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Isetann
GRN 117040, January 27, 2000
J. Mendoza
Facts:
Petitioner was hired by private respondent Isetann
Department Store as a security checker and subsequently became head of
the Security Checkers Section of private respondent.
Sometime in 1991, as a cost-cutting measure, private respondent
decided to phase out its entire security section and engage the services of
an independent security agency. For this reason, petitioner's employment
was terminated effective October 11, 1991. This prompted the petitioner to
file a complaint for illegal dismissal, illegal layoff, unfair labor practice,
underpayment of wages, and nonpayment of salary and overtime pay.
The Labor Arbiter decided basically in favor of the petitioner, finding
the latter to have been illegally dismissed and ordering the respondent to
reinstate the complainant and to pay the latter full backwages without
qualification or deduction from the time of his dismissal until reinstatement
(computed till promulgation only) based on his monthly salary at the time of
his termination but limited to (3) three years.
Private respondent appealed to the NLRC which reversed the decision
of the Labor Arbiter and ordered petitioner to be given separation pay
equivalent to one month pay for every year of service, unpaid salary, and
proportionate 13th month pay. Petitioner moved for reconsideration but the
same was denied.
Hence this petition.
Issue:
Whether contracting out of labor to replace current
employees is a valid ground for dismissal; what are the consequences of a
dismissal for an authorized cause but without observing due process.
Ruling:
to give notice and hearing (in the case of dismissals for just causes under
Art. 282).
For this reason, they regard any dismissal or layoff without the
requisite notice to be null and void even though there are just or authorized
causes for such dismissal or layoff.
Consequently, in their view, the
employee concerned should be reinstated and paid backwages.
We agree with our esteemed colleagues, Justices Puno and
Panganiban, that we should rethink the sanction of fine for an employer's
disregard of the notice requirement. We do not agree, however, that
disregard of this requirement by an employer renders the dismissal or
termination of employment null and void. Such a stance is actually a
reversion to the discredited pre-Wenphil rule of ordering an employee to be
reinstated and paid backwages when it is shown that he has not been given
notice and hearing although his dismissal or layoff is later found to be for a
just or authorized cause. Such rule was abandoned in Wenphil because it is
really unjust to require an employer to keep in his service one who is guilty,
for example, of an attempt on the life of the employer or the latter's family,
or when the employer is precisely retrenching in order to prevent losses.
The need is for a rule which, while recognizing the employee's right to
notice before he is dismissed or laid off, at the same time acknowledges the
right of the employer to dismiss for any of the just causes enumerated in Art.
282 or to terminate employment for any of the authorized causes mentioned
in Arts. 283-284. If the Wenphil rule imposing a fine on an employer who is
found to have dismissed an employee for cause without prior notice is
deemed ineffective in deterring employer violations of the notice
requirement, the remedy is not to declare the dismissal void if there are just
or valid grounds for such dismissal or if the termination is for an authorized
cause. That would be to uphold the right of the employee but deny the right
of the employer to dismiss for cause. Rather, the remedy is to order the
payment to the employee of full backwages from the time of his dismissal
until the court finds that the dismissal was for a just cause. But, otherwise,
his dismissal must be upheld and he should not be reinstated. This is
because his dismissal is ineffectual.
Not all notice requirements are requirements of due process. Some are
simply part of a procedure to be followed before a right granted to a party
can be exercised. Others are simply an application of the Justinian precept,
embodied in the Civil Code, to act with justice, give everyone his due, and
observe honesty and good faith toward one's fellowmen. Such is the notice
requirement in Arts. 282-283. The consequence of the failure either of the
employer or the employee to live up to this precept is to make him liable in
damages, not to render his act (dismissal or resignation, as the case may be)
void. The measure of damages is the amount of wages the employee should
have received were it not for the termination of his employment without prior
notice. If warranted, nominal and moral damages may also be awarded.
We hold, therefore, that, with respect to Art. 283 of the Labor Code, 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. It is similar to the failure to observe the provisions of Art.
1592, in relation to Art. 1191, of the Civil Code. Indeed, under the Labor
Code, only the absence of a just cause for the termination of employment
can make the dismissal of an employee illegal. This is clear from Art. 279
which provides:
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.
Thus, only if the termination of employment is not for any of the
causes provided by law is it illegal and, therefore, the employee should be
reinstated and paid backwages. To contend that even if the termination is
for a just or authorized cause the employee concerned should be reinstated
and paid backwages would be to amend Art. 279 by adding another ground
for considering a dismissal illegal. What is more, it would ignore the fact that
under Art. 285, if it is the employee who fails to give a written notice to the
employer that he is leaving the service of the latter, at least one month in
advance, his failure to comply with the legal requirement does not result in
making his resignation void but only in making him liable for damages.
Given the nature of the violation, therefore, the appropriate sanction
for the failure to give notice is the payment of backwages for the period
when the employee is considered not to have been effectively dismissed or
his employment terminated.
The refusal to look beyond the validity of the initial action taken by the
employer to terminate employment either for an authorized or just cause can
result in an injustice to the employer. For not giving notice and hearing
before dismissing an employee, who is otherwise guilty of, say, theft, or even
of an attempt against the life of the employer, an employer will be forced to
keep in his employ such guilty employee. This is unjust.