NOTES IN LABOR LAW REVIEW Roxas, etc.
countered: petitioners have failed
TOPIC: Fundamental Principles and Policies
A. Constitutional Provisions
1. Article II, Secs. 9, 10, 11, 13, 14, 18, 20
State Policies
Section 9. The 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.
Espina v. Zamora
GR No. 143855, September 21, 2010
President Joseph E. Estrada signed into law
R.A. 8762 or the Retail Trade Liberalization
Act of 2000. It expressly repealed R.A. 1180,
which absolutely prohibited foreign nationals
from engaging in the retail trade business.
Some embers of the House of Representatives,
filed the present petition, assailing the
constitutionality of R.A. 8762 on the following
grounds:
First, the law runs afoul of Sections 9, 19, and
20 of Article II of the Constitution which
enjoins the State to place the national
economy under the control of Filipinos to
achieve equal distribution of opportunities,
promote industrialization and full employment,
and protect Filipino enterprise against unfair
competition and trade policies.
Second, foreign retailers like Walmart and
K-Mart would crush Filipino retailers and
sari-sari store vendors, destroy
self-employment, and bring about more
unemployment.
Respondents Executive Secretary Ronaldo
Zamora, Jr., Trade and DTI Secretary Mar
to overcome the presumption of
constitutionality of R.A. 8762. Indeed, they
could not specify how the new law violates the
constitutional provisions they cite. Sections 9,
19, and 20 of Article II of the Constitution are
not self-executing provisions that are
judicially demandable.
SC: But as the Court explained in Tañada v.
Angara, the provisions of Article II of the 1987
Constitution, the declarations of principles
and state policies, are not self-executing.
Legislative failure to pursue such policies
cannot give rise to a cause of action in the
courts.
In other words, the 1987 Constitution does not
rule out the entry of foreign investments,
goods, and services. While it does not
encourage their unlimited entry into the
country, it does not prohibit them either. In
fact, it allows an exchange on the basis of
equality and reciprocity, frowning only on
foreign competition that is unfair. The key, as
in all economies in the world, is to strike a
balance between protecting local businesses
and allowing the entry of foreign investments
and services.
The control and regulation of trade in the
interest of the public welfare is of course an
exercise of the police power of the State. A
person’s right to property, whether he is a
Filipino citizen or foreign national, cannot be
taken from him without due process of law.
Section 10. The State shall promote social
justice in all phases of national development.
Define Social Justice: Social justice calls for
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.
Manila Water v. Del Rosario
GR No. 188747, January 29, 2014
In the instant petition, Manila Water
essentially questions the award of separation
pay to respondent who was dismissed for
stealing the company’s property which
amounted to gross misconduct. It argues that
separation pay or financial assistance is not
awarded to employees guilty of gross
misconduct or for cause reflecting on his
moral character.
Our focus will be on the propriety of the award
for separation pay.
As a general rule, an employee who has been
dismissed for any of the just causes
enumerated under Article 282 of the Labor
Code is not entitled to a separation pay.
In exceptional cases, however, the Court has
granted separation pay to a legally dismissed
employee as an act of "social justice" or on
"equitable grounds.” In both instances, it is
required that the dismissal (1) was not for
serious misconduct; and (2) did not reflect on
the moral character of the employee.
The policy of social justice is not intended to
countenance wrongdoing simply because it is
committed by the underprivileged. At best[,] it
may mitigate the penalty but it certainly will
not condone the offense. Compassion for the
poor is an imperative of every humane society
but only when the recipient is not a rascal
claiming an undeserved privilege. Social
justice cannot be permitted to be refuge of
scoundrels any more than can equity be an
impediment to the punishment of the guilty.
Those who invoke social justice may do so only
if their hands are clean and their motives
blameless and not simply because they happen
to be poor. This great policy of our
Constitution is not meant for the protection of
those who have proved they are not worthy of
it, like the workers who have tainted the cause
of labor with the blemishes of their own
character.
In the subsequent case of Toyota Motor Phils.
Corp. Workers Association (TMPCWA) v.
National Labor Relations Commission we
expanded the exclusions and elucidated that
separation pay shall be allowed as a measure
of social justice only in instances where the
employee is validly dismissed for causes other
than:
1) Serious misconduct;
2) Willful disobedience;
3) Gross and habitual neglect of duty;
4) Fraud or willful breach of trust;
5) Commission of a crime against the
employer or his family; or
6) Those reflecting on his moral
character.
In the same case, we instructed the labor
officials that they must be most judicious and
circumspect in awarding separation pay or
financial assistance as the constitutional
policy to provide full protection to labor is not
meant to be an instrument to oppress the
employers.
The attendant circumstances in the present
case considered, we are constrained to deny
Del Rosario separation pay since the admitted
cause of his dismissal amounts to serious
misconduct. He is not only responsible for the
loss of the water meters in flagrant violation
of the company’s policy but his act is in utter
disregard of his partnership with his employer
in the pursuit of mutual benefits.
Section 11. The State values the dignity of
every human person and guarantees full
respect for human rights.
Q: Which of the two takes precedence, human
rights or property rights?
A: Human rights.
Section 13. The State recognizes the vital role
of the youth in nation-building and shall
promote and protect their physical, moral,
spiritual, intellectual, and social well-being. It
shall inculcate in the youth patriotism and
nationalism, and encourage their involvement
in public and civic affairs.
Section 14. The State recognizes the role of
women in nation-building, and shall ensure
the fundamental equality before the law of
women and men.
 Philppine Telegraph v. NLRC
GR No. 118978, May 23, 1997
On September 2, 1991, private respondent
(Grace de Guzman) was once more asked to
join petitioner company as a probationary
employee, the probationary period to cover
150 days. In the job application form that was
furnished her to be filled up for the purpose,
she indicated in the portion for civil status
therein that she was single although she had
contracted marriage a few months earlier, that
is, on May 26, 1991.
It now appears that private respondent had
made the same representation in the two
successive reliever agreements which she
signed on June 10, 1991 and July 8, 1991. When
petitioner supposedly learned about the same
later, its branch supervisor in Baguio City,
Delia M. Oficial, sent to private respondent a
memorandum dated January 15, 1992
requiring her to explain the discrepancy. In
that memorandum, she was reminded about
the company's policy of not accepting married
women for employment. She was subsequently
terminated.
SC: The Constitution, cognizant of the
disparity in rights between men and women in
almost all phases of social and political life,
provides a gamut of protective provisions. To
cite a few of the primordial ones, Section 14,
Article II on the Declaration of Principles and
State Policies, expressly recognizes the role of
women in nation-building and commands the
State to ensure, at all times, the fundamental
equality before the law of women and men.
Corollary thereto, Section 3 of Article XIII (the
progenitor whereof dates back to both the
1935 and 1973 Constitution) pointedly requires
the State to afford full protection to labor and
to promote full employment and equality of
employment opportunities for all, including an
assurance of entitlement to tenurial security of
all workers. Similarly, Section 14 of Article
XIII mandates that the State shall protect
working women through provisions for
opportunities that would enable them to reach
their full potential.
In the case at bar, petitioner's policy of not
accepting or considering as disqualified from
work any woman worker who contracts
marriage runs afoul of the test of, and the
right against, discrimination, afforded all
women workers by our labor laws and by no
less than the Constitution. Contrary to
petitioner's assertion that it dismissed private
respondent from employment on account of
her dishonesty, the record discloses clearly
that her ties with the company were dissolved
principally because of the company's policy
that married women are not qualified for
employment in PT & T, and not merely because
of her supposed acts of dishonesty.
That it was so can easily be seen from the
memorandum sent to private respondent by
Delia M. Oficial, the branch supervisor of the
company, with the reminder, in the words of
the latter, that "you're fully aware that the
company is not accepting married women
employee (sic), as it was verbally instructed to
you." Again, in the termination notice sent to
her by the same branch supervisor, private
respondent was made to understand that her
severance from the service was not only by
reason of her concealment of her married
status but, over and on top of that, was her
violation of the company's policy against
marriage ("and even told you that married
women employees are not applicable [sic] or
accepted in our company.")
Under American jurisprudence, job
requirements which establish employer
preference or conditions relating to the
marital status of an employee are categorized
as a "sex-plus" discrimination where it is
imposed on one sex and not on the other.
Further, the same should be evenly applied
and must not inflict adverse effects on a racial
or sexual group which is protected by federal
job discrimination laws. Employment rules
that forbid or restrict the employment of
married women, but do not apply to married
men, have been held to violate Title VII of the
United States Civil Rights Act of 1964, the
main federal statute prohibiting job
discrimination against employees and
applicants on the basis of, among other things,
sex.
Section 18. The State affirms labor as a
primary social economic force. It shall protect
the rights of workers and promote their
welfare.
Wesleyan University v. Faculty
GR No. 181806, March 12, 2014
 In closing, it may not be amiss to mention that
when the provision of the CBA is clear, leaving
The Non-Diminution Rule found in Article 100
no doubt on the intention of the parties, the
of the Labor Code explicitly prohibits
literal meaning of the stipulation shall govern.
employers from eliminating or reducing the
benefits received by their employees. This rule,
however, applies only if the benefit is based on
However, if there is doubt in its interpretation,
an express policy, a written contract, or has
it should be resolved in favor of labor, as this
ripened into a practice. To be considered a
is mandated by no less than the Constitution.
practice, it must be consistently and
(citing Section 18)
deliberately made by the employer over a long
period of time.

Serrano v. Gallant Maritime

An exception to the rule is when "the practice GR No. 167614, March 24, 2009
is due to error in the construction or
application of a doubtful or difficult question
of law." The error, however, must be corrected
For Antonio Serrano (petitioner), a Filipino
immediately after its discovery; otherwise, the
seafarer, the last clause in the 5th paragraph
rule on Non-Diminution of Benefits would still
of Section 10, Republic Act (R.A.) No. 8042 or
apply.
the Migrant Workers and Overseas Filipinos
Act of 1995, to wit:

The Memorandum dated August 16,

2005 is contrary to the existing CBA Sec. 10. Money Claims. - x x x In case of
termination of overseas employment without
just, valid or authorized cause as defined by
law or contract, the workers shall be entitled
Neither do we find any reason to disturb the
to the full reimbursement of his placement fee
findings of the CA that the Memorandum dated
with interest of twelve percent (12%) per
August 16, 2005 is contrary to the existing
annum, plus his salaries for the unexpired
CBA.
portion of his employment contract or for
three (3) months for every year of the
unexpired term, whichever is less.
Sections 1 and 2 of Article XII of the CBA
provide that all covered employees are entitled
to 15 days sick leave and 15 days vacation leave
does not magnify the contributions of overseas
with pay every year and that after the second
Filipino workers (OFWs) to national
year of service, all unused vacation leave shall
development, but exacerbates the hardships
be converted to cash and paid to the employee
borne by them by unduly limiting their
at the end of each school year, not later than
entitlement in case of illegal dismissal to their
August 30 of each year.
lump-sum salary either for the unexpired
portion of their employment contract "or for
three months for every year of the unexpired
The Memorandum dated August 16, 2005,
term, whichever is less" (subject clause).
however, states that vacation and sick leave
Petitioner claims that the last clause violates
credits are not automatic as leave credits
the OFWs' constitutional rights in that it
would be earned on a month-to-month basis.
impairs the terms of their contract, deprives
This, in effect, limits the available leave
them of equal protection and denies them due
credits of an employee at the start of the
process.
school year. For example, for the first four
months of the school year or from June to
September, an employee is only entitled to five
Respondents appealed to the National Labor
days vacation leave and five days sick leave.
Relations Commission (NLRC) to question the
Considering that the Memorandum dated
finding of the LA that petitioner was illegally
August 16, 2005 imposes a limitation not
dismissed.
agreed upon by the parties nor stated in the
CBA, we agree with the CA that it must be
struck down.
Petitioner also appealed to the NLRC on the
sole issue that the LA erred in not applying the
ruling of the Court in Triple Integrated Services,
Inc. v. National Labor Relations Commission
that in case of illegal dismissal, OFWs are
entitled to their salaries for the unexpired
portion of their contracts.
employment, especially on the matter of
money claims, as this was not stipulated upon
by the parties.
Does the subject clause violate

Section 10, Article III of the Constitution

SC: The unanimous finding of the LA, NLRC
and CA that the dismissal of petitioner was on non-impairment of contracts?
illegal is not disputed. Likewise not disputed is
the salary differential of US$45.00 awarded to
petitioner in all three fora. What remains The answer is in the negative.
disputed is only the computation of the
lump-sum salary to be awarded to petitioner
by reason of his illegal dismissal.
As aptly observed by the OSG, the enactment
of R.A. No. 8042 in 1995 preceded the
execution of the employment contract between
The Arguments of Petitioner
petitioner and respondents in 1998. Hence, it
cannot be argued that R.A. No. 8042,
particularly the subject clause, impaired the
Petitioner contends that the subject clause is employment contract of the parties. Rather,
unconstitutional because it unduly impairs the when the parties executed their 1998
freedom of OFWs to negotiate for and stipulate employment contract, they were deemed to
in their overseas employment contracts a have incorporated into it all the provisions of
determinate employment period and a fixed R.A. No. 8042.
salary package. It also impinges on the equal
protection clause, for it treats OFWs
differently from local Filipino workers (local
But even if the Court were to disregard the
workers) by putting a cap on the amount of
timeline, the subject clause may not be
lump-sum salary to which OFWs are entitled
declared unconstitutional on the ground that it
in case of illegal dismissal, while setting no impinges on the impairment clause, for the
limit to the same monetary award for local
law was enacted in the exercise of the police
workers when their dismissal is declared power of the State to regulate a business,
illegal; that the disparate treatment is not
profession or calling, particularly the
reasonable as there is no substantial
recruitment and deployment of OFWs, with
distinction between the two groups; and that it
the noble end in view of ensuring respect for
defeats Section 18, Article II of the
the dignity and well-being of OFWs wherever
Constitution which guarantees the protection
they may be employed.
of the rights and welfare of all Filipino
workers, whether deployed locally or
overseas.
Does the subject clause violation

Section 1, Article III of the Constitution,

Lastly, petitioner claims that the subject
and Section 18, Article II and Section 3,
clause violates the due process clause, for it
deprives him of the salaries and other Article XIII on labor as a protected sector?
emoluments he is entitled to under his fixed
period employment contract.
The answer is in the affirmative.

The Arguments of the Solicitor General

The Solicitor General (OSG) points out that as
R.A. No. 8042 took effect on July 15, 1995, its
provisions could not have impaired
petitioner's 1998 employment contract. Rather,
R.A. No. 8042 having preceded petitioner's
contract, the provisions thereof are deemed
part of the minimum terms of petitioner's
Section 1, Article III of the Constitution
guarantees:
No person shall be deprived of life, liberty, or
property without due process of law nor shall
any person be denied the equal protection of
the law.

Section 18, Article II and Section 3, Article XIII
accord all members of the labor sector,
without distinction as to place of deployment,
full protection of their rights and welfare.
Our present Constitution has gone further in
guaranteeing vital social and economic rights
to marginalized groups of society, including
labor. Under the policy of social justice, the
law bends over backward to accommodate the
interests of the working class on the humane
justification that those with less privilege in
life should have more in law. And the
obligation to afford protection to labor is
incumbent not only on the legislative and
executive branches but also on the judiciary to
translate this pledge into a living reality.
Social justice calls for 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.
Imbued with the same sense of "obligation to
afford protection to labor," the Court in the
present case also employs the standard of
strict judicial scrutiny, for it perceives in the
subject clause a suspect classification
prejudicial to OFWs.
In fine, the Government has failed to discharge
its burden of proving the existence of a
compelling state interest that would justify the
perpetuation of the discrimination against
OFWs under the subject clause.
The OSG defends the subject clause as a police
power measure "designed to protect the
employment of Filipino seafarers overseas x x
x. By limiting the liability to three months [sic],
Filipino seafarers have better chance of
getting hired by foreign employers." The
limitation also protects the interest of local
placement agencies, which otherwise may be
made to shoulder millions of pesos in
"termination pay.”
The OSG explained further:
Often, placement agencies, their liability being
solidary, shoulder the payment of money
claims in the event that jurisdiction over the
foreign employer is not acquired by the court
or if the foreign employer reneges on its
obligation. Hence, placement agencies that are
in good faith and which fulfill their obligations
are unnecessarily penalized for the acts of the
foreign employer. To protect them and to
promote their continued helpful contribution
in deploying Filipino migrant workers,
liability for money are reduced under Section
10 of RA 8042.
This measure redounds to the benefit of the
migrant workers whose welfare the
government seeks to promote. The survival of
legitimate placement agencies helps [assure]
the government that migrant workers are
properly deployed and are employed under
decent and humane conditions.
Assuming that, as advanced by the OSG, the
purpose of the subject clause is to protect the
employment of OFWs by mitigating the
solidary liability of placement agencies, such
callous and cavalier rationale will have to be
rejected. There can never be a justification for
any form of government action that alleviates
the burden of one sector, but imposes the same
burden on another sector, especially when the
favored sector is composed of private
businesses such as placement agencies, while
the disadvantaged sector is composed of OFWs
whose protection no less than the Constitution
commands. The idea that private business
interest can be elevated to the level of a
compelling state interest is odious.
Moreover, even if the purpose of the subject
clause is to lessen the solidary liability of
placement agencies vis-à-vis their foreign
principals, there are mechanisms already in
place that can be employed to achieve that
purpose without infringing on the
constitutional rights of OFWs.
The POEA Rules and Regulations Governing
the Recruitment and Employment of
LandBased Overseas Workers, dated February
4, 2002, imposes administrative disciplinary
measures on erring foreign employers who
default on their contractual obligations to
migrant workers and/or their Philippine
agents. These disciplinary measures range
from temporary disqualification to preventive
suspension. The POEA Rules and Regulations
Governing the Recruitment and Employment
of Seafarers, dated May 23, 2003, contains
similar administrative disciplinary measures
against erring foreign employers.
Resort to these administrative measures is
undoubtedly the less restrictive means of
aiding local placement agencies in enforcing
the solidary liability of their foreign
principals.
Thus, the subject clause in the 5th paragraph
of Section 10 of R.A. No. 8042 is violative of
the right of petitioner and other OFWs to equal
protection.
Further, there would be certain misgivings if
one is to approach the declaration of the
unconstitutionality of the subject clause from
the lone perspective that the clause directly
violates state policy on labor under Section 3,
Article XIII of the Constitution.
While all the provisions of the 1987
Constitution are presumed self-executing,
there are some which this Court has declared
not judicially enforceable, Article XIII being
one, particularly Section 3 thereof, the nature
of which, this Court, in Agabon v. National
Labor Relations Commission, has described to
be not self-actuating:
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. xxx
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.
Thus, Section 3, Article XIII cannot be treated
as a principal source of direct enforceable
rights, for the violation of which the
questioned clause may be declared
unconstitutional. It may unwittingly risk
opening the floodgates of litigation to every
worker or union over every conceivable
violation of so broad a concept as social justice
for labor.
It must be stressed that Section 3, Article XIII
does not directly bestow on the working class
any actual enforceable right, but merely
clothes it with the status of a sector for whom
the Constitution urges protection through
executive or legislative action and judicial
recognition. Its utility is best limited to being
an impetus not just for the executive and
legislative departments, but for the judiciary
as well, to protect the welfare of the working
class. And it was in fact consistent with that
constitutional agenda that the Court in Central
Bank (now Bangko Sentral ng Pilipinas)
Employee Association, Inc. v. Bangko Sentral
ng Pilipinas, penned by then Associate Justice
now Chief Justice Reynato S. Puno, formulated
the judicial precept that when the challenge to
a statute is premised on the perpetuation of
prejudice against persons favored by the
Constitution with special protection -- such as
the working class or a section thereof -- the
Court may recognize the existence of a suspect
classification and subject the same to strict
judicial scrutiny.
Section 20. The State recognizes the
indispensable role of the private sector,
encourages private enterprise, and provides
incentives to needed investments.
Rosario v. Victory Ricemill
GR. No. 147572, February 19, 2003
Procedural process was not served because no
Notice to Explain was served upon the
dismissed employee.
Indeed, under the Labor Code, only the
absence of a just cause for the termination of
employment can make the dismissal of an
employee illegal. This is clear from Art. 279
which provides:
Security of Tenure. – In cases of regular
employment, the employer shall not terminate
the services of an employee except for a just
cause or when authorized by this Title. An
employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss
of seniority rights and other privileges and to
his full backwages, inclusive of allowances,
and to his other benefits or their monetary
equivalent computed from the time his
compensation was withheld from him up to
the time of his actual reinstatement.
Thus, only if the termination of employment is
not for any of the causes provided by law is it
illegal and, therefore, the employee should be
reinstated and paid backwages.
In so ruling, the Court recognized that "the
law, in protecting the rights of labor,
authorized neither the oppression nor
self-destruction of the employer," thus:
The refusal to look beyond the validity of the
initial action taken by the employer to
terminate employment either for an
authorized or just cause can result in an
injustice to the employer. For not giving notice
and hearing before dismissing an employee,
who is otherwise guilty of, say, theft, or even
of an attempt against the life of the employer,
an employer will be forced to keep in his
employ such guilty employee. This is unjust.
It is true the Constitution regards labor as "a
primary social economic force." But so does it
declare that it "recognizes the indispensable
role of the private sector, encourages private
enterprise, and provides incentives to needed
investment. The Constitution bids the State to
"afford full protection to labor." But it is
equally true that "the law, in protecting the
rights of the laborer, authorizes neither
oppression nor self-destruction of the
employer. And it is oppression to compel the
employer to continue in employment one who
is guilty or to force the employer to remain in
operation when it is not economically in his
interest to do so.
On the other hand, with respect to dismissals
for cause under Art. 282, if it is shown that the
employee was dismissed for any of the just
causes mentioned in said Art. 282, then, in
accordance with that article, he should not be
reinstated. However, he must be paid
backwages from the time his employment was
terminated until it is determined that the
termination of employment is for a just cause
because the failure to hear him before he is
dismissed renders the termination of his
employment without legal effect.
In fine, the lack of notice and hearing is
considered as being a mere failure to observe a
procedure for the termination of employment
which makes the dismissal ineffectual but not
necessarily illegal. The procedural infirmity is
then remedied by ordering the payment to the
employee his full backwages from the time of
his dismissal until the court finally rules that
the dismissal has been for a valid cause.
Having established that respondent had just
and valid cause to terminate petitioner’s
employment but failed to hear him prior to his
dismissal, respondent is obliged to pay
petitioner his backwages computed from the
time of his dismissal up to the time the
decision in this case becomes final.
2. Article III, Secs. 1, 4, 7, 8, 10, 16, 18(2)
Section 1. No person shall be deprived of life,
liberty, or property without due process of law,
nor shall any person be denied the equal
protection of the laws.
Sameer Overseas v. Cabiles
GR No. 170139, August 5, 2014
Petitioner’s allegation that respondent was
inefficient in her work and negligent in her
duties may, therefore, constitute a just cause
for termination under Article 282(b), but only
if petitioner was able to prove it.
The burden of proving that there is just cause
for termination is on the employer. "The
employer must affirmatively show rationally
adequate evidence that the dismissal was for a
justifiable cause." Failure to show that there
was valid or just cause for termination would
necessarily mean that the dismissal was
illegal.
 charged employee at least two written notices
before termination. One of the written notices
To show that dismissal resulting from
must inform the employee of the particular
inefficiency in work is valid, it must be shown
acts that may cause his or her dismissal. The
that: 1) the employer has set standards of
other notice must "[inform] the employee of
conduct and workmanship against which the
the employer’s decision." Aside from the
employee will be judged; 2) the standards of
notice requirement, the employee must also be
conduct and workmanship must have been
given "an opportunity to be heard."
communicated to the employee; and 3) the
communication was made at a reasonable time
prior to the employee’s performance
Petitioner failed to comply with the twin
assessment.
notices and hearing requirements. Respondent
started working on June 26, 1997. She was told
that she was terminated on July 14, 1997
This is similar to the law and jurisprudence on
effective on the same day and barely a month
probationary employees, which allow
from her first workday. She was also
termination of the employee only when there
repatriated on the same day that she was
is "just cause or when [the probationary
informed of her termination. The abruptness
employee] fails to qualify as a regular
of the termination negated any finding that
employee in accordance with reasonable
she was properly notified and given the
standards made known by the employer to the
opportunity to be heard. Her constitutional
employee at the time of his [or her]
right to due process of law was violated.
engagement.

Republic Act No. 10022 was promulgated on

However, we do not see why the application of
March 8, 2010. This means that the
that ruling should be limited to probationary
reinstatement of the clause in Republic Act No.
employment. That rule is basic to the idea of
8042 was not yet in effect at the time of
security of tenure and due process, which are
respondent’s termination from work in 1997.
guaranteed to all employees, whether their
Republic Act No. 8042 before it was amended
employment is probationary or regular.
by Republic Act No. 10022 governs this case.

In this case, petitioner merely alleged that

Thus, when a law or a provision of law is null
respondent failed to comply with her foreign
because it is inconsistent with the Constitution,
employer’s work requirements and was
the nullity cannot be cured by reincorporation
inefficient in her work. No evidence was
or reenactment of the same or a similar law or
shown to support such allegations. Petitioner
provision. A law or provision of law that was
did not even bother to specify what
already declared unconstitutional remains as
requirements were not met, what efficiency
such unless circumstances have so changed as
standards were violated, or what particular
to warrant a reverse conclusion.
acts of respondent constituted inefficiency.

We are not convinced by the pleadings

Petitioner failed to comply with
submitted by the parties that the situation has
the due process requirements so changed so as to cause us to reverse binding
precedent.

Respondent’s dismissal less than one year

from hiring and her repatriation on the same
day show not only failure on the part of
petitioner to comply with the requirement of
the existence of just cause for termination.
They patently show that the employers did not
comply with the due process requirement.
We observe that the reinstated clause, this
time as provided in Republic Act. No. 10022,
violates the constitutional rights to equal
protection and due process. Petitioner as well
as the Solicitor General have failed to show
any compelling change in the circumstances
that would warrant us to revisit the precedent.

A valid dismissal requires both a valid cause

and adherence to the valid procedure of We reiterate our finding in Serrano v. Gallant
dismissal. The employer is required to give the Maritime that limiting wages that should be
recovered by an illegally dismissed overseas
worker to three months is both a violation of
due process and the equal protection clauses of
the Constitution.
Along the same line, we held that the
reinstated clause violates due process rights. It
is arbitrary as it deprives overseas workers of
their monetary claims without any discernable
valid purpose.
Tongko v. Manulife
GR No. 167622, November 7, 2008
Based on the foregoing cases, if the specific
rules and regulations that are enforced against
insurance agents or managers are such that
would directly affect the means and methods
by which such agents or managers would
achieve the objectives set by the insurance
company, they are employees of the insurance
company.
In the instant case, Manulife had the power of
control over Tongko that would make him its
employee. Several factors contribute to this
conclusion.
In the Agreement dated July 1, 1977 executed
between Tongko and Manulife, it is provided
that:
The Agent hereby agrees to comply with all
regulations and requirements of the Company
as herein provided as well as maintain a
standard of knowledge and competency in the
sale of the Company's products which satisfies
those set by the Company and sufficiently
meets the volume of new business required of
Production Club membership.
Under this provision, an agent of Manulife
must comply with three (3) requirements: (1)
compliance with the regulations and
requirements of the company; (2)
maintenance of a level of knowledge of the
company's products that is satisfactory to the
company; and (3) compliance with a quota of
new businesses.
Among the company regulations of Manulife
are the different codes of conduct such as the
Agent Code of Conduct, Manulife Financial
Code of Conduct, and Manulife Financial Code
of Conduct Agreement, which demonstrate the
power of control exercised by the company
over Tongko. The fact that Tongko was obliged
to obey and comply with the codes of conduct
was not disowned by respondents.
Thus, with the company regulations and
requirements alone, the fact that Tongko was
an employee of Manulife may already be
established. Certainly, these requirements
controlled the means and methods by which
Tongko was to achieve the company's goals.
More importantly, Manulife's evidence
establishes the fact that Tongko was tasked to
perform administrative duties that establishes
his employment with Manulife.
In its Petition for Certiorari dated January 7,
2005 filed before the CA, Manulife argued that
even if Tongko is considered as its employee,
his employment was validly terminated on the
ground of gross and habitual neglect of duties,
inefficiency, as well as willful disobedience of
the lawful orders of Manulife.
It is readily evident from the above-quoted
portions of Manulife's petition that it failed to
cite a single iota of evidence to support its
claims. Manulife did not even point out which
order or rule that Tongko disobeyed. More
importantly, Manulife did not point out the
specific acts that Tongko was guilty of that
would constitute gross and habitual neglect of
duty or disobedience. Manulife merely cited
Tongko's alleged "laggard performance,"
without substantiating such claim, and
equated the same to disobedience and neglect
of duty.
We cannot, therefore, accept Manulife’s
position.
In Quebec, Sr. v. National Labor Relations
Commission, we ruled that:
When there is no showing of a clear, valid and
legal cause for the termination of employment,
the law considers the matter a case of illegal
dismissal and the burden is on the employer to
prove that the termination was for a valid or
authorized cause. This burden of proof
appropriately lies on the shoulders of the
employer and not on the employee because a
worker's job has some of the characteristics of
property rights and is therefore within the
constitutional mantle of protection. No person
shall be deprived of life, liberty or property
without due process of law, nor shall any
person be denied the equal protection of the
laws.
We again ruled in Times Transportation Co., v.
NLRC that:
The law mandates that the burden of proving
the validity of the termination of employment
rests with the employer. Failure to discharge
this evidentiary burden would necessarily
mean that the dismissal was not justified, and,
therefore, illegal. Unsubstantiated suspicions,
accusations and conclusions of employers do
not provide for legal justification for
dismissing employees. In case of doubt, such
cases should be resolved in favor of labor,
pursuant to the social justice policy of our
labor laws and Constitution.
This burden of proof was clarified in
Community Rural Bank of San Isidro, Inc. v.
Paez to mean substantial evidence, to wit:
The Labor Code provides that an employer
may terminate the services of an employee for
just cause and this must be supported by
substantial evidence. The settled rule in
administrative and quasi-judicial proceedings
is that proof beyond reasonable doubt is not
required in determining the legality of an
employer's dismissal of an employee, and not
even a preponderance of evidence is necessary
as substantial evidence is considered sufficient.
Substantial evidence is more than a mere
scintilla of evidence or relevant evidence as a
reasonable mind might accept as adequate to
support a conclusion, even if other minds,
equally reasonable, might conceivably opine
otherwise.
Here, Manulife failed to overcome such burden
of proof. It must be reiterated that Manulife
even failed to identify the specific acts by
which Tongko's employment was terminated
much less support the same with substantial
evidence. To repeat, mere conjectures cannot
work to deprive employees of their means of
livelihood. Thus, it must be concluded that
Tongko was illegally dismissed.
Serrano v. NLRC
GR No. 117040, January 27, 2000
Violation of Notice Requirement Not a Denial
of Due Process.
The cases cited by both Justices Puno and
Panganiban refer, however, to the denial of
due process by the State, which is not the case
here. There are three reasons why, on the
other hand, violation by the employer of the
notice requirement cannot be considered a
denial of due process resulting in the nullity of
the employee's dismissal or layoff.
The first is that the Due Process Clause of the
Constitution is a limitation on governmental
powers. It does not apply to the exercise of
private power, such as the termination of
employment under the Labor Code. This is
plain from the text of Art. III, §1 of the
Constitution, viz.: "No person shall be
deprived of life, liberty, or property without
due process of law. . . ." The reason is simple:
Only the State has authority to take the life,
liberty, or property of the individual. The
purpose of the Due Process Clause is to ensure
that the exercise of this power is consistent
with what are considered civilized methods.
The second reason is that notice and hearing
are required under the Due Process Clause
before the power of organized society are
brought to bear upon the individual. This is
obviously not the case of termination of
employment under Art. 283. Here the
employee is not faced with an aspect of the
adversary system. The purpose for requiring a
30-day written notice before an employee is
laid off is not to afford him an opportunity to
be heard on any charge against him, for there
is none. The purpose rather is to give him time
to prepare for the eventual loss of his job and
the DOLE an opportunity to determine
whether economic causes do exist justifying
the termination of his employment.
Even in cases of dismissal under Art. 282, the
purpose for the requirement of notice and
hearing is not to comply with 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."
The third reason why the notice requirement
under Art. 283 cannot be considered a
requirement of the Due Process Clause is that
the employer cannot really be expected to be
entirely an impartial judge of his own cause.
This is also the case in termination of
employment for a just cause under Art. 282
(i.e., serious misconduct or willful
disobedience by the employee of the lawful
orders of the employer, gross and habitual
neglect of duties, fraud or willful breach of
trust of the employer, commission of crime
against the employer or the latter's immediate
family or duly authorized representatives, or
other analogous cases).
Lack of Notice Only Makes
Termination Ineffectual
Not all notice requirements are requirements
of due process. Some are simply part of a
procedure to be followed before a right
granted to a party can be exercised. Others are
simply an application of the Justinian precept,
embodied in the Civil Code, to act with justice,
give everyone his due, and observe honesty
and good faith toward one's fellowmen. Such
is the notice requirement in Arts. 282-283. The
consequence of the failure either of the
employer or the employee to live up to this
precept is to make him liable in damages, not
to render his act (dismissal or resignation, as
the case may be) void. The measure of
damages is the amount of wages the employee
should have received were it not for the
termination of his employment without prior
notice. If warranted, nominal and moral
damages may also be awarded.
Indeed, under the Labor Code, only the
absence of a just cause for the termination of
employment can make the dismissal of an
employee illegal. This is clear from Art. 279
which provides:
Security of Tenure. — In cases of regular
employment, the employer shall not terminate
the services of an employee except for a just
cause or when authorized by this Title. An
employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss
of seniority rights and other privileges and to
his full backwages, inclusive of allowances,
and to his other benefits or their monetary
equivalent computed from the time his
compensation was withheld from him up to
the time of his actual reinstatement.
Agabon v. NLRC
GR No. 158693, November 17, 2004
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
The fact that the Serrano ruling can cause
283, or for health reasons under Article 284,
unfairness and injustice which elicited strong
and due process was observed; (2) the
dissent has prompted us to revisit the
dismissal is without just or authorized cause
doctrine.
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 To be sure, the Due Process Clause in Article
due process was not observed. 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
In the first situation, the dismissal is
a civilized society as conceived by our entire
undoubtedly valid and the employer will not
history. Due process is that which comports
suffer any liability.
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
In the second and third situations where the
and judicial powers of the government
dismissals are illegal, Article 279 mandates
provided by the Bill of Rights.
that the employee is entitled to reinstatement
without loss of seniority rights and other
privileges and full backwages, inclusive of
Due process under the Labor Code, like
allowances, and other benefits or their
Constitutional due process, has two aspects:
monetary equivalent computed from the time
substantive, i.e., the valid and authorized
the compensation was not paid up to the time
causes of employment termination under the
of actual reinstatement.
Labor Code; and procedural, i.e., the manner
of dismissal. Procedural due process
requirements for dismissal are found in the
In the fourth situation, the dismissal should be
Implementing Rules of P.D. 442, as amended,
upheld. While the procedural infirmity cannot
otherwise known as the Labor Code of the
be cured, it should not invalidate the dismissal.
Philippines in Book VI, Rule I, Sec. 2, as
However, the employer should be held liable
amended by Department Order Nos. 9 and 10.
for non-compliance with the procedural
Breaches of these due process requirements
requirements of due process.
violate the Labor Code. Therefore statutory
due process should be differentiated from
failure to comply with constitutional due
The present case squarely falls under the process.
fourth situation. The dismissal should be
upheld because it was established that the
petitioners abandoned their jobs to work for
Constitutional due process protects the
another company. Private respondent,
individual from the government and assures
however, did not follow the notice
him of his rights in criminal, civil or
requirements and instead argued that sending
administrative proceedings; while statutory
notices to the last known addresses would
due process found in the Labor Code and
have been useless because they did not reside
Implementing Rules protects employees from
there anymore. Unfortunately for the private
being unjustly terminated without just cause
respondent, this is not a valid excuse because
after notice and hearing.
the law mandates the twin notice
requirements to the employee's last known
address. Thus, it should be held liable for
After carefully analyzing the consequences of
noncompliance with the procedural
the divergent doctrines in the law on
requirements of due process.
employment termination, we believe that in
cases involving dismissals for cause but
without observance of the twin requirements
A review and re-examination of the relevant
of notice and hearing, the better rule is to
legal principles is appropriate and timely to
abandon the Serrano doctrine and to follow
clarify the various rulings on employment
Wenphil by holding that the dismissal was for
termination in the light of Serrano v. National
just cause but imposing sanctions on the
Labor Relations Commission.
employer. Such sanctions, however, must be
stiffer than that imposed in Wenphil. By doing
so, this Court would be able to achieve a fair respondent warrants the payment of
result by dispensing justice not just to indemnity in the form of nominal damages.
employees, but to employers as well. The amount of such damages is addressed to
the sound discretion of the court, taking into
account the relevant circumstances.
It must be stressed that in the present case, Considering the prevailing circumstances in
the petitioners committed a grave offense, i.e., the case at bar, we deem it proper to fix it at
abandonment, which, if the requirements of P30,000.00. We believe this form of damages
due process were complied with, would would serve to deter employers from future
undoubtedly result in a valid dismissal. 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
An employee who is clearly guilty of conduct
violative of Article 282 should not be protected Code and its Implementing Rules.
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.

Justice Isagani Cruz strongly asserts the need

to apply a balanced approach to labor
management relations and dispense justice
with an even hand in every case:

We have repeatedly stressed that social justice

– or any justice for that matter – is for the
deserving, whether he be a millionaire in his
mansion or a pauper in his hovel. It is true that,
in case of reasonable doubt, we are to tilt the
balance in favor of the poor to whom the
Constitution fittingly extends its sympathy
and compassion. But never is it justified to
give preference to the poor simply because
they are poor, or reject the rich simply because
they are rich, for justice must always be
served for the poor and the rich alike,
according to the mandate of the law.

The violation of the petitioners' right to

statutory due process by the private