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.

Labor Law; Administrative Law; If the factual findings of the NLRC and the Labor Arbiter
are conflicting, the reviewing court may delve into the records and examine for itself the
questioned findings.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. 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. 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.

Same; Dismissal of Employees; 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.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. 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 latters representative in connection with the employees 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.

Same; Same; Abandonment; Words and Phrases; Abandonment is the deliberate and
unjustified refusal of an employee to resume his employmentit is a form of neglect of
duty, hence, a just cause for termination of employment by the employer.
Abandonment is the deliberate and unjustified refusal of an employee to resume his
employment. It is a form of neglect of duty, hence, a just cause for termination of
employment by the employer. 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.

Same; Same; Same; Moonlighting; Subcontracting for another company clearly shows
the intention to sever the employer-employee relationship; The record of an employee is
a relevant consideration indetermining the penalty that should be meted out to him.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.

Same; Same; The employer may not be compelled to continue to employ such persons
whose continuance in the service will patently be inimical to his interests.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 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.

Same; Same; 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.
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.

Same; Same; Due Process; Notice Requirement; Procedurally, (1) if the dismissal is
based on a just cause under Article 282 of the Labor Code, 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, 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; Failure to observe due process in a dismissal for just or
authorized cause does not invalidate the dismissal but makes the employer liable for
non-compliance with the procedural requirements of due process.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.

Same; Same; Same; Same; The fact that the employee may not be residing in the
address indicated in the employers records does not excuse the employer from sending
the notices to the employees last known address.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 employees last
known address. Thus, it should be held liable for non-compliance with the procedural
requirements of due process.

Same; Same; Same; Same; The Court believes that the ruling in Serrano v. National
Labor Relations Commission, 323 SCRA 445 (2000), did not consider the full meaning
of Article 279 of the Labor Code which provision means that the termination is illegal
only if it is not for any of the justified or authorized causes provided by law and that
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 the Court to revisit the doctrine.
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.

Same; Same; Same; Constitutional Law; 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.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. 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.

Same; Same; Same; Same; Statutory due process should be differentiated from failure
to comply with constitutional due processconstitutional 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.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. Breaches of these due process requirements violate the Labor Code. Therefore
statutory due process should be differentiated from failure to comply with constitutional
due process. Constitutional due process protects the individual from the government
and assures him of his rights in criminal, civil or administrative proceedings; while
statutory due process found in the Labor Code and Implementing Rules protects
employees from being unjustly terminated without just cause after notice and hearing.

Same; Same; Same; The better rule is to abandon the Serrano doctrine and to follow
Wenphil v. National Labor Relations Commission, 170 SCRA 69 (1989), by holding that
the dismissal was for just cause but imposing sanctions on the employer, which
sanctions, however, must be stiffer than that imposed in Wenphil.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.

Same; Same; Same; The constitutional policy to provide full protection to labor is not
meant to be a sword to oppress employersthe commitment of this Court to the cause
of labor does not prevent it from sustaining the employer when it is in the right.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. 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.

Same; Same; Social Justice; 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 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; Social
justice is not based on rigid formulas set in stoneit has to allow for changing times
and circumstances.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. 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.
Same; Same; Due Process; The violation of an employees right to statutory due
process by the employer warrants the payment of indemnity in the form of nominal
damages, the amount of which is addressed to the sound discretion of the court, taking
into account the relevant circumstances.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. 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.

Same; Evidence; Payment; Burden of Proof; As a general rule, one who pleads
payment has the burden of proving iteven 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.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 documentswhich will show that overtime, differentials, service
incentive leave and other claims of workers have been paidare not in the possession
of the worker but in the custody and absolute control of the employer.
Same; Wages; Thirteenth Month Pay; The 13th month pay is included in the definition of
wage under Article 97(f) of the Labor Code from which the employer is prohibited under
Article 113 from making any deductions without the employees knowledge and consent.
Anent the deduction of SSS loan and the value of the shoes from petitioner Virgilio
Agabons 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 so as to further protect the
level of real wages from the ravages of world-wide inflation. 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 of the same Code from making any deductions without the employees 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 Agabons 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.

PUNO, J., Dissenting Opinion:

Labor Law; Dismissal of Employees; Due Process; I respectfully dissent and maintain
my view that the workingmans right to job security and due process of law cannot be
measured with a reduced price tag.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, 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 workingmans right to
job security and due process of law cannot be measured with a reduced price tag. The
majority opinion treats an employees 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.
Same; Same; Same; Social Justice; Words and Phrases; Constitution is an ode to
social justice; 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 society, and hence regulate all their actions
accordingly.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. 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. 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.

Same; Same; Same; Same; Substantive rights are not to be weakened by a diminished
procedural right, for in weakening the procedure, we weaken the substantive right.
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 of rights. These constitutional creeds should not be dwarfed by deeds. A
contrary posture would convert these creeds as meaningless constitutional patter. The
principle of social justice was not embedded in the fundamental law for demogoguery. It
was meant to be a vital, articulate, compelling principle of public policy. Social justice
should be a living reality and not a mere high level abstraction. 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.

Same; Same; Same; Same; Social justice in these cases is not equality but protection.
The constitution puts the employee on equal footing with his employer. 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. As Mr. Chief Justice Fernando
stressed in Victorias Milling Co., Inc. v. Workmens Compensation CommissionTo
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.

Same; Same; Same; The Supreme Court has long extended constitutional due process
in labor cases involving private action.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 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. In De Leon v. National Labor Relations
Commission where 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 petitioners position as his
only means of livelihood. In Reyes v. Philippine Duplicators, Inc., 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 non-compliance 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.

Same; Same; Same; The posture that the constitutional due process requirement limits
government action alone and does not apply to private action is already passmodern
notions of violations of due process which may fairly be attributed to the State have
expanded considerably in recent decades.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 constitutionalistBut 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 states 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. 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. Individual invasions of individual rights in certain
instances have become proper subjects of constitutional restraints. In fine, as Mr.
Justice Felix Frankfurter put it in Joint Anti-Fascist Refugee Committee v. McGrath,
[d]ue process, unlike some legal rules, is not a technical conception with a fixed
content unrelated to time, place, and circumstances x x x. 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. Beyond 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.

Same; Same; Same; An employee who is denied procedural due process is entitled to
reinstatement, nothing less.An employee who is denied procedural due 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 x
x x security of tenure x x x 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 chartersthrough a four-paragraph section in the Article on Social Justice and
Human Rights which details the protective mantle accorded to labor alone. Thus, Art.
XIII, Sec. 3 of the 1987 Constitution decrees that [t]he State shall afford full protection
to labor x x x and promote full employment x x x (All workers) shall be entitled to
security of tenure x x x 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 processuntil
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 hearingreinstatement.

ame; Same; Same; Compliance with procedural due process is not a burden on
employers.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.
Same; Same; Same; Dismissal without due process debases human dignity.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. Employees are not entitled to
anything less.

Same; Same; Same; Security of Tenure; In the hierarchy of rights of an employee, the
right to security of tenure is high, if not the highest.In the hierarchy of rights of an
employee, the right to security of tenure is high, if not the highest. Its paramount value is
recognized and guaranteed under our new Constitution. 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.

Same; Same; Same; Same; Workers need work more than anything elsework is a
defining feature of human existence.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. 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. Shylock said it well: You take my life when
you do take the means whereby I live.
Same; Same; Same; Same; To simply allow payment of nominal damages for violation
of employees right to due process is to give undue advantage to employersthe right
to security of tenure and due process is beyond monetary valuation.To simply allow
payment of nominal damages for violation of employees 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 extending Serrano. Agabon is far worse than Serrano.

Same; Same; Same; Same; 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 employees right to job security.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 employees 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
just penalize with the payment of pennies violations of the employees right to due
process. Without doubt, Wenphil and Serrano have lengthened the queue of the
unemployed. Agabon will stretch it out even more.
Same; Same; Same; Same; The Supreme Court should protect labor and it should walk
the talk.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.

PANGANIBAN, J., Separate Dissenting Opinion:

Labor Law; Dismissal of Employees; Due Process; I respectfully submit that nothing has
transpired in the past four and 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.With due respect, I strongly oppose the Courts inexplicable
turnaround. This ruling is a setback on labors rights. Thus, I reiterate my Dissent 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 employeefrom 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 countrys
development and global competence. Any further trampling of their rights is undeserved.

Same; Same; Same; 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.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 jurisprudential settled that when procedural due process
is violated, the proceedingsin this case, the dismissalshall be voided, and the
parties returned to their status 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 to 284 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 to criminal prosecutions to
administrative cases and election cases as well. I made a summary of these Decisions
in my aforesaid Serrano Opinion, which I shall no longer repeat here.

Same; Same; Same; Constitutional Law; The traditional doctrine that constitutional
rights may be invoked only against the State should be modified to enable the judiciary
to cope with new paradigms and to continue protecting the people from new forms of
abuses.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.

TINGA, J., Separate Opinion:

Labor Law; Dismissal of Employees; Due Process; The importance of sending the
notice of termination should not be trivializedthe termination letter serves as
indubitable proof of loss of employment, and its receipt compels the employee to
evaluate his or next options.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?

Same; Same; Same; 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.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, the
Court held: Of course, the employers 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.

Same; Same; Same; The Labor Code, in its inception, did not require notice or hearing
before an employer could terminate an employee for just cause.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.

Same; Same; Same; 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.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 wherein we held that the failure of petitioner to
give the private respondent the benefit of a hearing before he was dismissed constitutes
an infringement on his constitutional right to due process of law. Still, this theory has
been refuted, pellucidly and effectively to my mind, by Justice Mendozas disquisition in
Serrano.

Constitutional Law; Legal Philosophy; Judicial Legislation; Theories, no matter how

entrancing, remain theoretical unless adopted by legislation, or more controversially, by
judicial opinion.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 . . . 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.

Same; Same; Same; The strained analogy between the State and a private employer
does not square since the attributes of an employer are starkly incongruous with those
of the Stateemployers plainly do not possess the awesome powers and the
tremendous resources which the State has at its command.Justice Panganibans
Separate Opinion asserts that corporate behemoths and even individuals may now be
sources of abuses and threats to human rights and liberties. 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 detre 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.

Same; Same; Same; 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.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 Roosevelts New Deal regimemost of them addressing problems of labor
were struck down by an arch-conservative Court. 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. Of course, this Court should not be
insensate to the means and methods by which the entrenched powerful class may
maneuver the sociopolitical system to ensure self-preservation. However, the remedy to
rightward judicial bias is not leftward judicial bias. The more proper judicial attitude is to
give due respect to legislative prerogatives, regardless of the ideological sauce they are
dipped in.

Same; Same; Same; While the Bill of Rights maintains a position of primacy in the
constitutional hierarchy, it has scope and limitations that must be respected and
asserted by the Court, even though they may at times serve somewhat bitter ends.
While the Bill of Rights maintains a position of primacy in the constitutional hierarchy, 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.
Same; Same; Same; We must avoid overarching declarations in order to justify an end
result beneficial to labor.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.

Same; Same; Same; It is not difficult to be enraptured by novel legal ideastheir

characterization is susceptible to the same marketing traps that hook consumers to new
products; 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; Just as patriotism is the last refuge of
scoundrels, the broad constitutional claim that the Bill of Rights may be invoked to
invalidate actions by private entities against private individuals is the final resort of the
desperate litigant.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.

Same; Labor Law; Due Process; It was only after the enactment of the Labor Code that
the doctrine relied upon by the dissenting opinions became en vogue.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.
Same; Same; Same; Without specific and pertinent legislation, judicial bodies will be at
a loss, formulating their own conclusion to approximate at least the aims of the
Constitutionultimately, 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. 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 employmenta utopian
notion, doubtlessbut 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.

Same; Same; Same; The Courts 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.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
workers 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.
The Courts 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 employees 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 employees 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.
Labor Law; Dismissal of Employees; Due Process; The circumstances distinguishing
just and authorized causes are too markedly different to be subjected to the same rules
and reasoning in interpretation.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.

Same; Same; Same; 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 hearingbased on
reading Section 279 alone, the existence of just cause by itself is sufficient to validate
the termination.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.

Same; Same; Same; Reinstatement; The remedy of reinstatement despite termination

for just cause is simply not authorized by the Labor Code.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, 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 Codeserious 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 causesare 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.

Same; Same; Same; The Labor Code presents no textually demonstrable commitment
to invalidate a dismissal for just cause due to the absence of notice or hearing.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.

Same; Same; Separation Pay; Supreme Court; Equity Jurisdiction; The award of
separation pay as a measure of social justice has no statutory basis, but clearly
emanates from the Courts so-called equity jurisdiction.The award of separation pay
as a measure of social justice has no statutory basis, but clearly emanates from the
Courts so-called equity jurisdiction. The Courts 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. Abstract as the concept is, it does not admit to
definite and objective standards.

Same; Same; Social Justice; 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.I consider the pronouncement
regarding the proper monetary awards in such cases as Wenphil Corp. v. NLRC, Reta,
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.

Same; Criminal Law; Under Art. 288 of the Labor Code, which is a penal provision, 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; Art. 288 clearly serves as a punitive fine,
rather than a compensatory measurenothing in its language indicates an intention to
compensate or remunerate a private person for injury he may have sustained.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. 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 employees 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.

Same; Damages; The proper legal basis for holding the employer liable for monetary
damages to the employee dismissed for just cause is the Civil Code.As earlier stated,
Wenphil allowed the payment of indemnity to the employee dismissed for just cause is
dependent on the facts of each case and the gravity of the omission committed by the
employer. However, I considered Wenphil flawed insofar as it is silent as to the statutory
basis for the indemnity award. This failure, to my mind, renders it unwise for to reinstate
the Wenphil rule, and foster the impression that it is the judicial business to invent
awards for damages without clear statutory basis. The proper legal basis for holding the
employer liable for monetary damages to the employee dismissed for just cause is the
Civil Code. The award of damages should be measured against the loss or injury
suffered by the employee by reason of the employers 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.

Same; Same; The damages referred under Section 217(4) of the Labor Code are those
available under the Civil Code, 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.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. 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.

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Public Attorneys Office for petitioners.
Nestor P. Ricolcol for private respondents.

YNARES-SANTIAGO, J.:

This petition for review seeks to reverse the decision1 of the Court of Appeals dated
January 23, 2003, in CA-G.R. SP No. 63017, modifying the decision of National Labor
Relations Commission (NLRC) in NLRC-NCR Case No. 023442-00.
Private respondent Riviera Home Improvements, Inc. is engaged in the business of
selling and installing ornamental and construction materials. It employed petitioners
Virgilio Agabon and Jenny Agabon as gypsum board and cornice installers on January
2, 1992 until February 23, 1999 when they were dismissed for abandonment of work.

Petitioners then filed a complaint for illegal dismissal and payment of money claims3
and on December 28, 1999, the Labor Arbiter rendered a decision declaring the
dismissals illegal and ordered private respondent to pay the monetary claims. The
dispositive portion of the decision states:

WHEREFORE, premises considered, We find the termination of the complainants

illegal. Accordingly, respondent is hereby ordered to pay them their backwages up to
November 29, 1999 in the sum of:

1. Jenny M. AgabonP56, 231.93

2. Virgilio C. Agabon56, 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 Agabons 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 petitioners 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 Agabons 13th month pay for 1998 in the amount of
P2,150.00.
SO ORDERED.6

Hence, this petition for review on the sole issue of whether petitioners were illegally
dismissed.7

Petitioners assert that they were dismissed because the private respondent refused to
give them assignments unless they agreed to work on a pakyaw basis when they
reported for duty on February 23, 1999. They did not agree on this arrangement
because it would mean losing benefits as Social Security System (SSS) members.
Petitioners also claim that private respondent did not comply with the twin requirements
of notice and hearing.8

Private respondent, on the other hand, maintained that petitioners were not dismissed
but had abandoned their work.9 In fact, private respondent sent two letters to the last
known addresses of the petitioners advising them to report for work. Private
respondents 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 latters representative in connection
with the employees work; (b) gross and habitual neglect by the employee of his duties;
(c) fraud or willful breach by the employee of the trust reposed in him by his employer or
his duly authorized representative; (d) commission of a crime or offense by the
employee against the person of his employer or any immediate member of his family or
his duly authorized representative; and (e) other causes analogous to the foregoing.

Abandonment is the deliberate and unjustified refusal of an employee to resume his

employment.14 It is a form of neglect of duty, hence, a just cause for termination of
employment by the employer.15 For a valid finding of abandonment, these two factors
should be present: (1) the failure to report for work or absence without valid or justifiable
reason; and (2) a clear intention to sever employer-employee relationship, with the
second as the more determinative factor which is manifested by overt acts from which it
may be deduced that the employees has no more intention to work. The intent to
discontinue the employment must be shown by clear proof that it was deliberate and
unjustified.16

In February 1999, petitioners were frequently absent having subcontracted for an

installation work for another company. Subcontracting for another company clearly
showed the intention to sever the employer-employee relationship with private
respondent. This was not the first time they did this. In January 1996, they did not report
for work because they were working for another company. Private respondent at that
time warned petitioners that they would be dismissed if this happened again. Petitioners
disregarded the warning and exhibited a clear intention to sever their employer-
employee relationship. The record of an employee is a relevant consideration in
determining the penalty that should be meted out to him.17

In Sandoval Shipyard v. Clave,18 we held that an employee who deliberately absented

from work without leave or permission from his employer, for the purpose of looking for
a job elsewhere, is considered to have abandoned his job. We should apply that rule
with more reason here where petitioners were absent because they were already
working in another company.

The law imposes many obligations on the employer such as providing just
compensation to workers, observance of the procedural requirements of notice and
hearing in the termination of employment. On the other hand, the law also recognizes
the right of the employer to expect from its workers not only good performance,
adequate work and diligence, but also good conduct19 and loyalty. The employer may
not be compelled to continue to employ such persons whose continuance in the service
will patently be inimical to his interests.20

After establishing that the terminations were for a just and valid cause, we now
determine if the procedures for dismissal were observed.

The procedure for terminating an employee is found in Book VI, Rule I, Section 2(d) of
the Omnibus Rules Implementing the Labor Code:

Standards of due process: requirements of notice.In all cases of termination of

employment, the following standards of due process shall be substantially observed:

I. For termination of employment based on just causes as defined in Article 282 of the
Code:
(a) A written notice served on the employee specifying the ground or grounds for
termination, and giving to said employee reasonable opportunity within which to explain
his side;
(b) A hearing or conference during which the employee concerned, with the assistance
of counsel if the employee so desires, is given opportunity to respond to the charge,
present his evidence or rebut the evidence presented against him; and
(c) A written notice of termination served on the employee indicating that upon due
consideration of all the circumstances, grounds have been established to justify his
termination.
In case of termination, the foregoing notices shall be served on the employees 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 employees last known address.21 Thus, it should be held liable for
noncompliance with the procedural requirements of due process.

A review and re-examination of the relevant legal principles is appropriate and timely to
clarify the various rulings on employment termination in the light of Serrano v. National
Labor Relations Commission.22

Prior to 1989, the rule was that a dismissal or termination is illegal if the employee was
not given any notice. In the 1989 case of Wenphil Corp. v. National Labor Relations
Commission,23 we reversed this long-standing rule and held that the dismissed
employee, although not given any notice and hearing, was not entitled to reinstatement
and backwages because the dismissal was for grave misconduct and insubordination, a
just ground for termination under Article 282. The employee had a violent temper and
caused trouble during office hours, defying superiors who tried to pacify him. We
concluded that reinstating the employee and awarding backwages may encourage him
to do even worse and will render a mockery of the rules of discipline that employees are
required to observe.24 We further held that:

Under the circumstances, the dismissal of the private respondent for just cause should
be maintained. He has no right to return to his former employment.
However, the petitioner must nevertheless be held to account for failure to extend to
private respondent his right to an investigation before causing his dismissal. The rule is
explicit as above discussed. The dismissal of an employee must be for just or
authorized cause and after due process. Petitioner committed an infraction of the
second requirement. Thus, it must be imposed a sanction for its failure to give a formal
notice and conduct an investigation as required by law before dismissing petitioner from
employment. Considering the circumstances of this case petitioner must indemnify the
private respondent the amount of P1,000.00. The measure of this award depends on
the facts of each case and the gravity of the omission committed by the employer.25
The rule thus evolved: where the employer had a valid reason to dismiss an employee
but did not follow the due process requirement, the dismissal may be upheld but the
employer will be penalized to pay an indemnity to the employee. This became known as
the Wenphil or Belated Due Process Rule.

On January 27, 2000, in Serrano, the rule on the extent of the sanction was changed.
We held that the violation by the employer of the notice requirement in termination for
just or authorized causes was not a denial of due process that will nullify the
termination. However, the dismissal is ineffectual and the employer must pay full
backwages from the time of termination until it is judicially declared that the dismissal
was for a just or authorized cause.

The rationale for the re-examination of the Wenphil doctrine in Serrano was the
significant number of cases involving dismissals without requisite notices. We
concluded that the imposition of penalty by way of damages for violation of the notice
requirement was not serving as a deterrent. Hence, we now required payment of full
backwages from the time of dismissal until the time the Court finds the dismissal was for
a just or authorized cause.

Serrano was confronting the practice of employers to dismiss now and pay later by
imposing full backwages.

We believe, however, that the ruling in Serrano did not consider the full meaning of
Article 279 of the Labor Code which states:

ART. 279. Security of Tenure.In cases of regular employment, the employer shall not
terminate the services of an employee except for a just cause or when authorized by
this Title. An employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up to the
time of his actual reinstatement.

This means that the termination is illegal only if it is not for any of the justified or
authorized causes provided by law. Payment of backwages and other benefits, including
reinstatement, is justified only if the employee was unjustly dismissed.
The fact that the Serrano ruling can cause unfairness and injustice which elicited strong
dissent has prompted us to revisit the doctrine.

To be sure, the Due Process Clause in Article III, Section 1 of the Constitution embodies
a system of rights based on moral principles so deeply imbedded in the traditions and
feelings of our people as to be deemed fundamental to a civilized society as conceived
by our entire history. Due process is that which comports with the deepest notions of
what is fair and right and just.26 It is a constitutional restraint on the legislative as well
as on the executive and judicial powers of the government provided by the Bill of Rights.

Due process under the Labor Code, like Constitutional due process, has two aspects:
substantive, i.e., the valid and authorized causes of employment termination under the
Labor Code; and procedural, i.e., the manner of dismissal. Procedural due process
requirements for dismissal are found in the Implementing Rules of P.D. 442, as
amended, otherwise known as the Labor Code of the Philippines in Book VI, Rule I,
Sec. 2, as amended by Department Order Nos. 9 and 10.27 Breaches of these due
process requirements violate the Labor Code. Therefore statutory due process should
be differentiated from failure to comply with constitutional due process.

Constitutional due process protects the individual from the government and assures
him of his rights in criminal, civil or administrative proceedings; while statutory due
process found in the Labor Code and Implementing Rules protects employees from
being unjustly terminated without just cause after notice and hearing.

In Sebuguero v. National Labor Relations Commission,28 the dismissal was for a just
and valid cause but the employee was not accorded due process. The dismissal was
upheld by the Court but the employer was sanctioned. The sanction should be in the
nature of indemnification or penalty, and depends on the facts of each case and the
gravity of the omission committed by the employer.

In Nath v. National Labor Relations Commission,29 it was ruled that even if the
employee was not given due process, the failure did not operate to eradicate the just
causes for dismissal. The dismissal being for just cause, albeit without due process, did
not entitle the employee to reinstatement, backwages, damages and attorneys fees.
Mr. Justice Jose C. Vitug, in his separate opinion in MGG Marine Services, Inc. v.
National Labor Relations Commission,30 which opinion he reiterated in Serrano, stated:
C. Where there is just cause for dismissal but due process has not been properly
observed by an employer, it would not be right to order either the reinstatement of the
dismissed employee or the payment of backwages to him. In failing, however, to comply
with the procedure prescribed by law in terminating the services of the employee, the
employer must be deemed to have opted or, in any case, should be made liable, for the
payment of separation pay. It might be pointed out that the notice to be given and the
hearing to be conducted generally constitute the two-part due process requirement of
law to be accorded to the employee by the employer. Nevertheless, peculiar
circumstances might obtain in certain situations where to undertake the above steps
would be no more than a useless formality and where, accordingly, it would not be
imprudent to apply the res ipsa loquitur rule and award, in lieu of separation pay,
nominal damages to the employee. x x x.31

After carefully analyzing the consequences of the divergent doctrines in the law on
employment termination, we believe that in cases involving dismissals for cause but
without observance of the twin requirements of notice and hearing, the better rule is to
abandon the Serrano doctrine and to follow Wenphil by holding that the dismissal was
for just cause but imposing sanctions on the employer. Such sanctions, however, must
be stiffer than that imposed in Wenphil. By doing so, this Court would be able to achieve
a fair result by dispensing justice not just to employees, but to employers as well.
The unfairness of declaring illegal or ineffectual dismissals for valid or authorized
causes but not complying with statutory due process may have far-reaching
consequences.

This would encourage frivolous suits, where even the most notorious violators of
company policy are rewarded by invoking due process. This also creates absurd
situations where there is a just or authorized cause for dismissal but a procedural
infirmity invalidates the termination. Let us take for example a case where the employee
is caught stealing or threatens the lives of his co-employees or has become a criminal,
who has fled and cannot be found, or where serious business losses demand that
operations be ceased in less than a month. Invalidating the dismissal would not serve
public interest. It could also discourage investments that can generate employment in
the local economy.

The constitutional policy to provide full protection to labor is not meant to be a sword to
oppress employers. The commitment of this Court to the cause of labor does not
prevent us from sustaining the employer when it is in the right, as in this case.32
Certainly, an employer should not be compelled to pay employees for work not actually
performed and in fact abandoned.

The employer should not be compelled to continue employing a person who is

admittedly guilty of misfeasance or malfeasance and whose continued employment is
patently inimical to the employer. The law protecting the rights of the laborer authorizes
neither oppression nor self-destruction of the employer.33

It must be stressed that in the present case, the petitioners committed a grave offense,
i.e., abandonment, which, if the requirements of due process were complied with, would
undoubtedly result in a valid dismissal.

An employee who is clearly guilty of conduct violative of Article 282 should not be
protected by the Social Justice Clause of the Constitution. Social justice, as the term
suggests, should be used only to correct an injustice. As the eminent Justice Jose P.
Laurel observed, social justice must be founded on the recognition of the necessity of
interdependence among diverse units of a society and of the protection that should be
equally and evenly extended to all groups as a combined force in our social and
economic life, consistent with the fundamental and paramount objective of the state of
promoting the health, comfort, and quiet of all persons, and of bringing about the
greatest good to the greatest number.34
This is not to say that the Court was wrong when it ruled the way it did in Wenphil,
Serrano and related cases. Social justice is not based on rigid formulas set in stone. It
has to allow for changing times and circumstances.

Justice Isagani Cruz strongly asserts the need to apply a balanced approach to labor-
management relations and dispense justice with an even hand in every case:

We have repeatedly stressed that social justiceor any justice for that matteris 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 Commission,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 employees one month
salary. This indemnity is intended not to penalize the employer but to vindicate or
recognize the employees 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 documentswhich will show that overtime, differentials, service
incentive leave and other claims of workers have been paidare 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
Agabons 13th month pay, we find the same to be unauthorized. The evident intention of
Presidential Decree No. 851 is to grant an additional income in the form of the 13th
month pay to employees not already receiving the same43 so as to further protect the
level of real wages from the ravages of world-wide inflation.44 Clearly, as additional
income, the 13th month pay is included in the definition of wage under Article 97(f) of
the Labor Code, to wit:

(f) Wage paid to any employee shall mean the remuneration or earnings, however
designated, capable of being expressed in terms of money whether fixed or ascertained
on a time, task, piece, or commission basis, or other method of calculating the same,
which is payable by an employer to an employee under a written or unwritten contract of
employment for work done or to be done, or for services rendered or to be rendered and
includes the fair and reasonable value, as determined by the Secretary of Labor, of
board, lodging, or other facilities customarily furnished by the employer to the
employee . . .
from which an employer is prohibited under Article 11345 of the same Code from
making any deductions without the employees knowledge and consent. In the instant
case, private respondent failed to show that the deduction of the SSS loanand the value
of the shoes from petitioner Virgilio Agabons13th month pay was authorized by the
latter. The lack ofauthority to deduct is further bolstered by the fact that petitioner Virgilio
Agabon included the same as one of his moneyclaims against private respondent.
The Court of Appeals properly reinstated the monetary claims awarded by the Labor
Arbiter ordering the private respondent to pay each of the petitioners holiday pay for
four regular holidays from 1996 to 1998, in the amount of P6,520.00, service incentive
leave pay for the same period in the amount of P3,255.00 and the balance of Virgilio
Agabons 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 Agabons 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, J., See Dissenting Opinion.

Panganiban, J., 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., On Leave.
Tinga, J., In the result, per separate opinion.
Chico-Nazario, J., I concur in J. Punos dissenting opinion.
Garcia, J., I join J. Punos dissenting opinion.

DISSENTING OPINION
PUNO, J.:

Strike if you will, but hear me first! was adjuration of Themistocles, c. 528-462 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.1 It 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 Commission2
put an abrupt end to the longstanding 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 bloodlinetheir
jobswithout due process of law.

A decade later, we re-examined Wenphil in Serrano v. National Labor Relations

Commission3 but the struggle of our employees for job security turned from bad to
worse. In Serrano, the majority held that the employers 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 crumbsbackwages
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 in Serrano 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.
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 11 (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 employees right to due process
against the power of the peso of the employers.

To an employee, a job is everything. Its loss involves terrible repercussionsstoppage

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 workingmans right to job security and due process of law cannot be
measured with a reduced price tag. The majority opinion treats an employees 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

x x x 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 x x x (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 Goldfields 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 x x x between
labor and capital in industry and in agriculture. The State may provide for compulsory
arbitration.

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 communitys 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 life-
and-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 Association22 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 x x x. 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 Rights25 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.

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 everyones 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
titleto 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 workingmans 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 of 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
demogoguery. 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
x x x 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 petitioners 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.

x x x 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.

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. Workmens
Compensation Commission35

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 Appeals39 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 Commission41 where 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 petitioners 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 non-compliance 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. In Miguel 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 mans 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 employers 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 employers 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 rule.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 Relations53

1. the right to a hearing which includes the right to present ones 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 states
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.56 Individual invasions
of individual rights in certain instances have become proper subjects of constitutional
restraints.57 In 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 x x x. 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.59 Beyond 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, x x x [corporations 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 x x x.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 nobodys 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 run 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 productionno matter what was produced or who it
harmed.

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
x x x 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 due 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 x x x security of
tenure x x x65 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 chartersthrough 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 x x x and promote full employment x x x (All workers) shall be entitled to
security of tenure x x x 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 processuntil
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 hearingreinstatement.

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 employees 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 (Post-
Employment) 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) simple notices: (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 employers 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.
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 employers 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 Employment68 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 for what is at stake is not only
the employees position but also their means of livelihood.69 It must not be oppressive
and abusive since it affects ones 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 employees right to pre-
dismissal notice will negate the right of an employer to dismiss for cause. The pre-
Wenphil 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 employers 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.71
Employees are not entitled to anything less.

Seven. In the hierarchy of rights of an employee, 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 laws 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.78 Shylock 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 employees 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 extending Serrano. Agabon is far worse than Serrano.

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 under Serrano, 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:

x x x The dilution of the rule has been abused 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 employees 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 employers 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 employees
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 just penalize with the payment of pennies
violations of the employees right to due process. Without doubt, Wenphil and Serrano
have 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.

SEPARATE DISSENTING OPINION

PANGANIBAN, J.:

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 causeseparation pay in accordance
with Article 2832 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 2773 of the Labor Code and Section 24
of Rule XXIII of the 1999 Implementing Rules and Regulations. The majority holds that
for violation of the employees 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 thatwhether for
a valid cause or notdismissing 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
employees right to notice and hearing, through the payment of indemnity to each
dismissed employee in an amount ranging from P1,000 to P10,000.

In 2000, Serrano6 held that such dismissals for just or authorized causes but without
due process were merely ineffectual (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 Labors Rights

With due respect, I strongly oppose the Courts inexplicable turnaround. This ruling is a
setback on labors rights. Thus, I reiterate my Dissent7 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 employeefrom 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 countrys 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 jurisprudential settled that when procedural
due process is violated, the proceedingsin this case, the dismissalshall be voided,
and the parties returned to their status 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 2828 to 2849 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 termination10 to criminal prosecutions11 to
administrative cases12 and election cases13 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) the reinstatement 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 restaurants
customers. In an altercation with a co-employee, he slapped [the latters] 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 employers businessa fastfood chain catering to the general public,
towards whom courtesy was a prized virtue.

In most of the succeeding cases, thoughincluding the present one before us in which
petitioners had been dismissed without prior notice and hearingthere 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.

Respect for Due Process Should Be Maintained

The ponencia concedes that the workers 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]nes 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.

SEPARATE OPINION:
TINGA, J.:

I concur in the result, the final disposition of the petition being correct. There is no
denying the importance of the Courts ruling today, which should be considered as
definitive as to the effect of the failure to render the notice and hearing required under
the Labor Code when an employee is being dismissed for just causes, as defined under
the same law. The Court emphatically reaffirms the rule that dismissals for just cause
are not invalidated due to the failure of the employer to observe the proper notice and
hearing requirements under the Labor Code. At the same time, The Decision likewise
establishes that the Civil Code provisions on damages serve as the proper framework
for the appropriate relief to the employee dismissed for just cause if the notice-hearing
requirement is not met. Serrano v. NLRC,1 insofar as it is controlling in dismissals for
unauthorized causes, is no longer the controlling precedent. Any and all previous rulings
and statements of the Court inconsistent with these determinations are now deemed
inoperative.

My views on the questions raised in this petition are comprehensive, if I may so in all
modesty. I offer this opinion to discuss the reasoning behind my conclusions, pertaining
as they do to questions of fundamental importance.

Prologue
The factual backdrop of the present Petition for Review is not novel. Petitioners claim
that they were illegally dismissed by the respondents, who allege in turn that petitioners
had actually abandoned their employment. There is little difficulty in upholding the
findings of the NLRC and the Court of Appeals that petitioners are guilty of
abandonment, one of the just causes for termination under the Labor Code. Yet, the
records also show that the employer was remiss in not giving the notice required by the
Labor Code; hence, the resultant controversy as to the legal effect of such failure vis--
vis the warranted dismissal.

Ostensibly, the matter has been settled by our decision in Serrano2, wherein the Court
ruled that the failure to properly observe the notice requirement did not render the
dismissal, whether for just or authorized causes, null and void, for such violation was
not a denial of the constitutional right to due process, and that the measure of
appropriate damages in such cases ought to be the amount of wages the employee
should have received were it not for the termination of his employment without prior
notice.3 Still, the Court has, for good reason, opted to reexamine the so-called Serrano
doctrine through the present petition

Antecedent Facts

Respondent Riviera Home Improvements, Inc. (Riviera Home) is engaged in the

manufacture and installation of gypsum board and cornice. In January of 1992, the
Agabons were hired in January of 1992 as cornice installers by Riviera Home.
According to their personnel file with Riviera Home, the Agabons given address was
3RDS Tailoring, E. Rodriguez Ave., Moonwalk Subdivision, P-II Paraaque City, Metro
Manila.4
I
t 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 Arbiters 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 Decision15 dated 23 January 2003, the Court of Appeals
affirmed the finding that the Agabons had abandoned their employment. It noted that the
two elements constituting abandonment had been established, to wit: the failure to
report for work or absence without valid justifiable reason, and; a clear intention to sever
the employer-employee relationship. The intent to sever the employer-employee
relationship was buttressed by the Agabons 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 Agabons
thirteenth (13th) month pay. It ruled that the failure to adduce proof in support thereof
was not fatal and that the burden of proving that such benefits had already been paid
rested on Riviera Homes.16 Given that Riviera Homes failed to present proof of
payment to the Agabons of their holiday pay and service incentive leave pay for the
years 1996, 1997 and 1998, the Court of Appeals chose to believe that such benefits
had not actually been received by the employees. It also ruled that the apparent
deductions made by Riviera Homes on the thirteenth (13th) month pay of Virgilio
Agabon violated Section 10 of the Rules and Regulations Implementing Presidential
Decree No. 851.17 Accordingly, Riviera Homes was ordered to pay the Agabons holiday
for four (4) regular holidays in 1996, 1997 and 1998, as well as their service incentive
leave pay for said years, and the balance of Virgilio Agabons 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
terminationthe first to apprise the employee of the cause for which dismissal is
sought, and the second to notify the employee of the decision of dismissal.20 The
Agabons likewise maintain that they did not seek reinstatement owing to the strained
relations between them and Riviera Homes.

The Agabons present to this Court only one issue, i.e.: whether or not they were illegally
dismissed from their employment.21 There are several dimensions though to this issue
which warrant full consideration.

The Abandonment Dimension

Review of Factual Finding of Abandonment

As the Decision points out, abandonment is characterized by the failure to report for
work or absence without valid or justifiable reason, and a clear intention to sever the
employer-employee relationship. The question of whether or not an employee has
abandoned employment is essentially a factual issue. 22 The NLRC and the Court of
Appeals, both appropriate triers of fact, concluded that the Agabons had actually
abandoned their employment, thus there is little need for deep inquiry into the
correctness of this factual finding. There is no doubt that the Agabons stopped reporting
for work sometime in February of 1999. And there is no evidence to support their
assertion that such absence was due to the deliberate failure of Riviera Homes to give
them work. There is also the fact, as noted by the NLRC and the Court of Appeals, that
the Agabons did not pray for reinstatement, but only for separation pay and money
claims.23 This failure indicates their disinterest in maintaining the employer-employee
relationship and their unabated avowed intent to sever it. Their excuse that strained
relations between them and Riviera Homes rendered reinstatement no longer feasible
was hardly given credence by the NLRC and the Court of Appeals.24

The contrary conclusion arrived at by the Labor Arbiter as regards abandonment is of

little bearing to the case. All that the Labor Arbiter said on that point was that Riviera
Homes was not able to refute the Agabons claim that they were terminated on 23
February 1999.25 The Labor Arbiter did not explain why or how such finding was
reached or how such finding was more credible than that of Riviera Homes. Being
bereft of reasoning, the conclusion deserves scant consideration.
Compliance with Notice Requirement

At the same time, both the NLRC and the Court of Appeals failed to consider the
apparent fact that the rules governing notice of termination were not complied with by
Riviera Homes. Section 2, Book V, Rule XXIII of the Omnibus Rules Implementing the
Labor Code (Implementing Rules) specifically provides that for termination of
employment based on just causes as defined in Article 282, there must be: (1) written
notice served on the employee specifying the grounds for termination and giving
employee reasonable opportunity to explain his/her side; (2) a hearing or conference
wherein the employee, with the assistance of counsel if so desired, is given opportunity
to respond to the charge, present his evidence or rebut evidence presented against
him/her; and (3) written notice of termination served on the employee indicating that
upon due consideration of all the circumstances, grounds have been established to
justify termination.

At the same time, Section 2, Book V, Rule XXIII of the Implementing Rules does not
require strict compliance with the above procedure, but only that the same be
substantially observed.

Riviera Homes maintains that the letters it sent on 10 March 1999 to the Agabons
sufficiently complied with the notice rule. These identically worded letters noted that the
Agabons had stopped working without permission that they failed to return for work
despite having been repeatedly told to report to the office and resume their
employment.26 The letters ended with an invitation to the Agabons to report back to the
office and return to work.27

The apparent purpose of these letters was to advise the Agabons that they were
welcome to return back to work, and not to notify them of the grounds of termination.
Still, considering that only substantial compliance with the notice requirement is
required, I am prepared to say that the letters sufficiently conform to the first notice
required under the Implementing Rules. The purpose of the first notice is to duly inform
the employee that a particular transgression is being considered against him or her, and
that an opportunity is being offered for him or her to respond to the charges. The letters
served the purpose of informing the Agabons of the pending matters beclouding their
employment, and extending them the opportunity to clear the air.
Contrary to the Agabons claim, the letter-notice was correctly sent to the employees
last known address, in compliance with the Implementing Rules. There is no dispute
that these letters were not actually received by the Agabons, as they had apparently
moved out of the address indicated therein. Still, the letters were sent to what Riviera
Homes knew to be the Agabons last known address, as indicated in their personnel file.
The Agabons insist that Riviera Homes had known of the change of address, offering as
proof their company IDs which purportedly print out their correct new address. Yet, as
pointed out by the NLRC and the Court of Appeals, the addresses indicated in the IDs
are not the Agabons, but that of the person who is to be notified in case on emergency
involve either or both of the Agabons.

The actual violation of the notice requirement by Riviera Homes lies in its failure to
serve on the Agabons the second notice which should inform them of termination. As
the Decision notes, Riviera Homes argument that sending the second notice was
useless due to the change of address is inutile, since the Implementing Rules plainly
require that the notice of termination should be served at the employees 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. Noncompliance with the notice rule, as evident in this case,
contravenes the Implementing Rules. But does the violation serve to invalidate the
Agabons dismissal for just cause?

The So-Called Constitutional Law Dimension

Justices Puno and Panganiban opine that the Agabons should be reinstated as a
consequence of the violation of the notice requirement. I respectfully disagree, for the
reasons expounded below.

Constitutional Considerations
Of Due Process and the Notice-Hearing
Requirement in Labor Termination Cases

Justice Puno proposes that the failure to render due notice and hearing prior to
dismissal for just cause constitutes a violation of the constitutional right to due process.
This view, as acknowledged by Justice Puno himself, runs contrary to the Courts
pronouncement in Serrano v. NLRC28 that the absence of due notice and hearing prior
to dismissal, if for just cause, violates statutory due process.
The ponencia of Justice Vicente V. Mendoza in Serrano provides this cogent overview
of the history of the doctrine:
Indeed, to contend that the notice requirement in the Labor Code is an aspect of due
process is to overlook the fact that Art. 283 had its origin in Art. 302 of the Spanish Code
of Commerce of 1882 which gave either party to the employer-employee relationship
the right to terminate their relationship by giving notice to the other one month in
advance. In lieu of notice, an employee could be laid off by paying him a mesada
equivalent to his salary for one month. This provision was repealed by Art. 2270 of the
Civil Code, which took effect on August 30, 1950. But on June 12, 1954, R.A. No. 1052,
otherwise known as the Termination Pay Law, was enacted reviving the mesada. On
June 21, 1957, the law was amended by R.A. No. 1787 providing for the giving of
advance notice for every year of service.29

Under Section 1 of the Termination Pay Law, an employer could dismiss an employee
without just cause by serving written notice on the employee at least one month in
advance or one-half month for every year of service of the employee, whichever was
longer.30 Failure to serve such written notice entitled the employee to compensation
equivalent to his salaries or wages corresponding to the required period of notice from
the date of termination of his employment.
However, there was no similar written notice requirement under the Termination Pay
Law if the dismissal of the employee was for just cause. The Court, speaking through
Justice JBL Reyes, ruled in Phil. Refining Co. v. Garcia:31
[Republic] Act 1052, as amended by Republic Act 1787, impliedly recognizes the right of
the employer to dismiss his employees (hired without definite period) whether for just
case, as therein defined or enumerated, or without it. If there be just cause, the
employer is not required to serve any notice of discharge nor to disburse termination
pay to the employee. x x x32

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 employers prerogative to dismiss employees hired without a definite
period may be with or without cause. But if the manner in which such right is exercised
is abusive, the employer stands to answer to the dismissed employee for damages.34

The Termination Pay Law was among the repealed laws with the enactment of the
Labor Code in 1974. Significantly, the Labor Code, in its inception, did not require notice
or hearing before an employer could terminate an employee for just cause. As Justice
Mendoza explained:

Where the termination of employment was for a just cause, no notice was required to be
given to the employee. It was only on September 4, 1981 that notice was required to be
given even where the dismissal or termination of an employee was for cause. This was
made in the rules issued by the then Minister of Labor and Employment to implement
B.P. Blg. 130 which amended the Labor Code. And it was still much later when the
notice requirement was embodied in the law with the amendment of Art. 277(b) by R.A.
No. 6715 on March 2, 1989.35
It cannot be denied though that the thinking that absence of notice or hearing prior to
termination constituted a constitutional violation has gained a jurisprudential foothold
with the Court. Justice Puno, in his Dissenting Opinion, cites several cases in support of
this theory, beginning with Batangas Laguna Tayabas Bus Co. v. Court of Appeals36
wherein we held that the failure of petitioner to give the private respondent the benefit
of a hearing before he was dismissed constitutes an infringement on his constitutional
right to due process of law.37

Still, this theory has been refuted, pellucidly and effectively to my mind, by Justice
Mendozas disquisition in Serrano, thus:

x x x 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 employees 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.

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 latters immediate family or duly authorized representatives,
or other analogous cases)38

The Court in the landmark case of People v. Marti39 clarified the proper dimensions of
the Bill of Rights.
That the Bill of Rights embodied in the Constitution is not meant to be invoked against
acts of private individuals finds support in the deliberations of the Constitutional
Commission. True, the liberties guaranteed by the fundamental law of the land must
always be subject to protection. But protection against whom? Commissioner Bernas in
his sponsorship speech in the Bill of Rights answers the query which he himself posed,
as follows:

First, the general reflections. The protection of fundamental liberties in the essence of
constitutional democracy. Protection against whom? Protection against the state. The
Bill of Rights governs the relationship between the individual and the state. Its concern
is not the relation between individuals, between a private individual and other
individuals. What the Bill of Rights does is to declare some forbidden zones in the
private sphere inaccessible to any power holder. (Sponsorship Speech of
Commissioner Bernas; Record of the Constitutional Commission, Vol. 1, p. 674; July 17,
1986; Italics supplied)40
I do not doubt that requiring notice and hearing prior to termination for just cause is an
admirable sentiment borne out of basic equity and fairness. Still, it is not a constitutional
requirement that can impose itself on the relations of private persons and entities.
Simply put, the Bill of Rights affords protection against possible State oppression
against its citizens, but not against an unjust or repressive conduct by a private party
towards another.

Justice Puno characterizes the notion that constitutional due process limits government
action alone as pass, and adverts to nouvelle vague theories which assert that
private conduct may be restrained by constitutional due process. His dissent alludes to
the American experience making references to the post-Civil War/pre-World War II era
when the US Supreme Court seemed overly solicitous to the rights of big business over
those of the workers.

Theories, no matter how entrancing, remain theoretical unless adopted by legislation, or

more controversially, by judicial opinion. There were a few decisions of the US Supreme
Court that, ostensibly, imposed on private persons the values of the constitutional
guarantees. However, in deciding the cases, the American High Court found it
necessary to link the actors to adequate elements of the State since the Fourteenth
Amendment plainly begins with the words No State shall . . .41

More crucially to the American experience, it had become necessary to pass legislation
in order to compel private persons to observe constitutional values. While the equal
protection clause was deemed sufficient by the Warren Court to bar racial segregation
in public facilities, it necessitated enactment of the Civil Rights Acts of 1964 to prohibit
segregation as enforced by private persons within their property. In this jurisdiction, I
have trust in the statutory regime that governs the correction of private wrongs. There
are thousands of statutes, some penal or regulatory in nature, that are the source of
actionable claims against private persons. There is even no stopping the State, through
the legislative cauldron, from compelling private individuals, under pain of legal
sanction, into observing the norms ordained in the Bill of Rights.
Justice Panganibans 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 detre 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 Roosevelts New Deal regimemost of them addressing
problems of laborwere struck down by an archconservative Court.43 The preferred
rationale then was to enshrine within the constitutional order business prerogatives,
rendering them superior to the express legislative intent. Curiously, following its judicial
philosophy at the time the U.S. Supreme Court made due process guarantee towards
employers prevail over the police power to defeat the cause of labor.44

Of course, this Court should not be insensate to the means and methods by which the
entrenched powerful class may maneuver the socio-political system to ensure self-
preservation. However, the remedy to rightward judicial bias is not leftward judicial bias.
The more proper judicial attitude is to give due respect to legislative prerogatives,
regardless of the ideological sauce they are dipped in.

While the Bill of Rights maintains a position of primacy in the constitutional hierarchy,45
it has scope and limitations that must be respected and asserted by the Court, even
though they may at times serve somewhat bitter ends. The dissenting opinions are
palpably distressed at the effect of the Decision, which will undoubtedly provoke those
reflexively sympathetic to the labor class. But haphazard legal theory cannot be used to
justify the obverse result. The adoption of the dissenting views would give rise to all
sorts of absurd constitutional claims. An excommunicated Catholic might demand
his/her reinstatement into the good graces of the Church and into communion on the
ground that excommunication was violative of the constitutional right to due process. A
celebrity contracted to endorse Pepsi Cola might sue in court to void a stipulation that
prevents him/her from singing the praises of Coca Cola once in a while, on the ground
that such stipulation violates the constitutional right to free speech. An employee might
sue to prevent the employer from reading outgoing e-mail sent through the company
server using the company e-mail address, on the ground that the constitutional right to
privacy of communication would be breached.

The above concerns do not in anyway serve to trivialize the interests of labor. But we
must avoid overarching declarations in order to justify an end result beneficial to labor. I
dread the doctrinal acceptance of the notion that the Bill of Rights, on its own, affords
protection and sanctuary not just from the acts of State but also from the conduct of
private persons. Natural and juridical persons would hesitate to interact for fear that a
misstep could lead to their being charged in court as a constitutional violator. Private
institutions that thrive on their exclusivity, such as churches or cliquish groups, could be
forced to renege on their traditional tenets, including vows of secrecy and the like, if
deemed by the Court as inconsistent with the Bill of Rights. Indeed, that fundamental
right of all private persons to be let alone would be forever diminished because of a
questionable notion that contravenes with centuries of political thought.

It is not difficult to be enraptured by novel legal ideas. Their characterization is

susceptible to the same marketing traps that hook consumers to new products. With the
help of unique wrapping, a catchy label, and testimonials from professed experts from
exotic lands, a malodorous idea may gain wide acceptance, even among those self-
possessed with their own heightened senses of perception. Yet before we join the mad
rush in order to proclaim a theory as brilliant, a rigorous test must first be employed to
determine whether it complements or contradicts our own system of laws and juristic
thought. Without such analysis, we run the risk of abnegating the doctrines we have
fostered for decades and the protections they may have implanted into our way of life.
Should the Court adopt the view that the Bill of Rights may be invoked to invalidate
actions by private entities against private individuals, the Court would open the
floodgates to, and the docket would be swamped with, litigations of the scurrilous sort.
Just as patriotism is the last refuge of scoundrels, the broad constitutional claim is the
final resort of the desperate litigant.

Constitutional Protection of Labor

The provisions of the 1987 Constitution affirm the primacy of labor and advocate a
multi-faceted 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 workers right to security of 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 workers security of tenure
had only the protective mantle of statutes and their interpretative rules and regulations.
It was as uncertain protection that sometimes yielded to the political permutations of the
times. It took labor nearly four decades of sweat and tears to persuade our people thru
their leaders, to exalt the workers 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 of tenure. The
1987 Constitution is even more solicitous of the welfare of labor. Section 3 of its Article
XIII mandates that the State shall afford full protection to labor and declares that all
workers shall be entitled to security of tenure. Among the enunciated State policies are
the promotion of social justice and a just and dynamic social order. In contrast, the
prerogative of management to dismiss a worker, as an aspect of property right, has
never been endowed with a constitutional status.

The unequivocal constitutional declaration that all workers shall be entitled to security of
tenure spurred our lawmakers to strengthen the protective walls around this hard
earned right. The right was protected from undue infringement both by our substantive
and procedural laws. Thus, the causes for dismissing employees were more defined
and restricted; on the other hand, the procedure of termination was also more clearly
delineated. These substantive and procedural laws must be strictly complied with before
a worker can be dismissed from his employment.47

It is quite apparent that the constitutional protection of labor was entrenched more than
eight decades ago, yet such did not prevent this Court in the past from affirming
dismissals for just cause without valid notice. Nor was there any pretense made that this
constitutional maxim afforded a laborer a positive right against dismissal for just cause
on the ground of lack of valid prior notice. As demonstrated earlier, it was only after the
enactment of the Labor Code that the doctrine relied upon by the dissenting opinions
became en vogue. This point highlights my position that the violation of the notice
requirement has statutory moorings, not constitutional.

It should be also noted that the 1987 Constitution also recognizes the principle of
shared responsibility between workers and employers, and the right of enterprise to
reasonable returns, expansion, and growth. Whatever perceived imbalance there might
have been under previous incarnations of the provision have been obviated by Section
3, Article XIII.

In the case of Manila Prince Hotel v. GSIS,48 we affirmed the presumption that all
constitutional provisions are self-executing. We reasoned that to declare otherwise
would result in the pernicious situation wherein by mere inaction and disregard by the
legislature, constitutional mandates would be rendered ineffectual. Thus, we held:
As against constitutions of the past, modern constitutions have been generally drafted
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 employmenta utopian notion, doubtlessbut 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. (italics supplied)51

xxx
[FLORENZ D.] REGALADO: I notice that the 1935 Constitution had only one section on
social justice; the same is true with the 1973 Constitution. But they seem to have stood
us in good stead; and I am a little surprised why, despite that attempt at self-censorship,
there are certain provisions here which are properly for legislation.52

xxx
BISHOP [TEODORO S.] BACANI: [I] think the distinction that was given during the
presentation of the provisions on the Bill of Rights by Commissioner Bernas is very
apropos here. He spoke of self-executing rights which belong properly to the Bill of
Rights, and then he spoke of a new body of rights which are more of claims and that
these have come about largely through the works of social philosophers and then the
teaching of the Popes. They focus on the common good and hence, it is not as easy to
pinpoint precisely these rights nor the situs of the rights. And yet, they exist in relation to
the common good.53

xxx
MS. [MINDA LUZ M.] QUESADA: I think the nitty-gritty of this kind of collaboration will
be left to legislation but the important thing now is the conservation, utilization or
maximization of the very limited resources. x x x
[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 peoples organizations as a principal means of empowering the people to pursue
and protect through peaceful means . . ., I do not suppose that the Committee would
like to either preempt or exclude the legislature, because the concept of a
representative and democratic system really is that the legislature is normally the
principal means.

[EDMUNDO G.] GARCIA: That is correct. In fact, people cannot even dream of
influencing the composition or the membership of the legislature, if they do not get
organized. It is, in fact, a recognition of the principle that unless a citizenry is organized
and mobilized to pursue its ends peacefully, then it cannot really participate
effectively.54

There is no pretense on the part of the framers that the provisions on Social Justice,
particularly Section 3 of Article XIII, are self-executory. Still, considering the rule that
provisions should be deemed self-executing if enforceable without further legislative
action, an examination of Section 3 of Article XIII is warranted to determine whether it is
complete in itself as a definitive law, or if it needs future legislation for completion and
enforcement.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. x x x (emphasis supplied)56

At present, the Labor Code is the primary mechanism to carry out the Constitutions
directives. This is clear from Article 357 under Chapter 1 thereof which essentially
restates the policy on the protection of labor as worded in the 1973 Constitution, which
was in force at the time of enactment of the Labor Code. It crystallizes the fundamental
laws 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 workers 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 Courts 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 employees 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 employees dismissal is weighed against the standards laid
down in Article 279, as well as Article 282 in relation to Article 277(b) of the Labor Code,
for a dismissal for just cause, and Article 283 for a dismissal for an authorized cause.
The Effect of Statutory Violation Of Notice and Hearing
There is no doubt that the dismissal of an employee even for just cause, without prior
notice or hearing, violates the Labor Code. However, does such violation necessarily
void the dismissal?

Before I proceed with my discussion on dismissals for just causes, a brief comment
regarding dismissals for authorized cause under Article 283 of the Labor Code. While
the justiciable question in Serrano pertained to a dismissal for unauthorized cause, the
ruling therein was crafted as definitive to dismissals for just cause. Happily, the Decision
today does not adopt the same unwise tack. It should be recognized that dismissals for
just cause and dismissals for authorized cause are governed by different provisions,
entail divergent requisites, and animated by distinct rationales. The language of Article
283 expressly effects the termination for authorized cause to the service of written
notice on the workers and the Ministry of Labor at least one (1) month before the
intended date of termination. This constitutes an eminent difference than dismissals for
just cause, wherein the causal relation between the notice and the dismissal is not
expressly stipulated. The circumstances distinguishing just and authorized causes are
too markedly different to be subjected to the same rules and reasoning in interpretation.
Since the present petition is limited to a question arising from a dismissal for just cause,
there is no reason for making any pronouncement regarding authorized causes. Such
declaration would be merely obiter, since they are neither the law of the case nor
dispositive of the present petition. When the question becomes justiciable before this
Court, we will be confronted with an appropriate factual milieu on which we can render a
more judicious disposition of this admittedly important question.
B.Dismissal for Just Cause

There is no express provision in the Labor Code that voids a dismissal for just cause on
the ground that there was no notice or hearing. Under Section 279, the employer is
precluded from dismissing an employee except for a just cause as provided in Section
282, or an authorized cause under Sections 283 and 284. Based on reading Section
279 alone, the existence of just cause by itself is sufficient to validate the termination.
Just cause is defined by Article 282, which unlike Article 283, does not condition the
termination on the service of written notices. Still, the dissenting opinions propound that
even if there is just cause, a termination may be invalidated due to the absence of
notice or hearing. This view is anchored mainly on constitutional moorings, the basis of
which I had argued against earlier. For determination now is whether there is statutory
basis under the Labor Code to void a dismissal for just cause due to the absence of
notice or hearing.

As pointed out by Justice Mendoza in Serrano, it was only in 1989 that the Labor Code
was amended to enshrine into statute the twin requirements of notice and hearing.59
Such requirements are found in Article 277 of the Labor Code, under the heading
Miscellaneous Provisions. Prior to the amendment, the notice-hearing requirement
was found under the implementing rules issued by the then Minister of Labor in 1981.
The present-day implementing rules likewise mandate that the standards of due
process, including the requirement of written notice and hearing, be substantially
observed.60
Indubitably, the failure to substantially comply with the standards of due process,
including the notice and hearing requirement, may give rise to an actionable claim
against the employer. Under Article 288, penalties may arise from violations of any
provision of the Labor Code. The Secretary of Labor likewise enjoys broad powers to
inquire into existing relations between employers and employees. Systematic violations
by management of the statutory right to due process would fall under the broad grant of
power to the Secretary of Labor to investigate under Article 273.

However, the remedy of reinstatement despite termination for just cause is simply not
authorized by the Labor Code. Neither the Labor Code nor its implementing rules states
that a termination for just cause is voided because the requirement of notice and
hearing was not observed. This is not simply an inadvertent semantic failure, but a
conscious effort to protect the prerogatives of the employer to dismiss an employee for
just cause. Notably, despite the several pronouncements by this Court in the past
equating the notice-hearing requirement in labor cases to a constitutional maxim,
neither the legislature nor the executive has adopted the same tack, even gutting the
protection to provide that substantial compliance with due process suffices.

The Labor Code significantly eroded management prerogatives in the hiring and firing of
employees. Whereas employees could be dismissed even without just cause under the
Termination Pay Law61, the Labor Code affords workers broad security of tenure. Still,
the law recognizes the right of the employer to terminate for just cause. The just causes
enumerated under the Labor Codeserious 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 causesare 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 understoodif a dismissed employee is deprived of the right to notice and
hearing, and thus denied the opportunity to present countervailing evidence that
disputes the finding of just cause, reinstatement will be valid not because the notice and
hearing requirement was not observed, but because there was no just cause in the
dismissal. The opportunity to dispute the finding of the just cause is readily available
before the Labor Arbiter, and the subsequent levels of appellate review. Again, as held
in Serrano:

Even in cases of dismissal under Art. 282, the purpose for the requirement of notice and
hearing is not to comply with the Due Process Clause of the Constitution. The time for
notice and hearing is at the trial stage. Then that is the time we speak of notice and
hearing as the essence of procedural due process. Thus, compliance by the employer
with the notice requirement before he dismisses an employee does not foreclose the
right of the latter to question the legality of his dismissal. As Art. 277(b) provides, Any
decision taken by the employer shall be without prejudice to the right of the worker to
contest the validity or legality of his dismissal by filing a complaint with the regional
branch of the National Labor Relations Commission.62
The Labor Code presents no textually demonstrable commitment to invalidate a
dismissal for just cause due to the absence of notice or hearing. This is not surprising,
as such remedy will not restore the employer or employee into equity. Absent a showing
of integral causation, the mutual infliction of wrongs does not negate either injury, but
instead enforces two independent rights of relief.

The Damages Dimensions

Award for Damages Must Have Statutory Basis
The Court has grappled with the problem of what should be the proper remedial relief of
an employee dismissed with just cause, but not afforded either notice or hearing. In a
long line of cases, beginning with Wenphil Corp. v. NLRC63 and up until Serrano in
2000, the Court had deemed an indemnification award as sufficient to answer for the
violation by the employer against the employee. However, the doctrine was modified in
Serrano.

I disagree with Serrano insofar as it held that employees terminated for just cause are
to be paid backwages from the time employment was terminated until it is determined
that the termination is for just cause because the failure to hear him before he is
dismissed renders the termination of his employment without legal effect.64 Article 279
of the Labor Code clearly authorizes the payment of backwages only if an employee is
unjustly dismissed. A dismissal for just cause is obviously antithetical to an unjust
dismissal. An award for backwages is not clearly warranted by the law.

The Impropriety of Award for Separation Pay

The formula of one months pay for every year served does have statutory basis. It is
found though in the Labor Code though, not the Civil Code. Even then, such
computation is made for separation pay under the Labor Code. But separation pay is
not an appropriate as a remedy in this case, or in any case wherein an employee is
terminated for just cause. As Justice Vitug noted in his separate opinion in Serrano, an
employee whose employment is terminated for a just cause is not entitled to the
payment of separation benefits.65 Separation pay is traditionally a monetary award paid
as an alternative to reinstatement which can no longer be effected in view of the long
passage of time or because of the realities of the situation.66 However, under Section 7,
Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code, [t]he separation
from work of an employee for a just cause does not entitle him to the termination pay
provided in the Code.67 Neither does the Labor Code itself provide instances wherein
separation pay is warranted for dismissals with just cause. Separation pay is warranted
only for dismissals for authorized causes, as enumerated in Articles 283 and 284 of the
Labor Code.

The Impropriety of Equity Awards

Admittedly, the Court has in the past authorized the award of separation pay for duly
terminated employees as a measure of social justice, provided that the employee is not
guilty of serious misconduct reflecting on moral character.68 This doctrine is
inapplicable in this case, as the Agabons are guilty of abandonment, which is the
deliberate and unjustified refusal of an employee to resume his employment.
Abandonment is tantamount to serious misconduct, as it constitutes a willful breach of
the employer-employee relationship without cause.

The award of separation pay as a measure of social justice has no statutory basis, but
clearly emanates from the Courts so-called equity jurisdiction. The Courts 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 employees interests protected by the Labor Code is the interest of
the State in seeing to it that its regulatory laws are complied with. Article 288 is intended
to satiate the latter interest. Nothing in the language of Article 288 indicates an intention
to compensate or remunerate a private person for injury he may have sustained.

It should be noted though that in Serrano, the Court observed that since the
promulgation of Wenphil Corp. v. NLRC73 in 1989, fines imposed for violations of the
notice requirement have varied from P1,000.00 to P2,000.00 to P5,000.00 to
P10,000.00.74 Interestingly, this range is the same range of the penalties imposed by
Article 288. These fines adverted to in Serrano were paid to the dismissed employee.
The use of the term fines, as well as the terminology employed a few other cases,75
may have left an erroneous impression that the award implemented beginning with
Wen-phil 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: Employers Liability under the Civil Code

As earlier stated, Wenphil allowed the payment of indemnity to the employee dismissed
for just cause is dependent on the facts of each case and the gravity of the omission
committed by the employer. However, I considered Wenphil flawed insofar as it is silent
as to the statutory basis for the indemnity award. This failure, to my mind, renders it
unwise for to reinstate the Wenphil rule, and foster the impression that it is the judicial
business to invent awards for damages without clear statutory basis.
The proper legal basis for holding the employer liable for monetary damages to the
employee dismissed for just cause is the Civil Code. The award of damages should be
measured against the loss or injury suffered by the employee by reason of the
employers violation or, in case of nominal damages, the right vindicated by the award.
This is the proper paradigm authorized by our law, and designed to obtain the fairest
possible relief.

Under Section 217(4) of the Labor Code, the Labor Arbiter has jurisdiction over claims
for actual, moral, exemplary and other forms of damages arising from the employer-
employee relations. It is thus the duty of Labor Arbiters to adjudicate claims for
damages, and they should disabuse themselves of any inhibitions if it does appear that
an award for damages is warranted. As triers of facts in a specialized field, they should
attune themselves to the particular conditions or problems attendant to employer-
employee relationships, and thus be in the best possible position as to the nature and
amount of damages that may be warranted in this case.
The damages referred under Section 217(4) of the Labor Code are those available
under the Civil Code. It is but proper that the Civil Code serve as the basis for the
indemnity, it being the law that regulates the private relations of the members of civil
society, determining their respective rights and obligations with reference to persons,
things, and civil acts.76 No matter how impressed with the public interest the
relationship between a private employer and employee is, it still is ultimately a
relationship between private individuals. Notably, even though the Labor Code could
very well have provided set rules for damages arising from the employer-employee
relationship, referral was instead made to the concept of damages as enumerated and
defined under the Civil Code.

Given the long controversy that has dogged this present issue regarding dismissals for
just cause, it is wise to lay down standards that would guide the proper award of
damages under the Civil Code in cases wherein the employer failed to comply with
statutory due process in dismissals for just cause.
First. I believe that it can be maintained as a general rule, that failure to comply with the
statutory requirement of notice automatically gives rise to nominal damages, at the very
least, even if the dismissal was sustained for just cause.

Nominal damages are adjudicated in order that a right of a plaintiff which has been
violated or invaded by another may be vindicated or recognized without having to
indemnify the plaintiff for any loss suffered by him.77 Nominal damages may likewise be
awarded in every obligation arising from law, contracts, quasi-contracts, acts or
omissions punished by law, and quasi-delicts, or where any property right has been
invaded.

Clearly, the bare act of failing to observe the notice requirement gives rise to nominal
damages assessable against the employer and due the employee. The Labor Code
indubitably entitles the employee to notice even if dismissal is for just cause, even if
there is no apparent intent to void such dismissals deficiently implemented. It has also
been held that ones employment, profession, trade, or calling is a property right and
the wrongful interference therewith gives rise to an actionable wrong.78
In Better Buildings, Inc. v. NLRC,79 the Court ruled that the while the termination therein
was for just and valid cause, the manner of termination was done in complete disregard
of the necessary procedural safeguards.80 The Court found nominal damages as the
proper form of award, as it was purposed to vindicate the right to procedural due
process violated by the employer.81 A similar holding was maintained in Iran v. NLRC82
and Malaya Shipping v. NLRC.83 The doctrine has express statutory basis, duly
recognizes the existence of the right to notice, and vindicates the violation of such right.
It is sound, logical, and should be adopted as a general rule.
The assessment of nominal damages is left to the discretion of the court,84 or in labor
cases, of the Labor Arbiter and the successive appellate levels. The authority to
nominate standards governing the award of nominal damages has clearly been
delegated to the judicial branch, and it will serve good purpose for this Court to provide
such guidelines. Considering that the affected right is a property right, there is
justification in basing the amount of nominal damages on the particular characteristics
attaching to the claimants employment. Factors such as length of service, positions
held, and received salary may be considered to obtain the proper measure of nominal
damages. After all, the degree by which a property right should be vindicated is affected
by the estimable value of such right.

At the same time, it should be recognized that nominal damages are not meant to be
compensatory, and should not be computed through a formula based on actual losses.
Consequently, nominal damages usually limited in pecuniary value.85 This fact should
be impressed upon the prospective claimant, especially one who is contemplating
seeking actual/compensatory damages.

Second. Actual or compensatory damages are not available as a matter of right to an

employee dismissed for just cause but denied statutory due process. They must be
based on clear factual and legal bases,86 and correspond to such pecuniary loss
suffered by the employee as duly proven.87 Evidently, there is less degree of discretion
to award actual or compensatory damages.

I recognize some inherent difficulties in establishing actual damages in cases for

terminations validated for just cause. The dismissed employee retains no right to
continued employment from the moment just cause for termination exists, and such time
most likely would have arrived even before the employer is liable to send the first notice.
As a result, an award of backwages disguised as actual damages would almost never
be justified if the employee was dismissed for just cause. The possible exception would
be if it can be proven the ground for just cause came into being only after the dismissed
employee had stopped receiving wages from the employer.

Yet it is not impossible to establish a case for actual damages if dismissal was for just
cause. Particularly actionable, for example, is if the notices are not served on the
employee, thus hampering his/her opportunities to obtain new employment. For as long
as it can be demonstrated that the failure of the employer to observe procedural due
process mandated by the Labor Code is the proximate cause of pecuniary loss or injury
to the dismissed employee, then actual or compensatory damages may be awarded.

Third. If there is a finding of pecuniary loss arising from the employer violation, but the
amount cannot be proved with certainty, then temperate or moderate damages are
available under Article 2224 of the Civil Code. Again, sufficient discretion is afforded to
the adjudicator as regards the proper award, and the award must be reasonable under
the circumstances.88 Temperate or nominal damages may yet prove to be a plausible
remedy, especially when common sense dictates that pecuniary loss was suffered, but
incapable of precise definition.

Fourth. Moral and exemplary damages may also be awarded in the appropriate
circumstances. As pointed out by the Decision, moral damages are recoverable where
the dismissal of the employee was attended by bad faith, fraud, or was done in a
manner contrary to morals, good customs or public policy, or the employer committed
an act oppressive to labor.89 Exemplary damages may avail if the dismissal was
effected in a wanton, oppressive or malevolent manner.
Appropriate Award of Damages to the Agabons
The records indicate no proof exists to justify the award of actual or compensatory
damages, as it has not been established that the failure to serve the second notice on
the Agabons was the proximate cause to any loss or injury. In fact, there is not even any
showing that such violation caused any sort of injury or discomfort to the Agabons. Nor
do they assert such causal relation. Thus, the only appropriate award of damages is
nominal damages. Considering the circumstances, I agree that an award of Fifteen
Thousand Pesos (P15,000.00) each for the Agabons is sufficient.

All premises considered, I VOTE to:

(1) DENY the PETITION for lack of merit, and AFFIRM the Decision of the Court of
Appeals dated 23 January 2003, with the MODIFICATION that in addition, Riviera
Homes be ORDERED to pay the petitioners the sum of Fifteen Thousand Pesos
(P15,000.00) each, as nominal damages.
(2) HOLD that henceforth, dismissals for just cause may not be invalidated due to the
failure to observe the due process requirements under the Labor Code, and that the
only indemnity award available to the employee dismissed for just cause are damages
under the Civil Code as duly proven. Any and all previous rulings and statements of the
Court inconsistent with this holding are now deemed INOPERATIVE.
Petition denied, judgment affirmed with modification.
Notes.Separation pay is allowed as a measure of social justice only in those
instances where the employee is validly dismissed for causes other than serious
misconduct or those reflecting on his moral character. (Salavarria vs. Letran College,
296 SCRA 184 [1998])
While the right of an employer to terminate the services of an employee for a just or
authorized cause is recognized, nevertheless, the dismissal of employees must be
made within the parameters of law and pursuant to the tenets of equity and fair play.
(Colegio de San Juan de Letran vs. Association of Employees and Faculty of Letran,
340 SCRA 587 [2000])

The offer to re-employ an employee could not have the effect of validating an otherwise
arbitrary dismissal. (Hantex Trading Co., Inc. vs. Court of Appeals, 390 SCRA 181
[2002]) Agabon vs. National Labor Relations Commission, 442 SCRA 573, G.R. No.
158693 November 17, 2004