Professional Documents
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SUPREMECOURTREPORTSANNOTATEDVOLUME323
445
EN BANC.
446
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446
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447
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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.
Same Same Same Not all notice requirements are
requirements of due process.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,
448
448
to act with justice, give everyone his due, and observe honesty and
good faith toward ones fellowmen. Such is the notice requirement
in Arts. 282283. 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.
Same Same Same 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.We hold, therefore, that, with respect to Art. 283 of
the Labor Code, 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. It is similar to the failure to observe the provisions of
Art. 1592, in relation to Art. 1191, of the Civil Code in rescinding
a contract for the sale of immovable property. Under these
provisions, while the power of a party to rescind a contract is
implied in reciprocal obligations, nonetheless, in cases involving
the sale of immovable property, the vendor cannot exercise this
power even though the vendee defaults in the payment of the
price, except by bringing an action in court or giving notice of
rescission by means of a notarial demand. Consequently, a notice
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455
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456
Records, p. 2.
457
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457
Decision, dated April 30, 1993 of Labor Arbiter Pablo C. Espiritu. Petition,
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6
458
458
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460
In Asian Alcohol
Corporation v. National Labor Relations
10
Commission, the Court likewise upheld the termination of
employment of water pump tenders and their replacement
by independent contractors. It ruled that an employers
good faith in implementing a redundancy program is not
necessarily put in doubt by the availment of the services of
an independent contractor to replace the services of the
terminated employees to promote economy and efficiency.
Indeed, as we pointed out in another case, the
[management of a company] cannot be denied the faculty
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Id., at 662.
10
11
461
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14
15
(1997).
462
462
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and hearing to
________________
16
17
463
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464
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...
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.
________________
20
21
Id., at 7576.
465
465
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E.g., Reta v. NLRC, 232 SCRA 613 (1994) (dismissal for negligence
and insubordination).
466
466
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467
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26
27
468
468
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 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
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469
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28
470
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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. It cannot be that the former regime
denied due process to the employee. Otherwise, there
should now likewise be a rule that, in case an employee
leaves his job without cause and without prior notice to his
employer, his act should be void instead of simply making
him liable for damages.
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 latters immediate family or
duly authorized representatives, or other analogous cases).
_________________
The employee, upon whom no such notice was served in case of
termination of employment without just cause shall be entitled to
compensation from the date of termination of his employment in an
amount equivalent to his salaries or wages corresponding to the required
period of notice.
30
Abe v. Foster Wheeler Corp., 110 Phil. 198 (1960) Malate Taxicab
471
31
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31
32
33
472
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ones, in case one of the obligors should not comply with what is incumbent
upon him . . . .
ART. 1592: In the sale of immovable property, even though it may have been
stipulated that upon failure to pay the price at the time agreed upon the rescission
of the contract shall of right take place, the vendee may pay, even after the
expiration of the period, as long as no demand for rescission of the contract has
been made upon him either judicially or by a notarial act. After the demand, the
court may not grant him a new term.
35
473
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Emphasis added.
38
474
474
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475
41
Id., 20.
42
Art. XIII, 3.
43
Manila Trading and Supply Co. v. Zulueta, 69 Phil. 485, 487 (1940) (per
Laurel, J.) Accord, Villanueva v. NLRC, 293 SCRA 259 (1998) DI Security and
General Services, Inc. v. NLRC, 264 SCRA 458 (1996) Flores v. NLRC, 256 SCRA,
735 (1996) San Miguel Corporation v. NLRC, 218 SCRA 293 (1993) Colgate
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476
476
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477
SEPARATE OPINION
BELLOSILLO, J.:
We point out at the outset that this Petition for Review,
which was filed before the promulgation of St. Martin
1
Funeral Home v. National Labor Relations Commission, is
not the proper means by which NLRC decisions are
appealed to this Court. Before St. Martin Funeral Home, it
was only through a Petition for Certiorari under Rule 65
that NLRC decisions could be reviewed and nullified by us
on the ground of lack of jurisdiction or grave abuse of
discretion amounting to lack or excess of jurisdiction. After
St. Martin Funeral Home, petitions like the one at bar are
initially filed in the Court of Appeals for proper
adjudication.
In the interest of justice, however, and in order to write
finis to the instant case which has already dragged on for
so long, we shall treat the petition pro hac vice as one for
certiorari under Rule 65 although it is captioned Petition
for Review on Certiorari, after all, it was filed within the
reglementary period for the filing of a petition for certiorari
under Rule 65.
Briefly, on 4 April 1985 private respondent Isetann
Department Store, Inc. (ISETANN), employed petitioner
Ruben Serrano as Security Checker until his appointment
as Security Section Head. On 11 October 1991 ISETANN
through its Human Resource Division Manager Teresita A.
Villanueva sent Serrano a memorandum terminating his
employment effective immediately in view of the
retrenchment program of the company,
and directing him
2
to secure clearance from their office. Petitioner Serrano
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478
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Rollo, p. 63.
479
479
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480
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481
481
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regulations
promulgated pursuant to guidelines set by the
10
DOLE.
As specifically provided in Art. 283 of the Labor Code,
the employer may terminate the employment of any
employee due to redundancy by serving a written notice on
the worker and the DOLE at least one (1) month before the
intended date thereof. In the instant case, ISETANN
11
clearly violated the provisions of Art. 283 on notice. It did
not send a written
_________________
9
Ed., p. 347.
10
11
employer may also terminate the employment of any employee due to the
installation of labor saving devices, redundancy, retrenchment to prevent
losses or the closing or cessation of operation of the establishment or
undertaking x x x by serving a written notice on the worker and the
Ministry of Labor and Employment at least one (1) month before the
intended date thereof x x x x.
482
482
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483
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14
Id., p. 78.
15
16
Id., p. 94.
17
Id., p. 96.
484
484
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19
485
strongly
recommend,
we
impose
a
disturbance
compensation as discussed hereunder.
In the instant case, we categorically declare that
Serrano was not denied his right to due process. Instead,
his employer did not comply with the 30day notice
requirement. However, while Serrano was not given the
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486
486
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487
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487
In the case at bar, both the Labor Arbiter and the NLRC found
that no written notice of the charges had been given to petitioner
by the respondent company, x x x Accordingly, in accordance with
the wellsettled mle, private respondents should pay petitioner
P1,000.00 as indemnity for violation of his right to due process x x
x x Although an employee validly dismissed for cause he may
nevertheless be given separation pay as a measure of social
justice provided the cause is not serious misconduct reflecting on
his moral character (italics supplied).
24
Shoemart, Inc. v. NLRC, G.R. No. 74229, 11 August 1989, 176 SCRA
385The employee was found to have abandoned his job but for failure to
observe the notice requirement, the employer was fined P1,000.00 Pacific
Mills, Inc. v. Alonzo, G.R. No. 78090, 26 July 1991, 199 SCRA 617The
employee violated company rules and regulations but because of
procedural lapse the company was fined P1,000.00 Aurelio v. NLRC, G.R.
No. 99034, 12 April 1993, 221 SCRA 432The managerial employee
breached the trust and confidence of his employer but for failure to
observe the notice requirement the company was fined P1,000.00
Worldwide Papermills, Inc. v. NLRC, G.R. No. 113081, 12 May 1995, 244
SCRA 125The employee was found guilty of gross and habitual neglect of
his duties and of excessive absences. For failure to comply with the notice
requirement the company was fined P5,000.00 Reta v. NLRC, G.R. No.
112100, 27 May 1994, 232 SCRA 613The employee was guilty of
inefficiency, negligence and insubordination but the company was fined
P10,000.00 for failure to observe the notice requirement.
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488
488
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489
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490
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employees.
Ideed, from the time the employee is dismissed from the
service without noticein this case since 11 October 1991to
the termination of his case, assuming it results in his rein
________________
26
491
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492
may
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Liverpool Gas Co., 3 Ad. & EL 433, 449, 11 Eng. Rep. 478 (K.B. 1836).
2
493
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Ibid.
494
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495
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496
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Ibid., p. 546.
497
497
not proven. But here, such a cause is present as found by both the
Labor Arbiter and the NLRC. There is only a violation by GTI of
the procedure prescribed in Article 283 of the Labor Code in
effecting the retrenchment of the petitioners.
It is now settled that where the dismissal of an employee is in
fact for a just and valid cause and is so proven to be but he is not
accorded his right to due process, i.e., he was not furnished the
twin requirements of notice and the opportunity to be heard, the
dismissal shall he upheld but the employer must be sanctioned for
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III.
REEXAMINATION
OF
THE
DOCTRINE: FROM BAD TO WORSE
WENPHIL
498
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Op cit., p. 76.
499
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Op cit., p. 76.
500
500
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501
Ms. Ramos:
Yes Sir.
Yes, sir.
xxx
_______________
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10
502
No, sir.
xxx
xxx
Yes, sir.
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503
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504
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505
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14
facts. For this reason too, we have held that notice to the
employee is required to enable him to contest the factual
bases of the management decision or good faith of15 the
retrenchment or redundancy before the DOLE.
In
addition, this notice requirement16 gives an employee a little
time to adjust to his joblessness.
________________
11
Sebuguero, supra.
International
Hardware,
Inc.
v.
National
Labor
Relations
15
16
506
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507
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508
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509
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510
510
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Supra.
511
511
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See also JGB and Associates, Inc. vs. NLRC, 254 SCRA 457 (1996)
Philippine Savings Bank v. NLRC, 261 SCRA 409 (1996) Pasudeco, Inc.
vs. NLRC, 272 SCRA 737 (1997) P.I. Manpower, Inc. vs. NLRC, 267
SCRA 451 (1997) Canura v. NLRC, 279 SCRA 45 (1997) International
Pharmaceuticals, Inc. vs. NLRC, 287 SCRA 213 (1998) Mabuhay
Development Industries vs. NLRC, 288 SCRA 1 (1998), all ponencias of
Mr. Justice Mendoza.
512
512
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employment without a definite period for any of the following just causes:
(a) The closing or cessation of operation of the establishment or
enterprise, or where the employer has to reduce his work force by
more than onehalf (1/2) due to serious business reverses, unless
the closing is for the purpose of circumventing the provisions of
this chapter
(b) Serious misconduct or willful disobedience by the employee of the
orders of his employer or representative in connection with his
work
(c) Gross and habitual neglect by the employee of his duties
(d) Fraud or willful breach by the employee of the trust reposed in
him by his employer or representative
(e) Commission of a crime or offense by the employee against the
person of his employer or any immediate member of his family or
representative and
(f) Other causes analogous to the foregoing.
22
513
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514
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515
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Art. 1700. The relation between capital and labor are not merely
contractual. They are so impressed with public interest that labor
contracts must yield to the common good. Therefore, such
contracts are subject to the special laws on labor unions, collective
bargaining, strikes and lockouts, closed shop, wages, working
conditions, hours of labor and similar subjects.
516
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518
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519
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rulings form part of the law of the land and Congress was
aware of them when it enacted the Labor Code and when
its implementing rules and regulations were promulgated
especially the rule ordering employers to follow due process
when dis
520
520
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521
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522
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523
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524
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VITUG, J.:
The lawful severance by an employer of an employer
employee relationship would require a valid cause. There
are, under the Labor Code, two groups of valid causes,
and
1
these are the just causes under Article 282 and the
authorized
_______________
1
525
employer may also terminate the employment of any employee due to the
installation of labor saving devices, redundancy, retrenchment to prevent
losses or the closing or cessation of operation of the establishment or
undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the workers and the
Ministry of Labor and Employment at least one (1) month before the
intended date thereof. In case of termination due to the installation of
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See San Miguel Corporation vs. NLRC, 255 SCRA 580. Section 7, Rule
I, Book VI, of the Omnibus Rules Implementing the Labor Code provides:
Sec 7. Termination of employment by employer.The just causes for terminating the
services of an employee shall be those provided in Article 282 of the Code. The
separation from work of an employee for a just cause does not entitle him to the
termination pay provided in Code, without prejudice, however, to whatever rights,
benefits and privileges he may have under the applicable individual or collective
bargaining
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See Foonote 2.
Section 1, Rule XXIII, of the Rules Implementing the Labor Code
clearly states that (i)n cases of regular employment, the employer shall
not terminate the services of an employee except for just or authorized
causes as provided by law, and subject to the requirements of due
process.
Section 2, I, of the same Rule provides that in case of termination of
employment based on just causes under Article 282 of the Labor Code, is it
required that there be
(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 cases of termination based on authorized causes under Article 283 of
the Labor Code, Section 2, II, of the same Rule mandates that there be a
written notice to the employee and the appropriate Regional Office of the
Department (of Labor and Employment) at east thirty days before the
effectivity of the termination, specifying the ground/s therefor.
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SEPARATE OPINION
PANGANIBAN, J.:
In the case before us, the Court is unanimous in at least
two findings: (1) petitioners dismissal was due to an
authorized cause, redundancy and (2) petitioner was
notified of his dismissal only on the very day his
employment was terminated. The contentious issue arising
out of these two findings is as follows: What is the legal
effect and the corresponding sanction for the failure of the
employer to give the employee and the Department of
Labor and Employment (DOLE) the 30day notice of
termination required under Article 283 of the Labor Code?
During the last ten (10) years, the Court has answered
the foregoing question by ruling that the dismissal should
be upheld although the employee should be given
indemnity or damages ranging from P1,000 to P10,000
depending on the circumstances.
The present ponencia of Mr. Justice Mendoza holds that
the termination of his employment should be considered
ineffectual and the [employee] should be paid back wages
from the time of his dismissal until the Court finds that the
dismissal was for a just cause.
Reexamination of the Indemnity Only Rule
I am grateful that the Court has decided to reexamine our
tenyear doctrine on this question and has at least, in the
process, increased the monetary award that should go to
the dismissed employeefrom a nominal sum in the
concept indemnity or damages to full back wages.
Shortly after my assumption of office on October 10, 1995, I
already questioned this practice of granting indemnity
only to employees 1 who were dismissed for cause but
without due process. I formally
________________
1
See Panganiban, Battles in the Supreme Court, 1998 ed., p. 155 et seq.
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2
283 SCRA 242, December 15, 1997. In that case, I proposed to grant
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534
and (2) due process. During the last ten years, the Court
has been quite firm in this doctrinal concept, but it has
been less than consistent in declaring the illegality of a
dismissal when due process has not been observed. This is
particularly noticeable in the relief granted. Where there
has been no just or authorized cause, the employee is
awarded reinstatement or
_______________
ART. 283. Closure of establishment and reduction of personnel.The
employer may also terminate the employment of any employee due to the
installation of labor saving devices, redundancy, retrenchment to prevent
losses or the closing or cessation or operation of the establishment or
undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the workers and the
[Department] of Labor and Employment at least one (1) month before the
intended date thereof. In case of termination due to the installation of
labor saving devices or redundancy, the worker affected thereby shall be
entitled to a separation pay equivalent to at least his one (1) month pay or
to at least one (1) month pay for every year of service, whichever is higher.
In case of retrenchment to prevent losses and in cases of closures or
cessation of operations of establishments or undertaking not due to
serious business losses or financial reverses, the separation pay shall be
equivalent to one (1) month pay or to at least onehalf (1/2) month pay for
every year of service, whichever is higher. A fraction of at least six (6)
months shall be considered one (1) whole year.
ART. 284. Disease as a ground for termination.An employer may
terminate the services of an employee who has been found to be suffering
from any disease and whose continued employment is prohibited by law or
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Mapal v. NLRC, 233 SCRA 266, June 17, 1994 Ala Mode Garments,
Inc. v. NLRC, 268 SCRA 497, February 17, 1997 Pizza Hut/Progressive
Development Corp. v. NLRC, 252 SCRA 531, January 29, 1996 MGG
Marine Services, Inc. v. NLRC, 259 SCRA 664, July 29, 1996 Ranises v.
NLRC, 262 SCRA 671, September 24, 1996.
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Conti v. NLRC, 271 SCRA 114 April 10, 1997 Alhambra Industries, Inc. v.
NLRC, 238 SCRA 232, November 18, 1994 JGB and Associates, Inc. v. NLRC, 254
SCRA 457, March 7, 1996 Samillano v. NLRC, 265 SCRA 788, December 23,
1996.
9
167, December 13, 1994 Sebuguero v. NLRC, 248 SCRA 532, September 27, 1995
Wenphil Corp. v. NLRC, 170 SCRA 69, February 8, 1989.
10
210 SCRA 277, 286, June 23, 1992, per Gutierrez, Jr., J.
11
138 SCRA 166, 170171, August 16, 1985, per Makasiar, CJ.
12
Among those are Galman v. Sandiganbayan, 144 SCRA 43, 87, September
12, 1986 People v. Albano, 163 SCRA 511 July 26, 1988 Saldana v. Court of
Appeals, 190 SCRA 396, 403, October 11, 1990 Paulin v. Gimenez, 211 SCRA 386,
392, January 21, 1993.
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14
Ibid., p. 703.
15
199 SCRA 92, July 12, 1991, per Narvasa, J. (later CJ).
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Ibid., p. 101.
17
18
19
20
21
22
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accused.
24
Recently, the25 Court vacated its earlier Decision in
People v. Parazo upon realizing that the accuseda deaf
mute, a mental retardate, whose mental age [was] only
seven (7) years and nine (9) months, and with low IQ of 60
onlyhad not been ably assisted by a sign language expert
during his
arraignment and trial. Citing People v.
26
Crisologo, we ruled that the accused had been deprived of
a full and fair trial and a reasonable opportunity to defend
himself.He had in effect been denied his fundamental
right to due process of law. Hence, we set aside the trial
proceedings and granted the accused a rearraignment and
a retrial.
Of late, we also set aside a Comelec Resolution
disallowing the use by a candidate of a certain nickname
for the purpose of her election candidacy. The Resolution
was issued pursuant to a letterpetition which was passed
upon by the Comelec without affording the candidate the
opportunity to explain her side and to counter the
allegations in said letterpetition. In invalidating the said
Resolution, we again underscored the
________________
23
GR No. 129058, March 29, 1999, 305 SCRA 29, per Bellosillo, J.
24
25
Purisima, J.
26
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470.
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29
30
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NLRC, 233 SCRA 260, June 17, 1994 Villarama v. NLRC, 236 SCRA 280,
September 2, 1994 Rubberworld (Phils.), Inc. v. NLRC, 183 SCRA 421,
March 21, 1990 Kwikway Engineering Works v. NLRC, 195 SCRA 526,
March 22, 1991, and several other cases.
32
In Reta v. NLRC, 232 SCRA 613, May 27, 1994 and Alhambra
Seahorse Maritime Corp. v. NLRC, 173 SCRA 390, May 15, 1989
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only. Since the Labor Code does not accord employees the
right to a hearing, ergo, he concludes, they do not have the
right to due process.
I disagree. True, as pointed out by Mr. Justice Mendoza,
traditional doctrine holds that constitutional rights may be
invoked only against the State. This is because in the past,
only the State was 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 such traditional doctrine
should be modified to enable the judiciary to cope with
these new paradigms and 34a
to continue protecting the people
from new forms of abuses.
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. Worth noting is that [o]nes employment,
profession, trade or calling is a property right within the
protection
of the constitutional, guaranty of due process of
35
law.
In a long line of cases involving judicial, quasijudicial
and administrative proceedings, some of which I
summarized earlier, the Court has held that the twin
requirements of notice and hearing (or, at the very least, an
opportunity to be heard) constitute the essential elements
of due process. In labor proceedings, both are the conditio
sine qua non for a
________________
34a
35
Wallem Maritime Services, Inc. v. NLRC, 263 SCRA 174, October 15,
1996 per Romero, J. Bernas, The 1987 Constitution of the Republic of the
Philippines: A Commentary, 1996 ed., p. 101.
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RCPI v. NLRC, 223 SCRA 656, June 25, 1993 Samillano v. NLRC,
San Miguel Corporation v. NLRC, 173 SCRA 314, May 12, 1989.
38
Art. 277. x x x
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effectual as having legal force valid. Thus, ineffectual, being its opposite,
means having no legal force or not valid.
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