payment of money claims against respondent company.
On December 28, 1999, the Labor Arbiter held that the dismissal of petitioners was illegal and
ordered respondent company to pay them backwages, holiday and service incentive leave
pay, and separation pay in lieu of reinstatement. On appeal, the NLRC reversed the decision
of the Labor Arbiter and ruled that the latter erred in awarding backwages and separation pay
to petitioners who deliberately abandoned their work. On certiorari, the Court of Appeals
affirmed the findings of the NLRC but ordered respondent company to pay petitioners their
money claims. Hence, this petition for review on the lone issue of whether petitioners were
illegally dismissed from the service.
While I appreciate the view of Mme. Justice Ynares-Santiago that "[t]he indemnity to be
imposed should be stiffer in order to discourage the abhorrent practice of 'dismiss now, pay
later,'" 6 the majority, however, simply retained, if not diminished, the indemnity granted to the
dismissed employees. Consequently, I respectfully dissent and maintain my view that the

workingman's right to job security and due process of law cannot be measured with a reduced
price tag. The majority opinion treats an employee's right to due process as no more than an
abstract declaration. I am unwilling to diminish petitioners' constitutional right to procedural
due process which is necessary to protect their security of tenure. I proffer the following
precepts:

One. Our Constitution is an ode to social justice. The Court should give due obeisance to this
ode for social justice is not a mere euphony of words. In other countries, political debates over
the last two centuries continue to rage on whether social rights should be given constitutional
protection. 7 In our jurisdiction, however, constitutional social rights have long been embedded
in all our Constitutions, and thus at the very least should be respected and protected by our
courts.
Social justice is that virtue by which individuals and groups fulfill their obligations to human
society by contributing positively to the complete well-being of their fellowmen considered as
members of that society, and hence regulate all their actions accordingly. 8 Social justice as a
creed in the 1935 Constitution was crafted by Delegate Jose C. Locsin. He persistently
pounced on the necessity of including social justice in the Constitution to protect those who
have little in life. In the course of the debates, the core concept of social justice was
developed to mean
. . . justice to the common tao, the "little man" so-called. It means justice to him, his
wife, and children in relation to their employers in the factories, in the farms, in the
mines, and in other employments. It means justice to him in the education of his
children in the schools, in his dealings with the different offices of the government,
including the courts of justice. 9

1935 Constitution
Thus, Article II (Declaration of Principles), Section 5 of the 1935 Constitution, provides that
"[t]he promotion of social justice to insure the well-being and economic security of all the
people should be the concern of the State." Mr. Justice Jose Laurel, in his concurring opinion
in the main case of Ang Tibay v. Court of Industrial Relations, 10 explained the constitutional
milestone
Our Constitution was adopted in the midst of surging unrest and dissatisfaction
resulting from economic and social distress which was threatening the stability of
governments the world over. Alive to the social and economic forces at work, the
framers of our Constitution boldly met the problems and difficulties which faced them
and endeavored to crystallize, with more or less fidelity, the political, social and
economic propositions of their age . . . (by inserting) general provisions in the
Constitution which are intended to bring about the needed social and economic
equilibrium between component elements of society through the application of what
may be termed as the justitia communis advocated by Grotius and Leibinitz many
years ago to be secured through the counterbalancing of economic and social forces
and opportunities which should be regulated, if not controlled by the State or placed,
as it were, in custodia societatis. "The promotion of social justice to insure the well-

being and economic security of all the people" was thus inserted as a vital principle in
our Constitution. 11

And, as quoted in the 1940 case of Antamok Goldlfields Mining Company v. Court of
Industrial Relations, 12 this Court held that in order that the declaration of the principle of social
justice "may not just be an empty medley of words, the Constitution in various sections
thereof has provided the means towards its realization." 13 Thus, the promotion of the welfare
of the working classes was concretized in Article XIII (General Provisions), Section 6, which
mandates that "[t]he State shall afford protection to labor, especially to working women and
minors, and shall regulate the relations . . . between labor and capital in industry and in
agriculture. The State may provide for compulsory arbitration."
EcDSHT

Delegate Locsin even exerted a last-ditch effort to amend the draft of the constitutional
provision on labor to read in part, "[t]he State recognizes the right of all workers to work and
shall enact laws protecting labor." In defense of his substitute amendment, Delegate Locsin in
a stirring speech dwelt on the necessity of paying more attention to the needs of the working
class and of including in the Constitution a provision guaranteeing to all workers the right to
work. His substitute amendment was however defeated, but only because his ideas were
already said to be within the scope of the constitutional provisions on social justice and on
labor which was then being considered. 14
As early as Calalang v. Williams, 15 the Court already threw in some wind of caution
The promotion of social justice, however, is to be achieved not through a mistaken
sympathy towards any given group. Social justice is "neither communism, nor
despotism, nor atomism, nor anarchy," but the humanization of laws and the
equalization of social and economic forces by the State so that justice in its rational
and objectively secular conception may at least be approximated. Social justice
means the promotion of the welfare of all the people, the adoption by the Government
of measures calculated to [e]nsure economic stability of all the competent elements of
society, through the maintenance of a proper economic and social equilibrium in the
interrelations of the members of the community, constitutionally, through the adoption
of measures legally justifiable, or extra-constitutionally, through the exercise of powers
underlying the existence of all governments on the time-honored principle of salus
populi est suprema lex. 16
Social justice, therefore, must be founded on the recognition of the necessity of
interdependence among divers and 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." 17

Indeed, in light of the accelerated pace of Philippine industrialization then, the Filipinos who
used to be more or less anchored to the soil and living comparatively simple lives were fast
becoming full-fledged members of the complex and impersonal industrial society. They and
their families were entirely at the mercy of the severities of the labor system. They were
wholly dependent for their subsistence, sustenance and sheer survival on a job and regular
wage.

In time, Mr. Chief Justice Enrique M. Fernando drew the arches of social justice as follows:
What is thus stressed is that a fundamental principle as social justice, identified as it is
with the broad scope of police power, has an even more basic role to play in aiding
those whose lives are spent in toil, with destitution an ever-present threat, to attain a
certain degree of economic well-being. Precisely, through the social justice coupled
with the protection to labor provisions, the government is enabled to pursue an active
and militant policy to give reality and substance to the proclaimed aspiration of a
better life and more decent living conditions for all. It is in that spirit that in 1969, in Del
Rosario vs. Delos Santos (L-20586, March 21, 1969, 22 SCRA 1196), reference was
made to what the social justice concept signifies in the realistic language of the late
President Magsaysay: "He who has less in life should have more in law." After tracing
the course of decisions which spoke uniformly to the effect that the tenancy legislation,
now on the statute books, is not vitiated by constitutional infirmity, the Del Rosario
opinion made clear why it is easily understandable "from the enactment of the
Constitution with its avowed concern for those who have less in life, [that] the
constitutionality of such legislation has been repeatedly upheld." What is sought to be
accomplished by the above fundamental principle is to assure the effectiveness of the
community's effort to assist the economically underprivileged. For under existing
conditions, without succor and support, they might not, unaided, be able to secure
justice for themselves. 18

1973 Constitution
The 1973 Constitution carried over the concept of social justice under the 1935
Constitution. 19 Article II (Declaration of Principles and State Policies), Section 6 of the 1973
Constitution, provides that "[t]he State shall promote social justice to ensure the dignity,
welfare, and security of all the people. Towards this end, the State shall regulate the
acquisition, ownership, use, enjoyment, and disposition of private property, and equitably
diffuse property ownership and profits." Its counterpart provision on labor was specific and
categorical. Article II (Declaration of Principles and State Policies), Section 9 of the 1973
Constitution, commands that "[t]he State shall afford 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. The State may provide for compulsory arbitration." The elevation of this provision in
the Declaration of Principles and State Policies of the 1973 Constitution underscored its
sublime significance. Hence, in Philippine Apparel Workers Union v. National Labor Relations
Commission, 20 this Court explained that this obligation of the State to the workingman has
repercussions on the stability, if not survival, of the nation itself
More than elusive justice, survival is the daily problem of the worker and his family.
The employer is not faced with such a problem. More often than not, the employer
dissipates part of his income or profit in pleasures of the flesh and gambling aside
from luxuries, fabulous parties and conspicuous consumption.
The stability of the economy does not depend on the employer alone, but on
government economic policies concerning productivity in all areas and not only in the
clothing or textile industries. There is not even an intimation that the company is
losing. It is the living wage of the workers which is the basis of a stable economy. If

the company cannot pay a living wage, it has no business operating at the expense of
the lives of its workers from the very start.

The preservation of the lives of the citizens is a basic duty of the State, more vital than
the preservation of the profits of the corporation. When the State is engaged in a lifeand-death struggle, like war or rebellion, it is the citizen worker who fights in defense
of the State and for the preservation of the existence of corporations and businesses
within its territorial confines. When the life of the State is threatened from within and
without, it is the citizen, not the corporation or business enterprise, that mans the
weapons of war and march into battle.
To invoke the nebulous term "stable economy" to justify rejection of the claims of the
workers as against the assets of the employer, is to regard human life as more
expendable than corporate capital. There is nothing in the Constitution that expressly
guarantees the viability of business enterprises much less assuring them of profits. 21

Thus, in affirming the reinstatement of an employee, this Court in Philippine Air Lines v.
Philippine Air Lines Employees Association 22 held that
[t]he futility of this appeal becomes even more apparent considering the express
provision in the Constitution already noted, requiring the State to assure workers
"security of tenure." It was not that specific in the 1935 Charter. The mandate was
limited to the State affording "protection to labor, especially to working women and
minors . . ." If by virtue of the above, it would not be legally justifiable to reverse the
order of reinstatement, it becomes even more readily apparent that such a conclusion
is even more unwarranted now. To reach it would be to show lack of fealty to a
constitutional command. 23

1987 Constitution
The 1987 Constitution has deepened the roots of social justice and expanded its branches to
include "all phases of national development." 24 An entire article was devoted to Social Justice
and Human Rights 25 which properly includes a full section on labor
LABOR
Sec. 3.The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of 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 of 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.
TICaEc

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.

Then, Article II (Declaration of Principles and State Policies), Section 18 of the 1987
Constitution, provides that "[t]he State affirms labor as a primary social economic force. It
shall protect the rights of workers and promote their welfare." Under Article II (Declaration of
Principles and State Policies), Section 9 of the 1987 Constitution, "[t]he State shall promote a
just and dynamic social order that will ensure the prosperity and independence of the nation
and free the people from poverty through policies that provide adequate social services,
promote full employment, a rising standard of living and an improved quality of life for all."
These provisions protecting labor are not mere beliefs but should be reinforced by everyone's
behavior.
The Labor Code of the Philippines and its Implementing Rules
In 1974, P.D. No. 442, as amended, otherwise known as the Labor Code of the Philippines,
was enacted. There was power in its purpose which was trumpeted in its title to afford
protection to labor, promote employment and human resources development and insure
industrial peace based on social justice. Article 3 of its Preliminary Title under General
Provisions provides
ART. 3.Declaration of basic policy. The State shall afford 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.

Under Labor Relations (Book Five), Article 211 states

ART. 211.Declaration of Policy. A. It is the policy of the State:
(a)To promote and emphasize the primacy of free collective bargaining and
negotiations, including voluntary arbitration, mediation and conciliation, as
modes of settling labor or industrial disputes;
(b)To promote free trade unionism as an instrument for the enhancement of
democracy and the promotion of social justice and development;
(c)To foster the free and voluntary organization of a strong and united labor
movement;
(d)To promote the enlightenment of workers concerning their rights and
obligations as union members and as employees;
(e)To provide an adequate administrative machinery for the expeditious
settlement of labor or industrial peace;

(f)To ensure a stable but dynamic and just industrial peace; and
(g)To ensure the participation of workers in decision and policy-making
processes affecting their rights, duties and welfare.

In May 1980 and then again in March 1989, B.P. Blg. 70 and R.A. No. 6715 were approved,
respectively, "to strengthen the constitutional right of workers", and "to extend protection to
labor." Accordingly, Volkschel Labor Union v. Bureau of Labor Relations, 26 decreed that "[i]n
the implementation and interpretation of the provisions of the Labor Code and its
implementing regulations, the workingman's welfare should be the primordial and paramount
consideration." 27
Two. Courts at all times should give meaning and substance to constitutional postulates in
favor of the workingman. The 1987 Constitution is fraught with provisions protecting the
workingman, e.g., Secs. 9, 10 and 18, Art. II, and Sec. 3, Art XIII, a legacy of the evolution off
rights. These constitutional creeds should not be dwarfed by deeds. A contrary posture would
convert these creeds as "meaningless constitutional patter." 28 The principle of social justice
was not embedded in the fundamental law for demagoguery. It was meant to be a vital,
articulate, compelling principle of public policy. 29 Social justice should be a living reality and
not a mere high level abstraction. 30 Thus, while the Constitution must be read as a whole,
even if we do not invoke its Due Process Clause, the coherent application of the separate
constitutional creeds on social justice and labor is enough to uphold the workers'
constitutional right to work and their consequent right to job security. These substantive rights
are not to be weakened by a diminished procedural right. For in weakening the procedure, we
weaken the substantive right. The importance of the procedure to protect the exercise of the
right to work cannot be overemphasized.
I have always, as I do now, adhered to the constitutional precepts of social justice and
protection to labor. Some years back, in Pepito v. Secretary of Labor, 31 I, as an Assistant
Solicitor General, invoked the argument of constitutional guarantee of security of tenure as
the rationale for the reinstatement of an employee. The argument was sustained by this Court
speaking through Mr. Chief Justice Fernando no less
. . . As set forth in the Comment, considered as the answer, Solicitor General Estelito
P. Mendoza, Assistant Solicitor General Reynato S. Puno and Solicitor Jesus V. Diaz
"are of the opinion that petitioner's reinstatement is in order." Their view follows from
pronouncements of this Tribunal "handed down in consonance with the social justice
and protection to labor provisions of the Constitution."
. . . That point is well-taken. In the latest case in point, Meracap v. International
Ceramics Mfg. Co., Inc., this Court left no doubt that it is committed to the principle of
vitalizing "the constitutional mandate of security of tenure as an aspect of the
protection accorded labor." There should be no reason why there should be a
deviation in this litigation especially so when again, as noted in the Comment, respect
for such a mandate has been accorded in previous opinions. 32

With due respect, we should not now deviate from this doctrine.

TaDSHC

Three. The constitution puts the employee on equal footing with his employer. 33 As between
an employee, usually poor and unlettered, and the employer, who has resources to secure
able legal advice, the law has reason to demand from the latter stricter compliance. For,
social justice in these cases is not equality but protection. 34 As Mr. Chief Justice Fernando
stressed in Victorias Milling Co., Inc. v. Workmen's Compensation Commission 35
To repeat, courts should ever be on the alert lest through inadvertence or faulty
analysis the expected opposition from management be appraised much more
favorably than warranted. The unfortunate result would be that both the social justice
concept and the complementary constitutional command of protection to labor would
be disregarded and set at naught. There is no higher duty cast on the judiciary than to
guard against such an undesirable possibility, fraught as it is with consequences truly
to be deplored. 36

In a similar vein, Mr. Chief Justice Ramon C. Aquino, in his Concurring Opinion in Allied
Investigation Bureau v. Hon. Inciong, 37 opined that "social justice in the case of the laborers
means compassionate justice or an implementation of the policy that those who have less in
life should have more in law." 38 The Constitution helps labor for a simple reason. Employees
are overmatched in their struggle against their employers. Their playing field is not level.

Four. This Court has long extended constitutional due process in labor cases involving private
action. Prior to Wenphil, the rule etched in stone is that an employer can validly dismiss an
erring employee only after giving him notice and hearing. Thus, decades ago, this Court
in Batangas Laguna Tayabas Bus Co. v. Court of Appeals 39 ruled 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." 40 In De Leon v. National Labor
Relations Commission 41where an employee was dismissed without notice, it was held that
"[t]here is in this case a clear denial of due process, a constitutional right which must be
safeguarded at all times especially when what is at stake is petitioner's position as his only
means of livelihood." 42 In Reyes v. Philippine Duplicators, Inc., 43 where petitioner Reyes was
dismissed from the service in 1977 without any investigation or hearing, this Court found
that the dismissal was arbitrary as Reyes was denied due process. Hence, even the noncompliance with Sections 2 and 3, Rule XIV, Book V of the Implementing Rules and
Regulations of the Labor Code pursuant to the amendments of P.D. No. 850 which was
issued in 1975, requiring a prior clearance from the Department of Labor to terminate the
services of an employee, rendered the termination illegal and nullified the dismissal of the
employee. 44
In August 1981, B.P. Blg. 130 did away with the clearance to terminate employment. Prior
notice and formal investigation were however instead imposed as conditions sine qua
non before termination may be effected. 45 Thus, the inviolability of prior notice and
hearing before an employee could be dismissed was iterated and reiterated. InMiguel v.
National Labor Relations Commission, 46 where the employee was simply handed his walking
papers without any explanation, this Court held that the dismissal was unwarranted and ruled
that "[t]he due process requirement is not a mere formality that may be dispensed with at will.
Its disregard is a matter of serious concern since it constitutes a safeguard of the highest

order in response to man's innate sense of justice." 47 Kwikway Engineering Works v. National
Labor Relations Commission, 48 explained that "[t]he twin requirements of notice and hearing
constitute essential elements of due process in cases of employee dismissal: the requirement
of notice is intended to inform the employee concerned of the employer's intent to dismiss
and the reason for the proposed dismissal; upon the other hand, the requirement of hearing
affords the employee an opportunity to answer his employer's charges against him
accordingly to defend himself therefrom before dismissal is effected. Neither of these two
requirements can be dispensed with without running afoul of the due process requirement of
the 1987 Constitution." 49 In a stream of ceaseless cases, we adhered to the doctrine that
failure to comply with the two-notice rule makes the dismissal illegal and reinstatement or
payment of separation pay in order. 50 In fine, "fire the employee, and let him explain later"
violates this hallowed rules. 51 It has always been this way until Wenphil.
This is not to hold that a trial-type proceeding is required to be conducted by
employers. 52 Hearings before the employers prior to the dismissal are in the nature of and
akin to administrative due process which is free from the rigidity of certain procedural
requirements. Mr. Justice Laurel way back in 1940 enumerated the cardinal rights of parties in
administrative proceedings in the landmark case of Ang Tibay v. Court of Industrial
Relations 53
1.the right to a hearing which includes the right to present one's case and submit
evidence in support thereof;
2.the tribunal must consider the evidence presented;
3.the decision must have something to support itself;
4.the evidence must be substantial which means such evidence as a reasonable mind
might accept as adequate to support a conclusion;
5.the decision must be based on the evidence presented at the hearing, or at least
contained in the record and disclosed to the parties affected;
6.the tribunal or body or any of its judges must act on its own independent
consideration of the law and facts of the controversy, and not simply accept the views
of a subordinate;
7.the board or body should, in all controversial questions, render its decision in such
manner that the parties to the proceeding can know the issues involved and the
reasons for the decision rendered. 54

The posture that the constitutional due process requirement limits government action alone
and does not apply to private action is already pass. Thus, even in the United States, the
application of due process to private conduct has gained approval and has become a settled
norm. For, as expressed by Professor Laurence H. Tribe, a noted constitutionalist
But particularly where ostensibly "private" power is the primary source of the coercion
and violence that oppressed individuals and groups experience, it is hard to accept
with equanimity a rigid legal distinction between state and society. The pervasive
system of racial apartheid which existed in the South for a century after the Civil War,

for example, thrived only because of the resonance of society and politics . . . the
close fit between private terror, public discrimination, and political exclusion. So too,
where it is the state's persistent inaction in the face of patterns of deprivation for which
the state and society seem to many to bear collective responsibility, the premise that
only identifiable state "action" may be called constitutional account is deeply
troubling. 55

Accordingly, modern notions of violations of due process which may fairly be attributed to the
State have expanded considerably in recent decades. Seemingly private conducts have
arguably been treated as adequate state actions. 56Individual invasions of individual rights in
certain instances have become proper subjects of constitutional restraints. 57In fine, as Mr.
Justice Felix Frankfurter put it in Joint Anti-Fascist Refugee Committee v. McGrath, 58 "'[d]ue
process,' unlike some legal rules, is not a technical conception with a fixed content unrelated
to time, place, and circumstances . . . Due process is not a mechanical instrument. It is not a
yardstick. It is a delicate process of adjustment inescapably involving the exercise of
judgment by those whom the Constitution entrusted with the unfolding of the
process." 59Beyond argument, the Constitution was designed to embody and celebrate values
and to inculcate proper acceptance of them, as much as to compel governments to abide by
them. 60
This is as it ought to be for as well observed by Dr. David C. Korten, Founder and President
of the People Centered Development Forum, ". . . [c]orporations have emerged as the
dominant governance institutions on the planet, with the largest among them reaching into
virtually every country of the world and exceeding most governments in size and power.
Increasingly, it is the corporate interest more than the human interest that defines the policy
agendas of states and international bodies . . ." 61 Assailing the threat to liberty coming from
these new economic rulers, President Franklin Delano Roosevelt said: "The royalists of the
economic order have conceded that political freedom was the business of government but
they have maintained that economic slavery was nobody's business. They granted that the
government could protect the citizen in his right to vote, but they denied that the government
could do anything to protect the citizen in his right to work and his right to live." 62 To be sure,
some of the unlamented decisions of the Supreme Court of the United States were
those which allowed private corporations to rim roughshod over the rights of workers.
Observed Korten again: 63
A conservative court system that was consistently responsive to the appeals and
arguments of corporate lawyers steadily chipped away at the restraints a wary
citizenry had carefully placed on corporate powers. Step-by-step, the court system put
in place new precedents that made the protection of corporations and corporate
property a centerpiece of constitutional law. These precedents eliminated the use of
juries to decide fault and assess damages in cases involving corporate-caused harm
and took away the right of states to oversee corporate rates of return and
prices. Judges sympathetic to corporate interests ruled that workers were responsible
for causing their own injuries on the job, limited the liability of corporations for
damages they might cause, and declared wage and hours laws unconstitutional. They
interpreted the common good to mean maximum production no matter what was
produced or who it harmed.
TDcHCa

The choice that confronts us is which right to uphold: the right to work of an
underprivileged natural person or the right to property of an overprivileged artificial person.
In truth, there is but one choice to make for it is highly anomalous to bestow better rights to
an artificial person than a natural person. 64
Certainly, these are neither "novel legal ideas" nor "nouvelle vague theories" but careful
directions brought about by the evolution of laws and the due process clause which saw the
need to rightfully protect the underprivileged as a result of ominous occurrences over the
years.. These, on the contrary, are persuasive axioms which prevail in other countries and
should find application in our jurisdiction.
Indeed, it strains my imagination to see how the application of the constitutional due process
clause to cases of illegal dismissal can "open the floodgates to, and the docket . . . swamped
with, litigations of the scurrilous sort" and "give rise to all absurd constitutional claims." Suffice
it to say that equating an excommunicated Catholic demanding reinstatement, or a celebrity
endorser suing to be able to sing for another brand, or even an employee preventing his
employer to read his out going e-mail with a dismissed employee exerting his constitutional
right to security of tenure and due process of clause is too off-line. Withal, as adverted to, we
have long extended constitutional due process and security of tenure in labor cases involving
private action and I have yet to see "litigations of the scurrilous sort" being entertained by the
courts.

Five. An employee who is denied procedural doe process is entitled to reinstatement. Nothing
less. This Court, in carrying out the constitutional directive of the 1973 Constitution requiring
the State to "assure the rights of workers to . . . security of tenure . . ." 65 has quite
consistently nullified, simply on constitutional grounds, dismissals in violation of procedural
due process, notwithstanding the absence of an express provision of any statute. The Court
has done the same under the 1987 Constitution which admittedly has given more protection
to labor than any of our previous charters through a four-paragraph section in the Article on
Social Justice and Human Rights which details the protective mantle accorded to labor
alone. 66 Thus, Art. XIII, Sec. 3 of the 1987 Constitution decrees that "[t]he State shall afford
full protection to labor . . . and promote full employment . . . (All workers) shall be entitled to
security of tenure . . ." Art. XII, Sec. 18 of the 1987 Constitution mandates that "[t]he State
affirms labor as a primary social economic force. It shall protect the rights of workers and
promote their welfare." All told, this Court for almost three decades has set aside, on
constitutional grounds, dismissals in violation of procedural due process until Wenphil
came along, with the interests of the employer tailing and suddenly enjoying preference. To
uphold Wenphil, Serrano, and now Agabon, is to dilute the protection to those who need it
most despite the constitutional mandate which in the language of Mr. Justice Cardozo speaks
with "a reverberating clang that drowns all weaker sounds." With due respect, the grant of
indemnity to the dismissed employee "as both penalty and disincentive" as the majority
provides in the instant case does not square with the protection accorded by the Constitution
to labor. There is only one main relief in cases of dismissal without notice and hearing
reinstatement.

Six. Compliance with procedural due process is not a burden on employers. There is no valid
reason why employers should have any difficulty according procedural due process to their
employees. The rules are fairly simple. Section 2, Rule XXIII (Termination of Employment),
Book V (Labor Relations), Omnibus Rules Implementing the Labor Code, provides
Section 2.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.
II.For termination of employment as based on authorized causes defined in Article 283
of the Code, the requirements of due process shall be deemed complied with upon
service of a written notice to the employee and the appropriate Regional Office of the
Department at least thirty (30) days before the effectivity of the termination, specifying
the ground or grounds for termination.
III.If the termination is brought about by the completion of the contract or phase
thereof, no prior notice is required. If the termination is brought about by the failure of
an employee to meet the standards of the employer in the case of probationary
employment, it shall be sufficient that a written notice is served the employee within a
reasonable time from the effective date of termination.

Similarly, Section 2, Rule I (Termination of Employment and Retirement), Book VI (PostEmployment) of the same Omnibus Rules, which covers all establishments and undertakings,
whether for profit or not, except the Government, requires the same notice and hearing.
In sum, in cases of dismissal based on just causes (Article 282, Labor Code), the employer
must give two (2) simplenotices: (1) notice before dismissal to apprise the employee being
dismissed of the particular acts or omissions for which the dismissal is sought, and (2)
subsequent notice to inform him of the employer's decision to dismiss him. In cases of
dismissal for authorized causes (Article 283, Labor Code), the employer must serve
an uncomplicated written notice on the worker and on the Department of Labor and

Employment at least one (1) month before the intended closure of the establishment or
reduction of personnel. The law requires nothing more.
cEAaIS

It is distressing to say the least why employers should be exempted from observing this
simple duty. In fine, to give to labor what is due them is far from authorizing oppression nor
destruction of the employer as some views would have.The employer cannot simply abuse
the conduct of his business to the prejudice of an employee. The persistence in violating the
rights of the workers is the employer's own doing and self-destruction which may be let alone.
The right of an employer to dismiss an employee differs from and should not be confused
with the manner in which such right is exercised. While the management has certain
privileges, the exercise of such privileges must be made without abuse of discretion,
Thus, Dole Philippines v. National Labor Relations Commission, 67 recognized as a
management prerogative the determination of the need for the phasing out of a department
as a labor and cost saving device. In the same manner, Remereco Garments Manufacturing
v. Minister of Labor and Employment 68 conceded that it is the sole prerogative of
management to dismiss or lay-off an employee. But in these two cases, and in so many other
cases, this Court cautioned that the exercise of such prerogatives must be made without
abuse of discretion forwhat is at stake is not only the employee's position but also their
means of livelihood. 69 It must not be oppressive and abusive since it affects one's person
and property. It is the right of every workingman to assure himself and his family a life worthy
of human dignity. Consequently, in dismissing an employee based on authorized cause or for
just cause, as the case may be, the employer must, at the very minimum, comply with
procedural due process. Failure to observe due process, particularly the prior notice
requirement, rightly deserves stiff sanctions, if not condemnation, and not a mere slap on the
wrist, as the majority now propounds. As I said in Serrano
It is equally puzzling why the majority believes that restoring the employee's right to
pre-dismissal notice will negate the right of an employer to dismiss for cause. The preWenphil rule simply requires that before the right of the employer to dismiss can be
exercised, he must give prior notice to the employee of its cause. There is nothing
strange nor difficult about this requirement. It is no burden to an employer. He is bereft
of reason not to give the simple notice. If he fails to give notice, he can only curse
himself. He forfeits his right to dismiss by failing to follow the procedure for the
exercise of his right.
xxx xxx xxx
In fine, if the employer's right to dismiss an employee is forfeited for his was failure to
comply with this simple, reasonable duty to pre-notify his employee, he has nothing to
blame but himself. 70

Verily, dismissal without due process debases human dignity. It is, therefore, incumbent upon
the employer to conduct a formal investigation and inform the employee of the specific
charges against him. Most certainly, the resolution of extreme cases, e.g., where the
employee threatens the life of the employer, are the exceptions rather than the ordinary and
usual cases. As such, rules governing them should not be used as the general rule. Rather,
employers should be reminded that under our system of government, even the most
hardened criminals are given their day in court. 71Employees are not entitled to anything less.

Seven. In the hierarchy of rights of an employees, the right to security of tenure is high, if not
the highest. Its paramount value is recognized and guaranteed under our new
Constitution. 72 Consequently, the first paragraph of Article XIII, Section 3 of the 1987
Constitution, extends the protective mantle of the Constitution to all of labor including the
promotion of full employment. The second paragraph specifies the guaranteed right to
security of tenure. All other rights, e.g., the right to collective bargaining and negotiations, the
right to peaceful concerted activities, the right to strike and form unions, and the right to due
process, merely complement the right to job security. All these complementary rights are
meaningless to an unemployed Juan De la Cruz. Thus, we held in Rance v. National Labor
Relations Commission, 73 "[i]t is the policy of the State to assure the right of workers to
'security of tenure.' 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, Therefore he
should be protected against any arbitrary deprivation of his job." 74 Almira v. B.F. Goodrich
Philippines, Inc. 75 is worth quoting
It would imply at the very least 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. It is not only because of the law's concern for the
workingman. There is, in addition, his family to consider. Unemployment brings untold
hardships and sorrows on those dependent on the wage-earner. The misery and pain
attendant on the loss of jobs then could be avoided if there be acceptance of the view
that under all the circumstances of this case, petitioners should not be deprived of
their means of livelihood. Nor is this to condone what had been done by them. For all
this while, since private respondent considered them separated from the service, they
had not been paid. From the strictly juridical standpoint, it cannot be too strongly
stressed, to follow Davis in his masterly work, Discretionary Justice, that where a
decision may be made to rest [on] an informed judgment rather than rigid rules, all the
equities of the case must be accorded their due weight. Finally, labor law
determinations, to quote from Bultmann, should be not only secundum rationem but
also secundum caritatem.76

Eight. Workers need work more than anything else. For a wageworker, a job is important.
While there is work, there is food on the table. Take away work, replace it with a meager lump
sum, and the food will disappear. Through work, the breadwinner satisfies his basic needs
and those of his family. He also provides himself with a means to express himself, transform,
develop and perfect his skills and talents. Through work, he interacts and establishes
relations with others.Work is a defining feature of human existence. It is the means of
sustaining life and meeting essential needs. It is also an activity through which individuals
affirm their own identity, both to themselves and to those around them. It is crucial to
individual choice, to the welfare of families and to the stability of societies. 77 Every man has
the right to work, to a chance to develop his qualities and his personality in the exercise of his
profession, to equitable remuneration which will enable him and his family to lead a worthy life
on material, social, cultural and spiritual level. 78Shylock said it well: "You take my life when
you do take the means whereby I live." 79
Nine. To simply allow payment of nominal damages for violation of employee's right to due
process is to give undue advantage to employers. One does not need to have a stratospheric

mind to know that the Constitution gave greater rights to employees over their
employers. The intent is to equalize the fight of the underprivileged against the overprivileged.
We cannot allow the employers to marginalize the right of the workingman to due process for
a few pesos without mocking the protection accorded by the Constitution to the powerless.
The deprivation of the right to security of tenure and due process is beyond monetary
valuation. In fine, to lengthen the longevity of Serrano is to sharpen the dangerous divide
between the haves and have-nots in our society. But Agabon is not merely
extendingSerrano. Agabon is far worse than Serrano.
TDaAHS

In Serrano, the dismissed employee was awarded backwages from the time his employment
was terminated until it was determined that the termination was for an authorized cause.
Using the facts of the instant case as an illustration, petitioner-employees who were
dismissed in February 1999 stand to get roughly 63 months of backwages underSerrano, i.e.,
the number of months from the time they were dismissed in February 1999 until November
2004 when it was determined that the termination was for just cause. In Agabon, however, the
dismissed employee is merely being granted an indemnity equivalent to Thirty Thousand
Pesos. This is exactly Wenphil more than a decade later, with the cost of money and inflation
factored in. Indeed, the sorry plight of the workers has just been worsened, if not preserved,
by the new majority ruling.
Just a word more. In Serrano, I pointed out:
. . . The dilution of the rule has been abased by unscrupulous employers who then
followed the "dismiss now, pay later" strategy. This evil practice of employers was
what I expected the majority to address in re-examining the Wenphil doctrine. At the
very least, I thought that the majority would restore the balance of rights between an
employee and an employer by giving back the employee's mandatory right to notice
before dismissal. It is disquieting, however, that the majority re-arranged this balance
of right by tilting it more in favor of the employer's right to dismiss. Thus, instead of
weakening a bit the right to dismiss of employers, the majority further strengthens it by
insisting that a dismissal without prior notice is merely "ineffectual" and not illegal.
The stubborn refusal of the majority to appreciate the importance of pre-dismissal
notice is difficult to understand. It is the linchpin of an employees right against an
illegal dismissal. The notice tells him the cause of [the] dismissal. It gives him a better
chance to contest his dismissal in an appropriate proceeding as laid down in the
parties' collective bargaining agreement or the rules of employment established by the
employer, as the case may be. In addition, it gives to both the employee and employer
more cooling time to settle their differences amicably. In fine, the prior notice
requirement and the hearing before the employer gives an employee a distinct,
different and effective first level of remedy to protect his job.
xxx xxx xxx
I respectfully submit that the majority cannot revise our laws nor shun the social justice
thrust of our Constitution in the guise of interpretation especially when its result is to
favor employers and disfavor employees. The majority talks of high nobility but the
highest nobility is to stoop down to reach the poor. 80

In these times when our lowly workers can hardly maintain body and soul together due to
their meager means, I find it hard to believe that the majority in Wenphil, in Serrano, and now
in the instant case Agabon, persists in weakening our employee's right to job security. The
stance simply offends a basic principle of justice so entrenched in our tradition and etched in
our conscience. An employee may not have a torrens title to his job but it is not too much to
require that before he is dismissed by his employer, he should be given a simple notice of the
cause of his dismissal and a summary hearing to present his side. All our constitutional and
statutory precepts on social justice and the protection of labor will go to naught if we
perpetuate our ruling that a dismissal without the required prior notice is valid and if we
justpenalize with the payment of pennies violations of the employee's right to due process.
Without doubt, Wenphil andSerranohave lengthened the queue of the
unemployed. Agabon will stretch it out even more.
In the case at bar, where petitioners Jenny Agabon and Virgilio Agabon were dismissed from
the service for abandonment of work without the due process requirements of two (2) notices
and hearing, I submit that the dismissals should be nullified and set aside, and petitioners
immediately reinstated without loss of seniority rights and other privileges. This Court should
protect labor and it should walk the talk.
Accordingly, I vote for the immediate REINSTATEMENT of petitioners Jenny M. Agabon and
Virgilio C. Agabon, without loss of their seniority rights and other privileges and with full
backwages, and the REVERSION to the pre-Wenphil Doctrine in resolving future labor cases.
PANGANIBAN, J ., dissenting:
The core issue of the present case concerns the legal effect of and the corresponding
sanction for the failure of an employer to give an employee the pre-dismissal written notice of
termination and opportunity to be heard required under the Labor Code and its implementing
Rules.
In Serrano v. NLRC, 1 the Court held that such termination of employment should be
considered "ineffectual" and, as such, sanctioned with payment of full back wages plus in
case the dismissal was for an authorized cause separation pay in accordance with Article
283 2 of the Labor Code. In addition, nominal and moral damages may also be awarded, if
warranted by the evidence.
In the case before us now, the employment of petitioners was terminated on the ground of
abandonment of their work. However, the employer failed to accord them their right to prior
notice and hearing, required under Article 277 3 of the Labor Code and Section 2 4 of Rule
XXIII of the 1999 Implementing Rules and Regulations. The majority holds that for violation of
the employee's right to statutory due process, an indemnity in the amount of P30,000 should
be awarded to the petitioners as nominal damages under the Civil Code. According to the
majority, this award should serve to discourage employers from violating the statutory due
process rights of their employees.
With due respect, I disagree with this ruling, because it aggravates the rights of our work
force, and diminishes respect for due process.

Jurisprudence on Right to
Notice and Hearing
Prior to the promulgation in 1989 of Wenphil v. NLRC, 5 the Court held that whether for a
valid cause or not dismissing employees without giving them prior notice and the
opportunity to be heard was illegal; and that, as a consequence, they were entitled
to reinstatement plus full back wages. Wenphil abandoned this policy and ruled that if the
dismissal was for a just or an authorized cause, but without due process, the termination
was valid; but that the employer should be sanctioned, for violating the employee's right to
notice and hearing, through the payment of indemnity to each dismissed employee in an
amount ranging from P1,000 to P10,000.
DHSEcI

In 2000, Serrano 6 held that such dismissals for just or authorized causes but without due
process were merelyineffectual (not illegal). Nevertheless, the employee was entitled to full
back wages plus nominal and moral damages, if warranted by the evidence; and, in case the
dismissal was for an authorized cause, separation pay in accordance with Article 283 of the
Labor Code.
This time, in the present case, the majority is incredibly reverting to Wenphil in upholding the
validity of employment terminations without due process.
A Setback on
Labor's Rights
With due respect, I strongly oppose the Court's inexplicable turnaround. This ruling is a
setback on labor's rights. Thus, I reiterate my Dissent 7 in Serrano. In that case, I was grateful
enough that the Court had decided to reexamine and modify the ten-year Wenphil doctrine. In
the process, it had at least increased the monetary award that should go to the dismissed
employee from a nominal sum in the concept of "indemnity or damages" to "full back
wages."
I respectfully submit that nothing has transpired in the past four and a half years
since Serrano was issued, that justifies further diminution of whatever constitutional rights to
due process and security of tenure our workers still enjoy. On the contrary, nothing is more
evident than the inescapable fact that their empowerment makes them better partners in the
country's development and global competence. Any further trampling of their rights is
undeserved.

As explained in my Dissenting Opinion in Serrano, the notice requirement finds basis not only
in the Labor Code but, more important, in the due process clause of the Constitution.
Consequently, when an employee is dismissed without due process, the legal effect is
an illegal dismissal; and the appropriate sanction is full back wages plus reinstatement, not
merely full back wages (or separation pay), much less merely "indemnity of one month salary
for every year of service." It is jurisprudentially settled that when procedural due process is
violated, the proceedings in this case, the dismissal shall be voided, and the parties

returned to theirstatus quo ante; that is, the employees should be given back their old jobs
and paid all benefits as if they have never been dismissed.
In ruling that the dismissal should be deemed legal, the majority has virtually rendered
nugatory the employees' right to due process as mandated by law and the Constitution. It has
implicitly allowed the employer simply to ignore such right and just pay the employee.
I respectfully submit that illegal dismissal results not only from the absence of a legal cause,
in accordance with Articles 282 8 to 284 9 of the Labor Code, but likewise from the failure to
observe due process. There are many labor and other cases in which acts violative of due
process have unequivocally been declared illegal by the Court. They range from similar cases
of employment termination 10 to criminal prosecutions 11 to administrative cases 12 and election
cases 13 as well. I made a summary of these Decisions in my aforesaid Serrano Opinion,
which I shall no longer repeat here.
Violation of Due Process
Amounts to Illegality of Proceedings
In all these cases, the Court has uniformly ruled that the denial of the fundamental right to due
process resulted in the illegality of the proceedings. Thus, the deprived individuals should be
brought back to their status quo ante, not merely awarded nominal damages or indemnity.
Our labor force deserves no less. Indeed, the State recognizes it as its primary social
economic force, 14 to which it is constitutionally mandated to afford full protection. 15 Yet, the
Court refuses to declare the illegality of dismissals made without due process. I insist that we
should denounce such dismissals as null and void and grant our workers these proper reliefs:
(1) a declaration that the termination or dismissal is illegal and unconstitutional; and (2)
thereinstatement of the employee, without loss of seniority rights and accruing benefits
plus full back wages.
Exception to Due
Process Sanctions
The only exception to the above sanctions would be a case analogous to Wenphil, one clearly
showing the impracticality and the futility of observing the procedure laid down by law in
terminating employment. To recall, the employee involved in Wenphil had exhibited a violent
temper and caused trouble even in the presence of the restaurant's customers. In an
altercation with a co-employee, he "slapped [the latter's] cap, stepped on his foot and picked
up the ice scooper and brandished it against [him]." When summoned by the assistant
manager, the employee "shouted and uttered profane words" instead of giving an
explanation. Under the circumstances, instant action was necessary to preserve order and
discipline, as well as to safeguard the customers' confidence in the employer's business a
fastfood chain catering to the general public, towards whom courtesy was a prized virtue.
In most of the succeeding cases, though including the present one before us in which
petitioners had been dismissed without prior notice and hearing there were ample
opportunities for the employers to observe the requisites of due process. There were no
exigencies that called for immediate response.

For the infringement of the fundamental right to due process, I believe that the price the Court
once again sets is too insignificant and too niggardly at such a late hour. I iterate that
imposing a stiffer sanction is the only way to emphasize to employers the extreme importance
of the right to due process. Such right is too sacred to be taken for granted or glossed over in
a cavalier fashion. To hold otherwise, as by simply imposing an indemnity (or even "full back
wages" as was done in Serrano), is to allow the rich and powerful to virtually purchase and
thereby stifle a constitutional right granted to the poor and marginalized.
TAIEcS

Respect for Due Process

Should be Maintained
The ponencia concedes that the worker's right to due process is both statutory and
constitutional in nature. Yet, it still gives it little regard and value.
May I just recall that in Wallem Maritime Services v. NLRC, 16 the Court said that "[o]ne's
employment, profession, trade or calling is a property right within the protection of the
constitutional guaranty of due process of law." An objective reading of the Bill of Rights clearly
shows that the due process protection is not limited to government action alone. The
Constitution does not say that the right cannot be claimed against private individuals and
entities. Indeed, the employee is entitled to due process, not because of the Labor Code, but
because of the Constitution. Elementary is the doctrine that constitutional provisions are
deemed written into every statute, contract or undertaking.
True, traditional doctrine holds that constitutional rights may be invoked only against the
State, which in the past was the only entity in a position to violate these rights, including the
due process clause. However, with the advent of liberalization, deregulation and privatization,
the State tended to cede some of its powers to the "market forces." Hence, corporate
behemoths and even individuals may now be sources of abuses and threats to human rights
and liberties. I believe, therefore, that this traditional doctrine should be modified to enable the
judiciary to cope with new paradigms and to continue protecting the people from new forms of
abuses.
In the final analysis, what is involved here is not simply the amount of monetary award
whether insignificant or substantial; whether termed as indemnity, penalty, separation pay or
full back wages. Neither is the subject here merely a matter of respect for workers' rights or
adequate protection of labor. The bottom line is the constitutionally granted right to due
process, which is the very essence of justice itself. Where the rule of law is the bedrock of our
free society, justice is its very lifeblood. A denial of due process is thus no less than a denial
of justice itself.
Summary
In conclusion, I believe that even if there was just or authorized cause for termination of
employment, but due process was not afforded the employee, the dismissal proceedings
must be declared null and void. Consequently, the employee must be reinstated and given full
back wages and accruing benefits. Depending on the facts of each case, damages as
provided under applicable articles of the Civil Code may additionally be awarded.

An exception may be entertained if the employer could adequately prove that under the
peculiar circumstances of the case, there was no opportunity to comply with due process
requirements; or doing so would have been impractical or gravely adverse to the employer, as
when the employee was caught in flagrante delicto. Under such circumstances, dismissal
would not be illegal, and no award may properly be granted. Nevertheless, as a measure of
compassion in this specific instance, the employee may be given a nominal sum depending
on the circumstances, pursuant to Article 2221 of the Civil Code.
WHEREFORE, I vote to GRANT the Petition and ORDER the petitioners' REINSTATEMENT
without loss of seniority rights and other privileges, plus FULL BACK WAGES from the date of
termination until actual reinstatement.
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 Decisionlikewise 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 failurevis--vis the warranted dismissal.
Ostensibly, the matter has been settled by our decision in Serrano, 2 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 Serranodoctrine through the present petition
THSaEC

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" (piece-work) 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 1/2) 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 Decision 15 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 employeremployee relationship. The intent to sever the employer-employee 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 pay 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. 19 Further, 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.
TCDcSE

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 employeremployee 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 reached. 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 of emergency involving 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.
IHCDAS

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. NLRC 28 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 onehalf 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. . . . 32

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 Appeals 36wherein 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 in Serrano, thus:
. . . 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 xxx 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. Marti 39 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.
CDcHSa

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 arch-conservative 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 selfpreservation. 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.
aDcETC

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 an 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 workers 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.
DSTCIa

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 based
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 self-executing. If the constitutional provisions are
treated as requiring legislation instead of self-executing, 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 self-executing. 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 xxx 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 selfcensorship, there are certain provisions here which are properly for legislation. 52
xxx xxx 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 xxx xxx
MS. [MINDA LUZ M.] QUESADA: I think the nitty-gritty of this kind of collaboration will
be left to legislationbut the important thing now is the conservation, utilization or
maximization of the very limited resources. . . .

[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.
HICSTa

[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. 55 Particularly, 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. . . . (emphasis supplied) 56

At present, the Labor Code is the primary mechanism to carry out the Constitution's
directives. This is clear from Article 3 57 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.
DaHISE

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 Law 61 , 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. NLRC 63and 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, 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.
IcSEAH

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, 70 Reta,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. NLRC 73in 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 withWenphil was based on Article 288 of the Labor Code. Yet,
an examination of Wenphil reveals 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 Wenphilflawed 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.
HSDIaC

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 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. NLRC 82 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 are 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 theDecision, 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.
IHAcCS

(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.
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.
3.Id., pp. 1314.
4.Id., p. 92.
5.Id., p. 131.
6.Id., p. 173.
7.Id., p. 20.
8.Id., pp. 2123.
9.Id., p. 45.
10.Id., pp. 4243.
11.Rosario v. Victory Ricemill, G.R. No. 147572, 19 February 2003, 397 SCRA 760, 767.
12.Reyes v. Maxim's Tea House, G.R. No. 140853, 27 February 2003, 398 SCRA 288, 298.
13.Santos v. San Miguel Corporation, G.R. No. 149416, 14 March 2003, 399 SCRA 172, 182.
14.Columbus Philippine Bus Corporation v. NLRC, 417 Phil. 81, 100 (2001).
15.De Paul/King Philip Customs Tailor v. NLRC, 364 Phil. 91, 102 (1999).
16.Sta. Catalina College v. NLRC, G.R. No. 144483, 19 November 2003.
17.Cosmos Bottling Corporation v. NLRC, G.R. No. 111155, 23 October 1997, 281 SCRA 146,
153154.
18.G.R. No. L-49875, 21 November 1979, 94 SCRA 472, 478.
19.Judy Philippines, Inc. v. NLRC, 352 Phil. 593, 606 (1998).
20.Philippine-Singapore Transport Services, Inc. v. NLRC, 343 Phil. 284, 291 (1997).
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.
23.G.R. No. 80587, 8 February 1989, 170 SCRA 69.
24.Id. at 76.
25.Id.

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.
29.G.R. No. 122666, 19 June 1997, 274 SCRA 386.
30.G.R. No. 114313, 29 July 1996, 259 SCRA 699, 700.
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.
33.Filipro, Inc. v. NLRC, G.R. No. L-70546, 16 October 1986, 145 SCRA 123.
34.Calalang v. Williams, 70 Phil. 726, 735 (1940).
35.Gelos v. Court of Appeals, G.R. No. 86186, 8 May 1992, 208 SCRA 608, 616.
36.G.R. No. 112100, 27 May 1994, 232 SCRA 613, 618.
37.Art. 2221, Civil Code.
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; and Sampaguita 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.
41.Villar v. NLRC, G.R. No. 130935, 11 May 2000.
42.Rollo, pp. 6071.
43.UST Faculty Union v. NLRC, G.R. No. 90445, 2 October 1990.
44."Whereas" clauses, P.D. No. 851.
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.
PUNO, J., dissenting.
1.Plutarch, Lives: Themistocles, Ch. 3, Sec. 11.
2.G.R. No. 80587, February 8, 1989, 170 SCRA 69.
3.G.R. No. 117040, January 27, 2000, 323 SCRA 445.
4.Id., 472.
5.Id., 499500; 523524.
6.Ponencia, 15.
7.See Fabre, C., Social Rights Under the Constitution. Government and the Decent Life. Oxford
University Press, 2000.
8.Rerum Novarum (On the Condition of the Working Classes). Encyclical of His Holiness Pope Leo
XIII on Capital and Labor issued on May 15, 1891.
9.I J. Aruego, The Framing of the Philippine Constitution 147 (1936).
10.L-46496, May 29, 1939, 7 Lawyer's Journal 487.
11.Id., 494.
12.70 Phil. 340 (1940).
13.Id., 357.
14.II J. Aruego, The Framing of the Philippine Constitution 656657 (1937).
15.70 Phil. 726 (1940).
16.The welfare of the people is the supreme law.
17.70 Phil. 726, 734735 (1940).
18.Fernando, Enrique M., Constitution of the Philippines, 8081 (1974).
19.Bernas, Joaquin G., The 1987 Constitution of the Republic of the Philippines. A Commentary, 81
(2003).

20.G.R. No. 50320, July 31, 1981, 106 SCRA 444.

21.Id., 462.
22.L-24626, June 28, 1974, 57 SCRA 489.
23.Id., 495496.
24.Section 10, Article II (Declaration of State Policies and Principles, State Policies), 1987
Constitution provides: "The State shall promote social justice in all phases of development."
25.Article XIII (Social Justice and Human Rights), 1987 Constitution.
26.L-45824, June 19, 1985, 137 SCRA 42.
27.Id., 48.
28.Philippine Blooming Mills Employees Organization v. Philippine Blooming Mills Co., L-31195,
June 5, 1973, 51 SCRA 189, 210.
29.Bocobo, Jorge., Cult of Legalism, cited by Mr. Justice Gregorio Perfecto in his Concurring
Opinion in Ocampo Vda. De Gomez v. The Government Insurance Board, 78 Phil. 216, 225
(1947); and by Mr. Justice Teodoro Padilla some 40 years later in National Service
Corporation v. National Labor Relations Commission, G.R. No. 69870, November 29, 1988,
168 SCRA 122, 138.
30.Magnolia Corporation v. National Labor Relations Commission, G.R. No. 116813, November 24,
1995, 250 SCRA 332, 340.
31.L-49418, February 29, 1980, 96 SCRA 454.
32.Id., 457; 459460.
33.Philippine Airlines v. Santos, G.R. No. 77875, February 4, 1993, 218 SCRA 415.
34.Agustin v. Workmen's Compensation Commission, L-19957, September 29, 1964, 12 SCRA 55,
59.
35.L-25665, May 22, 1969, 28 SCRA 285.
36.Id., 298.
37.L-49678, June 29, 1979, 91 SCRA 265.
38.Id., 274.
39.L-38482, June 18, 1976, 71 SCRA 470.
40.Id., 480.
41.G.R. No. 52056, October 30, 1980, 100 SCRA 691.

42.Id., 698.
43.G.R. No. 54996, November 27, 1981, 109 SCRA 489.
44.Egyptair v. National Labor Relations Commission, G.R. No. 63185, February 27, 1987, 148
SCRA 125; Oliva v. National Labor Relations Commission, G.R. No. 57865, April 28, 1983,
121 SCRA 827; Visperas v. Inciong, G.R. No. 51299, December 29, 1982, 119 SCRA
476; Bachiller v. National Labor Relations Commission, G.R. No. 51484, June 25, 1980, 98
SCRA 393.
45.Metro Port Service Inc. v. National Labor Relations Commission, G.R. Nos. 7163233, March 9,
1989, 171 SCRA 190.
46.G.R. No. 78993, June 22, 1988, 162 SCRA 441.
47.Id., 445, citing Natividad v. Workmen's Compensation Commission, L-42340, August 31, 1978,
85 SCRA 115, 119120; and Luzon Surety Co. v. Beson, L-26865-66, January 30, 1970, 31
SCRA 313, 318. See also De Leon v. National Labor Relations Commission, G.R. No.
52056, October 30, 1980, 100 SCRA 691.
48.G.R. No. 85014, March 22, 1991, 195 SCRA 526.
49.Id., 531; citing Century Textile Mills, Inc. v. National Labor Relations Commission, G.R. No.
77859, May 25, 1988, 161 SCRA 528, 535.
50.Nitto Enterprises v. National Labor Relations Commission, G.R. No. 114337, September 29,
1995, 248 SCRA 654;Pepsi-Cola Bottling Co. v. National Labor Relations Commission, G.R.
No. 101900, June 23, 1992, 210 SCRA 277;De Vera v. National Labor Relations
Commission, G.R. No. 93070, August 9, 1991, 200 SCRA 439; Tingson v. National Labor
Relations Commission, G.R. No. 84702, May 18, 1990, 185 SCRA 498; Ruffy v. National
Labor Relations Commission, G.R. No. 84193, February 15, 1990, 182 SCRA 365;
and National Service Corp. v. National Labor Relations Commission, G.R. No. 69870,
November 29, 1988, 168 SCRA 122.

51.Batangas Laguna Tayabas Bus Company v. National Labor Relations Commission, G.R. No.
94429, May 29, 1992, 209 SCRA 430,439.
52.Sajonas v. National Labor Relations Commission, L-49286, March 15, 1990, 183 SCRA 182.
53.69 Phil. 635 (1940).
54.Id., 642644; cited by Alliance of Democratic Free Labor Organization v. Laguesma, G.R. No.
108625, March 11, 1996, 254 SCRA 565, 573574; and Doruelo v. Commission on
Elections, G.R. No. 67746, November 21, 1984, 133 SCRA 376, 381382.
55.Tribe, L., Constitutional Choices (Chapter 16. Refocusing the "State Action" Inquiry: Separating
State Acts from State Actors). Harvard University Press, 1985.

56.See Gunther, G. and Sullivan, K. Constitutional Law, 13th Ed. (Chapter 10. The Post Civil
War Amendments and Civil Rights Legislation: Constitutional Restraints on Private Conduct;
Congressional Power to Implement Amendments). The Foundation Press, Westbury, New
York, 1997.
57.See Cohen, W. and Varat, J., Constitutional Law. Cases and Materials. 9th Ed. (Chapter 12.
Application of the Post Civil War Amendments to Private Conduct: Congressional Power to
Enforce the Amendments). The Foundation Press, Westbury, New York, 1993.
58.341 U.S. 123 (1951).
59.Cited by Altschuler, B. and Sgroi, C., Understanding Law in a Changing Society. (Chapter 3. Due
Process of Law, 94). Prentice Hall, Inc., 1996.
60.Chemerinsky. E., Rethinking Sate Action., 80 Nw.U.L.Rev. 503, 535546, 550553
(1985), citing Franz v. United States, 707 F.2d 582, 594 n. 45 (D.C.Cir. 1983).
61.Korten, When Corporations Rule the World, 54 (2002 ed).
62.Acceptance Speech for the Democratic Nomination for President, Philadelphia, June 27, 1936.
63.Korten, op. cit., 59.
64.See Hartmann, Unequal Protection: The Rise of Corporate Dominance and the Theft of Human
Rights.
65.Article II (Declaration of Principles and State Policies), Section 9 of the 1973 Constitution.
66.Article XIII (Social Justice and Human Rights), Section 3 of the 1987 Constitution.
67.G.R. No. 120009, September 13, 2001, 365 SCRA 124.
68.G.R. Nos. 56176-77, February 28, 1985, 135 SCRA 167, 175.
69.International Harvester Macleod v. Intermediate Appellate Court, G.R. No. 73287, May 18,
1987; citing D.M. Consunji, Inc. v. National Labor Relations Commission, G.R. No. 71459,
July 30, 1986, 143 SCRA 204; Kapisanan ng Manggagawa sa Camara Shoes v. Camara
Shoes, G.R. No. 50985, January 30, 1982, 111 SCRA 477.
70.323 SCRA 445, 504505, 523.
71.De Leon v. National Labor Relations Commission, G.R. No. 52056, October 30, 1980, 100
SCRA 691, 698.
72.Tolentino v. National Labor Relations Commission, G.R. No. 75380, July 31, 1987, 152 SCRA
724.
73.G.R. No. 68147, June 30, 1988, 163 SCRA 279.
74.Id., 284285. See also Bondoc v. People's Bank and Trust Company, L-43835, March 31, 1981,
103 SCRA 599, 605.

75.L-34974, July 25, 1974, 58 SCRA 120.

76.Id., 131.
77.Juan Somavia, ILO Director-General, June 2001.
78.Octagesima Adveniens. An Apostolic Letter of His Holiness Pope Paul VI., citing Gaudium et
Spes, 25: AAS 67 (1966), p. 1089.
79.The Merchant of Venice.
80.Id., 503504; 521.
PANGANIBAN, J., dissenting:
1.380 Phil. 416, January 27, 2000.
2."Art. 283. Closure of establishment and reduction of personnel. The employer may also
terminate the employment of any employee due to the installation of labor saving devices,
redundancy, retrenchment to prevent losses or the closing or cessation or operation of the
establishment or undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the workers and the [Department] of
Labor and Employment at least one (1) month before the intended date thereof. In case of
termination due to the installation of labor saving devices or redundancy, the worker affected
thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to
at least one (1) month pay for every year of service whichever is higher. In case of
retrenchment to prevent losses and in cases of closures or cessation of operations of
establishments or undertaking not due to serious business losses or financial reverses, the
separation pay shall be equivalent to one (1) month pay or to at least one-half (1/2) month
pay for every year of service, whichever is higher. A fraction of at least six (6) months shall
be considered one (1) whole year."
3."Art. 277. . . .
(b)Subject to the constitutional right of workers to security of tenure and their right to be protected
against dismissal except for a just and authorized cause and without prejudice to the
requirement of notice under Article 283 of this Code, the employer shall furnish the worker
whose employment is sought to be terminated a written notice containing a statement of the
causes for termination and shall afford the latter ample opportunity to be heard and to defend
himself with the assistance of his representative if he so desires in accordance with company
rules and regulations promulgated pursuant to guidelines set by the Department of Labor and
Employment. 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. The burden of proving that the
termination was for a valid or authorized cause shall rest on the employer. The Secretary of
the Department of Labor and Employment may suspend the effects of the termination
pending resolution of the dispute in the event of a prima facie finding by the appropriate
official of the Department of Labor and Employment before whom such dispute is pending
that the termination may cause a serious labor dispute or is in implementation of a mass layoff."

4."Sec. 2. 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."
5.170 SCRA 69, February 8, 1989.
6.Supra.

Separate Opinions
Separate Opinions
7.Pp. 531547. See also my Separate Opinions in Better Buildings, Inc. v. NLRC, 347 Phil. 521,
535, December 15, 1997; and Del Val v. NLRC, 357 Phil. 286, 294, September 25, 1998.
8."Art. 282. Termination by employer. An employer may terminate an employment for any of the
following causes:
(a)Serious misconduct or willful disobedience by the employee of the lawful orders of his employer
or representative in connection with his 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 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."
9."Art. 284. Disease as a ground for termination. An employer may terminate the services of an
employee who has been found to be suffering from any disease and whose continued
employment is prohibited by law or is prejudicial to his health as well as to the health of his
co-employees: Provided, That he is paid separation pay equivalent to at least one (1) month
salary or to one-half (1/2) month salary for every year of service, whichever is greater, a
fraction of at least six (6) months being considered as one (1) whole year."

10.Pepsi-Cola Bottling Co. v. NLRC, 210 SCRA 277, June 23, 1992; Bacus v. Ople, 217 Phil. 670,
October 23, 1984;Philippine National Bank v. Apalisok, 199 SCRA 92, July 12, 1991.
11.People v. Bocar, 138 SCRA 166, 170171, August 16, 1985; People v. San Diego, 135 Phil.
514, December 24, 1968; People v. Sola, 191 Phil. 21, March 17, 1981; People v. Dacudao,
170 SCRA 489, February 21, 1989; People v. Calo Jr., 186 SCRA 620, June 18,
1990; People v. Burgos, 200 SCRA 67, August 2, 1991; People v. Parazo, 369 Phil. 398,
July 8, 1999 (Resolution on the Motion for Reconsideration).
12.Fabella v. Court of Appeals, 346 Phil. 940, November 28, 1997.
13.Villarosa v. Comelec, 377 Phil. 497, November 29, 1999.
14.18, Art II, 1987 Constitution.
15.3, Art. XIII, ibid.
16.331 Phil. 476, 485, October 15, 1996, per Romero, J.
TINGA, J:
1.380 Phil. 416 (2000).
2.Id.
3.Id. at 443, 445, 448.
4.Rollo, p. 42.
5.Id. at 32.
6.Ibid.
7.Id. at 5960.
8.Id. at 15.
9.Id. at 34.
10.Id. at 92.
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. Guevara-Salonga

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. 171172.

18.Rollo, p. 173.
19.Id. at 22.
20.Id. at 23 citing Kingsize Manufacturing Corporation v. NLRC, 238 SCRA 349.
21.Rollo, p. 20.
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, 170171.
25.Rollo, p. 91.
26.Supra note 6.
27.Id.
28.Supra note 1.
29.Supra note 1 at 446.
30.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.
31.124 Phil. 698 (1966).
32.Id. at 703.
33.139 Phil. 747 (1969).
34.Id. at 754.
35.Serrano v. NLRC, supra note 1 at 447.
36.G.R. No. L-38482, 18 June 1976, 71 SCRA 470.
37.Serrano v. NLRC, supra note 1 at 480.
38.Serrano, supra note 1 at 445446.
39.G.R. No. 81651, 18 January 1991, 193 SCRA 57.
40.Id. at 67.
41.See G. Gunther and K. Sullivan, Constitutional Law (14th ed.) at 867.
42.Separate Opinion of Justice Panganiban, p. 12.
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.
46.G.R. No. 106027, 234 SCRA 441, 25 July 1994.
47.Id. at 451452.
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.
50.Id. at 103104 citing 16 AM JUR 2d 283284.
51.II RECORD OF THE CONSTITUTIONAL COMMISSION: PROCEEDINGS AND DEBATES 613.
52.Id. at 617.
53.Id. at 626.
54.Id. at 644.
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 microanalysis 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.
60.Section 2, Rule XXIII, Book V, OMNIBUS RULES IMPLEMENTING THE LABOR CODE.
61.Supra note 2.

62.Serrano v. NLRC, supra note 1 at 445.

63.G.R. No. 80587, 8 February 1989, 170 SCRA 69.
64.Serrano, supra note 1 at 453.
65.Serrano, supra note 1 at 485; J. Vitug, separate concurring and dissenting.
66.Balaquezon EWTU v. Zamora, G.R. No. L-46766-7, 1 April 1980, 97 SCRA 5, 8.
67.". . . 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).
71.G.R. No. 112100, May 27, 1994, 232 SCRA 613.
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).
74.Serrano v. NLRC, supra note 1 at 442.
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.
77.Article 2221, Civil Code.
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).
80.Id. at 531.
81.Id.

82.G.R. No. 121927, 22 April 1998.

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.
87.See Art. 2199, Civil Code.
88.Art. 2225, Civil Code.
89.Page 16, Decision, citing jurisprudence.